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Supreme Court of Canada

Interest—Damages awarded against Crown for wrongful retention of moneys compulsorily retained—Statutory authority providing for interest to be allowed in such circumstances—The Interpretation Act, R.S.S. 1965, c. 1, s. 7—The Proceedings against the Crown Act, R.S.S. 1965, c. 87, s. 17(1)—The Queens Bench Act, R.S.S. 1965, c. 73, s. 46.

[The King v. Carroll, [1948] S.C.R. 126; Ross v. The King (1902), 32 S.C.R. 532; Prince Albert Pulp Co. Ltd. v. Foundation Company of Canada, Ltd., [1977] 1 S.C.R. 200; Toronto Railway Co. v. Corporation of the City of Toronto, [1906] A.C. 117; Gettle Bros. Construction Co. Ltd. v. Alwinsal Potash of Canada Ltd. (1969), 5 D.L.R. (3d) 719, referred to.]

APPLICATION pursuant to Rule 61 of the Rules of the Supreme Court of Canada for an order amending the order pronounced on November 23, 1977, in an appeal from a judgment of the Court of Appeal for Saskatchewan[1], by deleting therefrom reference to the payment of interest by the applicant, the Government of Saskatchewan. Application dismissed.

G.J.D. Taylor, Q.C., R.S. Meldrum, Q.C., and G.K. Randall, for the applicants.

J.J. Robinette, Q.C., and W.M. Elliott, Q.C., for the respondent.

T.B. Smith, Q.C., and J. Mabbutt, for the intervener, the Attorney General of Canada.

[Page 38]

The judgment of the Court was delivered by

RITCHIE J.—This is an application brought under the provisions of Rule 61 of the Rules of this Court for an order amending the order pronounced oh November 23, 1977, whereby the respondent, Canadian Industrial Gas & Oil Ltd., was held entitled to recover from the Crown in the right of Saskatchewan the moneys it had paid by way of mineral income tax and royalty surcharge under Saskatchewan legislation, regulations and orders which were declared to be ultra vires by that order.

By the present application, the Government of Saskatchewan and the Attorney General for that Province seek to have the said order varied by deleting therefrom the following provision made for the payment of interest:

The appellant is entitled to judgment against the Government for the recovery of the sums paid by way of mineral income tax and royalty surcharge with interest thereon from the respective dates of payment up to the date of repayment. (The italics are my own.)

By direction of the Court oral argument was presented on behalf of the applicants, and the Attorney General of Canada and the Attorney General of Manitoba intervened to support the application although no oral argument was presented on behalf of either of them.

In support of its contention the applicant relies on the language employed by Mr. Justice Taschereau (as he then was) speaking for the majority of this Court in the case of The King v. Carroll[2], at p. 132, where he said:

It is settled jurisprudence that interest may not be allowed against the Crown, unless there is a statute or a contract providing for it. (King v. Miller, [1930] S.C.R. 293; Hochelaga Shipping v. The King [1944] S.C.R. 138; The King v. Racette, [1948] S.C.R. 28.) In the present case, there is no statutory provision and no contractual obligation in support of the suppliants’ claim.

[Page 39]

The Carroll case and the authorities there cited, however, involved actions against the federal Crown which were governed by the then federal Petition of Right Act, whereas the question of the granting of remedies in the present case must be governed by the law of the Province of Saskatchewan (see Ross v. The King[3]).

This is a case in which damages had been awarded against the Crown for the wrongful retention of moneys compulsorily retained and the sole question raised by this application is whether there is statutory authority in the law of Saskatchewan providing for interest to be allowed in such circumstances.

In this regard the applicant relies primarily on the provisions of s. 7 of the Saskatchewan Interpretation Act, R.S.S. 1965, c. 1, which read:

7. No provisions in an Act shall affect the rights of Her Majesty unless it is expressly stated therein that Her Majesty is bound thereby.

This section must, however, be read in light of the following express provisions of s. 17(1) of the Saskatchewan Proceedings against the Crown Act, R.S.S. 1965, c. 87, which read as follows:

17. (1) Subject to this Act, in proceedings against the Crown the rights of the parties are as nearly as possible the same as in a suit between person and person; and the court may:

(a) make any order, including an order as to costs, that it may make in proceedings between persons; and

(b) otherwise give such appropriate relief as the case may require.

In a suit between person and person in the Province of Saskatchewan, the entitlement to interest is governed by s. 46 of The Queens Bench Act, R.S.S. 1965, c. 73, which reads as follows:

46. Interest shall be payable in all cases in which it is now payable by law, or in which it has been usual for a jury to allow it.

In considering the effect of this section in the case of Prince Albert Pulp Company Ltd. v. The

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Foundation Company of Canada, Limited[4], Mr. Justice Martland, who delivered the judgment of the Court, adopted and relied upon the judgment of the Privy Council in Toronto Railway Company v. Corporation of the City of Toronto[5], in which an identical section of the Ontario Judicature Act, (R.S.O. 1897, c. 51, s. 113) was considered by the Board and where it was held:

The result, therefore, seems to be that in all cases where, in the opinion of the Court, the payment of a just debt has been improperly withheld, and it seems to be fair and equitable that the party in default should make compensation by payment of interest, it is incumbent upon the Court to allow interest for such time and at such rate as the Court may think right.

As Mr. Justice Martland points out, there are a number of other cases in Saskatchewan which recognize the power of the court to award interest in such circumstances, the most recent of which is Gettle Bros. Construction Co. Ltd. v. Alwinsal Potash of Canada Ltd.[6], in which case an appeal to this Court was dismissed without written reasons.

As s. 17(1) of The Proceedings against the Crown Act provides that where the Crown is a party to the proceedings its rights “are as nearly as possible the same as in a suit between person and person”, it follows that it is incumbent upon the Court to require that the Crown make compensation by payment of interest on moneys improperly withheld from the respondent as any other party would be required to do.

A vigorous argument was presented on behalf of the applicant to the effect that this section was directed to procedural rather than substantive matters, and this contention was said to be supported by the reference to “an order as to costs” as those words occur in subs. 1(a) of the section. In developing this argument, however, only passing reference was made to subs. (b) of the section which clothes the Court with the broad power to “give such appropriate relief as the Court may require in any proceeding brought against the Crown”. The authority to “give such appropriate

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relief as the case may require” is clearly not limited to procedural matters and any force that could be attached to the applicant’s argument based upon s. 17(1)(a) is neutralized by the subsection immediately following it.

For all these reasons I would dismiss this application with costs.

Application dismissed with costs.

Solicitors for the respondent: MacPherson, Leslie & Tyerman, Regina.

Solicitors for the applicants: Goldenberg, Taylor, Randall, Buckwold & Halstead, Saskatoon.

Solicitors for the interveners: McKercher, McKercher, Stack, Korchin & Laing, Saskatoon.

 



[1] [1978] 2 S.C.R. 545.

[2] [1948] S.C.R. 126.

[3] (1902), 32 S.C.R. 532.

[4] [1977] 1 S.C.R. 200.

[5] [1906] A.C. 117.

[6] (1969), 5 D.L.R. (3d) 719.

 

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