Dywidag Systems International, Canada Ltd. v. Zutphen Brothers Construction Ltd., [1990] 1 S.C.R. 705

Her Majesty The Queen in Right of Canada, as represented by the Minister of Public Works Appellant

v.

Dywidag Systems International, Canada Limited and Zutphen Brothers Construction Limited, a body corporate Respondents

and

The Attorney General for Ontario, the Attorney General of Quebec and the Attorney General for Alberta Interveners

indexed as: dywidag systems international, canada ltd. v. zutphen brothers construction ltd.

File No.: 20333.

1990: January 24; 1990: March 29.

Present: Dickson C.J. and Wilson, L'Heureux‑Dubé, Sopinka, Gonthier, Cory and McLachlin JJ.

on appeal from the nova scotia supreme court, appeal division

Constitutional law ‑‑ Charter of Rights ‑‑ Life, liberty and security of person ‑‑ Defendant corporation applying to add Crown as a third party to action brought before the provincial superior court ‑‑ Federal legislation conferring exclusive jurisdiction on Federal Court in relation to all claims against Crown in right of Canada ‑‑ Whether federal legislation contravenes s. 7 of the Canadian Charter of Rights and Freedoms ‑‑ Whether corporation may invoke s. 7 of the Charter ‑‑ Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 17(1), (2) ‑‑ Crown Liability Act, R.S.C. 1970, c. C‑38, s. 7(1).

Constitutional law ‑‑ Charter of Rights ‑‑ Equality before the law ‑‑ Defendant corporation applying to add Crown as a third party to action brought before the provincial superior court ‑‑ Federal legislation conferring exclusive jurisdiction on Federal Court in relation to all claims against Crown in right of Canada ‑‑ Whether federal legislation contravenes s. 15(1) of the Canadian Charter of Rights and Freedoms ‑‑ Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 17(1), (2) ‑‑ Crown Liability Act, R.S.C. 1970, c. C‑38, s. 7(1).

Courts ‑‑ Federal Court ‑‑ Jurisdiction ‑‑ Defendant corporation applying to add Crown as a third party to action brought before the provincial superior court ‑‑ Federal legislation conferring exclusive jurisdiction on Federal Court in relation to all claims against Crown in right of Canada ‑‑ Whether federal legislation contravenes s. 7 or 15(1) of the Canadian Charter of Rights and Freedoms ‑‑ Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 17(1), (2) ‑‑ Crown Liability Act, R.S.C. 1970, c. C‑38, s. 7(1).

Zutphen brought an application in the Nova Scotia Supreme Court to add the Crown as a third party to the action commenced against it by Dywidag. The chambers judge rejected Zutphen's argument that s. 17(1) and (2) of the Federal Court Act and s. 7(1) of the Crown Liability Act, which give the Federal Court exclusive jurisdiction over claims against the Crown, violate ss. 7 and 15 of the Canadian Charter of Rights and Freedoms, and dismissed the application. The Court of Appeal set aside the decision, holding that the impugned legislative provisions infringed s. 15 of the Charter and that this violation could not be justified under s. 1 of the Charter. This appeal is to determine whether s. 17(1) and (2) of the Federal Court Act and s. 7(1) of the Crown Liability Act contravene ss. 7 and 15 of the Charter.

Held: The appeal should be allowed.

Section 7 of the Charter has no application in this case. A corporation cannot be deprived of life, liberty and security of the person and cannot avail itself of the protection offered by s. 7 of the Charter.

With regard to s. 15(1) of the Charter, for the reasons expressed in Rudolph Wolff & Co. v. Canada, the impugned provisions of the legislation do not constitute discrimination.

Cases Cited

Followed: Rudolph Wolff & Co. v. Canada, [1990] 1 S.C.R. 000; Irwin Toy Ltd. v. Quebec (Attorney General), 1989 CanLII 87 (SCC), [1989] 1 S.C.R. 927; referred to: R. v. Big M Drug Mart Ltd., 1985 CanLII 69 (SCC), [1985] 1 S.C.R. 295.

Statutes and Regulations Cited

Canadian Charter of Rights and Freedoms, ss. 1, 7, 15(1).

Crown Liability Act, R.S.C. 1970, c. C‑38, s. 7(1).

Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 17(1), (2).

APPEAL from a judgment of the Supreme Court of Nova Scotia, Appeal Division (1987), 1987 CanLII 5247 (NS CA), 76 N.S.R. (2d) 398, 35 D.L.R. (4th) 433, 29 C.R.R. 6, 17 C.P.C. (2d) 149, reversing a decision of Richard J. (1986), 1986 CanLII 7148 (NS SC), 75 N.S.R. (2d) 187, 186 A.P.R. 187, dismissing an application to add the Crown as a third party. Appeal allowed.

T.B. Smith, Q.C., A.R. Pringle and Joseph de Pencier, for the appellant.

No one appeared for the respondent Dywidag Systems International, Canada Limited.

Elwin MacNeil, Q.C., A. Wayne MacKay and Edmond W. Chiasson, for the respondent Zutphen Brothers Construction Limited.

Robert E. Charney, for the intervener the Attorney General for Ontario.

Jean Bouchard and Madeleine Aubé, for the intervener the Attorney General of Quebec.

Richard Taylor, for the intervener the Attorney General for Alberta.

//Cory J.//

The judgment of the Court was delivered by

Cory J. -- This appeal was heard on the same day as that of Rudolph Wolff & Co. v. Canada, [1990] 1 S.C.R. 000. Like Wolff, it raises the issue of the constitutionality of the legislative provisions that give the Federal Court of Canada exclusive jurisdiction over claims against the Crown. It must be resolved in the same manner as Wolff for the reasons expressed in that case.

Factual Background

In 1983, the Federal Crown contracted with Zutphen Brothers Construction Ltd. for the reconstruction of a dilapidated wharf in Glace Bay, Nova Scotia. Two weeks later, Zutphen entered into a subcontract with Dywidag Systems International, Canada Ltd. for the reconstruction of the wharf in accordance with the plans and specifications contained in the primary contract prepared by the Department of Public Works.

Disputes between the three parties soon arose. In 1985, Dywidag sued Zutphen in the Nova Scotia Supreme Court for losses it had incurred because of errors in the plans and specifications provided by Zutphen. When Zutphen defended itself by claiming that any errors in plans and specifications were caused by the Crown, Dywidag commenced a separate action in the Federal Court of Canada against the Crown. The Crown then notified Zutphen that it would claim against it for any losses it incurred as a result of the Federal Court action.

To avoid a multiplicity of actions, Zutphen brought an application to the Supreme Court of Nova Scotia, Trial Division, to add the Crown as a third party to the action commenced against it by Dywidag. Zutphen argued that s. 17(1) and (2) of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, as amended (now R.S.C., 1985, c. F-7), and s. 7(1) of the Crown Liability Act, R.S.C. 1970, c. C-38, as amended (now R.S.C., 1985, c. C-50, s. 15(1)) violate ss. 7 and 15 of the Canadian Charter of Rights and Freedoms. Richard J., sitting in chambers, dismissed the application. Zutphen appealed to the Supreme Court of Nova Scotia, Appeal Division. The appeal was allowed and leave was granted to add the Crown as a third party.

Jones J.A., writing for the Appeal Division, rejected Zutphen's argument based on s. 7 of the Charter, but held that the impugned legislative provisions infringed s. 15 of the Charter. Citing R. v. Big M Drug Mart Ltd., 1985 CanLII 69 (SCC), [1985] 1 S.C.R. 295, he held that a corporation was entitled to challenge the constitutionality of the Federal Court Act and the Crown Liability Act on the grounds that they contravened s. 15 of the Charter. He held that the impugned provisions of these Acts violated s. 15(1) because they placed the Crown in a preferred position compared to the other parties. Finally, he held that this violation could not be justified under s. 1 of the Charter since the Crown had not proven that exclusive Federal Court jurisdiction was either necessary in this case or that it was related to concerns that were pressing and substantial.

Applicability of s. 7 of the Charter

There can now be no doubt that a corporation cannot avail itself of the protection offered by s. 7 of the Charter. In Irwin Toy Ltd. v. Quebec (Attorney General), 1989 CanLII 87 (SCC), [1989] 1 S.C.R. 927, the majority of this Court held that a corporation cannot be deprived of life, liberty and security of the person and cannot therefore avail itself of the protection offered by s. 7 of the Charter. At page 1004 it was stated:

. . . it appears to us that [s. 7] was intended to confer protection on a singularly human level. A plain, common sense reading of the phrase "Everyone has the right to life, liberty and security of the person" serves to underline the human element involved; only human beings can enjoy these rights. "Everyone" then, must be read in light of the rest of the section and defined to exclude corporations and other artificial entities incapable of enjoying life, liberty or security of the person, and include only human beings.

It is true that there is an exception to this general principle that was established in Big M Drug Mart, supra, where it was held that "[a]ny accused, whether corporate or individual, may defend a criminal charge by arguing that the law under which the charge is brought is constitutionally invalid" (pp. 313-14). Here no penal proceedings are pending and the exception is obviously not applicable.

Section 15 of the Charter

With regard to s. 15(1) of the Charter, for the reasons expressed in Wolff, the impugned provisions of the legislation do not constitute discrimination.

Disposition

I would allow the appeal but in the circumstances without costs. The constitutional questions should be answered as follows:

1. Are s. 17(1) and (2) of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, as amended, and s. 7(1) of the Crown Liability Act, R.S.C. 1970, c. C-38, as amended, consistent with ss. 7 and 15 of the Canadian Charter of Rights and Freedoms in so far as they confer exclusive jurisdiction in the Federal Court in relation to all claims against the Crown?

Answer: Yes.

2. If s. 17(1) and (2) of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, as amended, and s. 7(1) of the Crown Liability Act, R.S.C. 1970, c. C-38, as amended, are not rendered void by virtue of their inconsistency with the Canadian Charter of Rights and Freedoms, are they none the less inoperative in the particular facts of this case in so far as they confer exclusive jurisdiction on the Federal Court in relation to all claims against the Crown?

Answer: This question need not be answered.

3. If s. 17(1) and (2) of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, as amended, and s. 7(1) of the Crown Liability Act, R.S.C. 1970, c. C-38, as amended, or both, are inconsistent either with s. 7 or s. 15 of the Canadian Charter of Rights and Freedoms, are they a reasonable limit within the meaning of s. 1 of the Charter?

Answer: This question need not be answered.

Appeal allowed.

Solicitor for the appellant: John C. Tait, Ottawa.

Solicitors for the respondent Zutphen Brothers Construction Limited: Doucet MacNeil Chiasson, Halifax.

Solicitor for the intervener the Attorney General for Ontario: Robert E. Charney, Toronto.

Solicitor for the intervener the Attorney General of Quebec: The Department of Justice, Québec.

Solicitor for the intervener the Attorney General for Alberta: Richard F. Taylor, Edmonton.