Québec Ready Mix Inc. v. Rocois Construction Inc., [1989] 1 S.C.R. 695

Québec Ready Mix Inc., Lévis Ready Mix Inc.,

Pierre Viger, Verreault Frontenac Ready-Mix Inc.,

Claude Ferland, Michel Bérubé, Pierre Legault,

Pilote Ready-Mix Inc., Gaston Pilote Appellants

v.

Rocois Construction Inc. Respondent

and

The Attorney General of Canada Respondent

and

Dominion Ready-Mix Inc.,

Jean Desjardins, Marc Crépin Mis en cause

and

The Attorney General for Alberta,

the Attorney General of Quebec,

the Attorney General for Saskatchewan Interveners

and between

Dominion Ready-Mix Inc.,

Jean Desjardins and Marc Crépin Appellants

v.

Rocois Construction Inc. Respondent

and

The Attorney General of Canada Respondent

and

Lévis Ready Mix Inc., Pierre Viger, Verreault

Frontenac Ready-Mix Inc., Claude Ferland,

Michel Bérubé, Pierre Legault Mis en cause

and

Pilote Ready-Mix Inc., Gaston Pilote Mis en cause

and

The Attorney General for Alberta,

the Attorney General of Quebec,

the Attorney General for Saskatchewan Interveners

indexed as: québec ready mix inc. v. rocois construction inc.

File Nos: 19697, 19701.

1988: May 17, 18; 1989: April 20.

Present: Dickson C.J. and Beetz, McIntyre, Lamer, Le Dain*, La Forest and L'Heureux-Dubé JJ.

on appeal from the federal court of appeal

Constitutional law -- Division of powers -- Trade and Commerce ‑‑ Combines Investigation Act -- Private right action created if loss suffered because of conduct contrary to Part V of Combines Investigation Act or for non-compliance with order of court or commission -- Whether or not s. 31.1 creating private cause of action ultra vires Parliament -- Whether or not section requiring action under Combines Investigation Act to be brought in Federal Court ultra vires Parliament -- Combines Investigation Act, R.S.C. 1970, c. C-23, s. 31.1, (3) -- Constitution Act, 1867, s. 92(2).

Courts -- Jurisdiction -- Federal Court -- Action brought under Combines Investigation Act and Civil Code -- Whether or not Federal Court competent to hear action based both on Combines Investigation Act and Civil Code -- Civil Code of Lower Canada, art. 1053.

Rocois Construction Inc. (Rocois) alleged in Federal Court that Québec Ready-Mix Inc. (Québec) and Dominion Ready-Mix Inc. (Dominion) had formed an agreement that violated s. 31.1(1)(a) of the Combines Investigation Act. Rocois claimed damages under both s. 31.1 of the Combines Investigation Act and art. 1053 of the Civil Code of Lower Canada. The defendants Québec and Dominion brought a motion for a preliminary ruling on the constitutionality of s. 31.1(1)(a) (which creates a private cause of action) and s. 31.1(3) of the Act (which makes the Federal Court a court of competent jurisdiction for the purposes of any action under s. 33.1), and on the Federal Court's competence to hear an action founded on both federal and provincial law.

The Federal Court, Trial Division held s. 31.1(1)(a) ultra vires Parliament, and, consequently, found that it lacked jurisdiction to hear the claim. The Federal Court of Appeal, however, upheld s. 31.1(1)(a) as intra vires Parliament and found the Federal Court had jurisdiction with respect to the claim founded on s. 31.1(1)(a) of the Act but not with respect to the claim based on the Civil Code.

The constitutional questions stated by this Court queried: (1) whether s. 31.1(1)(a) of the Combines Investigation Act was ultra vires Parliament under s. 91(2) of the Constitution Act, 1867; (2) whether s. 31.1(3) was ultra vires Parliament; and, (3) whether the Federal Court had jurisdiction to hear a claim based both on s. 31.1(1)(a) and art. 1053 of the Civil Code of Lower Canada.

Held: The appeals should be dismissed. The first and second constitutional questions should be answered in the negative. As to the third, the Federal Court is competent to hear a claim founded on s. 31.1(1)(a) of the Combines Investigation Act but is not competent to hear a claim founded on art. 1053 of the Civil Code of Lower Canada.

Section 31.1(1)(a) of the Combines Investigation Act is intra vires Parliament, for the reasons given in General Motors of Canada Ltd. v. City National Leasing, under s. 91(2) of the Constitution Act, 1867. The Federal Court has jurisdiction with respect to proceedings under s. 31.1(3) because the prerequisite that there be existing and applicable federal law in support of those proceedings has been met. The Federal Court, however, does not have jurisdiction with respect to the claim based on art. 1053 of the Civil Code of Lower Canada.

Cases Cited

Followed: General Motors of Canada Ltd. v. City National Leasing, [1989] 1 S.C.R. 000.

Statutes and Regulations Cited

Civil Code of Lower Canada, art. 1053.

Combines Investigation Act, R.S.C. 1970, c. C-23, s. 31.1(1)(a), (3).

Constitution Act, 1867, s. 92(2).

Federal Court Rules, r. 474.

APPEALS from a judgment of the Federal Court of Appeal, 1985 CanLII 5523 (FCA), [1985] 2 F.C. 40, allowing an appeal from a judgment of Marceau J., 1979 CanLII 4144 (FC), [1980] 1 F.C. 184. Appeals dismissed. The first and second constitutional questions should be answered in the negative. As to the third, the Federal Court is competent to hear a claim founded on s. 31.1(1)(a) of the Combines Investigation Act but is not competent to hear a claim founded on art. 1053 of the Civil Code of Lower Canada.

Henri-Louis Fortin, for Québec Ready Mix Inc., et al.

Gérald Tremblay, for Dominion Ready-Mix Inc., et al.

Pierre Gaudreau, for the respondent Rocois Construction Inc.

T. B. Smith, Q.C., Gaspard Côté, Q.C., Arnold Fradkin and David Lucas, for the respondent the Attorney General of Canada.

Jean-K. Samson and Jean Bouchard, for the intervener the Attorney General of Quebec.

Robert G. Richards, for the intervener the Attorney General for Saskatchewan.

Robert Maybank, for the intervener the Attorney General for Alberta.

//The Chief Justice//

The judgment of the Court was delivered by

THE CHIEF JUSTICE -- The principal issue in this appeal is identical to the issue raised in the companion case of General Motors of Canada Limited v. City National Leasing ("GM"), [1989] 1 S.C.R. 000, namely, whether Parliament has the constitutional authority to enact s. 31.1 of the Combines Investigation Act, R.S.C. 1970, c. C-23, as amended by S.C. 1974-75-76, c. 76, s. 12 (the "Act"), in the exercise of its power to regulate trade and commerce under section 92, head (2) of the Constitution Act, 1867. The two cases were heard together and judgment in GM is being delivered concurrently herewith. In this appeal, two questions not raised in the GM case -- relating to the jurisdiction of the Federal Court -- were also stated by the court.

The appeal originated in an action brought by Rocois Construction Inc. ("Rocois") against Québec Ready Mix Inc. ("Québec") and Dominion Ready-Mix Inc. ("Dominion") in the Federal Court -- Trial Division, alleging that the defendant companies had formed an agreement that violated s. 31.1(1)(a) of the Act; Rocois claimed damages under both s. 31.1 of the Act and art. 1053 of the Civil Code of Lower Canada. The defendants Québec and Dominion presented a motion under Rule 474 of the Federal Court for a preliminary ruling on the constitutionality of s. 31.1(1)(a) and s. 31.1(3) of the Act (which makes the Federal Court a court of competent jurisdiction for the purposes of any action under s. 33.1), and on the Federal Court's competence to hear an action founded on both federal and provincial law.

The legislation in question in this appeal is as follows:

Combines Investigation Act:

31.1 (1) Any person who has suffered loss or damage as a result of

(a) conduct that is contrary to any provision of Part V, or

(b) the failure of any person to comply with an order of the Commission or a court under this Act,

may, in any court of competent jurisdiction, sue for and recover from the person who engaged in the conduct or failed to comply with the order an amount equal to the loss or damage proved to have been suffered by him, together with any additional amount that the court may allow not exceeding the full cost to him of any investigation in connection with the matter and of proceedings under this section.

(2) In any action under subsection (1) against a person, the record of proceedings in any court in which that person was convicted of an offence under Part V or convicted of or punished for failure to comply with an order of the Commission or a court under this Act is, in the absence of any evidence to the contrary, proof that the person against whom the action is brought engaged in conduct that was contrary to a provision of Part V or failed to comply with an order of the Commission or a court under this Act, as the case may be, and any evidence given in those proceedings as to the effect of such acts or omissions on the person bringing the action is evidence thereof in the action.

(3) For the purposes of any action under subsection (1), the Federal Court of Canada is a court of competent jurisdiction.

(4) No action may be brought under subsection (1),

(a) in the case of an action based on conduct that is contrary to any provision of Part V, after two years from

(i) a day on which the conduct was engaged in, or

(ii) the day on which any criminal proceedings relating thereto were finally disposed of,

whichever is the later; and

(b) in the case of an action based on the failure of any person to comply with an order of the Commission or a court, after two years from

(i) a day on which the order of the Commission or court was violated, or

(ii) the day on which any criminal proceedings relating thereto were finally disposed of,

whichever is the later.

Civil Code of Lower Canada:

Art. 1053. Every person capable of discerning right from wrong is responsible for the damage caused by his fault to another, whether by positive act, imprudence, neglect or want of skill.

In the Federal Court, Trial Division, 1979 CanLII 4144 (FC), [1980] 1 F.C. 184, Marceau J. held that s. 31.1(1)(a) of the Combines Investigation Act was ultra vires Parliament, and, consequently, that the court lacked jurisdiction to hear the claim. In the Federal Court of Appeal, 1985 CanLII 5523 (FCA), [1985] 2 F.C. 40, judgments were delivered by Pratte, Ryan and MacGuigan JJ. All three decisions upheld s. 31.1(1)(a) as intra vires Parliament. Subsequent to the decision of Marceau J. a number of judgments were delivered in this Court and in other Canadian courts which had a decisive bearing on the decision of the Federal Court of Appeal to reverse Marceau J. The court's decision on the issue of the jurisdiction of the Federal Court to hear the claim was delivered by MacGuigan J. He held that the court had jurisdiction with respect to the claim founded on s. 31.1(1)(a) of the Act, but not the claim based on the Civil Code.

Leave to appeal to this Court was granted and the following constitutional questions were stated:

1.Is s. 31.1(1)(a) of the Combines Investigation Act, R.S.C. 1970, c. C-23, as amended, ("the Act"), ultra vires the Parliament of Canada?

2.Is subsection 31.1(3) of the Act ultra vires the Parliament of Canada?

3.Has the Federal Court of Canada jurisdiction to hear a claim based both on s. 31.1(1)(a) of the Act and on art. 1053 of the Civil Code of Lower Canada?

For the reasons given in the companion case of General Motors of Canada Ltd. v. City National Leasing, I am of the opinion that s. 31.1(1)(a) of the Combines Investigation Act is intra vires the Parliament of Canada under s. 91(2) of the Constitution Act, 1867.

To answer the second question stated by the Court, I adopt the following statement by MacGuigan J. on behalf of the Federal Court of Appeal, at p. 79:

With respect to the exercise of jurisdiction by the Federal Court of Canada under subsection 31.1(3) the prerequisite is that there be existing and applicable federal law which can be invoked to support proceedings before the Court: McNamara Construction (Western) Ltd. et al. v. The Queen, 1977 CanLII 13 (SCC), [1977] 2 S.C.R. 654; Quebec North Shore Paper Co. et al. v. Canadian Pacific Limited et al., 1976 CanLII 10 (SCC), [1977] 2 S.C.R. 1054. Since that prerequisite is here satisfied by the cause of action provided by subsection 31.1(1), the validity of subsection 31.1(3) follows from that of paragraph 31.1(1)(a).

In respect of the third of the stated questions, I also agree with the judgment of the Federal Court of Appeal. MacGuigan J. held, at p. 80, that as regards the part of the claim based on art. 1053 of the Civil Code, "the Federal Court has no jurisdiction to decide that part of the claim"; and added that the Federal Court only has jurisdiction in the present case, "with respect to proceedings brought under existing and applicable federal law." I note that the parties did not raise any argument on this issue before this Court.

Disposition

For the reasons given above I would answer the three questions raised in this appeal as follows:

Question 1.Is s. 31.1(1)(a) of the Combines Investigation Act, R.S.C. 1970, c. C-23, as amended, ("the Act"), ultra vires the Parliament of Canada?

Answer:No.

Question 2:Is subsection 31.1(3) of the Act ultra vires the Parliament of Canada?

Answer:No

Question 3:Has the Federal Court of Canada jurisdiction to hear a claim based both on s. 31.1(1)(a) of the Act and on art. 1053 of the Civil Code of Lower Canada?

Answer:The Federal Court of Canada is competent to hear a claim founded on s. 31.1(1)(a) of the Combines Investigation Act; the Court is not competent to hear a claim founded on art. 1053 of the Civil Code of Lower Canada.

The appeal is dismissed with costs.

Appeals dismissed with costs.

Solicitors for Québec Ready Mix Inc., et al.: Stein, Monast, Pratte & Marseille, Québec.

Solicitors for Dominion Ready-Mix Inc., et al.: Clarkson, Tétrault, Montréal.

Solicitors for Rocois Construction Inc.: Gaudreau & St-Cyr, Québec.

Solicitor for the Attorney General of Canada: Frank Iacobucci, Ottawa.

Solicitors for the Attorney General of Quebec: The Attorney General of Québec, Ste-Foy.

Solicitor for the Attorney General for Saskatchewan: Brian Barrington‑Foote, Regina.

Solicitor for the Attorney General for Alberta: The Attorney General for Alberta, Edmonton.

*Le Dain J. took no part in the judgment.