T-2-88
Life Underwriters Association of Canada/
Association des Assureurs -vie du Canada (Plain-
tiff)
v.
Provincial Association of Quebec Life Underwrit-
ers/Association provinciale des Assureurs -vie du
Québec (Defendant)
INDEXED AS: LIFE UNDERWRITERS ASSOCIATION OF CANADA
v. PROVINCIAL ASSOCIATION OF QUEBEC LIFE UNDERWRIT
ERS
Trial Division, Dubé J. — Montréal, April 18, 19,
20, 21 and 22; Ottawa, June 14, 1988.
Constitutional law — Distribution of powers — Action for
infringement of certification marks Plaintiff non-profit
corporation incorporated by special Act of Parliament seeking
injunction preventing provincial corporation from conferring
title "CLU" (Chartered Life Underwriter) and "AVA"
(Assureur- vie agréé) Whether plaintiffs exclusive use of
marks conflicts with exclusive provincial powers over insur
ance and professional qualifications Whether doctrine of
paramountcy applies with respect to conflicts between Trade
Marks Act and Quebec Insurance Act Special Act incor
porating plaintiff cannot in its objects and powers clause
encroach on matters within exclusive provincial jurisdiction
Regulation of trades and profession within provincial jurisdic
tion — Objects and powers of federally incorporated compa
nies are limited to extent of legislative authority of Parliament
Sections of plaintiffs enabling legislation directed at mat
ters within provincial jurisdiction are ultra vires Parliament —
Ownership of validly registered trade mark does not entitle
holder to contravene laws of province.
Corporations Non-profit corporation incorporated by
special Act of Parliament Objects including conducting
examinations on life insurance business, granting certificates
and use of term Chartered Life Underwriter (CLU) Sections
of incorporating Act held unconstitutional as ultra vires Par
liament for infringement of areas of provincial jurisdiction —
Parliament's power of incorporation limited to objects to
which Parliament's legislative authority extends.
Insurance — Non-profit Canada corporation incorporated
with objects of conducting examinations on life insurance
business, granting certificates and right to use designation
Chartered Life Underwriter (CLU) — Plaintiff seeking to
enjoin breakaway provincial corporation from infringing cer
tification marks — Portions of plaintiffs incorporating Act
ultra vires Parliament as infringing areas within provincial
jurisdiction — Name of profession (such as Chartered Life
Underwriter) cannot be registered as certification mark.
Trade marks Infringement — Whether registration of
certification marks "CLU" and "AVA", entitling owner to
exclusive use throughout Canada — Whether certification
marks "Chartered Life Underwriter" and "Assureur -vie
agréé" (for which application of registration filed and which
have been used in association with plaintiffs services since
1924 and 1957) entitling exclusive use throughout Canada —
Name of profession, such as "Chartered Life Underwriter",
cannot be registered as certification mark Titles and desig
nations at issue not registrable under s. 12(2) of Trade Marks
Act since use in Canada not sufficiently distinctive Unregis
tered certification marks cannot form basis of action since Act
does not allow for such relief Plaintiff cannot rely on s. 7(b)
of Act since Court cannot make finding of passing off under
subsection without provision in Act providing right of action
for unregistered certification marks Plaintiffs marks struck
from Register.
The plaintiff is a non-profit corporation incorporated in 1924
by a special Act of Parliament. Its objects and powers included
conducting examinations on the life insurance business, the
granting of certificates of efficiency to its members and the
authorizing of use of the title "Chartered Life Underwriter of
Canada". The designations "CLU" (Chartered Life Under
writer) and "AVA" (Assureur -vie agréé) were registered pur
suant to the Trade Marks Acts as certification marks in 1987.
Subsequently, applications were filed to register the designa
tions "Chartered Life Underwriter" and "Assureur -vie agréé"
as certification marks.
The defendant is a non-profit Quebec corporation incorpo
rated in 1962. From 1980 to December 1986 the defendant
operated as a self-governing provincial association of the plain
tiff. In 1986, the defendant passed a resolution whereby it
would provide to its members courses leading to the designation
of "Chartered Life Underwriter". The Quebec Insurance Act
had been amended in 1974 to allow insurance agents the right
to acquire the specified titles, including that of "Chartered Life
Underwriter" as approved by the defendant. Following the
aforementioned resolution, the plaintiff revoked the defendant's
status as a self-governing provincial association. The plaintiff
initiated this action for infringement of certification marks
alleging it was entitled to the exclusive use throughout Canada
of the certification marks "CLU" and "AVA" by virtue of
their registration pursuant to the Trade Marks Act. Plaintiff
also claimed to have exclusive use of the designations "Chart-
ered Life Underwriter" and "Assureur vie agréé" for which an
application for registration had been filed, as they have been
used in association with the plaintiff's services since 1924 and
1957. The Plaintiff seeks an injunction prohibiting the provin
cial organization from qualifying persons in Quebec engaged in
the life insurance business and from using the aforementioned
titles and designations without its consent. The defendant chal
lenges the validity of plaintiff's marks and registrations on the
ground that they do not meet the requirements of section 18 of
the Trade Marks Act and further contends that plaintiff's
enabling legislation is ultra vires of Parliament in that it
encroaches on provincial fields of jurisdiction.
Held, (1) an injunction should be denied; (2) plaintiff's
certification marks are struck from the Register of Trade
Marks and (3) paragraphs 2(c),(d) and (e) of the An Act to
incorporate The Life Underwriters' Association of Canada are
declared unconstitutional and ultra vires Parliament.
A professional designation such as "CLU" cannot be regis
tered as a certification mark under the Trade Marks Act as the
power to regulate trades and professions rests with the prov
inces. Furthermore, the marks in question are not registrable
pursuant to subsection 12(2) of the Act as their use in Canada
has not become sufficiently distinctive. A certification mark
derives its existence from the Act, not from the common law,
and as such, it is limited by the provisions of that statute. The
plaintiff cannot rely upon paragraph 7(b) of the Act since no
right of action for an unregistered certification mark has been
provided for in the statute.
The objects and powers conferred upon plaintiff by para
graphs 2(c),(d) and (e) of its enabling legislation are clearly
within provincial jurisdiction. The authority to hold examina
tions, grant certificates of efficiency and confer professional
titles falls within the field of education, a provincial matter
pursuant to section 93 of the Constitution Act, 1867. Parlia
ment is restricted by section 154 of the Canada Corporations
Act in its ability to incorporate companies without share capital
to the "objects, to which the legislative authority of the Parlia
ment of Canada extends".
Plaintiff submitted that, under the doctrine of paramountcy,
if there be a conflict between the Trade Marks Act and the
Quebec Insurance Act, the federal legislation must prevail.
Accordingly, a province could not enact legislation authorizing
a private organization, such as the defendant, to defeat plain
tiff's valid trade mark rights. But, the property right conferred
by a validly registered trademark does not entitle its owner to
act in contravention of provincial legislation. The legislature
may validly control plaintiff's activities in areas within provin
cial jurisdiction including the exercise of the profession of
insurance underwriter and the conferment of titles upon the
members of that profession.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
An Act to incorporate The Life Underwriters' Associa
tion of Canada, S.C. 1924, c. 104 (as am. by S.C.
1957, c. 46), ss. 2, 12.
Canada Corporations Act, R.S.C. 1970, c. C-32, s. 154.
Combines Investigations Act, R.S.C. 1970, c. C-23.
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.)
[R.S.C. 1970, Appendix II, No. 5] (as am. by Canada
Act 1982, 1982, c. 11 (U.K.), Schedule to the Consti
tution Act, 1982, Item 1), ss. 91(2), 92(1 1),(13), 93.
Criminal Code, R.S.C. 1970, c. C-34.
Interpretation Act, R.S.C. 1970, c. 1-23, s. 20.
Legal Professions Act, R.S.B.C. 1960, c. 214 (now Bar
risters and Solicitors Act, R.S.B.C. 1979, c. 26).
Professional Code of Quebec, R.S.Q. 1977, c. C-26.
Quebec Companies Act, R.S.Q. 1977, c. C-38.
Quebec Insurance Act, R.S.Q. 1964, c. 295.
Quebec Insurance Act, R.S.Q. 1977, c. A-32, s. 335(b).
The Insurance Act, 1910, S.C. 1910, c. 32, s. 4.
The Securities Act, R.S.O. 1970, c. 426.
Trade Marks Act, R.S.C. 1970, c. T-10, ss. 2, 7(b),(e),
12(1)(b),(2), 18(1)(a),(6), 19, 22, 23(3), 55.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Asbjorn Horgard AIS v. Gibbs/Nortac Industries Ltd.,
[1987] 3 F.C. 544; 14 C.P.R. (3d) 314; MacDonald et al.
v. Vapor Canada Ltd., [1977] 2 S.C.R. 134; Jabour v.
Law Society of British Columbia et al., [1982] 2 S.C.R.
307; C.P.R. v. City of Winnipeg, [1952] 1 S.C.R. 424.
APPLIED:
The Wool Bureau of Canada, Ltd. v. Queenswear
(Canada) Ltd. (1980), 47 C.P.R. (2d) 11 (F.C.T.D.);
Canadian Council of Professional Engineers v. Lubrica
tion Engineers, Inc., [1985] 1 F.C. 530 (T.D.); Citizens
Insurance Company of Canada v. Parsons (1881), 7 App.
Cas. 96 (P.C.); Attorney-General for Canada v. Attor-
ney-General for Alberta, [ 1916] 1 A.C. 588 (P.C.);
Canadian Indemnity Co. et al. v. A.-G. of British
Columbia, [1977] 2 S.C.R. 504; Lafferty v. Lincoln
(1907), 38 S.C.R. 620; Re Imrie and Institute of Char
tered Accountants of Ontario, [1972] 3 O.R. 275 (H.C.);
Attorney-General for Ontario v. Attorney-General for
Canada, [1937] A.C. 405 (P.C.); Dominion Stores Ltd.
v. The Queen, [1980] 1 S.C.R. 844; Benson and Hedges
(Canada) Ltd. et al. v. Attorney-General of British
Columbia (1972), 27 D.L.R. (3d) 257 (B.C.S.C.).
CONSIDERED:
Bonanza Creek Gold Mining Company v. Rex, [ 1916] 1
A.C. 566 (P.C.); John Deere Plow Company v. Wharton,
[1915] A.C. 330 (P.C.); Multiple Access Ltd. v.
McCutcheon et al., [1982] 2 S.C.R. 161; Attorney-Gen
eral for Ontario v. Attorney-General for the Dominion,
[1896] A.C. 348 (P.C.); Attorney-General for Canada v.
Attorney-General for British Columbia, [ 1930] A.C. 1 1 1
(P.C.); Deloitte Haskins and Sells Ltd. v. Workers'
Compensation Board et al., [ 1985] 1 S.C.R. 785.
DISTINGUISHED:
Canadian Board for Certification of Prosthetists and
Orthotists v. Canadian Pharmaceutical Association et al.
(1985), 5 C.P.R. (3d) 236 (Ont. H.C.); Society of
Accountants and Auditors v. Goodway (1907), 24 R.P.C.
159 (Ch. D.); Toms and Moore v. Merchant Service
Guild Ld. (1908), 25 R.P.C. 474 (Ch. D.); British Legion
v. British Legion Club (Street) Ld. (1931), 48 R.P.C. 555
(Ch. D.); Society of Incorporated Accountants v. Vincent
(1954), 71 R.P.C. 325 (Ch. D.).
AUTHORS CITED
Hogg, Peter W. Constitutional Law of Canada, 2nd ed.
Toronto: The Carswell Company Limited, 1985.
Smith, James and Renaud, Yvon, Droit Québécois des
Corporations Commerciales, Volume 1, Montréal:
Judico Inc., 1974.
COUNSEL:
Roger T. Hughes, Q.C. and Stephen M. Lane
for plaintiff.
Hugues G. Richard and Marek Nitoslawski
for defendant.
Robert Monette for Attorney General of
Quebec (intervener).
SOLICITORS:
Sim, Hughes, Dimock, Toronto, for plaintiff.
Leger, Robic & Richard, Montréal, for
defendant.
Bernard, Roy & Associés, Montréal, for
intervener.
The following are the reasons for judgment
rendered in English by
Duet J.: This action in infringement raises seri
ous questions of constitutional jurisdiction as well
as complex issues under the Trade Marks Act (the
Act).'
1 R.S.C. 1970, c. T-10.
1. The facts
The plaintiff (the National) is a non-profit cor
poration incorporated in 1924 under a special Act
of the Parliament of Canada. 2 The head office of
the National is at Don Mills, Ontario. The defen
dant (the Provincial) denies the constitutional
validity of the special Act.
The Provincial is also a non-profit corporation,
incorporated in 1962 and subsisting under the
Quebec Companies Act, Part III. 3 Its head office
is at Montréal, Quebec. The Provincial has, since
1965, been recognized by the Quebec Superinten
dent of Insurance as an association of life insur
ance agents under the Quebec Insurance Act. 4
This recognition was subsequently renewed by an
"Acte d'agrément" signed on January 14, 1983
and still in force.
Prior to the incorporation of the Provincial in
1962, the local associations of the National located
within the Province of Quebec decided to form a
Provincial Association. Amendments were made to
the constitution and by-laws of the National to
provide for the formation of provincial associa
tions. The Provincial, from its incorporation and
up until 1980, was an "authorized" provincial
association of the National, under subsection
23(1) of the National's constitution.' From 1980
to December 1986, the Provincial was recognized
as a self-governing provincial association of the
National under subsection 24(7) of its constitution
(1980) and was the" only such provincial associa
tion in the country authorized or recognized by the
National.
On May 23, 1986 the Provincial, in a general
assembly held in Montréal, passed a resolution
authorizing the Provincial to provide to its mem
bers a university course leading to the designation
of "Chartered Life Underwriter" (Assureur -vie
agréé). Following that resolution, the National on
'- An Act to incorporate The Life Underwriters' Association
of Canada, S.C. 1924, c. 104 (as am. by S.C. 1957, c. 46).
3 R.S.Q. 1977, c. C-38.
4 R.S.Q. 1977, c. A-32.
5 Constitution and By-laws, January 1980. Local associations
were also provided for in the National's Constitution and
By-laws of 1951 (Article XIII) and 1959 (S. 20).
December 10, 1986 by resolution of its Board,
revoked the Provincial's recognition as a self-gov
erning provincial association. However, the Provin
cial continues to operate as an association with
voluntary membership in the Province of Quebec
and so does the National.
Since 1929 the National has constituted an
Institute of Chartered Life Underwriters of
Canada, the membership of which is comprised of
those of its members to whom the National has
given the CLU (Chartered Life Underwriter) and
AVA (Assureur -vie agréé) titles and designations.
However, the Provincial denies that the National
or its Institute have the right to confer these titles
in the Province of Quebec. The National registered
the following designations under the Trade Marks
Act in December 1987:
cru, registration no. 335,823
AVA, registration no. 335,977
Chartered Life Underwriter & Design (a maple leaf), registra
tion no. 335,724
Assureur -vie agréé & Design (a maple leaf), registration no.
335,464
The National has also applied for these two
certification marks:
Chartered Life Underwriter application no. 574,894
Assureur -Vie Agréé & Design application no. 574,899
The Provincial denies the existence of these
trade marks and the titles and the validity of these
registrations.
The Quebec Insurance Act [R.S.Q. 1964, c.
295] was amended in 1974 [S.Q. 1974. c. 70] to
include several sections, including section 335,
which reads as follows:
335. Whoever has the right to the title of insurance agent
may also, where such is the case, have the right to the following
titles:
(a) life insurer;
(b) chartered life insurer (C.L.U.) or «assureur -vie agrééo
(A.V.A.), with the approval of the Provincial Life Insurers
Association of Québec and in accordance with the rules of
that Association;
(c) life insurance broker, if he represents more than one life
insurance company;
(d) insurance broker, if he represents more than one damage
insurance company;
(e) any title to which he is authorized under the Insurance
Brokers Act.
Those basic facts are agreed to by both parties.
2. The issues
In its action, filed on January 5 of this year, the
National claims that, by virtue of the registrations
of the certification marks CSU and AVA, it is
entitled to their exclusive use throughout Canada.
It alleges furthermore that with reference to the
certification marks "Chartered Life Underwriter"
and "Assureur -vie agréé", for which it has filed
an application for registration, it has used them in
association with its services with reference to life
insurance agents, estate planning and financial
management since 1924 in the case of "Chartered
Life Underwriter", and since 1957 in the case of
"Assureur -vie agréé". It claims to be entitled to
their exclusive use throughout Canada.
As to the other two marks comprising a maple
leaf symbol, the National claims having used them
in association with wares, being pamphlets, peri
odicals, journals, etc. relating to the business of
life insurance, since 1972. It claims therefore to be
entitled to their exclusive use throughout Canada.
The National states that the Provincial now
threatens to qualify persons in the Province of
Quebec who are engaged in the life insurance
business and to permit them to use the above titles
and designations without the consent of the Na
tional. It alleges that these actions of the Provin
cial are likely to cause confusion and to infringe
upon the National's rights to its marks and also to
depreciate the plaintiff's goodwill. The National
therefore seeks an injunction and all appropriate
remedies.
The Provincial, for its part, challenges the valid
ity of the plaintiff's marks and registrations on the
following grounds, namely that they are not marks
within the meaning of the Act, they were not
registrable on the date of registration under para
graph 18(1)(a) of the Act, they are not distinctive
within the meaning of paragraph 18(1)(b) and the
National is not a person entitled to secure such
registrations under subsection 18(1) in fine.
The Provincial further contends that the
National's enabling legislation is unconstitutional
in that it encroaches on provincial fields of juris
diction and, even if it were constitutional, it does
not in any way authorize the National to use any
titles other than those contained in paragraph 2(e)
of the said Act, titles which are not the marks
claimed by the National.
In its counterclaim the Provincial asks the Court
not only to dismiss the National's action but also
to order that the aforesaid marks be struck and to
declare the National's enabling legislation of no
force or effect, unconstitutional and ultra vires the
Parliament of Canada.
The Attorney General of the Province of
Quebec, who was authorized to intervene in the
case by an order of this Court, alleges that the
conclusions in which the National is seeking exclu
sive use of the aforesaid marks conflict with and
nullify the legal effect of section 335 of the Quebec
Insurance Act, and that such an association incor
porated under a federal statute cannot overrule the
law of a province dealing with an exclusively pro
vincial power, namely the fields of insurance and
of professional qualifications. Counsel further
argues that the National cannot use the Trade
Marks Act to shortcut a provincial act of a public
nature.
It will therefore be necessary to review in depth
the arguments of the parties.
3. The validity of the certification marks
The National argues that section 19 of the
Trade Marks Act provides that registration of a
trade mark in respect of any services gives to the
owner the exclusive right to the use throughout
Canada of such trade mark in respect of such
services. Moreover, section 22 protects a registered
trade mark against depreciation of the value of the
goodwill attaching thereto. Paragraph 7(b) pro
vides that, whether or not a trade mark is regis
tered, no person shall direct public attention to its
services in such a way as to be likely to cause
confusion in Canada between his services and
those of another. And section 55 endows the Fed
eral Court with the necessary jurisdiction to enter-
tain any action for the enforcement of any provi
sion of the Act.
As to the Federal Court having jurisdiction in
respect of actions brought under paragraph 7(b),
the Federal Court of Appeal in Asbjorn Horgard
AIS v. Gibbs/Nortac Industries Ltd. 6 found that
provision to be valid federal legislation in that it
rounds out the regulatory scheme prescribed by
Parliament in the exercise of its legislative power
in relation to trade marks: paragraph 7(b) is not
an expansion of federal jurisdiction, it is merely a
completion of an otherwise incomplete circle of
jurisdiction. Counsel for the Provincial strongly
attacked that decision and filed the text of a
learned paper which he delivered recently to bol
ster his position. However, having delivered him
self of his "cri du coeur" he bowed to the obvious,
namely that the Court of Appeal decision binds me
and presently stands as the law in the matter.
It is common ground that the trade marks in
question are "certification marks". The purpose of
a certification mark is to identify a standard to
apply to wares or services. Certification mark is
defined as follows in section 2 of the Act:
2.
"certification mark" means a mark that is used for the purpose
of distinguishing or so as to distinguish wares or services that
are of a defined standard with respect to
(a) the character or quality of the wares or services,
(b) the working conditions under which the wares have been
produced or the services performed,
(c) the class of persons by whom the wares have been
produced or the services performed, or
(d) the area within which the wares have been produced or
the services performed,
from wares or services that are not of such a defined
standard;
A certification mark is a trade mark under the
Act as appears under the definition of trade mark
in section 2:
6 [1987] 3 F.C. 544; 14 C.P.R. (3d) 314.
2.
"trade mark" means
(b) a certification mark,
Section 23 provides that a certification mark
may be registered only by a person who was not
engaged in the manufacture of wares or the
performance of the services involved. The owner
may licence others to use the mark in association
with their wares or services. He may prevent its
use by unlicensed persons.
Cattanach J. appropriately described a certifica
tion mark in The Wool Bureau of Canada, Ltd. v.
Queenswear (Canada) Ltd.' at page 15: "It is
tantamount to the conferment of a seal of approval
and would naturally enhance the sale of a product
so identified in accordance with the good repute
acquired by the certification mark."
The National also argues that, even where
marks are not registered, the right of a profession
al association to confer designations on certain of
its members who have met certain standards has
been recognized and protected by the Court. And-
erson J. of the Ontario High Court of Justice in
Canadian Board for Certification of Prosthetists
and Orthotists v. Canadian Pharmaceutical Asso
ciation et al.' granted an interlocutory injunction
to restrain the defendant board from using the
designations "Certified Orthotist" and "c.o." or
"co" as professional designations. The plaintiff
board had been organized since 1967 to administer
educational programmes in the prosthetists and
orthotists professions. It had been granted letters
patent establishing it as a non-profit corporation
under the Canada Corporations Act. 9
Counsel for the National also referred to four
English High Court of Justice, Chancery Division,
decisions wherein the designations of certain socie-
' (1980), 47 C.P.R. (2d) 11 (F.C.T.D.).
8 (1985), 5 C.P.R. (3d) 236 (Ont. ITC.).
9 R.S.C. 1970, c. C-32.
ties were protected by the Court. 10
Counsel for the Provincial pointed out that in
the Ontario case the Court was merely dealing
with an interlocutory injunction and it was there
fore sufficient for the Court to find a prima facie
case, or at least a serious issue to be tried. As to
the English cases, since that country is a unitary
state, the Court did not have to deal with the
division of powers as between a federal parliament
and provincial legislatures. Moreover, in none of
those cases were the defendants' designations
granted by statute.
On the other hand, the Provincial argues, first,
that the titles at issue are professional designa
tions, not certification marks, and may not be
registered. In fact, the documentary evidence sub
mitted by the National shows in many instances
that it considers chartered life underwriters as
professionals and the designations in question to be
professional titles. As they are professional titles,
they are used in association with persons, not in
association with wares or services.
Just as the words "lawyer", "notary", "physi-
cian", "engineer" and so on cannot be registered
as certification marks, so the title "chartered life
underwriter" cannot be regarded as a certification
mark. In my view, the name of a profession itself
cannot be used, as a standard, a definite norm, a
distinguishing mark that can be placed on wares or
services.
A recent decision of my brother Muldoon J. in
Canadian Council of Professional Engineers v.
Lubrication Engineers, Inc." has already ruled
that professional designations cannot be registered
as the Registrar would then be usurping the
powers conferred on the provinces to regulate
10 Society of Accountants and Auditors v. Goodway
(1907), 24 R.P.C. 159 (Ch. D.); Toms and Moore v. Merchant
Service Guild Ld. (1908), 25 R.P.C. 474 (Ch. D.); British
Legion v. British Legion Club (Street) Ld. (193I), 48 R.P.C.
555 (Ch. D.); and Society of Incorporated Accountants v.
Vincent (1954), 71 R.P.C. 325 (Ch. D.).
" [1985] 1 F.C. 530 (T.D.).
professions, powers which are deemed to be public
in nature. It is true that the Province of Quebec
has not yet placed the profession of "chartered life
underwriter" on the list of professions, but surely
federal legislation cannot be used to deny the
province the right to do so when it sees fit.
The evidence shows that what the National
provides and the Provincial would like to offer, is
services, specifically specialized courses in insur
ance enabling insurers who so desire to become
qualified as, and earn the title of, "chartered life
underwriters". As the faculties of medicine and
law produce physicians and lawyers without there
by assuming the right to register the names of
those professions as certification marks, so the
National, even if its federal authorization to hold
examinations and confer titles were valid (which is
not admitted), does not thereby acquire the right
to register those titles as certification marks.
The following passage from Muldoon J. in the
aforesaid case is worth reproducing, since it men
tions another reason justifying the refusal to regis
ter professional titles as trade marks (at page 550):
There is another reason for declining to register professional
designations as trade marks. It is a practical reason which is
completely consonant with the statutory prohibitions. It is that
the registrar cannot practicably know, from day to day, who is
entitled to bear a professional title or who is forbidden to do so
by reason of expulsion from a provincial or territorial profes
sional association or relinquishment of professional status.
Records of such matters are kept by provincial and territorial
governing bodies established by their appropriate statutes. They
have the authorized task of effecting professional discipline and
of enforcing their respective laws prohibiting unauthorized
practice and unauthorized use of professional designations
which "lead to the belief' among the public that an unlicensed
or unregistered person is a qualified member of the particular
professional association.
Under the provisions of paragraph 18(1)(a) of
the Act, the registration of a trade mark is invalid
if the trade mark in question was not registrable
on the date of the registration. To find out whether
a mark is registrable, we must fall back to section
12 of the Act, which provides in paragraph
12(1)(b) that a mark is registrable if it is not
clearly descriptive of the persons required to pro
vide the services concerned in the registration. It
seems clear to me that the titles "Chartered Life
Underwriter" and "Assureur -vie agréé" are
descriptive and that the certification marks "cLu"
and "AVA" are only initials representing these two
titles.
However, subsection 12(2) of the Act provides
that a trade mark which is not registrable under
the foregoing paragraph may be so registrable if it
has been used by the applicant in Canada so as to
have become distinctive.
In this regard the Provincial presented an expert
in marketing, Mr. Sylvain Tessier, MBA, and his
affidavit concerning a poll conducted in Québec
and Montréal using telephone questionnaires. On a
final sample of 600 persons polled the survey gave
detailed results which are reflected in the following
paragraph of the conclusions:
[TRANSLATION] In conclusion, it can be said that the mean
ing of the designations "AVA" and "cLu" is not well known.
Too few persons were able to define their meaning and even
fewer were able to connect a chartered life underwriter with the
name of the organisation conferring that title on him. Thus, of
the 600 persons answering, question 2, 1.3% recognized and
defined AVA and 2.8% recognized and defined CLU. It is only
when it was given in full that the person answering said he was
familiar with "chartered life underwriter". The recognition
percentage (67.5%) is not surprising when we consider that the
term "chartered life underwriter" is a very clear description of
the person's profession. On the other hand, question 2 con
vinced us that the designations "AVA" and "cLu" are not well
known.
Counsel for the National, as expected and in
accordance with a well-established tradition in
such adversary proceedings, mounted a frontal
attack on the validity of the poll. I note two
arguments in addition to the classical ones based
on the jurisprudence in the matter: the poll was
not bilingual and the persons answering were
divided equally between Montréal and Québec,
though the population of the metropolitan area is
several times greater than that of the provincial
capital. However, the explanations given by the
expert witnesses were satisfactory. Only two per
sons were unable to answer because the questions
were put in French only. As regards the equal
number of persons questioned in the two cities, the
expert weighted the results in accordance with
sampling data. The purpose of the weighing was to
give to each person questioned a weight corre
sponding to his actual weight in the population
tested: he thus obtained a sample which was repre
sentative of the population.
At the outset both parties recognized the compe
tence of the expert witness. For my part, I am
persuaded that the sample was conducted in
accordance with accepted scientific standards in
the matter. Personally, I must say that before
hearing this case I had no idea as to the meaning
of the designations AVA and cLu. I was of course
familiar with the title "chartered accountant", but
I do not recall having heard or seen the terms
"Assureur -vie agréé" and "Chartered Life Under
writer". As regards the marks AVA and CLu, I
cannot find that they have been so used in Canada
as to have become distinctive.
The evidence further established that the titles
Cru and "Chartered Life Underwriter" are used
by life insurers who have obtained their qualifica
tions in the United States and Jamaica, without
distinction as to the origin of their titles. However,
it was not established that these agents had
worked in Canada.
The Provincial also argued that an unregistered
certification mark cannot form the basis for an
action. Subsection 23(3) of the Act provides that
the owner of a registered certification mark may
prevent its use by unauthorized persons. As a
certification mark is not a creature of the common
law or the civil law, but of the Trade Marks Act, if
it is not registered in accordance with that Act it
does not therefore deserve the same protection as
other trade marks. Counsel submitted no prece
dents for or against this proposition. My research
uncovered nothing on point. If the certification
mark did not exist at common law and is the
creature of a statute, it is limited by the provisions
of that statute.
In particular, the expressions "Assureur -vie
agréé" and "Chartered Life Underwriter" are
purely generic and descriptive expressions, as can
be seen by the use made of them by the plaintiff
itself. Once again, a descriptive word cannot be a
trade mark.
According to the Provincial, the National has
been guilty of "genericide", a cardinal sin in trade
marks matters which consists of adopting a mark
so generic as to self-destruct. The documentation
of the National teems with genericidal expressions,
such as "the chartered life underwriter is compe
tent", the "AVA is a professional", and so on: in
short, an unforgivable crime.
In this connection, the National cannot rely on
paragraph 7(b) of the Act. Following the judg
ment of the Supreme Court of Canada in Mac-
Donald et al. v. Vapor Canada Ltd.,' 2 it is now
established that this Court does not have jurisdic
tion to make a finding of passing off under this
paragraph without the support of appropriate
legislation. The federal legislation in the matter,
namely the Trade Marks Act, provides no right of
action for an unregistered certification mark. Such
a mark therefore cannot benefit from the protec
tion provided by paragraph 7(b) of the Act.
For all these reasons, therefore, it follows that
the certification marks of the National are invalid
and the National accordingly is not entitled to the
injunction. This decision would end the matter, but
as it may be reversed and as the constitutional and
corporate arguments are also highly significant, 1
feel I ought to review them and draw the necessary
conclusions.
4. The incorporation of the plaintiff
The National was incorporated by an Act of the
Parliament of Canada entitled An Act to incorpo
rate The Life Underwriters' Association of
Canada" assented to on July 19, 1924. The
objects and powers of the Association are recited
in section 2 which reads as follows:
- 11977] 2 S.C.R. 134.
" S.C. 1924, c. 104 (as am. by S.C. 1957, c. 46).
2. The objects and powers of the Association shall be to
promote by all lawful means the proper and efficient practice of
the business of life insurance within the Dominion of Canada;
and for the said purpose,—
(a) To publish, distribute and sell pamphlets, periodicals,
journals, books and other literature relating to the business of
life insurance;
(b) To devote the funds of the Association to promoting the
welfare of its members in such manner as the Association
may decide;
(c) To hold such examinations on the principles and practice
of life insurance or general educational attainments, as may
be found expedient;
(d) To grant certificates of efficiency to its members;
(e) To authorize the use by such of its members as it may
designate of the title and description "Chartered Life Under
writer of Canada."
The National argues that, although under sub
section 92(11) of the Constitution Act, 1867 [30
& 31 Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II,
No. 5] (as am. by Canada Act 1982, 1982, c. 11
(U.K), Schedule to the Constitution Act, 1982,
Item 1)], the provinces have the exclusive power
for the incorporation of companies with provincial
objects, that provision merely confines the charac
ter of the actual powers and rights which the
Provincial government can bestow, but does not
take away the right of the Federal Parliament to
incorporate companies for objects other than pro
vincial. In a 1916 decision of the House of Lords,
Bonanza Creek Gold Mining Company v. Rex 14 it
was held that a company incorporated by letters
patent possessed the rights normally bestowed
upon a natural person to carry on business
throughout Canada, no matter under what juris
diction it was incorporated. Viscount Haldane,
L.C. said as follows at page 583:
The whole matter may be put thus: The limitations of the
legislative powers of a province expressed in s. 92, and in
particular the limitation of the power of legislation to such as
relates to the incorporation of companies with provincial
objects, confine the character of the actual powers and rights
which the provincial Government can bestow, either by legisla
tion or through the Executive, to powers and rights exercisable
within the province. But actual powers and rights are one thing
and capacity to accept extra-provincial powers and rights is
quite another.
However, a company must comply with the laws
of the province in which it is carrying on business.
'' [1916] 1 A.C. 566 (P.C.).
Its incorporation under federal statute does not
confer upon it special status. In Citizens Insurance
Company of Canada v. Parsons" Sir Montague E.
Smith said as follows at pages 116-117:
But, in the first place, it is not necessary to rest the authority
of the dominion parliament to incorporate companies on this
specific and enumerated power. The authority would belong to
it by its general power over all matters not coming within the
classes of subjects assigned exclusively to the legislatures of the
provinces, and the only subject on this head assigned to the
provincial legislature being "the incorporation of companies
with provincial objects," it follows that the incorporation of
companies for objects other than provincial falls within the
general powers of the parliament of Canada. But it by no
means follows (unless indeed the view of the learned judge is
right as to the scope of the words "the regulation of trade and
commerce") that because the dominion parliament has alone
the right to create a corporation to carry on business through
out the dominion that it alone has the right to regulate its
contracts in each of the province. (My underlining.)
In John Deere Plow Company v. Wharton' 6 the
House of Lords found that the authority of the
Parliament of Canada to legislate for "the regula
tion of trade and commerce" conferred by subsec
tion 91(2) of the Constitution Act, 1867 enables
the Parliament to prescribe the extent and limits of
the powers of companies, the objects of which
extend to the entire Dominion. The status and
powers of a Dominion company as such cannot be
destroyed by a provincial Legislature. Viscount
Haldane, L.C. referring to their Lordships, said at
pages 340-341:
But they think that the power to regulate trade and commerce
at all events enables the Parliament of Canada to prescribe to
what extent the powers of companies the objects of which
extend to the entire Dominion should be exercisable, and what
limitations should be placed on such powers. For if it be
established that the Dominion Parliament can create such
companies, then it becomes a question of general interest
throughout the Dominion in what fashion they should be
permitted to trade .... They do not desire to be understood as
suggesting that because the status of a Dominion company
enables it to trade in a province and thereby confers on it civil
rights to some extent, the power to regulate trade and com
merce can be exercised in such a way as to trench, in the case
of such companies, on the exclusive jurisdiction of the provin
cial Legislatures over civil rights in general .... It is enough
for present purposes to say that the Province cannot legislate so
as to deprive a Dominion company of its status and powers.
This does not mean that these powers can be exercised in
15 (1881), 7 App. Cas. 96 (P.C.).
16 [1915] A.C. 330 (P.C.).
contravention of the laws of the Province restricting the rights
of the public in the Province generally. What it does mean is
that the status and powers of a Dominion company as such
cannot be destroyed by provincial legislation. This conclusion
appears to their Lordships to be in full harmony with what was
laid down by the Board in Citizens Insurance Co. v. Parsons.
(My underlining.)
The National invites the Court to hold that the
object of the plaintiff to promote the business of
life insurance within the Dominion of Canada is
not a provincial object and that the federal Parlia
ment has an incorporating power by virtue of the
residuary character of the "Peace, Order, and
good Government" power in the opening words of
section 91.
The National also submits that the power of the
federal Parliament to incorporate goes beyond
mere incorporation: it is part of the internal order
ing, as distinguished from commercial activities. In
Multiple Access Ltd. v. McCutcheon et al. ' 7 the
Supreme Court of Canada had to decide whether
the "insider trading" provisions of Ontario The
Securities Act' were ultra vires and inoperative
under the paramountcy doctrine with respect to a
federally-incorporated company because they
duplicated provisions of the Canada Corporations
Act. Dickson J. (as he then was) stated at pages
176-177:
It has been well established ever since John Deere Plow Co.
v. Wharton, [1915] A.C. 330 (P.C.) that the power of legislat
ing with reference to the incorporation of companies with other
than provincial objects belonged exclusively to the Dominion
Parliament as a matter covered by the expression "the peace,
order and good government of Canada". Additionally, the
power to regulate trade and commerce, at all events, enabled
the Parliament of Canada to prescribe to what extent the
powers of companies the objects of which extend to the entire
Dominion should be exercisable and what limitations should be
placed on such powers ... The power of Parliament in relation
to the incorporation of companies with other than provincial
objects has not been narrowly defined. The authorities are clear
that it goes well beyond mere incorporation. It extends to such
matters as the maintenance of the company, the protection of
creditors of the company and the safeguarding of the interests
of the shareholders. It is all part of the internal ordering as
distinguished from the commercial activities.
" [1982] 2 S.C.R. 161.
18 [The Securities Act], R.S.O. 1970, c. 426.
The Provincial admits that the Federal Parlia
ment has the necessary jurisdiction to incorporate
federal companies under the provisions of the
introductory paragraph of section 91 of the Con
stitution Act, 1867. However, this jurisdiction is
limited to the incorporation of companies for other
than provincial purposes. It submits that the
National's enabling legislation is ultra vires as it is
really an attempt to regulate a purely local com
mercial activity or industry, namely the business of
life insurance and the activity of a life insurer, and
to legislate on educational and professional mat
ters, which are all fields within exclusive provincial
jurisdiction.
If one considers the objects and powers con
ferred on the National by section 2 of its enabling
legislation, one can see that the objects and powers
in question are manifestly within provincial juris
diction, in particular, paragraphs (c), (d) and (e),
which I reproduce for ease of reference:
2....
(e) to hold such examinations on the principles and practice of
life insurance or general educational attainments; as may
be found expedient;
(d) to grant certificates of efficiency to its members;
(e) to authorize the use by such of its members as it may
designate of the title and description "Chartered Life
Underwriter of Canada."
It is well established that education is a provin
cial matter under section 93 of the Constitution
Act, 1867, and it is manifest that the authority to
hold examinations, grant certificates of efficiency
and confer titles on persons in the profession falls
within the field of professional education. If the
federal Parliament attempted to pass legislation
authorizing a federal corporation to hold examina
tions and grant degrees to traditional professionals,
such as lawyers or physicians, or to tradesmen,
such as plumbers or electricians, who are not
employed by the federal government but work in
the provinces, either for themselves or for private
corporations, such interference would be clearly
unacceptable and such a statute of the federal
Parliament would be ultra vires as it would be a
flagrant breach of the division of powers provided
in the Constitution Act, 1867. The mere adding of
the words "in the Dominion of Canada" in section
2, cited above, does not turn an essentially provin
cial activity into a federal one.
It is beyond question that the regulation of an
industry or commercial activity in a province is
within the exclusive jurisdiction of that province
under subsection 92(13) of the Constitution Act,
1867, "Property and Civil Rights in the Province".
In this connection I return to the Citizens case,
already cited, and in particular to this passage
from Sir Montague E. Smith, at pages 110-111:
Their Lordships cannot think that the latter construction is the
correct one. They find no sufficient reason in the language
itself, nor in the other parts of the Act, for giving so narrow an
interpretation to the words "civil rights." The words are suf
ficiently large to embrace, in their fair and ordinary meaning,
rights arising from contract, and such rights are not included in
express terms in any of the enumerated classes of subjects in
sect. 91
If, however, the narrow construction of the words "civil rights,"
contended for by the appellants were to prevail, the dominion
parliament could, under its general power, legislate in regard to
contracts in all and each of the provinces, and as a consequence
of this the province of Quebec, though now governed by its own
Civil Code, founded on the French law, as regards contracts
and their incidents, would be subject to have its law on that
subject altered by the dominion legislature, and brought into
uniformity with the English law prevailing in the other three
provinces, notwithstanding that Quebec has been carefully left
out of the uniformity section of the Act.
In 1916, the Privy Council in Attorney-General
for Canada v. Attorney-General for Alberta" held
that section 4 of the The Insurance Act, 1910 20 ,
enacted by the Parliament of Canada was ultra
vires of the Parliament of Canada. The section
purported to prohibit the business of life insurance
in Canada to any person not holding a license from
the federal Minister. The Court held that the
authority conferred by the Constitution Act, 1867,
subsection 91(2) to legislate on trade and com
merce does not extend to the regulation by a
licensing system of a particular trade in which
Canadians would otherwise be free to engage in
the provinces. Since that authority could not be
'`' [1916] 1 A.C. 588 (P.C.).
20 S.C. 1910, c. 32.
enacted under the general power conferred by
section 91 to legislate for the peace, order and
good government of Canada, as it trenched upon
the legislative authority granted to the provinces
by subsection 92(13) to make laws as to civil rights
in the province, then the legislation was ultra
vires. Viscount Haldane L.C. said at page 597:
No doubt the business of insurance is a very important one,
which has attained to great dimensions in Canada. But this is
equally true of other highly important and extensive forms of
business in Canada which are to-day freely transacted under
provincial authority. Where the British North America Act has
taken such forms of business out of provincial jurisdiction, as in
the case of banking, it has done so by express words ....
In a 1977 decision, Canadian Indemnity Co. et
al. v. A.-G. of British Columbia 21 the Supreme
Court of Canada ruled that a provincial legislation
establishing a compulsory automobile insurance
plan was valid. Martland J. said as follows at page
512:
The impact of the legislation upon the appellants' automobile
insurance business in British Columbia could not be more
drastic. However, that effect of the legislation upon companies
whose operations are interprovincial in scope does not mean
that the legislation is in relation to interprovincial trade and
commerce. The aim of the legislation relates to a matter of
provincial concern within the Province and to property and civil
rights within the Province.
The field of regulation of trades and professions
is also within provincial jurisdiction. In his book
Constitutional Law of Canada, 2nd ed., Peter W.
Hogg wrote at page 461:
7. Professions and trades
Regulation of professions and trades typically takes the form
of restrictions on entry, coupled with rules of conduct, which
often include fee-setting, and administration by a governing
body. Such regulation is no different for constitutional purposes
than that of other industries, and comes within property and
civil rights in the province.
In Lafferty v. Lincoln 22 the Supreme Court of
21 [1977] 2 S.C.R. 504.
22 ( 1907), 38 S.C.R. 620.
Canada held that The Medical Profession Act 23 of
Alberta was intra vires. Idington J. said at page
627:
It certainly would fall within the usual powers given to
provinces of the Dominion; to regulate the practice of medicine;
to regulate the practice of law, or other like professions; to fix
the standards of qualification entitling such persons to practice;
to prohibit others respectively not so qualified from practising;
and if need be, to carry into effect such powers, to create
colleges or such other corporations as the Legislature might
deem proper.
Lieff J. of the Ontario Supreme Court in Re
Imrie and Institute of Chartered Accountants of
Ontario 24 dealt with the rules of professional con
duct at the Institute of Chartered Accountants of
Ontario regarding false statements and a provision
of the Criminal Code on the same matter. He said
at page 277:
However, it would appear to be more correct to look at the pith
and substance of these enactments. The federal Government is
attempting to control public morality by prohibiting certain
types of conduct. The provincial Government has created the
Institute of Chartered Accountants and has given it the power
to enact rules to control the standard of fitness, moral character
and professional conduct of its members. The Legislature has
simply provided the Institute with a means of controlling its
members, such power being clearly permitted under the author
ity of s. 92 of the B.N.A. Act, 1867.
In Jabour v. Law Society of British Columbia
et al. 25 the Supreme Court of Canada discussed
the restrictions imposed upon advertising by law
yers by the Bar of a province and the application
of federal legislation namely the Combines Inves
tigation Act, 26 to those restrictions. The Court
found inter alia that the provincial Legal Profes
sions Act 27 validly authorized the Benchers to take
disciplinary action against a lawyer named Jabour
for engaging in advertising. It also held that a
province is authorized to regulate the moral and
financial aspects of a business carried on or a
profession practiced within its boundaries. Estey J.
said at pages 334-335:
223 S.A. 1906, c. 28.
24 [1972] 3 O.R. 275 (H.C.).
2 ' [1982] 2 S.C.R. 307.
26 R.S.C. 1970, c. C-23.
27 R.S.B.C. 1960, c. 214 (now Barristers and Solicitors Act,
R.S.B.C. 1979, c. 26).
The matter reaches even further. The general public is not in a
position to appraise unassisted the need for legal services or the
effectiveness of the services provided in the client's cause by the
practitioner, and therefore stands in need of protection. It is the
establishment of this protection that is the primary purpose of
the Legal Professions Act. Different views may be held as to
the effectiveness of the mode selected by the Legislature, but
none of the parties here challenged the right of the province to
enact the legislation. It is up to the Legislature to determine the
administrative technique to be employed in the execution of the
policy of its statutes. I see nothing in law pathological about the
selection by the provincial Legislature here of an administrative
agency drawn from the sector of the community to be
regulated.
Of course, the federal Parliament has the power
to create companies with federal purposes. Section
154 of the Canada Corporations Act clearly pro
vides that the Minister may incorporate companies
without share capital for any of the "objects, to
which the legislative authority of the Parliament of
Canada extends"; and the federal Parliament may
from time to time justify the constitutionality of a
law of general application which incidentally
affects property and civil rights within a province.
Parliament may see to the establishment of an
administrative governmental body to control the
application of such a law. It has not done so in this
case. However, the absence of such a body does
not render the law unconstitutional.
In MacDonald et al. v. Vapor Canada Ltd. 28 the
Supreme Court of Canada dealt with paragraph
7(e) of the Trade Marks Act, prohibiting anyone
from acting contrary to honest industrial or com
mercial usage in Canada. The Supreme Court held
paragraph 7(e) ultra vires the Parliament because
it was legislation affecting property and civil
rights, and concluded that the Federal Court
lacked jurisdiction in the matter. Laskin C.J. said
at page 156:
In the absence of any regulatory administration to oversee the
prescriptions of s. 7 (and without coming to any conclusion on
whether such an administration would in itself be either suffi
cient or necessary to effect a change in constitutional result), I
cannot find any basis in federal power to sustain the unquali
fied validity of s. 7 as a whole or s. 7(e) taken alone. It is not a
sufficient peg on which to support the legislation that it applies
throughout Canada when there is nothing more to give it
validity.
28 [1977] 2 S.C.R. 134.
1 therefore conclude that paragraphs (c), (d)
and (e) of section 2 of the National's enabling
legislation are directed at matters within provin
cial jurisdiction and are ultra vires the Parliament
of Canada.
5. The Quebec Insurance Act and the Trade
Marks Act
In 1974 the Province of Quebec amended its
Quebec Insurance Act to include section 335 men
tioned above. As paragraph 335(b) reads, the Pro
vincial is granted the power to issue the designa
tions "Chartered Life Insurers" (c.L.u.) or
"Assureur -vie agréé" (A.v.A.). It is common
ground that there is an obvious error: the English
designations should have read "Chartered Life
Underwriters" ("c.L.u."). Moreover, the English
name of the association is given as "Provincial Life
Insurers Association of Quebec", but ought to
have read the "Provincial Association of Quebec
Life Underwriters".
The drafting of this particular paragraph is
somewhat less than masterful. It stipulates that
the insurance agent may have the right to the titles
"with the approval of" the Provincial "in accord
ance with the rules of that Association". The
National argues that in 1974, when the legislation
was enacted, the rules of the Provincial were to the
effect that the National was granting the titles:
therefore, paragraph 335(b) merely confirms the
authority of the National over the titles. Right up
to 1987, the statutes or rules of the Provincial
required, as a condition of use of such designa
tions, that a person be a member of the National
in good standing. The Provincial, however, no
longer operates under the same rules and wants to
enforce its own right to grant the titles.
On the other hand, the National seeks the pro
tection of the Trade Marks Act. It is well estab
lished that the Federal Parliament has the com
petence to enact trade mark laws. In Attorney-
General for Ontario v. Attorney-General for
Canada 29 Lord Atkin of the Privy Council said as
follows at page 417:
29 [1937] A.C. 405 (P.C.).
There exists in Canada a well established code relating to
trade marks created by Dominion statutes, to be found now in
the Trade Marks and Designs Act, R.S.C., 1927, c. 201,
amended by S.C., 1928, c. 10. It gives to the proprietor of a
registered trade mark the exclusive right to use the trade mark
to designate articles manufactured or sold by him. It creates,
therefore, a form of property in each Province and the rights
that flow therefrom. No one has challenged the competence of
the Dominion to pass such legislation. If challenged one obvious
source of authority would appear to be the class of subjects
enumerated in s. 91(2), the Regulation of trade and commerce,
referred to by the Chief Justice.
That decision was quoted with approval by the
Supreme Court of Canada in Dominion Stores
Ltd. v. The Queen 3° wherein Estey J. said at page
861:
The Canada Standards legislation was approached and vali
dated by the Privy Council as legislation in relation to trade
marks. The pith and substance of the Canada Standards statute
was clearly a trade mark creation and licensing plan which the
Privy Council found to be valid legislation based on s. 91(2) of
the British North America Act.
The National argues that if there be a conflict
between the Trade Marks Act and the Quebec
Insurance Act, then under the doctrine of para-
mountcy the federal legislation must prevail. That
doctrine was expounded by Lord Watson of the
Privy Council in Attorney-General for Ontario v.
Attorney-General for the Dominion." He wrote at
page 366:
It has been frequently recognised by this Board, and it may
now be regarded as settled law, that according to the scheme of
the British North America Act the enactments of the Parlia
ment of Canada, in so far as these are within its competency,
must override provincial legislation.
In Attorney-General for Canada v. Attorney-
General for British Columbia, 32 Lord Tomlin of
the Privy Council established four principles to
assist in the determination of such a conflict of
jurisdiction (at page 118):
Questions of conflict between the jurisdiction of the Parlia
ment of the Dominion and provincial jurisdiction have fre
quently come before their Lordships' Board, and as the result of
the decisions of the Board the following propositions may be
stated:—
(1.) The legislation of the Parliament of the Dominion, so
long as it strictly relates to subjects of legislation expressly
30 [1980] 1 S.C.R. 844.
3' [1896] A.C. 348 (P.C.).
32 [1930] A.C. 1l 1 (P.C.).
enumerated in s. 91, is of paramount authority, even though it
trenches upon matters assigned to the provincial legislatures by
s. 92: see Tennant v. Union Bank of Canada.
(2.) The general power of legislation conferred upon the
Parliament of the Dominion by s. 91 of the Act in supplement
of the power to legislate upon the subjects expressly enumer
ated must be strictly confined to such matters as are unques
tionably of national interest and importance, and must not
trench on any of the subjects enumerated in s. 92 as within the
scope of provincial legislation, unless these matters have
attained such dimensions as to affect the body politic of the
Dominion: see Attorney-General for Ontario v. Attorney-
General for the Dominion.
(3.) It is within the competence of the Dominion Parliament
to provide for matters which, though otherwise within the
legislative competence of the provincial legislature, are neces
sarily incidental to effective legislation by the Parliament of the
Dominion upon a subject of legislation expressly enumerated in
s. 91: see Attorney-General of Ontario v. Attorney-General for
the Dominion; and Attorney-General for Ontario v. Attorney-
General for the Dominion.
(4.) There can be a domain in which provincial and Domin
ion legislation may overlap, in which case neither legislation
will be ultra vires if the field is clear, but if the field is not clear
and the two legislations meet the Dominion legislation must
prevail: see Grand Trunk Ry. of Canada v. Attorney-General
of Canada.
In practice, the courts have always endeavoured
to award an interpretation of the competing stat
utes so as to avoid conflict. For instance, Dickson
J. said as follows in the Multiple Access case
aforementioned at page 191:
In principle, there would seem to be no good reasons to speak
of paramountcy and preclusion except where there is actual
conflict in operation as where one enactment says "yes" and the
other says "no"; "the same citizens are being told to do
inconsistent things"; compliance with one is defiance of the
other.
In a more recent Supreme Court decision,
Deloitte Haskins and Sells Ltd. v. Workers' Com
pensation Board et al. 33 Wilson J. posed the ques
tion and gave her own answer, at page 806:
How then should the constitutional question stated by the
Chief Justice be answered? Does s. 107(1)(h) of the Bankrupt
cy Act conflict with s. 78(4) of The Workers' Compensation
Act so as to render the latter provision inoperable? I do not
believe so. Section 78(4) does not purport to deal with a
bankruptcy situation and, by virtue of the presumption of
constitutionality, the provincial legislature is presumed to be
legislating within its competence rather than outside it. Faced
with the choice of construing the provincial legislation in a way
which would cause it to invade the federal sphere, thereby
attracting the doctrine of paramountcy, or construing it in
accordance with the presumption of constitutionality, I prefer
J3 [1985] 1 S.C.R. 785.
the latter course. I believe also that it accords better with the
more recent authorities on the scope of the paramountcy
doctrine.
The National invites the Court to resolve the
conflict in the light of the fact that the National,
since 1924, has adopted the designations and con
ferred them upon its members, whereas the Pro
vincial, incorporated in 1972, required under its
own rules that anyone using the designations be a
member of the National: therefore, it was in such
circumstances that the Quebec Legislation was
passed and it should be read accordingly, without
any invasion of the federal field.
The National argues that the Province of
Quebec cannot be taken to permit a private organ
ization, such as the Provincial, merely by amend
ing its own rules, to defeat the valid trade mark
rights of the National. It submits that the Provin
cial has never been a government body and that
insurance underwriting has not been designated as
a profession under the Professional Code of
Quebec. 34
On the other hand, even assuming that the
National was validly incorporated and is acting
intra vires, it cannot exercise these powers in
contravention of the Province of Quebec which
specify the rights of persons in that province.
In John Deere Plow Company v. Wharton 35 the
House of Lords was dealing with the Companies
Act of British Columbia 36 which provided that
companies incorporated by the Dominion Parlia
ment shall be licensed or registered under the
provincial act as a condition of carrying on busi
ness in that province. The Court held that the
authority of the Parliament of Canada to legislate
for "the regulation of trade and commerce" con
ferred by subsection 91(2) of the Constitution Act,
1867 enables the Parliament to prescribe the
extent and limits of the powers of companies the
objects of which extend to the entire Dominion:
therefore the status and powers of a Dominion
company as such cannot be destroyed by a provin -
34 R.S.Q. 1977, c. C-26.
35 supra, no. I 6.
36 R.S.B.C. 1911, c. 39.
cial Legislature. However, Viscount Haldane L.C.
said as follows at page 341:
It is enough for present purposes to say that the Province
cannot legislate so as to deprive a Dominion company of its
status and powers. This does not mean that these powers can be
exercised in contravention of the laws of the Province restrict
ing the rights of the public in the Province generally. [My
underlining.]
Even if the trade marks in question were valid
and registered, that property right would not by
itself entitle the National to act in contravention of
the laws of a province. In Benson and Hedges
(Canada) Ltd. et al. v. Attorney-General of Brit-
ish Columbia" the B.C. Supreme Court held that
the Province had the legislative authority to pro
hibit the sale of liquor, including advertising.
Hinkson J. said at page 266:
It is contended that the restriction on advertising is an improper
restriction upon the use of the trade mark, but for the reasons
stated by Viscount Haldane, L.C., in the John Deere Plow Co.
v. Wharton decision, supra, I conclude that the rights arising
from the granting of a trade mark cannot be exercised in
contravention of the laws of the Province restricting the rights
of the public in the Province generally. [My underlining.]
Peter W. Hogg in his Constitutional Law of
Canada, 2nd edition, under the chapter entitled
"Characterization of laws" dealt with the "pith
and substance" doctrine which enables one level of
government to enact laws with substantial impact
on matters outside its jurisdiction. He pointed out
that there are many examples of laws which have
been upheld despite their incidental impact on
matters outside the enacting body's jurisdiction.
He wrote at page 314:
A provincial law in relation to insurance (provincial matter)
may validly restrict or even stop the activities of federally-
incorporated companies (federal matter);
In my view, such is the case here. The Quebec
Insurance Act may validly control the activities of
the National in a provincial matter such as the
exercise of the profession of insurance underwriter
" (l972), 27 D.L.R. (3d) 257 (B.C.S.C.).
and the conferment of titles upon the members of
that profession.
6. Corporate ultra vires
Counsel for the Provincial submitted that even if
the enabling legislation creating the National were
regarded as constitutionally valid, that does not
confer upon it the powers of a natural person. It is
limited to the powers expressly awarded to it by
the special act which created it. That is the princi
ple of ultra vires as stated by Viscount Haldane
L.C. in Bonanza Creek, cited above, at page 577:
The doctrine means simply that it is wrong, in answering the
question what powers the corporation possesses when incorpo
rated exclusively by statute, to start by assuming that the
Legislature meant to create a company with a capacity resem
bling that of a natural person, such as a corporation created by
charter would have at common law, and then to ask whether
there are words in the statute which take away the incidents of
such a corporation.
In other words, a corporation created by special
act has no powers other than those contained in
the Act, except, of course, the inherent powers
described in the Interpretation Act" and in par
ticular under section 20, namely to sue and be
sued, to contract and be contracted with and to
acquire and hold personal property, as well as
other powers not relevant here. Additional to these
powers are those specifically provided for in the
Canada Corporations Act, Part IV.
In the case of the National, section 12 of its
enabling legislation authorized it to hold real prop
erty with a total value not exceeding $100,000. An
amendment was made in 1957 to retroactively
eliminate this limitation.
The theory of ultra vires in corporate law is
restated by the writers James Smith and Yvon
Renaud, Droit Québécois des Corporations
Commerciales. 39 The paragraph taken from page
238 reflects the writers' thinking:
[TRANSLATION] 4. The company is an artificial person,
separate from the natural persons composing it, and it enjoys
powers that vary depending on its charter or statute of incorpo
ration. Commercial corporations are usually created by letters
patent under Part I of the Companies Act. Since Bonanza
3X R.S.C. 1970, c. 1-23.
39 Volume 1, Judico Inc., Montréal, 1974.
Creek Gold Mining Co. v. The King, there has been general
agreement that with respect to third parties the theory of ultra
vires does not limit the capacity of companies incorporated by
letters patent, only that of companies incorporated by special
statute.
Later, at page 244, the writers draw the follow
ing conclusion:
[TRANSLATION] 14. So far as third parties are concerned.
an ultra vires act of a company incorporated by special statute
is void, and cannot be ratified by the shareholders. (Ashbury
Rly Carriage and Iron Co. v. Riche (1875) L.J. 44 Ex. 185
(H.L.).)
Reference should also be made to two other
citations taken from the Bonanza Creek case,
supra. The first at page 578:
Such a creature, where its entire existence is derived from the
statute, will have the incidents which the common law would
attach if, but only if, the statute has by its language gone on to
attach them. In the absence of such language they are exclud
ed, and if the corporation attempts to act as though they were
not, it is doing what is ultra vires and so prohibited as lying
outside its existence in contemplation of law.
And also at page 584:
In the case of a company the legal existence of which is wholly
derived from the words of a statute, the company does not
possess the general capacity of a natural person and the doc
trine of ultra vires applies.
On the other hand, the National submits that a
corporation ought not to be prohibited from per
forming activities, such as using and registering
trade marks, as may be reasonably necessary to
the carrying out of its business. In a decision more
recent than Bonanza, C.P.R. v. City of Winnipeg'
the Supreme Court of Canada had to determine
whether a company (created by special statute as
in the case at bar) had the authority to enter into
an agreement with the City. Locke J. acknowl
edged that the authority of a statutory corporation
differed from that of a common law corporation.
However, such a corporation is not limited solely
to the objects specifically set out in the statute of
incorporation (at page 485):
The comment of Lord Selborne L.C., on the decision of the
House of Lords in Ashbury Railway Co. v. Riche, supra, in
Attorney General v. Great Eastern Railway Co., is that the
doctrine of ultra vires as explained in the earlier case is to be
maintained but that it should be reasonably understood and
applied and that whatever may fairly be regarded as incidental
to or consequential upon those things which the legislature has
[1952] 1 S.C.R. 424.
authorized ought not, unless expressly prohibited, be held by
judicial construction to be ultra vires. There is nothing in the
letters patent or in the Act of 1881 which prohibited the
railway company from entering into such a covenant as the one
here in question ... In my opinion, the contention that it was
beyond the powers of the Canadian Pacific Railway Co. to
enter into the bond and covenant, fails.
I take this to mean that companies incorporated
by special statute are entitled to the exercise of
powers which are incidental or consequential upon
the powers expressly authorized by statute, unless
such powers are expressly prohibited. In other
words, the statute must be given a broad interpre
tation so as not to unduly restrict the activities of
the company.
If we look again at section 2 of the National's
enabling legislation in light of the rules I have just
stated, it is clear that this section does not express
ly confer the power to offer courses of study or to
confer the titles "Assureur -vie agréé", "AVA",
"Chartered Life Underwriter" and "cLu". The
Act authorized the National to "hold examina
tions" and "grant certificates of efficiency". The
only titles which the Act expressly allows it to
confer are those of "Chartered Life Underwriter
of Canada" and "assureur licencié en assurance-
vie au Canada".
On the other hand, I am not prepared to say
that such powers would not be incidental or conse
quential upon the powers expressly granted to the
National by its statute of incorporation. In any
event, I do not have to make such a decision as to
the action is denied on other grounds.
CONCLUSIONS
For the plaintiff to obtain the injunction it is
seeking it must establish the following points:
First, that it has the legal capacity to bring an
action: for the foregoing reasons I find that it does
in fact have this capacity even though paragraphs
2(c), (d) and (e) of its enabling legislation are
ultra vires the Parliament of Canada;
Second, that the trade marks on which it bases
its action are validly registered: my conclusions are
that they are not;
Third, that the provisions of paragraph 7(b) of
the Trade Marks Act may compensate for the lack
of registration of certain marks: in the circum
stances, I have found that they do not;
Fourth, that the defendant is infringing the
plaintiff's rights to the registered or non-registered
marks: my conclusion is that the defendant did not
commit such an infringement but acted in accord
ance with the provincial statute governing its own
activities, a statute which is within the powers
conferred upon the provinces under the Constitu
tion Act, 1867.
The plaintiff is accordingly not entitled to an
injunction.
In accordance with these reasons, I must also
direct that the following registrations be struck
from the Register of Trade Marks:
TMA 335,823 for the mark "cru", registered on December 31,
1987;
TMA 335,977 for the mark "AVA", registered on December 31,
1987;
TMA 335,724 for the mark "Chartered Life Underwriter &
Design", registered on December 24, 1987; and
TMA 335,464 for the mark "Assureur -Vie Agréés & Design",
registered on December 18, 1987.
Finally, I find that paragraphs 2(c), (d) and (e)
of the Act to incorporate The Life Underwriters'
Association of Canada" are of no force or effect,
unconstitutional and ultra vires the Parliament of
Canada.
The whole with costs to the defendant.
41 S.C. 1924, c. 104 (as am. by S.C. 1957, c. 46).
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.