Most Canadian provinces have specific legislation dealing with procedural requirements that must be followed when bringing lawsuits against the Crown. In Nova Scotia, that legislation is the Proceedings Against the Crown Act ("PACA"). Exactly what constitutes a "proceeding against the Crown" is broad, and includes claims made by set-off or counterclaim. Even where the Crown initiates a lawsuit, PACA will apply if the defendant countersues or defends on the basis that it owes the Crown less due to a set-off (i.e. because the Crown owes the defendant something as well).

One of the restrictions under PACA is that a proceeding against the Crown cannot be conducted by way of a jury trial. Recently, in Attorney General of Nova Scotia v. Scott Mattatall (2013), the Supreme Court of Nova Scotia was asked to determine whether a jury election can be made where the Crown brings a lawsuit against a defendant, and no counterclaim or set-off claim is made.

The Mattatall case involved a motor vehicle accident that occurred in 2002. The Defendant, Scott Mattatall, collided with the Murdock Bridge, causing damage so significant that the structure had to be replaced. As the owner of the bridge, the Province of Nova Scotia sought to recover the full cost of its replacement from the defendant.

The Province assumed that the case would be heard by a judge alone, but the Defendant elected to have a trial by jury under the Civil Procedure Rules ("Rules"). In Nova Scotia, the Rules are written by the Judges of the Supreme Court and Court of Appeal, who are given authority to do so under the Judicature Act. PACA states that the Rules apply, subject to certain exceptions, in proceedings against the Province, but there is no rule stating that the Rules apply when the Province is the plaintiff.

The Province brought a motion to strike the jury notice, making two central arguments. First, the Province argued that PACA applies in the circumstances, thereby prohibiting a jury trial. Second, the Province stated that because the Judicature Act does not explicitly apply to the Province as plaintiff, the Province is not bound by the jury provisions of the Rules. The Province made the same argument regarding the Juries Act. Based on ancient rights of the Crown and the Interpretation Act, the general rule is that the Province is not bound by any legislation unless the legislation specifically states that it applies to the Crown. The Province also referred to other ancient rights of the Crown, including the theory that the Crown has no peers. The suggestion was that jurors would be inclined to decide against the Province because of the Province's institutional status.

Justice Murphy of the Supreme Court of Nova Scotia disagreed with the Province, and dismissed its motion to strike the jury election. The Court held that PACA is very clear, and does not apply to cases that only involve a lawsuit by the Crown against a defendant.

With respect to the Judicature Act, the Rules, and the Juries Act, the Court held that two exceptions apply to the general rule that the Province is not bound by statutes that do not clearly bind the Province. The "necessary implication" exception applies because the purpose of those acts and the Rules would be frustrated if the Rules did not apply to all parties. Alternatively, the Rules apply under the "Crown as litigant" exception. Under that exception, whenever the Crown takes the benefit of a piece of legislation, it is bound by all the related provisions. In the context of litigation, that means that when the Province commences litigation under the Rules as a plaintiff, it is obliged to follow all of the rules that would ordinarily apply.

In coming to its conclusion, the Court rejected the notion that the Province should be immune from a jury trial because the Crown has no peers. The Court noted that there is no exemption for other large institutions, where jurors might take deep pockets into account in their decision-making. The Court pointed to cases in other provinces where the province had commenced litigation as a plaintiff and was subject to a jury trial.

The immediate consequence of the Court's decision is that defendants are entitled to a jury trial in defending claims by the Province. The broader implication from the Court's reasons is that the Province will now be precluded from making any argument that it should be afforded special procedural treatment, or that the Rules do not apply when the Province is the plaintiff. As noted, PACA still applies where the Province is defendant, or a counterclaim or set-off argument is made in a proceeding by the Province.

The Province commenced an appeal of Justice Murphy's decision, but has now abandoned that appeal. As a result, this decision cannot be overturned, and sets a valuable precedent in claims by the Province.