Citizen's Insurance Co. v. Parsons
Encyclopedia
Citizen's Insurance Company of Canada v. Parsons (1881), 7 App. Cas. 96 is a major Canadian constitutional case decided by the Judicial Committee of the Privy Council
. The Council interpreted the property and civil rights
clause of section 92(13) in the Constitution Act, 1867
to be read expansively to include contracts related to insurance to be within the power of the provincial governments, while the countervailing Trade and Commerce
clause of section 91(2) was to be read narrowly.
of the province, and only the federal government could regulate matters in relation to the trade and commerce power.
wrote the opinion of the Council. He notes, as a general proposition, that the British North America Act, 1867 must be interpreted as an ordinary statute.
The case largely turned on the issue of the law overlapping two heads of power. Smith focused on interpreting the Trade and Commerce power to which he famously stated that:
This was followed by,
As the section was inherently broad it was necessary to read it in a limited fashion.
In all, Smith establishes three characteristics of the trade and commerce power: 1) the "regulation of trade and commerce" should not be read literally 2) it includes international and interprovincial trade as well as "general regulation of trade affecting the whole dominion" 3) it does not extend to regulate contracts between businesses.
Judicial Committee of the Privy Council
The Judicial Committee of the Privy Council is one of the highest courts in the United Kingdom. Established by the Judicial Committee Act 1833 to hear appeals formerly heard by the King in Council The Judicial Committee of the Privy Council (JCPC) is one of the highest courts in the United...
. The Council interpreted the property and civil rights
Property and civil rights
In Canadian constitutional law, section 92 of the Constitution Act, 1867 provides the provincial government with the exclusive authority to legislate on matters related to property and civil rights in the Province. Note that civil rights in this context is different from what is understood as civil...
clause of section 92(13) in the Constitution Act, 1867
Constitution Act, 1867
The Constitution Act, 1867 , is a major part of Canada's Constitution. The Act created a federal dominion and defines much of the operation of the Government of Canada, including its federal structure, the House of Commons, the Senate, the justice system, and the taxation system...
to be read expansively to include contracts related to insurance to be within the power of the provincial governments, while the countervailing Trade and Commerce
Trade and Commerce
In Canadian constitutional law, section 91 of the Constitution Act, 1867 provides the federal government with the authority to legislate on matters related to the regulation of Trade and Commerce...
clause of section 91(2) was to be read narrowly.
Background
Parsons was the owner of a hardware store that was covered by an insurance policy provided by Citizen Insurance Co. of Canada. When a fire burnt down the store Parsons tried to collect on the insurance but he was denied on account of an exemption clause found in the contract. Parsons sued the Insurance Company for not conforming to the Ontario Fire Insurance Policy Act. The Insurance Company argued that the Act was ultra viresUltra vires
Ultra vires is a Latin phrase meaning literally "beyond the powers", although its standard legal translation and substitute is "beyond power". If an act requires legal authority and it is done with such authority, it is...
of the province, and only the federal government could regulate matters in relation to the trade and commerce power.
Opinion of the Council
Sir Montague SmithMontague Edward Smith
Sir Montague Edward Smith PC QC was a British barrister and judge who served as one of the last Justices of the Court of Common Pleas.-Life:...
wrote the opinion of the Council. He notes, as a general proposition, that the British North America Act, 1867 must be interpreted as an ordinary statute.
The case largely turned on the issue of the law overlapping two heads of power. Smith focused on interpreting the Trade and Commerce power to which he famously stated that:
- The words "regulation of trade and commerce," in their unlimited sense are sufficiently wide, if uncontrolled by the context and other parts of the Act, to include every regulation of trade ranging from political arrangements in regard to trade with foreign governments, requiring the sanction of parliament, down to minute rules for regulating particular trades.
This was followed by,
- But a consideration of the Act shows that the words were not used in this unlimited sense. In the first place the collocation of No. 2 with classes of subjects of national and general concern affords an indication that regulations relating to general trade and commerce were in the mid of the legislature, when conferring the power on the dominion Parliament. If the words had been intended to have the full scope of which in their literal meaning they are susceptible, the specific mention of several of the other classes of subjects enumerated in sect. 91 would have been unnecessary...
As the section was inherently broad it was necessary to read it in a limited fashion.
- Construing therefore the words "regulation of trade and commerce" by the various aids to their interpretation above suggested, they would include political arrangements in regard to trade requiring the sanction of parliament, regulation in matters of inter-provincial concern, and it may be that they would include general regulation of trade affecting the whole dominion.
In all, Smith establishes three characteristics of the trade and commerce power: 1) the "regulation of trade and commerce" should not be read literally 2) it includes international and interprovincial trade as well as "general regulation of trade affecting the whole dominion" 3) it does not extend to regulate contracts between businesses.