A-494-79
The Queen in right of Canada (Plaintiff)
(Appellant)
v.
Montreal Urban Community Transit Commission
(Defendant) (Respondent)
Court of Appeal, Pratte and Le Dain JJ. and Hyde
D.J.—Montreal, March 19, 1980.
Jurisdiction — Torts — Right of subrogation — Appellant
subrogated, pursuant to Government Employees Compensation
Act, to rights of an employee in an action for damages —
Appeal from Trial Division's decision that Court without
jurisdiction to hear the matter — Appeal allowed — Govern
ment Employees Compensation Act, R.S.C. 1970, c. G-8, s.
8(3),(4) — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10,
s. 17(4) (a).
APPEAL.
COUNSEL:
Jacques Ouellet, Q.C. for appellant (plain-
tiff).
René Roy for respondent (defendant).
SOLICITORS:
Deputy Attorney General of Canada for
appellant (plaintiff).
Pépin, Létourneau & Associés, Montreal, for
respondent (defendant).
The following is the English version of the
reasons for judgment delivered orally by
PRATTE J.: This appeal raises only one question:
was the Trial Judge correct in holding that the
action instituted by appellant against respondent
was not within the jurisdiction of the Trial Divi
sion? [See supra, at page 149.]
On April 11, 1975 an employee of appellant
working for the Post Office Department was
injured in the course of his employment when he
was hit by a bus owned by respondent. Shortly
thereafter, this employee availed himself of the
provisions of the Government Employees Compen
sation Act, R.S.C. 1970, c. G-8, and was compen
sated in accordance with that Act. Appellant was
accordingly subrogated to the rights of her
employee against the third parties responsible for
the accident. Subsections 8(3) and (4) of the
Government Employees Compensation Act contain
the following provisions:
8....
(3) If the employee or his dependants elect to claim compen
sation under this Act, Her Majesty shall be subrogated to the
rights of the employee or his dependants and may maintain an
action in his or their names or in the name of Her Majesty
against the person against whom the action lies and any sum
recovered shall be paid into the Consolidated Revenue Fund.
(4) Where an action is brought under subsection (3) and the
amount recovered and collected exceeds the amount of compen
sation to which the employee or his dependants are entitled
under this Act, there may be paid out of the Consolidated
Revenue Fund to the employee or his dependants such portion
of the excess as the Minister with the approval of the Treasury
Board deems necessary, but if after such payment has been
made the employee becomes entitled to an additional amount of
compensation in respect of the same accident, the sum paid
under this subsection may be deducted from such additional
compensation.
On March 5, 1976 appellant, relying on the
subrogation of which she was the beneficiary,
brought an action against respondent, which she
held liable for the damage suffered by her
employee, to claim compensation for this damage
from it. This is the action which was dismissed by
the Trial Judge on the ground that he lacked
jurisdiction.
It is common ground that the jurisdiction of the
Trial Division in the case at bar can only be
derived from section 17(4)(a) of the Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, according to
which:
17....
(4) The Trial Division has concurrent original jurisdiction
(a) in proceedings of a civil nature in which the Crown or
the Attorney General of Canada claims relief; ...
Since the decision of the Supreme Court of
Canada in McNamara Construction, 2 however, it
is clear that section 17(4)(a) only has the effect of
' These provisions were considered by the Exchequer Court
in The Queen v. P. B. Ready-Mix Concrete & Excavators Ltd.
(1956) 5 D.L.R. (2d) 268. In that case Thorson P. emphasized
that, under these provisions the Crown, whatever amount it
may have paid to the victim, acquires all the latter's rights
against the originator of the damage.
2 [1977] 2 S.C.R. 654.
conferring jurisdiction on the Federal Court with
respect to actions which are based on federal law.
In order to decide if appellant's action is within the
jurisdiction of the Trial Division, therefore, it must
be determined whether this action is based on
federal law. If it is, the jurisdiction exists; if it does
not, it does not exist.
I think there can be no question that appellant's
action is based in part on the provincial law gov
erning respondent's civil liability, and on the feder
al statute regarding compensation of government
employees, which governs the subrogation which
appellant alleges exists in her favour. In order to
succeed, appellant must rely both on provincial law
and on federal law, which in the case at bar
creates a special subrogation different from the
subrogation that might exist under provincial law.
Though the point is a very difficult one, I do not
think it is necessary, in order for an action to be
based on federal law in accordance with the
requirement of McNamara, for that action to be
based exclusively on that law. As my brother Le
Dain J. observed in Bensol Customs Brokers Lim
ited v. Air Canada [1979j 2 F.C. 575, at 583:
There will inevitably be claims in which the rights and obliga
tions of the parties will be determined partly by federal law and
partly by provincial law. It should be sufficient in my opinion if
the rights and obligations of the parties are to be determined to
some material extent by federal law. It should not be necessary
that the cause of action be one that is created by federal law so
long as it is one affected by it.
In the case at bar, I think the federal statute has
an important part to play in determining the rights
of the parties, since without it appellant would not
be able to maintain any right against respondent. I
cannot agree with counsel for the respondent, who
argued, if I understood correctly, that in the cir
cumstances the federal statute has only a second
ary role, since all it does is to authorize the Crown
to exercise a remedy already existing under federal
law. It is true that the role of the federal statute
may seem secondary to respondent, to whom the
identity of its creditor matters little, but the role of
that statute is of particular interest to the Crown,
since without it it would have no right.
For these reasons, I am of the opinion that
appellant's action is sufficiently based on federal
law to lead necessarily .to the conclusion that the
Trial Division has jurisdiction.
I would therefore allow the appeal with costs, I
would quash the decision of the Trial Division and
I would refer the case back to it for a decision on
the merits.
* * *
LE DAIN J. concurred.
* * *
HYDE D.J. concurred.
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.