Minneapolis Steel & Machinery Co. of Canada Ltd. v. Baxter Brothers

The claimant presented, in a letter to the Minister of Railways and Canals, a claim for damages for breach of an alleged contract for sale by the Crown to claimant's assignor of certain land occupied by the Canadian National Railways.

The contract involved the erection by the purchaser of a 26 storey building, four floors of which were to be leased to the Canadian National Railways, and five floors to the Department of Customs and Excise, and it was apparent from the claimant's letter that the successful financing of its project depended on these leases being entered into, and that the failure to obtain them was the substantial basis of its claim. Several cabinet ministers took part in the negotiations for the alleged contract, and it was the subject of cabinet discussions and Orders in Council. The Acting Minister of Railways and Canals, purporting to act under s. 38 of the Exchequer Court Act, referred the claim, as set out in claimant's letter, to the Exchequer Court. The Crown subsequently moved for permission to withdraw the reference, or, alternatively, for the statement of claim to be struck out, on the grounds: (1) that the reference was not authorized by s. 38, and was, therefore, ultra vires of the Minister of Railways and Canals; (2) that an Order in Council purporting to direct the withdrawal was effective, if the reference had been validly made; and (3) that the statement of claim as delivered was not within the purview of the reference authorized. The motion was dismissed ([1927] Ex. C.R. and the Crown appealed.

Held, this Court had jurisdiction to hear the appeal, under s. 82 of the Exchequer Court Act; the rejection of the first and second grounds of the motion was tantamount to allowipg a demurrer by the claimant to two prospective defences of the Crown, and effectively excluded them from the issues; moreover, the first ground challenged the Exchequer Court's jurisdiction, and the judgment affirming that jurisdiction was a final judgment.

Held, further, that the claim did not arise "in connection with the administration of " the Department of Railways and Canals, within s. 38 of the Exchequer Court Act; the project was a governmental undertak- *PRESENT:-Anglin C.J.C. and Duff, Mignault, Newcombe, Rinfret, Lamont and Smith JJ.

S.C.R.