Judgment of the Court
DUFF C.J.-The Crown is proceeding by way of information for the recovery from the defendant, the Bank of Montreal, of certain sums charged by the defendant to His Majesty's account as disbursed in payment of cheques purporting to be drawn by the authority of His Majesty and duly endorsed. These cheques were signed by the proper signing officers, but the endorsements are alleged to be forged. The appellant, the Bank of Montreal, claims indemnity from the Royal Bank of Canada under
section 50 of the Bills of Exchange Act:
the bill subsequently to the forged or unauthorized endorsement if notice of the endorsement being a forged or unauthorized endorsement is given to each such subsequent endorser within the time and in the manner in this section mentioned.
2. Any such person or endorser from whom said amount has been recovered shall have the like right of recovery against any prior endorser BANK subsequent to the forged or unauthorized endorsement.
Such notice of the endorsement being a forged or unauthorized Duff Cj.
endorsement shall be given within a reasonable time after the person seeking to recover the amount has acquired notice that the endorsement is forged or unauthorized, and may be given in the same manner, and if sent by post may be addressed in the same way, as notice of protest or dishonour of a bill may be given or addressed under this Act.
The appellant, accordingly, purporting to act under the Rules, 234 to 241, of the Exchequer Court, served a third party notice on the Royal Bank of Canada. The learned President of the Exchequer Court set aside this notice on the application of the Royal Bank. From this order the Bank of Montreal appeals.
The rule making authority exercised by the Exchequer Court is derived from sections 87 and 88 of the Exchequer Court Act, which are as follows:
87. (1) The Judges of the Court may, from time to time, make general rules and orders,
(a) for regulating the practice and procedure of and in the Exchequer Court;
(b) for the effectual execution and working of this Act, and the attainment of the intention and objects thereof;
(c) for the effectual execution and working in respect to proceedings in such Court or before such Judge, of any Act giving jurisdiction to such Court or Judge and the attainment of the intention and objects of any such Act;
88. Such rules and orders may extend to any matter of procedure or otherwise, not provided for by any Act, but for which it is found necessary to provide in order to ensure their proper working and the better attainment of the objects thereof.
2. Copies of all such rules and orders shall be laid before both Houses of Parliament within ten days after the opening of the session next after the making thereof.
3. All such rules and orders and every portion of the same not inconsistent with the express provisions of any Act shall have and continue to have force and effect as if herein enacted, unless during such session an address of either the Senate or House of Commons shall be passed for the repeal of the same or of any portion thereof, in which case the same or such portion shall be and become repealed: Provided that the Governor in Council may, by proclamation, published in the Canada Gazette, or either House of Parliament may, by any resolution passed at any time within thirty days after such rules and orders have been laid before Par- We have no doubt that, notwithstanding the comprehensive language of these sections, they do not invest the judges of the Exchequer Court with power, by promulgating a rule, to enlarge the scope of the subject matters within the jurisdiction of the Exchequer Court. The question of DulCJ. substance is whether the claim of the appellant set forth in the third party notice under section 50 of the Bills of Exchange Act is a claim in respect of which the Exchequer Court has jurisdiction.
That jurisdiction is defined by
section 30 of the Act which, in so far as material, is in these words:
The principal contention of counsel for the appellants was that, the proceeding under the information being an action or suit " of a civil nature *
* * in which the Crown is plaintiff
* * *," the Court has, by the explicit words of the section, " concurrent original jurisdiction " with the courts of the provinces,-in this case with the Supreme Court of Ontario, in which province the cause of action arose. In such an action, that court would have jurisdiction to try and give judgment upon such a claim as that presented by the third party notice, and it is argued therefore that the Exchequer Court is invested with a like jurisdiction.
We cannot accede to this ingenious argument. The Supreme Court of Ontario has jurisdiction, by virtue of the statutes and rules by which it is governed, to entertain and dispose of claims in what are known as third party proceedings.
Claims for indemnity, for example, from a third party, by a defendant in respect of the claim in the principal action against him, can be preferred and dealt with in the principal action. But there can be no doubt that the proceeding against the third party is a substantive proceeding and not a mere incident of the principal action. These rules are in essence rules of practice, not of law, introduced for the purposes of convenience and to prevent circuity of proceedings.
We think, therefore, that
section 30, in virtue of the sub-paragraph mentioned, by which the Exchequer Court possesses " concurrent original jurisdiction in
* * actions * * of a civil nature ** in which the Crown is plaintiff," does not make it competent to the Exchequer Court to deal with the claim in question.
The remaining point concerns the language of sub-paragraph (a) by force of which the Court is given jurisdiction We do not doubt that the words " to enforce any law of Canada " would have, standing alone, sufficient scope to include a claim under
section 50 of the Bills of Exchange Act. No doubt the principal action is strictly within the words " cases relating to the revenue."
There is also, no doubt, a sense in which the third party claim relates to the revenue since it is a claim to have the third party indemnify the defendant in respect of a debt which the defendant is called upon to pay to the Crown. There is a great deal to be said also on grounds of convenience in favour of investing the Court with jurisdiction to entertain such claims for indemnity. On the whole, however, we think, having regard to the context, that this claim is not within the intendment of sub-paragraph (a).
The appeal should be dismissed with costs.
Appeal dismissed with costs.
Statutes and regulations cited
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Bills of Exchange Act
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Exchequer Court Act
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sections 87
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88 of the Exchequer Court Act
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Unresolved citations