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PROPERTY AND CIVIL RIGHTS IN THE PROVINCE SECTION 92(13)

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Presentation on theme: "PROPERTY AND CIVIL RIGHTS IN THE PROVINCE SECTION 92(13)"— Presentation transcript:

1 PROPERTY AND CIVIL RIGHTS IN THE PROVINCE SECTION 92(13)

2 PROPERTY AND CIVIL RIGHTS IN THE PROVINCE: S. 92(13) Most important and far-reaching head of jurisdiction for provinces. Civil rights ≠ civil liberties, rather contract, property, and tort Appeared first in Quebec Act 1774—restored French civil law but left English public and criminal law in place. "VIII. And be it further enacted by the Authority aforesaid, That all his Majesty's Canadian Subjects within the Province of Quebec […] hold and enjoy their Property and Possessions […] and all other their Civil Rights.” Basic thrust: leave in the hands of the provinces the law governing the relationships between individuals. This does not mean all the law between private individuals is governed by provincial law. There are a number of notable exceptions expressly provided for in BNA: Marriage and divorce Patents of invention and discovery Banking Trade and commerce, etc.

3 PROPERTY AND CIVIL RIGHTS IN THE PROVINCE: S. 92(13) The effect of s. 92(13) is, however, to leave the regulation of most of the law regulating the relationship between individuals to the provinces: Real property Wills and succession Contracts an torts Labour relations Section 92(13) should be read in conjunction with s. 92(16), which provides the provinces with jurisdiction in “all matters of a merely local or private nature in the province” The effect of these two provisions is extensive. Occasionally, cases do not identify whether they are decided under s. 92(13) or (16): Attorney General (Quebec) v Kellog’s Co [1978]

4 IMPORTANT QUESTIONS Does the impugned law, in pith and substance, fall within s. 92(13)? 1.Does the law concern “property” or “civil rights”? 2.Are those property or civil rights located “[with]in the province”? Both of these questions must be answered in the affirmative. In addition, provincial laws, generally speaking, cannot have “extraterritorial effect” unless there is a “real and substantial” connection between the law and the case at hand (Hunt).

5 “PROPERTY AND CIVIL RIGHTS” THE DECIDED CASES

6 CITIZENS INSURANCE V PARSONS (1881) Facts: “Insurance” does not expressly fall within a head of jurisdiction. Ontario statute required certain conditions to be included in every fire insurance policy entered into in the Province. Sir Montague Smith [for the Court] “Civil rights” includes contracts and contractual rights: “The words [property and civil rights] are sufficiently large to embrace, in their fair and ordinary meaning, rights arising from contract and such rights are not included in express terms in any of the enumerated classes of subjects in s. 91.” [Pith and substance] What is this analysis? “The next question for consideration is whether, assuming the Ontario Act to relate to the subject of property and civil rights, its enactments and provisions come within any of the classes of subjects enumerated in s. 91.” [?]

7 CITIZENS INSURANCE V PARSONS (1881) Conclusion on last question “[Parliament’s] authority to legislate for the regulation of trade and commerce does not comprehend the power to regulate by legislation the contracts of a particular business or trade, such as the business of fire insurance in a single province, and therefore its legislative authority does not in the present case conflict or compete with the power over property and civil rights assigned to the legislature of Ontario.”

8 BÉDARD V DAWSON [1923] Facts: Québec legislature had passed an act regulating “disorderly houses” (i.e. brothels). The legislation (1) made it an offence to allow your house or building to be used as a disorderly house; and (2) provided that violations of various provisions of the Criminal Code constituted prima facie evidence of such. Iddington J: “Property” includes the regulation of nusances: The protection of neighbouring property from nuisances meant that this Québec law fell within s. 92(13). This power is absolute so long as it does not encroach on Parliament’s power: “[T]he provincial legislatures have [an] absolute power over property and civil rights … so long as they did not in fact encroach upon the powers assigned … to … Parliament.

9 BÉDARD V DAWSON [1923] Iddington J: Felt ill at ease adding prohibitions to offences under the Criminal Code: “There is … one aspect [of the law] which rather disturbs me, and that is this: the Act takes certain sections of the Criminal Code as the basis of its subject matter and then proceeds to apply convictions thereunder as a basis of its application. … [I]t would look very much like adding … to penalties imposed by Parliament … when Parliament alone is endowed with the power … of determining what is the proper measure of the punishment.” Analysis: Given what we know today about paramountcy and interjurisdictional immunity, what do we think the court was concerned about here?

10 MCNEIL V NOVA SCOTIA BOARD OF CENSORS [1978] Facts: Theatres and Amusements Act (NS) granted authority to Amusements Regulation Board to prevent films from being shown in the province. Ritchie [Martland, Pigeon, Beetz, and de Grandpré JJ concurring]: This is legislation which, in pith and substance, falls within the province’s jurisdiction to make laws in relation to property: “The legislation is concerned with dealings in and the use of property (i.e. films) which take place wholly within the Province …” Shannon and Home Oil provided that the regulation of trade of products imported into the province falls within s. 92(13): “[T]he impugned legislation constitutes nothing more than the exercise of provincial authority over transactions taking place wholly within the province and applies to the ‘regulating, exhibition, sale and exchange of films’ whether those films have been imported from another country or not.”

11 MCNEIL V NOVA SCOTIA BOARD OF CENSORS [1978] Ritchie [Martland, Pigeon, Beetz, and de Grandpré JJ concurring]: Ritchie J seems to have felt it necessary to confirm that the legislation did not relate to criminality: “I take the view that the impugned legislation is not concerned with criminality. … This is not to say that Parliament is in any way restricted in its authority to pass laws penalizing immoral acts or conduct, but simply that the provincial government in regulating a local trade may set its own standards which in no sense exclude the operation of federal law.” [i.e. providing there is no conflict and the matter falls within provincial jurisdiction, there is no problem] Laskin CJ [Judson, Spence and Dickson JJ dissenting]: This is, in pith and substance, criminal law: “The determination of what is decent or indecent or obscene in conduct or in a publication, what is morally fit for public viewing, whether in films, in art or in a live performance is … within the exclusive power of … Parliament.”

12 MCNEIL V NOVA SCOTIA BOARD OF CENSORS [1978] Laskin CJ [Judson, Spence and Dickson JJ dissenting]: This is, in pith and substance, a criminal law: “This is not a case where civil consequences are attached to conduct defined and punished as criminal under federal legislation [as in Bédard v Dawson] bur rather a case where a provincially authorized tribunal itself defines and determines legality, what is permissible and what is not. This, in my view, is a direct intrusion into the field of criminal law.” “[The] objects [of a provincial law] must … be anchored in the provincial catalogue of powers and must, moreover, not be in conflict with a valid federal legislation. It is impossible in the present case to find any such anchorage …and this apart from the issue of conflict which, I think, arises in relation to the Criminal Code.” This case should be distinguished from Bédard v Dawson, as premises (theatres) are not being regulated (but rather, film). Here the connection to property is too tenuous.

13 RIO HOTEL LTD V NB LIQUOR LICENSING BOARD [1987] Facts: The New Brunswick Liquor Licensing Board prohibited nude dancing as a condition to obtain an entertainment license. Dickson CJ [McIntyre, Wilson, and Le Dain JJ concurring]: In pith and substance, the law falls within the legislative jurisdiction of the province “The legislation [relates] to property and civil rights within the province and to matters of a purely local nature.” No conflict warranting invocation of paramountcy. “Although there is some overlap [with the Criminal Code], there is no direct conflict.” [The doctrine of paramountcy does not apply]

14 QUÉBEC V KELLOGG’S [1978] Facts: The Québec gov’t adopted a regulation prohibiting advertising aimed at children that used cartoons. Complaints and injunctions were filed against Kellogg’s for violating the regulation. Martland J [Ritchie, Pigeon, Dickson, Beetz and de Grandpré]: The federal power to regulate broadcasting is not relevant. What is relevant is the provincial legislative competence: “What is in issue here is the power of a provincial legislature to regulate and control the conduct of a commercial enterprise in respect of its business activities within the province.”

15 QUÉBEC V KELLOGG’S [1978] Martland J [Ritchie, Pigeon, Dickson, Beetz and de Grandpré]: Interjurisdictional immunity did not apply: “[Kellogg] cannot justify conduct which has been rendered illegal because it is using a medium of television.” “In my opinion this regulation does not seek to regulate or to interfere with the operation of a broadcast undertaking.”

16 “IN THE PROVINCE” THE DECIDED CASES

17 WHAT HAS TO BE ‘IN THE PROVINCE’? Traditionally, if the law was one, in pith and substance, in relation to either property or a civil right located within the province, the law would apply to incidental, “extraterritorial effects”. For property, this was easier: if, in pith and substance, the law was one in relation to the property within the province, it would be intra vires the province.(Bédard v Dawson; Laskin CJ in Interprovincial Co-op) For civil rights, such as a chose in action, identifying situs often proved more capricious (Royal Bank; Churchill Falls; Pigeon and Ritchie JJ in Interprovincial). Recently, however, the Supreme Court has suggested that these cases are merely reflections of a “real and substantial connection” between the subject of the law and the province whose law is being challenged (Binnie J in ICBC v Uniform).

18 PITH & SUBSTANCE PLUS EXTRATERRITORIAL 92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say, (13) Property and Civil Rights in the Province. “In the province” is mentioned twice. Possible interpretation: 1.Legislation, in pith and substance, must be in relation to property or civil rights within the territory of the province pursuant to the words “in the Province” found in subsection 13 (Royal Bank; Churchill Falls) 2.Extraterritorial application of all provincial legislation is limited by the words “in each province” found in the chapeau to s. 92 (Unifund).

19 Does the provincial statute being challenged, in pith and substance, fall within the jurisdiction of the province? YesNo The law is ultra vires the province and invalid The law is intra vires the province and inapplicable Should the provincial statute being challenged be interpreted as having the asserted extraterritorial effect? Would the application of the provincial statute being challenged violate the prohibition on extraterritorial interference? The law is intra vires the province and applicable Yes No (Royal Bank; Churchill Falls; Interprovincial) (Hunt; ICBC v Unifund; BC v Imperial Tobbacco)

20 PITH & SUBSTANCE PLUS EXTRATERRITORIAL A law might be challenged for two reasons: 1.in pith and substance, it falls outside the jurisdiction of the body that enacted it (look to the specific head of power); and 2.it operates exterritorialy in an impermissible fashion (look to the chapeau of s. 91). In Churchill Falls, the law was challenged on the first ground. The pith and substance of the Newfoundland act was not a matter falling within provincial jurisdiction: it sought to regulate a civil right situate outside the province. If Unifund, the law was challenged on the second ground. While, in pith and substance, the Ontario Act was valid (pursuant to Citizens Insurance v Parsons), it could not apply, in this case, to ICBC because of the absence of a real and substantial connection. If (1) is not true, the law is ultra vires and invalid. If (2) is not true, the law inapplicable (note, the law remains valid). If both (1) and (2) are true, the law is intra vires and its extraterritorial effects are merely incidental.

21 BEFORE HUNT Royal Bank, Churchill Falls, and Interprovincial Where is the property or civil right located?

22 ROYAL BANK V R [1913] Facts: Alberta wanted to construct a provincial railway. In order to fund this endeavour, bonds were issued in London, proceeds paid through New York, and credited to the railway’s account. The railway was a disaster: it failed to deliver and pay its creditors. Under normal circumstances, the investors/creditors would be free to claim the money back. In the ordinary course of affairs, this right of recovery was in Québec (the location of the head office of the bank). However, Alberta passed a law appropriating all the proceeds of the bonds that were sold (i.e. the money that the railway had raised from investors) and interest on funds held by the railway, leaving investors/creditors high and dry. The Bank refused to pay over the money that it held, claiming that the law was ultra vires the Alberta legislature.

23 ROYAL BANK V R [1913] Viscount Haldane LC [for the Court]: In this case, the civil right—right to claim repayment in circumstances were the scheme was aborted—rests not in Alberta but rather in Montréal. That is where creditors would be entitled to exercise their right to payment. Therefore, the Alberta statute that sought to eliminate the right to claim repayment was ultra vires the provincial legislature for affecting civil rights outside of the Province.

24 LADORE V BENNETT [1939] Facts: City of Windsor constituted from amalgamation of four pre-existing municipalities. Those municipalities were in financial precarious situations, owing substantial amounts to creditors. Some of those creditors were entitled to payment outside the Province. Under the act amalgamating the municipalities, the Ontario Municipal Board acted to restructure the old debts under the City of Windsor and reduce the interest payable.

25 LADORE V BENNETT [1939] Lord Atkin: Section 92(8) – Municipal institutions provides the province with jurisdiction to dissolve and create municipalities. If a municipality is dissolved, its debts die with it. The pith and substance of the act is one relating to the destruction and creation of municipalities: “[T]he pith and substance of [the relevant act relate] to municipal institutions in the Province.” Thus, attacks premised on the fact that the acts “infringe on [Parliament’s] exclusive power relating to bankruptcy or insolvency” or “deal with civil rights outside the Province” are ineffectual. Those are merely incidental effects. Those creditors who provided money to the now defunct municipalities did so at their own peril.

26 LADORE V BENNETT [1939] Lord Atkin: “If the Provincial Legislature can dissolve a municipal corporation and create a new one to take its place, it can invest the new corporation with such powers of incurring obligations as it pleases, and … may define the amount of interest which such obligations may bear.”

27 INTERPROVINCIAL CO-OP LTD V R [1976] Facts: Interprovincial Co-op was licensed in Saskatchewan and Ontario to release chemical into rivers. Those chemicals flowed into Manitoba and damaged her fisheries. Manitoba sued, both under the common law and a Manitoba Act that allowed recovery in more situations than would be permitted under the common law; rendered licences to pollute as ineffectual in determining liability. According to rules of private international law, the civil right arises where “the acts complained of were done”—here, Saskatchewan. Thus, despite the fact that the effects of the law are felt in Manitoba, the civil right, or chose in action, would generally be thought to arise in Saskatchewan.

28 INTERPROVINCIAL CO-OP LTD V R [1976] Pigeon J [Martland and Beetz JJ concurring]: Construes this as a question of civil rights not property. The question here is whether the Manitoba legislation offends the doctrine of territorial limitation. The Manitoba legislation was directed at “acts done” outside the Province. While the Manitoba courts clearly have jurisdiction over Inteprovincial, it being present in Manitoba, it does not follow that there is an unlimited jurisdiction to apply any substantive law. The question of applicable substantive law will be determined by the validity of laws in reference to the BNA, 1867. It had been previously decided that provincial legislatures are not competent to legislate the situs of intangible property. Therefore, in Royal Bank v R, the Alberta legislature would not have been able to legislate the situs or location of the civil right in question (viz, the right to be paid back money owed).

29 INTERPROVINCIAL CO-OP LTD V R [1976] Pigeon J [Martland and Beetz JJ concurring]: The same logic applies here—the Manitoba legislature cannot legislate the location of the civil wrong. However, equally, a sister province cannot license pollution in Manitoba. “[A]t common law, pollution of waters to an injurious degree is a tort that gives rise to a cause of action for those whose property rights are affected thereby. I fail to see how a provincial authority could, by licensing the polluting operations, destroy this cause of action as against persons whose rights are affected outside its borders.” The conclusion is, therefore, that legislating in relation to pollution that crosses provincial borders is ultra vires provincial legislatures. More importantly, however, a province cannot legislate the situs of a civil wrong.

30 INTERPROVINCIAL CO-OP LTD V R [1976] Pigeon J [Martland and Beetz JJ concurring]: Thus, the matter of regulating interprovincial pollution falls to Parliament: “The basic principle of the division of legislative powers in Canada is that all legislative power is federal except in matters over which provincial Legislatures are given exclusive authority.” “Hence, when the question before [the courts] is where does the legislature authority reside over a given subject in Canada, there is always the possibility for them to find that it is not in any provincial Legislature but in … Parliament.” Conclusions: Saskatchewan and Ontario cannot license pollution in Manitoba Manitoba cannot legislate on pollution emanating from acts undertaken in Saskatchewan and Ontario However, Manitoba can still sue pursuant to the common law.

31 INTERPROVINCIAL CO-OP LTD V R [1976] Ritchie J: Construes this as a question of civil rights not property. Parliament can legislate on water quality and pollution in interprovincial rivers. Provincial legislatures can legislate on the effect of that pollution within its borders, including proof thereof and damage therefrom. However, the Manitoba legislation that attempts to invalidate the effect of a license granted in another province is ultra vires. The question here is whether the acts in Saskatchewan and Ontario amounted to actionable torts. If they did not, there will be no valid cause of action in Manitoba. Here, providing pollution was licensed in Saskatchewan and Ontario, no civil liability exists. And, as such, no right of an injunction lies.

32 INTERPROVINCIAL CO-OP LTD V R [1976] Laskin CJ [Judson and Spence JJ concurring (dissenting)]: Construes this as an issue of property not civil rights: “I do not regard this as a case where Manitoba has purported to bring within its borders a tort which could not justifiably be litigated there under Manitoba law by common law choice of law principles.” “I do not regard any of these circumstances … as involving legislation in relation to any civil rights or interests of the appellants outside of Manitoba. Of course, the Manitoba Act has an effect upon them, but its purpose is to strike at the damage and loss produced in Manitoba to Manitoba property.

33 CHURCHILL FALLS CORP V NEWFOUNDLAND [1984] Facts Newfoundland granted leases to Churchill Falls Corp to construct power generation facilities in Labrador. Churchill Falls Corp negotiated an agreement with Hydro Québec for the provision of electricity prorated to the cost of the capital investment. The contract was to last for 40 years, extendable by Hydro Québec to 65 years. Newfoundland, unhappy with the arrangement, passed an act repossessing the facilities from Churchill Falls, probably on the strength of Bédard v Dawson. The appellants argued that the act was ultra vires insofar as it interfered with civil rights outside the province.

34 CHURCHILL FALLS CORP V NEWFOUNDLAND [1984] McIntyre J [Ritchie, Dickson, Beetz, Estey, Chouinard, Lamer and Wilson JJ concurring]: Extraterritorial effects do not alone invalidate provincial legislation: “Where the pith and substance of the provincial enactment is in relation to matters which fall within the field of provincial legislative competence, incidental or consequential effects on extra-provincial rights will not render the act ultra vires.” The fundamental question here was whether the Newfoundland act was aimed at property or civil rights (what was it’s pith and substance?) If it was property, that (expropriated) property—the power generation plants— were clearly located within the province. If it was civil rights, the question would then arise as to whether those rights are situate in Québec or Newfoundland.

35 CHURCHILL FALLS CORP V NEWFOUNDLAND [1984] McIntyre J [Ritchie, Dickson, Beetz, Estey, Chouinard, Lamer and Wilson JJ concurring]: The legislation is, in pith and substance, in relation to “civil rights”. “[T]he … Act is a colourable attempt to … derogate from the rights of Hydro- Quebec to receive an agreed amount of power at an agreed price.” Given the fact Québec has a legal right to have the power delivered to it in Québec and there is an express jurisdiction clause in the contract for the courts of Québec, the civil right, or chose in action, is situate in Québec. As such, the Newfoundland legislature is incompetent to legislate to affect that right.

36 AFTER HUNT Hunt, ICBC v Unifund, BC v Imperial Tobacco, and Van Breda Is the application of the law impermissibly extraterritorial?

37 HUNT V T&N PLC [1993] Facts: The Business Concerns Records Act (QC) prevented removal of documents from Québec relating to any business concern in Québec by courts in other jurisdictions. Litigation in BC required these documents to be produced. The question was whether the Business Concerns Records Act (QC) was inapplicable to other provinces. The application of traditional notions of “property in the province” would suggest that this is an open and shut case (with Québec being free to regulate physical property within its borders). However, the “extraterritorial effect” of the Act on discovery in another province merited closer examination.

38 HUNT V T&N PLC [1993] La Forest J [for the Court]: While the challenged legislation concerns “property in the province”, it has an “extraterritorial effect”, in that it denies evidence to courts in other provinces but not Québec. By doing so, it does not give “‘full faith and credit’ to the judgments of sister provinces.” For that reason, it violates the principles of “order and fairness” and, as such, it is inapplicable to the other provinces. “A province undoubtedly has an interest in protecting the property of its residents within the province, but it cannot do so by unconstitutional means. Here, the means chosen are intended to unconditionally refuse recognition to orders and thereby impede litigation[.]” The result being “a judicial order in another province will be denied effect.” “I would answer the constitutional question by saying that the Act should be read as not applying to the provinces since such application would be ultra vires under the constitutional principles set forth in the Morguard case.”

39 ICBC V UNIFUND ASSURANCE CO [2003] Facts: Accident in BC involving ON residents. Unifund, the ON residents’ insurer, made no-fault payment of $750,000 to the residents under their policy. The ON residents sued ICBC—the insurer for the BC residents responsible for the accident—for compensation and won $2,500,000. ICBC claimed a reduction of $750,000 in the amount payable under the award as allowed by BC law. Under ON law, Unifund enjoyed a cause of action (in ON) against ICBC for no-fault payments made. ICBC had attorned to the jurisdiction of the ON courts. Typically, regulation of insurance is a matter that falls within provincial jurisdiction (Citizens Insurance v Parsons). However, application of Ontario law would here result in an “extraterritorial effect”. If this effect is constitutionally permissible, Unifund has a valid cause of action. If not, it does not.

40 ICBC V UNIFUND ASSURANCE CO [2003] Binnie J [McLachlin CJ, Iacobucci, Binnie and LeBel JJ]: There is no jurisdiction simpiciter: “The PAU should not be interpreted as a general attornment by the appellant to Ontario insurance law in respect of a motor vehicle accident that occurred in BC.” There is no prescriptive jurisdiction: “Section 275 of the Ontario Insurance Act is constitutionally inapplicable to the appellant because its application in the circumstances of this case would not respect territorial limits on provincial jurisdiction.”

41 ICBC V UNIFUND ASSURANCE CO [2003] Major, Bastarache and Deschamps JJ: There is jurisdiction simpliciter: “There are a number of considerations which, taken together with the general language of the PAU, indicate that the appellant is subject to Ontario’s jurisdiction. There is prescriptive jurisdiction: “Valid provincial laws can affect matters which are sufficiently connected to the province. The respondent has shown that the subject matter which the Insurance Act covers, interinsurer indemnification, falls within provincial jurisdiction and is sufficiently connected to Ontario so as to render the statute applicable to the appellant.”

42 ICBC V UNIFUND ASSURANCE CO [2003] Binnie J [McLachlin CJ, Iacobucci, Binnie and LeBel JJ]: In determining whether legislation applies: 1.Provincial legislation will only apply to matters meaningfully connected to the province. 2.Whether there is a meaningful connection will depend on the relationship among:  The enacting jurisdiction;  The subject matter of the legislation; and  The individual entity sought to be regulated by it. 3.This is because of order and fairness  The applicability of an otherwise competent provincial legislation to out-of- province defendants is conditioned by the requirements of order and fairness that underlie our federal arrangements; and 4.The principles of order and fairness, being purposive, are applied flexibly according to the subject matter of the legislation.”

43 ICBC V UNIFUND ASSURANCE CO [2003] Binnie J [McLachlin CJ, Iacobucci, Binnie and LeBel JJ]: There is no question that the regulation of insurance falls within provincial jurisdiction under s. 91(13) (Citizens Insurance v Parsons). The question is whether the application of insurance legislation to out-of-province insurers should be driven by “order and fairness”. “The applicability of an otherwise competent provincial regulatory scheme to an out-of-province defendant is conditioned by the requirements of order and fairness that underlie our federal arrangements.” Decisions dealing with extraterritorial legislation reflected a concern for “order and fairness” “…put[ting] the focus less on the idea of actual physical presence and more on the relationships among the enacting territory, the subject matter of the law, and the person sought to be subjected to its regulation.”

44 ICBC V UNIFUND ASSURANCE CO [2003] Binnie J [McLachlin CJ, Iacobucci, Binnie and LeBel JJ]: The extraterritorial application of the law will turn on whether there is a “sufficient connection” in the case at hand. This is, and has been, the underlying test for determining whether “within the province”. “[T]he problem in Royal Bank of Canada … was not physical presence as such but that there was insufficient connection between the province of Alberta, on the one hand, and the out-of-province bondholders and their money on deposit with the bank’s head office in Québec, on the other hand, to justify the regulation of the debt by Alberta.” “It appears from the case law that different degrees of connection to the enacting province may be required according to the subject matter of the dispute.”

45 ICBC V UNIFUND ASSURANCE CO [2003] Binnie J [McLachlin CJ, Iacobucci, Binnie and LeBel JJ]: The definition of a “real and substantial” connect will turn on the subject-matter of the legislation. “[D]ifferent degrees of a connection to the enacting province may be required according to the subject matter of the dispute.” Here, the legislation should not be permitted extraterritorial application, as there is not a “real and substantial connection” 1.“[T]he appellant [is] not authorized to sell insurance in Ontario [and] it does not in fact do so.” 2.“It’s insured vehicles in this case did not venture into Ontario.” 3.“The accident did not take place in Ontario” 4.“[T]he appellant had not hired anyone in Ontario to promote its products.” 5.“It was not in the Ontario marketplace.”

46 ICBC V UNIFUND ASSURANCE CO [2003] ICBC v Unifund leaves us somewhat confused: Binnie J’s words suggest that prior cases interpreting s. 91(13), such as Royal Bank and Churchill Falls, are merely reflections of the absence of the unifying principle of real and substantial connection. Is this all we need? Can we now do away with the requirement that the property or civil right be located in the province, providing the connection between the legislation and the jurisdiction is sufficient? What problems does this pose as regards the predictability and clarity of the law?

47 BC V IMPERIAL TOBACCO [2005] Facts: BC legislature passed an act providing the BC gov’t with a direct cause of action against manufacturers of tobacco products. Those suffering from the effects of tobacco consumption were BC residents. The health care costs, justifying the action, would be felt in BC by the gov’t. Of the 14 companies responsible, only 3 were Canadian and had presence in BC. Exposure occurred both in and out of BC.

48 BC V IMPERIAL TOBACCO [2005] Major J: First “pith and substance”, then “territoriality”. “The first step is to determine the pith and substance, or dominant feature, of the impugned legislation, and to identify a provincial head of power under which it might fall. Assuming a suitable head of power can be found, the second step is to determine whether the pith and substance respects the territorial limitations on that head of power—i.e. whether it is in the province.” “If [the matter] is in the province, the limitations have been respected, and the legislation is valid. If it is outside the province, the limitations have been violated, and the legislation is invalid.”

49 BC V IMPERIAL TOBACCO [2005] Major J Cases like Churchill Falls constitute an extension of Binnie J’s “sufficient connection” “[As pointed out in Unifund] ‘the relationships among the enacting territory, the subject matter of the law, and the person[s] sought to be subjected to its regulation’ play [a role] in determining the validity of legislation alleged to be impermissibly extra-territorial in scope. In Churchill Falls, an examination of those relationships indicated that the intangible civil rights constituting the pith and substance of the Newfoundland legislation at issue were not meaningfully connected to the legislating province, and could property be the subject matter only of Quebec legislation.” But wasn’t it because the civil rights were not situate in Newfoundland? While it might be that there location outside of Newfoundland means that they are not meaningfully connected to the province, why not be specific?

50 BC V IMPERIAL TOBACCO [2005] Major J Tangible pith and substance: “If the pith and substance is tangible, whether it is in the province is simply a question of its physical location.” How does this square with Hunt? Intangible pith and substance: “If the pith and substance is intangible, the court must look to the relationships among the enacting territory, the subject matter of the legislation and the persons made subject to it, in order to determine whether the legislation, if allowed to stand, would respect the dual purposes of the territorial limitations in s. 92 (namely, to ensure that provincial legislation has a meaningful connection to the enacting province and pays respect to the legislative sovereignty of other provinces.). If it would, the pith and substance of the legislation would be regarded as situated in the province.”

51 BC V IMPERIAL TOBACCO [2005] Major J In this case, the law affects “civil rights” (the right of the BC gov’t to claim damages). Whether or not those civil rights fall within the province will turn on whether the law has a sufficient “connection” to BC. “Though the cause of action that is its pith and substance may capture, to some extent, activities occurring outside of British Columbia, no territory could possibly assert a stronger relationship to that cause of action than British Columbia. That is because there is at all times one critical connection to British Columbia exclusively: the recovery permitted by the action is in relation to expenditures by the government of British Columbia for the health care of British Columbians.”

52 BC V IMPERIAL TOBACCO [2005] Major J: The law is not invalid by reason of extraterritoriality, as: 1.It concerns reimbursement for health care costs incurred by the BC government in BC. 2.It concerns only “persons in BC”. The fact that exposure may have occurred outside of BC was not critical.

53 QUESTIONS? Is legislation, in pith and substance, related to property located wholly within the province, always valid, as suggested by Major J in BC v Imperial Tobacco at [36]? If so, how do we square this with Hunt? The law there related to property located squarely within the province (business records), but it was inapplicable. If so, how do we square this with Binnie J’s in ICBC v Unifund at [64] that cases like Royal Bank, Ladore v Bennett, and Churchill Falls, were just elaborations of a general principle of “sufficient connection”? On the basis of this assertion, while it might be a relevant consideration, it is certainly not decisive at the pith and substance analysis whether the property is located with the province. Do we now have one test (real and substantial connection)? Is situs no longer decisive at the pith and substance analysis? Can BC legislate constitutionally regulate property owned by its residents located outside of the province? If we only have one test, wouldn’t the Ontario Insurance Act in Unifund be invalid? How is there a difference between invalidity and inapplicability if there is one test?

54 CLUB RESORTS V VAN BREDA [2012] Van Breda, like Hunt, Imperial Tobacco, and Unifund, was fueled by an overarching concern of the Supreme Court of Canada to ensure “order and fairness” “[T]he connections between the matters or the parties, on the one hand, and the court, on the other, must be of some significance in order to promote order and fairness.” The same would go for provincial legislation: The connection between the subject matter of the legislation, on the one hand, and the province, on the other, must be of some significance in order to promote order and fairness. Some might argue that this case helps us identify more clearly what objective factors serve to connect the subject matter of the legislation with the forum. In cases of tort, presumptive factors tending to evidence a “real and substantial connection” have been identified as:  (a) the defendant is domiciled or resident in the province;  (b) the defendant carries on business in the province;  (c) the tort was committed in the province; and  (d) a contract connected with the dispute was made in the province.  This list is meant to be presumptive. New factors may be added, or additional factors may be more relevant or displace this list.

55 CLUB RESORTS V VAN BREDA [2012] We might adapt these to provincial legislation:  (a) the subject of the legislation is domiciled or resident in the province;  (b) the subject of the legislation carries on business in the province;  (c) the mischief to which the legislation is direct occurred in the province; and  (d) a contract connected with the legislation was made in the province. This is a speculative list that may help us identify when there is a presumption that extraterritoriality does not render provincial legislation inapplicable. In this case, the presumption of jurisdiction was premised on the fact that the contract was entered to in Ontario. The defendants were not able to rebut the presumption that this fact resulted in, and therefore the court found that it had jurisdiction to hear the dispute.


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