A-218-73
The Queen (Defendant-Appellant)
v.
Transworld Shipping Ltd. (Plaintiff - Respondent)
Court of Appeal, Jackett C.J., Thurlow J. and
Hyde D.J.—Montreal, May 6; Ottawa, June 30,
1975.
Crown—Contracts—Appellant accepting respondent's bid in
response to invitation for tenders—Appellant changing
requirements and not executing charterparty with 'respond-
ent—Trial Division awarding damages—Appeal—Department
of Transport Act, R.S.C. 1970, c. T-15, ss. 3, 15—British
North America Act, 1867, s. 106—Financial Administration
Act, R.S.C. 1970, c. F-10, ss. 25, 33, 34—Federal Court Act,
s. 57(3)—Federal Court Rules 408, 409—Government Con
tract Regulations, ss. 6, 14, 15.
Appellant invited tenders for chartering of "Commonwealth
flag vessels", and accepted respondent's bid. But when the
charterparty was sent to appellant for execution, respondent
was informed that it would not be executed, as "Canadian flag
vessels" were now required. The Trial Division awarded dam
ages for breach of contract.
Held, dismissing the appeal, there is no merit in the claim
that, because a written charterparty was contemplated, the
contract was not completed on acceptance of the tender. From
the time of acceptance, each party was bound. There was a
completed contract to enter into a charterparty which appellant
repudiated through anticipatory breach. Appellant's other
arguments, though based on facts not in issue at trial, fail as
well. (1) When the Crown did not plead that necessary Trea
sury Board authority had not been obtained, it must be
assumed that it had been. Unless the Government Contract
Regulations contain a special direction that no contract shall
"have any force or effect" unless so authorized, if it is for a
higher amount than prescribed by the regulation, it is doubtful
that such failure would invalidate an otherwise valid contract.
(2) Section 15 of the Department of Transport Act is appli
cable only to written contracts, and it has not been shown that
the officer who accepted the bid was not "a person specially
authorized"; such authority cannot, under section 15, be ques
tioned by anyone other than the Minister, or someone acting
for him or the Crown. It is too late now to make such a
challenge.
The Queen v. Murray [1965] Ex.C.R. 663, [1967] S.C.R.
262; The King v. Vancouver Lumber Company (1920) 50
D.L.R. 6; Mackay v. Attorney-General of B.C. [1922] 1
A.C. 457; St. Ann's Island Shooting and Fishing Club
Ltd. v. The King [1949] 2 D.L.R. 17 (Ex.), [1950] S.C.R.
211; The Queen v. Henderson (1898) 28 S.C.R. 425;
Dominion Building Corporation v. The King [1933] A.C.
533; S.S. "Tordenskjold" v. S.S. "Euphemia" (1909) 41
S.C.R. 154 and The "Tasmania" (1890) 15 A.C. _ 223,
applied. Drew v. The Queen [1956-1960] Ex.C.R. 339,
considered. Carlton, Ltd. v. Commissioners of Works
[1943] 2 All E.R. 560; Churchward v. The Queen (1865)
L.R. 1 Q.B. 173 and Commercial Cable Company v.
Government of Newfoundland [1916] 2 A.C. 610,
discussed.
APPEAL.
COUNSEL:
R. Cousineau for appellant.
R. Langlois for respondent.
SOLICITORS:
Deputy Attorney General of Canada for
appellant.
Langlois, Drouin & Laflamme, Quebec, for
respondent.
The following are the reasons for judgment
rendered in English by
JACKETT C.J.: This is an appeal by the appel
lant from a judgment of the Trial Division award
ing the respondent $110,124.24 for breach of con
tract with interest and costs.
The action in the Trial Division arose out of
steps taken by the Department of Transport in
connection with what has been referred to as "the
1970 Arctic Resupply Program".
While that "Program" was apparently devised
to ensure a movement to Arctic posts of supplies
destined for private persons as well as to various
government departments, on the basis of the some
what sparse evidence with regard thereto, I am of
the view that it must be concluded that it was
authorized, and added to the activities of the
Department of Transport, by or pursuant to appro
priate legislation.
The undisputed facts may be very briefly sum
marized as follows:
(a) On May 13, 1970, the Department of
Transport invited tenders for the chartering of
"Commonwealth flag" tankers and dry cargo
vessels for specified segments of the aforesaid
movement. Such invitation contained a compre-
[1973] F.C. 1274.
hensive description of the terms of each of the
proposed charters.
(b) On May 21, 1970, the respondent tendered
in writing the vessel Theokletos in respect of
one of the proposed charters, which would have
been a time charter having a duration of 60 days
commencing between July 12 and July 22, 1970.
The respondent's tender was on the basis of the
terms set out in the invitation with certain
modifications.
(c) On or about May 28, 1970, a Department of
Transport official notified the respondent by
telephone that its tender was accepted and that
it should, therefore, prepare its charter and
submit it to the Department for signature. 2
(d) The respondent prepared a charter in
accordance with its tender, executed it and, on
June 11, 1970, sent it to the Department for
execution.
(e) On June 22, 1970, after the respondent had
sent the charter to the Department for signature
but before it had been executed on behalf of the
appellant, the Department informed the
respondent that its charter on the basis of its
tender would not be executed because it had
been decided that the vessel to be chartered
would have to be a "Canadian flag" vessel.
As I understand the evidence and argument, it
is, in fact, even though it was never expressly so
stated, common ground that, from the point of
view of the chartering business, a requirement that
a vessel be a Canadian flag vessel is so much more
onerous than a requirement that a vessel be a
Commonwealth flag vessel that it is a requirement
for a subject matter that is commercially different
in kind.
I should also say that, while the Department,
after stating its intention not to honour its accept
ance of the respondent's tender, did give the
respondent a "choice" between chartering the
Theokletos converted to Canadian Registry on the
2 In this particular year, such acceptances do not appear to
have been made in writing. The appellant makes no point of
this and I know of no principle in the law of contract or in the
special law applicable to Government contracts that would
require them to be in writing nor have we been referred to any
such principle.
terms on which it had been tendered as a Com
monwealth flag vessel or of having new tenders
called, in my view, notwithstanding the offer of
such a "choice", what happened was a simple
repudiation of a commercial bargain without, as
far as the record shows, any business justification
or recognition of the resulting obligation to pay
damages for breach of contract; and this, notwith
standing the fact that, according to the evidence,
the change in "policy" resulting in such breach of
contract was made by senior members of the
Department in consultation with the Minister in
full consciousness that it involved increased costs.'
The "commercial bargain" or contract that was, in
my view, so breached was a contract to enter into a
charterparty on specified terms and not the char-
terparty that would have resulted from the carrying
out of that "bargain".
On this appeal it could not be seriously argued
that, had the matter been between ordinary per
sons, there would be any basis for attacking the
judgment appealed from. 4 The appeal is really
based on the contention that certain rules appli
cable to the making of contracts between an ordi
nary person and the Government of Canada (Her
Majesty in right of Canada) operated to prevent a
binding contract from coming into force in circum
stances where, had the matter been between ordi
nary persons, there would have been a binding
contract.'
3 See memorandum of Dr. Camu to the Director of Marine
Operations dated June 19, 1970. Clearly what was done was
deliberately done in breach of what had been agreed to by
acceptance of the tender. A memorandum quoted in the memo
randum filed on behalf of the appellant in this Court shows that
a senior official informed the Deputy Minister, "I have
given ... instructions to restrict the use of ships to Canadian
flag vessels only" and "We may expect ... reactions from
Transworld ... who had already been advised verbally that
their tanker had been accepted ...."
This comment is subject to the argument that was made as
forcefully as it could have been that, because a written charter-
party was contemplated, there was no contract completed by
acceptance of the tender. I am of the view that this contention,
besides being commercially unsound, is without legal merit.
For some discussion of the law applicable to contracts
between the Federal Government and ordinary persons under
our constitution, see The' Queen v. Murray [1965] 2 Ex.C.R.
663; [1967] S.C.R. 262.
Before considering the questions that were so
raised in this case, it is worthwhile, in my view, to
review, in a general way, certain considerations
that must be kept in mind when a question arises
as to whether there is a- contract between the
Government of Canada and some other person in a
field falling within the domain of the Department
of Transport. The points that I have in mind are
(a) departmental authority,
(b) parliamentary control,
(c) the Government Contracts Regulations, and
(d) section 15 of the Department of Transport
Act.
With regard to departmental authority in
respect of contracting, just as when any person
contracts as agent of an ordinary person, so, when
some person contracts on behalf of Her Majesty,
there must be authority for the agent to act on
behalf of the principal; and, in the case of a
government under our system of responsible gov
ernment, such authority must ordinarily be found
in or under a statute or an order in council.' In
this connection, it is to be noted that ordinary
government operations in Canada are divided
among statutorily created departments each of
which is presided over by a Minister of the Crown
who has, by statute, the "management" and direc
tion of his department. In my view, subject to such
statutory restrictions as may be otherwise imposed,
this confers on such a Minister statutory authority
to enter into contracts of a current nature in
connection with that part of the Federal Govern
ment's business that is assigned to his
department.' In the case of the Department of
Transport the relevant provision is section 3 of the
Department of Transport Act, which reads as
follows:
6 Compare Drew v. The Queen (1959) [1956-1960] Ex.C.R.
339 at page 350, and the cases there cited.
7 Such authority does not, of course, extend to cases where,
by statute, the authority to act or contract is expressly or
impliedly restricted to the Governor in Council or persons
expressly authorized by him. Compare The King v. Vancouver
Lumber Company (1920) 50 D.L.R. 6; Mackay v. Attorney
General for British Columbia [1922] 1 A.C. 457; and St. Ann's
Island Shooting and Fishing Club Ltd. v. The King [1949] 2
D.L.R. 17 (Ex.) and [1950] S.C.R. 211.
3. (1) There shall be a department of the Government of
Canada called the Department of Transport over which the
Minister of Transport appointed by commission under the
Great Seal shall preside.
(2) The Minister has the management and direction of the
Department and holds office during pleasure.
Once it appears that the Minister has prima facie
statutory authority to enter into contracts within
his department's domain, it follows, in my view,
subject to any inconsistent statutory provision, that
his power can, and will; in the ordinary course of
events, be exercised by the officers of his depart
ment. This facet of our system of government is
described in Carltona, Ltd. v. Commissioners of
Works, 8 as follows:
In the administration of government in this country the
functions which are given to ministers (and constitutionally
properly given to ministers because they are constitutionally
responsible) are functions so multifarious that no minister
could ever personally attend to them. To take the example of
the present case no doubt there have been thousands of requisi
tions in this country by individual ministries. It cannot be
supposed that this regulation meant that, in each case, the
minister in person should direct his mind to the matter. The
duties imposed upon ministers and the powers given to minis
ters are normally exercised under the authority of the ministers
by responsible officials of the department. Public business could
not be carried on if that were not the case. Constitutionally, the
decision of such an official is, of course, the decision of the
minister. The minister is responsible. It is he who must answer
before Parliament for anything that his officials have done
under his authority, and, if for an important matter he selected
an official of such junior standing that he could not be expected
competently to perform the work, the minister would have to
answer for that in Parliament. The whole system of departmen
tal organization and administration is based on the view that
ministers, being responsible to Parliament, will see that impor
tant duties are committed to experienced officials. If they do
not do that, Parliament is the place where complaint must be
made against them.
I turn to what I have referred to as parliamen
tary control. By virtue of section 106 of The
British North America Act, 1867, 9 federal govern
ment funds can only be expended when authorized
by Parliament. To make it impossible for contracts
to be binding in such a way as to circumvent this
requirement notwithstanding that the Government
e [1943] 2 All E.R. 560, per Lord Greene, M.R., at page 563.
9 Section 106 reads as follows:
106. Subject to the several Payments by this Act charged
on the Consolidated Revenue Fund of Canada, the same
shall be appropriated by the Parliament of Canada for the
Public Service.
is liable for all breaches of its legal obligations, 10
the Financial Administration Act contains the fol
lowing provisions:
25. (1) No contract or other arrangement providing for the
payment of money by Her Majesty shall be entered into or have
any force or effect unless the deputy head or other person
charged with the administration of a service for which there is
an appropriation by Parliament or an item included in esti
mates then before the House of Commons to which such
payment will be charged certifies that there is a sufficient
unencumbered balance available out of such appropriation or
item to discharge any commitments under such contract or
other arrangement that would, under the provisions thereof,
come in course of payment during the fiscal year in which the
contract or tither arrangement was entered into. [The underlin
ing is mine.]
33. It is a term of every contract providing for the payment
of any money by Her Majesty that payment thereunder is
subject to there being an appropriation for the particular
service for the fiscal year in which any commitment thereunder
would come in course of payment."
(No Defence has been raised in this case based on
these provisions, so there is no particular point in
referring to them except for completeness of back
ground to the pleadings in this case and to com
pare the words in section 25(1), viz: "No con
tract ... providing for the payment of money by
Her Majesty shall ... have any force or effect
unless the deputy head ... certifies that there is a
sufficient unencumbered balance available ..."
with the comparable words in section 34 of the
Financial Administration Act and the Government
Contracts Regulations.)
The third point of view from which the creation
of government contracts must be considered is the
Government Contracts Regulations, which have
been made under section 34 of the Financial
10 Compare section 57(3) of the Federal Court Act, which
reads:
There shall be paid out of the Consolidated Revenue Fund
any money or costs awarded to any person against the Crown
in any proceedings in the Court.
In effect, this provision enables monies to be paid out of public
funds in accordance with a Court judgment even though there
is no parliamentary appropriation other than section 57(3)
authorizing such payment.
11 Compare Churchward v. The Queen (1865) L.R. 1 Q.B.
173, and Commercial Cable Company v. Government of New-
foundland [1916] 2 A.C. 610.
Administration Act, which section reads as
follows:
34. The Governor in Council may make regulations with
respect to the conditions under which contracts may be entered
into and, notwithstanding any other Act,
(a) may direct that no contract by the terms of which
payments are required in excess of such amount or amounts
as the Governor in Council may prescribe shall be entered
into or have any force or effect unless entry into the contract
has been approved by the Governor in Council or the Trea
sury Board; [The underlining is mine.]
The relevant provisions in the Government Con
tracts Regulations would appear to be the
following:
6. Except as provided in these Regulations, no contract shall
be entered into without the approval of the Treasury Board.
PART III.
SERVICE CONTRACTS.
Tenders.
14. Before a service contract is entered into the contracting
authority shall invite tenders except in such cases or classes of
cases as the contracting authority considers the invitation of
tenders not to be in the public interest.
Entry into Service Contracts.
15. (1) A contracting authority may, without the approval
of the Treasury Board, enter into a service contract (other than
a contract that results in the appointment or employment of a
person as an officer, clerk or employee of Her Majesty) for any
of the following purposes:
(e) for transportation services other than those described in
paragraph (d) and for the hire or charter of vehicles, vessels
or aircraft if
(i) the amount payable under the contract does not exceed
twenty-five thousand dollars, or
(ii) the amount payable under the contract exceeds
twenty-five thousand dollars but does not exceed fifty
thousand dollars and not less than two tenders have been
obtained and the lowest accepted; 12
The final special provision of our statute law
that, I think, should be mentioned here in connec
tion with Department of Transport contracts is
section 15 of the Department of Transport Act,
which reads as follows:
15. No deed, contract, document or writing relating to any
matter under the control or direction of the Minister is binding
12 Apparently Treasury Board had, in effect, increased this
amount of $50,000 to $350,000 by way of a letter to the
Deputy Minister of Transport, in so far as "a contract for a
charter of a vessel" by that Department was concerned.
upon Her Majesty unless it is signed by the Minister, or unless
it is signed by the Deputy Minister and countersigned by the
Secretary of the Department, or unless it is signed by some
person specially authorized in writing by the Minister for that
purpose; and such authority from the Minister to any person
professing to act for him shall not be called in question except
by the Minister or by some person acting for him or for Her
Majesty."
Having referred in this somewhat sketchy fash
ion to the background of rules governing public
servants in the Department of Transport carrying
on contracting operations on behalf of the Federal
Government, it is appropriate now to refer to the
pleadings in this action.
Leaving aside the allegations of facts summa
rized above, which were either admitted or proved
at the trial of the action, certain allegations that
do not seem to be material and allegations relating
to quantum of damages (which question has not
been put in issue on this appeal), the only portion
of the pleadings to which reference need be made
are those parts of the Defence raising special
defences that read as follows:
3.—Plaintiff was not advised by the Defendant through a duly
authorized representative of the Department of Transport that
its tender of the "M.V. Theokletos" had been accepted."
7.—The Charter Party agreement referred to in paragraph 8 of
the Declaration had not been signed nor duly executed by a
duly authorized representative of the Minister of Transport
when Plaintiff was advised that only Canadian Flag vessels
would be used for the 1970 Arctic Resupply Program.
13 This section must be read in the light of The Queen v.
Henderson (1898) 28 S.C.R. 425; and Dominion Building
Corporation v. The King [1933] A.C. 533.
14 Paragraphs 5 and 6 of the Defence barely warrant men
tion. They read as follows:
5.—Defendant's invitation to tender dated May 13, 1970,
for its Arctic Resupply Program contained the following
provision: "Canadian owned and registered vessels may be
given preference, having regard to cost and suitability. Ice
strengthened vessels may be given special consideration
again having regard to cost and suitability ...".
6.—Plaintiff was fully aware and knew of the above cited
provision.
The clause in the invitation to tender referred to in paragraph 5
might have warranted accepting a tender not otherwise accept
able. Once a tender to which it did not apply was accepted,
however, the provision must be regarded as of no relevance.
8:—Plaintiff of his own accord decided to withdraw its tender
of the "M.V. Theokletos" on or about June 24, 1972.
9.—Defendant contends that no valid contract or charter party
was ever entered for the "M.V. Theokletos" and that in any
event Plaintiff terminated any prior negotiations for the execu
tion of a contract by withdrawing his tender for the hire of the
said vessel.
One argument that was put forward on these
pleadings was that, because a written charterparty
was contemplated, there was no completed con
tract when the tender was accepted. I entirely
agree with the learned Trial Judge that there is no
merit in this contention. It is clear that, from a
business point of view,' 5 the deal in all its details
was made when the tender was accepted. (If it
were not, from both parties' points of view the
whole exercise was a mere travesty.) Entering into
a written charterparty was no doubt necessary as a
matter of complying with subsequent legal and
maritime requirements but, in my view, from the
time of acceptance of tender each of the parties
was bound by the deal and each of them was
entitled to insist on compliance by the other with
the requirements of the deal. In other words, just
prior to the repudiation, the Government was en
titled to receive a charterparty containing the
terms agreed upon so that it could carry out the
necessary supplying of Arctic ports. (At that late
date it was almost certainly impracticable to make
alternative arrangements.) Similarly, the respond
ent was entitled, at that time, to have the Govern
ment accept a charterparty, on the agreed terms,
of the vessel that, once the tender was accepted, it
dedicated to this contract. (At that late date it was
almost certainly too late to make alternative
arrangements to utilize it for equivalent profit-
making operations.) 16
15 It was clearly the practice in that trade to use the word
"fixture" to indicate the time when the deal was entered into
(before the execution of a charterparty); and in this case, all
concerned were in agreement that there was a "fixture" when
the tender was accepted.
16 To suggest that the parties contemplated no binding con
tract until, in the ordinary course of departmental administra
tion, formal charterparties were signed—a process that would
probably outlast the movement of supplies to the Arctic—is to
contemplate an arrangement too unrealistic and outside sound
commercial practice to be attributed either to senior public
servants or to experienced business people.
Once it is found, as I think it must be on the
evidence in this case, that there was a completed
contract to enter into a cliarterparty when the
tender was accepted, and that that contract was
repudiated by the appellant in such manner as to
be a breach (anticipatory) of such contract, it
becomes clear that the defences contained in para
graphs 7, 8 and 9 of the Defence fail as defences to
such breach of contract. That leaves only para
graph 3, which is that the respondent was not
"advised" by the appellant through "a duly
authorized representative of the Department of
Transport" that its "tender ... had been accept
ed." On these three aspects, which are questions of
fact, all the evidence and the learned Trial Judge's
findings are against the appellant. It follows that
the defence contained in paragraph 3 of the
Defence also fails.
For the above reasons, I am of opinion that the
appeal must be dismissed with costs.
However, before parting with the matter, I deem
it advisable to comment on the arguments, apart
from the defences contained in the Defence, that
were put before us both by the memorandum filed
on behalf of the appellant in this Court and by
counsel for the appellant during the course of
argument, even though, in my view, such argu
ments are not open to the appellant on this appeal
because they are based on facts that were not put
in issue at the trial. 17
17 Compare SS. "Tordenskjold" v. SS. "Euphemia" (1909)
41 S.C.R. 154, and The Tasmania (1890) 15 A.C. 223, per
Lord Herschell, at page 225:
My Lords, I think that a point such as this, not taken at
the trial, and presented for the first time in the Court of
Appeal, ought to be most jealously scrutinised. The conduct
of a cause at the trial is governed by, and the questions asked
of the witnesses are directed to, the points then suggested.
And it is obvious that no care is exercised in the elucidation
of facts not material to them.
See also, re a possible amendment at this late stage, Rule 420,
which reads:
Rule 420. (1) The Court may, on such terms, if any, as
seem just, at any stage of an action, allow a party to amend
his pleadings, and all such amendments shall be made as may
be necessary for the purpose of determining the real question
or questions in controversy between the parties.
(Continued on next page)
The first such argument, as I understand it, is
based on the contention that, by reason of the
Government Contracts Regulations, no contract
was created by the acceptance of tender. This
argument is in effect that the contract to enter into
a charterparty of the Theokletos was a contract
under which the amount payable exceeded $350,-
000, that Treasury Board approval was, therefore,
necessary for such a contract, and that no such
approval was obtained. These facts were not plead
ed nor made the subject matter, as such, of discov
ery or evidence at trial. In my view, the onus was
on the appellant to plead such a defence (with the
facts on which it was based) in its Defence. This
follows from Rules 408(4) and 409, which read as
follows:
Rule 408. (4) A statement that a thing has been done or that
an event has occurred, being a thing or event the doing or
occurrence of which, as the case may be, constitutes a condition
precedent necessary for the case of a party, is to be implied in
his pleading.
Rule 409. A party shall plead specifically any matter (for
example, performance, release, a statute of limitation, prescrip
tion, fraud or any fact showing illegality)
(a) that he alleges makes a claim or defence of the opposite
party not maintainable,
(b) that, if not specifically pleaded, might take the opposite
party by surprise, or
(c) that raises issues of fact not arising out of the preceding
pleading.
In my view, justice requires that any defence based
on special statutory provisions must be pleaded,
particularly if it is based on specific facts, so that
the opposite party may have discovery with regard
to such facts and prepare to adduce evidence with
regard thereto. This is all the more so when such
defence is based on an indoor housekeeping rule
applicable to government administration and is
being used by the Government as against an out-
(Continued from previous page)
(2) No amendment shall be allowed under this Rule
(a) except upon terms designed to protect all parties so far
as discovery and preparation for trial are concerned, and
(b) during or after trial, except to make the pleadings
accord with the issues on which all parties went to trial or
on terms that there be a new trial, or that the other parties
otherwise be given an opportunity for such discovery and
preparation for trial as may be necessary to meet the new
or amended allegations.
side claimant. To permit an amendment on appeal
to raise a defence based on facts not so pleaded
and litigated at trial would open the door to pos
sibilities of rank injustice. In my view (leaving
aside the question as to the amount that would be
payable under the contract, which is not at all
clear), when the Crown, by its Defence, did not
plead that necessary Treasury Board authority was
not obtained before advertising for tenders, or at
least before accepting a tender, it must be
assumed, as a matter of fact, that such authority
was obtained. 18 In any event, unless, as contem
plated by section 34 of the Financial Administra
tion Act, the Government Contracts Regulations
contain a special direction, which' I have not been
able to find, that no contract shall "have any force
or effect" unless entry into such contract has been
authorized by Treasury Board, if it is for a higher
amount than that prescribed by the regulation, I
think it is very doubtful that failure to obtain such
an authority is any more than a breach of a
requirement as between departmental officers and
their superiors and it does not follow, in my view.
that such a failure necessarily invalidates an other
wise valid contract. In this connection, it is to be
noted that the only requirement for Treasury
Board authority is the Government Contracts
Regulations, which were made under authority of
that part of section 34 of the Financial Adminis
tration Act that authorized regulations with
respect to the conditions under which "contracts
may be entered into" and was not either
(a) a direction made in the exercise of the
authority under section 34 to "direct" that cer
tain contracts not have "any force or effect"; or
(b) a part of the contract-making authority,
such as was found in The King v. Vancouver
Lumber Co.; 19 Mackay v. Attorney-General for
18 Contrast The King v. Vançouver Lumber Co. (1920) 50
D.L.R. 6, per Viscount Haldane at page 9, and Mackay v.
Attorney-General for British Columbia [1922] 1 A.C. 457, per
Viscount Haldane at page 461, in both of which cases, any such
inference was rebutted by evidence that the requisite authority
had not been granted.
19 (1920) 50 D.L.R. 6.
British Columbia 2° and St. Ann's Island Shoot
ing and Fishing Club Ltd. v. The King. 2' *
The other argument that is not raised by the
pleadings is that the contract is invalid by virtue of
section 15 of the Department of Transport Act
which I repeat for convenience, viz:
15. No deed, contract, document or writing relating to any
matter under the control or direction of the Minister is binding
upon Her Majesty unless it is signed by the Minister, or unless
it is signed by the Deputy Minister and countersigned by the
Secretary of the Department, or unless it is signed by some
person specially authorized in writing by the Minister for that
purpose; and such authority from the Minister to any person
professing to act for him shall not be called in question except
by the Minister or by some person acting for him or for Her
Majesty.
As already indicated, I am not inclined to adopt
the view of the learned Trial Judge that this
section does not apply to the branch of public
business involved in this appeal. In my view, how
ever, the section cannot be accepted as a good
defence to the claim involved in this appeal
because
(a) having regard to the dictum of Taschereau
J. in The Queen v. Henderson, 22 at pages
432-33, it is only applicable to a "written con
tract" and the contract in this case being con
20 [1922] 1 A.C. 457.
21 [1949] 2 D.L.R. 17 (Ex.) and [1950] S.C.R. 211.
* If there were a statutory necessity for Treasury Board or
Governor in Council authority as a condition precedent to a
valid contract that had been properly raised by the pleadings, I
should have grave doubt that the Crown could have been
estopped from relying on it as suggested by the learned Trial
Judge. Compare St. Ann's Island Shooting and Fishing Club
Ltd. v. The King [1950] S.C.R. 211, per Rand J. at page 220:
..there can be no estoppel in the face of an express provision
of a statute", and Gooderham & Worts Ltd. v. C.B.C. [1947]
A.C. 66.
22 (1898) 28 S.C.R. 425.
stituted by an oral acceptance of a written "bid"
is not such a contract, 23 and
(b) it has not been pleaded or established that
the officer by whom the bid was accepted was
not a "person specially authorized in writing by
the Minister for that purpose" and "such au
thority from the Minister to any person profess
ing to act for him" cannot, by virtue of section
15, "be called in question except by the Minister
or some person acting for him or for Her Majes
ty"; when such a challenge, which is of a factual
nature, was not made when the facts were being
litigated, it is, in my view, too late to make it on
an appeal.
* * *
THURLOW J.: I concur.
* * *
HYDE D.J.: I concur.
23 See also Dominion Building Corporation v. The King
[1933] A.C. 533. I realize that there was evidence that Mr.
Jacques Fortier had authority to sign documents on behalf of
the Minister but my impression was that such documents were
of a formal character and that such evidence did not exclude
the possibility of others having authority to sign informal
documents in the ordinary course of departmental business.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.