R. v. Eldorado Nuclear Ltd.; R. v. Uranium Canada Ltd. (1983), 4 DLR (4th) 193, [1983] 2 SCR 551

Supreme Court of Canada

R. v. Eldorade Nuclear Ltd., [1983] 2 S.C.R. 551

Date: 1983-12-15

Her Majesty The Queen Appellant;

and

Eldorado Nuclear Limited—Eldorado Nucléaire Limitée Respondent.

and between

Her Majesty The Queen Appellant;

and

Uranium Canada Limited—Uranium Canada Limitée Respondent.

File Nos.: 17175 and 17176.

1983: January 27; 1983: December 15.

Present: Laskin C.J. and Ritchie, Dickson, Beetz, Mclntyre, Chouinard and Wilson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Criminal law—Crown immunity—Combines investigation—Crown corporations charged with conspiracy to lessen competition—Whether corporations entitled to Crown immunity—Combines Investigation Act, R.S.C. 1970, c. C-23, s. 32(1)(c) [rep. & sub. 1974-75-76 (Can.), c. 76, s. 14]—Interpretation Act, R.S.C. 1970, c. I-23, ss. 16, 27(2)—Atomic Energy Control Act, R.S.C 1970, c. A-19,s. 10—Government Companies Operation Act, R.S.C 1970, c. G-7, ss. 2 [am. 1974-75-76 (Can.), c. 33, s. 265 (Item 4)], 3, 6.

The respondents were charged under s. 32(1)(c) of the Combines Investigation Act of conspiring with others to unduly lessen competition in the production or sale of uranium products in Canada. They applied to the Supreme Court of Ontario for an order prohibiting the Provincial Court from proceeding to inquire into the charges on the basis that the Provincial Court lacked jurisdiction to proceed because they were agents of the Crown and therefore the Combines Investigation Act did not apply. The Supreme Court granted the applications and the Court of Appeal upheld the decision. This appeal is to determine whether respondents are immune from criminal liability under s. 32(1)(c) of the Combines Investigation Act because they are agents of the Crown.

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Held (Mclntyre and Wilson JJ. dissenting in part): The appeals should be dismissed.

Per Laskin C.J. and Ritchie, Dickson, Beetz and Chouinard JJ.: The Combines Investigation Act is not binding on the Crown. Section 16 of the Interpretation Act makes it clear that the Crown is immune unless expressly bound. There is no section in the Combines Investigation Act or the Interpretation Act which makes the Act applicable to Her Majesty. The effect of Crown immunity is not that the Crown is immune from prosecution even though there has been an unlawful act, rather, there is no unlawful act under the statute because the statute does not apply to the Crown. Crown immunity extends to agents and servants because the Crown only acts through agents and servants. The respondents are each by statute “for all its purposes an agent of Her Majesty”. A Crown agent is only entitled to immunity when it acts within the scope of the public purposes it is statutorily empowered to pursue. Prima facie, the conduct complained of was within the scope of Crown purposes, for which the companies were incorporated—namely, to implement national policy relating to atomic energy in all its aspects. No evidence was presented or alluded indicating that the companies acted outside corporate objects for other than Crown purposes. Accordingly, there is no merit in the appellant’s submission that the prohibition orders were premature.

[Canadian Broadcasting Corporation v. The Queen, [1983] 1 S.C.R. 339, distinguished; Canadian Broadcasting Corporation v. Attorney-General for Ontario, [1959] S.C.R. 188; Province of Bombay v. City of Bombay, [1947] A.C. 58; Conseil des Ports Nationaux v. Langelier, [1969] S.C.R. 60; considered; Her Majesty in Right of the Province of Alberta v. Canadian Transport Commission, [1978] 1 S.C.R. 61; Bank voor Handel en Scheepvaart N.V. v. Administrator of Hungarian Property, [1954] A.C. 584; Willion v. Berkley (1561), 1 Plowd. 223, 75 E.R. 339; Bonanza Creek Gold Mining Co. v. The King, [1916] 1 A.C. 566; Feather v. The Queen (1865), 122 E.R. 1191; Formea Chemicals Ltd. v. Polymer Corporation Ltd., [1968] S.C.R. 754; R. v. Stradiotto, [1973] 2 O.R. 375; Metropolitan Meat Industry Board v. Sheedy, [1927] A.C. 899; Tamlin v. Hannaford, [1950] 1 K.B. 18; British Columbia Power Corp. v. Attorney-General of British Columbia (1962), 34 D.L.R. (2d) 25, referred to.]

APPEALS from a judgment of the Ontario Court of Appeal (1982), 138 D.L.R. (3d) 626, 68

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C.C.C. (2d) 200, 39 O.R. (2d) 474, 21 B.L.R. 72, affirming a judgment of J. Holland J. (1982), 138 D.L.R. (3d) 626, 68 C.C.C. (2d) 200, 38 O.R. (2d) 130, 17 B.L.R. 275, granting an application for a writ of prohibition. Appeals dismissed, Mclntyre and Wilson JJ. dissenting in part.

John W. Brown, Q.C, Calvin S. Goldman and Michael R. Dambrot, for the appellant.

P.Y. Atkinson and F.D. Cass, for the respondent Eldorado Nuclear Ltd.

Gordon F. Henderson, Q.C., and Emilio Binavince, for the respondent Uranium Canada Ltd.

The judgment of Laskin C.J. and Ritchie, Dickson, Beetz and Chouinard JJ. was delivered by

DICKSON J.—The question is whether respondents, Uranium Canada Limited (“Uranium Canada”) and Eldorado Nuclear Limited (“Eldorado”), are immune from criminal liability under s. 32(1)(c) of the Combines Investigation Act, R.S.C. 1970, c. C-23, because they are agents of the Crown.

I The Proceedings to Date

By informations sworn July 4 and July 7, 1981 by Orest R. Sametz, Combines Investigation Officer, the respondents and others were charged with having conspired, combined, agreed or arranged together and with another to prevent or lessen, unduly, competition in the production, manufacture, purchase, sale or supply in Canada of uranium, uranium oxide and other uranium substances, contrary to s. 32(1)(c) of the Combines Investigation Act. A summons was issued to each of the respondent Companies. Each appeared before Judge Rice of the Ontario Provincial Court (Criminal Division). Tentative dates were set for a preliminary inquiry. Before the commencement of the inquiry, each Company applied to the Supreme Court of Ontario for an order prohibiting Judge Rice or any other judge from proceeding to inquire into the charges. It was contended that the Provincial Court lacked jurisdiction to proceed because

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they were agents of the Crown and therefore the Combines Investigation Act did not apply.

Although Uranium Canada and Eldorado were charged in separate informations, the two prohibition applications were heard together, by agreement. Notwithstanding certain differences in the legal origins of the two Companies, the two cases raise similar issues, and it is convenient to deal with both in a single judgment.

The prohibition applications were successful in the court of first instance. Mr. Justice J. Holland found that under the express terms of their governing statutes neither Company could act other than as an agent of the Crown, and, since the Combines Investigation Act did not bind Her Majesty, either expressly or by necessary implication, the conduct complained of in the charges could not be characterized as criminal. There was accordingly no foundation upon which the charges could be validly laid or prosecuted.

In an oral judgment the Ontario Court of Appeal upheld the prohibition orders. Cory J.A., Houlden and Thorson JJ.A. concurring, concluded:

(i) the Combines Investigation Act does not apply to the Crown because of s. 16 of the Interpretation Act, R.S.C. 1970, c. I-23;

(ii) by virtue of the statutes under which Uranium Canada and Eldorado are constituted, each Company is an agent of Her Majesty for all its purposes, and may act in no other capacity than as agent of the Crown;

(iii) the two Companies are authorized by their respective corporate objects clauses and relevant legislation to perform the acts complained of in the charges against them; and

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(iv) in carrying out such corporate purposes Uranium Canada and Eldorado are entitled to the same immunity from prosecution as the sovereign.

The Court of Appeal took this further point. Both the preamble and the specific provisions of the Atomic Energy Control Act, R.S.C. 1970, c. A-19, emphasize it is in the national interest to control and supervise atomic energy. The specific provisions of the Act should therefore prevail over the general provisions of the Combines Investigation Act. It followed that the Combines Investigation Act does not apply to the two Companies.

The appeal to this Court by the Attorney General of Canada is based on the submission that the Combines Investigation Act is binding on the Crown; in the alternative, that even if the Combines Investigation Act does not bind the Crown, Uranium Canada and Eldorado cannot claim Crown immunity for the following reasons:

(i) Nothing in the corporate objects of either Company, nor in the statutory provisions governing the Companies’ corporate existence, nor in the Atomic Energy Control Act itself, authorizes either Company to conspire, combine or agree to lessen unduly competition in the production, manufacture, purchase, sale or supply of uranium.

(ii) Although breaches of the Combines Investigation Act are not authorized by either Company’s corporate objects, nevertheless both Companies have the capacity, as opposed to the legal power, to commit criminal acts for which they may be held responsible.

(iii) By statute each Company is “for all its purposes” an agent of the Crown, but the words “its purposes” should be construed as meaning lawful purposes, such that the Companies will be agents of Her Majesty only when carrying out corporate purposes and exercising corporate powers in a lawful manner.

(iv) Uranium Canada and Eldorado are entitled to Crown immunity only when acting within

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their authority in furtherance of Crown purposes.

(v) There was no evidence before the Court of Appeal upon which to base a finding that Uranium Canada and Eldorado had not exceeded their respective corporative authorities. It is implicit in the fact that the information charges an offence contrary to s. 32(1) of the Combines Investigation Act that the Attorney General takes the position that the accused were not authorized to do the acts constituting the offence. Whether the accused exceeded authority is a factual matter to be determined from evidence which the Attorney General will lead in proof of the charge. Hence the prohibition orders were premature.

II Does the Combines Investigation Act bind the Crown?

The doctrine of Crown immunity from statutes is a very old common law doctrine. In 1457 Ashton J. stated, Y.B. 35 H.6, f.62:

quant un remedy soit fait pur un statute ce ne serra entendu en contre le roy s’il ne soit pas expressement reherse.

That wording may seem to be quite broad, but it has been suggested by H. Street, in “The Effect of Statutes upon the Rights and Liabilities of the Crown”, (1948) 7 U. of T.L.J. 357 at p. 361, that this had application only to the King’s prerogative and was therefore relatively narrow. It can at least be said that, a century later, the Court of Appeal in Willion v. Berkley (1561), 1 Plowd. 223, 75 E.R. 339, recognized clear limits on the extent of Crown immunity. The case concerned a statute involving the right to alienate land. The majority of the Court decided the King was bound, though there were no express words to that effect. Dyer C.J. said this at pp. 251-52:

And as to what is said, that the King shall not be bound by the Act, and that there shall not be any restraint in the estate which he takes, unless the same be precisely expressed in the Act, sir, in some cases I admit that the King shall not be restrained by general words, without express restraint in the Act, and that is according to the

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matter of the Act; but in this Act he shall be bound, for it is made for the furtherance of restitution, that is to say, where it was a great abuse that the donee had the power of aliening after issue had, (which being a common error was taken for the common law) this statute was made to reform the abuse, and to restore the common law in this point to its right and just course, which it did by restoring to the donor the observance of his intent. So that the design of the Act is to give restitution, and in restitutions the King has no favour, nor has his prerogative any exemption, but the party restored is favoured. [Footnotes omitted]

Brown J. said, at p. 248 “it is a difficult argument to prove that a statute, which restrains men generally from doing wrong, leaves the King at liberty to do wrong”. Street describes the law of that time in the following way, at p. 362:

By 1561 it had been established that the crown was bound by a statute which was intended to bind it, and it is clear that where the statute affected the subject’s rights rather than the crown’s, the courts would readily read into the statute an intention to bind the crown. On the contrary, there was a strong presumption that a general statute would not affect the king’s prerogative rights unless he were named in it.

Street’s thesis is that the modern common law position is based on a misunderstanding of the precedents. Whether or not this is true, and Street does make a persuasive case, it is clear that the current common law position embraces a broad notion of Crown immunity. In Province of Bombay v. City of Bombay, [1947] A.C. 58, the Privy Council held that the Crown was only bound by statute if expressly named therein, unless the Crown were bound by necessary implication. The latter concept was explained, at p. 63, in the following terms:

If it can be affirmed that, at the time when the statute was passed and received the royal sanction, it was apparent from its terms that its beneficent purpose must be wholly frustrated unless the Crown were bound, then it may be inferred that the Crown has agreed to be bound.

The Bombay test makes no differentiation between types of statutes involved, or types of rights or obligations imposed. This Court relied on the

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Bombay test in Her Majesty in Right of the Province of Alberta v. Canadian Transport Commission, [1978] 1 S.C.R. 61. I note in passing that the Attorney General is not submitting in this appeal, as he apparently did in the courts below, that the Crown is bound by the necessary implication doctrine.

Parliament has followed the lead of the common law, and taken the development one step further. Section 16 of the Interpretation Act removes even the necessary implication exception:

No enactment is binding on Her Majesty or affects Her Majesty or Her Majesty’s rights or prerogatives in any manner, except only as therein mentioned or referred to.

The conceptual rationale underlying the doctrine of Crown immunity is obscure. In Bonanza Creek Gold Mining Co. v. The King, [1916] 1 A.C. 566, the Privy Council said, at p. 586:

…it is the general rule in the construction of statutes that the Crown is not affected unless there be words to that effect, inasmuch as the law made by the Crown with the assent of the Lords and Commons is enacted prima facie for the subject and not for the Sovereign.

Why that presumption should be made is not clear. It seems to conflict with basic notions of equality before the law. The more active government becomes in activities that had once been considered the preserve of private persons, the less easy it is to understand why the Crown need be, or ought to be, in a position different from the subject. This Court is not, however, entitled to question the basic concept of Crown immunity, for Parliament has unequivocally adopted the premise that the Crown is prima facie immune. The Court must give effect to the statutory direction that the Crown is not bound unless it is “mentioned or referred to” in the enactment.

The Combines Investigation Act contains no section purporting to make the Act applicable to Her Majesty. Prima facie then, because of s. 16 of the Interpretation Act, the Combines Investigation

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Act is not binding on the Crown. The Attorney General, however, makes two arguments directed to showing that the Combines Investigation Act does apply to the Crown.

The first argument turns on the fact that s. 32 of the Combines Investigation Act, on which the charges in this case are based, was at one time s. 411 of the Criminal Code, 1953-54 (Can.), c. 51. In 1960 Parliament enacted An Act to amend the Combines Investigation Act and the Criminal Code, 1960 (Can.), c. 45, which repealed s. 411 of the Code and re-enacted the provision as s. 32 of the Combines Investigation Act. Section 22 of the 1960 amending legislation also contained the following provision:

Except to the extent that subsection (1) of section 32 of the Combines Investigation Act as enacted by this Act is not in substance the same as section 411 of the Criminal Code as in force immediately before the coming into force of this Act, the said subsection (1) of section 32 of the Combines Investigation Act shall not be held to operate as new law, but shall be construed and have effect as a consolidation and as declaratory of the law as contained in the said section 411 of the Criminal Code.

The Attorney General makes the point that both s. 411 of the 1953-54 Criminal Code and s. 32 of the Combines Investigation Act used the words “every one”, which were defined in s. 2(15) of the 1953-54 Criminal Code (as it still is today) in the following terms:

‘every one’, ‘person’, ‘owner’, and similar expressions include Her Majesty and public bodies, bodies corporate, societies, companies and inhabitants of counties, parishes, municipalities or other districts in relation to the acts and things that they are capable of doing and owning respectively;

Relying on the above-quoted provision in the 1960 amending legislation, the Attorney General submits that the words “every one” in s. 32 of the

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Combines Investigation Act now have the meaning it had when the section was part of the Criminal Code, and s. 32 of the Combines Investigation Act therefore applies to the Crown.

The flaw in the Attorney General’s first argument is that the definitions in s. 2 of the Criminal Code begin with the words “In this Act”. In other words, in the absence of a provision expressly incorporating the Criminal Code definition of “every one” into the Combines Investigation Act, the definition applies only in the Code itself. In my opinion the provision in the 1960 amending statute to the effect that s. 32 of the Combines Investigation Act should not “operate as new law” is not sufficient to overcome express words in the Criminal Code that restrict the definition of “every one” to that Act. Section 16 of the Interpretation Act requires an express provision to make an act binding on the Crown. The giving of royal assent amounts to a waiver of immunity. In the Court’s decision in Canadian Broadcasting Corporation v. Attorney-General for Ontario, [1959] S.C.R. 188 (the 1959 CBC case), both the majority and dissent agreed that clear language was needed to bind the Crown. The “shall not be held to operate as new law” stipulation in the 1960 amending Act is far too vague and oblique a reference to have the effect for which the Attorney General contends.

The Attorney General’s second argument is to the effect that the Criminal Code definition of “every one” is inferentially imported into the Combines Investigation Act by s. 27(2) of the Interpretation Act which reads:

All the provisions of the Criminal Code relating to indictable offences apply to indictable offences created by an enactment, and all the provisions of the Criminal Code relating to summary conviction offences apply to all other offences created by an enactment, except to the extent that the enactment otherwise provides.

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The Attorney General submits that the definition of “every one” in s. 2 of the Code is a provision “relating to indictable offences” and as such it applies to offences created by the Combines Investigation Act.

With respect, I disagree. The gist of this argument is that s. 27(2) of the Interpretation Act incorporates the Criminal Code definition of “every one” into all federal penal enactments, thereby making all such enactments binding on the Crown, “except to the extent that the enactment otherwise provides”. This cannot be right because it is directly contrary to the express words of s. 16 of the Interpretation Act, which provides that “No enactment is binding on Her Majesty… except only as therein mentioned or referred to”. Section 16 makes the Crown immune unless expressly bound, and it cannot be that s. 27 of the same Act binds the Crown unless expressly exempted. In my view s. 27(2) of the Interpretation Act does not import the Criminal Code definition of “every one” into the Combines Investigation Act, and it does not make the latter Act binding on the Crown.

Even if the Attorney General could succeed in showing that the Criminal Code definition of “every one” is incorporated into the Combines Investigation Act, he woud still face the obstacle posed by the decision in the 1959 CBC case, supra, where the majority held that the Criminal Code definition of the word “person”, which is identical to the definition of “every one”, did not make the Lord’s Day Act binding on the Crown, even though that Act expressly incorporated the Criminal Code definition. The majority view was that the provision that “person” included Her Majesty was not sufficiently clear to make the Crown criminally liable; it was read as stipulating that Her Majesty could be a victim of crime. The Interpretation Act, however, has been amended since this judgment was rendered. In 1959 the exception recognized by the section was: “unless it is expressly stated therein that Her Majesty is bound thereby”. The new exception clause reads: “except only as therein mentioned or referred to”.

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It is not necessary to determine whether the 1959 CBC case was rightly decided or whether the result in the case would be the same under the new version of s. 16; for present purposes it is enough to observe that there is some doubt whether the definition of “every one” in the Criminal Code has the effect of making the Code, and any enactment incorporating that definition, binding on the Crown.

For the above reasons, then, the submission of the Attorney General that the Combines Investigation Act binds the Crown must fail. The question that remains is whether Uranium Canada and Eldorado are entitled to the benefit of the Crown’s immunity from the prohibitory terms of the Combines Investigation Act.

III Are Eldorado Nuclear and Uranium Canada entitled to Crown Immunity?

In Canada, the head of state is Her Majesty the Queen, the reigning monarch of the United Kingdom. By providing that “no enactment is binding on Her Majesty… except only as therein mentioned or referred to”, Parliament has put the state, commonly referred to as the Crown, beyond the reach of Acts of Parliament that are not expressly made applicable to the Crown.

Like a corporation, the Crown must act through agents or servants. Assuming for the moment that Uranium Canada and Eldorado were acting as agents of the Crown, where do they stand vis-à-vis the Combines Investigation Act? The Attorney General submits that even if the Crown is immune, agents of the Crown may be personally liable for breaches of the civil or criminal law. It is argued that the principles applicable to civil and criminal responsibility are the same. The conclusion reached is that a Crown agent may be criminally responsible under the Combines Investigation Act.

The Attorney General relies on this Court’s decision in Conseil des Ports Nationaux v. Langelier, [1969] S.C.R. 60. This was a delict case.

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During the course of his reasons Martland J., speaking for the Court, said this, at p. 70:

What is in issue here is the responsibility of a person, whether individual or corporate, who, though a Crown agent, and purporting to act as such, commits an act which is unlawful. My understanding of the law is that a personal liability will result. The liability arises, not because he is an agent of the Crown, but because, though he is an agent of the Crown, the plea of Crown authority will not avail in such event.

This passage properly states the law, but I do not agree it produces the result for which the Attorney General contends.

At common law, the Sovereign could not be brought into the Queen’s courts in the ordinary way. This arose from an immunity of the Sovereign from court process. This immunity was distinct from the immunity of the Sovereign under statutes. Immunity from court process did not, however, leave the subject without any civil remedy. For certain matters, such as breach of contract, the procedure of petition of right was available to settle disputes between the Crown and a subject. In tort the Queen could not be sued but that did not prevent an agent of the Queen from being sued. In Feather v. The Queen (1865), 122 E.R. 1191 (C.A.), one of the authorities relied upon by Martland J., Cockburn C.J. speaking for the Court, said this, at pp. 1205-06:

For the maxim that the King can do no wrong applies to personal as well as to political wrongs; and not only to wrongs done personally by the Sovereign, if such a thing can be supposed to be possible, but to injuries done by a subject by the authority of the Sovereign. For, from the maxim that the King cannot do wrong it follows, as a necessary consequence, that the King cannot authorize wrong. For to authorize a wrong to be done is to do a wrong; inasmuch as the wrongful act, when done, becomes, in law, the act of him who directed or authorized it to be done. It follows that a petition of right which complains of a tortious act done by the Crown, or by a public servant by the authority of the Crown, discloses no matter of complaint which can entitle the petitioner to redress. As in the eye of the law no such wrong can be done, so, in law, no right to redress can arise; and the petition therefore, which rests on such a

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foundation falls at once to the ground. Let it not, however, be supposed that a subject sustaining a legal wrong at the hands of a minister of the Crown is without a remedy. As the Sovereign cannot authorize wrong to be done, the authority of the Crown would afford no defence to an action brought for an illegal act committed by an officer of the Crown… But in our opinion no authority is needed to establish that a servant of the Crown is responsible in law for a tortious act done to a fellow subject, though done by the authority of the Crown—a position which appears to us to rest on principles which are too well settled to admit of question, and which are alike essential to uphold the dignity of the Crown on the one hand, and the rights and liberties of the subject on the other.

The maxim that the Queen can do no wrong is a legal fiction which, at common law, serves the purpose of preventing the Queen from being impleaded in her own courts. There is, however, no comparable maxim that an agent of the Queen can do no wrong.

The conclusion that a Crown agent is personally responsible for an unlawful act still leaves the question whether the act is unlawful. Where the unlawfulness or the wrongfulness of the act arises without any recourse to a statute, the Crown’s immunity from statute, as expressed in s. 16 of the Interpretation Act, is irrelevant. If, for example, the agent commits a tortious act, it is the common law which characterizes it as unlawful. There is no immunity that the agent can claim.

Where the only source of the unlawfulness is a statute, however, the analysis is entirely different. Reference to a statute is necessary for criminal responsibility in Canada, apart from contempt of court, because s. 8 of the Criminal Code precludes any conviction for an offence at common law. If a person commits an act prohibited by statute, and the Attorney General seeks to prosecute for violation of that statute, the preliminary question that must be asked is whether that person is bound by the statute. If not, the person simply does not commit a violation of the statute. The situation is not that the person is immune from prosecution even though there has been an unlawful act;

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rather, that there has been no unlawful act under the statute. I have already said that the Combines Investigation Act does not bind the Crown. If Uranium Canada and Eldorado share the Crown’s immunity, they can have committed no offence under the Act.

Both the majority and the dissent in the 1959 CBC case, supra, accepted that proposition of law that s. 16 of the Interpretation Act extends to agents of the Crown. This Court’s decision in Formea Chemicals Ltd. v. Polymer Corporation Ltd., [1968] S.C.R. 754 also makes it clear that a reference to the Crown in a statute extends to Crown agents. If this were not the interpretation given to s. 16, the section would have no meaning, since the Crown only acts through servants and agents. Crown agents benefit from Crown immunity because they are acting on behalf of the Crown. The critical question, then, is whether Uranium Canada and Eldorado were acting as agents.

Uranium Canada and Eldorado are each, by statute, expressly made “an agent of Her Majesty”. Uranium Canada owes its status as a Crown agent to s. 10(4) of the Atomic Energy Control Act, which reads:

A company is for all its purposes an agent of Her Majesty and its powers may be exercised only as an agent of Her Majesty.

Eldorado’s agency status derives from the Government Companies Operation Act, R.S.C. 1970, c. G-7; section 3 reads:

Every Company is for all its purposes an agent of Her Majesty and its powers may be exercised only as an agent of Her Majesty.

The fact that these statutory provisions make each of the respondent Corporations “for all its purposes” an agent of the Crown does not mean, however, that these Companies act as Crown agents in everything they do.

Statutory bodies such as Uranium Canada and Eldorado are created for limited purposes. When a Crown agent acts within the scope of the public

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purposes it is statutorily empowered to pursue, it is entitled to Crown immunity from the operation of statutes, because it is acting on behalf of the Crown. When the agent steps outside the ambit of Crown purposes, however, it acts personally, and not on behalf of the state, and cannot claim to be immune as an agent of the Crown. This follows from the fact that s. 16 of the Interpretation Act works for the benefit of the state, not for the benefit of the agent personally. Only the Crown, through its agents, and for its purposes, is immune from the Combines Investigation Act.

This Court recently adopted this approach in Canadian Broadcasting Corporation v. The Queen, [1983] 1 S.C.R. 339 (the 1983 CBC case), where the CBC sought immunity in relation to charges of showing an obscene film contrary to s. 159(1)(a) of the Criminal Code. The CBC is established under the Broadcasting Act, R.S.C. 1970, c. B-l 1; section 40(1) of that Act provides as follows:

Except as provided in subsection 38(3), the Corporation is, for all purposes of this Act, an agent of Her Majesty, and its power under this Act may be exercised only as an agent of Her Majesty.

This Court upheld the decision of the Ontario Court of Appeal that the CBC could be prosecuted under the Criminal Code, notwithstanding it was an agent of the Crown. In the Court of Appeal and here, the key to this result was a Regulation promulgated under the Broadcasting Act which prohibited the broadcast of any “obscene, indecent or profane… presentation”. The CBC was charged with breach of the Criminal Code, not with breach of the Broadcasting Regulations, but the Regulation was important because the Broadcasting Act made the Corporation a Crown agent “for all purposes of this Act”, and the Regulation demonstrated that in broadcasting an obscene film the Corporation was not acting for purposes entrusted to it under the Act. This Court expressly adopted the following passage from the judgment of the Ontario Court of Appeal (at p. 353):

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In my view, when the Corporation exercises its powers with a view to carrying out the purposes of the Broadcasting Act, it acts as agent of Her Majesty and only as agent of Her Majesty. But, when it exercises its powers in a manner inconsistent with the purposes of the Act, it steps outside its agency role. That role subsists only so long as the Corporation’s broadcasts are implementing the policy laid down in the Act. This seems to me to be the effect of s. 40(1).

When the present proceedings were before the Ontario Court of Appeal this Court had not rendered judgment in the 1983 CBC case. The Court of Appeal distinguished its own decision in that case on the basis that the Broadcasting Act makes the CBC a Crown agent “for all purposes of this Act” while the Atomic Energy Control Act and the Government Companies Operation Act make each of the respondents in this appeal an agent of the Crown “for all its purposes”. The Court of Appeal thought the latter words were broader than the words of the Broadcasting Act, and under the statutory provisions at issue here “there are no limits on the status of the agency”.

With respect, I disagree. The Broadcasting Act uses the words “purposes of this Act” in the agency clause because the CBC is established by the Broadcasting Act and derives its corporate objects and powers from that Act (ss. 34(1), 39). Uranium Canada and Eldorado, on the other hand, are not created by the Atomic Energy Control Act or the Government Companies Operation Act, but are incorporated under the Canada Corporations Act  and receive their corporate objects and powers from that statute and from their letters patent. Under these circumstances, it would be inappropriate for the Atomic Energy Control Act or the Government Companies Operation Act to refer to the “purposes of this Act” in the agency clauses. For this reason I cannot accept that the difference in wording has the significance the Ontario Court of Appeal attributed to it. In my opinion, any limitations that might be imposed on the CBC’s agency status by the words “purposes of this Act” are also imposed on the agency of

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Uranium Canada and Eldorado by the words “its purposes”. That being so, the 1983 CBC case makes the same point as the present one: a Crown agent is entitled to the benefit of the immunity afforded by s. 16 of the Interpretation Act only when it acts within the scope of the Crown purposes it is authorized to serve.

I think it is also important to draw a distinction between (i) acts committed in the course of fulfilling Crown purposes but in no way undertaken in order to effect Crown purposes; and (ii) those acts committed which are designed to effect Crown purposes. Whereas the latter situation does invoke Crown immunity, the former does not. I refer, by way of illustration, to R. v. Stradiotto, [1973] 2 O.R. 375 (C.A.). In that case a member of the militia was charged with careless driving under the Ontario Highway Traffic Act. At the time, Stradiotto was driving a Department of National Defence vehicle while in his official militia duties. The Ontario Court of Appeal rejected the claim of Crown immunity on the basis that Stradiotto could have effected Crown purposes without violating The Highway Traffic Act. I agree with the result reached in Stradiotto, but not with the reasoning of the Ontario Court of Appeal. In my view, the reason Crown immunity could not be invoked was that the careless driving was wholly incidental to official militia purposes. The careless driving was in no manner in the furtherance of the Crown purposes of the militia. In driving carelessly, Stradiotto stepped outside Crown purposes and no longer was acting as agent. Accordingly, he could not claim immunity.

Against this background, can it be said that the acts alleged in the indictments here in question fall within the purposes of Uranium Canada and

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Eldorado? I will deal firstly with Uranium Canada.

Section 10(1) of the Atomic Energy Control Act provides that the Minister responsible for the Act may:

(b) with the approval of the Governor in Council, utilize, cause to be utilized and prepare for the utilization of atomic energy;

(c) with the approval of the Governor in Council, acquire, or cause to be acquired by purchase, lease, requisition or expropriation, prescribed substances and any mines, deposits or claims of prescribed substances and patent rights relating to atomic energy and any works or property for production or preparation for production of, or for research or investigation with respect to, atomic energy;

Section 10(2)(a) of the Act gives the Minister authority to procure the incorporation of companies under Part I of the Canada Corporations Act, R.S.C. 1970, c. C-32 , for the purpose of exercising and performing on behalf of the Minister such of the powers conferred upon him by s. 10(1) of the Atomic Energy Control Act as the Minister may from time to time direct.

Part I of the Canada Corporations Act , referred to in s. 10(2)(a) of the Atomic Energy Control Act, deals with the formation of new companies, and makes provision for matters typically dealt with in business corporation statutes, such as the powers and duties of companies, transfer of shares, alteration or reduction of share capital, calls, borrowing powers, and so on.

On June 21, 1971 Uranium Canada was incorporated under Part I of the Canada Corporations Act  by the Minister of Energy, Mines and Resources pursuant to his powers under s. 10(2) of the Atomic Energy Control Act. The Company’s letters patent set out its objects as follows:

(a) to exercise and perform on behalf of the Minister of Energy, Mines & Resources the powers, respon-

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sibilities, duties and obligations that may be imposed upon the Company pursuant to contracts to be entered into with the approval of the Governor in Council pursuant to the authority of Vote L-11 c of the Appropriation Act No. 1, 1971;

(b) to exercise and perform such other powers conferred on the Minister by subsection 1 of section 10 of the Atomic Energy Control Act, 1946, as amended by S.C. 1954, chapter 47, as the Minister may from time to time direct.

By supplementary letters patent issued June 10, 1975, Uranium Canada’s objects were amended by adding thereto paragraph (c) which reads:

to negotiate, execute and perform agreements for the purchase, stockpiling and sale of uranium concentrates and to do or procure the doing of anything necessary or incidental thereto, all subject to the approval of the Governor in Council.

Vote L-11c referred to in paragraph (a) of the Company’s objects is as follows:

Acquisition in fiscal years 1970-71, 1971-72, 1972-73, 1973-74 and 1974-75 of uranium concentrates in accordance with contracts to be entered into, with the approval of the Governor in Council, with Denison Mines Limited including authority to sell the uranium concentrates acquired under the said contracts and to appoint a sales agent for such purpose.

During the period covered by the charges in this case all the shares of Uranium Canada, except qualifying shares of the directors, were held by the Minister of Energy, Mines and Resources in trust for Her Majesty in right of Canada. All of the Company’s directors and officers were senior officials in various departments and branches of government, including External Affairs; Energy, Mines and Resources; Finance; Industry, Trade and Commerce; Justice; the Privy Council Office; and the Natural Sciences and Engineering Research Council. Uranium Canada conducts its affairs in, and has no place of business separate from, the offices of the Department of Energy, Mines and Resources. It has no employees of its

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own. Its total assets are $9 received in payment for directors’ qualifying shares.

In broad terms, Uranium Canada’s corporate functions are to buy and sell uranium and related products with the approval of the Governor in Council, and to exercise such other powers with respect to the acquisition, production and utilization of uranium as the Minister may direct. Uranium Canada is “for all its purposes” an agent of the Crown. The question that arises is whether entering into a conspiracy or arrangement to reduce competition in the production, sale or supply of uranium is within Uranium Canada’s corporate objects and “purposes”. On this point the Court of Appeal said:

It can be seen that the respondents are charged with doing acts which by their objects they are authorized to perform. Assuming, as we must, for the purposes of the appeal that the respondent companies performed the acts attributed to them in the indictment then the performance of those acts prima facie fell within the powers conferred on them by their objects clauses and their authorizing legislation.

I have no doubt marketing arrangements relating to uranium come within the powers conferred by paragraph (c) of Uranium Canada’s letters patent. They cannot be said to be incidental to the Company’s powers. Such powers, however, are to be exercised “subject to the approval of the Governor in Council”. Mr. Justice J. Holland concluded on the basis of the relevant legislation and the affidavits filed on the application that Uranium Canada is a Crown agent incorporated for the single purpose of carrying out the policy of the government of Canada relating to atomic energy, and that in so doing it operated under the directing mind of the Minister of Energy, Mines and Resources, and with the approval of the Governor in Council. Nothing in the records indicates otherwise. Whether Uranium Canada acted with or without government approval is important because the Atomic Energy Control Act provides that Uranium Canada is a Crown agent “for all its purposes”, not that it is a Crown agent in whatever it does. If Uranium Canada performed the acts complained of in the information with the approval

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of the Governor in Council, it acted within “its purposes” and is entitled to immunity as a Crown agent. If, on the other hand, it acted without such approval, it acted outside “its purposes”, and beyond the scope of its agency, and cannot claim to be immune on the basis that it entered the alleged combine on behalf of the Crown.

I turn now to the other respondent. Eldorado Mining and Refining (1944) Limited was incorporated by Letters Patent on June 30, 1945, under Part I of The Companies Act, 1934. In 1952 the Company’s name was changed to Eldorado Mining and Refining Limited, and in 1968 changed again to Eldorado Nuclear Limited—Eldorado Nucléaire Limitée. By 1964-65 (Can.), c. 52, s. 2, the short title of the Companies Act was changed to the Canada Corporations Act ; thereafter Eldorado was incorporated under Part I of the Canada Corporations Act . Eldorado’s corporate objects and purposes read in part:

To acquire, own, lease, prospect for, open, explore, develop, work, improve, maintain and manage mines and mineral lands and deposits, and to dig for, raise, crush, wash, smelt, assay, analyze, reduce, amalgamate, refine, pipe, convey and otherwise treat ores, metals and minerals, whether belonging to the company or not, and to render the same merchantable and to sell or otherwise dispose of the same or any part thereof or interest therein;

In 1968, by supplementary letters patent, the following was added to the above description of the Company’s objects:

and to purchase, lease, mine, refine, process and sell uranium, zirconium or any other material or equipment relative to the nuclear industry;

All of Eldorado’s issued shares are owned by, or held in trust for, Her Majesty in right of Canada. Hence Eldorado comes within the definition of “company” in the Government Companies Operation Act, R.S.C. 1970, c. G-7 (as amended by 1974-75-76 (Can.), c. 33, s. 265 (Item 4)), which reads:

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“Company” means a company incorporated under Part I of the Canada Corporations Act , or a corporation incorporated under the Canada Business Corporations Act, all the issued shares of which are owned by or held in trust for Her Majesty in right of Canada except, in the case of a company incorporated under Part I of the Canada Corporations Act , shares necessary to qualify other persons as directors;

Section 6 of the same Act provides:

This Act applies to a Company only from the date of the issue of a proclamation by the Governor in Council declaring this Act to be applicable to such Company.

On or about August 1, 1946, the Governor in Council issued a proclamation directing that the Government Companies Operation Act be applicable to Eldorado Mining and Refining (1944) Limited, which, as indicated above, subsequently became Eldorado Nuclear Limited. It is s. 3 of the Government Companies Operation Act that makes Eldorado “for all its purposes” an agent of Her Majesty.

As with Uranium Canada, agreements relating to the sale and supply of uranium fall within Eldorado’s corporate objects. I note, however, that unlike Uranium Canada, Eldorado’s corporate objects do not restrict it to acting with the approval of the Minister or the Governor in Council. Whatever the de facto relationship between Eldorado and the government may be, the Company’s corporate objects clauses and the relevant statutes leave it free to operate without government direction.

Does Eldorado’s independence in any way affect its right to claim Crown immunity? At common law the question whether a person is an agent or servant of the Crown depends on the degree of control which the Crown, through its ministers, can exercise over the performance of his or its duties. The greater the control, the more likely it is that the person will be recognized as a Crown agent. Where a person, human or corporate, exercises substantial discretion, independent of ministerial control, the common law denies Crown

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agency status. The question is not how much independence the person has in fact, but how much he can assert by reason of the terms of appointment and nature of the official: Bank voor Handel en Scheepvaart N.V. v. Administrator of Hungarian Property, [1954] A.C. 584 at pp. 616-17, and see Hogg, Liability of the Crown, 1971, p. 207. While Uranium Canada would easily meet the common law test of Crown agency, since it needs approval of the Governor in Council for what it does, I think it is clear that the common law would not recognize Eldorado as a Crown agent since it does not meet the de jure control test. I do not, however, think that this deprives Eldorado of the right of Crown immunity when acting within its corporate purposes.

The position at common law is not that those under de jure control are entitled to Crown immunity, but rather that immunity extends to those acting on behalf of the Crown. In Metropolitan Meat Industry Board v. Sheedy, [1927] A.C. 899, the Privy Council found the Board not to be a Crown agent because “there is nothing in the statute which makes the acts of administration his [the Minister’s] as distinguished from theirs” (p. 905). Sheedy is not an immunity case, rather, the question was whether Crown priority could be asserted in a liquidation. Nevertheless, it does indicate that the de jure test applies only in the absence of specific language indicating the body acts on behalf of or as an agent of the Crown. See also Tamlin v. Hannaford, [1950] 1 K.B. 18 (C.A.). A case such as British Columbia Power Corp. v. Attorney-General of British Columbia (1962), 34 D.L.R. (2d) 25, is easily distinguishable. In that case the statutory designation of Crown agent was held not to be conclusive, because the statute did not say “for all its purposes”. The majority concluded the statute made the Power Corporation an agent only for some

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purposes, not including the matter at issue in that appeal.

This Court’s decision in Formea Chemicals Ltd. v. Polymer Corporation Ltd., supra, is also instructive. The case concerned s. 19 of the Patent Act, R.S.C. 1952, c. 203.

The Government of Canada may, at any time, use any patented invention, paying to the patentee such sum as the Commissioner reports to be a reasonable compensation for the use thereof, and any decision of the Commissioner under this section is subject to appeal to the Exchequer Court.

Martland J., speaking for the Court, equated “Government of Canada” with the Crown. Polymer, like Eldorado, was made, for all its purposes, an agent of the Crown, though not under de jure control. Nonetheless, Polymer was held entitled to take advantage of s. 19.

In my opinion the Crown, under s. 19, has an unrestricted right to use a patent. It caused the respondent [Polymer] to be incorporated to manufacture, sell and deal in synthetic rubber and made the respondent, for all its purposes, its agent. The use by the respondent of the patent was, in the circumstances, a use by the Crown within s. 19. This being so, there was no infringement by the respondent of such patent [at p. 764].

The “agent for all its purposes” designation was held to be determinative; there was no inquiry into the actual independence of Polymer. I think this case makes it clear that when an enactment refers to the Crown, and a particular body is expressly made a Crown agent for all purposes, the enactment embraces the statutory agent. This applies to the construction of s. 16 of the Interpretation Act.

I also note that in the 1959 CBC case, supra, the CBC was by statute an agent:

The Corporation is for all purposes of this Act an agent of Her Majesty and its powers under this Act may be exercised only as an agent of Her Majesty.

As noted in Locke J.’s concurring judgment, the CBC was not under the regulation or direction of

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any department of government. Nevertheless, the majority found the CBC entitled to immunity. The dissenting members of the Court agreed that if the Crown had been immune under the Lord’s Day Act, that immunity would have extended to the CBC.

The major difference between Uranium Canada and Eldorado is that while the former is closely controlled by government, the latter, at least on paper, is not. Yet the statutory provisions making both corporations Crown agents for all their purposes are identical. I do not think it is admissible, without rewriting the statutes, to interpret these identical provisions differently. The status of Crown agents “for all its purposes” gives each such agent the benefit of Crown immunity under s. 16 of the Interpretation Act. The draftsmen of the governing statutes of Uranium Canada and Eldorado may well have been thinking of immunity from taxing statutes rather than criminal statutes, but the result is that there is immunity from both as long as the corporations are acting within their respective authorized purposes.

The Attorney General’s “lawful Crown purposes” argument has already been met by the conclusion that the two respondents are not bound by the Combines Investigation Act when acting within authorized purposes, so they cannot commit a violation of that Act when so acting. One additional point ought to be made. The Attorney General contended that neither respondent was given authority to contravene the Combines Investigation Act and therefore Crown immunity was not available; Crown immunity would apply only if there were statutory authority to contravene the Combines Investigation Act. With respect, I do not think this is an appropriate form of analysis. Statutory authority to commit an act that would otherwise be illegal, does not, it seems to me, invoke Crown immunity. It gives rise to a defence of statutory justification. A defence of statutory

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justification can be raised by any person, whether or not a Crown agent. This is conceptually and analytically distant from Crown immunity.

IV Were the Prohibition Orders Premature?

There is nothing in the statutory framework or in the letters patent of either Company to suggest that agreements or arrangements to lessen competition in the production, sale or supply of uranium are extraneous to the state purposes for which the two Companies were incorporated.

The Attorney General says, however, the prohibition orders in this case were premature because the question whether either Company exceeded its authority is a factual matter to be determined only upon evidence the Attorney General will lead in proof of the charges at the preliminary inquiry, and at subsequent trial if either Company should be committed for trial.

The Attorney General does not make any positive assertion that Uranium Canada acted without approval of the Governor in Council. If the Attorney General had evidence to this effect, or other evidence tending to show that Uranium Canada or Eldorado acted for other than Crown purposes, he should have so indicated by way of affidavit at the application before J. Holland J. No such evidence was presented there, or alluded to here. This matter has now been before three courts. In my opinion there is no merit in the submission that the prohibition orders were premature. The Attorney General has had ample opportunity to demonstrate, or at least assert categorically, that in entering the allegedly unlawful agreements and combinations the two Companies acted for other than Crown purposes. The Crown is immune from the Combines Investigation Act; the respondents are agents of the Crown. Prima facie, the conduct

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complained of is within the scope of Crown purposes for which the Companies were incorporated, which, as found by J. Holland J., are to implement national policy relating to atomic energy in all its aspects. Absent some indication that the Companies acted outside corporate objects for other than Crown purposes, they are immune from the terms of the Combines Investigation Act as agents of the Crown, and the Provincial Court Judge lacked jurisdiction to inquire into the charges. I would dismiss the appeals. No costs are sought.

The reasons of Mclntyre and Wilson JJ. were delivered by

WILSON J. (dissenting in part)—I have had the benefit of reading the reasons for judgment of my colleague, Dickson J., and must respectfully disagree with his conclusion that both Eldorado Nuclear Limited and Uranium Canada Limited are entitled to assert the Crown’s immunity from prosecution under s. 32(1)(c) of the Combines Investigation Act, R.S.C. 1970, c. C-23. In my view, only Uranium Canada is entitled to assert such immunity.

The history of the proceedings is set out in my colleague’s reasons for judgment and it is unnecessary for me to repeat it here. I agree with my colleague’s conclusion that by virtue of s. 16 of the Interpretation Act, R.S.C. 1970, c. I-23, the Crown is immune from prosecution under the Combines Investigation Act. The issue before the Court however, as I see it, is whether the respondent corporations can at this stage of the proceedings claim the benefit of this immunity by virtue of their status as Crown agents.

Prima facie the resolution of this issue would appear to involve a consideration of the alleged acts of the corporations in light of their authorized objects and purposes. An inquiry would be

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required to determine whether or not such acts were within such objects and purposes. It is submitted on behalf of the respondents, however, that such an inquiry is unnecessary since the respondents are expressed in their governing statutes to be for all their purposes agents of Her Majesty and able to exercise their powers only as such. This, they say, means that no matter what they do in carrying out their purposes, they are entitled to Her Majesty’s immunity. Parliament has effectively equated their authority with their capacity and the holding of a preliminary inquiry in these circumstances would be a futile exercise.

Uranium Canada makes its claim to immunity on the basis of s. 10(4) of the Atomic Energy Control Act, R.S.C. 1970, c. A-19, which reads:

A company is for all its purposes an agent of Her Majesty and its powers may be exercised only as an agent of Her Majesty.

Eldorado’s claim is based on s. 3(1) of the Government Companies Operation Act, R.S.C. 1970, c.G-7, which states:

Every Company is for all its purposes an agent of Her Majesty and its powers may be exercised only as an agent of Her Majesty.

Do these statutory provisions, by making a conclusive legislative pronouncement on the status of the respondents as Crown agents, also provide them with a blanket immunity from prosecution under the Combines Investigation Act for any acts which they might perform in furtherance of their statutory mandate? With respect, I do not think so.

In my view the authorities governing the scope of immunity of Crown agents demonstrate that the courts must apply a two-step test in determining whether an agent of the Crown is entitled to assert the Crown’s immunity. The first step is to decide whether the agent is authorized, expressly or impliedly, to perform the acts in question. In making this determination it is not enough to say that the purpose for which the acts are performed is an authorized purpose; the Court must also determine that the means which the agent uses to accomplish the purpose are expressly or impliedly

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authorized. If as a matter of statutory interpretation the means are authorized, the agent is entitled to immunity. If, however, there is no such authorization, the Court must move to the second step. The second step is to decide whether or not the agent is, for all intents and purposes, the alter ego of the Crown. If because of the degree of control—and by this is meant de jure as opposed to de facto control—which the Crown is able to exercise over the agent it is impossible for the Court to characterize the agent’s act as anything other than the act of the Crown, the agent is entitled to assert Crown immunity whether or not its governing statute authorizes the means by which the agent carries out its statutory purposes. If, however, the Crown does not have that degree of control, the agent will not be entitled to assert the immunity if the means it used are outside the purview of the statute. I turn to the authorities.

In R. v. Stradiotto, [1973] 2 O.R. 375, a member of the Canadian Armed Forces was held not to be immune from prosecution under the Ontario Highway Traffic Act even although he was acting under orders in the course of his employment. Evans J.A., writing for the Ontario Court of Appeal, said at p. 377:

The question for determination may be briefly stated: Is a servant of the Crown immune from prosecution under the Highway Traffic Act when he drives a motor vehicle in a negligent manner while in the course of carrying out orders which can be obeyed without driving carelessly?

He concluded that he was not. The Court conceded in Stradiotto that if the soldier had been ordered to do the very act alleged to constitute the offence, he would be immune from prosecution. Evans J.A. said at p. 379:

In my view, a distinction must be drawn between a breach of the Highway Traffic Act which is required to be committed by a soldier in order to carry out a military order and a breach of the statute which a soldier commits during the course of carrying out his duties which duties, however, can be properly discharged without committing a breach of the statute.

In Conseil des Ports Nationaux v. Langelier, [1969] S.C.R. 60, the respondents, who were

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owners of properties bordering on the St. Lawrence River, petitioned for an injunction to restrain the National Harbours Board from carrying out certain works on the river which they claimed would injuriously affect their properties. The Board moved by way of declinatory exception to dismiss the respondents’ petition on the ground that, being an agent of the Crown, it was not subject to injunction. The exception was dismissed at trial and the trial judgment was affirmed on appeal. The Board was granted leave to appeal to this Court. Mr. Justice Martland, speaking for the Court, dealt with the argument made on behalf of the Board that it was only capable of acting as a Crown agent and therefore enjoyed all the immunities of the Crown. He said at p. 70:

What is in issue here is the responsibility of a person, whether individual or corporate, who, though a Crown agent, and purporting to act as such, commits an act which is unlawful. My understanding of the law is that a personal liability will result. The liability arises, not because he is an agent of the Crown, but because, though he is an agent of the Crown, the plea of Crown authority will not avail in such event.

After reviewing a number of authorities Martland J. stated at p. 72:

As Choquette J. has pointed out, in the reasons for judgment of the Court of Appeal, s. 3(2) of the National Harbours Board Act declares that the Board “shall be and be deemed to be, for all the purposes of this Act, the agent of Her Majesty in right of Canada”. (The italicizing is my own.) It is only when the Board is lawfully executing the powers entrusted to it by the Act that it is deemed to be a Crown agent.

I am not prepared to accept the proposition enunciated in Wheeler v. Public Works Commissioners, [1903] 2 I.R. 202, that a corporation constituted for the sole purpose of doing acts for the Crown is not capable of doing a wrongful act in its corporate capacity, unless that statement is to be limited in its meaning to say that such a wrongful act is not authorized by its corporate powers. Otherwise the statement subscribes to the theory that a corporation cannot be made liable in tort because its corporate powers do not authorize it to commit a wrong. In my opinion, if a corporation, in the purported carrying out of its corporate purposes, commits a wrongful act, it is liable therefor and it cannot

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escape liability by alleging that it is not responsible for anything done outside its corporate powers. This is true whether it is purporting to act as a Crown agent, or not.

The National Harbour Board’s appeal was dismissed.

It has been suggested that there is a distinction to be drawn between the Crown’s immunity at common law from an action in tort and its immunity from liability or prosecution under a statute by virtue of s. 16 of the Interpretation Act and that the observations of Martland J. in Conseil des Ports Nationaux are confined to the former situation. With respect, I think this is to read down the principle applied by the learned justice in the case. The plaintiff, it will be recalled, was not seeking to enjoin the National Harbours Board from commission of a common law tort but from commission of a délit as contemplated by arts. 1053 et seq. of the Civil Code. Any immunity which the National Harbours Board was seeking to assert must accordingly have included immunity from provisions of the Civil Code.

Although a number of the cases upon which Martland J. relied involved the liability of public officials for tortious acts at common law, I do not believe that he intended to confine his remarks to common law liability. Rather, he seems to have espoused the broader principle which he quoted from Dicey on The Law of the Constitution (10th ed., 1959), p. 193 to the effect that Crown agents are personally liable “for acts done in their official character but in excess of their lawful authority”. As an example of such an act he refers to the violation of the Civil Code by the Quebec Liquor Commission in Roncarelli v. Duplessis, [1959] S.C.R. 121.

Moreover, I do not believe that it is sound in principle to draw a distinction in the present context between wrongs which are recognized by the common law and those which are created by statute. In Tobin v. The Queen (1864), 33 L.J.C.P. 199, Erle C.J. explained the principle that “the

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king can do no wrong” in the following way at p. 205:

The maxim that “the king can do no wrong” is true in the sense that he is not liable to be sued civilly or criminally for a supposed wrong; that which the sovereign does personally the law presumes will not be wrong; that which the sovereign does by command to his servants cannot be a wrong in the sovereign, because if the command be unlawful, it is in law no command, and the servant is responsible for the unlawful act in the same way as if there had been no command.

(Emphasis added.)

The principle thus stated recognizes that the servants and agents of the Crown are under an obligation to obey the law which is enforceable in the courts even if the sovereign’s personal obligation to do so is not enforceable in the same manner. To remove breaches of statute from the ambit of this principle would create an enormous range of executive action which would not be subject to independent judicial control.

Mr. Justice Estey, writing for the Court in the recent decision in Canadian Broadcasting Corporation v. The Queen, [1983] 1 S.C.R. 339, seems to have approved the reasoning in both Conseil des Ports Nationaux and Stradiotto. He stated at p. 343:

There is no doubt that in the existing state of the law employees of the Crown are responsible for their own acts done in their official character but in excess of their lawful authority.

And later he says at pp. 351-52:

The appellant is certainly in no better position than a minister of the Crown. It is difficult to believe that after the great constitutional struggles through which we and our forebears have gone to bring to an end the concept of the absolute monarchy we are still faced with the defence of absolute immunity by the monarch’s administration. Borrowing the words of Martland J., in Conseil des Ports Nationaux, supra: “It is only when the (Corporation) is lawfully executing the powers entrusted to it by the Act that it is deemed to be the Crown agent” (at p. 72). When so acting and thereby enjoying the status of Crown agent the immunities of the Crown flow through to the agent for its benefit. Where, however, the Corporation is not acting “for all purposes of this Act”

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or with reference to “its powers under this Act” the status and the benefits of Crown agency disappear.

The attribution of Crown immunity to the appellant may be an issue in circumstances not here before the Court and hence need not, for the disposition of this appeal, be determined. However, even if Crown immunity may be attributed to the appellant in some circumstances, and the actions of the appellant in such circumstances attributed to the Crown, it does not necessarily follow that the immunities attendant upon the status of Crown agency will flow through to the benefit and protection of the appellant in all circumstances. Here we have the Attorney General of the Province of Ontario prosecuting charges under the federal Criminal Code against a corporation established by the Parliament of Canada. The former brings the charges in the course of its duty to enforce the criminal law in the province and the latter is called upon to answer those charges by reason of its corporate existence and responsibilities under the Broadcasting Act. There is no authorization given by Parliament in its parent statute for the conduct of the appellant. The law reveals no reason why Her Majesty as the fountainhead of justice should not invoke the powers of the criminal courts to enforce a statute which expressly makes Her Majesty’s agents subject to its terms. But even that is not the case before us. There certainly can be no reason in law why the law enforcement agencies should not bring before the criminal court a corporation, however established, or any other person, where the conduct of that person, natural or legal, offends the Criminal Code and is not expressly authorized by Act of Parliament. We are not here concerned with whether the same principle would apply to conduct expressly authorized by another legislature acting within its plenary competence.

These cases seem to me to be authority for the proposition that the fact that an individual or a corporation enjoys the status of an agent of the Crown is not conclusive of his right to immunity. The agent will be personally liable for acts carried out beyond the scope of his authority and his authority must be closely examined in order to determine whether the means he used in carrying out his mandate were authorized or not. Following the approach taken by Evans J.A. in Stradiotto, I would find that where there is no express authorization to perform the alleged acts, the courts should presume that acts which violate the law are

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the unauthorized acts of the agent for which he will be personally liable. The onus should be on the agent to show that he could not carry out his mandate without the commission of such acts.

Without commenting on the correctness of their decision, I think that the majority of this Court in Canadian Broadcasting Corporation v. Attorney-General for Ontario, [1959] S.C.R. 188, took a similar approach to the question of whether the C.B.C. was entitled to assert Crown immunity from prosecution under the Lord’s Day Act, R.S.C. 1952, c. 171 (now R.S.C. 1970, c. L-13), for broadcasting on a Sunday. The statutory mandate in that case was to “carry on a national broadcasting service within Canada”. The majority treated that as a mandate to broadcast free of any limitation as to time. Since it would frustrate the corporation in the exercise of its mandate if the prohibition in the Lord’s Day Act applied to it, it had implied authority to broadcast on a Sunday and was entitled to the immunity for so doing.

By applying for an order of prohibition at this stage of the proceedings the respondents in this case have made it impossible for the courts to assess whether or not the acts alleged were necessary to enable the respondents to carry out their statutory mandate.

It has been argued that by confining the scope of the Crown agent’s immunity to those acts which were authorized the Court would be destroying the principle of Crown immunity. The argument is that Crown agents do not need immunity when they are carrying out acts within the scope of their authority. Since the Crown can act only through agents, it is said, the restriction of Crown immunity to the authorized acts of agents deprives the immunity of any substance. With respect, I do not think that this is so. In my view the common law authorities demonstrate that where the Crown agent’s capacity to act was so circumscribed that any act done in the course of his duties must be viewed as an act of the Crown itself, he was entitled to assert Crown immunity. The test, as set

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out in the House of Lords’ decision in Bank voor Handel en Scheepvaart N.V. v. Administrator of Hungarian Property, [1954] A.C. 584, is whether the Crown exercises de jure control over the agent. As Lord Reid put it at p. 617:

The question is not how much independence the [agent] in fact enjoys but how much he can assert and insist on by reason of the terms of his appointment or the nature of his office.

I do not see why the common law principle is not equally applicable to individuals or corporations who have been designated by statute as Crown agents. If those agents have the capacity to act for their own purposes as well as for purposes of the Crown, they will be entitled to immunity only to the extent that they act for purposes of the Crown. The fact that they are designated by statute to be Crown agents for all their purposes does not in my view preclude their acting for purposes of their own if they have the capacity to do so. I believe that the authorities bear out this analysis.

In British Columbia Power Corp. v. Attorney-General of British Columbia (1962), 34 D.L.R. (2d) 25 (B.C.C.A.), the issue was whether a public utility, the sole shareholder of which was the Crown in right of British Columbia, was immune from discovery and inspection in a suit by former shareholders. The utility claimed the immunity on the basis that under s. 6(1) of the governing statute it was stated to be “an agent of Her Majesty the Queen in right of the Province”. The Lieutenant-Governor in Council had the power to appoint the directors of the utility and to name someone to exercise all the powers, rights and duties of the Crown as a shareholder.

The utility argued that s. 6(1) made it an agent of the Crown “for all purposes with power to act only as agent”. Sheppard J.A. said that he had difficulty with that submission because it added words which were not present in the section. Moreover, he pointed out at p. 31 of his reasons that

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even if those words had been in the section “the agency so defined does not necessarily bring the agent within the immunity”. The issue was whether the utility had “by the statute in question become an agent within the prerogative” so as to be entitled to the Crown’s immunity. This had to be determined by the true interpretation of the statute as a whole. Sheppard J.A. said that:

In construing the statute, regard should be had to those tests applied in determining whether or not there is such an agency as to come within the prerogative of the Crown and the immunity from discovery.

He found that the utility was not entitled to the Crown’s immunity.

In the course of his reasons Sheppard J.A. considered whether the corporation had a contractual capacity apart from the Crown and he reviewed the powers of the corporation, including the power to sue and be sued and the power to enter into contracts in its own name. At page 35 he concluded that the utility could aptly be described in the words of Lord Justice Denning (as he then was) in Tamlin v. Hannaford, [1950] 1 K.B. 18, at p. 24:

In the eye of the law, the corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the King. It is, of course, a public authority and its purposes, no doubt, are public purposes, but it is not a government department nor do its powers fall within the province of government.

DesBrisay C.J.B.C., the other member of the majority in the British Columbia Power Corp. case, held that since s. 6(1) did not expressly designate the utility as an agent of the Crown for all purposes, it was not entitled to assert Crown immunity from discovery when it was acting pursuant to the directions of the legislature rather than as agent of the Crown. In my view, however, the reasoning of Sheppard J.A. embraces the broader principle that a legislative pronouncement to the effect that a corporation is a Crown agent

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for all its purposes does not deprive the corporation of the capacity to act for purposes of its own as opposed to those of the Crown. For example, in Conseil des Ports Nationaux the National Harbours Board had been deemed a Crown agent for all the purposes of the National Harbours Board Act. This did not prevent the courts from finding that the National Harbours Board was sufficiently independent from the Crown that it could be held personally liable for tortious acts committed in the course of carrying out its mandate and that it could be enjoined from causing the plaintiffs further injury through such acts.

I do not think that Metropolitan Meat Industry Board v. Sheedy, [1927] A.C. 899, and Formea Chemicals Ltd. v. Polymer Corporation Ltd., [1968] S.C.R. 754, are at all in conflict with this reasoning. In Sheedy the Judicial Committee of the Privy Council considered the question whether the Board was entitled to assert the Crown’s priority in the collection of debts owed to it by a company in liquidation. The court examined the legislation setting up the Board and found that it was a body with discretionary powers of its own. Accordingly, it determined that the Board could not be described as an agent of the Crown. The court observed at p. 905 that “Even if a Minister of the Crown has power to interfere with them [the Board], there is nothing in the statute which makes the acts of administration his as distinguished from theirs”. This observation, in my view, simply confirms that, viewed as a whole, the statute could not be said to have subjected the Board to the de jure control of the Crown.

In the Formea Chemicals case this Court addressed the question of whether the respondent Crown corporation had infringed the appellant’s patent. The majority of the Ontario Court of Appeal (per McLennan J.A.) held that Formea could not maintain an action of patent infringement against Polymer because the latter was immune from suit on the basis that it was an agent

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of the Crown ([1967] 1 O.R. 546). Wells J.A. dissented.

Mr. Justice Martland, writing for this Court, held that Formea’s appeal should be dismissed. He said at p. 758:

While I have reached the conclusion that the appeal fails, my reasons are not the same as those of the majority in the Court of Appeal.

It is unnecessary to determine, in the circumstances of the present case, what may be the liability of an agent of the Crown, which, without lawful authority, infringes upon the rights of others. I do not base my decision upon, nor do I adopt the general proposition that an action in tort will not lie as against an agent of the Crown.

Mr. Justice Martland decided the case on the basis that s. 19 of the Patent Act which gave the Crown the right to use the patent accrued to the benefit of Polymer because it was a Crown agent. He did not approach the case as a claim of Crown immunity by Polymer but rather as a question of the construction of s. 19 of the Patent Act to determine whether the right conferred by it on the Crown was available to Crown agents.

This Court’s recent decision in Canadian Broadcasting Corporation v. The Queen deals, in my view, with a somewhat different situation. In that case the question was whether the C.B.C. could assert Crown immunity from prosecution for broadcasting an obscene film. The Radio (T.V.) Broadcasting Regulations expressly prohibited the broadcast of any obscene presentation. The Court held that although the C.B.C. was by statute declared to be a Crown agent for all its purposes, it could hardly be within the scope of its purposes to present a film which the regulations prohibited it from broadcasting. The fact that this analysis was apt for the case before the Court does not in my estimation mean that the only way an agent who has been designated by statute as a Crown agent for all purposes can forfeit Crown immunity is by committing an act which lies outside the scope of its statutory purposes.

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I would approach the issue in the present case by following the path laid out by the authorities already referred to. How then do they apply?

In my view there is nothing in the governing statutes of either of the respondents to indicate that they were expressly or impliedly authorized to carry out their statutory purposes by engaging in violations of the Combines Investigation Act. It may be that the respondents could mount a case that the only way in which they could carry out their mandate effectively was through the acts alleged by the Crown. This question is not, however, before the Court at this stage of the proceedings and any resolution of the issue would have to await the outcome of a factual inquiry. It seems to me, therefore, that neither respondent can be said to be entitled at this stage to assert Crown immunity under the first step of the two-step test for immunity i.e. express or implied authorization.

Turning to step two—the de jure control test—I think that a distinction must be drawn between Uranium Canada and Eldorado. Uranium Canada operates under the direction of the Minister of Energy, Mines and Resources and exercises its powers “subject to the approval of the Governor in Council”. The identity between Uranium Canada and the Crown is accordingly just about as close as it could be. If the Governor in Council approved the alleged illegal acts of Uranium Canada I agree that Uranium Canada should be entitled to the Crown’s immunity.

Eldorado, on the other hand, has a wide measure of latitude with respect to the way in which it exercises its corporate powers. Indeed, I can find nothing in the governing legislation or in its Letters Patent to require it to respond to government directives. It is trite law that a corporation is a separate entity from its shareholders and that it is to the corporation and not the shareholders that the directors’ duties are owed. It seems to me, therefore, that Eldorado’s capacity exceeds its authority as agent of the Crown and that it can have “purposes” of its own. If this is so, I do not believe

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that its agency status is conclusive of its right to immunity.

The corporate powers of Eldorado are found in its Letters Patent and Supplementary Letters Patent and in The Companies Act, 1934, 1934 (Can.), c. 33, pursuant to which it was incorporated. Under its principal objects it has the usual powers of a mining company in relation to the exploration for and development of mines and minerals. These powers were expanded by Supplementary Letters Patent in 1968 to add:

and to purchase, lease, mine, refine, process and sell uranium, zirconium or any other material or equipment relative to the nuclear industry.

It also has extensive ancillary powers under both The Companies Act, 1934 and the Government Companies Operation Act, R.S.C. 1970, c. G-7, including the power to contract in its own name, employ its own officers and servants, and sue and be sued in its own name.

There is nothing in the Letters Patent, Supplementary Letters Patent or the governing statutes to permit the government or the Minister to interfere with the operation of the corporation. I note, for example, that pursuant to s. 73 of the Financial Administration Act, R.S.C. 1970, c. F-10, “the Governor in Council may make regulations with respect to the conditions upon which an agency corporation may undertake contractual commitments”. An “agency corporation” means a corporation named in Schedule C of the Act and Uranium Canada is a Schedule C corporation. Eldorado, however, is a “proprietary corporation” or a Schedule D corporation for purposes of the Act and no similar powers of interference in corporate operations is authorized in respect of this type of Crown corporation. Article 8 of the Financial Administration Act provides the government only with a certain element of fiscal, as opposed to operational, control over proprietary or Schedule D corporations. It is, in my view, quite unrealistic to treat Eldorado either as a matter of fact or a

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matter of law as the alter ego of the Crown in exercising all its powers.

In my view the preceding analysis is in accordance not only with authority but with sound policy. It seems to me that when Parliament wishes to give the executive the special powers and immunities it requires to carry out particular government responsibilities, it should do so in clear and unequivocal terms and not rely on either the common law doctrine of Crown immunity or s. 16 of the Interpretation Act. I think this is particularly true when it wishes to authorize illegal acts. I see no reason why the Court should contribute to a weakening of Parliamentary control over the executive branch of government by holding that a statutorily conferred agency status is conclusive of the agent’s right to immunity.

I have serious doubts that Parliament ever intended the respondents to have a carte blanche to engage in illegal activities on behalf of the Crown and to encourage other citizens to do likewise. The words of Taschereau J., dissenting in Canadian Broadcasting Corporation v. Attorney-General of Ontario, supra, at p. 195 come readily to mind:

I am quite satisfied that it never entered the mind of Parliament that C.B.C. could not be reached by the statute, while all the other private stations, not agents of the Crown, and which are now on an equal footing with the appellant, would be amenable to the law.

We might ask in this case whether Parliament ever contemplated that the respondents would go about the implementation of their statutory purposes by means of an illegal conspiracy with others, counting on the protection of their Crown immunity and leaving their co-conspirators to the full rigours of the law. In the case of Uranium Canada we at least have the comfort of knowing that the corporation is incapable of acting without the approval of the Governor in Council. With respect to Eldorado we have no comfort at all.

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For the reasons given I would dismiss the appeal with respect to Uranium Canada and allow it with respect to Eldorado.

Appeals dismissed, MCINTYRE and WILSON JJ. dissenting in part.

Solicitor for the appellant: Roger Tassé, Ottawa.

Solicitors for the respondent Eldorado Nuclear Ltd.: Aird & Berlis, Toronto.

Solicitors for the respondent Uranium Canada Ltd.: Gowling & Henderson, Ottawa.