Dow v Black

Facts and history of the case

St. Stephen is a town in Charlotte County, New Brunswick, adjacent to Calais, Maine. Houlton is a town in Maine, some 125km NNW of St. Stephen.

In June 1867, a few weeks before the Constitution Act, 1867 came into effect, the Legislature of New Brunswick passed an Act incorporating at the behest of William Lindsay, MPP and others, the Houlton Branch Railway Company, fundamentally to complete the St. Andrews and Quebec Railway, which would not even transit St. Stephen. Meanwhile, the European and North American Railway had constructed from 1865-1869 its Western Extension line from Saint John to Bangor, Maine, which included in York County some 50km North of St. Stephen, McAdam, New Brunswick and the Saint Croix-Vanceboro Railway Bridge.

In 1870, the town of Houlton offered a bonus of $30,000 to any company which would build, before 1872 had elapsed, a railway connecting Houlton with the terminus of the New Brunswick and Canada Railway near Debec, New Brunswick in Carleton County. The Houlton Branch Railway Company was prepared to build the railway, on condition that the town of St. Stephen also pay a bonus, of $15,000. The Legislature of New Brunswick then passed an Act authorising the county of Charlotte to issue debentures to raise the $15,000, to be paid by municipal assessments on the real and personal property of the inhabitants of St. Stephen, provisional on a majority of two-thirds of the ratepayers of the parish of St. Stephens. After the Act was passed, on 11 August 1870 there was a meeting of the ratepayers of St. Stephen, as required by the statute. The requisite majority in favour of the Act was obtained and the debentures issued. The general sessions of the County of Charlotte then issued the necessary assessment on St. Stephen to pay the interest on the debentures. Some residents of St. Stephen, who included William T Black amongst their number, challenged the assessment in the courts. The proponents were represented by James Dow, editor of the now-defunct St. Stephen Journal, and from 1871 to 1874, Mayor of St. Stephen.

In October 1871, on the completion of the European and North American Railway between Bangor, Maine and Saint John, New Brunswick, U.S. President Ulysses S. Grant and Governor General of Canada Lord Lisgar opened the aforementioned Saint Croix-Vanceboro Railway Bridge.

Summary

The challenge was brought by way of an application for certiorari in the Supreme Court of New Brunswick to quash the warrant of assessment, on the grounds that the provincial Act related to a railway extending beyond the limits of the Province and was therefore not within the constitutional authority of the Legislature of New Brunswick. In Trinity term 1872, the Supreme Court granted an interim rule nisi to quash the warrant of assessment. In the fall of 1872, the Supreme Court heard argument and reserved judgment on whether to confirm that initial decision. On 22 February 1873, in a 3-1 decision the Court held that the Act was unconstitutional and granted a rule absolute to quash the warrant of assessment.

Majority decision of Justice Allen

Mr. Justice Allen delivered the majority decision of the Court. He held that there was no doubt that the railway extended beyond the province of New Brunswick, and therefore fell under exclusive federal jurisdiction under the combined effect of s. 92(10)(a) and s. 91(29) of the Constitution Act, 1867. Since the purpose of the provincial statute was to provide for the construction and completion of a railway extending beyond the limits of the province, it fell within federal jurisdiction. The funds were necessary to the completion of the railway. If the act were within provincial jurisdiction, the Province would have the power to secure the existence or completion of inter-jurisdictional undertakings.

Dissenting opinion of Justice Fisher

Mr. Justice Fisher dissented. Prior to his appointment to the court, he had been a Father of Confederation and participated in both the Quebec Conference and the London Conference which had produced the terms of Confederation and the text of the Constitution Act, 1867. He distinguished between the pre-Confederation New Brunswick statute which incorporated the railway company and the subsequent statute authorising the town of St. Stephen to contribute to the financing of the railway. The pre-Confederation statute remained in force by virtue of s. 129 of the Constitution Act, 1867. That statute was the authority for the construction of the railway. The subsequent statute simply provided a way for the inhabitants of St. Stephen to contribute to the construction of that portion of the railway which was within New Brunswick. In his opinion, that financial arrangement was a purely local matter and therefore would be within provincial jurisdiction. He would have ruled the statute was constitutional.

Decision of the Judicial Committee

The supporters of the railway proposal then appealed to the Judicial Committee of the Privy Council, at that time the court of last resort for Canada within the British Empire. (The Supreme Court of Canada had not yet been created.) Judah P. Benjamin, Q.C., and William Grantham acted for the appellants. Edward Fry, Q.C., and Mr Bompas acted for the respondents.

On 5 March 1875, the Judicial Committee allowed the appeal, ruling that the New Brunswick Act was within provincial authority.

Sir James W. Colvile wrote the decision for the Committee. He held that the provincial Act did not relate to inter-provincial railways, a subject matter reserved to the federal Parliament by s. 91(29) and 92(10) of the Constitution Act, 1867. It was true that the railway company itself had been incorporated by an Act of the New Brunswick Legislature, shortly before the Constitution Act, 1867 came into force. However, the taxation statute in issue in the appeal did not relate to the construction of the railway, nor did it any way affect the corporate structure of the railway company. It simply enabled the majority of the inhabitants of the parish of St. Stephen to raise a subsidy for the railway by local taxation.

The Committee also rejected a second argument, namely that the taxation powers of the province were restricted to general powers to tax throughout the province and could not be used to authorise taxes for a local municipal purpose. The Province's taxation powers under s. 92(2) of the Constitution Act, 1867 are not so limited. Alternatively, even if the tax did not fall within s. 92(2), it would clearly be a law of a local or private nature within the meaning of s. 92(16) of the Constitution Act, 1867, and therefore within provincial authority on that basis.

Significance of the decision

The federal Department of Justice included this decision in the three volume collection of constitutional decisions of the Judicial Committee which the Department published when appeals to the Judicial Committee were abolished.