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1921 Supreme(SC) 82
Privy Council
Carson, Phillimore , Viscount Cave, Buckmaster, Justice Viscount Haldane, JJ.
In re The Board of Commerce Act, 1919 AND The Combines and Fair Prices Act, 1919. -Appellant
Versus
. -Resopndent
On appeal from the Supreme Court of Canada
Decided On : 11-11-1921
Charles Russell and Co., Alberta, Ontario , Geoffrey Lawrence, M. Alexander, Lanctot , John Simon, T. Mathew, Leese, Freshfields , Ontario, Blake and Redden, Newcombe
Federal parliament cannot legislate on matters exclusively within provincial jurisdiction, such as property and civil rights, under the guise of trade regulation or criminal law, unless exceptional circumstances (like war or famine) render the matter of paramount national importance.
Headnote:(A) British North America Act, 1867 - Sections 91, 92 and 101 - Board of Commerce Act, 1919 - Combines and Fair Prices Act, 1919 - Legislative capacity of the federal parliament - Regulation of trade and commerce - Property and civil rights in the provinces - Power to prohibit accumulation of necessaries of life and regulate profits - Federal parliament cannot use the "criminal law" or "regulation of trade and commerce" powers to encroach upon the exclusive jurisdiction of provincial legislatures over property and civil rights unless a state of emergency, such as war or famine, exists.
(B) Peace, Order, and Good Government - Scope - Federal intervention in provincial matters is only permissible under necessity in highly exceptional circumstances that imperil the peace, order, and good government of the country.
(C) Criminal Law - Use of criminal sanctions as a means to regulate subjects exclusively committed to provincial legislatures is impermissible.
(D) Establishment of Courts - Power to establish additional courts for the better administration of laws cannot be used to trench on provincial rights.
Facts of the case:
Federal statutes were enacted to establish a board to investigate and restrict trade combinations and the withholding of necessaries of life, including food, clothing, and fuel. The board issued an order prohibiting retail clothing dealers in a city from charging profits exceeding a prescribed percentage. The constitutional validity of the statutes and the board's authority to issue such orders were challenged on the basis of the division of legislative powers.
Findings of Court:
The legislation establishing the board with powers to regulate profits and prohibit the accumulation of necessaries of life is ultra vires the federal parliament.
Issues: Whether the federal parliament had the legislative capacity to enact statutes establishing a board with authority to regulate profits and restrict the accumulation of necessaries of life, and consequently, whether the board had lawful authority to make the order in question.
Ratio Decidendi: The regulation of property and civil rights is exclusively within provincial jurisdiction. The federal power to regulate trade and commerce or the criminal law does not permit interference with particular trades or provincial rights unless there are highly exceptional circumstances, such as war or famine, that make the matter of paramount national importance. In the absence of such necessity, federal legislation encroaching on provincial jurisdiction is invalid.
Result: The first question was answered in the negative, and the second question did not arise.
Legal Category Hierarchy
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constitutional law
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division of powers
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dominion powers
- trade and commerce
- criminal law
- peace, order, and good government
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provincial powers
- property and civil rights
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dominion powers
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judicial power
- establishment of courts
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division of powers
Viscount Haldane:-
This is an appeal from the Supreme Court of Canada, before which were brought, under statute, questions relating to the constitutional validity of the Acts above mentioned. As the six judges who sat in the Supreme Court were equally divided in opinion, no judgment was rendered. The Chief Justice and Anglin and Mignault, JJ., considered that the questions raised should be answered in the affirmative, while Idington, J., Duff and Brodeur, JJ., thought that the first question should be answered in the negative and that therefore the second question did not arise. These questions were raised for the opinion of the Supreme Court by a case stated under Section 32 of the Board of Commerce Act, 1919, and were (1) whether the Board had lawful authority to make a certain order; and (2) whether the Board had lawful authority to require the Registrar, or other proper authority of the Supreme Court of Ontario, to cause the order, when issued, to be made a rule of that Court.
The order in question was to the effect that certain retail dealers in clothing in the City of Ottawa were prohibited from charging as profits on sales more than a certain percentage on cost, which was prescribed as being fair profit. The validity of this order depended on whether the Parliament of Canada had legislative capacity, under the BRITISH NORTH AMERICA ACT of 1867, to establish the Board and give it authority to make the order.
The statutes in question were enacted by the Parliament of Canada in 1919, and were to be read and construed as one Act. By the first of these statutes, the Board of Commerce Act, a Board was set up, consisting of three commissioners appointed by the Governor-General, which was to be a Court of Record. The duty of the Board was to be to administer the second of the two statutes in question, the Combines and Fair Prices Act, called the Special Act. It was to have power to state a case for the opinion of the Supreme Court of Canada upon any question which, in its own opinion, was one of law or jurisdiction. It was given the right to inquire into and determine the matters of law and fact entrusted to it, and to order the doing of any act, matter, or thing required or authorized under either Act, and to forbid the doing or continuing of any Act, matter, or thing which, in its opinion, was contrary to either Act. The Board was also given authority to make orders and regulations with regard to these, and generally for carrying the Board of Commerce Act into effect. Its finding on any question of fact within its jurisdiction was to be binding and conclusive. Any of its decisions or orders might be made a rule or decree of the Exchequer Court, or of any Superior Court of any Province of Canada.
The second statute, the Combines and Fair Prices Act, 1919, was directed to the investigation and restriction of combines, monopolies, trusts and mergers, and to the withholding and enhancement of the prices of commodities.
By Part I the Board of Commerce was empowered to prohibit the formation or operation of combines as defined, and after investigation, was to be able to issue orders to that effect. A person so ordered to cease any act or practice in pursuance of the operations of a combine, was, in the event of failure to obey the order, to be guilty of an indictable offence, and the Board might remit to the Attorney-General of a Province the duty of instituting the appropriate proceedings. By part II the necessaries of life were to include staple and ordinary articles of food, whether fresh, preserved, or otherwise treated, and clothing and fuel, including the materials from which these were manufactured or made, and such other articles as the Board might prescribe. No person was to accumulate or withhold from sale any necessary of life, beyond an amount reasonably required for the use or consumption of his household, or for the ordinary purposes of his business. Every person who held more, and every person who held a stock-in-trade
