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A-737-77
The Foundation Company of Canada Limited (Plaintiff)
v.
The Queen (Appellant) (Defendant)
and
Thomas Fuller Construction Co. (1958) Limited (Respondent)
Court of Appeal, Jackett C.J., Heald and Ryan JJ.—Ottawa, October 25, 1978.
Practice — Jurisdiction — In action for damages for breach of contract or alternatively for negligence, third party notice by appellant (defendant) claiming either indemnification by respondent against liability to plaintiff pursuant to contract between appellant (defendant) and respondent, or to contribu tion from respondent pursuant to The Negligence Act of Ontario — Argued that McNamara case not applicable because third party proceedings in respect to appellant's possi ble liability in main action based on federal law.
APPEAL. COUNSEL:
No one appearing for plaintiff.
G. W. Ainslie, Q.C. and D. T. Sgayias for appellant (defendant).
P. D. Rasmussen for respondent.
SOLICITORS:
Hume, Martin & Timmins, Toronto, for plaintiff.
Deputy Attorney General of Canada for appellant (defendant).
Hewitt, Hewitt, Nesbitt, Reid, McDonald & Tierney, Ottawa, for respondent.
The following are the reasons for judgment delivered orally in English by
JACKETT C.J.: It is not necessary to hear you Mr. Rasmussen.
This is an appeal from a judgment of the Trial Division striking out a third party notice.
The principal action is an action by The Foun dation Company of Canada Limited against Her Majesty in right of Canada for damages for breach of contract or, in the alternative, for negli gence. By the third party notice, Her Majesty claims to be entitled either to be indemnified by the respondent against liability to The Foundation Company pursuant to a contract between Her Majesty and the respondent or to contribution from the respondent pursuant to The Negligence Act of Ontario, R.S.O. 1970, c. 296.
On a motion for directions respecting the third, party issue, judgment was given in the Trial Divi sion, reading as follows:
On the face of it the claim asserted by the Crown against the third party is not based on the contract alleged by the plaintiff. It is based on The Negligence Act of Ontario and on a separate contract between it and the third party. There is no "federal law" involved to support the jurisdiction of the Court to entertain the third party claim. On the basis of the McNamara decision the Court is without jurisdiction. The third party notice should therefore be struck out under Rule 1729, the whole with costs.
The appellant's appeal to this Court, as I under stand it, is based, in effect, on the contention that the McNamara decision of the Supreme Court of Canada' does not apply because the third party proceedings are in respect of the appellant's possi ble liability in the main action, which is based on a federal law, and the third party proceedings there fore fall within the jurisdiction that Parliament can confer on the Federal Court under section 101 of The British North America Act, 1867, notwith standing the McNamara decision.
' [1977] 2 S.C.R. 654.
In my view, for purposes of section 101, an action and a third party proceeding are two sepa rate proceedings; and, for the Federal Court to have jurisdiction in either proceeding, that pro ceeding must be to enforce a right conferred by a "federal law" 2 . Furthermore, in my view, the third party proceeding in this case is to enforce a right claimed to have been conferred by the ordinary provincial law of contract as applicable between subject and subject or by The Negligence Act of Ontario, neither of which is a "federal law"; and in my view, such a claim does not become a claim based on a "federal law" because the operation of a federal law enters into the creation of the condi tions precedent to the existence of the right that is being claimed under the provincial law.
This is the law established by the reasons for judgment in the McNamara case, as I understand them, and it is not subject to modification by reason of possible inconvenience or, indeed, as might happen in this case, by reason of the fact that Her Majesty may, in consequence, have no right of contribution under The Negligence Act of Ontario. The remedy, if one is desirable, lies in appropriate legislation.
I propose that the appeal be dismissed with costs.
* * *
HEALD J. concurred.
* * *
RYAN J. concurred.
2 Western Caissons (Quebec) Limited v. McNamara Corpo ration of Newfoundland Co. Limited [1979] 1 F.C. 509.
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