Judgments

Decision Information

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A-744-88
Life Underwriters Association of Canada/L'As- sociation des Assureurs-Vie du Canada (Appel- lant)
v.
Provincial Association of Quebec Life Underwrit- ers/L'Association Provinciale des Assureurs-Vie du Quebec (Respondent)
INDEXED AS: LIFE UNDERWRITERS ASSN. OF CANADA V. PRO VINCIAL ASSN. OF QUEBEC LIFE UNDERWRITERS (CA.)
Court of Appeal, Pratte, Marceau and Desjardins JJ.A.—Ottawa, February 20 and June 15, 1990.
Insurance Trial Judge finding s. 2(c), (d) and (e) of appellant's enabling Act ultra vires as powers conferred within exclusive provincial competence over education and regulation of professions On appeal, s. 2(c) and (d), authorizing appellant to hold examinations on principles and practice of life insurance and to grant certificates, held intra vires Federal legislation not unconstitutional solely because author izes federal company to carry on activities subject to provincial regulation S. 2(e), permitting appellant to confer title "Chartered Life Underwriter", ultra vires as conferring profes sional title within provincial jurisdiction.
Constitutional law Distribution, of powers Federal Act incorporating appellant permitting it to examine and certify members Not outside federal competence solely because gives appellant power to carry out activity to be regulated by provinces Provision enabling appellant to authorize use of title "Chartered Life Underwriter" ultra vires Parliament as within provincial jurisdiction over civil rights or regulation of professions.
Practice Judgments and orders Reversal or variation R. 1212, authorizing Court to amend judgment on appeal based on consent of parties not applicable where constitution ality of legislation at issue Attorney General of Quebec, granted intervenor status by Senior Prothonotary, opposing consent judgment acceptable to parties.
This was an appeal from the trial judgment holding para graphs 2(c), (d) and (e) of the appellant's enabling Act unconsti tutional on the ground that the powers conferred by those paragraphs fall within the exclusive jurisdiction of the prov inces over education and regulation of the professions. Those paragraphs respectively permit the appellant to hold examina tions on the principles and practice of life insurance, to grant certificates of efficiency and to authorize use of the title
"Chartered Life Underwriter" (C.L.U.). Before the appeal was heard, the parties notified the Court that they had arrived at a compromise terminating the action. One of the conditions of that compromise, to which the Attorney General of Quebec, an intervenor, did not agree, was that the Court would render a judgment allowing the appeal in part by replacing the finding of unconstitutionality with a finding that the provisions were constitutional. The issues were whether the Court, under Rule 1212, could amend a judgment on consent of the parties when the constitutionality of legislation is challenged and whether the provisions were unconstitutional.
Held (Marceau J.A. dissenting in part), the appeal should be allowed in part.
Per Pratte J.A.: The constitutionality of legislation does not depend upon the wishes of parties or the compromises they may make. Rule 1212, which allows the Court to amend a judgment which has been appealed based on the consent of the parties, does not apply.
The Trial Judge erred in finding paragraphs 2(c) and (d) unconstitutional. The constitutionality of federal legislation cannot be challenged solely on the ground that that legislation gives a company created by it the power to carry on an activity which is to be regulated by the provinces. However, he correct ly found paragraph 2(e) to be ultra vires. Except for matters that are within its jurisdiction, Parliament does not have the power to legislate to give persons the right to bear or use a title, whether professional or otherwise. The impugned legislation does not authorize the appellant to carry on an activity but to confer the right to use the title "Chartered Life Underwriter of Canada". Parliament cannot give a corporation the power to confer a right which it could not itself confer. Any regulation of this kind is a question of civil rights and within provincial jurisdiction.
Per Marceau J.A. (dissenting in part): Rule 1212 has no application where parties to an appeal seek to vary by common accord a judicial declaration concerning the constitutional validity of a legislative enactment, even if all the Attorneys General taking part agreed. The role of the Attorney General as guardian of the public interest does not supersede the role exclusively assigned to the courts to decide the limits of the legislative powers of either order of government.
Paragraphs 2(c), (d) and (e), which granted the corporation certain specific powers, are intra vires. Parliament is competent to incorporate companies and fix their powers, although the authority to incorporate does not include authority to regulate the exercise of powers granted by incorporation. The argument that the regulation of professions is the exclusive domain of the provinces, was met by noting that the Act does not purport to regulate a profession. The designations conferred by paragraph 2(e) neither impose obligations nor create immunities from provincial laws. Even if seen as creating "civil rights of a novel character", that in itself is not beyond the competence of Parliament. The mere conferring of a title would not, under the Constitution, be reserved exclusively to the legislative power
having authority to regulate the profession. The conferring and holding of a professional title may be part of the regulation of a profession in the limited sense of being directly linked to the exercise of the profession. Otherwise, it is a neutral act uncon- strained by the division of powers. The words "of Canada" in the designation controlled by the appellant were sufficient to distinguish it from the designation referred to in An Act respecting Insurance of Quebec, section 335. It could not be said that the title had been made a matter of provincial regulation by provincial legislation and therefore taken beyond federal competence.
Per Desjardins J.A.: The Attorney General of Quebec's refusal to acquiesce in the consent judgment submitted by the parties prevented the Court from approving that consent, assuming that the parties' and the intervenor's consent can resolve a point of constitutional law, as to which no opinion would be expressed.
Paragraph 2(e) is unconstitutional because it purports to give the appellant the power to confer a professional title. Parlia ment cannot give companies created by it power to confer a professional title as this power is part of the provincial jurisdic tion over regulation of the professions. The addition of the words "of Canada" does not give it constitutional legitimacy.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
An Act respecting Insurance, R.S.Q. 1977, c. A-32, s. 335.
An Act to incorporate The Life Underwriters' Associa tion of Canada, S.C. 1924, c. 104, s. 2.
Code of Civil Procedure, R.S.Q. c. C-25, arts. 95, 98, 99. Companies Act, R.S.Q. 1977, c. C-38.
Constitution Act, 1867, 30 & 31 Viet., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5], ss. 91, 92(11).
Federal Court Rules, C.R.C., c. 663, RR. 5, 1101, 1212. Trade Marks Act, R.S.C. 1970, c. T-10.
CASES JUDICIALLY CONSIDERED
REVERSED:
Life Underwriters Association of Canada v. Provincial Association of Quebec Life Underwriters, [1989] 1 F.C. 570; (1988), 33 C.C.L.I. 62; 19 C.I.P.R. 261; 22 C.P.R. (3d) 1; 20 F.T.R. 274 (T.D.).
CONSIDERED:
Attorney-General for Ontario v. Attorney-General for Canada, [1937] A.C. 405 (P.C.).
REFERRED TO:
Citizens Insurance Company of Canada v. Parsons (1881), 7 App. Cas. 96 (P.C.); John Deere Plow Com pany v. Wharton, [1915] A.C. 330 (P.C.); Great West Saddlery Co. v. The King, [1921] 2 A.C. 91 (P.C.).
AUTHORS CITED
Hogg, Peter W. Constitutional Law of Canada, 2nd ed.
Toronto: The Carswell Company Limited, 1985.
COUNSEL:
Roger T. Hughes, Q.C. and Stephen M. Lane
for appellant.
Hugues G. Richard for respondent.
James M. Mabbutt, Q.C. for Attorney Gener
al of Canada.
Robert Monette for Attorney General of
Quebec.
SOLICITORS:
Sim, Hughes, Dimock, Toronto, for appellant.
Leger, Robic & Richard, Montreal, for respondent.
Deputy Attorney General of Canada for Attorney General of Canada.
Bernard, Roy & Associes, Montreal, for Attorney General of Quebec.
The following is the English version of the reasons for judgment rendered by
PRATTE J.A.: The parties to this appeal are two associations of life insurance agents. The respond ent is a non-profit corporation created in 1962 under Part III of the Quebec Companies Act' and is made up of the insurance agents in that pro vince. The appellant draws its members from all of Canada; it was incorporated in 1924 by a special Act of the federal Parliament [An Act to incorpo rate The Life Underwriters' Association of Canada] 2 which defined its objects and powers in section 2 as follows:
2. The objects and powers of the Association shall be to promote by all lawful means the proper and efficient practice of the business of life insurance within the Dominion of Canada; and for the said purpose,—
(a) To publish, distribute and sell pamphlets, periodicals, journals, books and other literature relating to the busi ness of life insurance;
R.S.Q. 1977, c. C-38. 2 S.C. 1924, c. 104.
(b) To devote the funds of the Association to promoting the welfare of its members in such manner as the Associa tion may decide;
(c) To hold such examinations on the principles and prac tice of life insurance or general educational attainments, as may be found expedient;
(d) To grant certificates of efficiency to its members;
(e) To authorize the use by such of its members as it may designate of the title and description "Chartered Life Underwriter of Canada."
Since its creation the appellant has organized training courses for its members to improve their knowledge in the field of life insurance. To those it regards as sufficiently competent it issues the titles of "Chartered Life Underwriter" (abbreviated "C.L.U.") and "Assureur-vie agree" (abbreviated "A.V.A."). It has even registered the initials C.L.U. (registration No. 335 823) and A.V.A. (registration No. 335 977) as certification marks pursuant to the Trade Marks Act [R.S.C. 1970, c. T-10] .
On January 5, 1988 the appellant sued the respondent, alleging that the latter was about to organize training courses for its members and wished to confer on those who successfully com pleted the courses the right to use the titles "Chartered Life Underwriter" and "Assureur-vie agree" and their abbreviations C.L.U. and A.V.A. In the appellant's submission, these actions were a source of confusion and infringed its rights. It accordingly applied for an injunction and other suitable relief.
In its defence the respondent argued that the appellant had no right to the titles and designa tions in question, and by a counterclaim asked the Court to order that the trade marks registered by the appellant be struck out and also to find that the appellant's enabling Act was unconstitutional and ultra vires the Parliament of Canada.
The Attorney General of Quebec was informed of the constitutional problem raised by the respondent and obtained leave from the Trial Divi sion to intervene in the case.
Finally, the Trial Division dismissed the appel lant's action [[1989] 1 F.C. 570] with costs and, ruling on the respondent's counterclaim, ordered that the appellant's trade marks be struck out and found paragraphs 2(c), (d), and (e) of the appel-
lant's enabling Act to be unconstitutional on the ground that the powers conferred by those para graphs fall within the exclusive jurisdiction of the provinces over education and regulation of the professions.
The appellant appealed from this decision; the respondent appealed the part of the decision that dismissed its argument that all of the appellant's enabling Act should be invalidated.
The appeal was about to be heard when the appellant and the respondent notified the Registry that they had arrived at a compromise terminating the action. One of the conditions of that compro mise to which the Attorney General of Quebec did not agree, was that the Court would render a judgment allowing the appellant's appeal in part by replacing the finding that paragraphs 2(c), (d) and (e) of the appellant's enabling Act was uncon stitutional by a finding that that provision was constitutional; the trial judgment would be affirmed in all other respects.
The parties were told that the appeal would still be heard on the day appointed, because it was not clear that in these circumstances the Court would agree to substitute a finding of constitutionality for the finding of unconstitutionality made by the Trial Judge.
At the hearing counsel for the appellant first contented that the Court could rely simply on the consent by the appellant and the respondent in making the judgment to which they had agreed. He then sought to show that, contrary to what the Trial Judge held, paragraphs 2(c), (d) and (e) of the appellant's enabling Act were validly enacted. Counsel for the Attorney General of Canada, who had taken advantage of Rule 1101 of the Federal Court Rules, also supported this latter point of view which counsel for the Attorney General of Quebec was the only one to contest. Counsel for the respondent took no part in the argument, simply stating that he did not intend to proceed with his cross-appeal.
The appellant's argument that, in view of the compromise reached between it and the respond ent, the Court must necessarily render the judg ment on which they were agreed I think must be
dismissed. It is true that Rule 1212 of the Federal Court Rules 3 authorizes the Court to amend a judgment which has been appealed based simply on the consent of the parties. However, I do not think that the Court can use this rule as a basis for making a finding regarding the constitutionality of a statute. The constitutionality of legislation, whether public or private, does not depend on the wishes of parties and compromises they may make.
The Court must accordingly consider the consti tutionality of paragraphs 2(c), (d) and (e), which the Trial Judge found to be invalid. The text of this provision, I repeat, is as follows:
2. The objects and powers of the Association shall be to promote by all lawful means the proper and efficient practice of the business of life insurance within the Dominion of Canada; and for the said prupose,—
(c) . .
to hold such examinations on the principles and practice of life insurance or general educational attainments as may be found expedient;
(d) to grant certificates of efficiency to its members;
(e) to authorize the use by such of its members as it may designate of the title and description "Chartered Life Underwriter of Canada".
It is now well established that while, under subsection 92(11) of the Constitution Act, 1867 [30 & 30 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Consti tution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5]], the provinces have the exclusive power to create "companies with provincial objects", the federal Parliament may nevertheless create com panies that carry on their activities in more than one province (and which because of that are not created for "provincial objects"), even though those activities are such that regulation of them is
3 Rule 1212. A respondent may consent to the reversal or variation of the judgment appealed against by giving to the appellant a notice stating that he consents to the reversal or variation of the judgment in the manner therein indicated, and thereupon the Court shall, upon the application of the appel lant, pronounce judgment in accordance with the notice as a matter of course if the resultant judgment is one that would have been given on consent.
exclusively a matter for the provinces. 4 It therefore follows that the constitutionality of legislation adopted by the federal Parliament cannot be chal lenged solely on the ground that that legislation gives a company created by it the power to carry on an activity which is to be regulated by the provinces.
It seems clear from reading section 2 of the appellant's enabling Act in light of these rules that the Trial Judge was wrong to find that paragraphs 2(c) and (d) were unconstitutional. The only objec tion that can be made to these two paragraphs is that they authorize the apppellant to carry on activities the regulation of which is exclusively a matter for the provinces. As I have just said, that is not a ground of unconstitutionality.
However, the same is not true for paragraph 2(e), which gives the appellant the power
(e) To authorize the use by such of its members as it may designate of the title and description "Chartered Life Underwriter of Canada."
This provision does not authorize the appellant to carry on an activity; it gives it the power to confer on certain of its members the right to use the title "Chartered Life Underwriter of Canada". I think it is clear that Parliament cannot give a company the power to confer on its members a right which it could not confer on them itself. Except in mat ters that are within its jurisdiction,' Parliament does not have the power to legislate to give persons the right to bear or use a title, whether profession al or otherwise. Any regulation of this matter is within the field of civil rights; it is, because of that, within the exclusive jurisdiction of the provinces. The federal Parliament therefore cannot confer on the appellant the power to give its members the
4 See as to this Citizens Insurance Company of Canada v. Parsons (1881), 7 App. Cas. 96 (P.C.) at p. 116; John Deere Plow Company v. Wharton, [1915] A.C. 330 (P.C.), at p. 340; Great West Saddlery Co. v. The King, [1921] 2 A.C. 91 (P.C.) at p. 115.
See also Hogg, Constitutional Law of Canada, 2nd ed., at pp. 511 et seq.
5 For example, it can certainly give the companies it creates names and may legislate in this regard.
right to use the title of Chartered Life Underwriter because it could not itself give them that right.
The Trial Judge was therefore right in finding that paragraph 2(e) was unconstitutional, and it thus seems impossible to give effect to the compro mise reached between the parties in full. I would accordingly allow the respondent's appeal in part only and would vary the judgment of the Trial Division by replacing paragraphs 3 and 4 with the following paragraph:
The Court finds that s. 2(e) of the Act to incorporate The Life Underwriters' Association of Canada (14-15 George V, c. 104) is unconstitutional and ultra vires the Parliament of Canada.
I would further order the appellant to pay all the respondent's costs, both at trial and on appeal, and in accordance with the agreement by the parties I would set the amount of these costs at $75,000.
* * *
The following are the reasons for judgment rendered in English by
MARCEAU J.A. (dissenting in part): I readily agree with my colleague, Mr. Justice Pratte, on the preliminary issue of the declaration by consent, but unfortunately I am unable to accept his point of view on the substantive question of constitution ality.
1. My position on the preliminary issue is straightforward and can be quickly put. There is no doubt of the principle, in our adversary system of justice, that the litigants themselves are in a large measure masters of the course of action they pursue, and in matters where common ground can be achieved between them, the courts stand ready to give effect to their consent. However, this prin ciple, in my view, does not go so far as allowing the parties to an appeal to vary or reverse, by common accord, a judicial declaration concerning the con stitutional validity of a legislative enactment, any more than such a declaration could issue at first instance, were it supported by no more than the
consent of the litigants. Rule 1212 of the Rules of the Court has no application. 6
I add that I would hold the same view even if the order proposed by the parties, disposing of the constitutional issue, had the blessing of all the Attorneys General who had chosen to take part in the dispute. Although an Attorney General enjoys a special status as guardian of the public interest, that status does obviously not supersede the role exclusively assigned to courts to decide, in binding terms, what are the limits of the legislative powers of either order of government.
2. The constitutional issue is more complex, but I think I can explain my dissent from the position adopted by my colleague without extensive de velopments, since our views in fact concur to a fairly good extent.
The federal competence to incorporate compa nies and fix their powers has long been established and I know of no leading authorities supporting a restriction to that competence based on the objects of the company being incorporated. It is clear, however, that such an authority to incorporate does not include authority to regulate the exercise of powers granted by incorporation. Bearing in mind these two basic propositions, I fail to see how any of the provisions contained in paragraphs (c), (d) or (e) of section 2 of this Act incorporating The Life Underwriters Association of Canada, S.C. 1924, c. 104, 7 which provisions granted the corpo ration certain specific powers, could be said to have been ultra vires Parliament.
6 I reproduce the rule for convenience:
Rule 1212. A respondent may consent to the reversal or variation of the judgment appealed against by giving to the appellant a notice stating that he consents to the reversal or variation of the judgment in the manner therein indicated, and thereupon the Court shall, upon the application of the appellant, pronounce judgment in accordance with the notice as a matter of course if the resultant judgment is one that would have been given on consent.
For convenience, I reproduce again section 2 of this Act:
2. The objects and powers of the Association shall be to promote by all lawful means the proper and efficient practice of the business of life insurance within the Dominion of Canada; and for the said purpose,—
(Continued on next page)
It is argued against the validity of paragraph 2(e) that the regulation of professions is the exclu sive domain of the provinces. But the Act does not purport to regulate a profession. The designations conferred through paragraph 2(e) impose no obli gations nor do they create any immunities from provincial laws. If anything, they might be seen as creating "civil rights of a novel character", the right to a title, comparable to the rights created by a national trade mark established by an Act of Parliament to be applied to a commodity so as to attest the conformity of that commodity to a cer tain standard defined by the Act. But the Judicial Committee of the Privy Council in Attorney- General for Ontario v. Attorney-General for Canada, [1937] A.C. 405, has determined that that is not in itself beyond the competence of Parliament.
I do not see why the mere conferring of a title would, under the Constitution, be reserved exclu sively to the legislative power having authority to regulate the profession to which the title could be somehow related. To be called professional, it seems to me, a title, like a certificate, must be directly linked to the exercise of the profession; it must have consequences as to the right and ability of its holder to practice the profession. The confer ring and holding of a professional title in that sense may, of course, be part of the regulation of the profession, but otherwise the conferring and holding of a title is a neutral act, it seems to me, unconstrained by the division of powers. Any goodwill or economic influence generated by such conferral would accrue solely through the efforts of the Association and its members and would, in no way, be attributed to the state of the legislation.
(Continued from previous page)
(a) To publish, distribute and sell pamphlets, periodicals, journals, books and other literature relating to the business of life insurance;
(b) To devote the funds of the Association to promoting the welfare of its members in such manner as the Association may decide;
(c) To hold such examinations on the principles and practice of life insurance or general educational attainments, as may be found expedient;
(d) To grant certificates of efficiency to its members;
(e) To authorize the use by such of its members as it may designate of the title and description "Chartered Life Underwriter of Canada."
But could it not be said that a title may be made a matter of professional regulation by provincial legislation, and thereby taken beyond the control and even reach of any federal institution? It would not be correct, I think, to say that this is what happened here, the words "of Canada" in the designation controlled by the national association being sufficient to distinguish it from the designa tion referred to in section 335 of An Act respecting Insurance of Quebec.' But, in any event, even if it could be possible to attach to the provincial legisla tion the effect of prohibiting within the province the use of the title while practising the profession, the corporate integrity of the federal institution with all its powers, and the constitutional validity of its incorporating statute, would remain intact.
In my view, the declaration in the judgment of first instance that paragraphs 2(c), (d) and (e) of An Act to incorporate The Life Underwriters' Association of Canada are ultra vires Parliament is ill-founded and ought to be quashed.
* * *
The following is the English version of the reasons for judgment rendered by
DESJARDINS J.A.: The Senior Prothonotary granted the Attorney General of Quebec the right to intervene before the Trial Judge and make subsmissions regarding constitutionality at the hearing of the above case, pursuant to section 5 of the Federal Court Rules and articles 95, 98 and 99 of the Quebec Code of Civil Procedure: the intervention procedure, determined by analogy
8 Section 335 of An Act respecting Insurance, R.S.Q. 1977, c. A-32, reads thus:
335. Whoever has the right to the title of insurance agent may also, where such is the case, have the right to the following titles:
(a) life insurer;
(b) chartered life insurer (C.L.U.) or "assureur-vie agree" (A.V.A.), with the approval of the Provincial Life Insurers Association of Quebec and in accordance with the rules of that Association;
(c) life insurance broker, if he represents more than one life insurance company;
(d) insurance broker, if he represents more than one damage insurance company;
(e) any title to which he is authorized under the insurance Brokers Act (chapter C-74).
with Rule 1010 of the Federal Court Rules, was that the intervener should limit himself "solely to legal arguments at the close of the hearing, subject to his rights in connection with facts that may be disclosed and that may concern the Attorney Gen eral or the Minister".
Though this does not make the Attorney Gener al of Quebec's status equivalent to that of a party, he remains guardian of the public interest. His refusal to acquiesce in the consent judgment sub mitted by the parties, because of the constitutional position taken by them, prevents this Court from approving that consent—assuming that the parties' and the intervenor's consent can resolve a point of constitutional law, as to which I express no opin ion. On this first point, I agree with my colleagues.
On the second point, I concur in the result with Pratte J.A. Paragraph 2(e) of the Act to incorpo rate The Life Underwriters' Association of Canada 9 gives the appellant the right to authorize "the use by such of its members .. . of the title and description Chartered Life Underwriter of Cana- da" ("a porter le titre et a avoir la qualite d'as- sureur licencie en assurance-vie du Canada"). The appellant in fact awards the titles "assureur- vie agree" (A.V.A.) and "Chartered Life Under
9 S.C. 1924, c. 104. The complete section 2 reads as follows:
2. The objects and powers of the Association shall be to promote by all lawful means the proper and efficient practice of the business of life insurance within the Dominion of Canada; and for the said purpose,—
(a) To publish, distribute and sell pamphlets, periodicals, journals, books and other literature relating to the busi ness of life insurance;
(b) To devote the funds of the Association to promoting the welfare of its members in such manner as the Asssocia- tion may decide;
(c) To hold such examinations on the principles and practice of life insurance or general educational attainments, as may be found expedient;
(d) To grant certificates of efficiency to its members;
(e) To authorize the use by such of its members as it may designate of the title and description "Chartered Life Underwriter of Canada."
writer" (C.L.U.).'° The title is thus a professional one which complements the certificate of compe tence. The addition of the words "of Canada" ("au Canada") does not alter the classification of this legislation in any way and cannot give it constitutional legitimacy.
Federal jurisdiction over the powers Parliament can confer on the companies created by it stops where the field of provincial jurisdiction begins. The Canadian Parliament may incorporate compa nies having purposes other than "provincial" ones," but it cannot give them the power to confer a professional title, as this power is part of the provincial jurisdiction over regulation of the professions.
I would dispose of the appeal in the manner suggested by Pratte J.A.
1 ° Appeal case, p. 2217. See also p. 2249.
II Constitution Act, 1867, R.S.C., 1985, Appendix II, No. 5, subsection 92(11) and section 91, preamble.
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