GEORGE WALKEM SHANNON Vs. LOWER MAINLAND DAIRY PRODUCTS BOARD

JUDGEMENT

(1.) This is an appeal from a decision of the Court of Appeal for British Columbia reversing a decision of Manson J. who had given judgment in the action in favour of the plaintiffs, the present appellants. The appellants were dairy farmers carrying on their business in the Province of British Columbia and were affected by a Milk Marketing Scheme approved by the Lieutenant-Governor in Council under the Natural Products Marketing (British Columbia) Act, Ch. 34 of the Statutes of 1936. The scheme set up the Lower Mainland Diary Products Board (the defendants) and in the action the plaintiffs claimed a declaration that the Act was ultra vires of the Legislature of the Province: and that the plaintiffs were under no obligation to obtain licences from the defendants or comply with any of their demands : and further claimed an injunction to restrain the defendants from interfering with them. In the proceedings the Attorney-General for the Province intervened, and he alone was represented as respondent before this Board. The learned trial Judge decided in favour of the plaintiffs. The Court of Appeal reversed his decision following judgments they had delivered on a reference to them by the Lieutenant-Governor in Council asking whether the Act in question was ultra vires of the Legislature of the Province. Having answered the question in the negative they without further discussion allowed the appeal. The legislative history of the impugned statute is as follows. In November 1934, the Legislature of British Columbia passed an Act entitled the Natural Products Marketing (British Columbia) Act providing that the Lieutenant-Governor in Council might constitute a British Columbia Marketing Board and arming the Board with powers to act in co-operation and conjointly with the Dominion Marketing Board constituted under the Dominion Act, the Natural Products Marketing Act, 1934. In November 1935, the Governor-General in Council had referred to the Supreme Court of Canada the question whether the Dominion Act was ultra vires of the Dominion Legislature. On 17 June 1936, the Supreme Court held in In re Dominion Natural Products Marketing Act, 1934, (1936) SCR 398 ,1that it was ultra vires and their decision was affirmed by this Board on 28 January 1937: (1937) AC 377. Meantime, in April 1936, the Legislature of British Columbia had amended the Provincial Act of 1934, which now is in the form enacted in the Revised Statutes of British Columbia 1936, c. 165, together with an additional clause as to severability enacted in an Amendment Act of 1937, c. 41. It is not necessary to set out all the provisions of the Act in question, but reference should be made to the following definitions : 'Marketing' includes buying and selling, shipping for sale or storage and offering for sale : and in respect of a natural product includes its transportation in any manner by any person. 'Natural product' means any product of agriculture or of the forest, sea, lake or river and any article of food or drink wholly or partly manufactured or derived from any such product.

(2.) Section 4 (1) of the Act provides: The purpose and intent of this Act is to provide for the control and regulation in any or all respects of the transportation, packing, storage and marketing of natural products within the province including the prohibition of such transportation, packing, storage and marketing in whole or in part. The scheme of the Act is to enable the Lieutenant-Governor in Council to set up a Central British Columbia Marketing Board to establish or approve schemes for the control and regulation within the province of the transportation, packing, storage and marketing of any natural products, to constitute marketing boards, to administer such schemes, and to vest in those boards any powers considered necessary or advisable to exercise those functions. In particular the Lieutenant- Governor in Council may vest in any marketing board the powers [S. 4 (2) (d)], to fix and collect yearly, half-yearly, quarterly or monthly licence fees from any or all persons producing, packing, transporting, storing or marketing the regulated product : and for this purpose to classify such persons into groups and fix the licence fees payable by the members of the different groups in different amounts, and to recover any such licence fees by suit in any Court of competent jurisdiction. Section 4 (2) (j). To use in carrying out the purposes of the scheme and paying the expenses of the board any moneys received by the board.

(3.) The attack on the Act was made on these grounds : 1. That it encroaches on the class of subjects enumerated in S. 91 (2), B.N.A. Act, 1867. The regulation of trade and commerce. 2. That it also encroaches on S. 91 (3). The raising of money by any mode or system of taxation. 3. That without constitutional authority it delegates legislative power to the Lieutenant- Governor in Council. 1. It is sufficient to say upon this point that it is apparent that the legislation in question is confined to regulating transactions that take place wholly within the province, and are therefore within the sovereign powers granted to the Legislature in that respect by S. 92. Their Lordships do not accept the view that natural products as defined in the Act are confined to natural products produced in British Columbia. There is no such restriction in the Act, and the limited construction would probably cause difficulty if it were sought at some future time to co-operate with a valid Dominion scheme. But the Act is clearly confined to dealings with such products as are situated within the province. It was suggested that "transportation"would cover the carriage of goods in transit from one province to another, or overseas. The answer is that on the construction of the Act as a whole it is plain that "transportation"is confined to the passage of goods whose transport begins within the province to a destination also within the province. It is now well settled that the enumeration in S. 91 of "the regulation of trade and commerce"as a class of subject over which the Dominion has exclusive legislative powers does not give the power to regulate for legitimate provincial purposes particular trades or businesses so far as the trade or business is confined to the province: Citizens Insurance Co. of Canada V/s. Parsons, (1881) 7 AC 96 .In re Dominion Natural Products Marketing Act, 1934, (1936) SCR 398 .And it follows that to the extent that the Dominion is forbidden to regulate within the province, the province itself has the right under its legislative powers over property and civil rights within the province. The appellants did not dispute that there was a bona fide intention by the province to confine itself to its own sphere, but they contended that in fact whatever the intention the province had in fact encroached upon the Dominion sphere. If they could have established that contention they would have been in a stronger position. In this respect their Lordships desire to quote a passage from the opinion of Lord Atkin in the House of Lords in Gallagher V/s. Lynn, (1937) AC 863 .at p. 869, which was cited by Martin C. J., and which it will be convenient to bring into the line of authority on constitutional cases arising in the Dominions :