T-12-75
Alda Enterprises Limited (Plaintiff)
v.
The Queen, Commissioner of the Yukon Territory,
Government of the Yukon Territory, and Town of
Faro (Defendants)
and
Cyprus Anvil Mining Corporation (Third Party)
Trial Division, Collier J.—Vancouver, September
12 and 29; Ottawa, October 20, 1977.
Jurisdiction — Crown — Torts — Motion for judgment by
default — Action for damages and plea in nuisance against
Federal Crown, Territorial Commissioner and Government and
Municipality incorporated under Territorial Ordinance
Whether or not Court has jurisdiction to entertain claim
against Town — Federal Court Rule 433(2) — Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 17(1),(2),(3)(a) —
Crown Liability Act, R.S.C. 1970, c. C-38.
Plaintiff applies for judgment against the Town of Faro as
that defendant had not filed a defence within the specified
period. The action involves claims for general and specific
damages, loss of revenue, diminution of value, and a plea in
nuisance. The ground under the plaintiff's hotel had subsided
after water from burst sewage and water pipes melted the
underlying permafrost. The four defendants, it is asserted, are
the owners and operators of the water system. It is alleged that
the design and construction of the system was faulty, and the
Town of Faro's operation of it, negligent. The issue is whether
or not the Court has jurisdiction to entertain the claim against
the Town of Faro, and to grant the judgment sought.
Held, the motion is dismissed. If the allegations of the
statement of claim are true, the claim advanced against the
federal Crown is properly within the Court's jurisdiction. The
plaintiff, however, has not shown its proceedings against the
Town of Faro to be supported by "existing and applicable
federal law." A sometimes useful test to apply in approaching
the question of jurisdiction is to see whether this Court would
have jurisdiction if the claim advanced against one particular
defendant stood alone and was not joined in an action against
other defendants over whom there properly is jurisdiction.
McNamara Construction (Western) Limited v. The Queen
[1977] 2 S.C.R. 654, applied. Quebec North Shore Paper
Co. v. Canadian Pacific Limited [1977] 2 S.C.R. 1054,
applied. McGregor v. The Queen [1977] 2 F.C. 520,
applied. The "Sparrows Point" [1951] S.C.R. 396,
distinguished.
APPLICATION.
COUNSEL:
John Parker for plaintiff.
No one for defendants, The Queen, Commis
sioner of the Yukon Territory, and Govern
ment of the Yukon Territory.
No one for defendant, Town of Faro.
No one for Third Party.
SOLICITORS:
Parker & Wylie, Vancouver, for plaintiff.
Deputy Attorney General of Canada for
defendants, The Queen, Commissioner of the
Yukon Territory, and Government of the
Yukon Territory.
Farris, Vaughan, Wills & Murphy, Vancou-
ver, for Third Party.
The following are the reasons for judgment
rendered in English by
COLLIER J.: The plaintiff applies, pursuant to
Rule 433(2), for judgment against the defendant
Town of Faro for damages to be assessed. That
defendant has not filed a defence within the period
specified by the rules.
At issue is the jurisdiction of this Court to
entertain the claim asserted against the Town of
Faro and to grant the judgment sought.
The original statement of claim was filed on
January 2, 1975. An amended statement of claim
was filed on August 25, 1976. The plaintiff owns a
hotel in the Town of Faro. The town is a municipal
corporation created under the Municipal Ordi
nance of the Yukon Territory, R.O.Y.T. 1975, c.
M-12. The plaintiff claims special and general
damages because of subsidence of the land on
which the hotel was built.' The plaintiff, by agree
ment for sale entered into with the Government of
the Yukon Territory, bought the lot in question.
The lot is underlain with permafrost. In 1969 the
defendant Commissioner ". .. caused a sewer and
water system to be designed and installed on the
Faro townsite. ..." It is alleged the design and
1 Damages for loss of revenue and diminution of value are
also claimed.
construction of the system were faulty; that many
of the pipes failed, causing water to escape into the
permafrost. This water melted the permafrost,
causing subsidence of the hotel and the damages
complained of. Ownership and operation of the
water system is asserted to be in the Government
of Canada, Government of the Yukon Territory,
Commissioner of the Yukon Territory and the
Town of Faro. The town is alleged to have been
negligent in its operation of the system by running
it at too great pressure (contributing to the ruptur
ing of pipes) and increasing the flow into the
permafrost. It is further said that the town, by
paving roads near the hotel property without
installing storm sewers, thereby diverted additional
water into the plaintiff's property, all of which
again affected the permafrost.
In paragraph 16 of the amended statement of
claim, the case against all defendants is pleaded in
nuisance.
Mr. Parker, counsel for the plaintiff, submits
there is, in all the circumstances, jurisdiction in
respect of the suit against the town. It is said the
claim advanced here against the Federal Crown is
properly within the jurisdiction of the Court; that
this is the only court having jurisdiction in respect
of that particular claim. Assuming the allegations
in the statement of claim to be true, I agree.
Jurisdiction can be found, for the claim against the
Crown, in subsection 17(1) of the Federal Court
Act 2 and in the Crown Liability Act'. I do not
think subsection 17(2) or paragraph 17(3)(c) of
the Federal Court Act apply, as contended by the
plaintiff, in this case.
Mr. Parker then relies on certain portions of the
decision of the Supreme Court of Canada in
McNamara Construction (Western) Ltd. v. The
Queen 4 . The facts are stated in the reasons of
2 R.S.C. 1970 (2nd Supp.), c. 10.
' R.S.C. 1970, c. C-38.
4 [1977] 2 S.C.R. 654. See also The Queen v. Rhine [1978] 1
F.C. 356.
Laskin C.J.C. as follows: 5
The facts giving rise to this issue may be shortly stated. The
Crown in right of Canada entered into a contract with the
defendant appellant McNamara Construction (Western) Lim
ited, an Alberta company, for the construction of a Young
Offenders Institution in Drumheller, Alberta. Fidelity Insur
ance Company of Canada provided a surety bond to the Crown
in respect of McNamara's obligations under the construction
contract. This contract was preceded by a consulting contract
entered into between the Crown and J. Stevenson & Associates,
an Alberta firm of architects and engineers which prepared the
plans, specifications and tender documents upon which the
construction contract was based. Alleging a breach of their
respective contracts by Stevenson and by McNamara, the
Crown brought action against them in the Federal Court
claiming against each, in the alternative, damages for the
breach and claiming against Fidelity under its surety bond.
In the same action, McNamara and Fidelity gave notice,
pursuant to Federal Court Rule 1730, of a claim over against
their co-defendant Stevenson, alleging negligence on Steven-
son's part in the preparation of the plans. McNamara and
Fidelity also served a third party notice, pursuant to Federal
Court Rule 1726, on Lockerbie & Hole Western Limited, a
subcontractor, claiming relief over by reason of alleged negli
gence or breach of contract by the third party.
The defendants took the position there was no
jurisdiction in the Federal Court to hear the claim
of the Crown. The Supreme Court of Canada
sustained that position. The Court referred to and
amplified its earlier reasoning in Quebec North
Shore Paper Co. v. Canadian Pacific Ltd.: 6 for
this Court to have jurisdiction it is a prerequisite
... there be existing and applicable federal law which can be
invoked to support any proceedings before it. It is not enough
that the Parliament of Canada have legislative jurisdiction in
respect of some matter which is the subject of litigation in the
Federal Court.'
The Court found there was no existing federal
law on which the plaintiff there could found its
claim. The action was dismissed.
In respect of the third party proceedings (which
were, as here, between subject and subject) the
5 Page 657.
6 [1977] 2 S.C.R. 1054. See the following where the Quebec
North Shore principle has been applied: Blanchette v. C.N.R.
[1977] 2 F.C. 431; McGregor v. The Queen [1977] 2 F.C. 520;
The Queen v. Canadian Vickers Ltd. (unreported, T-1453-74—
reasons June 22, 1977); Skaarup Shipping Corp. v. Hawker
Industries Ltd. (T-1648-77—reasons September 26, 1977).
7 McNamara, page 658.
Court said: 8
I conclude, therefore, that the appellants' challenge to the
jurisdiction of the Federal Court must succeed and that their
appeals must, accordingly, be allowed with costs throughout.
The judgments of the Courts below should be set aside and the
statements of claim served on the appellants should be struck
out. In view of this conclusion, the consequential proceedings
between the co-defendants and the third party proceedings
must likewise fall, and it is unnecessary to deal with the issues
raised as to their validity or propriety. I would, however,
observe that if there had been jurisdiction in the Federal Court
there could be some likelihood of proceedings for contribution
or indemnity being similarly competent, at least between the
parties, in so far as the supporting federal law embraced the
issues arising therein. [My underlining.]
The plaintiff relies on the underlined sentence as
authority for this Court having jurisdiction in this
case. I cannot so interpret that observation.
The claim advanced by the plaintiff against the
Crown and the Town of Faro is not, in my opinion,
one for contribution or indemnity, in the sense
Laskin C.J.C. is using that expression. It seems to
me what is being spoken of there are true contribu
tion or indemnity proceedings among defendants,
or by defendants vis-Ã -vis third parties.
In my view the plaintiff has not shown that its
proceedings against the Town of Faro are support
ed by "existing and applicable federal law".
A sometimes useful test to apply in approaching
the question of jurisdiction is to see whether this
Court would have jurisdiction if the claim
advanced against one particular defendant stood
alone and was not joined in an action against other
defendants over whom there properly is
jurisdiction. 9 When that test is used here in respect
of the plaintiff's claim against the Town of Faro,
the answer must be, No. Mr. Parker frankly
conceded that answer. He said that, in those cir
cumstances, jurisdiction would lie with the
Supreme Court of the Yukon Territory. I assume
the applicable law then would be the statutory and
8 Pages 663-664. I note that at page 659, Laskin C.J.C.
included in federal law, federal "common law".
9 See McGregor v. The Queen [1977] 2 F.C. 520 at 522.
common law of the territory.
But, it is urged, that conclusion creates an
unjust and undesirable result: the plaintiff must
pursue his remedy in two courts. The argument
was put by Mr. Parker this way:
There is an ancient precedent of the common law that for
every right there must be a Court to which the subject can
resort to enforce that right.* In the present case, the subject
must resort to the Federal Court of Canada to enforce its right
against the Crown in Right of Canada. Now if the Plaintiff in
this action does not join the Town of Faro as one of the
Defendants, it could not later sue the Town of Faro because it
is an equally well established principle of the common law that
if a Plaintiff sues one of several tortfeasers that automatically
relieves the other tortfeasers of liability. Taking the two princi
ples together, then, there must be a Court in which the Plaintiff
can take action against the Town of Faro as a joint tortfeaser,
and the Court has to be the Federal Court of Canada, because
there is no other court in which the plaintiff can sue the Crown
in such an action as this.
* The old maxim, ubi jus ibi remedium, is part of the law of
the land. It says, of course, that where there is [a] right
recognized by the law there exists also a remedy for any
infringement of such right. Chief Justice Holt stated this
proposition in the old case of Ashby vs. White (1703), 2Ld
RAYM 938 at P.952. His words were these: "Indeed it is a vain
thing to imagine a right without a remedy, for want of right
and want of remedy are reciprocal". Were it not so it would be
a scandal on the law.
I do not quite agree with the proposition put
forward that merely suing one only of several
tortfeasors relieves the others of liability. As I
understand the old common law rule, it was the
taking of judgment (among other things) against
one concurrent tortfeasor which discharged the
others. 10 That common law principle came from
England, a unitary state with a unitary system of
courts. It may be that in Canada, with the division
of legislative powers, differing law in the prov
inces, and a dual court system, different consider
ations should apply. In any event, the old common
law rule no longer exists in England and in some of
10 This whole subject area is discussed in Glanville L. Wil-
liams. Joint Torts and Contributory Negligence. London, Ste-
vens & Sons Ltd., 1951. See particularly ss. 9-13, 15, 18-22,
and 28-30.
the Canadian provinces." Whether it still exists in
the Yukon Territory I cannot say. There appears
to be no legislative abolition of the rule in the
Contributory Negligence Ordinance. 12 Nor am I
able to say whether the rule still exists as part of
federal common law.
It would indeed be unfortunate if the applicable
law provided that the plaintiff would be defeated
in a claim against the Town of Faro in another
court by securing judgment against the federal
Crown in this Court. It would be equally unfortu
nate if the applicable law were that by suing and
recovering judgment against the town in the
Supreme Court of the Yukon Territory, recovery
against the federal Crown in this Court would be
barred. 13
But those lamentable possibilities cannot, having
in mind the Quebec North Shore and McNamara
principles, clothe this Court with jurisdiction.
Nor can possible duplication of proceedings (one
in this Court and another in the Yukon court) be a
ground for asserting jurisdiction here.
While duplication of proceedings is undesirable,
it may be a fact of life in a federal system such as
we have in Canada with the division of legislative
powers as set out in The British North America
Act, 1867.
I have considered The "Sparrows Point". 14 Kel-
lock J., in the course of upholding the admiralty
jurisdiction of the Exchequer Court over one par
ticular defendant, observed that all claims in that
particular case should be disposed of in one action
in one court "to avoid the scandal of possible
" See for example Alberta, Manitoba, New Brunswick and
Nova Scotia.
12 R.O.Y.T. 1975, c. C-14.
13 There could possibly be a further unfortunate consequence
if the plaintiff has not yet brought action against the town in
the Supreme Court of the Yukon Territory. A limitation period
may have intervened.
'4 [1951] S.C.R. 396.
different results. ..." 15 Rand J. concluded the
navigation of the vessel sued was the product of
the joint negligence of those on board her and of
the other defendant. He held them to be joint
tortfeasors. At page 411 he said this:
Every consideration of convenience and justice would seem to
require that such a single cause of action be dealt with under a
single field of law and in a single proceeding in which the
claimant may prosecute all remedies to which he is entitled;
any other course would defeat, so far, the purpose of the
statute. The claim is for damage done "by a ship"; the remedies
in personam are against persons responsible for the act of the
ship; and I interpret the language of the statute to permit a
joinder in an action properly brought against one party of other
participants in the joint wrong.
In my opinion, The `Sparrows Point" is distin
guishable on its particular facts, 16 and must now
be read in the light of the Quebec North Shore
and McNamara decisions.
The plaintiff's motion is therefore dismissed.
15 Page 404.
16 See Anglophoto Limited v. The "Ikaros" [1973] F.C. 483
where I attempted to distinguish it.
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.