Liquidators of Maritime Bank of Canada v Receiver-General of New Brunswick
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1892 |
| Date | 1892 |
| Year | 1892 |
| Court | Privy Council |
The
Held, affirming a judgment of the Supreme Court of Canada, that the provincial government of New Brunswick, being a simple contract creditor of the Maritime Bank of the Dominion of Canada in respect of public moneys of the province deposited in the name of the Receiver-General of the province, is entitled to payment in full over the other depositors and simple contract creditors of the bank, its claim being for a Crown debt to which the prerogative attaches.
APPEAL from a judgment of the Supreme Court of Canada (Dec. 14, 1889), affirming a judgment of the Supreme Court of New Brunswick (Oct. 19, 1888) upon a special case submitted.
Two questions were raised by the case, the material facts in which are stated in the judgment of their Lordships: first, was the provincial government entitled to payment in full by preference over the noteholders of the bank; second, if not, was the provincial government entitled to payment in full over the other depositors and simple contract creditors of the bank.
The first Court answered both questions in favour of the provincial government. The second Court decided the first question by a majority in favour of the appellants, by reason of the provisions of the 79th section of the Bank Act (Revised Statutes of Canada, c. 120). It decided the second question in favour of the respondent, holding in effect that the prerogative rights of the Crown could be invoked and exercised by and on behalf of the provincial government, which was, therefore, entitled to the priority claimed.
The Attorney-General (Sir R. Webster), Stockton, Q.C. (of the New Brunswick bar), and R. Brown, for the appellants:—
The prerogative rights of the Crown cannot be invoked and exercised by the provincial government, as distinguished from the Dominion Government. There is no section in the British North America Act of 1867 which gives this Crown right to the province. Accordingly, if the province possesses that right it must be on the general principle that the Lieutenant-Governor is entitled to exercise the prerogative of the Crown. But the effect of the Act of 1867 is that the Dominion Government represents the four provinces existing at the time of the Union and other provinces which were thereafter to be constituted; and, consequently, the direct connection between the Crown and the provinces has ceased. The Governor-General of Canada is the real representative of the Crown as the Dominion is at present constituted; and the Lieutenant-Governor of each province is not. Certain portions of prerogative are given to the Lieutenant-Governors, and that is inconsistent with their representing the Crown entirely. Otherwise, if the Dominion and the provinces both possess full prerogative rights you might have the Crown as representing the one contending with the Crown as representing the other. The judgment of Gwynne, J., in the Supreme Court was read and the reasoning therein contained adopted, it being suggested that sect. 92 of the Act should have been more emphatically relied on. Reference was also made to Reg. v. Bank of Nova ScotiaF1; Exchange Bank of Canada v. The QueenF2; Mercer v. Attorney-General of OntarioF3; St. Catherine's Milling and Lumber Company v. The Queen.F4 If the province as constituted under the Act of 1867 possesses all the rights which existed in the government of the colony before the Act, it is admitted that then it would have the same right of priority as the government had before the Act. But if the scheme of that Act was, as contended by the appellants, to establish a local executive and legislature under a lieutenant-governor who is appointed by the Governor-General, and not by the Queen, with functions different from...
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