T-166-83
Regional Municipality of Peel (Plaintiff)
v.
The Queen in right of Canada (Defendant)
INDEXED AS: PEEL (REGIONAL MUNICIPALITY) v. CANADA
Trial Division, Strayer J.—Toronto, October 14
and 15; Ottawa, November 27, 1986.
Constitutional law — Fundamental constitutional principles
— Payments made by municipality in compliance with Court
orders issued under s. 20(2) Juvenile Delinquents Act — S.
20(2) invalid — Action for restitution — Constitutional
principle to effect executive under no obligation to make
expenditure in absence of appropriation — Principle to be
applied in context of federal system and in light of principle of
redress for unjust enrichment — Action allowed — Bill of
Rights, 1688, 1 Will. & Mary, Sess. 2, c. 2 (U.K.) — Constitu
tion Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (R.S.C. 1970,
Appendix II, No. 5] (as am. by Canada Act 1982, 1982, c. 11
(U.K.), Schedule to the Constitution Act, 1982, Item 1), s.
91(27) Juvenile Delinquents Act, R.S.C. 1970, c. J-3 (rep.
and sub. by S.C. 1980-81-82-83, c. 110), s. 20(1),(2).
Crown — Prerogatives — Immunity — Payments made by
municipality under invalid federal legislation — Action for
recovery allowed — Crown cannot claim immunity on ground
no appropriation provided for by legislative branch — To
allow immunity claim tantamount to permitting federal gov
ernment to achieve constitutionally prohibited results —
Requirements of justice as between plaintiff and defendant —
Payment authorized under s. 57(3) Federal Court Act —
Crown Liability Act, R.S.C. 1970, c. C-38 — Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 57(3).
Restitution — Payments made by municipality in compli
ance with court orders issued under s. 20(2) Juvenile Delin
quents Act — S. 20(2) ultra vires Parliament of Canada —
Payments made under mistake of law and compulsion recover
able — Principles of federal system of government and of
redress for unjust enrichment combined to entitle municipality
to reimbursement — Juvenile Delinquents Act, R.S.C. 1970, c.
J-3 (rep. and sub. by S.C. 1980-81-82-83, c. 110), s. 20(/),(2).
Practice — Limitation of actions — Action for reimburse
ment of monies paid in compliance with invalid legislation —
Neither s. 11 Public Authorities Protection Act nor s. 45(1)(g)
Limitations Act barring recovery — Action one "upon the
case" — Limitation period re actions for trespass, contract,
debt or detinue applicable to restitutionary actions — Pro-
ceedings instituted within period prescribed by legislation —
Public Authorities Protection Act, R.S.O. 1980, c. 406, s. 11 —
Limitations Act, R.S.O. 1980, c. 240, s. 45(1 )(g) — Judicature
Act, R.S.O. 1980, c. 223 — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, ss. 35, 38.
From 1974 to 1982, the plaintiff municipality paid out
monies for the maintenance of juvenile delinquents in compli
ance with orders made by the Provincial Court of Ontario
under subsection 20(2) of the Juvenile Delinquents Act. The
payments were made directly to group homes. By judgment
rendered in July 1982, the Supreme Court of Canada held
subsection 20(2) to be ultra vires the Parliament of Canada on
the ground that it purported to authorize a court to impose a
financial burden on municipalities for the support of juvenile
delinquents. The plaintiff now seeks reimbursement from the
defendant in respect of payments made under that invalid
legislation.
Held, the action should be allowed.
The claim is essentially one for the recovery of money paid
under a mistake of law and under compulsion. It has been
established by the Supreme Court of Canada that money paid
under such circumstances can be recovered, and that restitution
can be had from a public authority even if the money has been
expended for the maintenance of a member of the public.
The proposition that the executive government of Canada
automatically has an enforceable legal obligation to pay for the
administration of federal laws is not a constitutionally valid
one. Under the Constitution, there is no right or obligation in
the federal executive to pay money when such has not been
appropriated; the Crown is not liable vicariously for the actions
of the legislative branch, and the doctrine of parliamentary
supremacy implies that courts cannot require Parliament to
vote appropriations. Those fundamental constitutional princi
ples must, however, be applied in the context of a federal
system and in the light of the principle of redress for unjust
enrichment. There is a political responsibility on the part of
each order of government in a federal system to administer
effectively the laws adopted by its legislative branch. The 1982
decision of the Supreme Court of Canada in Peel v. MacKenzie
demonstrates that in providing for the enforcement or adminis
tration of criminal law under subsection 91(27) of the Consti
tution Act, 1867, Parliament cannot pass on the financial
obligations of administration to a province or the instrumental
ity of a province if they do not voluntarily undertake such
obligations.
The Crown cannot invoke immunity from action for payment
of costs unlawfully imposed on the ground that the legislative
branch of government has provided no appropriation for the
defendant to make such payments as that would be to permit
the federal order of government to achieve what it cannot
achieve constitutionally, namely, the imposition of a financial
burden on the municipality for the maintenance of juvenile
delinquents. It is at this point that the principles of the federal
system of government and the principle of redress for unjust
enrichment join together to require that the defendant reim
burse the plaintiff for the costs incurred by it through compli
ance with an invalid law. The liability of the Crown arises out
of the requirements of justice as between the plaintiff and the
defendant. Subsection 57(3) of the Federal Court Act provides
authority for the payment of the amount expended by the
plaintiff pursuant to invalid orders.
Neither section 11 of the Public Authorities Protection Act
nor paragraph 45(1)(g) of the Limitations Act of Ontario bars
recovery of the amount claimed. Under section 11, an action
against any person for acts done or not done through neglect or
default in the execution of a duty under a statute must be
commenced within six months after the cause of action arose.
This is not such an action: the defendant herein is being sued on
an obligation which arises as a result of the actions of others. In
any event, since the cause of action arose when the Supreme
Court of Canada rendered its decision on July 22, 1982, and
since this action was commenced on January 18, 1983, less than
six months had elapsed after the cause of action arose, so that
section 11 would not constitute a bar.
With respect to paragraph 45(1)(g), this was an action
"upon the case" which, in the context of a modern statute,
should be viewed as a residual category of action with the result
that the limitation period applicable to actions for trespass,
contract, debt or detinue—covered by paragraph 45(1)(g)—
should apply to restitutionary actions. In the present case, the
action was commenced within the six-year period prescribed by
paragraph 45(1)(g). Finally, since there was no undue delay on
the part of the plaintiff, the defence of laches could not be
successfully invoked.
The claim for pre-judgment interest had to be dismissed as
the provisions of section 35 of the Federal Court Act had not
been met.
CASES JUDICIALLY CONSIDERED
APPLIED:
Carleton, County of v. City of Ottawa, [1965] S.C.R.
663; Regional Municipality of Peel v. MacKenzie et al.,
[1982] 2 S.C.R. 9.
CONSIDERED:
Brook's Wharf and Bull Wharf, Ld. v. Goodman Broth
ers, [1937] 1 K.B. 534 (C.A.); Fibrosa Spolka Akcyjna
v. Fairbairn, Lawson, Combe Barbour, Ld., [1943] A.C.
32 (H.L.); Deglman v. Constantineau, [1954] S.C.R.
725; Hydro Electric Commission of Nepean v. Ontario
Hydro, [1982] 1 S.C.R. 347; Amax Potash Ltd. et al. v.
Government of Saskatchewan, [1977] 2 S.C.R. 576; B.C.
Power Corporation v. B.C. Electric Company, [1962]
S.C.R. 642.
REFERRED TO:
Morgentaler et al. v. Ackroyd et al. (1983), 150 D.L.R.
(3d) 59 (Ont. H.C.); Jacobs (George Porky) Enterprises
Ltd. v. City of Regina, [1964] S.C.R. 326; Eadie v.
Township of Brantford, [1967] S.C.R. 573; White et al.
v. Central Trust Co. et al. (1984), 7 D.L.R. (4th) 236
(N.B.C.A.); Attorney General of Canada v. Canadian
National Transportation, Ltd. et al., [1983] 2 S.C.R.
206; R. v. Wetmore et al., [1983] 2 S.C.R. 284; R. v.
Transworld Shipping Ltd., [1976] I F.C. 159 (C.A.);
Welbridge Holdings Ltd. v. Metropolitan Corporation of
Greater Winnipeg, [1971] S.C.R. 957; North v. Wal-
thamstow Urban Council (1898), 67 L.J.Q.B. 972; In re
Diplock, [1948] Ch. 465; affd [1951] A.C. 251 (H.L.);
Maskell v. Horner, [1915] 3 K.B. 106 (C.A.); Salford
(Mayor & c., of, Borough of) v. County Council of
Lancashire (1890), 25 Q.B.D. 384 (C.A.); Green & Co. v.
Cukier & Toronto Gen'l Trusts, [1949] 4 D.L.R. 729
(Ont. C.A.); Hydro Electric Commission of the Town
ship of Nepean v. Ontario Hydro (1979), 92 D.L.R. (3d)
481 (Ont. H.C.).
COUNSEL:
J. E. Sexton, Q.C. and B. Morgan for
plaintiff.
J. E. Thompson for defendant.
SOLICITORS:
Osler, Hoskin & Harcourt, Toronto, for
plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
STRAYER J.:
Facts
This is an action for recovery of money paid out
by the plaintiff for the maintenance of juvenile
delinquents in compliance with orders made by the
Provincial Court of Ontario purportedly under
subsection 20(2) of the Juvenile Delinquents Act,
R.S.C. 1970, c. J-3 (that Act has since been
replaced by the Young Offenders Act, S.C.
1980-81-82-83, c. 110).
Subsections 20(1) and (2) of the Juvenile
Delinquents Act provided as follows:
20. (1) In the case of a child adjudged to be a juvenile
delinquent the court may, in its discretion, take either one or
more of the several courses of action hereinafter in this section
set out, as it may in its judgment deem proper in the circum
stances of the case:
(a) suspend final disposition;
(b) adjourn the hearing or disposition of the case from time
to time for any definite or indefinite period;
(c) impose a fine not exceeding twenty-five dollars, which
may be paid in periodical amounts or otherwise;
(d) commit the child to the care or custody of a probation
officer or of any other suitable person;
(e) allow the child to remain in its home, subject to the
visitation of a probation officer, such child to report to the
court or to the probation officer as often as may be required;
(/) cause the child to be placed in a suitable family home as
a foster home, subject to the friendly supervision of a proba
tion officer and the further order of the court;
(g) impose upon the delinquent such further or other condi
tions as may be deemed advisable;
(h) commit the child to the charge of any children's aid
society, duly organized under an Act of the legislature of the
province and approved by the lieutenant governor in council,
or, in any municipality in which there is no children's aid
society, to the charge of the superintendent, if there is one; or
(i) commit the child to an industrial school duly approved by
the lieutenant governor in council.
(2) In every such case it is within the power of the court to
make an order upon the parent or parents of the child, or upon
the municipality to which the child belongs, to contribute to the
child's support such sum as the court may determine, and
where such order is made upon the municipality, the municipal
ity may from time to time recover from the parent or parents
any sum or sums paid by it pursuant to such order.
Subsection (2) had been in the Act since 1908
(S.C. 1908, c. 40, subs. 16(2)).
At the trial of this matter the parties submitted
an agreed statement of facts most of which is
reproduced as follows:
2. By Judgment dated July 22, 1982, The Supreme Court of
Canada held that sub-section 20(2) of the Act was not within
the legislative competence of the Parliament of Canada insofar
as it purported to authorize a Court to impose a financial
burden on municipalities for the support of juvenile delin
quents. Regional Municipality of Peel v. MacKenzie and the
Attorney General of Canada et al., [[1982] 2 S.C.R. 9];
(1982), 139 D.L.R. (3d) 14 S.C.C... .
3. Under sub-section 20(1) of the Act a Court was authorized
to make any one of nine possible Orders with respect to a
juvenile delinquent. These included the following:
(a) Orders under s. 20(1)(a), and (b) which did not impose
any financial burden on a municipality;
(b) Orders under s. 20(1)(e) and (i) which were to be
implemented at the provincial level, and which did not
impose any financial burden on a municipality.
(c) Orders under s. 20(1)(h) which provided for the commit
tal of a juvenile delinquent to the charge of a Children's Aid
Society. By subsequent agreement between the federal, pro
vincial and municipal governments, the federal government
would be responsible for 50%, the province 30% and the
municipality 20% of the costs involved in such placements,
without any Order under s. 20(2); and
(d) Orders under s. 20(1)(d), (f) and (g) which were relied
on with respect to the placement of children with group
homes and other similar institutions, including private homes
as foster homes, the cost of all of which would be borne by a
municipality where so ordered by a court under subsection
20(2)....
4. The Plaintiff, the Regional Municipality of Peel, is a
Regional Municipality which was incorporated on October 1,
1973 and commenced functioning on January 1, 1974. From
1974 until 1982, the Peel Family Court made Orders pursuant
to sub-section 20(1) of the Act placing children with various
group homes and other similar institutions, and by virtue of the
provisions of sub-section 20(2) of the Act, the Court ordered
that the cost of such placements be borne by the Plaintiff
municipality. The majority of Orders made by the Peel Family
Court directed that children be placed with Viking Houses, a
division of Marshall Childrens' Foundation (Viking Houses).
5. The financial contributions which were required to be made
by the Plaintiff as a result of Orders made pursuant to sub-sec
tion 20(2) of the Act were to be made payable directly to the
various group homes, institutions and individuals in question.
6. The Plaintiff made payments to Viking Houses as well as
other group homes, institutions and individuals pursuant to
Orders made under sub-section 20(2) of the Act between the
period of January, 1974 and approximately July 22, 1982. The
gross amounts of such payments were $2,036,131.37. Up to
April, 1976, the Plaintiff received some small subsidies from
the Province under the General Welfare Assistance Act for
amounts paid for the support of juvenile delinquents as foster
children. The amount of these subsidy payments was
$25,330.50. From April, 1976, the Province provided a subsidy
to cover 50% of all the amounts paid by the Plaintiff pursuant
to Orders made under sub-section 20(2) of the Act. The total
amount of these subsidy payments was $843,986.65. The total
provincial subsidy payments were therefore $869,317.15. As a
result, the total net amount paid by the Plaintiff as a result of
Orders made pursuant to sub-section 20(2) of the Act was
$1,166,814.22... .
7. Throughout the period 1974 to 1982, where juveniles in
Ontario were committed by the Court to the charge of a
Children's Aid Society pursuant to paragraph 20(1)(h) of the
Act, the juveniles were transferred to provincial welfare laws by
a Provincial Secretary's Order pursuant to section 21 of the
Act, and the Federal Government paid fifty per cent of the cost
of such juveniles' support pursuant to the Canada Assistance
Plan. The Court made no orders under subsection 20(2) of the
Act against municipalities for the support of such juveniles ....
8. Throughout the period 1974 to 1982, where juveniles in
Ontario were committed by the Court to an industrial school
pursuant to paragraph 20(1)(i) of the Act, such juveniles
remained subject to provincial correctional law and were not
transferred to provincial welfare law under section 21 of the
Act. From April 1, 1974 through and including 1982, pursuant
to an agreement called the Young Offenders Agreement be
tween the Federal Government and Ontario, the Federal Gov
ernment paid the same portion of the costs of supporting such
juveniles as under the Canada Assistance Plan. The Young
Offenders Agreement was entered by the Federal Government
under the authority of the Appropriations Act No. 4, 1974 S.C.
1974-5-6 c. 21. The Young Offenders Agreement was instituted
by the Federal Government as an interim arrangement pending
the replacement of the Act by the Young Offenders Act. The
Young Offenders Act was ultimately enacted on July 7, 1982
and proclaimed in force on April 7, 1984... .
9. By applications for certiorari dated February 1, 1977, the
Plaintiff challenged three of the said Orders by which juveniles
were placed with Viking Houses and the Plaintiff was ordered
to pay Viking Houses for their support. The grounds on which
the Plaintiff relied were: (1) that sub-section 20(2) of the Act
was not within the legislative competence of the Parliament of
Canada, and (2) that none of the provisions of subsection 20(1)
of the Act authorized a placement to Viking Houses.
10. By Order in the Supreme Court of Ontario dated April 21,
1977, the Honourable Mr. Justice John Holland ruled in favour
of the Plaintiff on the second ground, holding that the Court
had no jurisdiction to order that juveniles be placed with or
committed to Viking Houses under Section 20(1) of the Act
and he ordered that the said Orders be quashed. On appeal by
Viking Houses, the decision of The Honourable Mr. Justice
John Holland was upheld by the Ontario Court of Appeal and
the Supreme Court of Canada by decisions dated June 24, 1977
and June 26, 1979 respectively. The Honourable Mr. Justice
John Holland and the Ontario Court of Appeal held that s.
20(2) of the Act was constitutionally valid. In view of its
decision on the other ground of challenge, the Supreme Court
of Canada expressly did not adjudicate on the constitutional
issue in its decision. The Defendant, Her Majesty the Queen,
was given notice of the constitutional issue raised by the
Plaintiff in its applications for certiorari dated February 1,
1977, and intervened and participated at each level of the
case .... Re Regional Municipality of Peel and Viking Houses
(1977), 16 O.R. (2d) 632 (H. Ct.); (1977), 16 O.R. (2d) 765
(C.A.); sub nom A.G. Ontario and Viking Houses v. Regional
Municipality of Peel (1979), 104 D.L.R. (3d) 1 (S.C.C.).
11. As a result of the said Order of the Honourable Mr. Justice
John Holland dated April 21, 1977, the juvenile T.G.N., who
had been adjudged to be delinquent, was brought back before
the Provincial Court (Family Division) by Viking Houses. By
an Order dated July 26, 1977, the Provincial Court (Family
Division) committed the custody of T.G.N. to an employee of
Viking Houses, directed that he should keep T.G.N. in a house
of Viking Houses, and ordered, under Section 20(2) of the Act,
that the Plaintiff pay a per diem amount for her support in the
house of Viking Houses.
12. The Plaintiff appealed the said Order dated July 26, 1977
regarding T.G.N., relying inter alia, on the ground that Section
20(2) of the Act was unconstitutional. By Judgments dated
July 10, 1978 and June 19, 1980 respectively, Madam Justice
Van Camp and the Ontario Court of Appeal upheld the said
Order. On further appeal, the Supreme Court of Canada held
by a Judgment dated July 22, 1982 that Section 20(2) of the
Act was unconstitutional insofar as it purported to authorize
the imposition by Court Order of a financial burden on munici
palities, and that Court set aside the said Order dated July 26,
1977 as invalid insofar as it imposed an obligation on the
Plaintiff to pay for the support of the said juvenile. The
Defendant, Her Majesty the Queen, was given notice of the
constitutional issue at each level of that case, and intervened
and participated before the Supreme Court of Canada .... Re
Regional Municipality of Peel and Viking Houses (unreported,
July 10, 1978) (H. Ct.); (1980) 113 D.L.R. (3d) 350 (C.A.);
sub nom Regional Municipality of Peel v. MacKenzie [[1982]
2 S.C.R. 9]; (1982), 139 D.L.R. (3d) 14 (S.C.C.).
13. With respect to the payments made by the Plaintiff, there
were four types of Orders under subsection 20(1) of the Act
which were made with the Orders under subsection 20(2)
against the Plaintiff. These four types of Orders are as follows:
(a) Orders made under paragraphs 20(1)(d), (f) or (g)
committing the juvenile to the corporate entity of a group
home, as in the Orders dealt with in the first Viking Houses
case, referred to in paragraphs 9 and 10 above, and set out in
Appendix "B". A schedule of the Orders falling within this
category is filed as Exhibit 3.
(b) Orders made under paragraph 20(1)(d) of the Act com
mitting the juvenile to an individual who was an employee of
the corporate entity of a group home, as in the Order dealt
with in the second Viking Houses case, referred to in para
graphs 11 and 12 above, and set out in Appendix "C". A
schedule of the Orders falling within this category is filed as
Exhibit 4.
(c) Orders made under paragraph 20(1)(f) of the Act plac
ing the juvenile in a foster home. A schedule of the Orders
falling within this category is filed as Exhibit 5, together with
copies of such Orders.
(d) An Order regarding the juvenile T.O.A., in which it was
ordered under paragraphs 20(1)(b) and (g) that the matter
be adjourned and that the juvenile attend a private educa
tional institution, the Toronto Learning Centre, and further
ordered under subsection 20(2) of the Act that the Plaintiff
pay the cost of this institution. This Order was upheld by the
Ontario Court of Appeal in a decision on January 15th,
1982, reported as T.O.A. v. Regional Municipality of Peel
(1982), 35 O.R. (2d) 260.... Regional Municipality of Peel
and A. (1980) 30 O.R. (2d) 452 and T.O.A. v. Regional
Municipality of Peel (1982), 35 O.R. (2d) 260.
14. It was not until the Plaintiff served Notice dated October
12, 1982 pursuant to the Crown Liability Act R.S.C. 1970,
Chapter C-38 that the Plaintiff expressly sought reimburse-
ment from the Defendant for payments made by it with respect
to Orders made under subsection 20(2) of the Act ....
In addition to the agreed facts, I find as a fact
that the plaintiff made these payments, in compli
ance with the orders purportedly made under sub
section 20(2) of the Juvenile Delinquents Act,
under compulsion. It is clear that failure to pay as
ordered by the Court would have exposed the
plaintiff to contempt proceedings. This was always
implicit and was made explicit, according to the
evidence, on at least two occasions. Exhibit 51 is a
letter dated January 13, 1977 from the solicitors
for the corporate group homes, Viking Houses, a
division of Marshall Childrens' Foundation, advis
ing the solicitor for the plaintiff that any position
taken by the plaintiff refusing immediate payment
under court orders made in favour of Viking
Houses would be the subject of contempt proceed
ings. No. 68 of the agreed exhibits is a memoran
dum dated July 25, 1977, received by the witness
Mr. Crozier, Commissioner of Social Services for
Peel, from the solicitor for the Regional Munici
pality, advising that counsel for Viking Houses
had informed them that failure to pay pursuant to
the orders would result in Viking Houses seeking a
warrant of committal or a warrant of distress.
While there was some effort made during the
trial to demonstrate that the plaintiff had clearly
protested payment including protesting to the Gov
ernment of Canada, this was not really demon
strated. I do not, however, consider it necessary
that a clear protest be established if it is apparent
the money was being paid under compulsion. It is
also apparent that the plaintiff did not wish to
deprive young offenders of care and supervision
and that, given the disposition made of their cases
by the Provincial Court, it was necessary that the
municipality pay in accordance with the Court
orders if they were to have some care and supervi
sion. This in itself created a form of practical
compulsion. For most of the period in question the
plaintiff was not sitting on its rights, however,
having commenced proceedings as early as Febru-
ary 1977, to challenge these orders.
Conclusions
(i) Principles of Restitution
The essential issue here is whether Her Majesty
in right of Canada can be obliged through this
action to reimburse the plaintiff municipality for
monies paid by the latter, not to the Government
of Canada, but to third persons for the benefit of
other third persons, all because the Parliament of
Canada adopted an invalid law which purported to
require those payments. It appears to me that this
action falls within that category of actions which
were maintainable against the Crown at common
law by petition of right (not required since 1971)
and is in no way dependent on the Crown Liability
Act, R.S.C. 1970, c. C-38.
It is clear that this money was paid under a
mistake of law: namely, under the mistaken belief
that subsection 20(2) of the Juvenile Delinquents
Act validly authorized the Provincial Court of
Ontario to make such orders. Even though the
plaintiff commenced to challenge this assumption
as early as February 1977 it quite properly com
plied with the law until the latter was finally held
invalid by the Supreme Court of Canada in 1982.
Normally laws should be observed until they are
held to be invalid: see e.g. Morgentaler et al. v.
Ackroyd et al. (1983), 150 D.L.R. (3d) 59 (Ont.
H.C.).
The plaintiff in its statement of claim says that
the defendant has been "unjustly enriched" and
also seeks "recoupment" for money paid by it to
discharge the "liability or responsibility of the
Defendant arising from its general public duty to
provide the funds necessary to implement its legis
lation". In argument it relied on a number of
authorities, some of which were directed more to
the general principle of unjust enrichment, and
others of which dealt with the particular remedy of
recovery of money paid under mistake of law to or
for the benefit of the defendant. While this is
essentially a claim for recovery of money paid
under mistake of law and under compulsion, it
involves a somewhat novel situation where one
must go beyond the precedents in looking for the
underlying principles upon which recovery may or
may not be based.
Without going back to Lord Mansfield and his
leading decisions of the 18th century on this sub
ject, it may suffice to begin with a decision of the
English Court of Appeal in Brook's Wharf and
Bull Wharf Ld. v. Goodman Brothers, [1937] 1
K.B. 534 where the plaintiff was allowed to recov
er custom duties paid by it, as it was obliged by
law to do, on furs imported by the defendant. The
Court approved the principle that where a plaintiff
has been compelled by law to pay money which the
defendant was ultimately liable to pay, as between
the plaintiff and defendant the plaintiff is entitled
to be reimbursed. It was said [at page 545] that
this obligation did not arise out of contract but
.... is imposed by the Court simply under the circumstances of
the case and on what the Court decides is just and reasonable,
having regard to the relationship of the parties.
In the case of Fibrosa Spolka Akcyjna v. Fair-
bairn, Lawson, Combe Barbour, Ld., [1943] A.C.
32 (H.L.), Lord Wright made the observation,
since much quoted, that [at page 61]:
It is clear that any civilized system of law is bound to provide
remedies for cases of what has been called unjust enrichment or
unjust benefit, that is to prevent a man from retaining the
money of or some benefit derived from another which it is
against conscience that he should keep.
While that case essentially involved recovery of
money paid under a contract that had become
frustrated by war, Lord Wright said that such
recovery was based neither on contract nor tort,
but falls within a "third category ... called quasi-
contract or restitution".
Such English jurisprudence has been cited with
approval in Canadian courts. In the case of Degl-
man v. Constantineau, [1954] S.C.R. 725 the
Supreme Court allowed the nephew of a deceased
person to recover from her estate payment for
services rendered by him to her during her life. He
had rendered such services on the oral understand
ing that she would provide for him in her will. She
failed to do so. He was not allowed to enforce the
contract because it was not in writing as required
by the Statute of Frauds [R.S.O. 1950, c. 371].
Mr. Justice Rand writing for himself and two
other Judges, allowed recovery on what he
described as [at page 728]
...the principle of restitution against what would otherwise be
an unjust enrichment of the defendant at the expense of the
plaintiff.
While Rand J. did not quote any authority for this
proposition, Cartwright J., writing for himself and
the majority of the Court, came to the same result
and quoted the above statement by Lord Wright in
the Fibrosa Spolka case. More recently, the
Supreme Court ' of Canada in Hydro Electric
Commission of Nepean v. Ontario Hydro, [1982]
1 S.C.R. 347 analyzed at length the principles of
law applicable to recovery of money paid, in error,
by one party to a contract to the other party.
While this decision is not directly on point, there
was extensive analysis in both the dissenting and
majority judgments as to the requirements for the
recovery of money paid under mistake of law.
Dickson J. [as he then was], dissenting, writing for
himself and Laskin C.J.C., having examined at
length the English and Canadian authorities and
having noted the many exceptions to the principle
that money paid under a mistake of law is not
recoverable, stated at pages 367 and 368 that the
doctrine of restitution or unjust enrichment is not
an exception or qualification to this rule but
instead provides an underlying principle of recov
ery in respect of which distinctions as to mistake of
law and mistake of fact are meaningless. He con
cluded that there should be recovery in that case
on such basis, but before doing so he examined
carefully the possibility that there might be equita
ble defences to what he presumably regarded as an
equitable right to recovery. He found no such
defences. Mr. Justice Estey, writing on behalf of
the majority, declined to order repayment of the
money to the plaintiff. While not expressly disa
greeing with the position of the dissenting Judges
as to the principles of unjust enrichment, he
expressed the view at page 412 that the plaintiff
had not raised squarely or relied on these princi
ples. The majority rejected recovery claimed on
the basis of a mistake of law because none of the
exceptions to the rule that one may not recover
money paid under a mistake of law were present in
this case. At pages 409 and 410, however, Estey J.
made it clear that if the payments had been made
under compulsion they would be recoverable
whether or not there was a mistake of law. In
effect, the presence of mistake of law would be
irrelevant. This would appear to accord with one of
the bases for recovery upheld in an earlier judg
ment of the Court written by Hall J. in Jacobs
(George Porky) Enterprises Ltd. v. City of Regina,
[1964] S.C.R. 326, at pages 330 and 331.
Another relevant decision of the Supreme Court
of Canada, although not directly applicable to the
present situation since it involved collection and
retention by the defendant of taxes paid to it under
compulsion pursuant to an allegedly invalid stat
ute, is Amax Potash Ltd. et al. v. Government of
Saskatchewan, [ 1977] 2 S.C.R. 576. There the
Court appears to have assumed that at common
law the plaintiff would have a right to recover such
money if the statute were held to be invalid. On
this assumption it was held that the provincial
legislature could not preclude such recovery by
legislation because such a statutory bar would
represent an indirect means of achieving the result
prohibited by the Constitution—that is, the gain
ing of revenues through an invalid scheme of
taxation.
A further Supreme Court decision of interest in
relation to the present case is that of Carleton,
County of v. City of Ottawa, [1965] S.C.R. 663.
In that case the City of Ottawa had annexed,
effective January 1, 1950, a portion of the Town
ship of Gloucester which was previously in the
County of Carleton. In 1948 one N.B., an indigent
person previously resident in this part of Glouces-
ter later to be annexed by Ottawa, was placed in a
home for the aged in Lanark County where she
was maintained at the expense of Carleton
County. At the time of the annexation of the
portion of Gloucester by Ottawa it was agreed
between Ottawa and Gloucester that Ottawa
would assume responsibility for the maintenance
of indigent residents in the area to be annexed.
Subsequently Carleton County delivered a list of
such persons to Ottawa but through oversight N.B.
was not included in the list. Carleton continued to
pay Lanark County for the maintenance of N.B.
until 1960, and then N.B. was moved to a home
operated by Carleton where she continued to be
maintained at the expense of Carleton County. In
1962, the error having been discovered, Carleton
demanded from Ottawa payment of the amounts
expended by Carleton from 1950 to 1962 for the
maintenance of N.B. It will be noted that responsi
bility for the maintenance of such indigents was
imposed by law on the county or city where they
were deemed resident pursuant to The Homes for
the Aged Act, S.O. 1947, c. 46. Carleton based its
claim on the doctrine of restitution. Hall J. deliver
ing the judgment of the Court, quoted with
approval the Brook's Wharf case supra, the
Fibrosa Spolka case supra and the Deglman case
supra. Apparently applying those cases, Hall J.
held that as Ottawa had assumed responsibility for
Carleton's obligations to indigent residents as of
1950, but through an error Carleton had continued
to pay for the maintenance of N.B., it would be
"against conscience" that Ottawa should escape
responsibility for those expenses. Ottawa was
therefore ordered to reimburse Carleton for them.
The particular significance of this case, vis-Ã -vis
the present case is that, although it apparently
involved only an error of fact, it concerned a
dispute between two public authorities to which
the doctrine of restitution or unjust enrichment
was applied; and that the money paid by the
plaintiff Carleton had not been paid to the defen
dant nor for its direct benefit but for the benefit of
a third party, N.B., which the defendant had an
obligation in law to support.
From other cases such as Eadie v. Township of
Brantford, [1967] S.C.R. 573 and (by inference)
the Nepean case supra one can conclude that
money paid under a mistake of law and under
compulsion can be recovered. More generally, the
County of Carleton case supports the view that
restitution can be had from a public authority even
if the money has been expended for the mainte
nance of a member of the public. Even more
importantly, the Deglman case, County of Carle-
ton case, and the dissenting judgment in Nepean
(the substance of which was not rejected by the
majority, just thought to be inapplicable in that
case) all indicate that in Canada there is now a
more generalized and fundamental principle of
redressing unjust enrichment which may go
beyond its English origins and which informs or
should inform any particular judgment in this
area. This has also been suggested by the New
Brunswick Court of Appeal in White et al. v.
Central Trust Co. et al. (1984), 7 D.L.R. (4th)
236 and by some writers: see e.g. Fridman and
McLeod, Restitution (1982), chapter 2; McCa-
mus, "Restitutionary Recovery of Moneys Paid to
a Public Authority Under a Mistake of Law:
Ignorantia Juris in the Supreme Court of Cana-
da" (1983), 17 U.B.C. L. Rev. 233; Gautreau,
"Developments in the Law of Restitution" (1984-
85), 5 Advocates' Q. 419. It is this principle which
must not be lost sight of in examining the difficul
ties facing the plaintiff in this case.
(ii) Constitutional Principles
A critical question is whether the defendant, the
executive government of Canada, can be said to
have received a benefit, either generally or through
the discharge of its legal responsibility, by the
payment by the Regional Municipality of Peel of
the cost of maintenance of juvenile delinquents
pursuant to an invalid federal law. In the narrow
sense, I am not able to find that the executive
government of Canada automatically has an
enforceable legal obligation to pay the costs of
administration of every Act of Parliament, even of
valid Acts. No authority has been submitted for
such a proposition and both experience and princi
ple suggest the contrary.
It is obvious for example that Parliament often
imposes obligations on individuals and corpora
tions which entail the expenditure by them of their
own money in the course of compliance with the
law. Little or no obligation is placed on the execu
tive branch in such cases, except perhaps for pur
poses of monitoring compliance. It is also obvious
that the provinces collectively spend hundreds of
millions of dollars in the enforcement and adminis
tration of the federal Criminal Code [R.S.C. 1970,
c. C-34] or the Juvenile Delinquents Act and its
successor. Arguably, those provincial expenditures
may be regarded as voluntary although it appears
to me from the decision of the Supreme Court of
Canada in Regional Municipality of Peel v.
MacKenzie et al., [ [ 1982] 2 S.C.R. 9] that a
federal enactment properly characterized as
"criminal law" could impose expenditure obliga
tions on a province or its instrumentalities. At
page 22 it was said that the purported imposition
on municipalities of the obligation under subsec
tion 20(2) of the Juvenile Delinquents Act
... could not be justified in the absence of a direct link with
federal legislative power under s. 91(27). [Emphasis added.]
This implies that if there were a "direct link" with
federal legislative power then such obligations
could be imposed on municipalities and it would
not be the federal executive that would be obliged
to make such expenditures.
•
On the basis of general constitutional principles,
it is also difficult to contend that there is
automatically a financial obligation on the federal
executive to pay for the administration of federal
laws. That executive is responsible to Parliament
for its expenditure of money, and if it has not been
authorized by Parliament to make a certain expen
diture it has no right or enforceable legal obliga
tion to do so. Nor is the Crown liable vicariously
for the actions of the legislative branch; Parlia
ment is in no sense the agent or servant of the
Crown. Further, the doctrine of parliamentary
supremacy implies that courts cannot require Par
liament to vote appropriations. If Parliament has
not provided for payment out of the federal Con
solidated Revenue Fund of the costs of implemen
tation of legislation, and has not validly imposed a
duty on others to bear those costs, a court could
not issue a mandatory injunction or a mandamus
to require Parliament to vote an appropriation for
the proper administration of its law. Any such
obligation is of a political, not a juridical, nature.
These are fundamental principles of the English
Constitution which emerged in the 17th century
and were confirmed by the Bill of Rights, 1688, 1
Will. & Mary, Sess. 2, c. 2 (U.K.). We have
inherited them through the language of the
preamble to the Constitution Act, 1867 [30 & 31
Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II, No.
5] (as am. by Canada Act 1982, 1982, c. 11
(U.K.), Schedule to the Constitution Act, 1982,
Item 1)] which states that we are to have a
constitution "similar in Principle to that of the
United Kingdom".
These fundamental constitutional principles de
veloped in a unitary state must, however, be
applied in the context of a federal system and in
the light of the principle of redress for unjust
enrichment. Even if there is not a right of action
against the federal executive for the cost of enforc
ing federal laws, or against the provincial execu
tive for the costs of enforcing provincial laws, there
is unquestionably a generally perceived political
responsibility on the part of each order of govern
ment in a federal system to administer effectively
the laws adopted by its legislative branch. In the
field of criminal law, the federal obligation is
underlined by the confirmation in Attorney Gener
al of Canada v. Canadian National Transporta
tion, Ltd. et al., [1983] 2 S.C.R. 206, followed in
R. v. Wetmore et al., [1983] 2 S.C.R. 284, that
Parliament's jurisdiction under head 91(27) of the
Constitution Act, 1867 includes the power to pro
vide for the enforcement of criminal law. The case
of Peel v. MacKenzie, supra demonstrates, how
ever, that in so providing for the enforcement or
administration of criminal law Parliament cannot,
in the circumstances involved here, pass on the
financial obligations of administration to a prov
ince or the instrumentality of a province if that
province or instrumentality does not voluntarily
undertake such obligations. Yet, if there were not
redress for the plaintiff in this case, Parliament
would have effectively done so through its invalid
legislation (subsection 20(2) of the Juvenile Delin
quents Act) which has since 1908 obliged munici
palities to pay such costs, and through its reliance
on the constitutional principle that there is no
right or obligation in the federal executive to pay
money where such has not been appropriated by
Parliament. In this connection, it is instructive to
consider the case of B.C. Power Corporation v.
B.C. Electric Company, [1962] S.C.R. 642. There
the validity of legislation expropriating the
common shares of the British Columbia Electric
Company Limited was being attacked as to its
constitutionality. The Crown in right of the prov
ince objected to the appointment of a receiver of
the company pending the outcome of the litigation,
on the grounds that such an order would affect the
property or interest of the Crown in the company
as provided for in the impugned legislation. The
Supreme Court confirmed that such a receiver
could be appointed pendente lite and that Crown
immunity from suit as it then generally existed in
British Columbia could not be invoked to prevent
such an order. At pages 644 and 645 Kerwin C.J.
on behalf of the Court stated:
In a federal system, where legislative authority is divided, as
are also the prerogatives of the Crown, as between the Domin
ion and the Provinces, it is my view that it is not open to the
Crown, either in right of Canada or of a Province, to claim a
Crown immunity based upon an interest in certain property,
where its very interest in that property depends completely and
solely on the validity of the legislation which it has itself
passed, if there is a reasonable doubt as to whether such
legislation is constitutionally valid. To permit it to do so would
be to enable it, by the assertion of rights claimed under
legislation which is beyond its powers, to achieve the same
results as if the legislation were valid. In a federal system it
appears to me that, in such circumstances, the Court has the
same jurisdiction to preserve assets whose title is dependent on
the validity of the legislation as it has to determine the validity
of the legislation itself.
This statement was quoted with approval in Amax
Potash Ltd. et al. v. Government of Saskatchewan
supra at page 591. Dickson J. remarked there that
while the B.C. Electric case involved somewhat
different issues, the Amax case
... would seem to be governed by the very considerations which
led to the decision in the earlier case. In each case, the concern
is with the preservation of the Constitution which is paramount.
[Emphasis added.]
Similarly, in the present case, if the Crown in
right of Canada can invoke an immunity from
action for payment of costs unlawfully imposed by
the legislative branch of the federal government on
the plaintiff, on the grounds that the legislative
branch has provided no appropriation or authori
zation for the defendant to make such payments,
then the federal order of government will have
achieved what the Constitution says it cannot
achieve: namely, the imposition of a financial
burden on the plaintiff municipality for the main
tenance of juvenile delinquents under the Juvenile
Delinquents Act.
(iii) The Principles Combined
It is at this point where the principles of the
federal system of government and the principle of
redress for unjust enrichment join together in
requiring that the defendant reimburse the plain
tiff for the costs incurred by the plaintiff through
compliance with the invalid law. It might well
have been impossible for anyone to have sued the
defendant directly to force the payment of such
monies in the first place. But where the plaintiff
has paid them in compliance with a federal law
that has turned out to be invalid, and in further
ance of the objectives of that law duly adopted by
Parliament, as between the plaintiff and the
defendant it would be unjust that the plaintiff
ultimately bear those costs rather than the
defendant.
In my view this creates no insuperable problem
in payment of such an amount by the executive
branch of government, notwithstanding the fact
that Parliament made no specific appropriation of
funds for the administration of this aspect of the
Juvenile Delinquents Act. The liability of the
Crown here arises out of general principles of law
and equity and it is provided by the Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, in subsection
57(3):
57....
(3) There shall be paid out of the Consolidated Revenue
Fund any money or costs awarded to any person against the
Crown in any proceedings in the Court.
This provides adequate authority for the payment
of the sum in question. See R. v. Transworld
Shipping Ltd., [1976] 1 F.C. 159 (C.A.), at page
165, note 10.
In finding that the Crown is liable to pay such
amount in the present circumstances, it is impor
tant to make clear what is not being decided. As
noted above, I am not prepared to adopt the view
that the federal executive is automatically and
legally obliged to pay all the costs of the adminis
tration of federal laws. Further, recovery here is
not being allowed on some theory of constitutional
tort based on liability for "legislating without due
care and attention". I recognize that the function
of enacting legislation involves a political and
social responsibility which does not give rise to a
private duty of care: see Welbridge Holdings Ltd.
v. Metropolitan Corporation of Greater Winnipeg,
[1971] S.C.R. 957, at pages 969 and 970. Instead,
liability to reimburse the plaintiff arises out of the
requirements of justice as between the two parties.
(iv) Invalidity of Disposition Orders
Counsel for the defendant contended that the
plaintiff had in effect made payments unnecessari
ly under orders which, while purportedly made
under subsection 20(2) were not in accordance
with the requirements prescribed in subsection
20(1) for orders for the disposition of juveniles
found to be delinquent. According to him, the
validity of an order issued under subsection 20(2)
depended on its compliance with the criteria for
such orders as were prescribed in subsection 20(1).
It is true that, as set out in paragraphs 9 and 10 of
the agreed statement of facts quoted above, the
plaintiff successfully challenged certain of the
orders for failure to comply with subsection 20(1).
It may be that many of the other orders were not
within the terms of subsection 20(1) and could
also have been challenged for that reason, but it is
not for me to determine that question in a collater
al proceeding such as this. Nor do I think compli
ance or non-compliance with subsection 20(1) is
relevant to the present claim by the plaintiff. For
there to be practical compulsion to pay, as I have
found existed in this case, it is not pertinent that
the plaintiff might ultimately have resisted such
compulsion successfully: see North v. Waltham-
stow Urban Council (1898), 67 L.J.Q.B. 972. It is
no doubt for this reason that the courts have
frequently insisted that all that is required, in
establishing a claim for restitution, is to show that
the payment was made under "practical" compul
sion: see, e.g., Eadie, supra. Further, while compli
ance with the criteria of subsection 20(1) would
determine the validity of the orders in so far as the
placement and supervision of the juvenile delin
quent was concerned, it was subsection 20(2)
which implicated the municipality in the matter.
The immediate cause of the unlawful impositions
on the municipality was the latter subsection and it
was in the mistaken belief as to its validity that the
municipality paid out the sums in question. The
municipality cannot be viewed as a volunteer in
making payments pursuant to that subsection even
if the orders might have been challengeable on
other bases. The municipality was obliged to treat
those orders as valid until they had been success
fully attacked on some ground. The municipality
launched that attack in 1977 with respect to sub
section 20(2) but did not succeed until it raised the
matter again in the MacKenzie case, as described
in paragraphs 11 and 12 of the agreed statement
of facts supra.
(v) Limitation Periods
By virtue of section 38 of the Federal Court Act,
the question of limitation periods is governed by
the law of Ontario where the cause of action arose.
The defendant pleaded prescription, invoking
the Limitations Act, R.S.O. 1980, c. 240, s. 45,
and the Public Authorities Protection Act, R.S.O.
1980, c. 406, s. 11. It also pleaded, for reasons
which were not explained nor are they apparent,
the Judicature Act, R.S.O. 1980, c. 223. In respect
of the first statute the defendant argued that the
case came within paragraph 45(1)(g) of the Act,
being an action "upon the case" which must be
commenced "within six years after the cause of
action arose". As for section 11 of the Public
Authorities Protection Act, it provides that an
action
11.—(1) ... against any person for an act done in pursuance
or execution or intended execution of any statutory or other
public duty or authority, or in respect of any alleged neglect or
default in the execution of any such duty or authority ....
must be commenced "within six months next after
the cause of action arose". In my view this is not
such an action: the defendant is not being sued for
acts done or not done through neglect or default in
the execution of a duty under a statute or other
wise. Neither a statute nor general principles of
law obliged it to act differently in respect of the
plaintiff. Instead, it is being sued on an obligation
which now arises as a result of the actions of
others.
The plaintiff argues that the Limitations Act
does not apply because this is an action for equita
ble relief which is nowhere referred to in section
45 of that Act. It contends instead that only the
equitable doctrine of laches applies, a much more
elastic concept. Further, it contends that the cause
of action did not arise until the decision of the
Supreme Court of Canada on July 22, 1982 in the
MacKenzie case, supra holding that subsection
20(2) of the Juvenile Delinquents Act is invalid.
The present action for recovery of monies paid by
the plaintiff in compliance with the invalid law
was commenced on January 18, 1983 less than six
months after that judgment.
Plaintiff argues that it could not have known
until that judgment that it had paid the money
under a mistake of law and the cause of action did
not arise until that time. It is therefore entitled to
claim for all monies paid between 1974 and 1982
pursuant to orders made under subsection 20(2) of
the Juvenile Delinquents Act. The defendant, of
course, contends that if the plaintiff is entitled to
recover anything, it can at best only recover such
amounts as were paid during the period of six
years immediately preceding the commencement
of this action, which would mean that payments
made prior to January 18, 1977 would not be
recoverable.
In my view the cause of action did not arise until
the decision of the Supreme Court of Canada on
July 22, 1982 holding subsection 20(2) to be inval
id. It was only then that any of the parties were
certain that the plaintiff had been compelled to
make payments which it was not constitutionally
obliged to make. Only then could the cause of
action be said to have arisen. I believe that this is
the position which is the most consistent with the
judgment of the majority of judges in Deglman v.
Constantineau, supra, at page 736. After empha
sizing that recovery was not based on contract,
Cartwright J. held that the obligation which the
law imposed on the deceased's administrator to
pay the deceased's nephew a sum of money in lieu
of the property which she had promised to devise
to him did not arise until the deceased died intes
tate. Until that time the nephew had no reason to
doubt that she would make the promised provision
in her will. Therefore the cause of action did not
accrue until the death of the deceased intestate.
See also the White case, supra, at page 252;
Fridman and McLeod, supra, at pages 600-602.
Similarly, in the present case it was not until the
decision of the Supreme Court on July 22, 1982
that the plaintiff knew that it had expended money
when it had no legal obligation to do so, and it was
then that a right to recoupment or restitution
arose.
It is interesting to note that in the case of
Carleton v. Ottawa, supra, the case closest to the
present one for these purposes and also involving
the law of Ontario as to the relevant limitation
period, no mention was made in any of the report
ed decisions of the claim being in any way statute-
barred. In that case payment was ordered in
respect of sums paid up by the plaintiff for a
period of more than twelve years prior to com
mencement of the action. In the Nepean case,
supra, the plaintiff conceded that the Limitations
Act applied so as to limit its claim to the six years
preceding issue of the writ. It therefore equally
conceded that the cause of action arose at the time
payment was made.
Concluding as I do that the cause of action here
did not arise until July 22, 1982 it is of little
importance which limitation period is applied to
this claim since none will bar recovery of all the
amounts claimed in this action. Even if the Public
Authorities Protection Act were to apply, the
action was commenced within six months after the
cause of action arose so it would not constitute a
bar. If paragraph 45(1)(g) of the Limitations Act
applies, the action was commenced well within the
six-year period permitted. I have in fact concluded
that paragraph 45(1)(g) of the Limitations Act
does apply to this action on the basis that it is "an
action ... upon the case". It is perhaps anomalous
that we should today be required to resort to
distinctions having their origin in the fourteenth
century and their significance in the forms of
action which Anglo-Canadian law purportedly
abandoned over a century ago. But the wording of
the Ontario statute obliges me to do so. An "action
upon the case" should in the context of a modern
statute be viewed somewhat as a residual category
of action, which is indeed a role not inconsistent
with its original development. As it developed,
action on the case was not confined to torts but
also was used for new claims such as assumpsit.
See e.g. Plucknett, A Concise History of the
Common Law (5th ed., 1956), at pages 372-373,
637-640. The result of finding this to be an action
on the case would be to have the same limitation
period apply to restitutionary actions, such as the
present one, as would apply to actions for trespass,
contract, debt or detinue (also covered by para
graph 45(1)(g) of the Ontario Limitations Act).
The same policy which justifies the limitation
period for these actions would appear to be equally
relevant to restitutionary actions. See Fridman and
McLeod, supra, at pages 597-602. There are many
cases where limitation statutes have been applied
to restitutionary actions (see e.g. Maskell v.
Horner, [1915] 3 K.B. 106 (C.A.); In re Diplock,
[ 1948] Ch. 465, affirmed [1951] A.C. 251
(H.L.)). In particular, such actions have on occa
sion been specifically held to be actions on the
case: see Salford (Mayor & c., of Borough of) v.
County Council of Lancashire (1890), 25 Q.B.D.
384 (C.A.); Green & Co. v. Cukier & Toronto
Gen'l Trusts, [1949] 4 D.L.R. 729 (Ont. C.A.).
The latter case, being a decision of the Ontario
Court of Appeal on the same statutory provision as
is involved here, is particularly pertinent.
My conclusion that this is an action on the case
and subject to a six-year limitation period does not
entirely resolve the matter, however. Section 2 of
the Ontario Limitations Act provides:
2. Nothing in this Act interferes with any rule of equity in
refusing relief on the ground of acquiescence, or otherwise, to
any person whose right to bring an action is not barred by
virtue of this Act.
This appears to mean that even though an action is
commenced within the limitation period prescribed
in the statute, if it is equitable in nature it may be
barred by the conduct of the plaintiff through, e.g.
delay. Although at the trial of the Nepean case
supra Craig J. seems to have assumed that the
existence of a relevant limitation statute precluded
a defence of laches (see (1979), 92 D.L.R. (3d)
481 (Ont. H.C.), at page 495) and Dickson J. in
the Supreme Court accepted this view (see page
379), neither referred to section 2 of the Limita
tions Act as quoted above. It is likely that an
action for recovery of money paid under mistake of
law should be regarded as an equitable action
subject to equitable defences. If, however, there
does remain a possible defence of laches here by
virtue of section 2, I find that there was no undue
delay on the part of the plaintiff in bringing this
action. Therefore laches cannot be successfully
invoked by the defendant.
(vi) Entitlement to Recovery
The plaintiff is therefore entitled to be paid by
the defendant the sum of $1,166,814.22 represent
ing the net amount expended by the plaintiff pur
suant to invalid orders made under subsection
20(2) of the Juvenile Delinquents Act.
(vii) Interest
The plaintiff in its statement of claim asks for
interest which I take to refer to pre-judgment
interest on the sums paid out by it under the
invalid federal law. I am unable to award such
interest because of the provisions of section 35 of
the Federal Court Act which states:
35. In adjudicating upon any claim against the Crown, the
Court shall not allow interest on any sum of money that the
Court considers to be due to the claimant, in the absence of any
contract stipulating for payment of such interest or of a statute
providing in such a case for the payment of interest by the
Crown.
There is no contract providing for the payment of
interest in the present case. Nor does there appear
to be any relevant statute; the claim, as I have
held, does not arise under the Crown Liability Act
which might, were it applicable, apply by reference
the law of Ontario on this subject.
(viii) Costs
The plaintiff is entitled to its costs.
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.