2 3 property rights in the province, yet had as a matter of fact not done so, Prop. 68 but operated wholly within the province, were within the jurisdiction of the provincial legislature, no declaration having been made under No. 10 of section 92 of the British North America Act that the railway was a work for the general advantage of Canada1, and this though all or nearly all the share- Meaning of holders and creditors were outside the province. and civil And the second case is Clarkson v. The Ontario province. Bank, where, referring to the Ontario Act respecting assignments for the benefit of creditors, which he held, erroneously as the Privy Council subsequently decided, to be ultra vires as relating to bankruptcy and insolvency, Osler, J., said: "This Act is a public Act of a general character. It purports to deal with the estates of all insolvent debtors in the province who make an assignment, in other words, who voluntarily place their estates in liquidation, and prescribes to whom and in what manner they shall make such assignment. It directly affects the Provincial rights of all their creditors whether in this or the foreign other provinces or elsewhere. So far, therefore, as it controls the rights of extra-provincial creditors, it is not confined to dealing with property and civil rights in the province, although that, as I held in Jones v. The Canada Central R. W. Co., may not be an objection in the case of creditors under an Act of a purely private or local character." But, it is submitted, the Act referred to only controls the 1 As to such declarations, see supra p. 603, n. 2. 4. 215 O. A. R. at p. 190, 4 Cart. at p. 527, a case decided with those of Edgar v. The Central Bank of Canada, Kennedy v. Freeman, and Hunter v. Drummond, all raising the same constitutional question. 3 Attorney-General of Ontario v. Attorney-General of Canada, (1894) A. C. 189. 446 U. C. R. 250, 1 Cart. 777, (1881). As to this case see supra pp. 461-2. Act affecting creditors. Prop. 68 rights of extra-provincial creditors so far as such creditors seek payment of their debts against the property of an insolvent person within the province ; and it seems quite consistent with principle that so far as outside creditors seek their remedy within the province, they are subject to the law of the province.1 Provincial autonomy. Privy judgment Case. In conclusion, reference may be made to the words of Dorion, C. J., in Bank of Toronto v. Lambe: "Every provision of the British North America Act shews that the object of the promoters of the measure was to place each province in a state of perfect independence as regards each other, to establish the utmost freedom of intercourse and commercial relations between them, to exclude from the legisla 1 Cf. supra pp. 328-9. The Privy Council in their judgment just referred to, (supra p. 767), although the constitutional validity of the provision whereby executions not completely satisfied by payment were Assignments postponed to an assignment for creditors under the Act was alone called for Creditors' in question, yet deal with the Act as whole, as they were urged to do upon the argument, sufficiently to show very clearly that it must be considered intra vires throughout. They do not discuss the point that the effect of it extends to extra-provincial creditors, but with reference to the above provision they say, [1894] A. C. at p. 198: "Now there can be no doubt that the effect to be given to judgments, and executions, and the manner and extent to which they may be made available for the recovery of debts, are prima facie within the legislative powers of the provincial parliament. Executions are a part of the machinery by which debts are recovered, and are subject to regulation by that parliament." The Minister of Justice objected, as might be expected, to a provincial Act authorizing the sale, by the Attorney-General as administrator, of real estate situate outside the province of intestates dying without known relations in the province: Hodgins' Provincial Legislation, 2nd ed., Pp. 151, 156-7. A case under No. 13 of section 92 of the British North America Act which has not been noticed before in this work, and may be mentioned here, is Gower v. Joyner, 32 C.L.J. 492,(1896), 17 C.L.T. 298, where the Supreme Court of the North-West Territories decided that an ordinance enacting that for ill-usage, non-payment of wages, or improper dismissal of a servant by his master, a justice of the peace might order such master to pay the servant one month's wages in addition to arrears and costs, and in default imprisonment for a month, was intra vires of the Legislative Assembly under this clause and No. 14, the administration of justice, Rouleau, J., dissenting. 2 M. L. R. 1 Q. B. at p. 146, 4 Cart. at pp. 42-3, (1885), sub_nom. The North British and Mercantile Fire and Life Insurance Co. v. Lambe. tax on belonging to stock is held provinces. tive authority of the provinces all regulations as to Prop. 68. trade and commerce, customs and excise, navigation. and shipping, banks, bankruptcy and insolvency,in fact every subject which might give occasion to an interference by one province directly or indirectly which would affect the interests of the other pro- Provincial vinces." However, the decision of the Privy Coun- corporations cil in the latter case1 shews him to be in error in and whose the conclusion he proceeds to draw, that the Quebec in other Act in question in that case, taxing monetary institutions incorporated and domiciled in other provinces, and whose stock was held by people residing out of Quebec, was ultra vires; and it also shews that he went too far in saying in The Attorney-General of Quebec v. The Attorney-General of the Dominion that: "the provincial legislatures exercise their authority over matters affecting the inhabitants of their respective provinces only.3 112 App. Cas. 575, 4 Cart. 7, (1887). 22 Q. L. R. at p. 237, 3 Cart. at p. 101. 3 In Bank of Toronto v. Lambe, 12 App. Cas. at pp. 584-5, 4 What is Cart. at pp. 19-20, the Privy Council say: "The next question is taxation whether the tax is taxation within the province. It is urged that the 'within the bank is a Toronto corporation, having is domicil there, and having its province'? capital placed there; that the tax is on the capital of the bank; that it must therefore fall on a person or persons, or on a property, not within Quebec. The answer to this argument is that No. 2 of section 92 of the British North America Act, does not require that the persons to be taxed by Quebec are to be domiciled or even resident in Quebec. Any persons found within the province may be legally taxed there if taxed directly. This bank," (sc. the Bank of Toronto), "is found to be carrying on business there, and on that ground alone it is taxed. There is no attempt to tax the capital of the bank, any more than its profits. The bank itself is directly ordered to pay a sum of money." And so in the Court below, Tessier, J., had said: "There are some shareholders residing out of the province in England, in the United States. That No. 2, matters nothing. There is only one moral and legal being in which sect. 92, all the shareholders are united, no matter where they reside. For example, suppose the Federal parliament had imposed the same tax, which is here in question, on the banks, would these institutions be able to avoid paying these taxes by alleging that part of their shareholders live in England or elsewhere, and that part of their capital is employed in one of their offices established in England or in the United States? Evidently this objection would be rejected. Why should it not be B.N.A. Act. What is taxation Prop. 68. when it is a question as to the same tax imposed by the legislature of Quebec? : M. L. R. 1 Q. B. at p. 166, 4 Cart. at pp. 59-60. Cf. per Baby, J., S. C., M. L. R. 1 Q. B. at p. 196, 4 Cart. at p. 87-8; per within the Ramsay, J., S.C., M. L. R. 1 Q. B. at p. 179, 4 Cart. at pp. 71-2. Cross, province'? J. observes, (S.C., M. L. R. 1 Q. B. at p. 158, 4 Cart. at p. 53):-" The principle of Confederation necessarily implied that one province would not interfere with the taxable subjects or property of another province; hence the qualifying words within the province' in sub-section 2 of section 92 include this limitation, which would have been implied from the circumstances, had even this express qualification been omitted"; but he erroneously held the tax in question to be on the paid up capital of the bank, "whose situs is without the province," whereas, as we have seen the Privy Council hold it was not on the capital at all. Cf. also per Burton, J. A., in Nickle v. Douglas, 37 O. A. R. at p. 62, (1875). In respect to what may perhaps be called the converse case to that which came up in Bank of Toronto v. Lambe, namely that of taxing persons in a province in respect to income derived wholly or partially from without the province, Hagarty, C. J., in Leprohon v. The City of Ottawa, 2 O.A. R. at p. 534, I Cart. at p. 605, (1878), with whom Patterson, J. A., would seem to agree, (S. C. 2 O. A. R. at p. 567, I Cart. at p. 643), intimates the view that direct taxation within the province' in No. 2 of section 92 cannot be legitimately extended to authorize this. But just as Burton, J. A. remarks in Nickle v. Douglas, 37 O. A. R. at p. 62, that it is "competent to the legislature having jurisdiction over the person to tax his personal property wherever situate, "-so it is submitted, it is competent for it to tax his personal property whencesoever derived. And as to Leprohon v. The City of Ottawa, see supra pp. 671-6. Taxing income derived from extra provincial sources. |