Marine Services International Ltd. v. Ryan Estate

In Constitutional Issues in Maritime Law on (Updated )

Précis: The Supreme Court of Canada held that the bar to litigation in a workers compensation statute was constitutionally valid and applicable to fatal injuries involving crew of a vessel. In so doing the Supreme Court has clarified the constitutional analysis required when dealing with Canadian maritime law and expanded the opportunities for provincial statutes to apply to maritime law matters.

This was a judicial review of a decision of the Workplace Health, Safety and Compensation Commission of Newfoundland. The issue was whether the Workplace Health, Safety and Compensation Act (“WHSA”) of Newfoundland prohibited an action under s. 6(2) of the Marine Liability Act (“MLA”) by the estates and dependents of two crew members who lost their lives when their fishing vessel sank. It was undisputed that the deceased crew members had been “workers” under the WHSA and that the defendants were “employers” under the WHSA. At first instance, the trial Judge noted that questions of liability in a marine context “clearly and obviously fall within federal jurisdiction” and said that the issue was whether the statutory bar in the WHSA was “merely casual or incidental” such that it would not give rise to the doctrine of interjurisdictional immunity. The trial Judge noted that the interjurisdictional immunity doctrine would be invoked where a provincial statute intrudes on the “core” of a federal power to the extent that it “impairs” that power. The trial Judge further said “there can be no greater level of impairment of the power to sue than to bar the exercise of that power” and held that the WHSA must be read down so as not to apply. Although this was sufficient to dispose of the case, the trial Judge also considered the paramountcy doctrine and held that it was also applicable.

On appeal, the Newfoundland Court of Appeal upheld the judgement of the trial Judge but with one dissent. The majority began its analysis by applying the pith and substance doctrine and had no difficulty finding that the WHSA was valid provincial legislation. It then considered the interjurisdictional immunity doctrine noting that this involved answering two questions: (i) does the provincial law trench on the core of a federal power and (ii) is the provincial law’s effect on the federal power sufficiently serious (i.e. does it impair and not merely affect the federal power). Relying heavily upon the Supreme Court of Canada’s decision in Ordon v Grail, [1998] 3 SCR 437, the majority held that the doctrine of interjurisdictional immunity applied and the statute should be read down. The majority also considered and applied the paramountcy doctrine holding that “if a maritime claimant wishes to avail of the right to sue, he or she will be precluded from doing so. He or she cannot comply with the federal law without violating the provincial law. The two provisions cannot, in an operative sense, co-exist.” The dissenting Justice would have held: that the WHSA was in pith and substance a no fault insurance scheme and not maritime negligence law; that there was no operational conflict under the paramountcy doctrine as the federal law did not compel claimants to make claims; and the interjurisdictional immunity doctrine did not apply because the core of the federal power was not engaged. A further appeal was launched to the Supreme Court of Canada.

The issues addressed by the Supreme Court were:
(1) Does the WHSA apply to the facts?
(2) Is the WHSA constitutionally inapplicable by reason of interjurisdictional immunity or inoperative by reason of paramountcy?

Decision: Appeal allowed. The bar to actions in the WHSA applies.

(1) The WHSA and the similar schemes in other provinces, as well as the federal Government Employees Compensation Act and Merchant Seamen Compensation Act, establish a no-fault compensation scheme for workplace related injuries that are distinct from and do not interact with any tort regimes. Disregarding the constitutional issues, the first question is whether the WHSA applies to the facts. The statutory bar in the WHSA benefits not only the “employer” of the injured employee but any employer that contributes to the scheme so long as the injury occurred in the course of employment and “occurred . . . in the conduct of the operations usual in or incidental to the industry carried on by the employer”. There is no dispute the deaths arose in the course of employment. The Commission found that the deaths “occurred . . . in the conduct of the operations usual in or incidental to the industry carried on by the employer” and their decision is entitled to deference. Therefore, absent the constitutional issues, the statutory bar in the WHSA applies.

(2) The first step in the resolution of the constitutional issue is an analysis of the “pith and substance” of the impugned legislation. This is an inquiry into the true nature of the law in question for the purpose of identifying the “matter” to which it essentially relates. Two aspects of the law are analyzed: the purpose of the enacting body and the legal effect of the provision. In this case, the constitutional validity of the WHSA is not challenged and a full pith and substance is not required.

Interjurisdictional Immunity

Interjurisdictional immunity protects the “basic, minimum and unassailable content” or core of federal jurisdiction under ss. 91 and 92 of the Constitution Act, 1867. A broad application of the doctrine is inconsistent with a flexible and pragmatic approach to federalism. The doctrine is of limited application and should be reserved for situations already covered by precedent. There is prior precedent favouring its application to the subject matter of this appeal, namely, the decision in Ordon v Grail where it was held that maritime negligence law is part of the core of the federal power over “Navigation and Shipping”. Like Ordon v Grail the present appeal involves the application of a provincial law to a maritime negligence action. The test to trigger the application of the interjurisdictional immunity doctrine is two pronged. The first step is to determine if the provincial law trenches on the protected core of a federal competence. If it does, the second step is to determine if the effect is sufficiently serious to invoke the doctrine. The impugned legislation must “impair” the core rather than merely affect it. “Impair” implies adverse consequences, a significant and serious intrusion.

Maritime negligence law is indeed at the core of the federal power over navigation and shipping, as stated in Ordon v Grail. The WHSA precludes the dependants of the deceased crew members from bringing proceedings under the MLA and does, therefore trench on the core of the federal power over navigation and shipping. The first prong of the test is therefore met. However, the effect of the intrusion is not sufficiently serious to satisfy the second branch of the test. Although Ordon v Grail held that interjurisdictional immunity applied, that decision predated the jurisprudence that set out the two step test and established the necessary levels of impairment. The level of intrusion of the WHSA is not significant or serious when one considers the breadth of the federal power over navigation and shipping, the absence of an impact on the uniformity of Canadian maritime law and the historical application of workers compensation schemes in the marine context.


The paramountcy doctrine applies where there is inconsistency between a valid federal enactment and an otherwise valid provincial enactment. Where there is such conflict, the federal enactment prevails and the provincial enactment is inoperative to the extent of the incompatibility. Paramountcy does not apply to an inconsistency between the common law and a valid enactment. The inconsistency required to invoke the paramountcy doctrine can be of two types. The first is an actual operational conflict in the sense that one enactment says “yes” and the other “no”. The second form of conflict is when the provincial enactment frustrates the purpose of the federal enactment but the standard is high. The fact that Parliament has legislated in respect of a subject does not lead to a presumption that Parliament intended to rule out any possible provincial action in respect of that subject. The federal statute should be interpreted, if possible, so as not to interfere with the provincial statute. The purpose of s. 6(2) of the MLA, which provides dependants with a right of action where the deceased had such an action, was to fill a gap in maritime tort law identified in Ordon v Grail. Section 6, when properly interpreted, accommodates the bar to actions in the WHSA. The words of s. 6 are permissive, “may”, which suggests there are situations where dependants may not bring a claim, such as where the action is barred by a workers compensation scheme. The deceased crew members would have had no cause of action because of the operation of the WHSA and, therefore, their dependants also have no cause of action. On this reading, there is no conflict between the statutes.

Two additional factors demonstrate that the MLA and workers compensation schemes do not conflict. First, an interpretation of the MLA that does not conflict with the WHSA ensures consistency with the federal workers compensation schemes in the Government Employees Compensation Act and the Merchant Seamen Compensation Act. Under these schemes, covered employees and their dependants cannot bring a claim under the MLA. If it was to be concluded that s. 6(2) of the MLA did not accommodate the bar to claims, it would equally be that s. 6(2) does not accommodate the statutory bars in the Government Employees Compensation Act and the Merchant Seamen Compensation Act. This would be contrary to the presumption that parliament does not enact related statutes that are inconsistent. Second, the WHSA and MLA are distinct in purpose and nature. The WHSA is a comprehensive no-fault insurance benefits scheme that removes compensation for workplace injury from the tort system of which the MLA is a part. The WHSA does not frustrate the purpose of the MLA which was to expand the range of claimants who could start an action in maritime negligence law. The WHSA merely provides for a different regime of compensation that is distinct and separate from tort.

Comment: This is a very important decision but one which was not unexpected given the decisions of the Supreme Court of Canada in Canadian Western Bank v Alberta, [2007] 2 S.C.R. 3, British Columbia (Attorney General) v Lafarge Canada Inc., [2007] 2 S.C.R. 86, Quebec v Canadian Owners and Pilots Association, 2010 SCC 39, and Tessier Ltee. v Quebec, 2012 SCC 23. The effect of this decision will undoubtedly be to seriously circumscribe the precedential value of Ordon v Grail and to increase the circumstances where provincial statutes will apply to maritime matters. The tests applied by the court are the same as those adopted in the decisions following Canadian Western Bank. However, the comment that the paramountcy doctrine does not apply where there is a conflict between common law and a provincial enactment is of particular interest. This is so because much of Canadian maritime law is common law that is continued by s. 42 of the Federal Courts Act. Until now it was an open question as to whether the maritime common law continued by s. 42 might be invoked under the paramountcy doctrine. This now seems unlikely.