Bourgoin v. La Compagnie du chemin de fer de Montreal

The constitutional issue in Bourgoin was whether a federally-regulated railway could sell itself to a provincial government without the authorization of a federal statute.

The answer was "no."

This result turns a lot on the way that 19th century corporate law differs from that of the present-day. Old-time corporations did not just get the civil rights of persons (which would include selling assets to other persons). They also had to act in accordance with their authorized purposes. Naturally, if the railway was federally-regulated, these purposes had to be provided for by federal statute.

Cushing v. Dupuy

The enduring issue in Cushing v. Dupuy concerned whether a provision in the federal Insolvency Act making certain court judgements "final" meant the Judicial Committee could not hear an appeal. The Committee held that the effect of the provision was to exclude an appeal to the JCPC as of right, but did not effect the ability of the Committee to give leave. The rationale was that giving leave was an aspect of the Crown Prerogative, which could only be extinguished by a statute if the statute was explicit. The editor of the Appeal Cases court reports added "quaere, what powers may be possess by the Parliament of Canada so to do", a note that anticipated battles in the twentieth century.

So far, we have been able to avoid talking about the tricky ontological issues about what the Judicial Committee of the Privy Council really was. We were able to get away with just treating it like the final court of appeal for the Empire, which nineteenth century Canada was very much a part of. In the twentieth century, that gets embarrassing, but no one was worried about that when Britannia still ruled the waves and Gilbert and Sullivan were at the height of their creative powers. Why not have your final court in London? As we will see, the part of Canada least enthusiastic about dying to keep China British -- Quebec -- was even less enthusiastic about having the relative powers of the federal and provincial governments decided by a tribunal located in Ottawa and picked entirely by federal Prime Ministers. But that's all in the future.

But whatever its merits as an impartial and imperial adjudicator, the Judicial Committee was built on a pile of legal fiction. In theory, litigants did not appeal to the Committee in accordance with some procedure set out in a statute. The legal fiction was rather that the Queen Insurance Company or Madame Belisle, as a subject of Queen (and now Empress) Victoria, was appealing to the batty old Hanoverian herself. And as the descendant and ultimate successor of a Norman bastard with above-average luck and leadership skills, she had the prerogative right to entertain an appeal from one of her subjects that her judges had erred.

Now nineteenth century Brits were sharp enough to see that leaving deciding the fine points of insolvency law to a grumpy matron from a line of notoriously plodding intellects was not fair either to her or to the contending parties. Shortly before she came to the throne, Parliament had enacted the Judicial Committee Act, which provided that members of the monarch's privy council who had "high judicial office" would constitute a judicial committee, and the monarch could refer matters to them, and they would advise him or her about them. This was already standard practice when colonial appeals were taken to the monarch, and it was already invariably the case that the monarch would just rubber stamp whatever the Committee advised.

However, some peculiar features arose from this fiction. For example, unlike the House of Lords, which was the final court of appeal for England and Wales, and whose judicial functions were exercised by largely the same people, the Judicial Committee always gave a single set of reasons, without dissent, since it would not be seemly for Her Majesty to receive conflicting advice about what to do. This was all good, since dissents and concurring judgements are really exercises in ego, and confuse lawyers.

The legal fiction had more controversial consequences in that it implied that any restriction on the jurisdiction of the Judicial Committee was, in legal theory, a restriction on the traditional prerogatives of the Queen. The constitutional battles of the seventeenth century had confirmed that Parliament could curtail Crown prerogatives, but went along with a presumption (remaining to this day) that it would not do so unless it said so expressly.

Sir Montague Smith reasoned that the Act must have intended to eliminate appeals as of right, but it did not explicitly eliminate the "Queen's" power to give leave. It therefore remained. The Committee gave leave, but it didn't help the appellant, since they ruled against him anyway. Or rather, humbly advised Her Majesty that her colonial court knew what it was talking about. Since the underlying issue was a secured transaction question under the Civil Code, which could only confuse common lawyers, that was a good move.

L'Union St-Jacques de Montréal v. Dame Julie Bélisle -- Provincial Insolvency Powers -- Thumbs Up

Canadian constitutional law starts with a widow's fight for her pension. Consistent with our jurisprudence's lack of a sense of potential movie adaptation rights, she lost.

As the Pithlord grows older, few phrases evoke more pity or fear into his heart than "actuarial insolvency". As the former firefighters and teachers of Detroit have discovered, a promise to pay a benefit is only as good as the funding available to pay it. Human nature being what it is, error or misfeasance may mean that the funding is not good enough. At that point, someone does not get what they were promised.

Actuarial insolvency brought down Detroit, it brought down Greece and it could bring down all the western countries, since in a demographic decline, no solution seems likely to pass without the support of physically frail, but politically potent oldsters. The Pithlord imagines a death spiral in which more and more financial demands are placed on the still-fertile, who react by having even fewer kids. Eventually, the forest returns, preferably with some suitable Wagnerian background music.

Nineteenth century Quebec did not have those kinds of demographic worries, since most people could number their siblings with double digits. It also did not have state-sponsored social security systems, solvent or otherwise. It did have numerous benevolent societies, which collected premiums and then promised pensions and other insurance. L'Union St.-Jacques du Montréal was one such institution. Unfortunately, its actuaries weren't up to snuff, and it ended up owing a number of widows more in pensions than it could afford to pay. Some of the widows agreed to voluntary reduction, but as with Argentina's creditors today, there were hold outs. Julie Bélisle was one. She insisted on being paid what she had been promised. And her stuborness started the whole tradition of Canadian constitutional jurisprudence.

The provincial legislature of Quebec (not yet calling itself the National Assembly) responded to the dilemma by restructuring all the pensions. Each of the widows would get $200 as capital, plus a possibility of more if the association got out of its financial difficulties. This was an ad hoc, political solution, but as General Motors and Chrysler taught us, we can't afford to be superior about it.

But ad hoc political solutions do not always have much legitimacy, and Madame Bélisle did not like the restructuring of her pension one bit. She pointed out that "Bankruptcy and Insolvency" is a matter to which "exclusive Legislative Authority" was given to the federal Parliament by item 21 of section 91 of the then-recent British North America Act, 1867. Only the feds could do what the province had done. She had a powerful argument, since in substance the province was restructuring obligations of an insolvent entity. The association argued that such a private Act (quite common in the 19th century) fit within the class of "Generally all Matters of a merely local or private Nature in the Province" given to the provinces by section 92 (16).

The Canadian court agreed with the widow, but the Privy Council did not. Certainly, the federal Parliament could have passed a general law dealing with the insolvency of beneficial societies. But it had not. It was therefore open to the province to deal with the sticky situation in a specific case. The Privy Council were conscious of how much of private law is really about priorities when there is not enough to go around, and saw that a rule like the one Madame Bélisle was seeking would have destoryed much of a provincial legislative power:

Their Lordships are by no means prepared to say that if any such law [as a general insolvency law for associations] had been passed by the Dominion Legislature, it would have been beyond their competency; nor that, if it had been so passed, it would have been within the competency of the provincial legislature afterwards to take a particular association out of the scope of a general law of that kind [...] But no such law every has been passed; and to suggest the possibility of such a law as a reason why the power of the provincial legislature over this local and private association should be in abeyance or altogether taken away, is to make a suggestion which, if followed up to its consequences, would go very far to destroy that power in all cases.

B´lisle is now a pretty obscure case, even though it was the first and even though the issues in it are still with us. But it is useful for the following points:

• While it has been suggested (most recently in the Tsilhqot’in case, that overlapping jurisdiction is a "modern" problem based on our "more complex" society, courts had to grapple with it from the beginning.
• Relatedly, the very earliest case suggested a reluctance to declare provincial laws invalid for entering the federal sphere when the federal Parliament had done nothing inconsistent with what the province was trying to do.
• * If the heavily centralist approach of the early domestic courts had prevailed instead of the approach of the Privy Council to respect provincial autonomy and diversity in private law, the country would have looked very different. As Trudeau suggested, Quebec secession would then have been an accomplished fact.

Wikipedia's account is here.

Derivatives Exempted from Bankruptcy Laws

Well, that was a bad idea.