THE PLACE OF PRIVATE LAW IN FEDERAL LEGISLATION:
THE ST-HILAIRE CASE AND
BIJURAL TERMINOLOGY RECORDS

2. Relevance of this Decision for Tax Law

Since the St-Hilaire decision, the Parliament of Canada has enacted the Federal Law-Civil Law Harmonization Act, No. 1, [22] which came into force on June 1, 2001. One provision in particular warrants a closer look. It is new section 8.1 of the Interpretation Act,[23] which reads as follows:

8.1 Both the common law and the civil law are equally authoritative and recognized sources of the law of property and civil rights in Canada and, unless otherwise provided by law, if in interpreting an enactment it is necessary to refer to a province's rules, principles or concepts forming part of the law of property and civil rights, reference must be made to the rules, principles and concepts in force in the province at the time the enactment is being applied. 

The principle of complementarity has been recognized and applied by the courts. New section 8.1 of the Interpretation Act, which applies to all federal enactments, including tax statutes, confirms that the complementary of federal law with the private law of the provinces is the rule, unless otherwise provided by law. This new section provides for a two-stage process, as it were, which corresponds to the approach employed by Mr. Justice Décary in the St-Hilaire case.

2.1. Public Law - Private law

The first stage is to determine whether Parliament is relying on a private law rule or whether it seeks instead to apply public law rules. As noted earlier, it is not enough to say that a federal tax law as a whole is a public law or a private law enactment. Although the I.T.A., for example, has been described as a public law statute if there ever was one,[24] one must go a bit further and ask, for each provision in which a private law concept is used, whether the civil rights of the litigants are at issue.

But what distinguishes a public law concept from a private law concept? Public law concerns relations between the state and individuals, and private law is concerned with relationships among individuals.[25] In other words, the distinguish feature of a private law rule is the regulation of the exercise of civil rights whereas the object of a public law rule is the regulation of relationships between the state and its citizens.

2.2. Federal Rules of Private Law

The second stage of the analysis is to determine whether Parliament has provided its own private law rule by defining a particular term, for example. An example of such intervention is the definition of the term "child" in section 252 I.T.A.[26]

However, where Parliament has not intervened to provide its own rule and the particular provision deals with a matter of private law, provincial private law will act as the suppletive law. Federal tax statutes contain a number of provisions that are based on private law concepts. On several occasions, the courts have looked into the nature of an act in the light of the Civil Code to determine the tax consequences. Examples include references to the concepts of trust, partnership, gift, substitution or legacy in the I.T.A.

3. Bijuralism and the Harmonization of Federal Statutes

The observation that federal laws may, in certain situations, require recourse to the civil law of Quebec should lead the Parliament of Canada to ensure that its own laws adequately reflect both systems of private law in this country, that is, civil law and common law. It is in this perspective that the federal government launched the Federal Law-Civil Law Harmonization Program. As noted in an earlier column, the first manifestations of this process occurred with the Harmonization Act, No. 1 and some tax legislation.[27] The object of these legislative amendments is to adapt the private law concepts found in federal laws so as to better reflect the civil law and the common law in both linguistic versions.

4. Bijural Terminology Records

Given these specialized legislative amendments, it was considered advisable to acquire tools that would enable litigants to understand the nature of the harmonization changes. So it was that the Department of Justice published bijural terminology records on its Internet website in early 2002. This initiative stemmed from a commitment by the Department during the course of enacting the Harmonization Act, No. 1.

Because of the innovative nature of legislative bijuralism, the bijural terminology records are intended to explain the harmonization amendments deriving from the Harmonization Act, No. 1 and the Income Tax Amendments Act, 2000.[28]

Taxation records include the terms co-ownership (copropriété), liquidator of a succession (liquidateur de succession), hypothec (hypothèque), hypothecary claim (créance hypothécaire), hypothecary creditor (créancier hypothécaire) and hypothecary debtor (débiteur hypothécaire). The fact that the changes result from the harmonization of federal legislation with the civil law of Quebec was underscored in the explanatory notes accompanying the Income Tax Amendments Act, 2000. The bijural records are thus another indication of the nature of the changes to tax legislation. They are currently available on the Justice Canada website dealing with the "Consolidated Statutes and Regulations", under the heading "Related Statutory Resources."[29]

The explanations that follow deal with questions of methodology in relation to the bijural records and are taken from the Department's website. An example of a bijural record can be found in the schedule to this article.

4.1. Methodology Employed for the Preparation of Bijural Records

For ease of consultation, some conventions have been followed in the preparation of the bijural records. Chief among these are the following:

4.1.1. One record for all occurrences of the same solution

These records deal with changes made to reflect appropriate civil and common law terminology. There is only one record per term or phrase, if the harmonization problem has been solved in the same way even if it occurs more than once in the Harmonization Act, No. 1 or in tax legislation. For example, there is only one record for "real property"/"immovable" (immeuble/bien réel), even though these terms are found in several harmonized legislative provisions. Words taken from the original provision that have been harmonized as well as the solutions adopted in the Harmonization Act, No. 1 for civil law and common law are in bold print.

4.1.2. Appropriate terms for each legal system

In some cases, common terminology is used for both common law and civil law: "acquisition"/acquisition.[30] In other cases, different terms must be used in order to reflect adequately the concepts of each legal system. For example, the terms for the common law of "special damages" / dommages-intérêts spéciaux and for the civil law: "pre-trial pecuniary loss" / perte pécuniaire antérieure au procès.[31]

4.1.3. Precedence of common law terms in English and precedence of civil law terms in French

Generally, in provisions that describe a legal concept by using distinct common law and civil law terminology, the common law term appears first in the English version and the civil law term appears first in the French version. Examples of this are "real property and immovable" in the English version and immeuble et bien réel in the French version.

4.1.4. Concepts with no corresponding concept in the other system

In certain cases, a concept found in one legal tradition may have no corresponding concept in the other. For example, while "equity" is relevant in common law, it does not exist in civil law. In such a case, the note "n/a" (not applicable) / s.o. (sans objet) will appear for the legal system which does not have the corresponding concept.

4.1.5. Rules of interpretation: the bijural tradition in Canada

The appropriateness of using the solutions adopted by the Harmonization Act, No. 1 in other contexts will need to be examined on a case-by-case basis.

When reading federal legislation, one should always keep in mind the new rules of interpretation that have been brought to the Interpretation Act by section 8 of the Harmonization Act, No. 1. More particularly, section 8.1 of the Interpretation Act recognizes the equality of the common law and the civil law, the principle of the complementarity of provincial law and the evolutionary nature of references to provincial law. Section 8.2 of the Interpretation Act is an interpretive tool for bijural legislative provisions.

Section 8.2 of the Interpretation Act reads as follows:

8.2 Unless otherwise provided by law, when an enactment contains both civil law and common law terminology, or terminology that has a different meaning in the civil law and the common law, the civil law terminology or meaning is to be adopted in the Province of Quebec and the common law terminology or meaning is to be adopted in the other provinces.

With the words "[u]nless otherwise provided by law", section 8.2 of the Interpretation Act provides that a legislative enactment may be dissociated from the private law of a province. Where "otherwise provided by law", the interpretation of the bijural legislative enactment should not take the provincial law into consideration. However, if no such rule is provided, the interpretation is subject to the ever-present necessity to take the existence of the common law and the civil law into account.

Section 8.2 of the Interpretation Act describes the method to be used in making this interpretation. First, the province in which the enactment is to apply must be determined: this indicates which legal system must be used. Next, by using this system, the meaning to be given to each private law term or phrase in each linguistic version of a federal provision will be found. Some phrases will have no meaning in one of the applicable systems: for example, the terms "liquidator of a succession" / liquidateur de succession belong to the civil law and do not correspond to any institution of the common law. Conversely, the terms "executor"/ exécuteur testamentaire have a meaning in common law but no longer have any meaning in the civil law of Quebec. In such a case, section 8.2 of the Interpretation Act instructs the common law jurist to disregard the civil law terms of "liquidator of a succession" / liquidateur de succession and the civilian jurist to do the same for the common law terms "executor"/exécuteur testamentaire. Moreover, where the same word applies in both the common law and the civil law, reference must be made to the corresponding institution in the private law system of the province where it is to be applied. For example, when a federal provision that contains the word "hypothèque" is applied to Manitoba, the word must be given the meaning of the common law institution "mortgage"/hypothèque and not the meaning of the civil law institution "hypothec"/hypothèque.

Thus, section 8.2 of the Interpretation Act permits an interpretation of federal legislation that is respectful of the specific features of civil law and common law.

4.1.6. Amendment to one linguistic version only

In cases where an amendment is made only to one linguistic version, the other linguistic version is nevertheless reproduced for ease of consultation.

4.2. Overview

Where a change to a federal tax Act involves the harmonization of the federal legislation with the civil law of Quebec, an indication to that effect will be found in the explanatory notes that accompany the amendment. However, a taxpayer who desires more information on the rationale for a particular change can now consult the bijural terminology records on the Internet website. They are a source of information as to the substantive and formal reasons behind the changes brought about by the amendments. The bijural terminology records currently include the changes made by two recently enacted pieces of legislation,[32] and other records will be added as new harmonization provisions are enacted.

Conclusion

The result of the Federal Law-Civil Law Harmonization Program will be the adaptation of federal legislation to reflect the common law and civil law in both linguistic versions. Taxpayers now have a number of tools to help them interpret federal legislation, in taxation and other areas. When the tax expert - lawyer, accountant, economist or someone from another background - has to deal with a provision where some terms have been added or amended for harmonization purposes, he or she will be able to consult the bijural records for clarification on the meaning of those terms. Moreover, those who must interpret a federal statute, whether involving public law, private law or a mixture of both, will find the new provisions of the Interpretation Act and the principles in the St-Hilaire case indispensable.

Schedule

EXAMPLE OF A BIJURAL TERMINOLOGY RECORD

Droit civil
copropriété
Common law
copropriété
Titre du texte législatif
Loi de l'impôt sur le revenu, L.R.C. (1985), ch. 1 (5e suppl.)
Disposition
248. (21)c) es subdivisions d'un bâtiment ou les lotissements d'une parcelle de fonds de terre effectués dans le cadre d'un partage ou en vue d'un partage et qui sont la propriété conjointe des mêmes personnes qui étaient copropriétaires du bâtiment ou de la parcelle de fonds de terre, ou de leurs cessionnaires, sont considérés comme un seul bien;
Problème
Le concept de « propriété conjointe » / joint ownership est propre à la common law en ce qu'il réfère habituellement au concept de « tenance conjointe » qui n'existe pas en droit civil.
Solution
Dans la version française, les termes « propriété conjointe » sont remplacés par « copropriété ». Dans la version anglaise, les termes jointly owned sont remplacés par co-owned. Le concept de « copropriété »/co-ownership est neutre et vaut pour les deux systèmes juridiques. Il est assez large pour englober les notions de « tenance conjointe » et de « tenance commune » en common law.
Disposition harmonisée
248. (21)c) les subdivisions d'un bâtiment ou les lotissements d'une parcelle de fonds de terre effectués dans le cadre d'un partage ou en vue d'un partage et qui sont la copropriété des mêmes personnes qui étaient copropriétaires du bâtiment ou de la parcelle de fonds de terre, ou de leurs cessionnaires, sont considérés comme un seul bien;
Loi de 2000 modifiant l'impôt sur le revenu
, L.C. 2001, ch. 17, par. 230(5)
Common Law
co-ownership
Civil Law
co-ownership
Title of the Legislative Text
Income Tax Act, R.S.C. (1985), c. 1 (5th Supp.)
Provision
248. (21)(c) subdivisions of a building or of a parcel of land that are established in the course of, or in contemplation of, a partition and that are jointly owned by the same persons who jointly owned the building or the parcel of land, or by their assignee, shall be regarded as one property, and
Problem
The concept of "joint ownership" / propriété conjointe is unique to common law as it usually refers to the concept of "joint tenancy", which does not exist in civil law.
Solution
In the French version, the term propriété conjointe is replaced by copropriété. In the English version, the term "jointly owned" is replaced by "co-owned". The concept of "co-ownership"/copropriété is neutral and appropriate for both legal systems. It is also broad enough to include both the common law concepts of "joint tenancy" and "tenancy in common".
Harmonized Provision
248. (21)(c) subdivisions of a building or of a parcel of land that are established in the course of, or in contemplation of, a partition and that are co-owned by the same persons who co-owned the building or the parcel of land, or by their assignee, shall be regarded as one property, and

Income Tax Amendments Act, 2000, S.C. 2001, c. 17, s. 230(5)

Footnotes

  • [22] S.C. 2001, c.4 ["Harmonization Act, No. 1"].

  • [23] R.S.C. 1985, c. I-21. This section and section 8.2 were added by the Harmonization Act, No. 1.

  • [24] Brisson and Morel, supra note 3 at 321.

  • [25] H. Brun and G. Tremblay, Droit public fondamental Québec:Presses de l'Université Laval, 1972), at 1. On the common law side, Lord Denning stated the test as follows (O'Reilly v. Mackman, [1982] 3 W.L.R. 604 (C.A.), at 619):

  • In modern times we have come to recognise two separate fields of law: one of private law, the other of public law. Private law regulates the affairs of subjects as between themselves. Public law regulates the affairs of subjects vis-à-vis public authorities.

  • [26] There are also particular definitions of the term "child" in sections 63, 70, 75.1, 110.6 and 148 I.T.A., for example.

  • [27] Income Tax Amendments Act, 2000, S.C. 2001, c.17; An Act to amend the Customs Act and to make related amendments to other Acts, S.C. 2001, c. 25; Excise Act, 2001, S.C. 2002, c. 22.

  • [28] Ibid.

  • [29] http://laws.justice.gc.ca/eng/index.html

  • [30] Harmonization Act, No. 1, subs. 18(1).

  • [31] Ibid. subs. 51(2).

  • [32] Harmonization Act, No. 1 and Income Tax Amendments Act, 2000 .

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