Non-Intereference with Vested Rights: Case Laws

Case laws on retrospectivity and Vested Rights

1.Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271:per Dickerson J]

2.Karras v. Richter, 1995 CanLII 5822 (SK Q.B.)

3.Assessment Commissioner of The Corporation of the Village of Stouffville v. Mennonite Home Associa tion, 1972 CanLII 9 (S.C.C.), [1973] S.C.R. 189; Acme Village School District v. Steele-Smith, [1933] S.C.R. 47; Spooner Oils Ltd. v. Turner Valley Gas Conservation Board & A.G. (Alta.), 1933 CanLII 1 (S.C.C.), [1933] S.C.R. 629; Abbott v. Minister for Lands, [1895] A.C. 425; Western Leaseholds Ltd. v. Minister of Na tional Revenue, [1961] C.T.C. 490 (Exch.); Director of Public Works v. Ho Po Sang, [1961] 2 All E.R. 721 (P.C.);Hargal Oils Ltd. v. Minister of National Reve nue, 1965 CanLII 68 (S.C.C.), [1965] S.C.R. 291 referred to]

Presumption against Interference with Vested Rights and common Law

There is a general presumption that the legislature does not interfere with the vested rights of those who are likely be affected by to be  Statute. The exact conditions in the following paragraph covers this presumption and regarding the presumption against the retrospective operation of law.The exact citation of the case is given at the end of the post and one can refer that for more clarity in regard to the exemptions and allied matters in Taxing Statutes.

The rule is that a statute should not be given a construction that would impair existing rights as regards person or property unless the language in which it is couched requires such a construction.

[ Spooner Oils Ltd. v. Turner Valley Gas Conservation Board, at p. 638.  [1933 CanLII 1 (S.C.C.), [1933] S.C.R. 629.]]

The presumption that vested rights are not affected unless the intention of the legislature is clear applies whether the legislation is retrospective or prospective in operation. A prospective enactment may be bad if it affects vested rights and does not do so in unambiguous terms. This presumption, however, only applies where the legislation is in some way ambiguous and reasonably susceptible of two constructions. It is perfect ly obvious that most statutes in some way or other interfere with or encroach upon antecedent rights, and taxing statutes are no exception. The only rights which a taxpayer in any taxation year can be said to enjoy with respect to claims for exemption are those which the Income Tax Act of that year give him. The burden of the argument on behalf of appellant is that appellant has a continuing and vested right to deduct exploration and drilling expenses incurred by it, yet it must be patent that the Income Tax Acts of 1960 and earlier years conferred no rights in respect of the 1965 and later taxation years. One may fall into error by looking upon drilling and exploration expenses as if they were a bank account from which one can make withdrawals indefinitely or at least until the balance is exhausted. No one has a vested right to continuance of the law as it stood in the past; in tax law it is imperative that legislation conform to changing social needs and governmental policy. A taxpayer may plan his financial affairs in reliance on the tax laws remaining the same; he takes the risk that the legislation may be changed.

The mere right existing in the members of the community or any class of them at the date of the repeal of a statute to take advantage of the repealed statute is not a right accrued: Abbott v. Minister of Lands [  [1895] A.C. 425. at p. 431]; Western Leaseholds Ltd. v. Minister of National Revenue [[1961] C.T.C. 490 (Exch.).]; Director of Public Works v. Ho Po Sang[[1961] 2 All E.R. 721 (P.C.).]

Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271:per Dickerson J]

As Quoted in

Karras v. Richter, 1995 CanLII 5822 (SK Q.B.)


Further the following will also make the point clear:

In Reid v. Reid. [(1886), 31 Ch.D. 402.]Bowen Li. said (at pp. 408-9):

Now the particular rule of construction which has been referred to, but which is valuable only when the words of an Act of Parliament are not plain, is embodied in the well-known trite maxim omnis nova constitutio futuris formam imponere debet non praeteritis, that is, that except in special cases the new law ought to be con strued so as to interfere as little as possible with vested rights. It seems to me that even in construing an Act which is to a certain extent retrospective, and in constru ing a section which is to a certain extent retrospective, we ought nevertheless to bear in mind that maxim as applicable whenever we reach the line at which the words of the section cease to be plain. That is a neces sary and logical corollary of the general proposition that you ought not to give a large retrospective power to a section, even in an Act which is to some extent intended to be retrospective, than you can plainly see the Legisla ture meant.
Karras v. Richter, 1995 CanLII 5822 (SK Q.B.)

Assessment Commissioner of The Corporation of the Village of Stouffville v. Mennonite Home Associa tion, 1972 CanLII 9 (S.C.C.), [1973] S.C.R. 189; Acme Village School District v. Steele-Smith, [1933] S.C.R. 47; Spooner Oils Ltd. v. Turner Valley Gas Conservation Board & A.G. (Alta.), 1933 CanLII 1 (S.C.C.), [1933] S.C.R. 629; Abbott v. Minister for Lands, [1895] A.C. 425; Western Leaseholds Ltd. v. Minister of Na tional Revenue, [1961] C.T.C. 490 (Exch.); Director of Public Works v. Ho Po Sang, [1961] 2 All E.R. 721 (P.C.);Hargal Oils Ltd. v. Minister of National Reve nue, 1965 CanLII 68 (S.C.C.), [1965] S.C.R. 291 referred to].

When Courts can Read words in Statute

In the case of I.C. V N.H[ full citation given at the end post] Cook J had observed that the gap in the statutes can be fulfilled by the Courts. He gave the following justification and line of reasoning while considering Change of Name Act,[Blogger]

” Our Act as worded has a “gap” which frustrates an application by one joint custodial parent for a change of his or her child’s surname. The issue thus becomes whether I should either merely disallow the within application and wait for the Legislature to amend the Act,or remedy omissions in the Act that are consistent with its objectives.”

Further giving justification for supplying this gap or filling the gap was elaborated by him in the following fashion.

 Both approaches have been discussed in The Interpretation of Legislation in Canada, (3rd Ed.) Pierre-Andre Cote, (Cars-well), at p.399, where it is stated:

“… there are also two schools of thought. One draws on the Literal Rule and favours judicial restraint, the other on the Mischief Rule, and posits correction of the text to make up for lacunae …”.

In Magor and St. Mellons Rural District Council v. Newport Corp. [1952] A.C. 189 (H.L.), Lord Denning (dissenting) supported the Mischief Rule and Lord Simmons supported the Literal Rule.

[Case Law in Canada is similarly divided. See: Re: Certain Titles to Land in Ontario (1973), 35 D.L.R.(3d) 10 (Ont. C.A.) and Ontario (Minister of Transport) v. Phoenix Assurance Co. (1974), 39 D.L.R.(3d) 481 (Ont. C.A.), affd. (1975) 5 N.R. 73 (S.C.C.). The later decision being affirmed by the Supreme Court of Canada]

Reasoning and Justification for Adding words into Act


 In Ontario (Minister of Transport), Schroeder, J., stated, at p. 487:

“… the true and perfect intention of the legislative body has received imperfect expression … and the logically defective letter of the enacted law may and should be made logically perfect so as to give effect to the legislative intention which is clearly evident.”

 Section 16 of the Interpretation Act states the following Rule of construction

“16. Every Act and every regulation and every provision of an Act or regulation shall be considered remedial and shall receive the liberal construction and interpretation that best ensures the attainment of the objects of the Act, regulation or provision according to its true meaning.”

He concluded that s. 10(1) of the Act is logically defective because the intention of the Legislature has received imperfect expression to give effect to its intention. One does not know when s. 10(1) will be perfected by addressing lacunae. Because we are dealing with a very young child who has just commenced school, I believe that the circumstances require adoption of the Mischief Rule. Adopting the literal rule in the circumstances of this case, in my view, would not meet the reasonable expectations of practical justice.

He believed that this approach also harmonizes with the Rule of construction set out in s.16 of the Interpretation Act which requires every Act to be considered remedial and to receive the liberal construction and interpretation that best ensures the attainment of the objects of the Act.

In short, I have concluded that there is imperfection or incompleteness in the language used in s. 10(1) and that which is logically defective should be made logically correct. This will give effect to the legislative intent which is, in my view, clearly evident.

He adopted by invoking and exercising the court’s “parens patriae” jurisdiction, to fill the legislative deficiency in the Act which was not in the interest. For support of such an approach see the comments of Madame Justice Wilson in D.B. and P.B. v. Director Of Child Welfare For Newfoundland, N.K.J. and E.J.J. (Interveners) and C.(1983). 44 N.R. 602; 39 Nfld. & P.E.I.R. 246: 111 A.P.R. 246; 30 R.F.L.(2d), 438 (S.C.C.), at pp. 445-446 [R.F.L.].


I.C. v. N.H., 2001 CanLII 33782 (NL S.C.T.D.),Supreme Court of Newfoundland and Labrador, Unified Family Court;Per   Cook, J

Presumption that Parliament acts reasonably

There is an elementary rule of presumption that Parliaments acts reasonably or in reasonable manner.To this regard the following observations of the South Africa's Constitutional Court are very relevant.The citation of the case are given at the the end of the paragraph and may be referred to.{blogger]

…the rule of law. Fundamental to the rule of law is the notion that government acts in a rational rather than an arbitrary manner. As South Africa: Constitutional Court observed in Prinsloo:

“ [T]he constitutional State is expected to act in a rational manner. It should not regulate in an arbitrary manner or manifest ˜naked preferences” that serve no legitimate governmental purpose, for that would be inconsistent with the rule of law and the fundamental premises of the constitutional State. . . . This has been said to promote the need for governmental action to relate to a defensible vision of the public good, as well as to enhance the coherence and integrity of legislation. In Mureinik’s celebrated formulation, the new constitutional order constitutes a bridge away from a culture of authority . . . to a culture of justification.. (footnotes omitted)"

Our Constitution accordingly requires that all legislation be rationally related to a legitimate government purpose. If not, it is inconsistent with the rule of law and invalid.

Matatiele Municipality and Others v President of the Republic of South Africa and Others (1) (CCT73/05) [2006] ZACC 2; 2006 (5) BCLR 622 (CC); 2006 (5) SA 47 (CC) (27 February 2006)

Foreign Decisions-Part..II Contd..

In a case  , the Constitutional Bench of South Africa observed as follows.In this case the Bench was analysing the implication of delegation of power in case of delegated legislation. It referred to these decisions to seek some guidance only.The following citation may be skipped through.It is  given only for the sake of completeness and pertains to the delegation of powers in the case of sub-ordinate legislation.[Blogger]

Although decisions in foreign jurisdictions should never be slavishly adopted, [See for example Bernstein and Others v Bester and Others NNO [1996] ZACC 2; 1996 (2) SA 751 (CC); 1996 (4) BCLR 449 (CC) at para 133 (per Kriegler J); Alexkor Ltd and Another v Richtersveld Community and Others [2003] ZACC 18; 2004 (5) SA 460 (CC); 2003 (12) BCLR 1301 (CC) at para 33.] a brief examination reveals that there is much that is similar between our law on delegation and the decisions of foreign courts. I consider that the manner in which they have dealt with similar issues on this aspect provides helpful guidance. In particular, a large number of common-law jurisdictions have adopted the presumption against sub-delegation contained in the maxim delegatus delegare non potest, subject generally to the exception that Ministers may freely of necessity delegate within their own departments.  This has become known as the “Carltona principle” The English Court of Appeal in Carltona above n 22 at 563 held that in order to allow the smooth functioning of government, Ministers are always entitled to have their functions exercised by officials in their departments as it is the Minister that remains responsible to Parliament. This rule is however confined to delegation within government departments. 
[See also Lewisham Borough Council and Another v Roberts [1949] 1 All ER 815 at 829 and Wade and Forsyth Administrative Law 8 ed (Oxford University Press, New York 2000) at 325.] 


In England [King-Emperor v Benoari Lal Sarma [1945] AC 14; Jackson, Stansfield and Sons v Butterworth [1948] 2 All ER 558 at 564-66. See also Craig Administrative Law 5 ed (Sweet and Maxwell, London 2003) at 523 and De Smith, Woolf and Jowell De Smith, Woolf and Jowell’s Principles of Judicial Review (Sweet and Maxwell, London 1999) at 227 and 233] Australia[R v Lampe and Others; Ex Parte Madalozzo (1963) 5 FLR 160; Long v Knowles [1968] Tas SR 46. See also Pearce and Argument Delegated Legislation in Australia 2 ed (Butterworths, Australia 1999) at 269-70 and Skyes, Lanaham, Tracey and Esser General Principles of Administrative Law 4 ed (Butterworths, Australia 1997) at 34.] and New Zealand,[ Geraghty v Porter [1917] NZLR 554; Hawke’s Bay Raw Milk Producers’ Co-operative Co Ltd. v New Zealand Milk Board [1961] NZLR 218.  ] the position is that delegation is less likely to be implied if a power is legislative in nature or if the decision involves the exercise of a wide discretion .[ The only time the Supreme Court of Canada has considered the sub-delegation of legislative powers was in Reference as to the Validity of the Regulations in Relation to Chemicals [1943] SCR 1 where it found that emergency war-time legislation permitted the delegation of regulation-making power. This decision should however be confined to the exceptional circumstances of the case. See Dussault and Borgeat Administrative Law: A Treatise 2 ed, Volume I (Carswell, Toronto 1985) at 416. The majority of Canadian authors argue that legislative powers are less likely to be delegated by implication. See id at 416 Jones and De Villars Principles of Administrative Law 3 ed (Carswell, Toronto 1999) at 140; Mullan Administrative Law 3 ed (Carswell, Toronto 1996) at 194.] 


In Canada the Supreme Court has regularly held that an authority cannot enact regulations that effectively turn the exercise of a power that was meant to be dealt with by it through regulation into a discretionary administrative power to be exercised by itself or another body.[ See Vic Restaurant Inc v City of Montreal [1959] SCR 58; City of Verdun v Sun Oil Company Ltd [1952] 1 SCR 222; Brant Dairy Company Ltd et al v Milk Commission of Ontario et al 30 DLR (3d) 559 (SCC). ]


The extent of delegation and the degree of control retained by the delegator have also been examined.[ See for example Credite Suisse and Another v Waltham Forest LBC [1997] QB 362; Cohen v West Ham Corporation [1933] Ch 814 at 826-27; R v Board of Assessors of Rates and Taxes of the City of Saint John (1965) 49 DLR (2d) 156; Labour Relations Board of Saskatchewan v Speers and Regina Undertakers Employees Federal Union[1948] 1 DLR 340. 


According to Wade and Forsyth "


[t]he vital question in most cases is whether the statutory discretion remains in the hands of the proper authority, or whether some other person purports to exercise it.” Wade and Forsyth above n 28 at 316. ] In Allingham and Another v Minister of Agriculture and Fisheries [[1948] 1 All ER 780.]for example, a committee had the wartime power to order farmers to grow certain crops on specific fields. With respect to one farmer they left the decision of which field should be used to their executive officer. The exercise of power was held to be invalid, but the Court noted that there would have been no problem if the committee had acted itself on the recommendation of the officer. There are also a number of Canadian and English decisions that suggest that it is impermissible to set as an administrative condition, compliance with the regulations of a private bodyn Ellis v Dubowski [1921] 3 KB 621 it was held that a County Council could not delegate its power to decide whether a film could be shown by declaring that any film approved by the British Board of Film Censors, a private body, could be shown. Similarly, a Canadian Court has held that a by-law requiring owners to build fences around their swimming pools that contained the additional requirement of the consent of neighbouring landowners, impermissibly delegated the municipal council’s power to private land owners.[Re Davies and Village of Forest Hill [1965] 1 OR 240. 


The court in Michie v M.D. of Rocky View No 44 et al (1968) 64 WWR 178 (Alta) at 182-83 declared invalid permits issued on the condition that they complied with requirements set by a private entity. The delegation has been found to be unlawful in each of these cases although the fact that the body is private has never been the reason given for the decision.]

AAA Investments (Proprietary) Limited v Micro Finance Regulatory Council and Another (CCT51/05) [2006] ZACC 9; 2006 (11) BCLR 1255 (CC); 2007 (1) SA 343 (CC) (28 July 2006)


It is to be observed that the position is almost similar to the approach adopted by Supreme Court  of India