Achieving Unity in the Interpretation of Federal Private Law:
Legal Framework and Fragments of Judicial Discourse

II. Strategies for Unifying Federal Private Law

In the previous part, we concluded that the formal unity of federal private law is determined a priori by the will of Parliament. In terms of experience, the primary role of the judicial interpreter is to recognize that desire for unity in the legislation. To that end, the interpreter may refer to the intrinsic aspects of the enactment, which relate mainly to its unity of conception, or to its extrinsic aspects, which relate rather to its unity of application. The courts must therefore try, between the origin and end results of the norm, in both its internal and its external aspects, to preserve the unity intended by Parliament. Nonetheless, assuming that a desire for unity exists, it may be that the statutory provision is affected, to a greater or lesser degree, by uncertainty. The procedures for identifying the unity of conception or application in the legislation then depend on the interpreter's reason and intuition. As well, in cases where the problem is incompleteness, those procedures can be used to infer unity of meaning where the intention of Parliament was, in theory, to rely on the application of provincial private law as suppletive law.

However appropriate interpretations may be, and we must show great restraint in commenting on them,[254] we are now going to examine the unification procedures we have identified in the course of our research. Those procedures essentially are fragments of judicial discourse - arguments or justifications on which judges base the uniform conception and application of legislation. We will examine them to identify the interpretive strategies adopted to achieve unification of federal private law. To that end, we assembled a substantial body of literature dealing with the interaction between federal legislation and provincial law, primarily in the areas of tax law and bankruptcy law.[255] We also consulted a list of recent decisions citing the Federal Law - Civil Law Harmonization Act, No. 1 or sections 8.1 and 8.2 of the Interpretation Act.[256]

In presenting the results of that research, we would note that we make no claim to having done an exhaustive search. We focused our analysis on a few procedures that recur in the judgments. For that reason, they seem to us to be most representative of what we have called "judicial dissociation" and the search for unity in federal private law. These are therefore primarily possibilities for further consideration, which it would certainly be worthwhile to explore in greater depth in separate studies. We have divided the possible approaches according to the interpretive axes we identified earlier, separating intrinsic from extrinsic and origin from end results. That classification is primarily a pragmatic one and is used to distinguish the procedures based on the aspects of interpretation to which they relate. Given the rhetorical perspective of our analysis, it is also possible that a decision will fall into more than one of the categories used to distinguish the procedures. We will therefore first examine the procedures used to determine unity of conception of federal legislation, and which focus on formal or systemic elements, from a perspective based primarily on internal dimensions, in Section (A). Second, in Section (B), we will examine the procedures used primarily to determine unity of application of federal legislation, and which focus on the reach or effects of the legislation, from a perspective based primarily on external dimensions.

A. Procedures for Determining Uniformity of Conception of Legislation

Without going so far as to say that all of the meaning of an enactment is to be found in its text, it is nonetheless correct to say that the courts generally look first to the text that they must apply, to discover its meaning.[257] The interpreter's approach takes circular routes, that move gradually from the centre of the text to its periphery, its context, until eventually it leads to extrinsic considerations that may lead to a better understanding of the intention of Parliament. That approach was helpfully described by Professor J.M. Kernochan, quoted by Justice Binnie in a dissenting opinion in Will-Kare Paving & Contracting Ltd. v. Canada:[258] "The precise words which are in issue in relation to the facts must be weighed in the light of successive circles of context."[259] We will therefore adopt somewhat the same approach to describe various procedures used to determine the unity of federal legislation, focusing first, in Section (1), on procedures relating to the unity of the terminology; next, in Section (2), on procedures relating to the unity of the legislation, and then, in Section (3), on procedures relating to the unity of external sources.

1. Unification of Terminology: Ordinary Meaning

In the preceding part, we considered the problem presented by the plain meaning rule in relation to the principle of complementarity of provincial law.[260] We would recall one of our conclusions: that interpretation that relies on the ordinary meaning of ordinary language may avoid the "necessity" of referring to provincial law as suppletive law, and that in that case there is no real need to refer to the specialized dictionary - to the technical concepts - of private provincial law. We would add here that the effect of that interpretation is to flatten the potential terminological diversity of provincial private law, since it takes the meaning of a term or expression from ordinary language and thus brings uniformity to the legal sources of the provision in issue.[261] The ordinary meaning meaning closes the text of the legislation in on itself, and, in a way, in terminological and legal terms, produces a certain autonomy of meaning, if not autarchy of meaning.

The ordinary meaning problem is particularly acute in tax law cases.[262] One example that speaks volumes is the concepts of "disposition" or "sale". The first term has been considered in numerous decisions, where the issue was whether the term was to be given a narrow or broad interpretation, specifically in order to determine whether it was capable of covering situations where a person divested themself of the property without transferring title. Generally speaking, in tax cases, it has been decided that the concept of disposition that appears in certain sections of the Income Tax Act[263] must be applied uniformly across Canada and in those cases is not directly connected with the concept of disposition in provincial common law.[264] For that purpose, the courts have referred to the broad meaning of the concept,[265] or more simply to its ordinary meaning.[266] It is also interesting to note that the reference to the ordinary meaning in a leading decision of the Supreme Court, R. v. Cie immobiliere BCN, relied in large part on a dictionary of ordinary language.[267]

Concerning the concept of sale in tax law, our analysis indicates that the courts are reluctant to assign it the same degree of autonomy in terms of meaning. Undoubtedly because of its more technical nature, the concept of sale has more readily been interpreted by reference to provincial law than by reference to its ordinary meaning. Those interpretations most often occurred in cases similar to the ones mentioned in reference to the concept of disposition, the issue in fact being whether the enjoyment of property obtained without title being transferred could amount to a sale. The few decisions identified essentially concluded that the concept of sale had to be defined by reference to provincial private law,[268] or more vaguely, to its legal meaning.[269] Special attention was also given in these decisions to the intention of the parties, to give them the right to determine the point at which title would be transferred and thus a sale concluded.

Again with respect to the concept of a sale in tax law, the importance of the decision of the Supreme Court of Canada in Will-Kare Paving & Contracting Ltd. v. Canada certainly must be stressed.[270] In that divided decision (a majority of four of the seven judges), the Court held that a company could not claim the investment tax credit for manufacturing and processing goods for sale or lease, because the company supplied the goods (asphalt) through contracts for work and materials (paving contracts). The majority held that the terms "sell" and "lease" have "an established legal meaning" and there is nothing in the legislation that would allow a meaning other than the commercial law meaning to be applied. The Court said: "to apply a 'plain meaning' interpretation of the concept of a sale in the case at bar would assume that the Act operates in a vacuum, oblivious to the legal characterization of the broader commercial relationships it affects." The Court concluded by saying, regarding the principles of interpretation: "The technical nature of the Act does not lend itself to broadening the principle of plain meaning to embrace popular meaning. The word sale has an established and accepted legal meaning."

Some confusion will be noted in the reasons of the majority regarding the use of the expression "plain meaning", which has been treated as if it were the same as ordinary meaning, as opposed to technical meaning in commercial law, while it then seems to be distinguished from ordinary meaning and correspond to the technical meaning set out in the Act. In our view, that is a relatively secondary problem, the important point being that the Court adopts the technical meaning as opposed to a meaning that is not part of commercial private law, the effect of which would have been to think of the law as operating in a "vacuum".[271] In addition, likening the ordinary meaning to the technical meaning poses no real problem if the conclusion results from, as it was in this case, from a contextual interpretation of the intention of Parliament to make such a reference. In fact, in the dissenting reasons, Binnie J. adopts a more restrictive method of analysis, referred to as "successive circles of context", and concludes that the Act must be interpreted using "the ordinary meaning of the word in everyday speech". Regardless of whether ordinary meaning is derived from a narrow linguistic context or a broader context, the basic observation, in our view, is that the more legislation is interpreted based on its text alone (in a vacuum), the more it will take on a meaning independent of the external context supplied by private law.[272] The ultimate effect is then, as may be seen in the analysis by Binnie J., to circumscribe the intention of Parliament within the letter of the law and conclude that it "meant what it said".[273]

Regardless of whether reference is made to ordinary meaning as the meaning in ordinary language or the meaning of the words in the legislation themselves, if not of the legislation itself, essentially what must be done is to distinguish between the meaning in the text itself (the ordinary meaning) and the meaning in a broader context, which is often considered to be extrinsic to the text (technical meaning, private law meaning, and even, a contrario, ordinary meaning as opposed to the legal meaning incorporated in the text).

These distinctions between intrinsic meaning (word, text, legislation) and extrinsic meaning (concept, context, language) have been raised in other cases[274] in relation to a variety of terms, and more particularly the following:

In our opinion, all these tax law examples illustrate the fact that the more the meaning of a norm is circumscribed by the text, in particular by the use of ordinary language, the more the norm will be applied uniformly. Accordingly, the search for unity in private law can always adopt the strategy of turning the norm back inward to the words in the text, understood in their "ordinary meaning", "natural meaning" or "ordinary sense", to avoid using the diversity of provincial law as suppletive law. In formal terms, the complementarity relationship with the suppletive law of the provinces is then severed when the meaning of a term is identified with the text of which it is a part, even though the term in question may, in some cases, retain connotations relating to technical concepts in provincial law.[282] We would note in conclusion that some cases also illustrate this phenomenon in bankruptcy law, although it seems to be much less common in that area, from our sample, for ordinary meaning to operate to sever the complementarity relationship.[283] The most interesting case, from that perspective, and the one most often encountered, is undoubtedly the interpretation of the expression "equity" as referring to fairness, good conscience or "spirit of fairness".[284]

2. Unification of Legislation: Complete Code

Earlier, we discussed the problem that arises in the interpretation of federal private law legislation in an oppositional relationship with the common law.[285] It seems to us that by creating the same relationship dynamic between federal legislation and provincial private law as exists between statute law and common law, there is a sort of denial that conceals the fact that there is no common law or general law in the federal legal system, and that the common law of the provinces operates as suppletive law in a relationship in which there is complementarity between two separate legal systems. One possible manifestation of this confusion, or trompe-l'oeil, in the interpretation process is the cases we have noted in which federal legislation is thought of as an "exhaustive code". We will now examine several decisions that applied that procedure and concluded that federal legislation is autonomous of extrinsic formal sources of private law. As we will see, those decisions also illustrate an approach that circumscribes the text within itself, this time not in terms of the terminology of which it is composed, but in terms of the entity itself, composed of the legislation, an entity that is then conceived of as hermetic and autonomous.

The relationship between an enactment and the common law is essentially determined by the intention of Parliament. When an intention is ascribed to Parliament to adopt an "exhaustive code" or "complete code", the ultimate conclusion will be that Parliament intended to cover an area of law entirely, and therefore to preclude application of the common law.[286] That technique differs from techniques that aim to "codify" the common law in an enactment, or to "amend" it or "incorporate" it using a term or concept that conveys its meaning. It is generally used in social legislation or specific regulatory legislation, for example in relation to insurance, labour and banking. As Professor Ruth Sullivan wrote on this subject: "Such statutes may largely codify or largely modify existing common law but in either case the legislation is intended to occupy the field and exclude resort to prior law."[287] It is thus characteristic of exhaustive codes that they incorporate existing norms "into a coherent, self-contained scheme". For that reason, the interpreter must, as a rule, place greater weight on the integrity of the code than on the presumption that it continues the common law, and adhere primarily to the natural meaning and the language used in the legislation.[288]

The relationship between statute law and common law, and the possibility of separating the two by means of a complete code, were discussed in several decisions included in our sample. Although the relationship with the common law is not always discussed in the context of interaction between federal legislation and provincial law, essentially the same type of analysis, based on an exclusion, is applied. For example, concerning the relationship between statute law and common law, we would note the separate reasons of L'Heureux-Dube J. in 2747-3174 Quebec Inc. v. Quebec (Régie des permis d'alcool).[289] In that case, the issue before the judge was whether the Charter of Human Rights and Freedoms[290] of Quebec must prevail over the common law of public law. Confirming that the same method of analysis applies to quasi-constitutional statute law as to ordinary statute law, she said, concerning the effects of legislative provisions on the common law, that it must be determined whether they have the effect of "codifying", "replacing" or "repealing" the common law, or whether they are "... a complete code that excludes or supplants the common law in a specific area of law" (emphasis added).[291]

A rule of interpretation that is stated so generally does not indicate how to identify such excluding or supplanting in practice.[292] In the cases we examined, the courts most often concluded that Parliament had intended to establish complete code by referring to the express language of a provision or the combined effect of a group of provisions. For example, in Frame v. Smith,[293] the Supreme Court concluded that there was a "comprehensive scheme" ("régime détaillé") by listing, in detail, all of the measures that the Ontario legislature had enacted in relation to custody and access rights, and deducting from that detailed body of rules that if the legislature had wanted to make provision for the civil action it was sought to bring, it would have done so. Similarly, in Gendron v. Supply and Services Union,[294] the Supreme Court determined that an employee could not bring action against their union in the superior court for a breach of the duty of fair representation, given the clear language in a provision of the Canada Labour Code providing for that duty and the legislative context of the rules governing labour relations. The Court determined the existence of a "comprehensive, exclusive code", a "complete and comprehensive scheme", based on an "overview" of the context of the code, and found an indication of Parliament's intention to "occupy the whole field" in terms of the duty of fair representation.[295] Thus in most of the cases the express terms of a provision or the entire legislative context in which the provision is found is enough to conclude that the legislature intended to limit the rights or remedies to what is stated in the text and accordingly to exclude anything not found there.[296]

Concerning the interaction between federal private law legislation and the provincial suppletive law, it would seem, at first blush, to be entirely possible to think, in light of the legislative provisions in issue, that the legislature intended to enact an exhaustive scheme or complete code.[297] In fact, the courts reached this conclusion in several of the decisions we examined. In quite a few of those decisions, the courts found that there was a complete code in respect of taxation, relating in particular to situations where overpayments had been made and a refund was claimed based on unjust enrichment.[298] As well, we identified a few decisions in which the doctrine was cited in relation to the Bankruptcy and Insolvency Act and the order of priority among creditors,[299] or the Banks Act and the legal rules governing banks' security interests.[300] In other cases it was concluded that there was a complete code in federal legislation relating to conditions of employment,[301] professional services[302] and aviation.[303]

That being said, those decisions concluded that there was a complete code but failed to consider the origin and the necessary prerequisite for that reasoning, that is, the rules of interpretation that apply to statute law and the relationship of systemic opposition that it assumes between statute law and common law.[304] This means that in most cases the courts have not considered the constitutional framework in which federal private law legislation applies and have not considered that the legislation applies where there is no federal common law.[305] From that perspective, the first consideration is not the relationship with the common law, but rather the division of powers, and more specifically the assignment of exclusive jurisdiction in relation to property and civil rights to the provinces.[306] By disregarding those premises, the perspective is inverted and the federal legislation (in relation to the common law), rather than provincial private law (in relation to the federal legislation), is assigned the characteristic of exclusivity.

It must nonetheless be acknowledged that where the federal legislation is effectively, in practice, an exhaustive scheme of norms, it is entirely correct to conclude that provincial law does not apply. In those cases, Parliament itself has determined entirely, and to the exclusion of provincial law, what the meaning of the private law concepts used, or the applicable rules, are. If we refer only to the principle of interpretation set out in Section 8.1 of the Interpretation Act, it does not seem at all "necessary", in that case, to refer to provincial law in order to apply the legislation in a province, because the legislation is exhaustive and contains all the law required for it to be applied. A good example of a decision based on solid reasons in this regard can be found in the Supreme Court's decision in Canada 3000.[307] In that recent decision, in which the complementarity principle was argued, the Supreme Court analyzed the legislation and the relevant legislative corpus as well as the objective of the legislation, and concluded that the concept of "property" and the detention remedy provided in the federal legislation should not be interpreted based on the provincial law. In that case, the modern, comprehensive approach was used to identify the meaning of the legislation and the intention of Parliament from the content of the legislative corpus and ultimately to conclude that there was a "comprehensive code".[308]

The preceding example illustrates the importance of doing a comprehensive and thorough analysis of the legislation before concluding that a provision is semantically autonomous or that there is an exhaustive scheme of rules intended to apply uniformly. In the absence of justification based on that kind of concrete, rational analysis of the intention of Parliament, the conclusion that there is a "complete code" could in fact be no more than a mere, and possibly arbitrary, assertion that the federal legislation is exclusive. We would then be looking at the backwards perspective we referred to earlier, which presumes that a code is complete. In fact, we noted that peremptory conclusions that a "complete code" exists can sometimes be based on facile reasoning.[309] As well, the assertion of a complete code very often relates to situations where a provincial provision would be additional to the federal legislation, rather than being incorporated into it or conflicting with it.[310] In such cases, where the supplementary provision would apply in addition to the legislation, it is more difficult, in our view, to prove that Parliament intended exclusive content, because where there is no interaction in substantive terms, it is mainly in the abstract that Parliament could be considered to have intended a "complete code" and that no provision of provincial law could complete the legislation.[311] If the interpreter does not concretely show, in relation to the entire context, that an intention to exclude supplementary law exists, we might think that they are essentially relying on a presumption.[312]

The most significant cases of reasoning that reverses the exclusion principle based on the "complete code" concept are certainly those that occur in constitutional decisions.[313] Some of those decisions have extended the operational conflict test beyond the contradictory effect of the provisions in issue, that is, the conflict that appears where provisions are applied simultaneously (operational incompatibility theory), and relied on the inapplicability of a provincial provision in light of Parliament's intention to occupy the field exclusively (complete code theory).[314] In our opinion, it is possible that such an intention to exclude could ultimately be based on a presumption (operational incompatibility not being limited to the explicit contradictory effect of the provisions, but extending only to the legislative objectives).[315] As Iacobucci J. said in Husky Oil, this type of reasoning reverses the perspective and its effect is to place lesser weight on the possibility of coexistence than on finding conflict.[316] In a way, it emphasizes the paramountcy of the legislation.

This last example confirms the potentially distorting effect of applying the complete code doctrine to federal private law legislation. It must be recalled that one of the guiding principles in the relationship between statute law and common law, and a fortiori in the complete code doctrine, is that the statute is to be given "precedence" over the common law.[317] By thus conflating the analysis of the relationship between statute law and common law, and more specifically the relationship where there is a complete code, with the analysis of the relationship between federal legislation and the suppletive private law of the provinces, we ultimately risk defining the division of legislative powers in relation to property and civil rights much more narrowly, in favour of the federal Parliament.

3. Unification of External Sources: One-dimensional Meaning

Unification of the external sources of federal private law legislation is certainly one of the most commonly encountered situations in the sample of decisions we examined. For numerous reasons, the courts may have to address uncertainty in terms of what bodies of law are the applicable references, and sometimes the appropriateness of referring to them. Those problems in interpretation or application essentially result from the implicit nature of the dependency of federal legislation on the external sources of private law. Given that this dependency is poorly understood, in relation to fundamental law and constitutional law, it may result in procedures to achieve uniformity that operate to preclude application of the complementarity principle. In other cases, that dependency is simply determined not to exist, in relation to the legislation or institution in issue. In all cases, the consequence of those procedures is to assign a one-dimensional meaning to the private law and depict federal legislation as being in a unitary relationship with its outside sources. These cases can be divided into three general categories, which seem to us to compose a logical picture. In a relationship in which the federal private law legislation is set up against two external sources (generally described as the civil law and the common law), uniformity can be logically achieved in only three ways: (i) by assigning the norm an "autonomous meaning" in relation to the external sources; (ii) by assigning the external sources an "equivalent meaning"; and (iii) by assigning one of the external sources a "predominant meaning".

(a) Autonomous Meaning

Our first type of case generally arises in situations where the legislation lies at the centre of federal jurisdiction, or at least in a context where the federal presence is heavily preponderant. In those situations, the courts recognize the autonomy of the federal legislation, and accordingly its uniformity of application nationally. This means that they sever any attachment to suppletive sources in provincial law.

That conclusion has been reached in aboriginal law, for example, in relation to First Nations title on reserve lands. It has been held that the First Nations' interest in reserve lands and in lands that are subject to Indian title were sui generis and could therefore not be governed by the common law property law. The formal sources of the common [general] law, whether common law or civil law, would therefore not apply in a suppletive manner, for the purpose of determining the applicable rules or the meaning of the concepts in issue, for example in relation to the band's reversionary interest, conditions subsequent or individual members' rights of possession.[318] As Lamer J. said in St. Mary's Indian Band v. Cranbrook (City), in those cases, there is a need to "pierce the veil of real property law in adjudicating native land rights disputes".

The autonomous nature of a norm or concept in federal law, in relation to provincial private law, can also be seen in several decisions relating to the "right of ownership". In bankruptcy cases originating in Quebec, it has been held that a trustee in bankruptcy, in their capacity as "trustee / fiduciaire", has a "right of ownership" in the bankrupt's property.[319] In a banking case originating in Alberta, the Supreme Court held that a bank's security given under the Bank Act results in a fixed charge, and thus to a proprietary interest, although it relates to a "dynamic collective of present and future assets".[320] In addition, again in a bankruptcy case, it has been held that the trustee is an "assignee" of the bankrupt, but with the clarification that the assignment is a [TRANSLATION]"new method of transferring property" and the trustee is not, in terms of the rights transmitted to them, in the position of an heir or assign who holds exactly the same rights as the bankrupt.[321]

We would also note two decisions of the Federal Court in which tax legislation was assigned autonomous status. In the first, a taxing statute was interpreted by referring to the "pith and substance" of the transactions rather than to the rules of form in provincial legislation to determine that there was a legal obligation and a borrower-lender relationship.[322] In the other decision, the Federal Court concluded that federal regulations relating to objects lost in airports prevailed, as a special law, over the provisions of the Civil Code of Lower Canada relating to the same matters.[323]

In two last singular decisions, we identified a procedure for creating autonomy of meaning that relies on the principles of interpretation of bilingual legislation. In Knimatra Fabrics,[324] a judge of the Quebec Superior Court relied on, inter alia, the common meaning and concluded that the Bank Act assigned priority to a bank only in respect of claims of an unpaid vendor (revendications d'un vendeur impaye), and not in respect of "claims of an unpaid vendor" (creances d'un vendeur impaye).[325] Although the Court interpreted the Act as referring to the narrow common law meaning found in the English version, and not to the broader civil law meaning found in the French version, the severance from suppletive provincial sources was accomplished in this case by imposing autonomy of meaning rather than by the prevalence of the common law in a civil law context: the ultimate consequence of the "shared meaning" principle is to circumscribe the legislation within an essentially internal dynamic.[326] That approach is also in evidence in the decision of the Supreme Court of Canada in Schreiber v. Canada (A.G.)[327] concerning the interpretation of an exception in the State Immunity Act.[328] Although the provision examined by the Court had been amended for harmonization purposes by Parliament, thus denoting an intention to refer to suppletive provincial law, the Court did a comprehensive analysis of the law (international law, common law, legislative history, cases decided under the Act, civil law). The equivalencies thus identified, however, were all eclipsed at the end of the reasons by reference to the principles of interpretation of bilingual legislation, under which the expression "dommages corporels" (in civil law) was used because it is clearer and more restrictive than the expression "personal injury" (in common law). We are inclined to think that the international context in which the decision was made prompted the Court to rely on an autonomous meaning, in spite of Parliament's action to achieve harmonization.[329]

(b) Equivalent Meaning

Establishing equivalency between the meanings in external sources or between external sources and the legislation is a common procedure for producing uniformity. In those cases, most often from a comparative perspective, the interpretation is open to distinct external sources, while not sacrificing uniformity of application. In a way, the interpreter remains in the realm of ambiguity, of fluidity of meaning, and perhaps even of interpretational hedging. If we put the three general categories identified earlier on a continuum, where we have decisions finding an autonomous meaning in the federal norm at one end and decisions assigning a predominant meaning to one of the external sources at the other end, we see that decisions that find equivalent meaning are divided between those two poles. While these decisions are open to external sources and to establishing an equivalency between those sources and the legislation, they may result in the legislation having a degree of autonomy, or, conversely, in one of the external sources having a degree of predominance over the other. In some intermediate cases, what we actually see is a complete flattening of the sources, with the effect being that the norm in question is placed in an obvious horizontal relationship. Ultimately, however, in all these cases, we see that the phenomenon of interpretation involves constant wavering between the legislation and its suppletive sources, and that this kind of tension between internal and external can sometimes be seen in efforts to establish varying degrees of equivalency.

For example, equivalency was established in several decisions even though a degree of legislative autonomy was recognized. In two decisions of the Supreme Court of Canada,[330] the criteria used to establish a support obligation or define the concept of custody were ascribed to the provisions of the Divorce Act, but by establishing equivalency of content, sometimes from a comparative perspective, with provincial legislation, common law, civil law or even international law. As well, in a series of decisions in bankruptcy cases relating to discharge of debts, the Quebec courts have recognized the existence of fiduciary relationships under the Bankruptcy Act while at the same time determining that this concept of a trustee, which is foreign in inspiration, could be applied in Quebec in an [TRANSLATION]"equivalent fact situation".[331] Also in bankruptcy, it has been held that although the 60-day notice required under the Civil Code is more stringent, it [TRANSLATION]"is equivalent . in its purpose and spirit" to the 10-day notice provided in the federal legislation.[332] And in tax law cases, it has been held that the concept of disposition as defined in the Income Tax Act existed in "tax legislation that applies throughout Canada" that must be applied uniformly, although the Court noted that Parliament had "treated" beneficial ownership in the same way as various forms of ownership recognized in the civil law.[333] In another decision, the Federal Court of Appeal recognized a degree of autonomy in the concept of payment in a regulatory context, but found that it was ultimately necessary to specify that the facts of the case presented no "inconsistency" with the civil law concept.[334]

Equivalency is even more apparent in some cases, which we describe as intermediate, because they lead to horizontal levelling of the legislative or external sources. For example, in a divorce case where the issue was the interpretation of the concept of "residence habituelle", the Quebec Superior Court established virtually complete equivalency between the Civil Code, the Rules of Practice of the Court, the Divorce Act and income tax law.[335] Equivalency of that kind can be seen in several other tax law decisions. In a decision of the Tax Appeal Board, it was held that except in certain exceptional cases, renting a property did not constitute a business under the "general law" (that is, "both in civil and common law") or even under the Income Tax Act.[336] As well, concerning the distinction between a contract for services and a contract of employment for tax law purposes, the Federal Court has ruled out application of the subordination or control test in civil law and instead refers (in the absence of a "universal", "peremptory" or "magic" test) to a "set of factors" developed over the years "both in civil and common law" (relationship of subordination; ownership of the tools of work; chance of profit and risk of loss; intention of the parties), thus without entirely discounting a civil law analysis.[337] Concerning a will with a legacy that could be voided in the event of remarriage, the Federal Court of Appeal applied the concept of "indefeasible vesting" ("devolution irrevocable") in a federal statute as if it were a civil law concept, specifying that the legacy in question "amounts to a legacy subject to a resolutory condition".[338]

In several other decisions, there is equivalency in spite of the predominance assigned to one of the two bodies of reference law, generally the common law. In tax law, the Superior Court has applied the common law "form test" to determine whether dividends received by a trustee constituted income or capital, while acknowledging that the result would be the same if the Quebec case law were applied, relying rather on the "sources des fonds" (source of the funds).[339] In two decisions relating to the allocation of capital cost, the question arose of whether an emphyteutic lease created a right of ownership or was rather a lease. In both cases, primarily because of the terminology employed in the tax provisions in issue ("leasehold interest", "tenure a bail"), the emphyteutic lease was treated in the same way as the institutions in common law property law, while at the same time preserving its civil law characteristics.[340] In documentary credit cases, and again for legislative drafting reasons, the courts have subsumed the civil law under technical common law concepts but without disregarding the civil law context. They have assigned a predominant common law meaning to the concepts of "simple contract" and "valuable consideration"[341] and of "joint liability",[342] while seeking arrangements or corresponding meanings in order to apply those concepts in Quebec. Also in documentary credit cases, the Supreme Court has affirmed that the fraud exception that can be set up against the autonomy of documentary credit letters is based on a "principle that is common" to both Canadian systems of law, but asserted that the common law decisions (the decisions predominantly cited .) may be "applied" in Quebec law because the effect of the exception is "essentially the same" under the two systems.[343]

(c) Predominant Meaning

Assigning a predominant meaning to one of the bodies of reference law is a procedure for unifying external sources that is just as common as the previous procedure. In this example, of course, we are excluding all decisions in which a court referred, on principle, to the private law of the province where the federal legislation applied. In those cases, we assume that the application of provincial law to supplement federal legislation does not involve any unifying objective or requirement of uniformity at the national level. Rather, we are referring here to decisions in which an external body of reference law is applied in a province when it would not normally be under the complementarity principle.

Considering our sample, the large majority of these situations arise in Quebec, where some decisions show the somewhat surprising conclusion that federal legislation refers, in private law matters, to common law sources. Speaking strictly logically, the consequence of that choice is to eliminate, at the federal level, the plurality of formal suppletive sources, although on the other hand it introduces an aspect of heterogeneity into the organic relationship between federal legislation and the private law of the province where it applies. However, it appeared to be fairly rare for this choice (or the effects it produces in terms of formal sources) to be expressly justified. Most of the time, it arises somewhat spontaneously in the judgment, as if it went without saying that common law applied in Quebec and was part of the existing law. In some cases, there is an underlying explanation based, for example, on the terminology originating in the common law. However, in a majority of cases, it was assumed that external sources from the other legal system of reference would apply and we found ourselves, so to speak, at the starting gate in the argument: things are as they are because the federal legislation is identical in substance to the common law.

The predominance of the common law is particularly apparent in bankruptcy cases. It arose in relation to the concept of settlement (disposition), where it was held that this concept, which is expressed in terms of common law and is unknown to civil law, could be defined by the elements of gratuite and tracing and be applied in Quebec under the Bankruptcy and Insolvency Act.[344] The concept of tracing, which is linked directly to the concept of a trust, was also cited in relation to monies held by a bankrupt supplier before the delivery of goods.[345] Another very eloquent example is provided in two decisions of the Quebec Court of Appeal where the rules of equitable set-off were cited, without restraint or justification, in order to apply the concept of set-off found in Section 97 of the Bankruptcy and Insolvency Act.[346] To define property (in this instance, the ability to redeem a life insurance policy), reference was also made to the concept of "power" in former Section 29(d) of the Bankruptcy Act, in spite of the fact that it was not necessary to refer to that concept in order to define property in civil law.[347] In relation to procedure, the Court of Appeal has made direct reference to the common law in determining that registration was required for a certificate of lis pendens to be issued under the federal Bankruptcy Act.[348] As well, in a case heard by the Quebec Superior Court, it was held that reference had to be made to the common law case law to determine the principles governing the awarding of solicitor-client costs under Section 197 of the federal Bankruptcy Act.[349]

The predominance of the common law is also seen in tax cases, although the underlying reason of uniformity in federal legislation is expressed more openly in that area. In cases heard in Quebec, the common law definition of a gift, a transfer without consideration, has been applied, in spite of the fact that the civil law allows for consideration or "indirect gifts".[350] As well, for the purpose of applying tax rules to "charitable organizations", the Supreme Court has established a direct connection between the Income Tax Act and the rules developed in English common law in relation to trusts.[351] Gonthier J., dissenting as to the scope of the concept, and more inclined to allow the courts the power to review the common law concept incorporated into the Act, further stated: "The ITA's conception of charity is uniform federal law across the country."[352] Concerning the law of trusts, again, we found one decision in which it was concluded, in a case originating in Quebec, and again on the ground of uniformity, that a person who receives trust income is a person "beneficially interested" in common law.[353] Moreover, to determine whether income from a rental property located in Quebec was income from "property" or a "business", the Tax Review Board referred not only to the ordinary meaning of the word "business" but also to the tests developed by the courts in the common law provinces.[354] As well, to distinguish between a contract for services and a contract of employment for tax law purposes, and contrary to the decisions noted previously, establishing equivalency between the bodies of reference law, specialized tribunals have repeatedly, in Quebec, strictly adopted an analysis and tests developed in the common law provinces, and in particular the tests set out in Wiebe Door Services.[355] Although reference is made in those cases to control or subordination in civil law, which was considered to be equivalent in common law, it was found not to be conclusive and was accorded no preference. Instead, a set of fact-based tests were applied, ultimately deriving from an empirical thought process that is a feature of the common law.[356]

A predominant common law meaning has also been preferred in other areas under federal jurisdiction. Concerning agreements between spouses in divorce cases, Mailhot J.A. of the Quebec Court of Appeal, dissenting, stated that the concept of unreasonableness or unfairness recognized by the Supreme Court of Canada does not refer to the concept of "lesion" in civil law, but rather to an underlying concept in the Divorce Act that applies uniformly to all Canadians.[357] In a patent infringement action originating in Quebec, Strayer J. of the Federal Court declined to apply provincial vicarious liability law to interpret the expression "a person who infringes", and very clearly stated that the common law principles of tort had been adopted by Parliament "by implication".[358] Concerning documentary credit, the Quebec Court of Appeal has concluded that the lesion suffered by a minor could not be raised against the bank that properly withheld the cheque he had issued, because this was a "personal defence" under the Bills of Exchange Act.[359] And in two cases in which the federal rules applicable to railway companies were considered to be silent on issues of civil liability, and thus the application of the common law as suppletive law was recognized, the Quebec Court of Appeal referred to the common law doctrine of "exceptional circumstances" to determine liability for accidents.[360]

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