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

• Author: Bruce Ryder
• Pages: 639-664



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theFire 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Parsonsopinion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