T-1058-83
Aviation Portneuf Ltée (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Walsh J.—Quebec City, March 8;
Ottawa, March 19, 1984.
Practice — Motion to strike pleadings — Motion pursuant
to R. 419(1)(a) to strike out statement of claim for failure to
disclose reasonable cause of action — Plaintiff claiming dam
ages resulting from suspension of commercial air freight ser
vice when Canadian Transport Commission refusing to stay
decision to annul plaintiff's permit pending outcome of appeal
to Minister — Commission within sixth category enunciated in
Westlake et al. v. The Queen in Right of The Province of
Ontario (1971), 21 D.L.R. (3d) 129 (Ont. H.C.), namely non-
corporate body not liable to be sued in action for damages by
incorporating statute nor by necessary implication — Under
Crown Liability Act, Crown cannot be sued if Commission
cannot — Motion allowed — Federal Court Rules, C.R.C., c.
663, R. 419 ( 1 )(a).
Practice — Parties — Plaintiff suing Crown for damages
resulting from suspension of operations when Canadian
Transport Commission refusing stay of decision to annul
plaintiff's permit as commercial air freight carrier — Test to
determine whether agent of Crown being extent and degree of
control by Governor in Council or Minister over agency
according to Supreme Court of Canada in Northern Pipeline
Agency v. Perehinec, [19831 2 S.C.R. 513 — Evidence estab
lishing Commission agent of Crown — Crown properly sued
pursuant to Crown Liability Act — Commission within cate
gory enunciated in Westlake et al. v. The Queen in Right of
The Province of Ontario (1971), 21 D.L.R. (3d) 129 (Ont. H.C.)
being non-corporate body not by terms of incorporating statute
or by necessary implication liable to damages suit, but review-
able by extraordinary remedies pursuant to ss. 18 and 28
Federal Court Act — Pursuant to Crown Liability Act, Crown
not liable to suit because Commission not so liable — State
ment of claim struck for failure to disclose reasonable cause of
action — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10,
ss. 18, 28.
Crown — Plaintiff seeking damages resulting from suspen
sion of commercial air freight service when Canadian Trans
port Commission refusing stay of decision to annul permit
pending appeal therefrom — Plaintiff contending decision
illegal, abusive of administrative discretion, erroneous and
discriminatory — Commission considering application for stay
twice — Statement of claim not establishing bad faith
Grant of stay discretionary — Compliance with requirements
of ss. 83 and 84 of Canadian Transport Commission General
Rules governing concurrent applications for stay and appeals,
not making grant of stay mandatory in absence of clear
language to that effect — Refusal of stay not tort although
resulting in damages and appeal ultimately successful —
Statement of claim struck for failure to disclose reasonable
cause of action — National Transportation Act, R.S.C. 1970,
c. N-17, ss. 6(1),(2), 7, 10, 14, 24, 25 — Aeronautics Act,
R.S.C. 1970, c. A-3, s. 16(1),(2) — Canadian Transport Com
mission General Rules, C.R.C., c. 1142, ss. 83, 84.
The defendant moves to strike out the statement of claim for
not disclosing a reasonable cause of action pursuant to Rule
419(1)(a) of the Federal Court Rules. The Canadian Trans
port Commission rescinded the plaintiffs permit to provide
commercial air freight service. The plaintiff served a notice of
appeal on the Minister at the same time as it petitioned for a
stay of the Commission's decision. Section 83 of the Canadian
Transport Commission General Rules provides that an appel
lant may apply ex parte to stay the Commission's decision
pending the outcome of the appeal. Section 84 provides that the
Commission shall not make such an order unless the appellant
files an undertaking to save harmless all other parties from
damages resulting from the making of such an order. The
plaintiff joined such an undertaking to its petition. The petition
was twice denied and the plaintiff was forced to suspend
operations for a season resulting in $179,500 in damages. The
plaintiff contends that the defendant had no discretion to refuse
the stay once the conditions in sections 83 and 84 had been
fulfilled and that even if there was a discretion refusal to
exercise it should not be made without justification. It is
alleged that administrative discretion was abused in that: (1) no
consideration was given to the damages which might result to
the plaintiff; (2) the Commission refused to consider the plain
tiffs undertaking to protect others from damages resulting
from a stay; and (3) it failed to consider the balance of
convenience, contrary to the spirit of section 84. The appeal
was eventually allowed, and the plaintiff is claiming damages
resulting from the refusal to stay the decision.
The defendant contends that the Commission is not a servant
of the Crown and hence the Crown Liability Act, which governs
the existence of the plaintiffs claim cannot be applied to allow
a claim against the Crown for damages allegedly caused by the
fault of the Commission. If the Crown can be sued, the next
question is whether there is actionable fault. Finally, the
defendant submits that the Commission is not liable to a
damages suit and therefore the Crown cannot be sued pursuant
to the Crown Liability Act.
Held, the motion to strike out the statement of claim is
allowed. According to the Supreme Court of Canada in North
ern Pipeline Agency v. Perehinec, [1983] 2 S.C.R. 513, the test
to determine whether a statutory entity is an agent of the
Crown is the extent and degree of control exercised over that
entity by the Crown through its ministers. While the Commis
sion has wide powers of investigation, control and licensing, it is
really performing these functions as an agent of the Crown
acting on behalf of the Minister to whom it must submit
reports. It does not have independent funds, its expenses being
provided for by funds appropriated by Parliament. Therefore
these proceedings were properly instituted against the Crown in
this Court. On the question of actionable fault, the Commission
examined the plaintiff's application for a stay of execution
twice. The granting of a stay is always discretionary. Nothing
in the statement of claim establishes bad faith. The Rules do
not make the granting of a stay mandatory when an undertak
ing, as required by section 84 thereof, is filed. If it was intended
to remove the discretion to grant a stay the Rules should have
said so affirmatively. If there is a discretion to refuse a stay, it
is not a tort to exercise that discretion even though the plaintiff
eventually succeeds in its appeal. As to whether the Commis
sion is liable to be sued for damages, the Commission falls
within the category enunciated by Houlden J. in Westlake et
al. v. The Queen in Right of The Province of Ontario (1971),
21 D.L.R. (3d) 129 (Ont. H.C.), namely a non-corporate body
which is not by the terms of the statute incorporating it nor by
necessary implication liable to be sued for damages, but which
is a legal entity in that its actions may be reviewed by way of
certiorari, mandamus and prohibition. Since the Commission
cannot be sued for damages, no claim can lie against the Crown
pursuant to the provisions of the Crown Liability Act even if
the Commission is an agent of the Crown.
CASES JUDICIALLY CONSIDERED
APPLIED:
Northern Pipeline Agency v. Perehinec, [1983] 2 S.C.R.
513; Westlake et al. v. The Queen in Right of The
Province of Ontario (1971), 21 D.L.R. (3d) 129 (Ont.
H.C.).
DISTINGUISHED:
The City of Halifax v. Halifax Harbour Commissioners,
[1935] S.C.R. 215; British Columbia Power Corporation
Limited v. Attorney-General of British Columbia, et al.
(1962), 38 W.W.R. 657 (B.C.C.A.).
REFERRED TO:
Westeel-Rosco Limited v. Board of Governors of South
Saskatchewan Hospital Centre, [1977] 2 S.C.R. 238;
Union Packing Company Limited v. His Majesty The
King, [1946] Ex.C.R. 49; Metropolitan Meat Industry
Board v. Sheedy, et al., [1927] A.C. 899 (P.C.); Hollin-
ger Bus Lines Limited v. Ontario Labour Relations
Board, [1952] O.R. 366 (Ont. C.A.).
COUNSEL:
Jean Fortin for plaintiff.
Jean-Marc Aubry for defendant.
SOLICITORS:
Brochet, Fortin & Associés, Quebec City, for
plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
WALSH J.: Defendant moves pursuant to Rule
419(1)(a) of the Rules of this Court [Federal
Court Rules, C.R.C., c. 663] to strike plaintiff's
statement of claim on the ground that it discloses
no reasonable cause of action. The declaration
states that plaintiff is an air carrier holding permit
3055/79 (C) authorized by a decision No. 5966
dated October 5, 1979 of the Air Transport Com
mittee of the Canadian Transport Commission. On
March 6, 1981, the Committee by its decision
6376 ordered that its decision 5966 and order
1980-A-56 be rescinded and plaintiffs permit
3055/79 (C) be annulled. On the same day they
issued order 1981-A-114 confirming the rescinding
of its earlier decision and order and annulling the
permit.
On April 2, 1981 plaintiff served on the Minis
ter of Transport notice of an appeal of this deci
sion 6376, and served a copy of this notice on the
Secretary of the Air Transport Committee. On the
same day plaintiff sent to the Air Transport Com-
mittee a petition asking for the staying of the
decision 6376 and of the order 1981-A-114 pursu
ant to sections 83 and 84 of the Rules' established
pursuant to the National Transportation Act
[R.S.C. 1970, c. N-17].
Said Rules 83 and 84 read as follows:
83. Concurrently with the institution of an appeal, an appel
lant may apply ex parte to the Commission for an order staying
the Commission's decision, ruling or order pending the outcome
of the appeal.
84. The Commission shall not make an order staying the
Commission's decision, ruling or order pending the outcome of
an appeal unless the appellant files with the Secretary an
undertaking, under seal, to save harmless all other parties from
damages resulting from the operation of such an order.
Plaintiff joined to its said petition, pursuant to
the said section 84 of the Rules an undertaking
under seal to save harmless all other parties from
damages resulting from the operation of such an
order.
On April 30, 1981, plaintiff in connection with
its notice of appeal sent its declaration to the
Minister of Transport and sent a copy to the
Secretary of the Air Transport Committee. On
May 1, 1981, the Air Transport Committee by
order 1981-A-225 dismissed the request for a stay
of its decision 6376 and its order 1981-A-114 on
the ground that it considered this unjustified. On
May 6, 1981, plaintiff by telegram asked the Air
Transport Committee to reconsider its decision of
May 1, 1981, and to grant the stay of the said
decision and order for motives set out in the said
telegram. By decision dated May 15, 1981, order
1981-A-283 the Air Transport Committee agreed
to reconsider its decision but refused to grant
plaintiff a stay of the decision No. 6376 and the
order 1981-A-114 on the ground that the notices
and supplementary issues submitted did not justify
the stay. Plaintiff contends that this placed it in an
untenable economic position and was an illegally
unjust decision.
' Canadian Transport Commission General Rules—Nation-
al Transportation Act—C.R.C., c. 1142.
On May 22, 1981, plaintiff appealed the deci
sion of May 15 to the Review Committee of the
Canadian Transport Commission. By telegram
dated July 28, 1981, the Review Committee in
turn dismissed plaintiff's request for a stay of the
decision 6376 annulling its permit. As a result of
this plaintiff had to suspend all its operations for
the 1981 season despite its pending appeal to the
Minister of Transport. Plaintiff contends that this
decision was illegal, abusive, erroneous and dis
criminatory, contending that by virtue of sections
83 and 84 of the Rules defendant had no discretion
to refuse the stay once the conditions specified
therein had been fulfilled and that in any event if
there was a discretion refusal to exercise it should
not be made without justification.
It is alleged that administrative discretion con
ferred by these Rules was abused in that no con
sideration was given to the damages which might
result to plaintiff by the refusal to grant the stay
pending the outcome of the appeal to the Minister
of Transport, and by refusing to give consideration
to the fact that plaintiff had filed an undertaking
to protect other parties from any damages which
could result from the stay, and finally by failing to
consider the balance of convenience contrary to
the spirit in the letter of section 84 of the Rules.
Eventually nearly a year later on April 29, 1982,
the Minister of Transport granted plaintiffs
appeal ordering that the decision 6376 be rescind
ed as well as the order 1981-A-114 and that full
effect be given to the original decision No. 5966
and the order 1980-A-56 so that plaintiff be again
authorized to provide commercial aerial freight
service (Class 4) in specified planes from a base
situated at St-Raymond (Lac Sept-Îles) in Port -
neuf County, Quebec.
Following this decision plaintiff recommenced
carrying out its service but the interruption for a
year of its operations caused it damages which are
detailed as follows:
Loss of income from caribou hunt $ 10,000.00
Loss of revenue from fishing 10,000.00
Loss of revenue from moose hunting 5,000.00
Expenses for protecting and maintaining the
assets of the company including interest on
amounts due, rent, insurance on planes, miscella
neous 10,000.00
Depreciation of Cessna 185 4,500.00
Loss on disposition of an asset (Cessna 172
C-GVQA) 30,000.00
Loss on disposal of the building and supplemen
tary cost for leasing 10,000.00
Loss of goodwill as a result of the entry into
competition of Roger Forgue to which enterprise
it could not object, and who benefited from the
issue of 40 caribou permits at a profit of
$15,000.00 capitalized at 15% 100,000.00
TOTAL $179,500.00
The statement of claim concludes that defend
ant is responsible for these damages as a result of
the refusal to stay the said decision and order
issued by virtue thereof pending the appeal to the
Minister of Transport.
It may be said at the outset that there is no
doubt that plaintiff has suffered considerable dam
ages by being forced to suspend its aviation service
for a year even though it eventually succeeded in
its appeal to the Minister of Transport. In the light
of hindsight and in view of its appeal having
eventually been maintained it is certainly unfortu
nate that it was not able to avoid these damages by
being permitted to continue to operate by a stay of
the order pending the outcome of the appeal. The
fact that damages have been suffered however
does not by itself give a right of action, as an
actionable fault must have occurred to give rise to
such a claim. Plaintiff's claim if it exists must be
by virtue of the provisions of the Crown Liability
Act. 2 The constitution of the Canadian Transport
Commission is set out in Part I of the National
Transporation Act. 3 Section 6 provides that it
shall consist of not more than seventeen members
appointed by the Governor in Council. Subsection
(2) of section 6 creates it as a court of record.
Section 7 provides that one of the commissioners
2 R.S.C. 1970, c. C-38.
3 R.S.C. 1970, c. N-17.
shall be appointed by the Governor in Council to
be President and two to be vice-presidents. Section
10 provides that the Secretary shall be similarly
appointed. Sections 21 to 28 deal with its powers.
Section 24 provides for the establishment of com
mittees including the Air Transport Committee
which committees shall exercise all the powers and
duties of the Commission and their orders have the
same effect as if issued by the Commission. Sec
tion 25 provides that an applicant may appeal to
the Minister and the Minister shall certify his
opinion to the Commission which the Commission
shall then comply with.
Subsection 16(1) of the Aeronautics Act 4 pro
vides that "The Commission may issue to any
person applying therefor a licence to operate a
commercial air service in the form of licence
applied for or in any other form." Subsection
16(8) provides "The Commission may suspend,
cancel or amend any licence or any part thereof
where, in the opinion of the Commission, the
public convenience and necessity so requires."
Defendant's principal contention is that the
Commission cannot be considered as a servant of
the Crown and hence the Crown Liability Act
cannot be applied so as to permit an action against
the Crown by plaintiff for damages caused by any
fault of the Commission, even if there were any
such fault. Reference is made in this connection to
the recent decision of the Supreme Court of
Canada in the case of Northern Pipeline Agency v.
Perehinec, [1983] 2 S.C.R. 513. This was an
action for breach of contract brought against the
Northern Pipeline to examine the question wheth
er it could be considered as an agent of the Crown
so that an action could be brought against the
Crown and as a result the Federal Court would
have jurisdiction pursuant to subsection 17(2) of
the Federal Court Act [R.S.C. 1970 (2nd Supp.),
c. 10]. At page 5 of that judgment [now reported
at pages 517-518 of S.C.R.] Justice Estey stated
as follows:
R.S.C. 1970, c. A-3.
Whether a statutory entity is an agent of the Crown, for the
purpose of attracting the Crown immunity doctrine, is a ques
tion governed by the extent and degree of control exercised over
that entity by the Crown, through its Ministers, or other
elements in the executive branch of government, including the
Governor in Council. In Metropolitan Meat Industry Board v.
Sheedy, [1927] A.C. 899, Viscount Haldane considered the
extent of the control by government, or conversely the uncon
trolled discretionary power in the board, in determining wheth
er the acts of the board in question constituted those of an
agent of the Crown. In concluding that the board there in
question was not an agent of the Crown His Lordship stated, at
p. 905:
They are a body with discretionary powers of their own. Even
if a Minister of the Crown has power to interfere with them,
there is nothing in the statute which makes the acts of
administration his as distinguished from theirs. That they
were incorporated does not matter. It is also true that the
Governor appoints their members and can veto certain of
their actions. But these provisions, even when taken together,
do not outweigh the fact that the Act of 1915 [Meat
Industry Act, 1915 (N.S.W.), c. 69] confers on the appellant
Board wide powers which are given to it to be exercised at its
own discretion and without consulting the direct representa
tives of the Crown.
He referred to similar reasoning of the Supreme
Court in the case of The City of Halifax v.
Halifax Harbour Commissioners' although in
that case the Court reached the opposite conclu
sion that the Harbour Commissioners when occu
pying certain lands within the City of Halifax were
in law the agents of His Majesty and thus were
beyond the reach of the municipal assessment and
taxation, stating that the test used by the Court
was the degree and extent of control by the Gover
nor in Council or by a Minister of the Crown over
the agency in question. Duff C.J. found the neces
sary degree of control by reference to the limita
tion of acquisition of property, borrowing,
administrative functioning, governance by by-law
of the agency and construction of works, all of
which were subject to the approval of the Gover
nor in Council, or, in some instances, by a Minister
of the Crown so that in total these controls and
restrictions of the operations of the agency were
found to be of such character as to constitute an
occupation for the Crown.
5 [1935] S.C.R. 215.
Justice Estey referred to two other cases in
which the same test was applied namely that of the
degree and extent of control by the Governor in
Council or by a Minister of the Crown over the
agency in question. One was an action in the
British Columbia Court of Appeal, British
Columbia Power Corporation Limited v. Attor-
ney-General of British Columbia, et al. 6 in which
it was concluded that the company in question, the
shares of which were all owned by the Crown in
the right of the Province, was not an instrumental
ity of government as it had a contractual capacity
apart from the Crown. Reference was also made
by Justice Estey to the case of Westeel-Rosco
Limited v. Board of Governors of South Sas-
katchewan Hospital Centre' where Ritchie J.
stated at pages 249-250:
Whether or not a particular body is an agent of the Crown
depends upon the nature and degree of control which the
Crown exercises over it. This is made plain in a paragraph in
the reasons for judgment of Mr. Justice Laidlaw, speaking on
behalf of the Court of Appeal for Ontario in R. v. Ontario
Labour Relations Board, Ex p. Ontario Food Terminal Board,
at p. 534, where he said:
It is not possible for me to formulate a comprehensive and
accurate test applicable in all cases to determine with cer
tainty whether or not an entity is a Crown agent. The answer
to that question depends in part upon the nature of the
functions performed and for whose benefit the service is
rendered. It depends in part upon the nature and extent of
the powers entrusted to it. It depends mainly upon the nature
and degree of control exercisable or retained by the Crown.
At page 250 of the same judgment Justice Ritchie
points out that the case of Halifax City v. Halifax
Harbour Commissioners is a case in which the
respondent Commissioners had been clearly desig
nated as Crown agents.
Justice Estey points out that in the case before
him the Agency by section 4 of its statute is
described as an Agency of the Government of
Canada called the Northern Pipeline Agency over
which the Minister shall preside. The Agency is
made subject to the management and direction of
the Minister. He then states [at pages 520-521]:
Applying the principle of control as enunciated in the deci
sions of the Privy Council and of this Court, supra, (and as
applied in the British Columbia Court of Appeal), to the
statutory provisions establishing the appellant, it would appear
that the appellant is indeed an agent of the Crown, at least in
6 (1962), 38 W.W.R. 657 (B.C.C.A.).
7 [1977] 2 S.C.R. 238.
the discharge of its primary function of attending to the design,
construction and installation of the pipeline.
Reference was also made by defendant to the
case of Union Packing Company Limited v. His
Majesty The Kings in which President Thorson at
pages 54-55 had occasion to examine the position
of the Bacon Board. He pointed out that its mem
bers are appointed by the Governor in Council and
their salaries are fixed by it. It cannot even appoint
any officers, clerks, or other persons or fix their
remuneration except subject to the approval of the
Governor in Council. It has no funds of its own
and its expenses are met out of moneys provided
by Parliament subject to the Minister's approval.
He concludes at page 55:
It seems perfectly clear to me from the Orders in Council that
the Bacon Board is purely a Government board performing
specific services for the Government and responsible to it for its
actions. It falls far short of having the free discretionary powers
that are necessary to independence. It is no more independent
than a Government department. It is quite a different kind of
body from that dealt with in Metropolitan Meat Industry
Board v. Sheedy (supra). In my opinion, the Bacon Board is
clearly a servant of the Crown, and, if the suppliant had any
cause of action, it acted properly in bringing a petition of right
against the Crown rather than instituting an action against the
Bacon Board.
In the case of Metropolitan Meat Industry Board
v. Sheedy, et a1. 9 the Board was established to
administer the Meat Industry Act, 1915. The
headnote reads in part:
The members of the Board were to be appointed by the
Governor, who had power to veto certain of its actions. The
Board had wide powers, which it exercised at its discretion; any
power of interference which a Minister of the Crown possessed
was not such as to make the acts of administration his acts.
Money received by the Board was not paid into the general
funds of the State, but to its own fund ....
In answer to this plaintiff refers to section 12 of
the National Transportation Act which provides
that the officers and employees attached to the
Commission may be paid out of moneys appro
priated by Parliament for the purpose, and to
section 14 that provides that the Governor in
Council may from time to time, or as the occasion
8 [1946] Ex.C.R. 49.
9 [1927] A.C. 899 (P.C.).
requires, appoint one or more experts, or persons
having technical or special knowledge of the mat
ters in question, to assist in an advisory capacity in
respect of any matter before the Commission. It
was also pointed out that the Halifax Harbour
Commission is an incorporated body which is not
the case of the Transport Commission. None of the
cases referred to were based on the Crown Liabili
ty Act.
Applying this jurisprudence to the Transport
Commission I have reached the conclusion that
while it has very wide powers of investigation,
control and licensing in connection with all modes
of transport, it is really performing these functions
as an agent of the Crown, acting on behalf of the
Minister to whom it must submit reports. It does
not have independent funds, its expenses being
provided for by funds appropriated by Parliament
for this purpose. I conclude therefore that it was
proper to institute these proceedings against the
Crown in this Court.
Even if it can be assumed that the Commission
is an agent or servant of the Crown permitting
proceedings to be brought under the provisions of
the Crown Liability Act some actionable fault of
such servant would have to be established in order
to give a cause of action against the Crown. In the
present case the Commission did not refuse to
examine the application of plaintiff for a stay of
execution of its decision pending the appeal to the
Minister. In fact the Review Board reconsidered
this even giving it a second hearing. The granting
of a stay in any proceeding pending an appeal is
always discretionary. There is nothing in any of
the allegations in the statement of claim to estab
lish bad faith on the part of the Air Transport
Committee or the Review Board. Plaintiff argues
that the granting of a stay was mandatory on
reading Rules 83 and 84 (supra). I do not so read
them. Rule 83 provides that an appellant "may
apply ex parte" for a stay and Rule 84 provides
that the Commission shall not make such an order
unless an undertaking has been filed under seal to
save harmless all other parties from damages
resulting from the operation of such an order. I do
not believe that it can be inferred from this that
discretion is removed when such an undertaking is
filed. If this was the intention the Rule should
have said so affirmatively, stating that if such an
undertaking is filed then the order shall be stayed
pending the outcome of the appeal to the Minister.
While plaintiff has fulfilled the requirements of
the Rule this does not mean that no discretion
remained to refuse the stay, which is an adminis
trative decision. If there is discretion to refuse a
stay pending an appeal it is not a tort to do so,
even though as a result of plaintiff eventually
succeeding in its appeal this refusal to maintain
the status quo in the interval resulted in damage.
If plaintiff felt that the decision was contrary to
natural justice the proper remedy may have been
by proceedings under section 18 of the Federal
Court Act if it were an administrative decision or
section 28 if it is considered to be a judicial or
quasi-judicial decision. Whether such remedies
were available or would have been successful is not
an issue before the Court on this motion. In any
event no such remedy was sought.
Defendant contends that in any event the
Canadian Transport Commission itself could not
be sued, and if this is the case then the Crown
cannot be sued pursuant to the provisions of the
Crown Liability Act. In this connection reference
was made to the Ontario case of Westlake et al. v.
The Queen in Right of The Province of Ontario 10
in which the headnote [at page 129] states in part:
... the Ontario Securities Commission, although enjoying such
legal existence as to enable it to appear and be represented
when its actions are before the Court for review by way of
mandamus, certiorari and prohibition where questions of its
jurisdiction arise, is not a legal entity capable of being sued in
an action for damages. Accordingly, no action may be brought
against it by a bankrupt corporation's owners of securities
issued pursuant to a prospectus and supplementary documents
accepted by the Commission, in which such owners seek dam
ages for breach of trust, breach of contract, deceit, common
10 (1971), 21 D.L.R. (3d) 129 (Ont. H.C.).
law negligence and negligence in failing to perform statutory
duties.
In this case Houlden J. set out six categories
into which bodies incorporated by statute are
liable to suit. His sixth category deals with non-
corporate bodies which are not by the terms of the
statute incorporating them or by necessary
implication liable to be sued in an action for
damages, but who are legal entities in that their
actions may be reviewed in proceedings brought
against them by way of the extraordinary remedies
of certiorari, mandamus and prohibition.
It would appear that the Canadian Transport
Commission falls within this category.
This case was referred to by Justice Estey in the
Northern Pipeline case (supra) as well as the case
of Hollinger Bus Lines Limited v. Ontario Labour
Relations Board, [ 1952] O.R. 366 in which the
Ontario Court of Appeal determined that the
Ontario Labour Relations Board was not an entity
subject to suit in the courts otherwise than by
judicial review by certiorari or like statutory
procedure. In that case Roach J.A. speaking for
the Court stated [at pages 377-378] in reference to
The Labour Relations Act [R.S.O. 1950, c. 194]:
The whole scheme and purpose of the Act is to deal with
certain phases of the employer-employee relationship. The
Board does not carry on any business. Its function is primarily
administrative and it has been given power to exercise certain
functions of a judicial nature. There is nothing in the Act
remotely suggesting that it was intended by the Legislature
that the Board should have the capacity either to sue or to be
sued.
It must be remembered that in the present case
the Commission is a court of record (subsection
6(2)).
If the Commission cannot be sued for damages
it follows that no claim can lie against the Crown
pursuant to the provisions of the Crown Liability
Act, even if the Commission is an agent of the
Crown.
For the above reasons I find that even assuming
that all the allegations in the statement of claim
are true as must be assumed at this stage of
proceedings, they disclose no reasonable cause of
action against defendant, so defendant's motion to
strike the statement of claim must be maintained
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.