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.
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.