Water Ballast

I am rather late on this, but I want to say something about a decision that the Supreme Court delivered ten days ago in a federalism case, Marine Services International Ltd. v. Ryan Estate, 2013 SCC 44. The constitutional issue which the Court had to resolve was whether the respondents, the estates of two fishermen whose ship had capsized, were able to bring an action in negligence against the ship’s builder and designer under (federal) maritime law, or whether their claim was barred by (provincial) worker-compensation law, pursuant to which the men’s families had been compensated.

(There was a statutory interpretation issue too, whether the worker-compensation scheme even applied to the estates’ claim which were, after all, directed not against the deceased’s employer, but against the builders of their ship. The Supreme Court concluded that it did, as the courts below had done. I have a hard time understanding that decision, but let’s put that down to my obtuseness, and move on to the constitutional issues.)

Provincial (as well as federal, as the Court points out) workers’ compensations schemes are all based on a trade-off: in exchange for compensation for workplace accidents (and illnesses) that does not depend on the employer’s fault, the worker is deprived of his or her right to pursue ordinary (fault-based) civil remedies against the employer. This means that compensation for a workplace injury is much more certain, but its amount is typically lower than what a court might have awarded in a negligence action if the worker prevailed. In the vast majority of cases, both the law of negligence and the workers compensation law are those of the same level of government (typically provincial, but federal in the case, notably, of federal civil servants), so a bar of negligence claims for workplace accidents operates relatively straightforwardly.

This case is unusual in that while the relevant workers compensation scheme is provincial, the applicable negligence is law part of maritime law, which is federal (pursuant to subs. 91(10) of the Constitution Act, 1867, which makes “navigation and shipping” a federal competence). This made it possible for the respondents to argue that unlike in the ordinary cases, the bar on negligence claims contained in the (provincial) workers compensation legislation did not foreclose their action.

Their first argument was based on the doctrine of inter-jurisdictional immunity, according to which an otherwise valid exercise of provincial legislative power cannot “impair” the exercise of a “protected core” of a federal power. The Supreme Court now considers the doctrine to be something of an anomaly in a constitutional structure that it has sought to shape to accept concurrent and co-operative exercises of federal and provincial powers, but it still applies in those areas where precedents so dictate. Maritime negligence law, including “the range of possible claimants in a maritime negligence action” (par. 59), is one such area, as the Court held in Ordon Estate v. Grail, [1998] 3 S.C.R. 437.

However, although it is clear that the application here of the workers compensation legislation limits “the range of possible claimants” in maritime negligence actions, the Supreme Court holds that this limitation does not raise to the level of “impairment” of the federal power:

[t]he intrusion … is not significant or serious when one considers the breadth of the federal power over navigation and shipping, the absence of an impact on the uniformity of Canadian maritime law, and the historical application of workers’ compensation schemes in the maritime context. (Par. 64)

The respondents’ second argument invoked the doctrine of federal paramountcy, which holds that in the event of  a conflict between validly enacted federal and provincial statutes, the federal law prevails to the extent of the inconsistency. A conflict exists when it is impossible for a citizen to comply with both statutes, or “when the provincial law frustrates the purpose of the federal law” (par. 69). There is no conflict in this case, says the Supreme Court, however defined. The federal statute provides a cause of action in negligence to the dependants of the deceased “under circumstances that would have entitled the person, if not deceased, to recover damages.” Here, due to the operation of the bar on negligence claims, the respondents’ “death occurred ‘under circumstances’ that would have disentitled them from recovering damages” (par. 77; emphasis in the original). Furthermore, the finding that federal and provincial law do not conflict ensures for consistency of treatment of the persons covered by federal workers compensation legislation (who are clearly denied remedies in negligence) and those covered by provincial legislation. In addition, while the purpose of the federal law is to create a tort remedy, the provincial statute is intended to “ remove[] compensation for workplace injury from the tort system” (par. 83). The latter purpose does not frustrate the former; provincial law “simply provides for a different regime for compensation that is distinct and separate from tort” (par. 84). The respondents’ arguments fail.

For my part, I think that the Supreme Court’s reasoning is quite weak. On the issue of inter-jurisdictional immunity, it is probably consistent with the Court’s recent decisions, but still frustrating. The Court does not provide any real guidance on what counts as an “impairment” of a federal power, beyond saying that a law which “impairs” a federal power does more than merely “affect” it, though it need not “sterilize” it. Its decision may be right, but it seems more impressionistic than anything. As for the issue of federal paramountcy, the Court’s reasoning seems outright circular. The Court says there is no conflict because “circumstances” disentitle the respondents from recovering, but the circumstance in question is the operation of the provincial statute, which is precisely the point in issue. I also find it difficult to see how a statute that aims at removing cases from the tort system does not, to some extent, frustrate the purpose of another statute that aims at bringing such cases into that system. The Court’s points about consistency are better taken, but, on the whole, I am not persuaded that its decision is correct.

The decision does, however, fit in with the Court’s stated aim to foster “a flexible and pragmatic approach to federalism” (par. 50), where federal and provincial law are, as much as possible allowed to operate side by side. In the famous Labour Conventions decision, Lord Atkin, for the Judicial Committee of the Privy Council, stressed that “the ship of state … still retains the watertight compartments which are an essential part of her original structure.” The Supreme Court now believes that the “watertight compartments” are not enough. Their operation must be complemented by allowing water ballast to flow from one side of the hull to another to keep the ship aright. Let us hope that the tanks in which the water is kept are solid enough, and that the water will not spill.

GEEKY RANT UPDATE: There is another, inconsequential but annoying, flaw in the Supreme Court’s reasons. At par. 28, the Court mentions Sir William Ralph Meredith, the author of a report that led to the enactment of workers compensation legislation in all Canadian provinces, describing him as “former Chief Justice of Ontario.” But, at the time he wrote the report, in 1910, Sir William was the future, not the former Chief Justice ― he only was appointed to that post in 1913. And yes, it is Sir William, not “Sir Meredith,” as Justices Lebel and Karakatsanis describe him at par. 29.

Author: Leonid Sirota

Law nerd. I teach public law at the University of Reading, in the United Kingdom. I studied law at McGill, clerked at the Federal Court of Canada, and did graduate work at the NYU School of Law. I then taught in New Zealand before taking up my current position at Reading.

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