VOL. XIX.] EXCHEQUER COURT REPORTS. 321, IN THE EXCHEQUER COURT OF CANADA. 1919 December 13. IN THE MATTER OF THE PETITION OF RIGHT OF CHARLES LIVINGSTON, SUPPLIANT ; ' ' AND HIS MAJESTY THE KING, RESPONDENT. Petition of Right--Constitutional Law—Powers of . finister—Con- tract, ratification by Order-in-Council—R. R. C. 1906, ch. 24., sections 2a, 35, 41, 42. The Minister of Militia entered into a contract with suppliant' whereby he agreed that articles of military clothin g required by • cadets of Royal Military Colle ge including repairs should be exclusively obtained from suppliant, the prices therefor to be paid out of the public funds of Canada. The contract which was for a term of over four years, was never authorized or ratified by an Order-in-Council. Held, that where a co n tract involving payments 'out of the public funds is made by a Minister of the Crown for a term of years without the authority of the Governor General in Council, and has never. been approved by them, the Crown cannot be made responsible therefor on a petition of rig ht. • 2. The fact that the Re g ulations of the Royal Military College provided for a deposit, in moneys. by Cadets, to pay for •articles covered by this contract, which money was payable to the Receiver General of Canada did not havé the effect of validating the contract so as to make it bindin g •upon the Crown. P ETITION OF RIGHT to recover from the Crown damages for breach of contract made by a Minister of the Crown ;but without authorization or ratification by Order-in-Council. The case was set down for hearing upon questions of law, but at the 'argument it was decided that the
322 EXCHEQUER COURT REPORTS. [VOL. XIX. 1919 hearing should he treated as if it were trial of the • LIVITGSTON v. action. THE KING. The case was tried at the City of Ottawa, before the Honourable, Mr. Justice Sir Walter Cassels, on the 28th day of November, 1919. Mr. Whiting, K.C. and C. W. Livingston for suppliant. Mr. Plaxton for respondent. . The suppliant, in his Petition of Right in sub- stance alleges that from 1898 to the date of the contract sued on he had always supplied the Royal Military College at Kingston from year to year with various articles of clothing and similararticles, without written contract. In 1911, after negotiations with the Department of Militia, a contract was signed. The contract i t s given at length in the Petition of Right and the principal sections thereof are reprinted here as follows : "MEMORANDUM OF AGREEMENT made this 9th day of August, A.D., 1911, • BETWEEN HIS MAJESTY THE KING, REPRESENTED BY THE HONOURABLE MINISTER OF MILITIA OF THE DoMINION OF CANADA, OF THE FIRST PART, AND CHARLES LIVINGSTON, doing business in the City 'of Kingston, under the style of C. LIVING-STON & BRO., MERCHANT TAILORS. OF THE SECOND PART. WITNESSETH, (1) The Party of the Second Part contracts and agrees with the Party of the .
VOL. XIX.] EXCHEQTJER COURT REPORTS. 323 First Part to furnish the articles of clothing, and re-1 9,1_42, pair the clothing of the Cadets of The Royal Mili- LIVINIZSTON Txs KING. tary College, as set out in the price list hereto annexed, dated February the first, 1911, 'at the several prices shown and contained in the said price list. (2) The Party of the First Part agrees with the Party of the Second Part that the articles of military clothing required by the Cadets of the Royal Military College, including repairs as shown in the price list before mentioned,' the cost of same being'; payable from Public Funds, shall be obtained from the Party of the Second Part exclusively. (5) It is agreed that the Commandant may annul this contract at any time, subject to the approval of the Honourable Minister of the Department ' of Militia and Defence, if the conditions of same are not complied with.. (6) This contract to be in force from the date of its approval until the 30th of June, 1915, and hereafter from year to year. It shall terminate at any • 30th June after 1914, provided 6 months notice to that effect is given bÿ. either of the Parties hereto; (8) It is agreed that the prices in the price list; hereto annexed, shall be subject to yearly revision by the Honourable the Minister of Militia and ,De- fence, the year in such cases to run from the 1st of July to the 30th of the following June .; provided that such revision shall only be made upon , the_ ,.. recommendation of the Commandaiit, and that the
324 EXCHEQUER COURT REPORTS. [VOL. XIX. r9i9 Party of the Second Part, shall have at least three LIVING ..~ S TON months' notice in advance of the change of prices. Tss KING. SIGNED, SEALED AND DELIVERED the day and year above mentioned. (Sgd.) .C. Livingston, F. W. Borden." They further allege that the contract was acted on in good faith by both parties until the 1st of April, 1.9 12, when the Department of Militia pur- ported to cancel the said contract by letter and without notice or just cause; and that the work was given to other contractors. All past work was paid for and that the said contract was binding upon the crown; and he sues for damages for breach of contract. The Crown in its defence in substance, alleges that the agreement and contract in question, if made between suppliant and Minister of Militia and Defence as alleged, was not binding in law upon the Crown and that it should have been specifically authorized by an Order-in-Council, which was not done; that there was no appropriation of public moneys voted by Parliament and payable from public funds to meet the payments provided for in the contract and that any payments made to the contractor were paid and expended under the direction of the Commandant of the Royal Military College and out of moneys received from Cadets of said college under regulations covering the same and were not paid or payable out of public funds. They further state that the contract in question was not of a routine or departmental nature as would enable the Minister to fix liability upon the Crown.
VOL. XIX.] EXCHEQUER COURT REPORTS.. 325 By their reply, the suppliant estates ° that public .11'1,-9, moneys were annually voted for said contract by LIVINGSTON TRE KING. Parliament and refer to the Auditor General's re- ports and the public estimates; and that, even if the Minister of Militia bad not inherent power to bind the CrOwn with respect to the contract in question, which is not admitted, the contract was ratified and approved of by Parliament by granting the moneys as aforesaid and by the fact that the suppliant was paid out of such grants, and that the contract, to be binding, did not require the . Order-in-Council. The facts are stated in the reasons for judgment of the Honourable Mr. Justice Oassels which follows : Cassels, J., now 'this (13th ' December, 1919) de-û"â~men livered judgment. A Petition of Right filed by one Charles Living-ston, in the City of ' Kingston, Merchant, claiming that on the 9th August, 1911, an agreement was, entered into between His Majesty the King, repre- sented by the Honourable, the Minister of Militia, of the first part, and the petitioner of the second part, whereby the party of ' the first part agreed with the party of the second part, that the .articles of military clothing required by the cadets .'of the Royal Military College, including repairs, as shown in the ' price list before mentioned, the costs of the same being payable from public funds, shall be obtained from the party of the second part exclusively. • The' agreement is set out in extenso in the petition of right. .
326 EXCHEQUER COURT REPORTS. [VOL. XIX. 1 9 ; 9 The agreement provided by section 6, is as fol- LIVINGSTON ro. lows : Tas KINa. "6. This contract to be in force from the date lessons for judgment. "of its approval until the 30th June, 1915, and "hereafter from year to year. It shall termin- • " ate at any 30th June after 1914, provided six "months' notice to that effect is given by either "of the parties hereto." The allegations in the petition are, that on the 1st April, 1912, the Department of Militia and Defence purported by a letter dated April 1st, 1912, to cancel the said contract without notice and without just cause. The petitioner admits that all sums due him fôr work performed up to the cancellation of the contract have been paid, but he claims by his petition damages for breach of the contract. By the 10th paragraph of his petition of right he alleges, -as follows: "10. That in addition to the damages claimed "in paragraph 9 hereof, the suppliant claims to "be entitled to damages which arise in the fol-"lowing manner : The suppliant had been ac-"customed to sell to the Cadets 'of the Royal "Military College many articles of clothing and "merchandise other than military supplies em-"braced in the contract in question, particular- ly civilian clothes 'and furnishings 'at the end "of the college terms, as since April 1st, 1912, "the Cadets were not required to come into the "suppliant's store in connection with the pur -"chase of military supplies, a large part of this "trade has been lost as a direct result of
VOL. XIX.] EXCHEQUER COURT REPORTS. 327 • "the cancellation of 'the. said contract. the ."suppliant claims damages for suèh'loss." - ' LIVINOGSTON Tits Klxo. This :claim on the hearing was abandoned.' • Essiou i for The Crown filed a defence. in which they claimed "aim" the . contract was not binding, the contention being that it had not the approval of the Governor-in- Council, as regnired by law. • It Was. agreed between the' parties that the quês-tions~of law involved should be argued, and the case was • set down to be heard on the legal questions, and came on for argument on the 28th November, 1919. - On the opening of the case it was suggested by. ' Counsel for' both sides that in•liéu of the pOints ,of law being argued, the hearing should be treated as if it were a trial of the action, it being agreed that no further evidence other than what appeared of record could be adduced; and it was also agreed that in the event of the Court being of opinion that the plaintiff was entitled to damages, the ,question . of quantum of damages .should be referred. For the purpose of the trial it was 'also admitted that the agreement in question . never received the approval of the Governor-in-Council. After the best consideration that I have been able to give to the ease, I am of' 'opinion that the conten- Lion of the Crown is well founded. I do not think it was within the powers of the Minister to enter into a contract binding the Crown for a term of years without the approval of the Governor in Council. I do not think the Regulations of the Royal Military College, Rules 14 tô 22, affect the case. The funds referred to are payable to the Receiver 'Gen-
828 EXCHEQUER COURT REPORTS. [VOL. XIX. 3-9 19 eral. 'The contract in question provides for the LIVINGSTON payment out of the public funds. Tae KIxm. Reference may be had to the Consolidated Rev-T' ufor enue and Audit Act', the Act relating to the Royal Military College', the Militia Act 3 , and also Jacques Cartier Bank v. The Queen'. The petition is dismissed with costs. Solicitor for suppliant: C. W. Livingston. Solicitor for respondent: T. J. Rignéy. 1 R. S. C., 1906, ch. 24, sections 2 (a), 85, 41 and 42. 2 R. S. C., 1906, ch. 48. 3 R. S. C., 1906, ch. 41. 4 (1895), 25 Can. S. C. R. 84, especially at page 88.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.