A-27-77
Manitoba Fisheries Limited (Appellant) (Plain-
tiff)
v.
The Queen (Respondent) (Defendant)
Court of Appeal, Heald and Uric J.J. and MacKay
D.J.—Winnipeg, June 28; Toronto, July 25, 1977.
Crown — Appeal from Trial Division's dismissal of
application for entitlement to compensation — Acquisition by
Crown of goodwill under Freshwater Fish Marketing Act
rendering business, plant, and equipment valueless — Whether
or not goodwill taken without compensation by statute, and
compensation payable — Whether or not Exchequer Court Act
provided substantive basis for awarding compensation
Whether or not deprivation of property contrary to Canadian
Bill of Rights — Freshwater Fish Marketing Act, R.S.C. 1970,
c. F-13, ss. 2, 7, 21(1), 23(1) — Exchequer Court Act, R.S.C.
1970, c. E-11, ss. 17, 18(1) — Canadian Bill of Rights, S.C.
1960, c. 44 (R.S.C. 1970, Appendix 111).
This is an appeal from Trial Division's judgment dismissing
appellant's application for declarations of entitlement to com
pensation for property taken and for the fair market value of
business as a going concern. It had been alleged that respond
ent acquired business and goodwill under Freshwater Fish
Marketing Act, and as no licences had been granted to private
concerns under the Act, appellant lost business, goodwill and
the value of its business assets. The Trial Judge found that
goodwill had been taken by respondent without compensation
and, therefore, the appellant argued that, in absence of clear
statutory authority providing otherwise, compensation was pay
able. Secondly, the appellant argued that the Exchequer Court
Act provided a substantive as well as jurisdictional basis for
awarding compensation for the taking of property: that the Act
was still in force when the right of action arose. Lastly, the
appellant argued that its deprivation of enjoyment of property
without compensation was contrary to the Canadian Bill of
Rights for it occurred without due process of law.
Held, the appeal is dismissed. The Corporation did not
purchase, confiscate, or in any other way acquire possession, in
fact or law, of any of the physical or intangible assets belonging
to the appellant. The Trial Judge correctly found that the
statute, considered as a whole, did not purport to take any
property with or without compensation. To establish the
respondent's liability to compensate the appellant and others
for loss of their business, a clear legislative intention to take the
goodwill—(assuming it is property)—without paying for it
must be shown. None can be divined, expressly or impliedly,
from the Act. Sections 17 and 18(1) of the Exchequer Court
Act do not provide the basis of a claim for compensation, but
merely clothed that Court with jurisdiction in the prosecution
of claims, of the kinds envisaged in the sections, against the
federal Crown. They do not create substantive rights in the
factual situation at bar. The Act did not deprive appellant of
the enjoyment of any property, and although its implementa
tion resulted in putting the appellant out of business, that result
did not occur due to any deprivation of the enjoyment of
property in the sense that those words are used in the Canadian
Bill of Rights.
Attorney-General v. De Keyser's Royal Hotel Ltd. [1920]
A.C. 508, applied; France Fenwick & Co. Ltd. v. The King
[1927] 1 K.B. 458, applied; Belfast Corporation v. O.D.
Cars Ltd. [1960] A.C. 490, applied.
APPEAL.
COUNSEL:
K. M. Arenson, D. McCaffrey, Q. C., and J.
Lamont for appellant (plaintiff).
L. P. Chambers and S. M. Lyman for
respondent (defendant).
SOLICITORS:
Kaufman Arenson, Winnipeg, for appellant
(plaintiff).
Deputy Attorney General of Canada for
respondent (defendant).
The following are the reasons for judgment
rendered in English by
URIE J.: This is' an appeal from a judgment of
the Trial Division, [[1977] 2 F.C. 4571, wherein
an action brought by the appellant for a declara
tion that it was entitled to compensation for prop
erty taken, was dismissed with costs. It was alleged
that the appellant's business and goodwill were
acquired by the respondent by virtue of the enact
ment of the Freshwater Fish Marketing Act',
which I will hereinafter refer to as the "Act". The
appellant also sought a further declaration that the
appellant was entitled to "the fair market value of
the said business as a going concern as at the 1st
day of May 1969...."
' R.S.C. 1970, c. F-13.
Briefly, the relevant facts are these.
The appellant, since at least 1926 or 1927,
marketed freshwater fish. The fish were purchased
from independent fishermen at various points in
Manitoba and were processed in various ways, at
plants owned by the appellant. The processed
product was sold principally to buyers in the
United States. It was, apparently, a highly com
petitive business. However, the learned Trial Judge
found as a fact that the appellant, and other firms
like it, had built up individual clienteles and com
petitive positions in the industry. He further held
[at page 461] that, on the evidence, "there was
goodwill, in the legal and business sense, attaching
to the plaintiff's operation" the value of which it
was not necessary for him to fix since the parties
agreed that any compensation payable in respect
thereof would be the subject of agreement between
them or, failing that, determined by a Judge of the
Trial Division. Whether or not the learned Trial
Judge erred in his determination as to the exist
ence or non-existence of goodwill in the appellant's
business need not, it seems to me, be explored in
these reasons since, for the purpose thereof, I will
assume that he was correct in making this finding.
The Freshwater Fish Marketing Act was appar
ently enacted by Parliament at the request of the
Provinces of Alberta, Saskatchewan, Manitoba
and Ontario and the Northwest Territories. The
appellant contended at trial and before this Court
that the practical effect of the legislation and the
manner in which it was administered was to put
the appellant out of business and to take from it its
goodwill vesting it in the Freshwater Fish Market
ing Corporation, the Crown corporation estab
lished pursuant to section 3(1) of the Act, without
compensation. Since by section 14 the Corporation
is, for all purposes of the Act, an agent of Her
Majesty, the appellant's action was brought
against her. It was also contended that the plant
and equipment of the appellant were rendered
valueless by the consequences of the legislation
and again no compensation has been paid.
The appellant's counsel conceded in argument in
this Court, and apparently at trial, that in order to
found its claim for compensation it must establish
a statutory right. As 1 understood them, counsel
for the appellant based their respective arguments
on three grounds:
1) Having found that property of the appellant,
namely goodwill, had been taken by the respond
ent without payment of compensation, unless clear
statutory authority could be found for taking in
such a way, compensation for goodwill, in the
broadest sense of that word, was payable to the
appellant. Since the Act here under scrutiny does
not provide authority for taking without payment
of compensation, the appellant is entitled to be
compensated for its property so taken.
2) The Exchequer Court Act provides a sub
stantive, as well as jurisdictional, basis for the
awarding of compensation for the taking of prop
erty. In this instance, because the right thereto
arose before the repeal of that Act when the
Federal Court Act came into force, the statutory
basis for payment of compensation can be found
therein.
3) The appellant was deprived of the enjoyment
of its property without compensation having been
paid. Failure to pay compensation means that the
Crown took "such action without "due process of
law" and thus was contrary to section 1 of the
Canadian Bill of Rights as that section is to be
interpreted by the imperative provisions of section
2(e) 2 of that Act.
Before dealing with these arguments, the Act
should be examined to the extent necessary to
determine the validity of the appellant's conten
tions.
As previously indicated, the Act established the
Freshwater Fish Marketing Corporation as an
agent of the federal Crown. The Corporation was
established
for the purpose of marketing and trading in fish, fish
products and fish by-products in and out of Canada....'
2 S.C. 1960, c. 44. See R.S.C. 1970, Appendix III.
3 Section 7.
and for that purpose was granted a number of
powers.'
Part III of the Act is entitled, "Regulation of
Interprovincial and Export Trade" and includes
sections 20 to 32 inclusive.
Section 23 confers on the Corporation certain
duties and powers and subsection (1) sufficiently
describes them for the purposes of this judgment.
23. (1) Subject to section 21, the Corporation has the exclu
sive right to market and trade in fish in interprovincial and
export trade and shall exercise that right, either by itself or by
its agents, with the object of
(a) marketing fish in an orderly manner;
(b) increasing returns to fishermen; and
(c) promoting international markets for, and increasing
interprovincial and export trade in, fish.
The species of fish upon which the marketing
rights are conferred are set forth in a Schedule to
the Act to which schedule additions and deletions
may be made from time to time. "Participating
province" is defined in section 2 to mean
... a province or territory in respect of which there is in force
an agreement entered into under section 25 with the govern
ment of that province or territory;
Section 21(1) is a key section and reads as
follows:
21. (1) Except in accordance with the terms and conditions
set forth in any licence that may be issued by the Corporation
in that behalf, no person other than the Corporation or an
agent of the Corporation shall
(a) export fish from Canada;
(b) send, convey or carry fish from a participating province
to another participating province or to any other province;
(c) in a participating province, receive fish for conveyance or
carriage to a destination outside the province; or
(d) sell or buy, or agree to sell or buy fish situated in a
participating province for delivery in another participating
province or any other province, or outside Canada.
Section 25 authorizes the Minister designated to
act for purposes of the Act to enter into agree
ments with Alberta, Saskatchewan, Manitoba,
Ontario and the Northwest Territories. Subsection
(2) authorizes these agreements to provide, inter
alia, for:
4 Section 7(a) to (i).
25. (2)...
(c) the undertaking by the province of arrangements for the
payment, to the owner of any plant or equipment used in
storing, processing or otherwise preparing fish for market, of
compensation for any such plant or equipment that will or
may be rendered redundant by reason of any operations
authorized to be carried out by the Corporation under this
Part; ...
The evidence discloses that such an agreement
was entered into with the Province of Manitoba in
June 1969 but no compensation was paid to the
appellant for any of its plant or equipment since
none actually was taken by the Crown nor has
compensation been paid for any plant or equip
ment made redundant by reason of the operations
of the Corporation. Neither was the appellant
granted a licence by the Corporation nor was it
exempted from the operation of Part III of the Act
so that, effectively, the appellant was put out of
business.
The evidence also discloses, in the words of the
learned Trial Judge [at page 465], that the "Cor-
poration, from the outset, because there was no
other source of supply, obtained the trade of the
United States customers of the plaintiff and its
Manitoba competitors."
With the statutory scheme in mind, the three
contentions of the appellant to which I earlier
referred may now be examined.
Dealing with the first contention it appears to be
founded on a false premise, namely, that the
learned Trial Judge found that the goodwill of the
appellant had been taken by the respondent. I do
not read his judgment as having so found although
he did hold that there was goodwill attaching to
the appellant's business operations. Assuming,
however, that goodwill is property, did the Corpo
ration take that property from the appellant? If
that question is answered in the affirmative, then,
as appears from the jurisprudence, there must be
found a clear legislative intent to do so without
compensation.
The Trial Judge found, on consideration of the
whole statute, that it did not purport to take any
property in any of the participating provinces from
anyone, with or without compensation. It is a
conclusion with which I must agree. The object of
the legislation in establishing the Corporation was
as set out in section 23(1) and may be generally
described as being for the orderly marketing of
fish and fish products with the consequential ben
efits said to flow from such a scheme accruing to
the fishermen. While the Corporation has been
endowed with exclusive rights, provision has been
made for the licensing of others to participate in
the export and interprovincial marketing of fish
and fish products.
In order to establish the liability of the respond
ent to compensate the appellant and others for the
loss of their business, it would have to be shown
that in the legislation there was a clear intention to
take the goodwill of the appellant, assuming that it
is property, without paying for it. In my view, no
such intention can be divined either expressly or
impliedly from the Act here under consideration.
There can be no question that a statute is not to
be construed as taking away the property of a
subject without compensation. 5 Clear and unmis
takable words showing that it was the intention of
Parliament that it is not to be paid, must be found
in the legislation. That principle has linked with it
the further requirement that the taking must be
one which involves the actual, physical assumption
of possession or use of the property by the Crown.
As was stated in the France Fenwick case 6 by
Wright J.:
... but I shall assume that the Crown has no right at common
law to take a subject's property for reasons of State without
paying compensation. I think, however, that the rule can only
apply (if it does apply) to a case where property is actually
taken possession of, or used by, the Government, or where, by
the order of a competent authority, it is placed at the disposal
of the Government. A mere negative prohibition, though it
involves interference with an owner's enjoyment of property,
does not, I think, merely because it is obeyed, carry with it at
common law any right to compensation. A subject cannot at
common law claim compensation merely because he obeys a
lawful order of the State.
Lord Radcliffe noted the distinction too in his
judgment in Belfast Corporation v. O.D. Cars
Ltd.' at pages 524-525.
5 Attorney-General v. De Keyser's Royal Hotel Ltd. [ 1920]
A.C. 508 at p. 541.
6 France Fenwick & Co. Ltd. v. The King [1927] 1 K.B. 458
at p. 467.
7 Belfast Corporation v. O.D. Cars Ltd. [ 1960] A.C. 490.
I am of the opinion that it is clear from the
stated objects and purposes of the Freshwater Fish
Marketing Act, from the whole scheme of the Act
and from a plain reading of the statute as a whole
that it neither directly nor indirectly discloses an
intention to take from anyone any kind of prop
erty, including in that term proprietary rights as
well as physical assets. The Corporation did not
purchase, confiscate or in any other way acquire
possession, in fact or in law, of any of the physical
or intangible assets belonging to the appellant.
There was no "taking", "taking away" or "taking
over" of any such assets in any realistic interpreta
tion of those words. 8 That being so the question of
whether or not the statute provides clear directions
that no compensation is to be paid for property
taken does not arise.
That view is not affected by the presence of
section 25(2)(c) in the Act since section 25 as a
whole merely empowers the Minister to enter into
agreements with participating provinces containing
certain provisions among which may be an under
taking by any such province to compensate an
owner for plant and equipment which will or may
become redundant by reason of the operations of
the Corporation. Paragraph (c) is not the source of
any rights to an owner and, as the learned Trial
Judge observed [at page 469]:
There is ... no intention, inference, or suggestion the federal
Crown should be the direct source of such compensation.
The appellant's next contention was that sec
tions 17 9 and 18(1) 10 of the Exchequer Court Act,
R.S.C. 1970, c. E-11, provide the basis of a claim
for compensation.
8 See Belfast Corporation v. O.D. Cars Ltd., supra, at p. 517.
9 17. The [Exchequer] Court has exclusive original jurisdic
tion in all cases in which the land, goods or money of the
subject are in the possession of the Crown, or in which the
claim arises out of a contract entered into by or on behalf of the
Crown.
10 18. (1) The [Exchequer] Court also has exclusive original
jurisdiction to hear and determine the following matters:
(a) every claim against the Crown for property taken for any
public purpose;
In my view, those sections merely clothed the
Exchequer Court with jurisdiction in the prosecu
tion of claims, of the kind envisaged in the sec
tions, against the federal Crown. Whether or not
they created substantive rights in other situations,
upon which I express no opinion, they certainly did
not do so in the factual situation of the case at bar.
There was not any taking of any of the appel
lant's property, as has already been shown, wheth
er for public purpose or otherwise. Neither did any
land, goods or money of the appellant come into
the possession of the Crown, no matter how broad
ly those words are interpreted. Thus, in my opin
ion, the Exchequer Court Act does not provide any
foundation for the appellant's action.
The third ground upon which the appellant
relied was the Canadian Bill of Rights and in
particular sections 1(a) and 2(e) thereof. Those
sections read as follows:
1. It is hereby recognized and declared that in Canada there
have existed and shall continue to exist without discrimination
by reason of race, national origin, colour, religion or sex, the
following human rights and fundamental freedoms, namely,
(a) the right of the individual to life, liberty, security of the
person and enjoyment of property, and the right not to be
deprived thereof except by due process of law;
2. Every law of Canada shall, unless it is expressly declared
by an Act of the Parliament of Canada that it shall operate
notwithstanding the Canadian Bill of Rights, be so construed
and applied as not to abrogate, abridge or infringe or to
authorize the abrogation, abridgment or infringement of any of
the rights or freedoms herein recognized and declared, and in
particular, no law of Canada shall be construed or applied so as
to
(e) deprive a person of the right to a fair hearing in accord
ance with the principles of fundamental justice for the deter
mination of his rights and obligations;
The learned Trial Judge rejected this argument
on the ground that the legislation, properly con
strued, does not purport to deprive the appellant or
anyone else of the enjoyment of his property. The
Canadian Bill of Rights, therefore, did not have to
be involved in this instance. With this conclusion I
agree.
Considerable support for so viewing the legisla
tion is derived from a very recent decision of the
Privy Council in Government of Malaysia v.
Selangor Pilot Association." The headnote of the
report sufficiently sets forth the facts of the case.
The Constitution of Malaysia provides by article 13:
(1) No person shall be deprived of property save in accord
ance with law. (2) No law shall provide for the compulsory
acquisition or use of property without adequate compensa
tion.
In 1969 six licensed pilots formed a partnership (the
"association") to provide pilotage services in Port Swettenham.
The association had physical assets and employed other li
censed pilots. Its income was the pilotage dues earned by the
pilots. In 1972, under powers conferred by section 29A of the
Port Authorities Act 1963, the port authority declared Port
Swettenham a pilotage district thereby making it an offence by
virtue of section 35A of the Act for pilots other than those
employed by the port authority to provide pilotage services in
the port. The port authority offered employment to all licensed
pilots, purchased the physical assets of the association and
began to operate a pilot service. The association brought an
action against the port authority and the Government of
Malaysia for declarations that they were entitled to compensa
tion for the loss of the goodwill of the business and that section
35A of the Port Authorities Act was unconstitutional and of no
effect. The action was dismissed. On appeal the Federal Court
granted a declaration that the association was entitled to
compensation for loss of goodwill.
On a further appeal to the Privy Council the
judgment of the Federal Court was reversed.
It is noteworthy, I think that article 13(1) of the
Constitution of Malaysia and section 1(a) of the
Canadian Bill of Rights each use the word
"deprived" in connection with "property". The
former, of course, uses the phrase "deprived of
property", while the latter speaks of being
"deprived" of "the enjoyment of property". I do
not think that anything turns on that difference in
language.
Viscount Dilhorne, writing for the majority of
the Privy Council, at pages 905-906 of the report
has this to say about the interpretation to be given
to the word "deprived" in the context in which it
was used in the Constitution.
The first question for consideration is whether this restriction
on the exercise of a pilot's rights given by the grant of a licence
amounted to a deprivation of property. An ordinary driving
licence in the United Kingdom entitles its holder to drive many
" [1977] 2 W.L.R. 901.
classes of vehicles, including heavy locomotives. If Parliament
in its wisdom thought it advisable that in future drivers of
heavy locomotives should have a special test and that unless the
holders of driving licences had passed that test, they should not
drive heavy locomotives, could it be said that all holders of
driving licences were in consequence deprived of property?
Does disqualification from holding a driving licence involve
deprivation of property? In the opinion of their Lordships, the
answer to these questions is in the negative. In their view the
restriction placed on the activities of individual licensed pilots
did not deprive them of property and if this be the case, it is
hard to see that it can be said to have deprived the licensed
pilots who were partners in the association of property. All they
lost was the right to act as pilots unless employed by the au
thority and the right to employ others on pilotage, neither right
being property. The result was that the association could no
longer carry on its business and employ licensed pilots but
unless it was deprived of property otherwise than in accordance
with law or its property was compulsorily acquired or used by
the port authority, there was no breach of article 13.
Again, at pages 907 - 908 he said:
Deprivation may take many forms. A person may be deprived
of his property by another acquiring it or using it but those are
not the only ways by which he can be deprived. As a matter of
drafting, it would be wrong to use the word "deprived" in
article 13(1) if it meant and only meant acquisition or use when
those words are used in article 13(2). Great care is usually
taken in the drafting of constitutions. Their Lordships agree
that a person may be deprived of his property by a mere
negative or restrictive provision but it does not follow that such
a provision which leads to deprivation also leads to compulsory
acquisition or use. If in the present case the association was in
consequence of the amending Act deprived of property, there
was no breach of article 13(1) for that deprivation was in
accordance with a law which it was within the competence of
the legislature to pass.
It may be that the association by its enjoyment over a consider
able period of time of a monopoly in the provision of pilotage
services had acquired a goodwill, the value of which would be
reflected on a sale by it of its business and of which it was
deprived by the amending Act. But if it were so, it does not
follow that the goodwill was acquired by the port au
thority from the association and in the opinion of the majority
of their Lordships it was not. [The emphasis is mine.]
I am of the opinion that what was said by
Viscount Dilhorne is equally applicable to the
interpretation of section 1(a) of the Canadian Bill
of Rights and thus lends strong support to the
conclusion of the learned Trial Judge, with which I
agree, that the Act here in question did not deprive
the appellant of the enjoyment of any property.
Unfortunately, implementation of the legislation
had the effect of putting the appellant out of
business but that result did not occur due to any
deprivation of property of the appellant by the
respondent. As earlier stated, the Crown did not
acquire, possess or use any property of the appel
lant, either tangible or intangible, unless it could
be said that the fishermen who supplied the appel
lant with their fish or the customers to whom the
appellant sold its fish and fish products had
become their property. Obviously that could not be
so because either the fishermen or the customers
could, if they so desired, do business with anyone
they wished. They were not the exclusive property
of the appellant or anyone else, as the admittedly
highly competitive nature of the business indicates.
What the appellant lost was not property but was
its right to carry on the business in which it had
been engaged, without a licence. 1f that loss
included whatever goodwill the appellant had, it
was not taken by the Corporation.
Having said that, clearly there was no depriva
tion of the enjoyment of property, in the sense that
those words are used in the Canadian Bill of
Rights. That being so, no failure of "due process"
was involved. Even if section 2 "may have grafted
on what was formerly regarded as 'due process' of
law requirements of a higher standard than for
merly prevailed for the protection of the human
rights and fundamental freedoms of the individual
recognized and declared by section 1(a)", 12 such
higher standard could not apply in this case
because there was no underlying deprivation of
property necessitating the application of such
higher standard, even assuming that such a new
standard was created by paragraph (e) of section
2. I am, therefore of the view that there has been
no breach of the Canadian Bill of Rights in this
case.
For all of the above reasons, the appeal must be
dismissed with costs. In view of this conclusion, it
is unnecessary to deal with the appellant's submis
sions with respect to the question of interest, if
12 Armstrong v. The State of Wisconsin and The United
States of America [1973] F.C. 437 per Thurlow J. at p. 439.
any, which might have been payable on any com
pensation which the respondent might have been
required to pay if she had been found liable.
I do not wish to leave this case without saying
that I fully recognize that the result may appear
harsh but, as was pointed out by the learned Trial
Judge, our responsibility is to interpret the law as
we see it and we must leave to others the obliga
tion to so frame it that unfairness does not result
in the implementation thereof.
▪ * *
HEALD J.: I concur.
* * *
MACKAY D.J.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.