The Incremental Evolution of National Receivership Law and the Elusive Search for Federal Purpose

Abstract

There was a period when provincial legislation that trespassed too deeply into the federal field of bankruptcy and insolvency law was likely to be declared to be ultra vires as an invasion of the exclusive federal power in relation to that field. The five-to-four split in the 1978 Supreme Court of Canada decision in Robinson v Countrywide Factors Ltd was very much a turning point. Thereafter, the constitutionality of provincial legislation was almost invariably determined through the application of the paramountcy principle. Pursuant to this principle, a provincial statute is rendered inoperative to the extent that it conflicts with the federal statute. The Supreme Court of Canada has created a two-branched test for determining the presence of a conflict. Under the first branch, there is an operational conflict when it is impossible to comply with both the federal and the provincial statute. Under the second branch, there is a conflict when the operation of the provincial statute frustrates the purpose of the federal statute. Either type of conflict will render the provincial statute inoperative...