T-2662-87
Northeast Marine Services Limited (Plaintiff)
v.
Her Majesty the Queen in Right of Canada and
Atlantic Pilotage Authority (Defendants)
INDEXED AS: NORTHEAST MARINE SERVICES LTD. v. CANADA
(T.D.)
Trial Division, MacKay J.—Halifax, October 9;
Ottawa, November 21, 1990.
Crown — Agency — Atlantic Pilotage Authority not acting
as agent of Crown in contract arrangements — Agency deter
mined according to nature and degree of control exercised by
Crown over Authority in contract matters, not merely general
status — Examination of Pilotage Act and Financial
Administration Act — Former expressly declaring Authority
not agent of Crown — Latter, s. 83 definition of "agent
corporation" limiting such corporations to those expressly
declared by another statute to be Crown agent — Controls
introduced in 1984 amendments to Financial Administration
Act relating to Crown intervention re: policies, not day-to-day
operations — Authority operating independently — Subject to
suit in own name — Also suable in own name under Interpre
tation Act, s. 21 — Statement of claim struck as against
Crown.
Maritime law — Pilotage — Action against Queen, Atlantic
Pilotage Authority for breach of contract, fiduciary duty and
statutory duty of care — Whether Authority agent of Her
Majesty — Motion to strike claim as against latter allowed —
Authority's status not altered by 1984 Financial Administra
tion Act amendments — Pilotage Act stating Authority neither
Crown agent nor "agent corporation" under F.A.A. — Legisla
tion providing authority suable in own name.
Federal Court jurisdiction — Trial Division— Statement of
claim alleging agency relationship between Atlantic Pilotage
Authority and Crown — Authority not acting as Crown agent
in contractual arrangements — No jurisdiction under Federal
Court Act, s. 17 to deal with claim against Crown — State
ment of claim struck as against Crown.
This was an application to strike out the statement of claim
as against the Crown for failure to disclose a reasonable cause
of action, or because it was frivolous or vexatious and an abuse
of process. It was alleged in the statement of claim that the
Atlantic Pilotage Authority was an agent of Her Majesty, that
it had breached its fiduciary duty and duty of care imposed by
statute, and was in breach of contract, or was guilty of mis
representation in relation to contract matters. The Crown
pleaded that the actions said to have been taken by the
Authority were taken as principal and not as agent of the
Queen. Upon this application, the plaintiff submitted that the
Pilotage Act should be subject to the 1984 amendments to the
Financial Administration Act. It submitted that the amend
ments limited the capacities of Crown corporations and modi
fied the Pilotage Act so as to make the Atlantic Pilotage
Authority an agent of the Crown. The Crown submitted that
the Financial Administration Act merely establishes a frame
work applicable to all Crown corporations. It argued that the
Government's powers set out therein do not diminish the in
dependence of the Authority, particularly because of Pilotage
Act, section 9 declaring that "An Authority is not an agent of
Her Majesty" and the definition of an "agent corporation" in
Financial Administration Act, section 83 which limits such
corporations to those expressly declared by another statute to
be a Crown agent. The plaintiff also submitted that the rela
tionship between the Authority and the Crown should not be
determined at this stage on an interlocutory and preliminary
motion to strike, but should be determined after full evidence at
trial. The plaintiff further argued that the Queen should have
the opportunity to defend against the plaintiff's claims since her
interests may ultimately be affected by the outcome as the
Authority is dependant for its financing upon government.
Held, the application should be allowed.
Whether or not a body is a Crown agent depends upon the
nature and degree of control which the Crown exercises over it.
Determination of the general status of a statutory body may
not resolve the issue before the court which may depend upon
the particular powers vested in the body i.e. the independence
with which it may act and its liability to suit in its own name.
The key to the resolution of that issue is determination of the
status of the Authority in its relation to the Crown in the
contract arrangements the Authority concludes with others.
That required examination of the Pilotage Act and the Finan
cial Administration Act. Under the Financial Administration
Act the Crown, through the appropriate Minister, exercises a
wide-ranging supervisory authority, including the authority to
make binding directives and ultimate responsibility for all
Crown corporations. As to the effects of the 1984 amendments
to the Financial Administration Act upon the Pilotage Act, the
plaintiff's submission invites a conclusion that avoids efforts to
construe the two Acts together. Where the specific provisions of
the two Acts conflict, the Financial Administration Act pre
vails because it is the later expression of Parliament's intent
and because section 87 thereof so provides. There is, however,
no inconsistency as to the general status of the Atlantic Pilot-
age Authority. The Pilotage Act expressly states that it is not
an agent of Her Majesty and it is not an "agent corporation"
within the definition in the Financial Administration Act.
Although the controls introduced in the 1984 amendments
provide a broad measure of ultimate control by the Crown over
the Authority, those controls relate mainly to administrative
processes to provide for standardization of procedures and
intervention by Crown officers in matters of policy rather than
to day-to-day operations. It was in the course of such opera
tions that the activities complained of took place. The Author
ity was not acting as agent for Her Majesty in tendering
contracts for services of pilot boats. It was operating independ
ently; acting in its own name and subject to suit therein.
The Authority was also suable in its own name under the
Interpretation Act, subsection 21(1). But even "agent corpora
tions" may be sued in their own names as if they were not
agents of the Crown, whether an obligation was incurred in the
name of the Crown or of the corporation, according to Finan
cial Administration Act, section 98. As Parliament has sought
to ensure that even agent corporations are suable, it would be
inefficient to permit claims arising out of contracts undertaken
in the regular course of business by Crown corporations which
are not agents of Her Majesty to result in impleading the
Queen as defendant.
Even if the Crown's financial interests might be affected by
the outcome of this litigation, the Queen did not wish to be
represented.
The agency issue went to the question of the Court's jurisdic
tion in relation to the Queen as defendant and once raised had
to be resolved. It was a question of law, determinable largely by
statutory interpretation, not a question of fact, the determina
tion of which requires evidence and argument at trial.
Under Federal Court Act, section 17, the Trial Division has
exclusive original jurisdiction where relief is claimed against
the Crown, including claims arising out of a contract entered
into on behalf of the Crown. As the Authority was not a Crown
agent in the contract arrangements, the Court lacked jurisdic
tion to deal with the claim against the Queen.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Federal Court Act, R.S.C., 1985, c. F-7, s. 17.
Federal Court Rules, C.R.C., c. 663, R. 419.
Financial Administration Act, R.S.C., 1985, c. F-11, ss.
25(4),(5), 83(1),(2), 87, 88, 89, 90, 91, 94, 96-101,
109-114, 115, 122, 123, 124, 127, 129, 130, 132, 149,
150.
Interpretation Act, R.S.C., 1985, c. I-21, s. 21(1).
Pilotage Act, R.S.C., 1985, c. P-14, ss. 3(1),(4), 4, 9, 15,
16, 17, 19, 20, 21, 22, 23, 27, 29, 30(2), 32, 33, 34, 35,
36(a),(b), 37, 38, 49, 52.
CASES JUDICIALLY CONSIDERED
APPLIED:
Northern Pipeline Agency v. Perehinec, [1983] 2 S.C.R.
513; (1983), 51 A.R. 10; 4 D.L.R. (4th) 1; [1984] .2
W.W.R. 385; 5 Admin. L.R. 199; 50 N.R. 248; [1983]
R.D.J. 637; Westeel-Rosco Ltd. v. Board of Governors of
South Saskatchewan Hospital Centre, [1977] 2 S.C.R.
238; (1976), 69 D.L.R. (3d) 334; [1976] 5 W.W.R. 688;
11 N.R. 514.
DISTINGUISHED:
Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959; Re
Associated Investors of Can. Ltd. (1988), 57 Alta. L.R.
(2d) 289 (C.A.).
CONSIDERED:
Metropolitan Meat Industry Board v. Sheedy, [1927]
A.C. 899 (P.C.).
REFERRED To:
Halifax, City of, v. Halifax Harbour Commissioners,
[1935] S.C.R. 215; [1935] 1 D.L.R. 657; British
Columbia Power Corp. Ltd. v. Attorney-General of Brit-
ish Columbia & British Columbia Electric Co. Ltd.
(1962), 34 D.L.R. (2d) 25; 38 W.W.R. 657 (B.C.C.A.);
R. v. Ont. Labour Relations Bd., Ex p. Ont. Food
Terminal Bd., [1963] 2 O.R. 91; (1963), 38 D.L.R. (2d)
530; 63 CLLC 15,464 (C.A.).
COUNSEL:
Michael W. Swinwood for plaintiff.
Tosh Hayashi for defendants.
SOLICITORS:
Lang, Michener, Honeywell, Wotherspoon,
Ottawa, for plaintiff.
Metcalf, Hayashi, Halifax, for defendants.
The following are the reasons for order ren
dered in English by
MACKAY J.: This is an application on behalf of
the defendant Her Majesty the Queen for an order
striking out the plaintiff's statement of claim in
whole or in part as against Her Majesty on the
ground that it discloses no reasonable cause of
action, is frivolous or vexatious, and is an abuse of
the process of the Court, pursuant to Federal
Court Rule 419 [Federal Court Rules, C.R.C., c.
663]. The motion referred to paragraphs (a), (b)
and (c) of Rule 419 but the grounds are properly
referrable to paragraphs (a), (c) and (f). The
essence of the motion is that the other defendant in
this action, Atlantic Pilotage Authority, whose
conduct is said to give rise to the plaintiff's claim,
is not an agent of Her Majesty.
When the motion came on for hearing in Hali-
fax there was also before the Court a motion by
the other defendant, Atlantic Pilotage Authority,
to strike the statement of claim as against it,
mainly on other grounds. Counsel for the plaintiff
moved for an adjournment of the latter motion in
order that he might have an opportunity to cross-
examine the affiant of an affidavit made in sup
port of the motion. In these circumstances the
motion on behalf of the Authority was adjourned
sine die; however, counsel for Her Majesty and for
the plaintiff proposed to proceed with the motion
on behalf of Her Majesty the Queen. This was
done.
In this action, commenced by statement of claim
filed in December 1987, the plaintiff alleges that
Atlantic Pilotage Authority was the agent of Her
Majesty, that the Authority breached its fiduciary
duty and duty of care imposed by statute, and was
in breach of contract, or was guilty of misrepre
sentation in relation to contract matters with the
plaintiff, causing loss to the plaintiff.
On behalf of the defendant Her Majesty the
Queen a defence was filed in May 1988 in which it
was submitted the statement of claim did not
allege any facts giving rise to liability on the part
of Her Majesty and that the claims set out in that
statement as against Her Majesty are not main
tainable in law, which objections were reserved. In
addition, on behalf of Her Majesty response was
made to matters alleged in the statement of claim,
denying knowledge of most allegations contained
in that statement, but claiming if those allegations
relating to actions alleged to have been taken by
Atlantic Pilotage Authority were proven, those
actions by the Authority were taken as principal
and not as an agent of Her Majesty.
In addition to argument on the merits of the
motion the plaintiff submits that it is not appropri
ate that the issue of the relationship of the defend
ant Atlantic Pilotage Authority to the Crown be
determined at this stage, on an interlocutory and
preliminary motion to strike; rather that should be
determined after full evidence and argument at
trial. In the plaintiff's submission there is an
arguable case that the Pilotage Authority is an
agent of Her Majesty the Queen and that case
should be permitted to be made at trial. Moreover,
since the Authority is dependant for its financing
upon government, at least for financing of deficits
in operations and of major capital costs, ultimately
Her Majesty's interests may be affected by the
outcome of the action and it is thus appropriate
that she have opportunity to defend against the
plaintiff's claims. Before turning to the merits of
the motion these arguments should be considered.
The submission that the outcome of the action
may ultimately affect Her Majesty's interests in a
financial way does not, in my view, assist the
plaintiff's position. The suggestion that the Au
thority is without assets of its own is, I believe, not
consistent with the facts as these appear from a
recent annual report of the Authority, filed by the
plaintiff, unless the Court is persuaded by the
plaintiffs argument that for all purposes, includ
ing the holding of assets, the Authority is an agent
or servant of the Crown. For the reasons that
follow I am not so persuaded. The possibility that
the Crown's financial interests may be affected by
the outcome of the trial, if judgment for the
plaintiff led to an award of damages that could not
be met by operating revenues or other funds within
control of the Pilotage Authority, is not in itself
persuasive for the plaintiffs case here, for Her
Majesty, far from seeking opportunity to be repre
sented to defend any financial interests in this
matter has, from its inception, adopted a position
that is consistent only with a desire not to be
represented. That is implicit in the claim upon
which the present motion is based, that there is nc
reasonable cause of action, in law, pleaded against
Her Majesty.
As for the suggestion that it is inappropriate at
this stage in proceedings to determine the issue
here raised, i.e., Her Majesty's freedom from lia
bility on the basis of the cause of action pleaded,
the matter goes to the question of jurisdiction of
the Court at least in relation to Her Majesty as
defendant, and once raised it must be resolved. It
is a question of law that is raised, determinable
largely as a matter of statutory interpretation, not
a question of fact, the determination of which
requires evidence and argument at trial. Thus, in
my view, the issue is not analogous to the issues
raised in a recent case relied upon by the plaintiff
for the proposition that only if it is plain and
obvious that a statement of claim discloses no
reasonable claim should it be struck: Hunt v.
Carey Canada Inc., [1990] 2 S.C.R. 959. In that
case the issue raised related to striking allegations
from the statement of claim concerning the tort of
conspiracy, not an issue related to jurisdiction of
the Court in relation to one or more of the
defendants.
In this case the jurisdictional issue raised by the
motion to strike the statement of claim as against
the defendant Her Majesty the Queen is of signifi
cance not only in relation to that defendant but
also for the Court's own jurisdiction under section
17 of the Federal Court Act, R.S.C., 1985, c. F-7,
even though the motion was not argued by counsel
in that context. Section 17 provides in part:
17. (1) The Trial Division has original jurisdiction in all
cases where relief is claimed against the Crown and, except
where otherwise provided, the Trial Division has exclusive
original jurisdiction in all of those cases.
(2) Without restricting the generality of subsection (1), the
Trial Division has exclusive original jurisdiction, except where
otherwise provided, in all cases in which
(a) the land, goods or money of any person is in the posses
sion of the Crown;
(b) the claim arises out of a contract entered into by or on
behalf of the Crown; or
(c) there is a claim against the Crown for injurious affection.
(5) The Trial Division has concurrent original jurisdiction
(b) in proceedings in which relief is sought against any
person for anything done or omitted to be done in the
performance of his duties as an officer or servant of the
Crown.
As I see it, unless the Atlantic Pilotage Author
ity is an agent of the Crown in the contract
arrangements the Authority may make, this Court
is without jurisdiction under section 17, or any
other section of its enabling statute, to deal with a
claim alleged against Her Majesty.
On the merits of the motion it is urged by the
applicant, Her Majesty the Queen, that the Au
thority is not an agent of the Crown under the
terms of the Pilotage Act, R.S.C., 1985, c. P-14,
and in light of jurisprudence which has dealt with
the issue of Crown agency status. The respondent,
the plaintiff in this action, contends that that
statute, originally enacted as S.C. 1970-71-72, c.
52 must be read subject to the later enactment in
1984 of amendments to the Financial Administra
tion Act, enacted by S.C. 1984, c. 31, now includ
ed within R.S.C., 1985, c. F-11. That amending
statute included what is now the long or full title
of that Act, i.e., "An Act to provide for the
financial administration of the Government of
Canada, the establishment and maintenance of the
accounts of Canada and the control of Crown
corporations". Counsel for the respondent submits
that the purpose of the amending Act was to "rein
in" or limit the capacities of Crown corporations
and the Financial Administration Act as so
amended effectively modifies the Pilotage Act so
as to make the Atlantic Pilotage Authority an
agent of the Crown. Whether or not that was its
general purpose there is no doubt that the 1984
amendments establish a broad framework for
administration of Crown corporations generally.
The effect of those changes on the status and
capacity of the Authority here involved, in general,
or in relation to particular activities, depends upon
review of both statutes here in question.
In Northern Pipeline Agency v. Perehinec,
[1983] 2 S.C.R. 513, at pages 517-518 per Estey
J. for the Court, as in Westeel-Rosco Ltd. v.
Board of Governors of South Saskatchewan Hos
pital Centre, [1977] 2 S.C.R. 238, at pages 249-
250 per Ritchie J. for the Court, the Supreme
Court of Canada has made clear that whether or
not a particular body is an agent of the Crown
depends on the nature and degree of control which
the Crown exercises over it. That test evolved
through a series of cases, some involving issues of
Crown immunity from suit in an earlier age and
some involving other questions. Among those cases
were some here relied upon by counsel, including a
number referred to by Estey J. in Perehinec: Met
ropolitan Meat Industry Board v. Sheedy, [1927]
A.C. 899. (P.C.); Halifax, City of, v. Halifax
Harbour Commissioners, [1935] S.C.R. 215;
Westeel-Rosco Limited, supra; British Columbia
Power Corp. Ltd. v. Attorney-General of British
Columbia & British Columbia Electric Co. Ltd.
(1962), 34 D.L.R. (2d) 25 (B.C.C.A.); R. v. Ont.
Labour Relations Bd., Ex p. Ont. Food Terminal
Bd., [1963] 20 O.R. 91 (C.A.).
As the decision of Mr. Justice Estey in Perehi-
nec, supra, makes clear, determination of the gen
eral status of a statutory body in relation to the
Crown may not resolve the issue of concern to the
court which may depend upon particular powers
vested in the body. Thus, in that case, the North
ern Pipeline Agency was readily found to be an
agent of the Crown but in the matter giving rise to
the claim, a contract concerning labour relations,
that Agency had been given power to contract in
its own name and was suable in its own name. Its
general status as an agent of the Crown was not in
itself determinative of the issue; rather, the in
dependence with which it could act in the matter
and its liability to suit in its own name were the
keys to finding that the Agency was subject to suit
in the provincial court. Whether the plaintiff there
might have sued in the Federal Court and joined
Her Majesty as defendant was not raised by that
case, as Estey J. noted (at page 539). That is akin
to the issue here presented.
In resolving, that issue the key is determination
of the status of the Pilotage Authority in its rela
tionship to the Crown in the contract arrange
ments the Authority seeks to conclude with others.
Unless it acts as an agent for Her Majesty in
regard to those activities which here give rise to
the plaintiff's claim, there can be no claim against
Her Majesty as defendant and this Court is with
out jurisdiction in relation to Her Majesty under
section 17 of the Federal Court Act.
Determination of the status of the Authority in
relation to the Crown requires examination of its
enabling legislation and also, in view of the plain
tiff's submissions, of the Financial Administration
Act. Annex A to these reasons sets out a summary
overview of the powers of the Pilotage Authority
under the Pilotage Act and the measures of control
exercised by officers or agencies of the Crown in
relation to the Authority pursuant to that Act and
to the Financial Administration Act.
There is no doubt that by virtue of the Financial
Administration Act the Crown, through the appro
priate Minister, the Minister of Finance, Treasury
Board or the Governor . in Council, exercises a
wide-ranging supervisory authority, including the
authority to make binding directives, and ultimate
responsibility for all Crown corporations. On
behalf of Her Majesty it is submitted that exten
sive as those powers of the Government of Canada
are, they merely establish a framework applicable
to the operations of. all Crown corporations. They
do not, it is said, diminish the comparative in
dependence of the Pilotage Authority which should
not be deemed an agent of Her Majesty. Particu
larly is this so because of section 9 of the Pilotage
Act, expressly declaring the Authority not to be an
agent of Her Majesty, and because of the defini
tion of an "agent corporation" in section 83 of the
Financial Administration Act which limits such
corporations to those expressly declared by another
statute to be an agent of the Crown. It is also
urged that particularly in its day-to-day operations
the Authority here has greater independence than
bodies found to be agents of the Crown in the
cases to which reference has been made. The
words of Viscount Haldane in Metropolitan Meat
Industry Board v. Sheedy, [1927] A.C. 899
(P.C.), at page 905 are said to be applicable here,
i.e.:
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 confers on the appellant Board wide
powers which are given to it to be exercised at its own discre
tion and without consulting the direct representatives of the
Crown.
For the plaintiff it is submitted that the concept
of independence perceived on behalf of Her Majes
ty ignores not only the effects of 1984 amendments
to the Financial Administration Act but also the
modern trend to limit Crown immunity. Reference
is made to the decision of Kerans J.A. in Re
Associated Investors of Can. Ltd. (1988), 57 Alta.
L.R. (2d) 289 (C.A.) at pages 296-298, and his
discussion of Crown prerogatives. In issue in that
matter was the immunity of servants, agents and
representatives of the Crown from compulsory
examination for discovery, specifically in relation
to a subpoena duces tecum requiring production of
documents, books and records of the Canada
Deposit Insurance Corporation. In holding that
there was no immunity Mr. Justice Kerans
reviewed the evolution of some aspects of Crown
prerogatives and immunity. This review is interest
ing, but, in my view, it is not directly relevant in
this case. Here Her Majesty does not claim
immunity from suit based on prerogative; rather, it
is claimed she is not properly a defendant because
the acts complained of were not done by a body,
the Pilotage Authority, on her behalf.
As for the general effects of the 1984 amend
ments to the Financial Administration Act upon
the Pilotage Act, the plaintiff's submission simply
invites a conclusion that avoids efforts to construe
the two Acts together. Clearly where the Financial
Administration Act conflicts with specific provi
sions of the Pilotage Act then the former must
prevail not merely because it is the later expression
of Parliament's intent but also because Parliament
has so provided by section 87 of the Financial
Administration Act, which provides that unless
expressly provided otherwise in the event of incon
sistency between Part X (relating to Crown corpo
rations) of that Act and any other Act of Parlia
ment, the Financial Administration Act is to
prevail.
There is, in my view, no inconsistency in specific
provisions of the two Acts about the general status
of the Atlantic Pilotage Authority. It is not an
agent of Her Majesty as the Pilotage Act expressly
states, and it is not an "agent corporation" within
the definition in the Financial Administration Act.
While I agree with the general thrust of the plain
tiff's argument about the effects of the 1984
amendments to the latter Act in providing a broad
measure of ultimate control by the Crown over the
Authority, those controls relate in the main to
administrative processes designed to ensure a
reasonable measure of standardization of proce
dures and opportunities for intervention by Crown
officers in relation to matters concerning policy.
Even in the requirement for submission and
approval of business plans, operating and capital
budgets, the process does not extend to authorizing
intervention by Crown officers in relation to the
day-to-day operations of the Authority. It is in
those operations that the Authority's status has
significance as an entity independent from the
Crown and not as Her Majesty's agent. And it is
in the course of those operations that the activities
here complained of were conducted. In matters of
tendering contracts for services of pilot boats,
which here give rise to the plaintiff's claim, I
conclude that the Atlantic Pilotage Authority was
not acting as agent for Her Majesty.
In these activities, subject to the prior approval
by government of its business plan and its operat
ing and capital budgets, and subject to any of its
own by-laws, it was operating independently of
supervision by government. It was acting in its own
name. It is subject to suit in relation to the matter
in its own name. In my view, in connection with
the arrangements which give rise to the plaintiff's
claim it was not acting as agent of the Crown, in a
manner which would create liability on the part of
Her Majesty if the Authority should ultimately be
found at fault for damages claimed by the plain
tiff. The actions of the Authority were in relation
to activities in its own domain, free from direct
supervision of the Crown or its officers, conducted
in a manner that does not result in impleading the
Crown as liable within the meaning of section 17
of the Federal Court Act for any wrongdoing by
the Authority.
There is an additional reason supporting this
conclusion. Parliament has sought to ensure that
Crown corporations may be sued in their own
name and in the courts with jurisdiction in relation
to the substance of any claim. In this case the
Authority is suable in its own name by virtue of
the Interpretation Act, R.S.C., 1985, c. I-21, sub
section 21(1). But even in the case of "agent
corporation[s]" section 98 of the Financial
Administration Act provides that whether an obli
gation be incurred in the name of the Crown or in
the name of the corporation, legal proceedings
may be brought against the corporation in its
name as if it were not an agent of the Crown.
Parliament having thus sought to ensure that even
agent corporations are open to suit, it would be
inefficient to permit claims arising out of contract
arrangements undertaken in the regular course of
business by Crown corporations which are not
agents of Her Majesty, to result in impleading Her
Majesty as defendant. That, it seems to me, is
contrary to the general public interest in efficiency
in the judicial process.
The motion here made was based on three para
graphs of Federal Court Rule 419. In my view
paragraph (a) is not an appropriate ground for
allowing the motion, since, in considering a motion
that the statement of claim discloses no reasonable
cause of action, the Court accepts the facts alleged
in the statement of claim as true. Here the state
ment of claim alleges that the Pilotage Authority
in the actions complained of was an agent of Her
Majesty, a legal conclusion I have not accepted.
Paragraph (c), that the statement of claim is
frivolous or vexatious in relation to Her Majesty as
a defendant is an appropriate basis here, as is
paragraph CO that the pleading is an abuse of the
process of the Court in so far as the Court has no
jurisdiction in relation to Her Majesty where there
is no lawful claim within section 17 of the Federal
Court Act.
For these reasons the application on behalf of
Her Majesty is allowed. An order goes striking the
statement of claim in its entirety as against the
defendant, Her Majesty the Queen, and though
not specifically requested, the Court of its own
motion orders that the name of Her Majesty, as
defendant in this action, be struck from the style
of cause.
ANNEX A
A summary overview of powers of the Atlantic Pilotage Au
thority under the Pilotage Act, R.S.C., 1985, c. P-14 and the
measures of control exercised by the Government of Canada
(The Crown) in relation to that Authority pursuant to the
Pilotage Act and the Financial Administration Act, R.S.C.,
1985, c. F-11.
The Authority is a body corporate by virtue of subsection
3(1) of the Pilotage Act and the schedule naming it. It consists
of a Chairman appointed by the Governor in Council and not
more than six other members appointed by the Minister of
Transport with the approval of the Governor in Council who
may also appoint a Vice-Chairman (subsections 3(2),(3), sec
tion 11). The name, the location of its head office and the
region of Canadian waters in which the Authority acts are set
out in the Schedule to the Act and all may be changed by the
Governor in Council (subsection 3(4), section 4).
Section 9 of the Pilotage Act specifically sets out "An
Authority is not an agent of Her Majesty". The Financial
Administration Act, Part X, deals with Crown corporations.
Subsection 83(1) defines an "agent corporation" as a "Crown
corporation that is expressly declared by or pursuant to any
other Act of Parliament to be an agent of the Crown"; it
defines "Crown corporation" as a parent Crown corporation or
a wholly-owned subsidiary, and it defines "parent Crown corpo
ration" as a corporation that is wholly owned directly by the
Crown not including a departmental corporation. In this case
the Atlantic Pilotage Authority is a "parent Crown corpora
tion" by virtue of paragraph 3(1)(b) and its inclusion in the list,
among others in that category, in Part I of Schedule III of the
Financial Administration Act.
The Financial Administration Act also includes provisions
referring exclusively to an agent corporation. It may exercise its
power only as an agent of the Crown. It may contract in the
name of the Crown or in its own name. Legal proceedings may
be brought or taken by or against the agent corporation in its
name in any court with jurisdiction as if the corporation were
not an agent of the Crown. Property held in its name or the
name of the Crown is vested in the Crown and may be disposed
of only in accord with regulations or on the authorization of the
Governor in Council. Property held by the agent corporation
may not be transferred as security and borrowing may not be
undertaken unless it is specifically authorized by Act of Parlia
ment (sections 96-101).
There is no provision in the Pilotage Act relating to the
capacity of the Authority to sue or its liability to suit, but it is
subject to subsection 21(1) of the Interpretation Act, R.S.C.,
1985, c. I-21, and is thus vested with the "power to sue and be
sued, to contract and be contracted with by its corporate name,
to have a common seal and to alter or change it at pleasure, to
have perpetual succession, to acquire and hold personal prop
erty for the purposes for which the corporation is established
and to alienate that property at pleasure".
Several powers of the Authority under the Pilotage Act
appear from that Act to be exercisable without supervision by
others representing the Crown. Thus, it may employ officers
and employees, pilots and apprentices or contract with a body
corporate of pilots in a given area as may be necessary for
proper conduct of its work (section 15), though officers and
employees are deemed to be persons employed in the Public
Service for purposes of compensation and superannuation (sec-
tion 16). An Authority may make by-laws for regulation of its
internal affairs (section 17). It may purchase, lease or other
wise acquire land, buildings, wharves, other structures, pilot
boats, radio and communication equipment and other equip
ment, supplies and services necessary for its purposes and it
may sell or lease any of this property (section 19). It shall
cancel a licence or pilotage certificate when the holder thereof
does not meet required qualifications (subsection 30(2)). It
may, for purposes of defraying its expenses, borrow money in
Canada or elsewhere (paragraph 36(a)), and all fines levied
under the Act are payable to the Authority concerned (section
49).
Several other powers of the Authority under the Pilotage Act
are exercisable with approval or subject to supervision of the
Government of Canada. Thus it may make regulations neces
sary for attainment of its objects with the approval of the
Governor in Council (section 20), and where there is objection
to a proposed regulation the Minister may order an investiga
tion and thereafter he or she may approve, amend or disapprove
of the proposed regulation (section 21). The Authority may
grant licences or certificates to qualified pilots or apprentices,
and may suspend or cancel any licence or certificate subject to
review and decision of the Minister if there is objection to a
decision of the Authority (sections 22, 23, 27, 29); and the
Authority shall keep a register, in a manner approved by the
Minister, of licensed pilots, apprentices and holders of certifi
cates (section 32). The Authority shall make regulations pre
scribing tariffs or pilotage charges, with approval of the Gover
nor in Council, consistent with providing a revenue sufficient to
permit it to operate on a self-sustaining financial basis (section
33), and where there is objection to a proposed tariff the
National Transportation Agency conducts an investigation
after which it makes a recommendation binding on the Author
ity (sections 34, 35 [as am. by R.S.C., 1985, (3rd Supp.), c. 28,
s. 359]). An Authority may issue debentures for such sums as
may be determined by the Minister of Finance (paragraph
36(b)), and it may with approval of that Minister invest in
bonds any moneys not immediately required for its purposes
(section 37). The Auditor General of Canada is the auditor of
each Authority (section 38). Finally, the Governor in Council
may make regulations under the Act respecting certain general
qualifications for holding of licences, for the holding of hear
ings by an Authority and for establishing compulsory pilotage
areas (section 52 [as am. by R.S.C., 1985 (1st Supp.), c. 31, s.
86]).
In addition to these powers expressly made subject to super
visory control by the Government of Canada under the Pilotage
Act, the plaintiff points to the Financial Administration Act for
additional measures of control over the Pilotage Authority.
These include provision that any debt or obligation of a Crown
corporation due to Her Majesty, or any claim by Her Majesty
against a Crown corporation may be forgiven in whole or in
part by being included as a budgetary vote in an appropriation
Act, and if forgiven shall be included in the Public Accounts
(subsections 25(4) and (5)). Part X includes the definition of a
corporation wholly owned by the Crown (subsection 83(2)),
and there is no doubt that the Pilotage Authority here is such a
corporation. Paramountcy of Part X of the Act over conflicting
provisions of any other Act of Parliament, except as otherwise
expressly provided, is declared by section 87. By section 88
each Crown corporation is made ultimately accountable,
through the appropriate Minister, to Parliament for the con
duct of its affairs. Under section 89 the Governor in Council
may give a directive to any parent Crown corporation and the
directors shall ensure the directive is implemented in a prompt
and efficient manner. Certain transactions require Parliamen
tary authorization (section 90), others require approval of the
Governor in Council (sections 91, 94).
Other provisions relate to directors and officers of Crown
corporations, their appointment by the Governor in Council, or
by the appropriate Minister with approval of the Governor in
Council, and their duties. Sections 109 to 114 vest responsibili
ty for management in the board of directors (section 109). The
board may by resolution make, amend or repeal any by-laws
regulating the affairs of the corporation unless its charter or
by-laws otherwise provide, a copy of the by-law is to be sent to
the appropriate Minister and to the President of the Treasury
Board, and the Governor in Council may direct the board of the
corporation to make, amend or repeal a by-law (section 114).
Under section 115 it is stipulated that every director and officer
of a Crown corporation has a duty of care to act in good faith
in the best interests of the corporation, exercising the care,
diligence and skill that a reasonably prudent person would
exercise in comparable circumstances, and each has a specific
obligation to comply with Part X of the Act, the regulations,
the charter and by-laws of the corporation.
Sections 120 to 152 of the Financial Administration Act deal
with financial management and control. Each parent Crown
corporation is required to submit annually a corporate plan to
the Minister for approval of the Governor in Council, encom
passing all its business and activities, including investments,
and its objectives, and it must carry on business only in a
manner consistent with an approved plan (section 122). Each
shall also submit for approval of Treasury Board an annual
operating and capital budget, with amendments as necessary
(sections 123, 124). If it intends to borrow money that must be
indicated in its corporate plan or an amended plan and it may
not borrow without approval of the Minister of Finance with
respect to the timing and the terms and conditions of the
transaction (section 127). A parent Crown corporation shall, if
directed by the Minister of Finance and the appropriate Minis
ter, pay to a special account credited in its name, moneys of the
corporation, and surplus money of the corporation must be paid
over to the Receiver General as directed by the Minister of
Finance and the appropriate Minister (sections 129, 130).
Annual auditor's reports (section 132), accounts, budgets,
returns, statements, documents, records, books, reports and
other information as required by Treasury Board or the appro-
priate Minister (section 149), and annual reports on the opera
tions of the corporation (section 150), are to be submitted by
each parent Crown corporation.
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.