T-1147-71
Georgette Larochelle and Maurice Côté as the
executors of Emile Couture (Plaintiffs)
v.
The Queen (Defendant)
Trial Division, Pratte J.—Montreal, November 17
and 19, 1975.
Crown—Whether Crown employees created false impression
that "C" authorized to operate cablevision undertaking—
Whether actions of Crown officials cause of alleged dam-
ages—Radio Act, R.S.C. 1952, c. 233 as am. S.C. 1952-53, c.
48; S.C. 1955, c. 57—General Radio Regulations, Pt. II, s.
8(2)—Broadcasting Act, S.C. 1967-68, c. 25.
C applied to the Minister of Transport, under the Radio Act
for authorization to operate a cablevision system. On March
26, 1968 he received two licences, one issued on March 19,
1968, to expire on March 31, 1968, the other showing April 1,
1968 as its date of issue and March 31, 1969 as its expiry date.
Under the Broadcasting Act, which took effect April 1, 1968, C
required a licence from the CRTC to operate a cable system.
Unaware that the Minister of Transport had granted the
licence request (save for carriage of three stations), CRTC
officials wrote to C on April 18, 1968, the wording of which
letter assumed that no licence had been granted. Upon discov
ering that the application had been granted, CRTC officials
again wrote to C. It is claimed that this letter of May 7, 1968
dispelled any of Cs doubts as to the validity of his licence. He
then spent $154,295.16 in setting up the system. On December
24, 1968, he was denied a licence by the CRTC. Continuing Cs
suit, executors now claim: (1) that Department of Transport
employees erred in issuing a licence for the year beginning
April 1 as they should have known that the new Act would take
effect on April 1, (2) that Transport and CRTC officials were
at fault in writing letters to C implying that his licence was still
valid, and (3) that officials of both were negligent in failing to
inform C that the licence had become invalid.
Held, the application is dismissed. (1) The official involved
did not know that the new Act would come into force on April
1. (2) Even if the letters and circulars received by C after
April 1 had not been sent, he would have fallen victim to the
same error, based, as it was not on the correspondence, but on
the fact that he was granted a licence for the year beginning
April 1. (3) While an omission may give rise to liability, a
prerequisite is a legal duty to act, absent here. It was incum
bent on neither the Department of Transport nor the CRTC to
inform C of the new Act or its consequences. And, all these acts
considered together do not render defendant liable either.
Eaton v. Moore [1951] S.C.R. 470, applied.
ACTION.
COUNSEL:
W. Hesler and L. Y. Fortier for plaintiffs.
P. Coderre, Q.C., for defendant.
SOLICITORS:
Ogilvy, Cope, Porteous, Montgomery,
Renault, Clarke & Kirkpatrick, Montreal,
for plaintiffs.
Deputy Attorney General of Canada for
defendant.
The following is the English version of the
reasons for judgment delivered orally by
PRATTE J.: Plaintiffs are the executors of Mr.
Emile Couture, who died on September 11, 1972.
In continuance of the suit initiated by Mr. Cou-
ture, they are claiming the sum of $154,295.16
which is allegedly owing as compensation for
damage suffered by Mr. Couture through the fault
of the employees of respondent. It is claimed that
these employees, officials of the Department of
Transport and the Canadian Radio-Television
Commission (CRTC), through their fault led Mr.
Couture to believe that he had been authorized to
operate a cable tejevision undertaking (that is, an
undertaking which consists of picking up radio and
television signals with an antenna and then direct
ing them, by means of coaxial cables, to the receiv
ing sets of the customers). This mistaken belief, it
is alleged, led Mr. Couture to spend the amount
claimed for the purpose of erecting an antenna and
installing a cable system. This expenditure was
unnecessary since, contrary to what Mr. Couture
had been led to believe, the CRTC had not author
ized him to carry on his cable television undertak
ing, and had to refuse him this authorization on
December 24, 1968.
At this stage in the proceedings, the only point
at issue is the matter of respondent's liability. In
fact, the parties agreed at the hearing that if I
found in favour of plaintiffs on this question, the
problem of determining and assessing damages
would then be the subject of a reference in accord
ance with Rule 500 et seg.
In order to understand the evidence, it is neces
sary to be familiar with certain provisions of the
Radio Act as it existed before April 1, 1968, and
the new Broadcasting Act' that came into force on
that day. Indeed, the loss for which plaintiffs are
claiming compensation would not have occurred if
the "licence" granted to Mr. Couture pursuant to
the Radio Act had not been invalidated through
implementation of the new Broadcasting Act.
Before April 1, 1968, the Radio Act 2 required
anyone wishing to establish and operate a "radio
station" to obtain a licence from the Minister of
Transport. According to the regulations in force,
the licence expired on March 31 following the date
on which it was issued, and was thereafter renew
able from year to year (General Radio Regula
tions, Part II, section 8(2)). The requirement of
obtaining a licence applied to broadcasting sta
tions, an expression referring only to transmitting
stations, and to receiving stations, such as the one
with which we are concerned here. This legislation
was amended by the new Broadcasting Act, which
was assented to on March 7, 1968 and came into
force April 1, 1968 (the date set by a proclamation
of March 25 which was published on March 30,
1968, in the Canada Gazette).
This Act created a new agency, the Canadian
Radio-Television Commission, without whose
authorization it was henceforth forbidden to carry
on a "broadcasting undertaking", an expression
defined by the Act so as to include not only
broadcasting stations as interpreted in the old Act,
namely radio and television transmitting stations,
but also receiving stations. However, this new
Commission could only grant a licence for broad
casting (in the wide sense of the term) to those
stations that had obtained a technical construction
and operating certificate from the Minister of
Transport.
S.C. 1967-68, c. 25.
2 R.S.C. 1952, c. 233, as amended: S.C. 1952-53, c. 48 and
S.C. 1955, c. 57.
By the terms of the earlier Act, in order to carry
on a cable television undertaking, it was enough to
obtain a permit from the Minister of Transport.
Under the new Act, it was forbidden to establish
such an undertaking without having obtained a
technical certificate from the Minister of Trans
port, or to operate it without a licence from the
CRTC. In these circumstances, it is understand
able that the legislator felt it necessary to insert
some provisions in the new Act to cover the transi
tion. All that need be said of these provisions,
contained in sections 63 and 64, is that they were
not applicable to Mr. Couture, who accordingly as
of April 1, 1968 was immediately and without
transition bound by all the requirements of the
new Act.
Mr. Couture was a businessman from Thetford
Mines who had previously operated two enter
prises, the first for distributing beer and the second
for bottling mineral water. In 1965 he suffered
from heart trouble and his doctor recommended
that he reduce his activities. He then thought of
giving up his businesses to establish and operate a
cable television undertaking; he believed that in
this way he would provide himself with the income
he needed while following the advice of his doctor.
He took steps to carry out his plans, with the result
that on January 22, 1968, he sent the Minister of
Transport an [TRANSLATION] "application for
authorization to establish an earth station provid
ing a commercial broadcast receiving service". In
this application, Mr. Couture requested authoriza
tion to pick up (for retransmission by cable)
broadcasts from ten television and twelve radio
stations.
On March 19, 1968, the Chief of the Radio
Regulations Division of the Department of Trans
port wrote Mr. Couture to inform him that his
application had been granted in part: he had been
given authorization to pick up and retransmit by
cable nineteen of the twenty-two television and
radio stations mentioned in his application, and he
received assurances, with respect to the other three
stations, that his application was still being stud
ied; the letter also emphasized that because of the
regulations in force, Mr. Couture would have,
under penalty of revocation of his licence, to
undertake construction of his receiving station
within three months, so that it could be put into
service within nine months of the date of his
licence.
On March 26, 1968 the Minister of Transport
wrote Mr. Couture, sending him [TRANSLATION]
"Licence No. 508-400423 authorizing operation of
an earth station that would provide a commercial
broadcast receiving service in Thetford Mines,
Black Lake, Que.". Enclosed with this letter,
which was signed by a Mr. Harold Corbett, of
whom I shall have occasion to speak later, were,
apparently, two "radio station licences", both
bearing No. 508-400423; 3 one of the licences had
March 19, 1968 as its date of issue and March 31,
1968 as the expiry date; the date of issue of the
other licence was April 1, 1968, and its expiry date
was March 31, 1969. Bearing in mind the fact
that, under the provisions of the new Broadcasting
Act (which, by a proclamation on March 25, was
to come into force on April 1, 1968), the Minister
of Transport no longer had the power to authorize
the carrying on of broadcasting undertakings, it
may be asked how it was possible on March 26,
1968 for the Minister of Transport to issue a
licence dated April 1, 1968 to the applicant. When
questioned on this matter, Mr. Corbett stated that
on March 26 he did not know the date on which
the new Act would come into force; no one in the
Department knew it, he said, until the proclama
tion was published in the Canada Gazette on
March 30.
Mr. Couture stated that, after receiving the two
letters, he wasted no time in making the necessary
preparations so that his receiving station would be
ready for operation within the nine months allowed
him. At this time, he knew that a new broadcast
ing Act was about to come into force but, accord
ing to his testimony, he knew nothing of its con-
3 I say that these two licences were "apparently" enclosed
with the letter of March 26, 1968 because it is possible that the
March 19 licence was enclosed with the letter of March 19, not
that of March 26.
So as not to have to return to the subject later, I should point
out here that at the end of his argument counsel for the
plaintiffs claimed that the licence dated April 1, 1968 was
perhaps not sent to Mr. Couture until some time in May.
Although such a possibility is compatible with the documents
produced, it cannot be considered. It is contrary to an allega
tion in the statement of claim admitted by defendant, and it is
contradicted by the testimony of Mr. Couture himself.
tents, and indeed had no idea that it would
invalidate the licence that had just been granted
him.
On April 8, 1968, an employee of the Depart
ment of Transport, Mr. Foucault, wrote the fol
lowing letter to Mr. Couture:
[TRANSLATION] This letter is to inform you that the new
Broadcasting Act (Chapter 25 of the 1967/68 Statutes), con
sisting of amendments to the Radio Act, was proclaimed in
force on April 1, 1968. Under this legislation, licences for cable
television systems (CATV) will be issued by a new body, the
Canadian Radio-Television Commission.
Section 63 of the said Broadcasting Act, a copy of which is
attached hereto, provides a transitional period for cable televi
sion systems. Consequently, if you desire to continue operating
your system(s), you will be required to file with the Commis
sion, within 90 days of April 1, 1968, an application for a
broadcasting licence for each system concerned.
The address of the Canadian Radio-Television Commission
is 48 Rideau Street, Ottawa, Ontario.
Meanwhile, on receipt of the renewal taxes payable we will,
as in the past, issue licences for earth stations providing a
commercial broadcast receiving service, with April 1, 1968 the
date of issue, for systems in which the licences expired on
March 31, 1968.
In view of the foregoing, if you intend to continue operating
your cable television systems in the 1968/69 fiscal year, and
you have not yet paid the renewal taxes, please forward the
twenty-five dollar fee for each system concerned to our Radio
Regulations office in your area as soon as possible.
The letter sent to Mr. Couture was to inform
him of the substance of the new Act and to advise
him that he could not carry on his undertaking
without first obtaining a licence from the CRTC.
This being the case, it is regrettable that the letter
was not worded more clearly and it is amazing
that the Department of Transport in this letter
expressed its intention to continue issuing licences
that, under the new Act, it no longer had the
power to grant. In any case, as far as Mr. Couture
was concerned, this letter does not seem to have
achieved its end. Indeed, Mr. Couture stated that
the letter made no impression on him, so convinced
was he of the validity of the licence that the
Minister of Transport had just issued to him.
Nevertheless, on reading this letter of April 8,
1968, Mr. Couture did understand that he had to
apply for renewal of his licence, since on April 19
he sent the following letter to the Department of
Transport:
[TRANSLATION] I have been informed by the Regional Su
perintendent of Radio Regulations that I must file a new
application for a broadcasting licence.
In accordance with the new Act, therefore, I hereby apply for
the renewal of my licence.
P.S. Enclosed is a cheque for $25.00, for renewal of licence no.
508/400423.
It should be stated at the outset that the Depart
ment of Transport did not acknowledge receipt of
this application until June 19, when it replied as
follows:
[TRANSLATION] I refer to your letter of April 19, 1968 in
which you apply for a new licence authorizing you to continue
operation of your cable television system in Thetford Mines,
Black Lake, Que.
You are undoubtedly aware that the new Broadcasting Act
entered into force on April 1, 1968. Under this Act the matter
of licences for broadcast receiving undertakings (CATV) is
under the authority of the Canadian Radio-Television Commis
sion, 48 Rideau Street, Ottawa. The aforementioned letter has
accordingly been forwarded to the Commission.
The sum of $25.00, which came with the above-mentioned
letter as a licence renewal fee, has been applied to licence no.
508-400423, issued on April 1, 1968.
Let us go back to April 1968. After Mr. Cou-
ture replied, as I indicated, to the letter sent him
by the Department of Transport on April 8, he
received a letter from the CRTC dated April 18,
1968. This letter came from the Secretary of the
Commission, F. K. Foster, and was signed by
Harold Corbett, who had been transferred from
the Department of Transport to the CRTC on
April 1, 1968; it read as follows:
[TRANSLATION] We refer to your application dated January
22, 1968 for authorization to establish and operate a cable
television system at Thetford Mines and Black Lake, Que,
which you submitted to the Department of Transport.
When the new Broadcasting Act came into force on April 1,
1968, the Department forwarded your application to the
Canadian Radio-Television Commission. A copy of the Broad
casting Act (1968) and the procedural regulations may be
obtained from the Queen's Printer, Ottawa, Ontario.
There were two reasons why this letter was sent
to Mr. Couture. The first is the fact that its signer
did not know that in March 1968 the Minister of
Transport had already granted the applicant the
licence he had applied for on January 22, except
for three of the twenty-two stations mentioned in
his application. The second is the fact that
employees of the Department of Transport had
decided that on April 1, 1968 when the new Act
was put into effect, all licence applications
received would be forwarded to the CRTC, for
action by them.
Upon receipt of this letter, the wording of which
assumed that he had not been granted a licence,
Mr. Couture was, as he stated, confused and wor
ried. It appears he even contacted representatives
of Bell Canada (the company responsible for
installing the coaxial cable network he needed),
who then suspended the preliminary work which
had already been started. However, surprising as
this may seem, he went neither to the CRTC nor
to a lawyer for advice on the validity of the licence
he had already obtained.
The matter proceeded no further until
employees of the CRTC discovered at the begin
ning of May 1968 that the application for a licence
submitted by Mr. Couture on January 22 had been
approved by the. Minister of Transport, with the
exception of three of the stations mentioned in the
application. When this error was discovered a new
letter, dated May 7, 1968 and signed by Harold
Corbett for the Secretary of the CRTC, F. K.
Foster, was sent to Mr. Couture. It reads as
follows:
[TRANSLATION] We refer to our letter dated April 18, 1968
regarding your application of January 22, 1968, for authoriza
tion to establish and opérate a cable system in Thetford Mines
and Black Lake, Que.
It has been brought to our attention that your application
was approved by the Department of Transport in a •letter dated
March 19, 1968. However, the Department indicated to you
that your plan to receive and distribute broadcasts from
WPTZ-TV in Plattsburg, N.Y., CFCF-TV in Montreal and
CKVL-FM in Verdun, Que., was still being considered.
In these circumstances, our letter of April 18, 1968 should
have informed you that the part of your application dated the
preceding January 22, 1968 has been forwarded to the Canadi-
an Radio-Television Commission.
Mr. Couture stated that when he read this
letter, his doubts dating from April 18 as to the
validity of his licence were dispelled; this was, he
said, because he was told to disregard the letter of
April 18. He then contacted Bell Canada again
and they resumed the preliminary work they had
recently abandoned; Mr. Couture proceeded with
his endeavours to ensure that his receiving station
would be in service within the nine months set by
the Regulations.
If we believe Mr. Couture on this subject, he
was so convinced of the validity of the licence
granted by the Minister of Transport that he paid
no attention to the letters sent to him by the
CRTC at the end of May and in August 1968.
Furthermore, in this case they were not letters
addressed to him personally but simply circulars
without his name on them; they were apparently
addressed to anyone carrying on a cablevision
undertaking. As a result, Mr. Couture testified
that he believed that the circular dated May 24
did not concern him since he held a licence, and
that it only involved operators who [TRANSLA-
TION] "were not covered by the Act". The circular
dated May 24, 1968 was worded as follows:
[TRANSLATION] Please find enclosed a supply of forms for
licence application to establish and carry on a broadcast receiv
ing undertaking.
These forms should be completed and mailed to us in fifteen
copies along with all appendices and related documents. Incom
plete applications will be returned to the applicant for
completion.
By the terms of section 63 of the Broadcasting Act, all
operators of a cable television system must file with the Com
mission a licence application to establish and carry on a
broadcast receiving undertaking by at the latest June 29, 1968.
Applications should be sent to Mr. F. K. Foster, Secretary of
the Canadian Radio-Television Commission, 48 Rideau Street,
Ottawa, Ontario.
Despite his belief that the circular did not apply
to him, Mr. Couture nevertheless acted on it by
sending fifteen copies of an [TRANSLATION]
"application for a licence to establish and operate
a broadcast receiving station in Canada" to the
CRTC on June 28, 1968. When he was reminded
of this fact, Mr. Couture tried to explain his action
in two ways: first he said (see "Evidence of Plain
tiff received out of court", page 20) that he
believed that this application only concerned the
three stations which he had not been authorized to
pick up by the Minister of Transport; he then
stated that when he filed this application he
believed he was only explaining what he was doing.
Of the two explanations, the first is hardly likely
since, in the licence application which he sent to
the CRTC on June 27, 1968, the application men
tioned only one of the three stations which he had
not been authorized to pick up by the Minister of
Transport.
By his own account, still convinced of the validi
ty of his licence, Mr. Couture continued through
the summer of 1968 having the necessary work
done for the establishment of his undertaking. On
August 16 or 20 he received a second circular from
the CRTC, which read as follows:
PUBLIC ANNOUNCEMENT
August 1, 1968
Canadian Radio-Television Commissioners today expressed
their concern over the danger of false assumptions being held
by some CATV operators.
These operators are some of those licensed by the Depart
ment of Transport, as of March 30, 1968. They were allowed to
operate a Community Antenna Television (CATV) system, but
are establishing or expanding their facilities on the assumption
that a licence—under the Broadcasting Act—will automatical
ly be issued by the Commission.
This is false. The Commission has not been authorizing such
establishments or expansions being made since April 1st, 1968.
Under Section 63(2) of the Broadcasting Act, the Commis
sion feels that it is necessary to advise all concerned that any
establishment or expansion, made after April 1st, 1968, will
have no legal obligation recognized by the Commission.
It will be considered as non-existent, notwithstanding any
prior licence, until a decision has been reached by the Commis
sion following a public hearing.
Applications dealing with such an establishment, or an
expansion that has been already made, will be subject to the
opposition of interested parties.
Three further CRTC public hearings for 1968 have already
been announced. They are at Moncton, September 25th;
Regina, October 22nd; Ottawa, November 19th.
Mr. Couture stated that, upon reading this
"announcement" he did not conclude that the
licence he held did not allow him to operate his
undertaking; he said he held this false assumption
until the end of September, 1968. At that time,
when the construction of the receiving station and
the cable network was complete, Mr. Couture
announced the forthcoming opening of his under-
taking at a press conference. When this news
reached CRTC officials, they informed him that
he could not begin this operation until the CRTC
granted him the licence for which he had applied.
It is admitted that the CRTC later denied him this
licence.
From all this evidence it emerges that Mr. Cou-
ture erroneously believed that after April 1, 1968
he was authorized to establish and operate a cable
television undertaking, and that because of this
mistaken belief he incurred unnecessary expenses.
Plaintiffs contend, as the sole basis of their claim,
that the error of which Mr. Couture was the victim
was caused by the .fault of defendant's employees
acting in the course of their duties. The action can
accordingly be successful only if it is proven that,
first, at least one of the alleged faults was commit
ted, and next, that this fault had a causal relation
ship to the damage for which compensation is
claimed.
The wrongful acts which plaintiffs allege were
committed by defendant's agents are the following:
(1) Employees of the Department of Transport,
specifically Mr. Corbett, committed a fault in
that, on March 26, 1968, they sent Mr. Couture
a licence for the year beginning the following
April 1. Thus, according to plaintiffs, Mr. Cor-
bett should have known that the new Act would
enter into force on April 1, and that the licence
issued to Mr. Couture had thereby lost its value;
(2) The employees of the Department of Trans
port and of the CRTC were also at fault in that
they wrote the above-cited letters to Mr. Cou-
ture after April 1, 1968. Plaintiffs submit that
these letters were worded in such a way as to
give the addressee the impression that, despite
the coming into force of the new Act, the licence
that had been issued to him by the Minister of
Transport was still valid;
(3) And finally, the employees of the CRTC
and of the Department of Transport were negli
gent in that they failed to inform Mr. Couture,
after April 1, 1968, that the licence sent to him
at the end of March had become invalid.
I wish to examine each of these allegations,
beginning with the last.
Assuming that it has been proven that no
employee of defendant informed Mr. Couture that
the licence granted him several days earlier had
become invalid as a result of the coming into force
of the new Act, I must say that such an omission
does not seem to me to be a fault for which
defendant may be held liable. If the licence
already granted to Mr. Couture lost its validity,
this was the result, not of an action by the Depart
ment of Transport or the CRTC, but simply of the
coming into force of the new Act. In my opinion, it
was not incumbent on either the Department of
Transport or the CRTC to inform Mr. Couture
that the new Act had come into force, or of its
effect. While it is true that the fault of omission
may give rise to liability, the failure to act must
correspond to a legal duty to act, as was pointed
out by Taschereau J. in Eaton v. Moore [1951]
S.C.R. 470, at page 479. To my mind, there was
no legal duty to act here.
With respect to the second kind of fault imputed
by plaintiffs to the employees of defendant,
namely that, after April 1, 1968, they wrote letters
to Mr. Couture in which it was misrepresented
that, despite adoption of the new Act, the licence
previously granted to him was still in effect, it is
not necessary to decide whether this allegation of
fault is proven since, in my opinion, even if it were,
defendant would still not be liable. Indeed, it
seems to me that any faults which may have been
committed by the employees of defendant in writ
ing to Mr. Couture after April 1, 1968 were not
the cause of the damage for which plaintiffs are
claiming compensation. To my mind, the evidence
clearly shows that even if the letters and circulars
received by Mr. Couture after April 1 had not
been sent to him, he would nevertheless still have
fallen victim to the same error, since his error was
due, not to this correspondence, but rather to the
fact that he was granted, at the end of March, a
licence for the year beginning April 1, 1968.
This leads me to the first fault imputed to
defendant, namely that her employees, specifically
Mr. Corbett, committed a fault when they issued a
licence to Mr. Couture in March 1968 for the year
beginning the following April 1. This allegation is
based on the assumption that Mr. Corbett knew at
that time that the new Act would come into force
on April 1. However, this assumption is not con
sistent with the undisputed testimony of Mr. Cor-
bett. I cannot question the truth of this testimony,
despite what counsel for the plaintiffs has said
about it.
Lastly, counsel for the plaintiffs submitted that
even if each of the acts imputed to defendant could
not in itself make the latter liable, it would be
different if these acts were examined not in isola
tion but all together, as a whole. I must admit that
I do not understand this argument. Patients being
treated in a hospital, it seems to me, do not
miraculously recover their health when they are
considered collectively instead of individually.
For these reasons, the action will be dismissed
with costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.