A-592-84
Jocelyn Brière, Suzanne Dorval -Brière, Stéphane
Brière, Bruce Brière, Louise St-Hilaire, Germaine
McKenzie (Appellants)
v.
Canada Mortgage and Housing Corporation
(Respondent)
INDEXED AS: BRIÈRE V. CANADA MORTGAGE AND HOUSING
CORPORATION (F.C.A.)
Court of Appeal, Marceau, Hugessen and
Lacombe JJ.-Montreal, April 24 and May 1;
Ottawa, July 3, 1986.
Federal Court jurisdiction - Trial Division - Action in
tort against Canada Mortgage and Housing Corporation
(CMHC) for damages due to use of urea formaldehyde foam
insulation - Appeal against decision Court lacking jurisdic
tion - CMHC Crown agent whose employees not Crown
servants - Court having jurisdiction - Cause of action based
on federal law - CMHC cannot rely on immunity which
ceased to exist for Crown itself on adoption of Crown Liability
Act - Ss. 7, 8 and 23 that Act giving Court concurrent trial
level jurisdiction over action against public body Crown agent,
when cause of action within s. 3 of said Act - Appeal allowed
- Canada Mortgage and Housing Corporation Act, R.S.C.
1970, c. C-16 (as am. by S.C. 1978-79, c. 16, s. 12), ss. 3,
5(1),(3),(4),(5), 11(1), 14(1), 17, 29(1)(b) - Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, ss. 17(1),(2),(4)(6), 26(1)
Crown Liability Act, R.S.C. 1970, c. C-38, ss. 7 (as am. by
R.S.C. 1970 (2nd Supp.), c. 10, s. 64), 8 (as am. by S.C.
1980-81-82-83, c. 47, s. 11), 23 - An Act to amend the
Statute Law, S.C. 1950, c. 51 - Exchequer Court Act, R.S.C.
1952, c. 98, s. 18.
Crown - Prerogatives - Canada Mortgage and Housing
Corporation - Federal Court having jurisdiction to hear tort
action for damages resulting from use of U.F.F.I. against
Corporation - Crown corporation cannot rely on immunity
which ceased to exist for Crown itself under Crown Liability
Act - Canada Mortgage and Housing Corporation Act,
R.S.C. 1970, c. C-16 (as am. by S.C. 1978-79, c. 16, s. 12), ss.
3, 5(1),(3),(4),(5), 11(1), 14(1), 17, 19(1)(b) - Crown Liability
Act, R.S.C. 1970, c. C-38, ss. 7 (as am. by R.S.C. 1970 (2nd
Supp.), c. 10, s. 64), 8 (as am. by S.C. 1980-81-82-83, c. 47, s.
11), 23.
Homeowners suffered significant damage as a résult of the
installation of urea formaldehyde foam insulation. They
instituted two actions in this Court, one against the Queen, the
other against the Canada Mortgage and Housing Corporation
(CMHC). They now appeal against the Trial Division decision
which allowed a motion to dismiss the action as against CMHC
on the ground that this Court lacked jurisdiction to hear it.
CMHC is "an agent of Her Majesty in right of Canada".
Under subsection 5(4) of the Canada Mortgage and Housing
Corporation Act, legal proceedings may be taken by or brought
against CMHC in its own name. Although the Corporation is
an agent of the Crown, its officers and employees are not
officers or servants of the Crown (subsection 14(1)).
The question is whether CMHC can be sued in tort in the
Federal Court in its own name.
Held, the appeal should be allowed.
Two conditions must be met for a claim to fall within the
limited jurisdiction of the Federal Court: (1) the cause of
action must be based, at least in part, on federal law; (2)
jurisdiction to hear the matter must have been expressly con
ferred by legislation.
In order to determine whether the first condition has been
met, it is necessary to consider the extent to which the statutory
law has altered the public law rules pertaining to immunities
and prerogatives of the Crown in right of Canada. With the
adoption in 1953 of the Crown Liability Act, Parliament ended
the rule of Crown immunity for the wrongful acts of its
servants. However, the Act speaks only of the Crown. To
determine how the statute affects the ordinary law regarding
the tortious liability of corporations which are agents of the
Crown, different possibilities must be distinguished. First, the
Act has changed nothing where there has been fault by the
corporation itself: the common law rules still apply making the
body fully liable. Reference is often made to the reasons of
Dickson J. (as he then was) in R. v. Eldorado Nuclear Ltd.,
[1983] 2 S.C.R. 551 as a basis for arguing that the corporation
could enjoy some measure of immunity. However, the
Eldorado case was not concerned with tortious liability but
with criminal misconduct committed within the scope of the
Corporation's mandate. The unambiguous position of Martland
J. which is in keeping with the common law rules that an agent
is liable in tort for his own wrongful act, cannot be disregarded.
Secondly, where there has been fault by an employee of the
corporation who is a Crown servant, the rule that there is no
indirect liability between Crown servants applies, with the
result that the corporation will not be held liable. A corporation
which is an agent of the Crown and whose employees are
servants of the Crown is a hierarchical intermediary not vicari
ously liable.
Thirdly, where the fault has been committed by an employee
of the corporation who is not a Crown servant, the Act has an
inevitable effect: the corporation can no longer rely, as an agent
of the Crown, on an immunity which has ceased to exist for the
Crown itself.
The wrongful acts of employees of corporations who are not
Crown servants will not make the Crown liable. The victim will
only have a remedy against the corporation itself. That remedy
is directly associated with federal law, having been in existence
only since the Crown Liability Act altered the public law rules
respecting Crown immunity. The first condition has thus been
met.
With respect to the Court's jurisdiction, there is no express
provision in the Federal Court Act covering an action in tort
against a Crown corporation. However, the Act is not the only
source of the Court's jurisdiction. Pursuant to subsection 26(1)
thereof, jurisdiction may be conferred by "any Act of ...
Parliament". Sections 7, 8 and 23 of the Crown Liability Act,
despite their convoluted wording, show that Parliament intend
ed to confer on the Federal Court a concurrent trial level
jurisdiction over an action brought against a public body which
is a Crown agent, when the cause of action falls within section
3 of the said Act.
CASES JUDICIALLY CONSIDERED
CONSIDERED:
Conseil des Ports Nationaux v. Langelier et al., [1969]
S.C.R. 60; R. v. Eldorado Nuclear Ltd., [ 1983] 2 S.C.R.
551; Quebec North Shore Paper Co. et al. v. Canadian
Pacific Ltd. et al., [1977] 2 S.C.R. 1054.
REFERRED TO:
Smith v. C.B.C., [1953] 1 D.L.R. 510 (Ont. H.C.);
Administration de la voie maritime du Saint-Laurent c.
Candiac Development Corp., [1978] C.A. 499 (Que.);
McNamara Construction (Western) Ltd. et al. v. The
Queen, [1977] 2 S.C.R. 654; Bensol Customs Brokers
Ltd. v. Air Canada, [1979] 2 F.C. 575 (C.A.): R. v.
Montreal Urban Community Transit Commission,
[1980] 2 F.C. 151 (C.A.); Bainbridge v. Postmaster-
General, [1906] 1 K.B. 178 (C.A.); Lees v. The Queen,
[1974] 1 F.C. 605 (T.D.); Lubicon Lake Band (The) v.
R., [1981] 2 F.C. 317 (T.D.); Rasmussen v. Breau,
[1986] 2 F.C. 500 (C.A.).
COUNSEL:
Guy Morin for appellants.
Jacques Ouellet, Q.C., and Gaspard Côté,
Q.C. for respondent.
SOLICITORS:
Lemay, Dubé, Laflamme & Associés, Sher-
brooke, Quebec, for appellants.
Deputy Attorney General of Canada for
respondent.
The following is the English version of the
reasons for judgment rendered by
MARCEAU J.: The question of jurisdiction raised
by this appeal would at first sight seem to be a
routine one of little or no practical interest. The
issue is whether the Canada Mortgage and Hous-
ing Corporation can be sued in tort in this Court in
its own name. One might be inclined to think that
the possibility of an action against a Crown corpo
ration in the Federal Court must undoubtedly have
been dealt with by the courts and dismissed, since
the reports give no cases in which it was allowed
and in any event, as the victim is seeking to sue the
Crown, the presence of the corporation itself as a
party to the action is to say the least redundant.
However, this initial reaction is wrong. First, a
final and comprehensive response to the subject of
the question never seems to have been given, and
second, it is far from certain that an action against
the corporation itself is not in certain circum
stances worthwhile, and indeed necessary. I think
that my analysis will adequately explain this.
The factual context in which the question arises
is important, but it is relatively straightforward.
The appellants are householders who said they
were put to substantial and unnecessary expense
and suffered significant damage because of the use
as insulation in the walls of their houses of a
product not recommended, urea formaldehyde
foam. They ascribed their unfortunate situation to
the wrongful action of the Canada Mortgage and
Housing Corporation (hereinafter referred to as
the "Corporation" or the "CMHC") and its
employees, and brought two actions in tort in this
Court, one against Her Majesty the Queen and the
other against the Corporation. In the statements of
claim which they filed in support of the two
actions they set forth the same facts, made the
same allegations of fault against the Corporation,
both personally and through its servants, and
claimed the same damages. It may have been
useless if not improper to bring two separate
actions instead of one joining the two defendants,
but this is only a minor point of procedure which
can easily be resolved, if necessary. The question
presented is one of substance that would arise
equally in a single action against the two defend
ants. The respondent, the CMHC, alleged in the
Trial Division that it cannot be sued in this Court
in its own name and that in any case its presence
as a defendant was unnecessary, and the Motions
Judge ruled in its favour on the first point. This
appeal was filed against the judgment [T-6046-81,
Rouleau J., April 6, 1984, not reported] allowing
the motion to dismiss the action on the ground that
this Court lacked jurisdiction to hear it.
Before embarking upon a study of the question
at issue itself, there is a preliminary matter which
must be dealt with. There can be no discussion of
jurisdiction ratione personae without first being
quite clear as to whom one is dealing with. It is
necessary to establish at the outset the legal char
acteristics of the CMHC as defined by its enabling
legislation, the Canada Mortgage and Housing
Corporation Act, R.S.C. 1970, c. C-16 [as am. by
S.C. 1978-79, c. 16, s. 12] .
The CMHC is a corporation (section 3).' It is
"for all purposes an agent of Her Majesty in right
of Canada" (subsection 5(1)). Its affairs are
managed by a Board (subsection 11(1)) 2 but the
Board must comply with any directions which it
receives from the government from time to time
(subsection 5(5)). 3 It receives its capital from the
Consolidated Revenue Fund (section 17). 4 It can
do all types of legal acts, acquire all kinds of rights
and undertake all kinds of obligations; it can there
fore acquire, hold, sell or dispose of real property
' 3. There is hereby established a corporation called the
"Canada Mortgage and Housing Corporation" consisting of
the Minister and those persons who from time to time comprise
the Board of Directors.
2 11. (1) The Board shall manage the affairs of the Corpora
tion and conduct its business and may for such purposes
exercise all powers of the Corporation.
'5....
(5) The Corporation shall comply with any directions from
time to time given to it by the Governor in Council or the
Minister respecting the exercise or performance of its powers,
duties and functions.
^ 17. The Minister, at the request of the Corporation and
with the approval of the Governor in Council, may, from time
to time out of unappropriated moneys in the Consolidated
Revenue Fund, pay to the Corporation an amount or amounts
not exceeding a total amount of twenty-five million dollars,
which shall constitute the capital of the Corporation.
(paragraph 29(1)(b)), 5 but the property it acquires
vests in Her Majesty (subsection 5(3)); 6 and I
conclude by two special features of particular
importance for these purposes, mentioned in sub
sections 5(4) and 14(1), which must be borne
clearly in mind:
5....
(4) Actions, suits or other legal proceedings in respect of any
right or obligation acquired or incurred by the Corporation on
behalf of Her Majesty, whether in its name or in the name of
Her Majesty, may be brought or taken by or against the
Corporation in the name of the Corporation in any court that
would have jurisdiction if the Corporation were not an agent of
Her Majesty.
14. (1) The Corporation may on its own behalf employ such
officers and employees for such purposes and on such terms and
conditions as may be determined by the Executive Committee
and such officers and employees are not officers or servants of
Her Majesty.
This provision of subsection 5(4), regarding the
right to bring legal proceedings, is well known. It
is to be found in most statutes establishing Crown
corporations. It has been in the CMHC Act since
1950 when, by a special statute known as An Act
to amend the Statute Law, S.C. 1950, c. 51,
Parliament made it a formal provision of sixteen
different Acts which had created corporations. As
will have been noticed, its wording might suggest
that it applies only to proceedings in contract.
However, the courts have refused to thus limit its
scope and no one today would limit the body's
right to bring legal proceedings in its own name,
before any tribunal and on any matter (cf. Smith
v. C.B.C., [1953] 1 D.L.R. 510 (Ont. H.C.);
Administration de la voie maritime du Saint-
Laurent c. Candiac Development Corp., [ 1978]
C.A. 499 (Que.)). However, while there is no
problem with the scope of the provision in subsec
tion 5(4), that is not true of subsection 14(1), the
final phrase of which cannot but prompt surprise
and is bound to be of considerable significance in
5 29. (1) The Corporation may,
(b) acquire and hold real or immovable property for its
actual use in operation and management of its business, sell
or dispose of such property and acquire other such property
in its stead for the same purposes;
6 5....
(3) Property acquired by the Corporation is the property of
Her Majesty and title thereto may be vested in the name of Her
Majesty or in the name of the Corporation.
this analysis. For the moment, I would simply say
that it is a provision which is only found in two
other Acts creating corporations and the reason for
which has to my knowledge never been clearly
established.
Having thus completed a review of the legisla
tion defining the legal status of the CMHC, we
may turn to the question itself. The approach to be
adopted is quite clear. Since the decisions of the
Supreme Court in McNamara Construction
(Western) Ltd. et al. v. The Queen, [1977] 2
S.C.R. 654, and Quebec North Shore Paper Co. et
al. v. Canadian Pacific Ltd. et al., [1977] 2 S.C.R.
1054, and the complementary decisions which fol
lowed on those, inter alia Bensol Customs Brokers
Ltd. v. Air Canada, [1979] 2 F.C. 575 (C.A.), and
R. v. Montreal Urban Community Transit Com
mission, [1980] 2 F.C. 151 (C.A.), it is well
established that two conditions are required for a
particular claim to fall within the limited jurisdic
tion of the Federal Court: first, the cause of action
must be based, at least in part, on federal law, and
second, legislation must have expressly conferred
jurisdiction on it to hear the matter. The question
raised can only be answered by determining
whether the two conditions here exist.
I — It will clearly not be easy to determine
whether the first condition has been met. Indeed,
this raises the whole problem of the extra-contrac
tual civil liability of corporations which are agents
of the Crown, the complexity of which is indicated
by the divergence of views among legal commenta
tors as well as the obscurity of certain judgments.
Discussion of it cannot be avoided, however, and I
will endeavour to explain my understanding of it.
To begin with, purely in terms of the general
principles of the common law, there is no doubt
that the principle of immunity based on the old
maxim "The King can do no wrong" will apply at
least to some extent to a corporation which is an
agent of the Crown. However, I think there is also
another principle that must be taken into account,
that of the absence of vicarious liability among
servants of the Crown. While there has never been
any doubt that a Crown servant had to be held
directly liable for his personal wrongful act as
anyone else, it has always been thought that he
was not to be held indirectly liable for the wrong
ful act of another. A Crown servant who is the
superior of other Crown servants will not be
responsible for the acts of his subordinates, unless
of course he has himself ordered or authorized the
act as then he can be held personally liable
through his participation. The principle has been
conclusively established since at least the time of
the decision of the British Court of Appeal in
Bainbridge v. Postmaster-General, [1906] 1 K.B.
178, which rejected an attempt by the victim of an
accident on an improperly maintained sidewalk to
hold the Postmaster-General indirectly liable for
the wrongful act of his employees. Emphasizing
that Post Office employees were Crown servants,
Collins M.R. wrote for the Court (at page 189):
Now, these passages which I have read shew that the Court
adopted the reasoning of the authority in the earlier case and
arrived at the conclusion that these subordinate officers are
officers of the Crown, and not in the relation of servants to
their superior officers.
These, I consider, are the two fundamental princi
ples of public law which can have a direct bearing
on the tortious liability at common law of public
corporations which are agents of the Crown. To
see how and to what extent this is so, it is neces
sary to distinguish the case of the corporation's
own wrongful act from that of a wrongful act by
its servants.
In the case of a wrongful act by the corporation
itself—damage being due, for example, to a formal
decision of its board of directors or to a failure to
act which is not attributable to a particular
employee—it would appear that there is no reason
to exclude the body's liability. Thus Martland J.,
speaking for the Supreme Court, said in Conseil
des Ports Nationaux v. Langelier et al., [1969]
S.C.R. 60, at page 70:
What is in issue here is the responsibility of a person,
whether individual or corporate, who, though a Crown agent,
and purporting to act as such, commits an act which is unlaw
ful. My understanding of the law is that a personal liability will
result. The liability arises, not because he is an agent of the
Crown, but because, though he is an agent of the Crown, the
plea of Crown authority will not avail in such event.
It is true that there is some doubt on this matter,
and reference is often made to passages in the
reasons of Dickson C.J. [then puisne Judge] in R.
v. Eldorado Nuclear Ltd., [1983] 2 S.C.R. 551, as
a basis for arguing that the corporation could even
then enjoy some measure of immunity, including
the following passage at pages 565-566:
When a Crown agent acts within the scope of the public
purposes it is statutorily empowered to pursue, it is entitled to
Crown immunity from the operation of statutes, because it is
acting on behalf of the Crown. When the agent steps outside
the ambit of Crown purposes, however, it acts personally, and
not on behalf of the state, and cannot claim to be immune as an
agent of the Crown. This follows from the fact that s. 16 of the
Interpretation Act works for the benefit of the state, not for the
benefit of the agent personally.
However, Eldorado was not concerned with a
simple case of tortious liability, but with criminal
misconduct, and the wrongful act alleged had been
committed by the organization within the scope of
its mandate and without in any way infringing the
provisions of its enabling Act. There might even be
a question as to whether this was fault within the
meaning of the law of civil liability. In any case, it
would seem difficult to disregard the unambiguous
position taken by Martland J., which is also in
keeping with the general rule that an agent is
liable in tort for his own wrongful act. I think one
may usefully rely on what P. Hogg writes on the
point in his book Liability of the Crown (at pages
109-110):
There is a question whether those public corporations which
are servants of the Crown may be held liable in tort. The
question is not of much practical importance because it is the
Crown itself which is liable for the torts of the corporation's
servants, the corporation being just a superior servant. If the
ordinary rules apply, however, the corporation would be liable
for torts which it had committed personally, for example, if its
governing body passed a resolution ordering the commission of
the tort. It is probable that this is indeed the legal position. On
the other hand, Glanville Williams has argued that a public
corporation differs from individual Crown servants in that the
public corporation has no private property to satisfy a judg
ment, and that State property is never available to satisfy a
judgment against a servant personally; he concludes that "the
general rule is that no action in tort can be brought against
such a corporation—not even an action for an empty judg
ment". It is unlikely that this view will gain acceptance for it
would make those public corporations which are servants of the
Crown immune from all actions, whether founded in tort or
contract or any other branch of the law.
Thus, where the corporation itself has been at
fault, it can be accepted that the common law
rules of tortious liability will apply without any
rule of public law being involved.
However, most of the time the wrongful act will
of course not be that of the corporation itself but
of one of its employees. In this situation, there
would not appear to be any doubt that the organi
zation cannot be held liable simply on the basis of
the common law rules. Why? The authorities do
not really provide a clear answer, but I suggest
that of the two public law rules mentioned above it
is the second which is the more relevant. There is
no indirect or vicarious liability among Crown
servants. A corporation which is an agent of the
Crown, the employees of which are servants of the
Crown, is a hierarchical intermediary which is not
vicariously liable. It is only when this second prin
ciple cannot be applied that the immunity princi
ple comes into play, and that will occur only when
the employees of the corporation are not Crown
servants: such cases are obviously rare but they
include, as we have seen, the one now before the
Court.
That is how I see the situation with respect to
the tortious liability of corporations which are
Crown agents, based solely on the general princi
ples of public law and the rules of the common
law. However, it remains to be seen to what extent
statutory law has altered this initial position. I do
not think there is any need to consider here the
1950 statute, mentioned above with reference to
subsection 5(4) of the CMHC Act, by which
Parliament confirmed the existence of a right of
action in the ordinary courts of law against public
bodies which are Crown agents. The courts have
indeed refused to limit the scope of this provision
to liability in contract, as we have seen, but there
has never been any doubt that this was strictly a
matter of procedural confirmation which did not
affect substantive law. Until 1953 the ordinary law
regarding the tortious liability of the Crown and
its agents, so far as I know, was covered by a single
piece of legislation, section 18 of the Exchequer
Court Act, R.S.C. 1952, c. 98, which authorized
that Court, on a petition of right, to hear and
determine claims against the Crown in a few spe
cific situations.
It was not until 1953, with the adoption of the
Crown Liability Act, R.S.C. 1970, c. C-38, that a
major transformation of the ordinary law regard
ing the tortious liability of the Crown was intro
duced. Parliament ended the rule of Crown
immunity for the wrongful acts of its servants,
retaining only the purely procedural requirement
of a petition of right which itself soon disappeared
when the Federal Court was created. However, the
Crown Liability Act speaks of the Crown: it is not
immediately clear how and to what extent it may
affect the ordinary law regarding the tortious lia
bility of corporations which are Crown agents. For
that purpose, the different possibilities again have
to be distinguished. Where there has been fault by
the corporation itself, the Act has certainly
changed nothing and the common law rules still
apply, making the organization fully liable. Where
there has been fault by an employee of the corpo
ration who is a Crown servant, here again it will
appear that the Act has made no change, for the
rule that there is no indirect liability between
Crown servants still remains unchanged and is still
a bar to liability by the corporation itself. Where
the fault was by an employee of the corporation
who is not a Crown servant, however, in my view
the Act has had an inevitable effect: the corpora
tion can clearly no longer rely, as an agent of the
Crown, on an immunity which has ceased to exist
for the Crown itself.
Three propositions emerge from the analysis
which I have just made of the problem of the
extra-contractual liability of corporations which
are Crown agents, as I understand it. First, the
lack of examples of corporations sued in the Feder
al Court is mainly due not to questions of jurisdic
tion or form, as is often said, but to substance, that
is the absence of any personal liability by public
bodies for the wrongful acts of their employees
who are Crown servants. Second, in the few cases
of corporations whose employees are not Crown
servants, the wrongful acts of the employees will
not make the Crown liable and the victim will only
have a remedy against the corporation itself.
Third, the victim's remedy against the body itself
for the wrongful acts of its employees is one which
has existed only since the Crown Liability Act has
altered the rules of public law pertaining to the
immunities and prerogatives of the Crown in right
of Canada, and is thus directly associated with
federal law. Reference may be made here to what
Laskin C.J. said in Quebec North Shore Paper,
supra, at page 1063:
It should be recalled that the law respecting the Crown came
into Canada as part of the public or constitutional law of Great
Britain, and there can be no pretence that that law is provincial
law. In so far as there is a common law associated with the
Crown's position as a litigant it is federal law in relation to the
Crown in right of Canada, just as it is provincial law in relation
to the Crown in right of a Province, and is subject to modifica
tion in each case by the competent Parliament or Legislature.
The first of the two conditions that must be met if
the Crown is to have jurisdiction, namely that the
action should be based at least in part on federal
law, is thus present: we may move on to the
second.
II — The second condition for the Federal Court
to be able to hear an action in tort against a
Crown corporation is that Parliament must have
formally conferred jurisdiction on it to hear such a
matter. Is that the case?
One might seek in vain in the Federal Court Act
[R.S.C. 1970 (2nd Supp.), c. 10] for any provision
directly covering such an action. It is clear that a
Crown corporation is not the Crown itself within
the meaning of subsections 17(1) and 17(2),' and
it has been held more than once that a Crown
17. (1) The Trial Division has original jurisdiction in all
cases where relief is claimed against the Crown and, except
where otherwise provided, the Trial Division has exclusive
original jurisdiction in all such cases.
(2) Without restricting the generality of subsection (1), the
Trial Division has exclusive original jurisdiction, except where
otherwise provided, in all cases in which the land, goods or
money of any person 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, and in all cases in which there is a claim
against the Crown for injurious affection.
corporation is not "an officer or servant of the
Crown" within the meaning of paragraph
17(4)(6) 8 (cf. Lees v. The Queen, [1974] 1 F.C.
605 (T.D.); Lubicon Lake Band (The) v. R.,
[1981] 2 F.C. 317 (T.D.)). These are the only
provisions that could be applicable; but the Feder
al Court Act is careful to state that it is not the
only source of the Court's jurisdiction. Subsection
26(1) reads as follows:
26. (1) The Trial Division has original jurisdiction in respect
of any matter, not allocated specifically to the Court of Appeal,
in respect of which jurisdiction has been conferred by any Act
of the Parliament of Canada on the Federal Court, whether
referred to by its new name or its former name. [My emphasis.]
The Crown Liability Act contains a section 7
which reads as follows:
7. (1) Except as provided in section 8, and subject to section
23, the Exchequer Court of Canada has exclusive original
jurisdiction to hear and determine every claim for damages
under this Act.
(2) The Exchequer Court of Canada has concurrent original
jurisdiction with respect to the claims described in subsection
8(2), and any claim that may be the subject-matter of an
action, suit or other legal proceeding referred to in section 23.
In order to understand these sections, of course,
one must know what is provided in sections 8 [as
am. by S.C. 1980-81-82-83, c. 47, s. 11] and 23.
They read:
8. (1) In this section, "provincial court" with respect to a
province in which a claim sought to be enforced under this Part
arises, means, in the Province of Quebec, the Provincial Court,
and in any other province, the county or district court that
would have jurisdiction if the claim were against a private
person of full age and capacity, or if there is no such county or
district court in the province or the county or district court in
the province does not have such jurisdiction, means the superior
court of the province.
(2) Notwithstanding the Exchequer Court Act, a claim
against the Crown for a sum not exceeding one thousand
dollars arising out of any death or injury to the person or to
property resulting from the negligence of a servant of the
Crown while acting within the scope of his duties or employ
' 17. ...
(4) The Trial Division has concurrent original jurisdiction
(b) in proceedings in which relief is sought against any
person for anything done or omitted to be done in the
performance of his duties as an officer or servant of the
Crown.
ment may be heard and determined by the provincial court, and
an appeal lies from the judgment of a provincial court given in
any proceedings taken under this section as from a judgment in
similar proceedings between subject and subject.
(3) No provincial court has jurisdiction to entertain any
proceedings taken by any person under this Part if proceedings
taken by that person in the Exchequer Court of Canada in
respect of the same cause of action, whether taken before or
after the proceedings are taken in the provincial court, are
pending.
23. Subsections 7(1) and 8(1) and (2) do not apply to or in
respect of actions, suits or other legal proceedings in respect of
a cause of action coming within section 3 brought or taken in a
court other than the Exchequer Court of Canada against an
agency of the Crown in accordance with any Act of Parliament
that authorizes such actions, suits or other legal proceedings to
be so brought or taken; but all the remaining provisions of this
Act apply to and in respect of such actions, suits or other legal
proceedings, subject to the following modifications:
(a) any such action, suit or other legal proceeding shall, for
the purposes of this Act, be deemed to have been taken in a
provincial court under Part II; and
(b) any money awarded to any person by a judgment in any
such action, suit or other legal proceeding, or the interest
thereon allowed by the Minister of Finance under section 18,
may be paid out of any funds administered by that agency.
Is it not indicated from a reading of these
provisions, in particular subsection 7(2), that Par
liament intended to confer on the Exchequer
Court, now the Federal Court [as am. by R.S.C.
1970 (2nd Supp.), c. 10, s. 64], a concurrent
(concomitante) trial level jurisdiction over an
action brought against a public body which is a
Crown agent, when the cause of action falls within
section 3 of the Crown Liability Act? This is
clearly the first meaning of the words used, despite
the "convoluted" type of wording, and this is how
all legal commentators who have discussed the
point have understood them. (See inter alfa René
Dussault, Traité de droit administratif canadien
et québécois, Les Presses de l'université Laval,
Québec, 1974, at page 1463; Henriette Immari-
geon, La responsabilité extra -contractuelle de la
Couronne au Canada, Wilson & Lafleur, at page
34; Gilles Pépin and Yves Ouellette, Principes de
contentieux administratif, 2nd ed., 1982, Les Edi
tions Yvon Blais inc., at page 508.)
Subsection 7(2) of the Crown Liability Act
never seems to have been the subject of a court
decision, and counsel for the respondent sought to
give it an interpretation other than that suggested
by the appellants with the support of the writers.
Essentially they argued, if I have understood them
correctly, that section 7 was not concerned with
questions of jurisdiction ratione personae, only of
jurisdiction ratione materiae, and the use of the
phrase "concurrent jurisdiction" in subsection (2)
was simply intended to mean that the victim had a
choice as to which of the two courts he could
approach, as either could give him compensation.
It is possible that what counsel for the respondent
suggested as the meaning of subsection 7(2) cor
responds to what the drafters of the legislation had
in mind at the time it was prepared; however, I do
not really think that the Court can derive from the
provision as enacted an interpretation which not
only refuses to give the key words "concurrent
jurisdiction" their full sense, but more importantly
makes the provision quite futile and pointless on its
own by divesting it of any meaning independent of
subsection (1). Most important of all, I do not see
why the Court would adopt, without being requi
red to do so, an interpretation which in theory
would continue the aberration of a single action
being brought and pursued simultaneously in two
different courts, and in practice in the case at bar
would definitely deprive the appellants of a right
which they are now barred from exercising by a
new action, as the period of prescription has
expired.
I consider that subsection 7(2) of the Crown
Liability Act can and must be construed literally
as conferring trial jurisdiction on the Federal
Court in cases of an action in tort like the one at
bar. The second condition required for this Court
to have jurisdiction is therefore also present.
This appeal must accordingly succeed. The Trial
Judge was wrong in finding that the Court had no
jurisdiction to hear the action as brought. His
judgment allowing the motion to dismiss must be
set aside and the motion dismissed.
I allow myself a very last remark. I am of course
aware that in the case of Canadian Saltfish Cor
poration and Joen Pauli Rasmussen and S/LF
Bordoyarvik and Herb Breau, Minister of Fisher
ies and Oceans, Canada, and Her Majesty the
Queen [to be reported in the Federal Court
Reports sub nom. Rasmussen v. Breau, [1986] 2
F.C. 500 (C.A.)], another panel of the Court, in a
decision handed down this very day, come to the
conclusion that an action in tort taken against the
Corporation cannot be entertained by this Court.
This may give the appearance of a complete disa
greement as to the approach to be adopted and the
principles to be applied. I do not think it is the
case. The power of the Court to entertain an action
against a Crown corporation is dependant, as I
have tried to show, on the cause of the action and
the particular status of the public body. The legal
characteristics of the Canadian Saltfish Corpora
tion are not the same as those of the Canada
Mortgage and Housing Corporation and the public
body was there impleaded on the basis of allega
tions which were of a completely different nature
from that of the allegations made here against the
Canada Mortgage and Housing Corporation.
HUGESSEN J.: I concur.
LACOMBE J.: I concur.
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.