DATE: 20020913
DOCKET: C36799

COURT OF APPEAL FOR ONTARIO

AUSTIN, MOLDAVER and MacPHERSON JJ.A.

BETWEEN:	)
	)
SHACK JANG MACK, QUEN YING LEE and YEW LEE	) ) )	Mary Eberts, Avvy Go and Jonathan Strug for the appellants
Plaintiffs	)
(Appellants)	)
	)	Paul Vickery and William
- and -	)	Knights for the respondent
	)
	)
ATTORNEY GENERAL OF CANADA	) )
Defendant	)
(Respondent)	)	HEARD:  June 10 and 11, 2002

On appeal from the judgment of Justice Peter Cumming of the Superior Court of Justice dated July 9, 2002 reported at (2001), 55 O.R. (3d) 113.

MOLDAVER  and MacPHERSON JJ.A.:

[1]         In the Quebec Secession Reference, [1] the Supreme Court of Canada observed that although the protection of minority rights has played an essential part in the design of Canada’s constitutional structure, our record for upholding such rights has by no means been spotless.  In this regard, Canada’s treatment of people of Chinese origin who sought to immigrate to this country between 1885 and 1947 represents one of the more notable stains on our minority rights tapestry.  For the first 38 of those years, until 1923, Parliament passed a series of laws that required persons of Chinese origin to pay a duty or ‘head tax’ upon entering Canada. [2] The tax, which grew progressively from $50 in 1885 to $500 in 1903, was meant to be prohibitive and it placed Canada beyond the reach of many. But not enough, apparently, for the government of the day, which explains why the tax was abolished in 1923 and replaced by legislation that for the next 24 years, until its repeal in 1947, effectively barred all but a select few Chinese people from immigrating to Canada. [3]

[2]         The appellants represent a class of people who seek redress from the Government of Canada for the harm occasioned by the impugned legislation – legislation which they quite properly characterize as racist and discriminatory. The class includes some individuals who actually paid the head tax, but in the main it consists of their spouses and descendants.

[3]         Among other forms of relief, the appellants seek the return, with compound interest, of monies paid as head tax and damages for pain and suffering, injury to dignity and loss of opportunity stemming from the impugned legislation. For present purposes, it is agreed that the appellants base their claim on the following three causes of action:

(1)             The impugned legislation is the source of two distinct violations of the appellants’ equality rights under s. 15 of the Charter.

(2)             The impugned legislation was at all times invalid and of no force or effect because it contravened a customary international law, by which Canada was legally bound, prohibiting racial discrimination.

(3)             The equitable principle of unjust enrichment applies and it requires the government to disgorge the revenues raised under the head tax legislation.

[4]         After being served with the statement of claim (the “claim”), the Attorney General of Canada moved under rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to have the claim struck out on the ground that it disclosed no reasonable cause of action. The motion was argued before Cumming J. of the Superior Court of Justice for two full days on April 24 and 25, 2001.  On July 9, 2001, Cumming J. released comprehensive written reasons in which he allowed the motion and struck the claim.

[5]         The appellants appeal from that order and seek to have the claim reinstated. For reasons that follow, we are satisfied that Cumming J. came to the correct conclusion. Accordingly, we would dismiss the appeal.

Background

[6]         Cumming J.’s comprehensive reasons for allowing the motion to strike out the appellants’ claim include a thorough review of the background facts and the test to be applied on a rule 21.01(1)(b) motion. Accordingly, we propose to move directly to the issues, commencing with the alleged infractions of the appellants’ equality rights under s. 15 of the Charter.

Alleged Section 15 Charter Breaches

[7]         The appellants allege that the impugned legislation is the source of two separate and distinct violations of their equality rights under s. 15 of the Charter.

[8]         First, they submit that the legislation stigmatized people of Chinese origin because it deemed them to be less worthy than other people. That stigma, they contend, continues unabated to this day because of the government’s unwillingness to refund the head tax and provide redress for the harm and suffering occasioned by 62 years of government- sponsored anti-Chinese legislation.

[9]         Second, the appellants point to the 1988 post-Charter agreement between the Government of Canada and Japanese Canadians in which the government provided redress for violating the human rights of Japanese Canadians during the Second World War. In the face of that agreement, they submit that the government’s failure to provide the Chinese Canadian community with similar redress is discriminatory because it promotes and perpetuates the idea that Chinese Canadians are less worthy of recognition and less valuable to society than Japanese Canadians.

[10]          Cumming J. dealt with both issues in his reasons. With respect to the first, he referred to Benner v. Canada (Secretary of State), [1997] 1 S.C.R. 358, for the proposition that “the Charter cannot apply retroactively or retrospectively”. He then quoted the relevant passages from Benner in which Iacobucci J. identified the test to be applied in determining whether a proposed application of the Charter is or is not retrospective. The passages quoted are found at pp. 383-84 of Benner and bear repetition:

[11]          Cumming J. then continued as follows:

[12]          We agree with Cumming J.’s analysis and would only note that, unlike the present situation, Benner is a clear case where because of his status at birth (born abroad before February 15, 1977 to a Canadian mother and a non-Canadian father) Benner was prevented in 1988 (3 years after s. 15 of the Charter had come into effect) from being accorded the automatic right to citizenship granted to children of Canadian fathers. In other words, in 1988, Benner’s status at birth was held against him and disentitled him to a benefit accorded to others because of certain provisions of the Citizenship Act that the court found to be discriminatory. With respect, the appellants have not shown any such comparable disadvantage.

[13]          Cumming J. then turned to the Japanese Canadian Redress Agreement (“Redress Agreement”) and the alleged breach of the appellants’ s. 15 Charter rights stemming from the government’s failure to extend similar redress to the Chinese Canadian community. [4]   Cumming J. refused to allow the claim to proceed on this ground because, in his view, the pleadings were deficient in two respects.

[14]          First, the pleadings failed to include “facts as to a discrimination claim framed in the post-Charter period.” Rather, as pleaded, the alleged discrimination flowed solely “from the impugned historical legislation, not from the Japanese Canadian Redress Agreement.” The pleading in question reads as follows:

[15]          Second, the pleadings failed to allege facts capable of showing discrimination in accordance with the principles enunciated in Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497 at 529, namely, facts capable of showing that the Redress Agreement functioned by device of stereotype or that the exclusion of the appellants from it had the effect of demeaning their worth and dignity. Cumming J.’s reasons in this regard are reproduced below:

[16]          We agree with Cumming J.’s analysis.  In particular, we note that in their pleadings, the appellants do not suggest that the alleged differential treatment of Japanese Canadians under the Redress Agreement reflects the stereotypical application of presumed group or personal characteristics, or otherwise has the effect of perpetuating or promoting the view that they are less capable, or less worthy of recognition or value as human beings or members of Canadian society (see Law, supra, at p. 529).

[17]          Even if the pleadings, read generously, can be said to incorporate such an allegation, we agree with the Attorney General of Canada that for the purpose of resolving this appeal, it is irrelevant that discrimination in Canada against immigrants of Asian origin generally encompassed both Chinese and Japanese people. At issue here are the specific acts of alleged discrimination pleaded in the statement of claim, and because those acts are so completely different from the acts of discrimination giving rise to the Redress Agreement, it is plain and obvious that the appellants cannot use that agreement as a springboard from which to launch their s. 15 Charter claim. See Lovelace v. Ontario, [2000] 1 S.C.R. 950 at 994-98.

Cause of Action Based on Customary International Law

[18]          The appellants submit that their claim supports a cause of action based on customary international law. In particular, they argue that it is not plain and obvious that customary international law did not condemn racial discrimination during the period of the impugned legislation and, to the extent that it did, Canada was legally bound to abide by it and can be held accountable for failing to do so.

[19]          Cumming J. devoted a considerable amount of time in his reasons to the international law component of the pleadings. In the end, he concluded that the appellants could not ground their claim in conventional international law because the instruments upon which they were relying did not exist at the time of the impugned legislation and to the extent Canada has since incorporated them into its domestic law, they have not been given retroactive effect. With respect to any international norms against racial discrimination that may have existed during the relevant time frame, Cumming J. found, in accordance with general principles of international law, that absent adoption, such norms were not binding upon Canada.

[20]          The appellants do not disagree with Cumming J.’s analysis so far as it goes. They maintain, however, that he failed to consider their customary international law argument and its impact on the viability of their claim.

[21]          To the extent that Cumming J. may have neglected the appellants’ customary international law argument, his oversight is understandable as the term ‘customary international law’ is not mentioned in the claim and it is questionable whether the pleadings even raise it as supporting a cause of action. That said, the Attorney General of Canada is not pressing the matter and invites us to address the issue on its merits.

[22]          The Attorney General of Canada submits, correctly in our view, that there are two required elements of customary international law. A proponent must establish:

(1)             a practice among States of sufficient duration, uniformity and generality; and

(2)             that States consider themselves legally bound by the practice.

(I. Brownlie, Principles of Public International Law, 5^th ed. (Oxford: Clarendon Press, 1998) at 4-7).

[23]          In the same text, at p. 5, Professor Brownlie explains that the evidence needed to establish custom can come from various sources and includes the following:

[24]          The appellants rely on a number of sources to establish the pre-1947 existence of a customary international law prohibiting racial discrimination. These include:

In addition, the appellants point to the Canadian Bill of Rights and the Charter, characterizing each as a codification of pre-existing rights, including the right to be free from racial discrimination.

[25]          The Attorney General of Canada submits that the source materials referred to by the appellants fall short of establishing a pre-1947 international custom prohibiting racial discrimination. According to the Attorney General, these materials, properly construed, represent pockets of enlightenment in an era when the protection of human rights did not figure prominently on the international scene. Support for this conclusion is found in the writings of leading international law scholars, such as Professor Francesco Capatorti. In his essay entitled “Human Rights, the Hard Road Toward Universality”, [5] Professor Capatorti observes that although the “birth of an international system of regulation of human rights has constituted a form of evolution … and not one of revolution”, the year in which the United Nations was created, 1945, is recognized as:

[26]          By way of elaboration, Professor Capatorti references certain “phenomena” in the late nineteenth century and first half of the twentieth century that, in his view, represented the “more significant antecedents of the protection of the human person.” (at p. 979)  At p. 980 however, he points out that these pockets of enlightenment should not be confused with a world-wide perspective on the protection of human rights:

[27]          As indicated, Professor Capatorti maintains that the breakthrough in the field of individual human rights from a fragmentary perspective to a global aim occurred in 1945, with the birth of the United Nations. At pp. 981-82 he notes:

[28]          Other international law scholars, such as Professor John Humphrey, describe the adoption of the U.N. Charter in 1945 as a ‘revolutionary’ foundation for the development of international human rights. In his article entitled “The Implementation of International Human Rights Law”, (1978) 24 New York Law School Review 31 at 32-33, Professor Humphrey writes:

[29]          To the extent that national judicial decisions from the pre-1947 era are relevant, the cases relied upon by the appellants, such as Regina v. Corporation of Victoria (1888), 1 B.C.R. Pt. II 331 (S.C.); Regina v. Mee Wah (1886) 3 B.C.R. 403 (Cty. Ct.); Tai Sing v. Macguire (1878) 1 B.C.R. Pt. I 101 (S.C.) and R. v. Gold Commissioner of Victoria District (1886), 1 B.C.R. Pt. II 260 (Div. Ct.), are of limited assistance since they do not address the issue at hand but relate instead to the separation of powers under ss. 91 and 92 of the Constitution Act, 1867. In any event, they must be read in light of Cunningham v. Tomey Homma, [1903] A.C. 151 (P.C.), a more recent decision and one of higher authority in which the Privy Council held that a statute which restricted entitlement to vote on the basis of race was both intra vires and a valid exercise of provincial power. Notably, speaking for the court, the Lord Chancellor observed at pp. 155-56 that “the policy or impolicy of such an enactment as that which excludes a particular race from the franchise is not a topic which their Lordships are entitled to consider.” As the Attorney General of Canada points out, Cunningham, a decision of the final appellate court of the day, stands in stark contradiction to the appellants’ assertion that a customary international law prohibiting racial discrimination existed in that era.

[30]          As for the foreign decisions cited by the appellants in support of their customary international law argument, we view them as examples of foreign domestic law, not customary international law and thus not binding on Canada. In any event, the appellants do not suggest that Canada adopted those decisions or the principles enunciated in them during the relevant time frame.

[31]          In sum, based on the evidence presented, it is plain and obvious that the appellants cannot succeed in establishing the existence of a pre-1947 customary international law prohibiting racial discrimination that would render the impugned legislation invalid. For that reason alone, the customary international law pleading must fail.

[32]          Even if we had decided that the evidence presented by the appellants was capable   of passing the threshold test, we would nonetheless have halted the action because of the well-established principle that customary international law may be ousted for domestic purposes by contrary domestic legislation. [6] Professor Brownlie states the principle succinctly in his article entitled Principles of Public International Law, supra, at p. 42:

See also Suresh v. Canada (Minister of Citizenship and Immigration) (2000), 183 D.L.R. (4^th) 629 (F.C.A.) at 659, reversed for other reasons at 2002 SCC 1; R. v. Gordon, [1980] B.C.J. No. 381 (S.C.) at para. 7; and Chung Chi Cheung v. The King, [1939] A.C. 160 at 167-68.

[33]          Applying that principle to this case, to the extent any customary international law prohibiting racial discrimination may have existed during the relevant time frame, it was clearly ousted by the impugned legislation. Accordingly, for that reason as well, the customary international law aspect of the claim must fail.

Unjust Enrichment

[34]          The appellants contend that the equitable principle of unjust enrichment applies in the circumstances of this case and that it requires the Government of Canada to disgorge the revenues raised under the head tax laws.  The recipients would be the surviving payors  of the tax (a very small number) or their surviving spouses (also a small number) and direct descendants.

[35]          The three elements of the principle of unjust enrichment are settled.  A claim for unjust enrichment requires the claimant to establish “an enrichment, a corresponding deprivation and absence of any juristic reason for the enrichment”:  see Pettkus v. Becker, [1980] 2 S.C.R. 834 at 848 per Dickson J.; see also Rathwell v. Rathwell, [1978] 2 S.C.R. 436 (“Rathwell”); Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v. Ontario, [1992] 3 S.C.R. 762 (“Peel”); and Peter v. Beblow, [1993] 1 S.C.R. 980.

[36]          In the present case, Cumming J. held, and the Attorney General of Canada concedes, that the appellants have established the first two branches of the test – the head tax enriched the Government of Canada and constituted a corresponding deprivation to the immigrants who paid it.  For purposes of this appeal, we accept Cumming J.’s decision and the respondent’s concession on these matters.  We also note that it is not disputed that the principle of unjust enrichment “can operate against a government to ground restitutionary recovery”:  see Air Canada v. British Columbia, [1989] 1 S.C.R. 1161 at 1203 per La Forest J.

[37]          The resolution of the unjust enrichment issue in this appeal turns on the third branch of the test – the absence of a juristic reason for permitting the government of Canada to retain the revenues raised during the 38 year history of the head tax laws.

[38]          The Attorney General of Canada contends that there is an obvious and conclusive juristic reason supporting retention in this case – the head tax laws themselves. 

[39]          There is considerable force in this submission.  In one of the leading cases, indeed the case in which the three branch test for unjust enrichment was initially set out, namely Rathwell, supra, Dickson J. gave as examples of juristic reasons “a contract or disposition of law” (at p. 455).  It would seem obvious that a statute falls within the category of a disposition of law.  In a second leading case, Peter v. Beblow, supra, Cory J. expressly stated that a statute can provide a juristic reason for retention of a benefit (at p. 1018).  See also Attorney General of Canada v. Confederation Life Insurance Company (1995), 24 O.R. (3d) 717 at 780 (Gen. Div.), aff’d (1997), 32 O.R. (3d) 102 (C.A.).

[40]          In the leading Canadian text, The Law of Restitution (Aurora: Canada Law Book Inc., 1990), the learned authors, Professor John McCamus and Peter Maddaugh, devote a section to the topic Unjust Retention: No Juristic Reason for Enrichment.  In their discussion of the phrase “disposition of law” from Rathwell, they state, at p. 46:

[41]          The appellants attempt to overcome these authorities with the submission that not every statute can constitute a juristic reason for retaining a payment.  The head tax laws, the appellants contend, should be regarded as an exception to the general rule.

[42]          It is true that there are exceptions to the general rule that a statute can provide a juristic reason for retention of a benefit.  For example, in Central Guaranty Trust v. Dixdale (1994), 24 O.R. (3d) 506, this court held that a first mortgagee who had mistakenly discharged a mortgage was entitled to priority over a second mortgagee despite the provisions of the Registry Act which appeared to require a contrary  result.  Laskin J.A. said, at pp. 515-16:

See also Deglman v. Brunet Estate, [1954] S.C.R. 725, where the court allowed the plaintiff to recover in quantum meruit even though the Statute of Frauds rendered unenforceable the oral agreement on which he had sued.

[43]          Central Guaranty Trust  and Deglman are private law cases.  However, the possibility of some exceptions to the general rule that a statute provides a juristic reason for retention of a benefit has also been raised in public law cases, including cases involving the retention by governments of revenues obtained pursuant to taxation statutes.  For example, in Reference re Goods and Services Tax (GST) (Can.), [1992] 2 S.C.R. 445, a minor issue was whether suppliers had a right to be reimbursed by the federal government for the expenses they incurred in collecting the GST.  One of the arguments made on their behalf was unjust enrichment.  The court rejected this argument.  Lamer C.J.C. stated the general proposition linking a statute and juristic reason in strong language; however, he did so without excluding the possibility of exceptions and, indeed, suggested one possible exception.  He said, at p. 477:

[44]          Against the backdrop of these authorities, we do not conclude that it is plain and obvious that the appellants’ argument on the third branch of the test of unjust enrichment – namely, that in some cases a statute will not provide a juristic reason for retention by a government of revenues received under a tax – cannot succeed.  Accordingly, we proceed to a consideration of the substance of the appellants’ argument on this issue.

[45]          At the start of her oral argument, counsel for the appellants submitted that a “moral balancing” is permitted in the analysis of juristic reason and that both the principles of international law and the provisions of the Charter would assist in this exercise.  The appellants made the same link between juristic reason and international law and the Charter in their factum:

[46]          The problem with these submissions is that they are not independent of the appellants’ submissions relating to their customary international law and Charter claims. Indeed, as the above paragraphs make clear, the appellants’ juristic reason argument is explicitly and inextricably linked to these two arguments.

[47]          A similar situation arose in Reference re Goods and Services Tax, supra.  The Canadian Federation of Independent Business (“CFIB”), an intervener, argued that suppliers had a right to be reimbursed by the federal government for the expenses they incurred in collecting the GST.  As noted above, the Supreme Court of Canada rejected the CFIB’s unjust enrichment argument in support of this position.  In doing so, Lamer C.J.C. succinctly identified, at p. 477, the duplicative quality, and the concomitant irrelevance, of the CFIB’s argument:

[48]          In the present case, Cumming J. identified a similar dilemma in the appellants’ submissions relating to juristic reason:

He then continued by summarizing, and applying, his reasoning on the Charter and international law arguments.  The Charter cannot be used to attack the head tax laws because it cannot be applied retroactively or retrospectively.  Customary international law principles relating to non-discrimination, even if they existed during the life of the head tax laws, are superseded by domestic legislation, which includes the head tax laws.

[49]          Cumming J. then reached his conclusion on the unjust enrichment issue:

[50]          We agree with this conclusion.  In short, the appellants’ submissions relating to juristic reason cover precisely the same ground as their submissions on the Charter and customary international law issues.  Rejection of the latter necessarily entails rejection of the former.

[51]          We make one final observation on the unjust enrichment issue in this appeal.  Throughout their argument, the appellants make reference to concepts, notions and values, including “moral balancing”, “good conscience” and “injustice”.  We agree with the proposition that these factors are part of the foundation of the equitable doctrine of unjust enrichment.  However, it is important to recognize that there are limits to the doctrine. In Peel, supra, McLachlin J. articulated, at pp. 802-803, a caution which we think bears repeating in this appeal:

[52]          In the first paragraph of these reasons, we said: “Canada’s treatment of people of Chinese origin who sought to immigrate to this country between 1885 and 1947 represents one of the more notable stains on our minority rights tapestry.”  We say that again.  However, the head tax laws ceased to operate 79 years ago, in 1923.  During their life, they were constitutional in domestic law terms and they did not violate any principles of customary international law.

[53]          The doctrine of unjust enrichment is an equitable doctrine. However, even the broad purview of equity does not provide courts with the jurisdiction to use current Canadian constitutional law and international law to reach back almost a century and remedy the consequences of laws enacted by a democratic government that were valid at the time. [7]

Disposition

[54]          We would dismiss the appeal.  Like Cumming J., we do not regard this as a case in which costs should be awarded.

Signed: “M.J. Moldaver J.A.”

            “J.C. MacPherson J.A.”

            “I agree Austin J.A.”

RELEASED: SEPTEMBER 13, 2002

“A. Mack A”