Fiery Foundations of Federalism: The Enduring Legacy of Citizens Insurance Co v Parsons

AuthorBruce Ryder
Pages639-664

FieryFoundationsofFederalism
THEENDURINGLEGACYOF
CITIZENS INSURANCE CO
v PARSONS
Bruce Ryder*
“. . . the Parsons case, they all go back to the Parsons case . . . .”
A. INTRODUCTION
Onehundredandfortyyearsagonotlongafterthetenthanniversary
ofConfederationonthenightofAugustWilliamParsonsgen
eralhardwarestoreonthesouthsideofBroadwaythemaincommercial
streetinthetownofOrangevilleOntariowasdestroyedbyre
Fires were a common occurrence on Broadway and elsewhere
throughoutthenewprovinceofOntarioandtheresultswereoftendev
astatingparticularlysincemanybuildingsatthetimewereconstructed
oflumberParsonshadnolessthanteninsurancepoliciesinsuringhis
storebuildingsandhisstockagainstlosscausedbyreAhandfulof
companiesrefusedtoindemnifyParsonsforhislossesallegingthathe
hadviolatedtheconditionsofhisinsurancecontractsParsonsledsuit
againsteachofthemseekingrecoveryCentraltohislegalarguments
 AssociateProfessorOsgoodeHallLawSchoolYorkUniversityTheauthorwould
liketothankVanessaLiooftheDuerinCountyMuseumandArchivesforher
invaluableassistance
 AremarkmadebyLouisStLaurentcounselfortheAorneyGeneralofCanada
duringhissubmissionstotheSupremeCourtofCanadainReference Re Natural Prod-
ucts Marketing Act (Canada)SCRasquotedinJohnTSaywellThe Law-
makersJudicialPowerandtheShapingofCanadianFederalismTorontoUniversityof
TorontoPressat
BR
wasthefailureofthecompaniestocomplywiththerequirementsofAn
Act to Secure Uniform Conditions in Policies of Fire InsurancetheFire Insur-
ance ActenactedbytheOntariolegislaturein
The litigation journey that ensued was a long one with stops in
GuelphTorontoOawaandLondonBythetimethecasewasheaded
totheJudicialCommieeofthePrivyCouncilParsonswasinsolvent
NeitherhenorhistrusteesrecoveredanypaymentsafterthePrivyCoun
cilsrulingfromeitherCitizensInsuranceorQueenInsurancethetwo
companiesthatpursuedtheirappealsallthewaytoLondonParsons
claimsagainsttheminhisfamouscasethusendedupyieldinghimno
nancialreliefitonlyaddedtothecostsofhiseortstorecoverfrom
thedestructionofhisbusinessButthePrivyCouncilrulinginCitizen s
Insurance Co vParsonsdidmakeremarkablyenduringcontributionsto
shaping the constitutional st ructure of the young countr y born just a
decadebeforehishardwarestoreburnedtotheground
PartBofthispaperoutlinesthefrequencyofresandthebusiness
practicesofreinsurancecompaniesinthesthatledtotheenact
mentoftheFire Insurance ActbytheOntariolegislaturePartCdescribes
someofthelocalconditionsinOrangevilleandpresentsafewdetails
aboutWilliamParsonslifeandthecalamitousseriesofresthatde
stroyedbuildingsonBroadwayinthesPartCalsosummarizesthe
proceedingsatthelowercourtsinParsonssuccessfulactionsagainst
the insurance companies t hat had refused to indemnify him for h is
lossesresultingfromtherePartDsituatestheissuesraisedby
Citizens Insurance Co v Parsonsinthelargerconstitutionaldebatesatthe
timebeforeturningtoananalysisoftheSupremeCourtofCanadaand
PrivyCouncilrulingsthatupheldtheFire Insurance Actasavalidex
erciseofprovincialjurisdictionpursuanttosectionoftheB ritish
North America ActPartDalsofocusesonthreefeaturesofSirMontague
SmithsopiniononbehalfofthePrivyCouncilthathavehadanendur
ingimpactonCanadianfederalism
TherstenduringfeatureoftheParsonsopinionisitsarmation
ofa v ision I will call equal federalism one that sees the provi ncial
legislaturesandtheDominionParliamentasequalinpowersandstatus
ThisvisioncontraststothevisionIwillcallimperialfederalismfa
vouredbyseveraljusticesoftheSupremeCourtofCanadainthelate
sandearlysImperialfederaliststhoughtoftherelationship
betweentheDominionandtheprovincesinamannerthatreplicated
 SOVictc
 AppCasPCParsons

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