T-1064-90
Donald P. Gracey and Coldham-Gracey Manage
ment and Communications Inc. (Plaintiffs)
v.
Canadian Broadcasting Corporation, an Agent of
Her Majesty The Queen, Patricia Best, Donna
Tranquada and Ken Wolff (Defendants)
INDEXED AS: GRACEY V. CANADIAN BROADCASTING CORP.
(T.D.)
Trial Division, Rouleau J.—Toronto, October 24;
Ottawa, December 19, 1990.
Federal Court jurisdiction — Trial Division — Libel and
slander action against CBC, employees — Requirements for
Federal Court jurisdiction set by Supreme Court in ITO case
not met — That claim against CBC insufficient to confer
jurisdiction on Federal Court, unless remedy contemplated by
Broadcasting Act or Crown Liability Act — Proper definition
of "existing and applicable federal law" at issue — Action not
founded on federal law, therefore cannot be tried in Federal
Court — Libel and slander common law tort not within
Parliament's legislative competence, accordingly within pro
vincial superior court jurisdiction.
Crown — Torts — Libel and slander — Action against
CBC, employees for allegedly malicious, defamatory state
ments broadcast — Motion by defendants seeking order strik
ing statement of claim under R. 419(1)(a) — Broadcasting Act
not specifically contemplating Federal Court jurisdiction over
libel and slander suit — Since libel and slander not within
Parliament's legislative competence, Court lacking jurisdiction
herein.
Broadcasting — Libel and slander action against CBC,
employees for allegedly malicious, defamatory statements
broadcast — Broadcasting Act not contemplating Federal
Court jurisdiction over such cases — Libel and slander outside
legislative competence of Parliament — Matter for provincial
superior Courts.
Both motions relate to a libel and slander action brought by
the plaintiffs against the Canadian Broadcasting Corporation
and certain of its employees who made allegedly malicious,
false and defamatory statements, on CBC's "The Morning
Show", concerning RCMP searches of plaintiffs' offices. The
plaintiffs say that the statements contained inferences and
innuendos with respect to certain business activities conducted
by them. Defendants' motion seeks an order striking out the
statement of claim on the grounds that it discloses no reason
able cause of action and that the Court lacks jurisdiction. The
plaintiffs' motion sought an order adding the Crown as a party
defendant. The main issue is whether the Court has jurisdiction
to entertain this action. The plaintiffs argued that the federal
Broadcasting Act, which establishes the Canadian Broadcast
ing Corporation, is sufficient federal law upon which to base a
libel and slander suit in this Court and that without it, there
could be no libel and slander because the CBC derives its
mandate from that federal legislation.
Held, defendants' motion to strike for want of jurisdiction
should be granted; plaintiffs' motion should be denied.
Jurisdiction in respect of proceedings by or against the
Federal Crown is largely governed by the Federal Court Act,
section 17 which provides that the Federal Court has jurisdic
tion in all cases where relief is claimed against the Crown and
that, subject to certain exceptions, this jurisdiction is exclusive,
and section 23 which contemplates jurisdiction in the Federal
Court in certain proceedings between citizens subject to a
number of pre-conditions. Section 101 of the Constitution Act,
1867 enables the Federal Parliament to establish courts "for
the better Administration of the Laws of Canada". The extent
of Federal Court jurisdiction was determined by the Supreme
Court case, ITO—International Terminal Operators Ltd. v.
Miida Electronics Inc. which established three requirements
for jurisdiction to exist.
(1) There must be a statutory grant of jurisdiction by the
federal Parliament. The Federal Court is not a court of general
jurisdiction in all federal matters: its jurisdiction must be
founded in the specific language used by Parliament in the
conferring legislation. Subsections 17(1) to (3) of the Federal
Court Act apply to cases where relief is sought against the
Crown. The fact that the plaintiffs' claim is brought against the
CBC, a national broadcasting institution and a federal Crown
corporation, is not sufficient to confer jurisdiction on this Court
unless the remedy sought is contemplated by the Broadcasting
Act or the Crown Liability Act. There is nothing in the
Broadcasting Act which specifically contemplates Federal
Court jurisdiction over a libel and slander suit. Although
subsection 15(2) of the Crown Liability Act was capable of an
interpretation which would confer jurisdiction on the Federal
Court to try this matter, that issue did not have to be decided in
the case at bar. For even if it conferred a general assignment of
jurisdiction, the second of the ITO requirements still had to be
satisfied.
(2) There must be an existing body of federal law which is
essential to the disposition of the case and which nourishes the
statutory grant of jurisdiction. In Quebec North Shore Paper
Co. et al. v. Canadian Pacific Ltd. et al. and McNamara
Construction (Western) Ltd et al. v. The Queen, the Supreme
Court held that there must be existing and applicable federal
law upon which the jurisdiction of the Federal Court can be
exercised. The distinction between claims considered to be
founded on federal law and those which are not lies in the
source of the right alleged to be infringed. The plaintiffs'action
against the Canadian Broadcasting Corporation and the other
defendants named cannot be tried in this Court because such a
suit is not founded on federal law.
(3) The law on which the case is based must be "a law of
Canada" as the phrase is used in section 101 of the Constitu
tion Act, 1867. Libel and slander is a common law tort over
which Parliament has no legislative competence and according
ly the matter falls under provincial superior court jurisdiction.
Since the Court lacks jurisdiction to entertain these proceed
ings, the defendants' motion to strike out the statement of claim
under Rule 419 could not be granted. In any event, defendants
had not established that it was plain and obvious that no cause
of action exists. Plaintiffs' motion to add the Crown as a party
defendant had to be denied since it is a pre-condition to the
adding of parties that the Federal Court have jurisdiction over
the action as between the party to be joined and the opposite
party.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Broadcasting Act, R.S.C., 1985, c. B-9, s. 31(4).
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as
am. by Canada Act 1982, 1982 (U.K.), Schedule to the
Constitution Act, 1982, Item 1), [R.S.C., 1985, Appen
dix II, No. 5] s. 101.
Crown Liability Act, R.S.C., 1985, c. C-50, ss. 2, 3,
15(1),(2), 21(2), 36(1).
Federal Court Act, R.S.C., 1985, c. F-7, ss. 17, 23.
Federal Court Rules, C.R.C., c. 663, RR. 419(1)(a),
1716.
Libel and Slander Act, R.S.O., c. 237.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Quebec North Shore Paper Co. et al. v. Canadian Pacific
Ltd. et al., [1977] 2 S.C.R. 1054; (1976), 9 N.R. 471;
McNamara Construction (Western) Ltd. et al. v. The
Queen, [1977] 2 S.C.R. 654; (1977), 75 D.L.R. (3d)
273; 13 N.R.181; ITO—International Terminal Opera
tors Ltd. v. Miida Electronics Inc. et al., [1986] 1 S.C.R.
752; (1986), 28 D.L.R. (4th) 641; 34 B.L.R. 251; 68
N.R. 241; Rasmussen v. Breau, [1986] 2 F.C. 500;
(1986), 30 D.L.R. (4th) 399; 68 N.R. 379 (C.A.).
APPLIED:
Bassett v. Canadian Broadcasting Corp. (1980), 30 O.R.
(2d) 140; 116 D.L.R. (3d) 332; 17 C.P.C. 254 (H.C.);
Airport Taxicab (Malton) Association v. Canada (Minis-
ter of Transport) et al. (1986), 7 F.T.R. 105 (F.C.T.D.);
Forde et al. v. Waste Not Wanted Inc. et al. (1984),
D.R.S. 55-027 (F.C.T.D.); Pacific Western Airlines Ltd.
v. R., [1980] 1 F.C. 86; (1979), 105 D.L.R. (3d) 60; 14
C.P.C. 165 (C.A.); Stephens v. R. (1982), 26 C.P.C. 1;
[ 1982] CTC 138; 82 DTC 6132; 40 N.R. 620 (F.C.A.).
NOT FOLLOWED:
Brière v. Canada Mortgage and Housing Corporation,
[1986] 2 F.C. 484; (1986), 30 D.L.R. (4th) 375; 68 N.R.
385; 42 R.P.R. 66 (C.A.).
CONSIDERED:
Oag v. Canada, [1987] 2 F.C. 511; (1987), 33 C.C.C.
(3d) 430; 73 N.R. 149 (C.A.).
REFERRED TO:
Dene Nation v. The Queen, [1983] 1 F.C. 146 (T.D.);
Waterside Cargo Co-operative v. National Harbours
Board (1979), 107 D.L.R. (3d) 576 (F.C.T.D.).
COUNSEL:
Darlene Madott for plaintiffs.
John Vaissi-Nagy for defendants.
SOLICITORS:
Teplitsky & Colson, Toronto, for plaintiffs.
Deputy Attorney General of Canada for
defendants.
The following are the reasons for order ren
dered in English by
ROULEAU J.: This motion on behalf of the
defendants seeks an order striking out the plain
tiffs' statement of claim pursuant to Rule
419(1)(a) of the Federal Court Rules [C.R.C., c.
663]; it is submitted that the statement of claim
discloses no reasonable cause of action and also
that this Court lacks jurisdiction to entertain the
proceedings. The plaintiffs also brought a motion
seeking an order permitting Her Majesty in Right
of Canada to be added as a party defendant to the
statement of claim.
These motions relate to a libel and slander suit
brought by the plaintiffs against the Canadian
Broadcasting Corporation and certain of its
employees. It relates to statements made on CBC's
"The Morning Show" concerning a series of
RCMP searches conducted at the offices of the
plaintiffs and those of their accounting firm. It is
alleged that these statements were malicious, false
and defamatory and contained inferences and
innuendos with respect to certain business activi
ties conducted by the plaintiffs.
In light of the lengthy jurisdictional argument
the application should have been more properly
brought pursuant to Rules 401 or 409 of the
Federal Court Rules. This raises the more difficult
issue: does the Court have jurisdiction with respect
to the libel and slander action brought by the
plaintiffs against the defendants. Very simply, the
question is whether jurisdiction has been conferred
on this Court to entertain such an action. I have
decided to canvass the issue rather than submit the
parties to a further debate.
Jurisdiction in respect of proceedings by or
against the Federal Crown is a matter largely
governed by the Federal Court Act [R.S.C., 1985,
c. F-7]. Section 17 provides, inter alia, that the
Federal Court has jurisdiction in all cases where
relief is claimed against the Crown and that, sub
ject to certain exceptions, this jurisdiction is exclu
sive. It further provides that in proceedings of a
civil nature in which the Crown claims relief as
therein defined, the Federal Court has concurrent
jurisdiction with the superior courts of the prov
inces. Thus the Crown can, subject to important
pre-conditions, sue in the Federal Court or the
superior courts of the provinces. Section 23 of the
Act, in simple terms, contemplates jurisdiction in
the Federal Court in certain proceedings between
citizens subject to a number of pre-conditions.
This basic outline of the essentials of jurisdiction
must be considered within the framework of a
large body of jurisprudence developed since the
establishment of the Federal Court and which has
unfortunately, resulted in a great deal of confu
sion. Problems of jurisdictional restrictions are
most often rooted in considerations of constitution
al law.
The power of the federal Parliament to establish
federal courts is limited by the terms of section
101 of The British North America Act [Constitu-
tion Act, 1867, 30 & 31 Vict., 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]]. That section author
izes courts "for the better Administration of the
Laws of Canada" but it does not authorize the
establishment of courts of general jurisdiction akin
to the provincial courts. Therefore, the Federal
Court can only be given jurisdiction over disputes
governed by the "Laws of Canada". It is well
settled that this phrase does not mean all laws in
force in Canada whatever their source, but means
federal laws, the clearest example being a federal
statute including regulations and orders made
thereunder.
At one time there was substantial judicial sup
port for the view that the Federal Court had
jurisdiction over any matter in relation to that over
which the federal Parliament had legislative
competence, even if that matter was not in fact
regulated by federal statute law. On this basis the
"Laws of Canada" could include a rule of provin
cial statute law or a rule of the common law if its
subject-matter was such that the law could have
been enacted or adopted by the federal Parlia
ment.
This notion was finally put to rest by the
Supreme Court of Canada in Quebec North Shore
Paper Co. et al. v. Canadian Pacific Ltd. et al.,
[1977] 2 S.C.R. 1054 and McNamara Construc
tion (Western) Ltd. et al. v. The Queen, [ 1977] 2
S.C.R. 654. In the Quebec North Shore case the
issue was whether the Federal Court had jurisdic
tion over a dispute arising out of a contract for the
transportation of newsprint from Quebec to the
United States. The Federal Court Act [R.S.C.
1970 (2nd Supp.), c. 10] appeared to give jurisdic
tion, because by section 23 it gave jurisdiction to
determine controversies in respect of undertakings
extending beyond the limits of a province. The
only doubt stemmed from the fact that the con
tract in dispute was governed by Quebec law and
not by federal law. It appeared that the Federal
Court Act contemplated this aspect because
section 23 authorized the granting of relief "under
an Act of the Parliament of Canada or otherwise".
The Supreme Court of Canada held that the Fed
eral Court did not have jurisdiction on the grounds
that there was no applicable and existing federal
law, whether under statute or regulation or
common law, upon which the jurisdiction of the
Court could be exercised.
In the McNamara Construction case, the
Supreme Court of Canada held that the Federal
Court had no jurisdiction over an action brought
by the Crown against a builder and an architect,
alleging the breach of a contract to build a peni
tentiary in Alberta. Again, the Federal Court Act
purported to grant jurisdiction over the case. Fur
ther, that the test of federal legislative competence
was satisfied because the Constitution Act, 1867
conferred on the federal Parliament legislative
competence over the federal Crown and over peni
tentiaries. However, because the applicable law
was the common law, the Supreme Court held that
the new requirement of "applicable and existing
federal law" was not satisfied and concluded that
the Federal Court had no jurisdiction over the
case.
Finally, in ITO—International Terminal Oper
ators Ltd. v. Miida Electronics Inc. et al., [1986]
1 S.C.R. 752, the Supreme Court developed a
three-pronged test for the determination of Feder
al Court jurisdiction. The Court stated at
page 766:
The general extent of the jurisdiction of the Federal Court has
been the subject of much judicial consideration in recent years.
In Quebec North Shore Paper Co. v. Canadian Pacific Ltd.,
[1977] 2 S.C.R. 1054, and in McNamara Construction (West-
ern) Ltd. v. The Queen, [1977] 2 S.C.R. 654, the essential
requirements to support a finding of jurisdiction in the Federal
Court were established. They are:
1. There must be a statutory grant of jurisdiction by the
federal Parliament.
2. There must be an existing body of federal law which is
essential to the disposition of the case and which nourishes
the statutory grant of jurisdiction.
3. The law on which the case is based must be "a law of
Canada" as the phrase is used in s. 101 of the Constitution
Act, 1867.
I propose to address each of those requirements
in light of the facts now before me for the purpose
of determining whether this Court possesses juris
diction over the matter in question.
1. Statutory Grant of Jurisdiction
The first requirement often finds expression in
the statement that the Federal Court is a statutory
court without inherent jurisdiction. That being so,
the Federal Court Act or some other federal stat
ute must confer jurisdiction over the matter. The
Federal Court is not a court of general jurisdiction
in all federal matters: its jurisdiction must be
founded in the specific language used by Parlia
ment in the conferring legislation. Such language
is of course found in sections 17 and 23 of the
Federal Court Act.
Subsections 17(1) to (3) of the Federal Court
Act apply to cases where relief is sought against
the Crown. Subsection 17(4) only refers to actions
against the Crown eo nomine and does not include
an action by or against a Crown agency. As the
style of cause in the plaintiff's statement of claim
is presently worded, none of these sections confers
jurisdiction on this Court since the Crown is not
named as a party to the proceedings and the
named defendants are neither Crown officers or
servants.
Section 23 of the Federal Court Act confers
jurisdiction where a claim for relief meets two
conditions. First, the claim must be made "under
an Act of the Parliament of Canada or otherwise"
and second, it must relate to a matter coming
within any of the classes of subjects specified in
the latter part of the section. The cause of action
on which the plaintiffs are relying must fall within
the parameters of paragraph (c) of section 23, that
is, "works and undertakings, connecting a province
with any other province or extending beyond the
limits of a province." The question therefore posed
is whether the fact that the plaintiffs' claim is
brought against the CBC, a national broadcasting
institution and a federal Crown corporation, suffi
cient to confer jurisdiction on this Court to hear
the matter. In my view, the answer to this question
is no, unless the remedy sought by the plaintiffs is
contemplated by the Broadcasting Act, R.S.C.,
1985, c. B-9 itself or the Crown Liability Act,
R.S.C., 1985, c. C-50.
There is nothing in the Broadcasting Act which
specifically contemplates Federal Court jurisdic
tion over a libel and slander suit. Subsection 31(4)
of the Broadcasting Act provides as follows:
31....
(4) Actions, suits or other legal proceedings in respect of any
right or obligation acquired or incurred by the Corporation on
behalf of Her Majesty, whether in its name or in the name of
Her Majesty, may be brought or taken by or against the
Corporation in the name of the Corporation in any court that
would have jurisdiction if the Corporation were not an agent of
Her Majesty.
Similar provisions are found in a number of
legislative enactments which establish Crown cor
porations. In Rasmussen v. Breau, [1986] 2 F.C.
500 (C.A.), the respondents instituted an action in
the Federal Court against the appellant Crown
corporation based on the tort of conversion. The
Saltfish Act, R.S.C. 1970 (1st Supp.), c. 37, con
tained a section identical in wording to subsection
31(4) of the Broadcasting Act. Thurlow C.J.,
unequivocally rejected the argument that the
Court had jurisdiction to hear the matter. Con
cerning the meaning of the above-quoted section,
he stated at page 505:
Plainly this section does nothing to confer on this Court
jurisdiction to entertain an action against the appellant. It does,
however, deprive the appellant of any right it might otherwise
have had to assert in any court of competent jurisdiction
immunity from suit on the basis of its being or its having acted
as an agent of the Crown. Similar provisions were held to
confer on provincial courts authority to entertain claims based
on contract against the Crown's statutory agent in Yeats v.
Central Mortgage & Housing Corp. ([1950] S.C.R. 513.)
I agree that this section does not confer jurisdic
tion on the Federal Court. To the contrary, it
expressly instructs litigants to file suits where they
would normally be tried. In the case of libel and
slander, as well as most torts, this would be the
provincial superior courts. Support for this propo
sition is found in Bassett v. Canadian Broadcast
ing Corp. (1980), 30 O.R. (2d) 140 (H.C.). In that
case, Southey J. dismissed an application to strike
a defamation suit from the record of the Ontario
High Court on the grounds that subsection 31(4)
[then subsection 40(4)] of the Broadcasting Act
was enacted for the purpose of putting the CBC in
the same position as an ordinary corporation in
respect of amenability to civil suits.
Counsel for the plaintiffs submits that even if I
were to decline jurisdiction on the basis of the
Federal Court Act or the Canadian Broadcasting
Act, the Crown Liability Act, confers jurisdiction
on this Court to entertain the proceedings in
question.
Under the old common law rule "the King could
do no wrong", the Crown itself could not be sued
in tort. Crown assets could not be reached indirect
ly by suing in tort a Department of Government,
or an official of the Crown. Additionally, govern
ment departments, not being legal entities could
not be sued. Servants of the Crown could not be
made liable vicariously for the torts of subordi
nates who were also servants of the Crown and not
of their superiors. Servants committing wrongs
were personally liable at common law to those
injured and, if the act was done at the superior's
behest, the latter may have been held liable as
well, not vicariously, but because the subordinate's
act in such circumstances was his own act.
The Crown Liability Act changed the old public
law rules. Pursuant to sections 2 and 3 of the Act,
the Crown is now liable in tort for the damage
caused by a servant who commits a tort. A servant
of the Crown includes an agent such as the
Canadian Broadcasting Corporation. Section 15
of the Act confers on the Federal Court exclusive
original jurisdiction to hear and determine every
claim for damages under the Act. That section
reads as follows:
15. (1) Except as provided in section 21 and subject to
section 36, the Federal Court has exclusive original jurisdiction
to hear and determine every claim for damages under this Act.
(2) The Federal Court has concurrent original jurisdiction
with respect to the claims described in subsection 21(2) and
any claim that may be the subject-matter of an action, suit or
other legal proceeding referred to in section 36.
Subsection 21(2) provides that a claim against
the Crown for a sum not greater than $1,000
belongs in the provincial court. Nevertheless, sub
section 36(1) provides as follows:
36. (1) Subsections 15(1) and 21(1) and (2) do not apply to
or in respect of actions, suits or other legal proceedings in
respect of a cause of action coming within sections 3 to 8
brought or taken in a court other than the Federal Court
against an agency of the Crown in accordance with any Act of
Parliament that authorizes such actions, suits or other legal
proceedings to be so brought or taken.
The effect of this provision is to render subsec
tion 15(1), by which exclusive original jurisdiction
is conferred on the Federal Court, inoperable in
the event that an Act of Parliament has directed
the bringing of the action in the provincial courts.
In my opinion, subsection 36(1) precludes Federal
Court jurisdiction where the Crown corporation's
enabling legislation authorizes the action to be
brought in the provincial superior courts. After
reading this section together with subsection 31(4)
of the Broadcasting Act one is led to conclude the
libel and slander action against the defendants
cannot be tried in this Court. This finding is
consistent with the concept of the Federal Court as
a statutory court with jurisdiction limited to that
which is conferred upon it by statute. In the
alternative, an alleged cause of action such as this
does not invoke whatever inherent jurisdiction
resides in this Court by virtue of the constitutional
section 101, together with its dependent legisla
tion.
Subsection 15(2) of the Crown Liability Act
provides that the Federal Court has concurrent
jurisdiction with respect to any claim that may be
the subject-matter of an action, suit or other legal
proceeding referred to in section 36. The present
action certainly fits that description: the Canadian
Broadcasting Corporation is an agent of the
Crown, and the enabling legislation authorizes
actions to be brought in the provincial superior
court. In my view, this section is capable of an
interpretation which would confer jurisdiction on
the Federal Court to try this matter.
However, this is not an issue which necessarily
needs to be decided in the case at bar. Even if
subsection 15(2) of the Crown Liability Act does
constitute a general assignment of jurisdiction to
the Federal Court, the second requirement for
jurisdiction established by the Supreme Court in
the ITO decision must still be satisfied.
2. Existing Federal Law
The second requirement to support a finding of
jurisdiction in the Federal Court is that there be
an existing body of federal law that is essential to
the disposition of the case and that nourishes the
statutory grant of jurisdiction. This requirement
was articulated in Quebec North Shore and
NcNamara Construction, wherein the Supreme
Court held that legislative competence alone was
not enough; there must be existing and applicable
federal law upon which the jurisdiction of the
Federal Court can be exercised. Only then can it
be said that the matter comes within the expres
sion "Administration of the Laws of Canada" in
section 101 of the Constitution Act, 1867. It is
notable that the Supreme Court never addressed
the concept of the better administration of those
laws, but that is another matter.
This test, while appearing straightforward, is
only easy to apply in extreme cases. Where federal
legislation gives a complete right of action, by
creating the obligation and conferring the remedy,
there is no question but that the proceeding is
founded on federal law. At the other extreme, if
the obligation arises and the remedy is available in
the provincial law, the Quebec North Shore and
McNamara cases apply and the Federal Court has
been held to lack jurisdiction. It is the numerous
cases which fall within this wide-ranging spectrum
that have created and continue to create litigation
as to the extent of this Court's jurisdiction.
The question which invariably arises in these
cases is the proper definition of the term "existing
and applicable federal law". Counsel for the plain
tiffs argued before me that the Broadcasting Act,
pursuant to which the defendants were acting or
working at the time they committed the alleged
tort, is sufficient federal law to meet this second
requirement.
The Federal Court of Appeal has been faced
with this issue on a number of occasions in consid
ering actions in tort against Crown servants or
officers. In each case the plaintiff, just as in this
case, sought to invoke the federal legislation pursu
ant to which the Crown servant was acting when
allegedly committing the tort. In Pacific Western
Airlines Ltd. v. R., [1980] 1 F.C. 86 (C.A.), it was
held that claims in respect of the crash of an
aircraft against air traffic controllers and other
Department of Transport employees who had been
carrying out responsibilities under the Aeronautics
Act [R.S.C. 1970, c. A-3] and regulations could
not be said to be founded on that legislation. The
claims were struck for want of jurisdiction.
In Stephens v. R. (1982), 26 C.P.C. 1 (F.C.A.),
the claim was against officers of Revenue Canada
who were alleged to have trespassed and commit
ted an illegal seizure, exceeding their authority
under the Income Tax Act [S.C. 1970-71-72, c.
63]. Even though that Act would have application
to questions of the validity and legal justification
of the officers' actions, the Court concluded that
the right to damages was created by provincial law
and was beyond the jurisdiction of the Federal
Court.
As previously mentioned, in Rasmussen v.
Breau, an action was commenced against the
Crown corporation based on the tort of conversion.
The Federal Court held that there was no federal
law to be administered against the appellant for
damages for the alleged conversion. The whole
basis for relief was the law of the province of
Newfoundland in which the asserted unlawful pur
chase and sale had taken place. Indeed in the
Rasmussen case it was ultimately the Crown eo
nominee which was held to have committed that
tort because of its dealings with the corporation.
Two other Federal Court of Appeal decisions,
which are difficult to reconcile with the Pacific
Western, Stephens and Rasmussen cases, demon
strate how subtle the distinction may become be
tween claims considered to be founded on federal
law and those which are not. In Oag v. Canada,
[1987] 2 F.C. 511 (C.A.), the Court considered
an action against the chairman and a member of
the National Parole Board in tort for damages for
wrongfully revoking a prisoner's release. This
claim for false arrest and wrongful imprisonment
was held to be founded on the federal legislation
that governed the prisoner's right to be released, a
finding which appears entirely contrary to the one
made in Stephens.
Apparently, the distinction lies in the source of
the right alleged to be infringed. In Oag, the Court
said the right to freedom was derived, not from the
common law, but from the federal statute whereas
in Stephens, it was the common law right to free
enjoyment of the property that was alleged to have
been infringed, and the Income Tax Act applied, if
at all, only to justify the trespass to property.
The second case is Brière v. Canada Mortgage
and Housing Corporation, [1986] 2 F.C. 484
(C.A.), wherein the plaintiffs instituted two
actions based on tort in the Federal Court, one
against the Queen in Right of Canada and one
against the Central Mortgage and Housing Corpo
ration. Marceau J. writing for the Court, held that
a determination as to whether the cause of action
was based on federal law, required a consideration
of the extent to which the Crown Liability Act had
altered the public law rules pertaining to immuni-
ties and prerogatives of the Crown. At page 494
His Lordship stated:
It was not until 1953, with the adoption of the Crown
Liability Act, R.S.C. 1970, c. C-38, that a major transforma
tion of the ordinary law regarding the tortious liability of the
Crown was introduced. Parliament ended the rule of Crown
immunity for the wrongful acts of its servants, retaining only
the purely procedural requirement of a petition of right which
itself soon disappeared when the Federal Court was created.
However, the Crown Liability Act speaks of the Crown: it is not
immediately clear how and to what extent it may affect the
ordinary law regarding the tortious liability of corporations
which are Crown agents.
Marceau J. went on to conclude that where the
wrongdoing was committed by one of the corpora-
tions's employees who was not a Crown servant,
the Act precluded the corporation from relying, as
an agent of the Crown, on an immunity which no
longer existed (for the Crown itself). Accordingly,
since the victim's remedy against the corporate
body for the wrongful acts of its employees was
created by the Crown Liability Act, the cause of
action was directly associated with federal law.
The requirement that the action be based, at least
in part, on federal law was accordingly held to
have been satisfied.
With all due respect, I am unable to agree with
this reasoning. I do not think that sections 3, 15,
21 and 36 of the Crown Liability Act are capable
of supporting the jurisdiction of this Court over
any type of civil action simply because the Crown
in Right of Canada or one of its agents is a party
defendant to the action and, the Act itself is
concerned with the Crown's tortious liability. This
is not, in my view, what the Supreme Court of
Canada envisioned when it spoke of "existing and
applicable federal law" in the Quebec North
Shore, McNamara and ITO cases; that is, a body
of law essential to the disposition of the case and
which nourishes the statutory grant of jurisdiction.
These sections cannot properly be construed as
conferring jurisdiction on the Federal Court to
entertain this type of action because they cannot
properly be read as being free from all limitations.
They must be confined to actions and suits in
relation to some subject-matter, legislation in
regard to which is within the legislative compe
tence of the federal Parliament. That legislation
must, in turn, give a complete right of action, by
creating an obligation and conferring a remedy.
I conclude therefore, that the plaintiffs' action
against the Canadian Broadcasting Corporation
and the other defendants named cannot be tried in
this Court because such a suit is not founded on
federal law. Moreover, even if there was a statu
tory grant of jurisdiction to the Federal Court to
try this case, there is no federal body of libel and
slander law nourishing this grant. This issue will
be addressed in the following section.
3. Legislative Competence
The third requirement for Federal Court juris
diction is that the federal law relied upon to
support the Court's jurisdiction be within the legis
lative competence of the Parliament of Canada.
The offence in question is libel and slander, which
has historical origins in the common law. Accord
ingly, the action is normally heard in provincial
superior courts. The Libel and Slander Act,
R.S.O., c. 237, on which this action is founded, is
provincial legislation which has codified this
common law tort.
As mentioned, counsel for the plaintiffs argues
that the federal Broadcasting Act, which estab
lishes the Canadian Broadcasting Corporation is
sufficient federal law upon which to base a libel
and slander suit in this Court. Without the Broad
casting Act it is argued, there could be no libel and
slander because the CBC derives its mandate from
that federal legislation.
I am not persuaded by this argument. The fact
that the CBC is a federal body is ancillary, the
main issue is whether its servants libelled and
slandered the plaintiffs. This cause of action must
be seen as existing separate and apart under the
law of tort, unless such an action has been contem
plated by the Broadcasting Act. An examination
of the Act shows this not to be the case. In my
view, this is a common law tort over which the
Parliament of Canada has no legislative compe
tence and accordingly the matter belongs in the
provincial superior courts. Nor, may I add, has
Parliament purported to make the Crown liable for
the alleged libel and slander committed by its
corporation.
Since the Court lacks jurisdiction to entertain
these proceedings, I am unable to grant the
defendants' motion to strike out the plaintiffs'
statement of claim pursuant to Rule 419. How
ever, were I to find this Court to have jurisdiction,
I would refuse to strike out the plaintiffs' state
ment of claim on the grounds it discloses no
reasonable cause of action. The Court will dismiss
an action or strike a claim on this basis only in
plain and obvious cases or where it is satisfied
beyond a reasonable doubt that the plaintiffs' case
would not succeed. On a motion of this nature, the
Court will generally exercise its discretion to
refuse to strike out the statement of claim where it
is not patently clear that the plaintiffs' claim is
without legal justification. If there is any doubt,
the matter is properly left to the Trial Judge.
Accordingly, an applicant under Rule 419(1)(a)
bears a heavy onus. In the present case that onus
has not been met. The plaintiffs' statement of
claim alleges the tort of libel and slander, a cause
of action known to law, to have been committed by
the defendants. Assuming all the facts alleged in
the statement of claim to be true, the plaintiffs
have an arguable case. The defendants have not
persuaded me that this case is "plain and obvious"
nor has it succeeded in showing beyond a reason
able doubt that no cause of action exists.
The final question to be decided is the plaintiffs'
motion to add the Crown in Right of Canada as a
party defendant to the statement of claim. Rule
1716 of the Federal Court Rules provides for the
addition of parties as plaintiffs or defendants. The
case law which has evolved in respect of this Rule
makes it abundantly clear that I am not in a
position to grant the plaintiffs' motion. It is a
pre-condition to the adding of parties that the
Federal Court have jurisdiction over the action as
between the party to be joined and the opposite
party. The applicant must show a federal law
capable of supporting an action between itself and
the party against whom it seeks to add.
In Airport Taxicab (Mallon) Association v.
Canada (Minister of Transport) et al. (1986), 7
F.T.R. 105 (F.C.T.D.), the Court held it improper
to add a co-defendant under Rule 1716 where no
cause of action based on federal law can be assert
ed against the proposed defendant. Likewise, in
Forde et al. v. Waste Not Wanted Inc. et al.
(1984), D.R.S. 55-027 (F.C.T.D.), the Court
refused to add applicants as party defendants
where it had no jurisdiction to entertain the action
by the plaintiff as against the applicants. The same
findings were made in Dene Nation v. The Queen,
[1983] 1 F.C. 146 (T.D.) and in Waterside Cargo
Co-operative v. National Harbours Board (1979),
107 D.L.R. (3d) 576 (F.C.T.D.). This list is by no
means comprehensive of all the cases on point.
For these reasons, the plaintiffs' motion adding
the Crown in Right of Canada is denied. The
defendants' motion that the plaintiffs' statement of
claim be struck on the grounds that this Court
lacks jurisdiction to entertain the proceedings is
granted.
Costs to the defendants.
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