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Lorsque le document est trop grand pour dtre reproduit en un seul cliche, il est fiimA d partir de Tangle sup^rieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'images n^cessaire. Les diagrammes suivants iilustrent la mAthode. 32X 1 2 3 1 2 3 4 5 6 ( :t^ I If. -i? / yZe^.-^^ 6^-^er^ /7 ARBITRATION XTNDEB THE BRITISH NORTH AMERICA ACT 1867, LAW OPINION On Proceedings and Award by Two Arbitrators, I I >r ARBITRATION UNDER THE BRITISH NORTH AMERICA ACT 1 867. LAW OPINION On Proceedings and Award by Two Arbitrators. On «ie ninth day of July last,, the Arbitrator appointed by the Govern- ment oi Quebec withdrew from the sittings of the Arbitrators and gave m the resignation of his appointment, which was accepted, and a super- sedeas was thereupon issued by that Government. The reasons for hia resignation are assigned in the printed pamphlet intended to make part of the record of proceedings before the Arbitrators. At the time of the resignation a decision had been agreed upon by two of the Arbitrators, the Honorable Messrs. MacPherson and Gray, upon certain preliminary questions, from which the Arbitrator chosen by Quebec dissented. That decision had not then been pronounced or officially pro- mulgated, although an order to that eflfect had been made at the time of adopting it. A hearing had also been had upon the question whether a decision by two of the Arbitrators (a majority) against the opinion of the third would be valid. Upon this latter question no decision had been arrived at and no final deliberation upon it had taken place. After the withdrawal and resignation of the Arbitrator appointed by Quebec, the judgment previously agreed upon by the two other Arbitrators on the preliminary questions was formerly pronounced by them. A decisioa was also agreed upon by the two Arbitrators in the absence of the third on the question of the power of the majority to decide, and was formally pronounced on the twenty-first day of July. The two Arbitrators afterwards held sittings on several different days, at which the counsel for Ontario were heard upon incidental points, and' finally upon the merits of the case ; and by an award (so called) rendered on the third day of September last, the two Arbitrators assumed to make a division and adjustment of the debts and assets of U. & L. Canswia under the auihority of the B. N. A. Act. At these sittings the Government of Quebec was not in any manner represented, but on the contrary protogted against the proceedings and the award as an illegal usurpation of authority and void in law. It is perhaps unnecessary to premise that in a matter involving sudi great ntest^s between parlies of high dignity, ^V^t:\nd fhafnX" Sthat there should be no infringement of legal rights ^nd that nothm public nyury. proceedings is the more essential as the three fvS ftWe to iS™ o'u™, the'AAitratovs as^u^ng to make the award 3 both OTSale to the public '™""''l™" ■ eonscqnences involved, that :^,^::^':fX;:rdi":rl^rrR ca.ef.i, e.a„.ed. The cuestions upon *>", trinLlitd^sS^Set Tl' trt? ° \w' he Lt oland ad uBtment contemplated by the Act Act, v,hjch a« *'^' *o,f "rtoaniei.t of three Arbitrators, one chosen by "shall be '■'f"™^^ 'S 'Kn„X the Governmentof Quebec, and one by teG^rrntlt Cda,""?„Lhesec,uestlons maybe stated under three specific heads : Arbitrators, two of them .olk^lS I dSi aS ;':, lid they do so in the absence "^""wtefternpon a hearing before two of the AAtators only, these t J-codd icgall^ender ^ .''»™7 ™ *^^^^^^^^ office, and Jalort rdten ?ev1w, tt gaining two co'uld legaily proceed lo hear the case, and to make a final award. Before entering upon these 'i^^^^^S^'^^l ^S.ZST. the subject of «'» Arb.tr'^.on ^P°y™;jP^«„^^„,, ,„„,ged the atten- character entirely different trom any wiuc . .„.i„.;„n3 It is ent tied .4' Municipal Law intended for a class of cases with which it has no analogy. Such is not only the view whicli sound reason suggests, but it is the neces- sary result of the provisions of the Act, coupled with the circumstances which attended its passution, and surround its execution. Tlie terms of the Act of Confederation were a matter of negotiation and compact between the delegates of the several Provinces of JJritish North America. Whatever was finally agreed upon by them was made part of the law. Their conference did not differ essentially in so far as their rela- tions to each, other were concerned, from a conference of independent nations. The two sections of the then Province of Canada, Upper Canada and Lower Canada, there discussed the subject of their financial condition, their income, resources and liabilities, and the division and adjustment of their common debts and assets. They could have given consent to any compromise or arrangement of the matter, which they thought fit, or cither could have Avithheld such consent or withdrawn it at any period of tho negotiation. Under the difficulty of an innneiliute settlement of their several rights, the discussion resulted in a coavention that they should be left to the arbitrament of three porsotis. This convention was expressed in tho Statute in definite and unaml)iguous terms, and was as absolute and final as any other positive provision contained in it. It had all the charac- teristics of a Public Treaty, containing and expressing its own law, which is the higher law, and not subject to be forced from its plain meaning by tho application of any rules of tho Municipal Law of one country or another. If, under such a treaty, tliroo or more commissioners were appointed to exercise a specific power, without any pi o vision for choosing an umpire or for giving authority to the majority, it is certain that upon tho dissent and withdrawal of tho commissioner ap[)ointed by one of tho Governments, such Government would not be l)ound by any decision given by the others. What the Provinces agreed to do, instead of finally settling tlioir respective claims then and there, was to take the judgment of three persons not of two. If eitiicr of the three Governments by whom they were to be chosen had not thought fit to appoint, it could not have been com- pelled to do so, and in such case no arbitration could have taken place ; for it was not by two under any circumstances, but by three that the Provhices had consented to be judged. If, after the appointments had been made, the death of an Arbitrator occurred, or othe ■ causes reduced the number from three to two, the compact was at an end. No power could enforce an appointment in the first instance, or a second appoint- ment to supply a vacancy, and in either case the simple result would be that the mode of settlement provided had become ineffective. Such a result, must of course, have led to a new compromise and a new mode of settle- ment ; and I have no doubt that sucli was the view taken at the time. It was intended that this mode of settlement should depend upon the subsist- ing consent of both Provinces ; and the concurrence of the three Arbitrators Avas regarded as indispensable to the safe and just settlement of the business. It could never, as a matter of public policy, have been contemplated by prudent men and statesmen, that two of the Arbitrators should have a power, under any circumstances, of banding together to the injury of either Pro- vince. Such a power would have been considered, and justly considered, dangerous to the interests of the whole Dominion, and perhaps to its integrity. nials the 4 u j "'^^^^ ' JJ^.^^.^^^,,,,; „,,,t be at three, of whom a Commissioner apponitcd b. tacii uovt one. f 1QI1 fvvn riominHsinuers arc to 1)0 named, and, "^t;;fs; in the Convention.,*., Groat l«tni^a„d.h^ avy Treat,, a t-'^f'-V'^'^'^V^? , 4 „ ' ffi£° co of opinion, i. to l,e the it is intended that it shall be so exercised. ^^^.^^.^^^ ,a;S^':t -t^^r ^^itrtSSTof t^- or a nation, or Trade Act, 3 Geo. iV., Cap. l^J, m }^ '^^'^ 1^-^ ^i^.i,-,,, j^ committed division of duties of custorn. between U&jLCi^^^^^^^^ ^^. to three Arbitrators, and tl^c mode ot api-omt^ncnt an ^^l. Sedhig are specifically kid down m «. s« JJ ^l^,^^;;- ,^,. ootU The first ot_ these (bcc D ^^^ ^^^ ™?'^^^ ^^ ,,tor or his removal makes provision tor cases «V ir-tW enacts that a majority may cr incaiKveity or re usal to act ; «" ^,^^^f ; - J/ ^ absence of th J third, all this special lof^ialatlon is implied in the few direct and unambi;i;uou8 Avords of the 142 Sec. of the ]J. N. A. Act whv insert it in such minute detail in another Act of the same Lo;i;islativo hudy, dcalinj^ with a cognate subject matter, between the same Provinces ? J5ut there is another piece not of perfected but of intended legislation which may bo consulted with profit u[ion this (|ue3tion, I alluilo to the Canada Bill, for effecting the tfnion of 1S41, Avhich, after several modifica- tions, became law. In that Bill, as at first prepared by able hands in England and submitted, it was proposed (Sec. !JH) to appoint five Arbi- trators to establish electoral divisions, two of them to be ap[)ointed by each (Jovcrnment, and these to appoint an Umpire ; and on tlieir failure to do so within a certain time, the ap[)oiiitniouts were to bo made by the Crown. By Section . Coko uiioii Lit. Wl (1>J. EoU. ub. 32a. Bolo boncfit of those Provinces, and in wliicb noithor Great Britain, nor any body in it, has the sli^^htost interest, is to bo construed by the muni- cipal law (ni)t of (ircat IJritain, for there hi no such uniform municipal law) but of Kii^land ; and I tliink it is pretty clear that it is not in the law of that country that we are to seek the rules of interpretation. Then, with respect to the law of the late Province of C'anada, contained in the Inter- pretation Act, it is restricted in terms to the Statutes of the Parliament of that Province, and cannot bo extended to control or interpret a Statute of the Imperial Parliament ; and it may safely bo affirmed, both of this law and of the law of England, that if either could ap|ily, it would settle nothing cs.sential to the result of this en((uiry. Lastly, there are the two systems of municipal law, one for Ontario and the other for (Quebec. They [)erhai)S do not difter very much upon the subject under consideration, but still the (jucstion remains, which of them is to be considered autho- ritative and paramount to the others and therefore entitled to furnish the rule of construction ? Now it seems to me that in the pori)lexity of this question, whether the Law of England, the Law of the Province of Canada, the Law of (Quebec, or the Law of Ontario is to prevail, the only safe and indeed the necessary conclusion is that they are all inapplicable, and that the Avordd of the Act nnist bo accepteil and followed in their obvious meaning. They should be so followed, with an absolute rejection of modi- fication and foi'ced construction by rules of municipal law which havo grown out of and are intended forcase^ an entirely dilferent and inferior class. I can easily imderstand why the Ooin-ts should have said that when persons are appointed for the j)urposc of valuing leather under the E.Kciso law, or of making local assessinent.s for a common sewer, or of adminis- tering the affairs of a Water Works Company, or of executing the duties o{ IJailiU's, or of performing other public fiuictions of a similar nature, that in order to secure promptness and efficiency in the discharge of such iluties, the majority can act ; but what possible analogy such cases and such powers have with the great p\il»lic duty of settling contlicting rights between quasi-independent i'loivnces, I am unable to understand. Yet, all the cases cited by the Coun.sel for Ontario and by Mr. Gray relate to the suljocts uulicated above, and they are really without any legal bearing upon the subject matter of this case, which might hero be safely left. It may bo thought proper, however, although the task seems to mc superfluous, to follow the (piestion upon the narrower grounds on which the two Arbitrators have pretended to sustain it, and this I now proceed to do. 1st. The first of the specific (jucstions is whether upon a hearing before the three Arbitrators two of them could legally render a decision in the ab- sence of the third. The formal opinion pronounced l)y the two Arbitrators on the twenty- first July, goes no further than to declare that a majority could iecido upon a matter heard before the three. It does not touch the question of the absence of the third at all. It might therefore be passed over without particular examination or pronouncing upon its character. As it was, however, the first of a series of grave mistakes, a few obser- vations ought to be made upon it in connexion with the words of the B. N. A. Act. It may be safely affirmed that these words, as found in Section 9 f ""• B''»J'. 2 I'utorH Hupt. twa. 142, if taken literally, arc not in tho least dcgroo amhiguotis or obgcnro ; they plainly ro(|uiro that tho division of tho debts and assf'taof tho Pro- vinces of U. and L. C. shall bo referred to tho Arbitrament of throo Arbi- trators, of whom ono shall bo chosen by tho Province of Qneboc. And it i8admittc inconveniente ; the primary and obvious rule in tho reading of powers in all histruments being, that the jilain meaning of the words shall have its effect and be followed. This rule has been preserved in the Courts of England, when dealing with references to Arbitrators, and powers delegated by private parties ; but in order to avoid mischievous obstructions and delay in matters of public authority, the language of some Statutes has been so construed, thai when a specific number of persons have been authorized to discharge duties of a certain class, such duties may be performed by a majority of them. This relaxation from the primary rule for the construc- tion of powers is reasonable in itself, but it must not be carried beyond the reason upon which it rests. Now, upon a careful examination of tho English cases, it will be found in all of them, either that tho public autho- rity as in some way arrayed on the one side, and private rights and interests on ihe other, or that there was a question of the right of tho majv)rity or Directors or other Administrators in corporate bodies to govern the minority in the administration of the business or the Corporation. Such is the fact ■with respect to all those cases cited by the Counsel for Ontario and the two Arbitrators already adverted to. The question in them all was of the 10 enforcement of the higher and larger interest, against the lower and narrower one ; but I deny that any well established case can be found in the English Books in which sucli a rule has been applied to the settlement of conflicting rights by Arbitration between litigant parties standing upon equal footing. The Arbitration in the present case may be said, in one sense, to be of a public nature because it is authorised by a Public Statute, and involves the rights of two great Provinces. That description of publicity attached also to the appointment and character of the Commis- sioners and Arbitrators under the authority of the Treaties and of the Canada Trade Act and Canada Bili montionod on a former page, and their duties wei'C eminently of a public nature ; yet it ha.s])cen seen that special provision Avas deemed necessary in all these instruments to legalize a deci- sion by any number less than the Avholc. But wlierein docs this Arbi- tration differ in essential character and effbcts from an Arbitration botw(;en two individuals ? If, a Legislature should by Statute make a similar provi- sion for the division of property between individuals A and B, it would not be a public matter in the sense assumed by tlio decision of the two nrbiti'ators. If instead of individuals it was between two Miniicipal Corporations, it would still be a mere Arbitration for the settlement of rights appurtenant to them as indiviilual bodies. Its nature is not clianged by the Corporation bein;^ two Provinces instead of two municipalities or two individuals ; the simi)le object is to settle conflicting rights between equal pariics. There is here no such puhllc nniure as justifies the departure from the primary rule concerning ordinary Arbitrations, in ordor to intro- duce the e.\^ optional one, for the piihllo nature contemplated in tlie cases in which the exceptional rule is a])plieii, is that in wliich the public aucliority was to be enforced against the private interests, and not that kind of publicity which depends simply upon the importance and digni*'y of co-equal litigant parties. To put the point in another form. If the submission to Arbitrators had been the mutual aci of the two Governments, by a proper instrument, without the intcriiosLion of the Imperial Parliament, (for that interposition was not at all nece isary to enable the Governments of Ontario and Quebec to settle their dilferenceg in that manner) in what respect would the Arbi- tration tb.en havo differed from an ordinary one between individuals ? Wliat principle of a public and higher interest paramnuit to a private and lower one could be found to justify a departure from the plain language of the sut7raission. But in point of fact the interposition of the Im[)orial authority introduces no new principle. It was made at the instance of the two Provinces, and founded upon their mutual agreement, and is in effect simply a formal expression of that agreement as an instrument duly executed under seal would be. lint I will pursue the topic of this parti- cidar decision of the two Arbitrators on the right of the majority to decide no further, for, as already stated, their opinion, although erroneous, is not of importance to the material question of the illegality of their final award. The point raised by the first question, relating to the absence of the third Arbitrator v.hen the decision Avas given, will, in order to prevent repetition, be treated under the second and third ( " sentence serait nuUe quand memo tous ceux qui Font rendue auraient " ^**^ " (5t6 de meme avis. Si un Arbitre refuse d'assistcr au jugemcnt, on ne " pout y faii'c proceder par los autres." Aibitro §ni. Ao. 2, p. 242 IJig. L. 17 §17 pt 13 da recoptiiJ.Dom. J.oixCiv.U. 1 Tit : 14, Soo II c. 5, p. lijl, fol Kd, A 12 It would be easy to add to these references, but the law in France as stated in them admits of no doubt. Nor does, indeed, the law in England, for all the cases cited from the English books in support of the proceed- ings and award of Messrs. MacPherson and Gray establish simply two things. 1st. That a wiayonV?/ of Arbitrators may decide tvhen specially autho- rized by the reference, against the opinion of the third, and sometimes, (but this is not so well settled) even in his absence after a hearing and deliberation by all. 2nd. That in matters of public authority committed to ofRccrs to be enforced against private interests, the majority may decide or act and so in public companies the majority of the Directors or other administrators bind the minority. This is the utmost extent of the rules derivable from the cases referred to ; and no case has been or can be produced in which it has been held that upon reference to a certain number of Arbitrators, whether such reference be by private instrument or public statute, an award can be given by less than the whole number when there is no provision to that effect ; and of course, by stronger reasr^n, in the absence of the third from the hearing and judgment. On the contrary, the whole of the authorities cited from the English law shew the illegality of the proceedings after the withdraAval of the Arbitrator appointed by Quebec. The same may be said of the cases citc