The central legal point established in the judgment is the importance of constitutional considerations in interpreting legal provisions related to water rights and power generation, and the requirement for a full consideration of claims involving constitutional issues.

Viscount Finlay :-

The question in this case is whether the writ of summons in the action was properly set aside. The action is one which raises questions as to the right to use the water of the Niagara River for the purpose of generating electricity.

By a treaty made in 1909 between His Majesty and the United States, which was confirmed by the Dominion of Canada Act of 1 and 2 Geo. 5, c. 23, an arrangement was made to limit the diversion of water from the Niagara River, and it was agreed that the United States might divert on their side water above the falls for power purposes not exceeding in the aggregate a daily diversion at the rate of 20,000 cubic feet of water per second, and that the United Kingdom (by the Dominion of Canada and the Province of Ontario) might do this on the other side to an amount not exceeding a daily diversion at the rate of 36,000 cubic feet of water per second.

In 1887 a body called the Commissioners of the Queen Victoria Niagara Falls Park was incorporated by the Ontario Statute 50 Vict. c. 13. The Park extended someway above and below the falls on the Canadian side, and it is under the charge of these Commissioners on behalf of the Ontario Government. In 1899 there was passed a Provincial Act (62 Vict. c.11), which by Section 36 empowered the Commissioners to enter into agreements with any persons or companies enabling them to take water from the river for the generation of electricity, and under the powers of this statute the Commissioners by an agreement, dated 29th January, 1903, empowered a syndicate to take water from the river sufficient to develop 1,25,000 electrical horse-power for a term of fifty years from 1st February, 1903. By Clause 16 of this agreement the Commissioners agreed that they would not themselves engage in making use of the water to generate power. The Syndicate, on 21st March, 1903, assigned the benefit of this agreement to the present appellants, the Electrical Development Company, the plaintiffs in the action, and the agreement and assignment were confirmed in 1905 by the Ontario Statute 5 Edw. 7, c. 12. The appellants erected works for the supply of electricity, and have supplied power in Ontario and also under a license from the Dominion Government for the export of electricity, which licence was granted under the Dominion Statute 6 and 7 Edw. 7, c. 16.

The Hydro-Electric Power Commission (the second defendent in this action) was established in 1907 by an Ontario Statute (6 and 7 Edw, 7 c. 19), which is now embodied in the Revised Statutes of Ontario, 1914. This Commission is a Government Department, and Section 23 of the original statute (now Section 16) provides as follows :-

"Without the consent of the Attorney-General no action shall be brought against the Commission or against any member thereof for anything done or omitted in the exercise of his office."

"It is on this section that the Hydro-Electric Power Commission relied on their application to have the writ of summons set aside, no consent to the bringing of the action having heen obtained by the appellants from the Attorney-General.

In 1916 there were passed by the Legislature of Ontario two statutes (6 Geo. 5, c. 20 and c. 21). The former of these statutes recited that it was desirable to utilise to the fullest extent the amount of water which might by the treaty of 1909 be diverted from the Niagara River, that the Hydro-Electric Power Commission had reported upon a scheme for its development, and that it was desirable that in the meantime the Commission should procure on the best terms available the additional power wanted. The statute then proceeded to provide that the Government might authorize the Commission to construct and operate works for the diversion of the water and production of electric power. Section 7 is as follows :-

"The exercise of the powers which may be conferred by or under the authority of this Act, or of any of them, shall not be deemed to be a making of use of the waters of the Niagara Ri