OF
*Mar.13-15.
ONTARIO (CLAIMANT)
..........
APPELLANT; *May
AND
THE ATTORNEY-GENERAL
OF
CANADA (RESPONDENT) ..........
APPEAL FROM THE EXCHEQUER OF Among the assets of the Province of Canada at Confederation were certain special funds, namely, U. Grammar School Fund, U. Building Fund and U. Improvement Fund, and the province was a debtor in respect thereto and liable for interest thereon.
By sec. of the B.N.A. Act., the Dominion Canada succeeded to such liability and paid the Province Ontario interest thereon at five per cent. up to 1904. In the award made in and finally established in on the arbitration, under see. of the Act to adjust the debts and assets Upper and Lower Canada, it was adjudged that these funds were the property of Ontario.
In 1904 the Dominion Government claimed the right to reduce the rate interest to four per cent., or if that was not acceptable to the Province to hand over the principal.
On appeal from the judgment the Exchequer Court in an action asking for a declaration as to the rights of the province in respect to said funds,
Held, affirming said judgment Ex. C.R. 292), Idington J. dissenting, that though before the said award the Dominion was obliged to hold the funds and pay the interest theron to Ontario, after the award the Dominion had a right to pay over the same with any accrued interest to the province and thereafter free from liability in respect thereof.
Held, also, that until the principal sum was paid over the Dominion was liable for interest thereon at the rate of five per cent. per annum.
Davies, Idington, Maclennan and Duff JJ.