Roman Corp. v. Hudson's Bay Oil & Gas Co., [1973] SCR 820

Supreme Court of Canada

Roman Corp. v. Hudson’s Bay Oil & Gas Co., [1973] S.C.R. 820

Date: 1973-05-07

Roman Corporation Limited and Stephen B. Roman (Plaintiffs) Appellants;

and

Hudson’s Bay Oil and Gas Company Limited, The Right Honourable Pierre E. Trudeau and The Honourable John J. Greene (Defendants) Respondents.

1973: February 28, March 1, 2; 1973: May 7.

Present: Fauteux C.J. and Abbott, Martland, Judson, Ritchie, Spence and Laskin JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Crown—Ministers—Statements by Ministers of the Crown as to Government policy restricting foreign ownership of uranium resources—Proposed sale not completed—No liability in tort on part of Ministers.

On February 24, 1970, the appellant R, acting on behalf of the appellant corporation, on his own behalf and on behalf of certain other shareholders of D Ltd. (a company operating a mine at Elliott Lake, Ontario, for the production of uranium oxide) entered into an oral agreement with M, acting on behalf of HB Co., for the sale by the appellants to HB Co. of shares which they owned or controlled in D Ltd. at $65 per share up to the maximum of 1,600,000 shares. Shortly thereafter, the respondent, the Prime Minister, announced in the House of Commons that the Government of Canada had learned of the agreement and was concerned that a substantial ownership interest in D Ltd. might be passing into non-Canadian hands. He said that the Government would, if necessary, introduce an amendment to the Atomic Energy Control Act to prevent the transaction.

R met with the Prime Minister and gave him details of the proposed sale. Subsequently, the Prime Minister advised R by telegram that the proposed transaction would not be acceptable to the Government within the terms of guidelines announced in the House of Commons by the respondent, the Minister of Energy, Mines and Resources. Some months later, a statement with respect to the carrying out of Government policy was issued from the Minister’s office.

As a result of the statements made by the respondent Ministers, the appellants and HB Co. did not proceed to complete their agreement. The appellants

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commenced an action claiming, as against the said respondents, a declaration that they had committed a tort or torts against the appellants, and damages in the amout of $104,000,000. The torts alleged to have been committed were: (i) wrongful procurement or attempted procurement of a breach of contract; (ii) conspiracy to harm the appellants; (iii) intimidation of the appellants; and (iv) unlawful interference with the economic interests of the appellants.

The respondent Ministers brought a motion for, inter alia, an order striking out the statement of claim as against them as disclosing no reasonable cause of action. The judge who heard the application concluded that the action as against the said respondents should be dismissed and an appeal from his judgment was dismissed by a unanimous decision of the Court of Appeal. The appellant corporation and R then appealed to this Court.

Held: The appeal should be dismissed.

If valid legislation were enacted to prevent the control of Canadian uranium resources passing from Canadian to non-Canadian hands and it prevented performance of a contract for transfer of such control, there was no doubt that the parties to the agreement would have no cause of action arising out of the enactment of such legislation. A statement of policy made bona fide by a Minister of the Crown of the intention of Government to enact such legislation cannot give rise to a claim in tort for inducing a breach of contract if the parties to the contract elect, in the light of that statement, not to proceed to perform the contract.

In order to succeed on the claim in tort for intimidation, the appellants would have to disclose that they had sustained damage by reason of a threat, made by the respondents, of an unlawful act. A declaration made in good faith by a Minister of the Crown as to Government policy and the intent to implement that policy by appropriate legislation is not a threat of an unlawful act.

On the assumption that on the facts pleaded it could be said that the respondents combined together, the facts did not establish a combination which would give rise to the tort of conspiracy. There was no suggestion that the actions of the respondents were taken with a view to injuring the appellants.

Finally, a claim for unlawful interference with the appellant’s economic interest, in the circumstances of

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this case, would have to be brought within the scope of one or more of the three causes of actions referred to above.

Roncarelli v. Duplessis, [1959] S.C.R. 121, distinguished; Crofter Hand Woven Harris Tweed Co. Ltd. v. Veitch, [1942] A.C. 435, referred to.

APPEAL from a judgment of the Court of Appeal for Ontario[1], dismissing an appeal from a judgment of Houlden J. Appeal dismissed.

J. Sedgwick, Q.C., P.B.C. Pepper, Q.C., and P.S.A. Lamek, for the plaintiffs, appellants.

J.T. Weir, Q.C., and B. Finlay, for the defendants, respondents.

The judgment of the Court was delivered by

MARTLAND J.—The appellants commenced an action against the respondents in the Supreme Court of Ontario, claiming, as against the individual respondents, who are hereinafter referred to as “the respondents”, a declaration that they had committed a tort or torts against the appellants, and damages in the amount of $104,000,000. As against the corporate respondent, hereinafter referred to as “Hudson’s Bay Company”, they sought a declaration that an agreement between the appellants and that company of February 24, 1970, was a valid and existing contract between the parties. The torts alleged to have been committed by the respondents were:

(i) wrongful procurement or attempted procurement of a breach of that contract;

(ii) conspiracy to harm the appellants;

(iii) intimidation of the appellants; and

(iv) unlawful interference with the economic interests of the appellants.

In support of their claims the appellants pleaded the following facts: Hudson’s Bay Company is incorporated under the laws of Canada, with head office at Calgary, Alberta. One John C. McLean was at all material times a director of Hudson’s Bay Company and, also, president of Continental Oil Company, which

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held more than 60 per cent of the outstanding common shares of Hudson’s Bay Company. On February 24, 1970, the appellant Roman, acting on behalf of the appellant corporation, on his own behalf and on behalf of certain other shareholders of Denison Mines Limited, hereinafter referred to as “Denison”, entered into an oral agreement with John C. McLean, acting on behalf of Hudson’s Bay Company, for the sale by the appellants to Hudson’s Bay Company of shares which they owned or controlled in Denison at $65 per share up to a maximum of 1,600,000 shares. The purchase price was to be paid, as to approximately one‑half, in cash, on closing, together with delivery of approximately $10,000,000 aggregate par value of preferred shares of Hudson’s Bay Company, the balance to be paid on February 15, 1971. The contemplated closing was to be at the end of March, 1970. Time was not of the essence of the agreement. The sale would comprise approximately 38 per cent of the outstanding shares of Denison, which operates a mine at Elliot Lake, Ontario, for the production of uranium oxide.

While it was not specifically pleaded, it is not contested that Continental Oil Company is an American corporation controlled by non-Canadians.

The statement of claim goes on to refer to an announcement in the House of Commons on March 2, 1970, by the respondent, the Prime Minister, the Right Honourable Pierre E. Trudeau, hereinafter referred to as “the Prime Minister”, that the Government of Canada had learned of the agreement, above mentioned, and was concerned that a substantial ownership interest in Denison might be passing into non-Canadian hands. He said that the Government would, if necessary, introduce an amendment to the Atomic Energy Control Act to prevent the transaction. It is pleaded that the solicitors for the parties had prepared a formal agreement by

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the end of March, 1970, but execution was delayed in the light of this announcement.

The appellant Roman met with the Prime Minister on March 4, 1970, and gave him the details of the proposed sale. The Prime Minister told Mr. Roman that the appellants would be informed of the guidelines to be decided on by the Government.

On March 19, 1970, the Prime Minister advised Mr. Roman by telegram that the proposed transaction would not be acceptable to the Government within the terms of the guidelines announced that day by the respondent, the Honourable John J. Greene, Minister of Energy, Mines and Resources, hereinafter referred to as “the Minister”. In this statement, made in the House of Commons, by the Minister, it was stated that the Government would pass regulations providing for restrictions on foreign ownership of any uranium property or plant in Canada.

On September 18, 1970, the Minister, in a statement issued from his office, said that, to carry out Government policy, legislation would be required, and that, pending such legislation, certain categories of transactions relating to the uranium industry in Canada would be approved. In the actual statement it was said that:

The first of these categories involves cases in which, under an executed and binding legal agreement an obligation had arisen prior to March 2nd 1970 for the transfer of a beneficial interest in a uranium property in Canada from one party to another. These agreements will be allowed to be carried out by the parties according to their terms.

The statement of claim goes on to allege that up to its date (December 1, 1970) no regulations had been enacted and no legislation had been introduced. It is pleaded that the appellants and Hudson’s Bay Company did not complete the transaction because of the statements made by the respondents.

Prior to the issuance of the statement of claim, Denison had issued a writ of summons, on October 1, 1970, against the Attorney Gener-

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al of Canada, claiming a declaration that the Atomic Energy Control Act, R.S.C. 1952, c. 11, as amended, was ultra vires.

Subsequent to the issuance of the statement of claim, on January 18, 1971, a writ of summons was issued by the appellants against the Minister and the Atomic Energy Control Board, seeking, as against the Minister, a declaration that there is no existing bar, under the laws of Canada, to their sale of their shares in Denison, and, as against the Board, a declaration that the Board was not required or entitled to carry out or implement the directions contained in the Minister’s announcement of September 18, 1970.

On December 23, 1970, the respondents applied for an order striking out certain portions of the statement of claim on the ground that they would tend to prejudice the fair trial of the action; also, for an order to strike out the statement of claim, as disclosing no reasonable cause of action, and dismissing the action as against the respondents.

In the reasons for judgment of the learned judge who heard the application, it is said:

This application might have been argued on the basis that, in acting as alleged in the statement of claim, the defendants Trudeau and Greene were merely carrying out their duties as Prime Minister of Canada and as a Minister of the Crown. The plaintiffs submit that they do not question the good faith of the defendants and the statement of claim contains no allegation that the defendants were acting with malice or for personal gain. However, counsel for the defendants Trudeau and Greene have seen fit to argue the application on narrower grounds, and I shall, therefore, deal with it on the basis of the arguments which have been advanced to the Court.

The narrower grounds to which he refers were the contention that the statements made in the House of Commons were privileged and that the statements in the Prime Minister’s telegram

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of March 19, and the Minister’s press release of September 18, were extensions of the statements made in the House of Commons. The learned judge agreed with this submission, and struck out the paragraphs of the statement of claim mentioned in the notice of motion. However, he went on to say this:

It is contended by counsel for the plaintiff that their clients have been unfairly treated, and the fact that no court has previously granted a remedy in these circumstances is no reason why the Court should not recognize a new cause of action as has been done in cases such as Hedley Byrne and Co. Ltd. v. Heller and Partners Ltd. [1964] A.C. 465; [1963] 2 All E.R. 575. They submit that, as a result of the actions of the defendants Trudeau and Greene, heavy losses have been suffered by the plaintiffs, and the plaintiffs should have an opportunity to present their case to a court to ask for compensation. If I had any doubt as to whether or not the plaintiffs have a cause of action, I should, of course, refuse this application and leave this matter to be decided at a trial. However, on a careful examination of the statement of claim, I am satisfied that the plaintiffs have no cause of action against the defendants Trudeau and Greene.

It is of the essence of our parliamentary system of government that our elected representatives should be able to perform their duties, courageously and resolutely, in what they consider to be the best interests of Canada, free from any worry of being called to account anywhere, except in Parliament. As I have pointed out earlier in this judgment, there is no allegation that the defendants Trudeau and Greene acted with malice or for personal gain; their bona fides is in no way attacked. Surely the actions which are alleged against them in the statement of claim are exactly what one would have expected of persons in their position, when confronted with a transaction which they believed to be detrimental to the best interests of this country.

He concluded that the action as against the respondents should be dismissed with costs.

The Court of Appeal, by unanimous decision, dismissed an appeal by the appellants from this

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judgment. Dealing with the statements made in the House of Commons, Aylesworth J.A., speaking for the Court, said this:

As to the first category, I respectfully agree with the learned trial Judge that the respondents cannot be called upon to plead to or to defend against, in any ordinary court of law, the allegations concerning statements they made in the House of Commons. For more than one hundred years no such court has entertained an action based upon such statements, declaring it to be within the absolute privilege of the House itself to deal with them as the House may see fit. I am, of course, at the moment confining my attention to statements made in good faith in the House and in the conduct of the business of the House, which is precisely the case as to the two statements immediately under consideration and described as falling within the first category I have outlined.

Dealing with statements which were made outside the House of Commons, he said:

What is tortious in the alleged acts of the respondents at the meeting? As responsible Ministers of the Crown, they explained to the appellant Roman, a vitally interested party, the policy of the Government as already announced in the House, namely, that “if necessary, the Government will introduce an amendment to the Atomic Energy Control Act, to take effect as of today, to prevent such a transaction”, and, it is alleged, agreed as to what the Government “should” do to help the appellants. Admittedly, their intentions in all they did or said were bona fide and in promotion of what, as Ministers of the Crown, they thought to be in the public interest. Moreover, the Court can take judicial notice of the well-known fact that the subject matter dealt with, namely, foreign ownership of Canadian resources, was and is of public concern. The lawful justification for their alleged actions at the meeting is thus so plain as to completely sweep away any foundation whatsoever for a claim in tort based on inducement to breach of contract (if there were inducement as contrasted with mere advice), conspiracy, intimidation or otherwise.

While much of what has been said already applies equally to them, I turn now specifically to the allega-

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tions respecting the telegram dispatched to appellant Roman by respondent Trudeau and the press release issued by the respondent Greene. The learned trial Judge thought that these actions or statements by the respondents were mere extensions of the statements made by the respondents in the House and, therefore, were protected with the same absolute privilege as those communications made in the House itself. That is to say, that these actions were, in essence, “proceedings in Parliament” within the extended meaning of that hallowed phrase as judicially interpreted and applied. Again, I respectfully agree.

It is from this judgment that the present appeal is bought to this Court. Without dissenting from the views expressed in the Courts below as to the privilege attached to statements made in Parliament, I would prefer to deal with this appeal on the broader issue, on which those Courts have also expressed an opinion. That issue is as to whether the appellants have a cause of action because they and Hudson’s Bay Company did not complete the contract for the sale of shares in Denison by the appellants to Hudson’s Bay Company by reason of statements made in good faith by the respondents, both Ministers of the Crown, as to the intention of the Government of Canada to take steps, by regulation or by legislation, to prevent a change of control of Canadian uranium resources from Canadian to non-Canadian hands.

I might point out at the outset that the appellants’ claim is not framed as one for loss of profits to the appellants by reason of interference with their business interests. The claim in damages is for $104,000,000, which is the total purchase price of the shares proposed to be sold. The appellants still own those shares, and it cannot be conceived that Hudson’s Bay Company would pay that amount for shares which have no present value in the appellants’ hands.

I might also point out, in passing, that the statement of guidelines made by the Minister on

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September 18, 1970, contemplated that an executed and binding legal agreement which had arisen prior to March 2, 1970, for the transfer of a beneficial interest in a uranium property in Canada would be allowed to be carried out. The appellants, in their statement of claim, plead that a legally binding oral agreement for the sale of the Denison shares was made on or about February 24, 1970, as evidenced by a written memorandum signed by Stephen B. Roman and John C. McLean.

The appellants contend that the respondents wrongfully procured a breach of contract between the appellants and Hudson’s Bay Company. There is, however, no plea of any breach by Hudson’s Bay Company in respect of its contract with the appellants. On the contrary, the appellants claim, as against Hudson’s Bay Company, a declaration that the agreement of February 24, 1970, is a valid and subsisting contract between the parties. What has occurred here, as stated in the pleadings, is that the parties did not, after the statements made by the respondents, proceed to complete their agreement. Clearly, this was because they apprehended that legislation, by way of regulation or statute, would be enacted to prevent the control of Canadian uranium resources passing from Canadian to non-Canadian hands.

If valid legislation for that purpose were enacted and it prevented performance of a contract for transfer of such control, there is no doubt that the parties to the agreement would have no cause of action arising out of the enactment of such legislation. A statement of policy made bona fide by a Minister of the Crown of the intention of Government to enact such legislation cannot, in my opinion, give rise to a claim in tort for inducing a breach of contract if the parties to the contract elect, in the light of that statement, not to proceed to perform the contract.

The appellants also make a claim in tort for intimidation. In order to succeed under this head, the facts relied upon by the appellants

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would have to disclose that they had sustained damage by reason of a threat, made by the respondents, of an unlawful act. In my opinion, it cannot be said that a declaration made in good faith by a Minister of the Crown as to Government policy and the intent to implement that policy by appropriate legislation is a threat of an unlawful act. On the contrary, it is part of a Minister’s duty to the public to disclose that policy from time to time.

The appellants allege a conspiracy by the respondents to harm the appellants. The leading English authority on the tort of conspiracy is Crofter Hand Woven Harris Tweed Company, Limited v. Veitch[2]. On the assumption that on the facts pleaded it could be said that the respondents combined together, the facts do not establish a combination which would give rise to the tort of conspiracy. I would apply the statement of Lord Simon L.C. in the above case at pp. 444 and 445:

The question to be answered, in determining whether a combination to do an act which damages others is actionable, even though it would not be actionable if done by a single person, is not “did the combiners appreciate, or should they be treated as appreciating, that others would suffer from their action”, but “what is the real reason why the combiners did it?” Or, as Lord Cave puts it, “what is the real purpose of the combination?” The test is not what is the natural result to the plaintiffs of such combined action, or what is the resulting damage which the defendants realize or should realize will follow, but what is in truth the object in the minds of the combiners when they acted as they did.

There is no suggestion in the statement of claim that the actions of the respondents, of which it complains, were taken with a view to injuring the appellants. What they were doing was to enunciate a policy in relation to the control of uranium resources in Canada, the

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effect of which, if implemented, could prevent the performance of the contract.

The appellants seek a declaration that the respondents committed a tort of unlawful interference with the appellants’ economic interest. A claim for such interference, in the circumstances of this case, would have to be brought within the scope of one or more of the three causes of action already discussed.

Counsel for the appellants cited the judgment of this Court in Roncarelli v. Duplessis[3]. The two cases are hardly analogous. In the Roncarelli case the defendant, who was the Prime Minister and the Attorney-General of Quebec, without legal justification and for a wrongful purpose caused the Quebec Liquor Commission to cancel the plaintiff’s liquor licence, resulting in substantial damage to his business. He was not acting in the exercise of any of his official powers. In the present case, in my opinion, the respondents, as Ministers of the Crown, were acting in the performance of their public duties in enunciating, in good faith, Government policy.

I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the plaintiffs, appellants: Fraser & Beatty, Toronto.

Solicitors for the defendants, respondents, The Rt. Hon. P.E. Trudeau and The Hon. J.J. Greene: Weir & Foulds, Toronto.