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Royal Bank of Canada v R
''Royal Bank of Canada v R'', is a notable Canadian constitutional decision of the Judicial Committee of the Privy Council where the Council limited the province's ability to create laws in relation to extraprovincial contractual rights.
==Background==
In 1909, the Alberta and Great Waterways Railway Company was incorporated by an Act of the Legislative Assembly of Alberta. Another Act was passed in the same year to authorize the Province to guarantee the principal and interest of bonds that were to be issued by the Company. The proceeds of the bonds raised in England were credited to a Railway Special Account set up by the province and kept in a branch of the Royal Bank of Canada in Edmonton, and the Company proceeded to enter into a contract with the Canada West Construction Company.
In 1910, public uneasiness was raised concerning the arrangements that had been entered into by the Province, and a commission of inquiry was set up to look into the matter. While the commission was deliberating, a new government was formed that proceeded to pass two new Actsthe first authorizing the transfer of the balance in the Railway Special Account into the General Revenue Fund of the Province on the basis that the company had defaulted on the construction of the railway, and the second providing that anyone suffering loss or damage under the first Act must file a claim with the Government that would be reported to the Legislature. When the Provincial Treasurer arranged to issue a cheque to draw the balance out of the special account, the Royal Bank of Canada refused to honour it. The Province then proceeded to sue the Bank for the funds, and the two Companies were joined in the action as defendants.
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