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Legal aspects of public or crown corporations in Canada Kimuli, Moses Aldrin 1980

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LEGAL ASPECTS OF PUBLIC OR CROWN CORPORATIONS IN CANADA by MOSES ALDRIN KIMULI LL.B. (Hons.) University of Dar es Salaam, 1977, Diploma in Legal P ract i ce , Law Development Centre, Kampala, 1978 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF LAWS in THE FACULTY OF GRADUATE STUDIES (Faculty of Law) We accept th i s thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA September, 1980 © Moses A ld r in K imul i , 1980 In presenting th i s thesis in part ia l fu l f i lment of the requirements for an advanced degree at the Univers ity of B r i t i s h Columbia, I agree that the L ibrary shall make i t f ree ly avai lable for reference and study. I further agree that permission for extensive copying of th i s thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publ ication of th i s thes is for f inanc ia l gain shal l not be allowed without my written permission. Faculty of Law, Univers ity of B r i t i s h Columbia, Vancouver, Canada Date S>tz - ^ to .^cbe r ?,o j ( i i ) ABSTRACT In 1841 Lord Sydenham, as Governor of the United Provinces, established a Board of Works as a separate legal ent i ty to construct a canal system. This was the f i r s t public or crown corporation. Since then, there has been a s i gn i f i cant increase in the use of the corporate form of enterprise organization and management by the government. However, th i s marked governmental dependency on the corporate legal form has not been matched by any appreciable inquiry into the legal problems and issues posed and raised by the chosen legal form. This essay attempts to analyse some of those problems and issues. Part One deals with the de f i n i t i on and c l a s s i f i c a t i o n of public corporations as well as the j u r i d i c a l forms that these corporations take. Interest groups, namely, taxpayers, creditors and suppliers of crown corporations, and victims of crown corporation delinquency are also i ntroduced. The substantive legal l i a b i l i t y of crown corporations forms the subject of Part Two. Here the contractual and tort ious l i a b i l i t y of crown corporations as well as the i r l i a b i l i t y for wrongs committed outside the i r national j u r i s d i c t i o n are considered. The procedural aspects of crown corporation law are treated in Part Three. A basic problem that runs through Parts Two and Three is the dual nature of crown corporations. In substance, crown corporations are public author i t ies ; they are part of the state machinery. In form, crown corporations are approximated to and resemble, private corporations. They enter into contracts and other legal re lat ionsh ips, commit torts and other legal wrongs, just l i k e private corporations do. Since the crown, as the ( i i £ ) personi f icat ion of the state, t r a d i t i o n a l l y enjoys a number of substantive and procedural immunities and p r i v i l eges , i t becomes necessary to determine the extent to which crown corporations partake of those immunities and p r i v i l eges . At the same time there are sound reasons for arguing that crown corporations should be placed in the same posit ion as private corporations, that i s , they should not be permitted to shelter behind crown immunities and p r i v i l eges . The legal duties of those entrusted with the management and administration of crown corporations and the issue of creditor protection are examined in Part Four. The discussion is conducted in the l i ght of the interests of those groups referred to above. Proposals and suggestions are made in the course of the essay. A summary and conclusions appear in Part Five. (iv) CONTENTS  PART ONE AN INTRODUCTION TO PUBLIC OR CROWN CORPORATIONS Page Section I. Introduction 1 I I. Forms of Legal Personal i t ies 2 I I I . Terminology 4 IV. Def in i t ion of Crown Corporation 5 V. C l a s s i f i c a t i on of Crown Corporations 9 VI. J u r i d i c a l Forms of Public Corporations 13 VII. Nature of A c t i v i t i e s Carried on by Crown Corporations. 17 VI I I . Interest Groups 18 IX. Object of Research 22 PART TWO SUBSTANTIVE LEGAL LIABILITY OF CROWN CORPORATIONS Section I. Introduction 24 II. The Dual Nature of Crown Corporations 24 I I I. Lack of a Well Documented Law of Public Corporations.. 28 IV. Crown Immunities, P r i v i l eges , Prerogatives and Immunity from Suit 30 V. Tortious L i a b i l i t y of Crown Corporations 70 VI. International Legal Status of Public Corporations 84 PART THREE PROCEDURAL ASPECTS OF CROWN CORPORATIONS Section I. Introduction II. Forum of Venue I I I. Notice 100 100 of Claim 105 IV. Immunity from Restraint 107 V. L imitat ion of Action 109 VI. Discovery and Interrogatories 11 VII. Debt P r i o r i t y 11 V i l l i Enforcement of Judgments 11 IX. General Comments 11 ,<v) PART FOUR DIRECTORS' DUTIES AND CREDITOR PROTECTION Page Section I. Introduction 118 I I. P o l i t i c a l Control and Public Accountabi l i ty 119 I I I. Jud i c i a l Controls 125 IV. Creditor Protection 138 PART FIVE SUMMARY AND CONCLUSIONS Section I. Part One 142 II. Parts Two and Three 142 I I I. Summary and Conclusion for Part Four 147 IV. General Observations •• 148 FOOTNOTES Part One 149 Part Two 157 Part Three 180 Part Four 185 Part Five 191 BIBLIOGRAPHY Books 192 A r t i c l e s 195 Cases 200 Statutes 209 O f f i c i a l Reports and Papers, etc 211 LIST OF APPENDICES Appendix A 212 B 213 C 214 D 216 E 218 - 1 -PART ONE AN INTRODUCTION TO PUBLIC OR CROWN CORPORATIONS 1. INTRODUCTION The p ro l i f e ra t i on of governmental a c t i v i t i e s and operations, a process which began in the last century but has assumed pre-eminence in the course of the present one, 1 has blurred the once hallowed d i s t i nc t i on between pr ivate and public powers.2 i t can no longer be assumed, as was generally the case under the predominance of l i be ra l economic philosophy in the nineteenth century that commercial and other economic a c t i v i t i e s are the province of the private sector, while that of the public sector is confined to defence, foreign a f fa i r s and certa in elementary police and administrative functions.3 Now the a c t i v i t i e s of the state cover a large number of economic, managerial and industr ia l functions, as well as social services of many kinds. More s i gn i f i c an t l y for present purposes, the process or phenomenon just adverted to has brought to the forefront a search for a l e ga l , administrative and organizational structure or framework suited to the changed, widenned and extended a c t i v i t i e s of the state. In shopping around for such a structure the Canadian government, l i k e other governments the world over,4 has stumbled upon the corporate form of enterprise organization. Hence the public or crown corporation. In s l i g h t l y d i f ferent language, Al lan B. Blakeney reports on th i s development as fo l lows;-"Governments which only a few decades ago contended themselves with a very narrow f i e l d of a c t i v i t y are today branching forth into new and very d i f ferent avenues of public service. This broadening of the scope of governmental a c t i v i t i e s has led to the evolution of new types of public administration. One of the new types which has found increasing favour in recent years has been the crown corporation." 5 The use of the word 'new' by Al lan B. Blakeney, unless otherwise - 2 -explained, would seem to be inappropriate. Public or crown corporations are not new legal i n s t i tu t ions in the sense of having been established t h i r t y or for ty years ago. The factual s i tuat ion is that, in Canada, the crown corporation made i t s debut in 1841, when Lord Sydenham, then Governor of the United Provinces, established a Board of Works with corporate form to construct a canal system.6 Since then, crown corporations have continued to mushroom.'' Not unexpectedly, in t he i r one hundred and forty or so years of existence, public or crown corporations have raised a myriad of issues and problems for lawyers and economists as well as p o l i t i c a l s c i en t i s t s . To the lawyer, issues re lat ing to the legal status of these corporations, the i r l i a b i l i t y to those they have wronged and the duties and re spons ib i l i t i e s of those entrusted with the management and administration of these organizations, inter a l i a , require urgent and immediate examination and cons iderat ion. 8 The extent to which crown corporations partake of crown immunities, pr iv i leges and prerogatives is of special v i t a l i t y . These and other legal issues and problems form the substance of th i s essay, but the non-legal aspects of crown corporations are not completely ignored; they are discussed in so far as they pave the way for a legal exposit ion. II. FORMS OF LEGAL PERSONALITIES The concept of the l ega l , j u r i s t i c or a r t i f i c i a l personality manifests i t s e l f in a var iety of forms.9 Without any doubt, the state is evidently the largest and most important legal personal ity. While i t is an accepted fact that the state, by i t s l eg i s l a tu re , makes laws, i t may i t s e l f be bound by those laws, and notwithstanding the fact that, by i t s courts and t r ibuna l s , the state sett les disputes, i t may i t s e l f be bound by j u d i c i a l - 3 -decrees. Thus, the state may be the subject of proprietary, contractual and tort ious rights and duties. In a nutshel l , i t is a legal person.10 In the second place are private corporations or companies. Their features are innumerable, and they appear in a l l sizes but the most outstanding features of these corporations are that they are bas ica l l y pr ivate ly owned and financed and the i r contro l , in terms of day-to-day a c t i v i t i e s , is in private hands, not public or o f f i c i a l bodies or persons. Of course one does not lose sight of the fact that occasionally, private corporations, especia l ly the large or widely-held ones, look to the government for funding. Also the protection of the general public ca l l s for some measure of public or governmental control over these corporat ions . i l Pr ivate corporations, in Canada, are generally incorporated under the Canada Business Corporations Act12 and the various Prov inc ia l Statutes providing for the incorporation of companies,! 3 and operate in what the economists t e l l us is the private sector. • Not far removed from the state or government are purely o f f i c i a l organizations, whose finances are provided by the taxpayer, whose a f f a i r s are concerned with government, and whose of f icers are public o f f i c i a l s , responsible to a p o l i t i c a l authority and through that authority to the public at large.1^ Local Government authorit ies provide obvious examples. These organizations are, however, detached from the state in that they incur l i a b i l i t i e s and enforce t he i r r ights separately. Next come the public corporations which may be divided into three broad categories; namely; - National or, in the Canadian context, federal public corporations; Provincial or state public corporations;15 and International or Multinational public corporat ions .^ This work is - 4 -devoted to Canadian federal public corporations. Save for purposes of comparison and analogy, provincial and international or multinational public corporations are not treated in th i s work. If any explanation should be sought, i t i s that any task must have i t s l i m i t s , otherwise i t becomes too wide and unmanageable. Further, the sort of issues and problems raised and posed by provincial public corporations are to a large extent s imi la r to those raised and posed by Federal public corporation and a repet i t i ve analysis is therefore eschewed. I I I. TERMINOLOGY In the f i r s t place, the word 'crown' i s not used in any personal sense but is used as "a convenient symbol for the state." I? "Crown in fact means government, and government means those innumerable o f f i c i a l s who co l lec t our taxes and grant us patents and inspect our drains. They are human beings with money-bags of the state behind them." 18 And Wells J.A. in Formea Chemicals Ltd. v. Polymer Corporation Ltd.19 was in agreement when he sa id ; -"The words 'Government of Canada' i n th i s section^O may, I think, be equated with the term 'the crown' as used in many of the English decisions . . . In my opinion the words ' the crown' and the words ' the Government of Canada' have the same meaning." 21 The term 'Her Majesty' i s assigned the same meaning.22 i f then, crown means government, 'crown corporations ' mean government corporations. They may as well be referred to as state corporations. Crown corporations are, however, legal e n t i t i e s , separate and d i s t i nc t from the state or government,23 a c lear appl icat ion of the pr inc iples of the epoch-making case of Salomon v. Salomon & Co.24 In the second place, crown or government corporations are also herein - 5 -referred to as ' pub l i c corporations'25 insofar as ' p u b l i c ' expresses the ant ithes is of ' p r i v a t e ' . They must at once be distinguished from large, widely-held or super-corporations, operating in the private sector but which are also sometimes referred to as public corporations.26 i t has been claimed that there is l i t t l e to dist inguish between crown or public corporations and the giant private corporations; that both types of corporation perform v i t a l soc ietal functions, make decisions of national importance, and set pol icy in s i gn i f i cant areas of concern, for example, the a l locat ion of resources, the d i rect ion and nature of investment; and that in a real sense the giant private corporations are arms of the State.27 It may well be so, but the fact that crown or public corporations are financed by the taxpayers and control led by the government whereas giant private corporations usually look to the private capital market as a source of funds and are not generally subject to min i s ter ia l and parliamentary control and guidance, is su f f i c ient ground for a separate treatment of the two types of corporation. There is the further consideration that crown corporations are instruments of public or national policy29 while private corporations, whatever t he i r s i ze , are pr imari ly motivated by the lust for p r o f i t . 'Crown corporations ' and 'Pub l ic corporations ' are used interchangeably. IV. DEFINITION OF CROWN CORPORATION It has been r i gh t l y pointed out^O that a precise de f in i t i on of the term "publ ic corporation ' is far from easy and that l i t t l e attempt has been made to give a general d e f i n i t i o n , but that should not deter one from try ing to f ind a working de f i n i t i on of the same. Indeed a number of authors, - 6 -writers and essayists have endeavoured to define a public or crown corporation. L.C.B. Gower^l defines a public corporation as ". . . the type of body set up to operate national ized industries or for the organization of other public enterprises and serv ices. " This de f i n i t i on does not t e l l us much about the public corporation and whatever force i t might have, i s minimized, in the Canadian context, by the fact that nat ional izat ion has not been as big or controversial an issue in Canada32 as i t has been in Great B r i t a i n . John Loxley and John Saul understand public corporations to be ". . . those organizations which f a l l outside the main l ines of the departmental and min i s ter ia l heirarchies and which have in consequence, some measure of quasi autonomy in the i r day-to-day a c t i v i t i e s (though of course a l l are ult imately t ied into the central ized decision making process).33 This de f i n i t i on i s pregnant with ambiguity. To R.B. Turkson public corportions are ". . • corporate bodies which have been established by parliament under l eg i s l a t i on outside the framework of the Companies Code . . ."34 Limitations must be placed on th i s de f i n i t i on as w e l l , because there is nothing to prevent a government from establ ishing a public corporation within the framework of a companies or corporations code. In f ac t , in Canada, a number of public corporations35 have been incorporated under the Canada Business Corporations Act or i t s predecessors. W. Friedmann36 out l ines , in l i eu of a de f i n i t i o n , what he ca l l s the universal legal character i s t ics of the public corporation. Some of these character i s t ic s appear as follows;-37 ( i ) The public corporation is normally created by special statute or (exceptionally) by charter. It does not, l i k e a commercial company, come into existence automatically, on fu l f i lment of certa in conditions. 38 - 7 -( i i ) The public corporation has no shares and no shareholders, e ither private or publ ic. Its shareholder, in a symbolic sense, is the nation represented through Government and Parliament. ( i i i ) The respons ib i l i t y of the public corporation i s to the Government, represented by the competent Minister, and through the Minister to Parliament.39 ( iv) The administration of the public corporation is ent i re ly in the hands of a Board which is appointed by the competent Min ister, sometimes after and mostly without consultation with any special group or industry but invar iably not on a basis of representation of special interests . Neither the Board members nor any employees of a Board are c i v i l servants. (v) The public corporation has the legal status of a corporate body with independent legal personal ity. (v i ) A l l public corporations are supervised by independent accounting and auditing as well as some form of public contro l . But the type of accounting and public control varies according to the type of public corporation. ( v i i ) A l l public corporations have a dual nature; they are instruments of national pol icy but they are autonomous un i t s , with legal independence and certa in aspects of commercial undertakings. The degree of independence var ies, however, according to the type and purpose of the public corporat ion.^ n Canadian authors have also made the i r contr ibut ion. Ashley and Smails define a crown corporation as "an i n s t i t u t i on with corporate form brought into existence by action of the Government of Canada to serve a public function."41 The acquis i t ion or take-over by the Government of Canadair Limited and the De Havil land A i r c ra f t of Canada Limited, formerly private companies, has undermined th i s de f i n i t i o n . These two companies are beyond dispute, crown corporations, but i t cannot be contended that they have been brought into existence by action of the Government of Canada; they were acquired as going concerns. A statutory de f in i t i on of a crown corporation i s provided in section 61(1) of the Financial Administration Act^2 as fo l lows: -- 8 -'"Crown corporation ' means a corporation that is u lt imately accountable, through a Minister, to Parliament for the conduct of i t s a f f a i r s , and includes the corporations named in Schedule B, Schedule C, and Schedule D." Schedules B, C, and D appear as Appendix A, B, and C respectively hereto. This de f i n i t i on has been condemned for uncertainty,43 ambiguity and confusion.44 Ashley and Smails45 reject th i s de f in i t i on because the expression "through a minister" which appears in the de f in i t i on leaves one wondering whether the Minister has a respons ib i l i t y for the conduct of the corporation or whether he acts merely as a messenger or a reporting l i nk to Parliament for the crown corporation. The true posit ion is that the Financial Administration Act (F.A.A.) and the acts establ ishing the corporations vest considerable powers in the appropriate Min ister. These powers imply a greater role and respons ib i l i t y than simply a reporting l i n k . For example, under the F.A.A. the appropriate Min i s ter , with the President of the Treasury Board, approves the annual operating budgets of crown corporations46 and with the Minister of Finance and the President of the Treasury Board, recommends the approval of annual capital budgets to the Governor in Council.47 Further, under the constituent acts48 of the Northern Canada Power Commission, Central Mortgage and Housing Corporation, St. Lawrence Seaway Authority, Canadian Commercial Corporation, Agr icu l tura l S t ab i l i z a t i on Board and Atomic Energy Control Board, the appropriate Minister has the power to direct the corporation respecting the exercise and performance of corporate powers and functions. The Privy Council 0ff ice49 reported some confusion surrounding the term 'crown corporation ' owing to the statutory de f in i t i on quoted above and that th i s confusion stems from the fact that the statutory de f i n i t i on is not exhaustive, since one must look beyond the F.A.A. to determine what are - 9 -crown corporations. This c r i t i c i s m is generated by the word " includes" in that de f i n i t i on . To remedy the s i tuat ion and remove any ambiguity associated with the term crown corporation, the government proposed that the term 'crown corporation ' should be applied only to those corporations l i s t ed in the schedules of the F.A.A.50 and that a corporation could be added to the schedules and thereby become a crown corporation only i f i t were wholly-owned by the Government of Canada, either d i r ec t l y or i nd i r ec t l y through another crown corporation. Such a c r i t e r i on would cover a l l corporations l i s t e d in the schedules of the F.A.A., plus subsidiaries of crown corporations and the i r subsidiaries as well as a l l corporations wholly-owned by the Government of Canada. The above c r i t i c i sms of the statutory de f in i t i on of crown corporation are not without v a l i d i t y but the basic flaw in th i s de f in i t i on i s that i t is s i l en t on two of the fundamental character i s t ics or attr ibutes of the public or crown corporation, namely that they are wholly-owned by the government and are instruments of broad national or public p o l i c y . 5 1 The other fundamental attr ibutes are that public corporations are financed through public sources, are subject to public control and are corporate bodies. A public or crown corporation may, therefore, be defined as a body corporate which is wholly-owned by the government and is an instrument of national or public po l i cy . It is bas ica l l y financed by the government and is subject to public control at two levels - cabinet or M in i s te r ia l and Pariiamentary.52 V. CLASSIFICATION OF CROWN CORPORATIONS The Financial Administration Act, part VIII of which deals s p e c i f i c a l l y with crown corporations, provides for the c l a s s i f i c a t i o n of crown corporations as "departmental", "agency" and "propr ietary" - 10 -corporations.53 This c l a s s i f i c a t i on is based on the extent of f inanc ia l independence enjoyed by the corporations and the general nature of t h e i r a c t i v i t i e s . 5 4 (a) Departmental Corporat ions 5 5 A departmental or Schedule B corporation is ". . . any crown corporation that is a servant or agent of Her Majesty in right of Canada and i s responsible for administrat ive, supervisory or regulatory services of a governmental nature." 5 6 Save that they are legal e n t i t i e s , departmental crown corporations are indist inguishable from ordinary departments of government in the general character of the i r a c t i v i t i e s and the i r relations with the appropriate Minister as well as the i r f inanc ia l admin i s t ra t ion . 5 7 They are financed by appropriations and a l l t he i r cash transactions take place through the consolidated Revenue Fund, and the Treasury Board, the Comptroller of the Treasury and the Auditor General have powers of control and regulation over the i r finances and accounting reco rd s . 5 8 They are a l l audited by the Auditor-General of Canada. 5 9 In essence, therefore, departmental corporations are departments of government over which, in addition to the above author i t ies , the Governor in Council or the appropriate Minister exerts more or less continuous f inanc ia l control and d i rect ion as would be the case for an ordinary department of government.60 They enjoy very l i t t l e , i f any, administrative and f inanc ia l independence. (b) Agency Corporations 5^ An agency or Schedule C corporation is ". . . any crown corporation that is an agent of Her Majesty in right of Canada and i s responsible for the management of trading or service operations on a quasi-- 11 -commercial basis, or for the management of procurement, construction or disposal a c t i v i t i e s on behalf of Her Majesty in right of Canada."62 Agency corporations are usually given control led revolving funds.63 Each corporation is required to submit an annual operating budget to the appropriate Minister,64 which, after approval by the Governor in Council on the recommendation of the Minister responsible and the Min ister of Finance, provides the figures for operations included in the estimates presented to Parliament. A capita l budget is also required which is l a i d before Parliament, after approval by the Governor in Council on the jo int recommendation of the appropriate Minister and the Minister of Finance.65 Annual reports, including f inanc ia l statements, are required as soon as poss ible, but within three months, after the end of the f inanc ia l year. They are addressed to the Min i s ter , who lays them before Parliament within f i f t een days of the i r receipt or i f Parliament is not then in session, within f i f t een days of the opening of the next session.66 The Governor in Council may make regulations with respect to the conditions upon which an agency corporation may undertake contractual commitments.67 Agency corporations have more breathing space, in terms of administrat ive, operational and f inanc ia l independence, than departmental corporations.68 (c) Proprietary Corporations69 At the other end of the scale are proprietary corporations. A proprietary or Schedule D corporation is one that ". . . is responsible for the management of lending or f inanc ia l operations, or for the management of commercial and industr ia l operations involving the production of or dealing in goods and the supplying of services to the publ ic, and is o rd ina r i l y required to conduct i t s operations without appropr ia t ions . " 7 0 - 12 -Proprietary Corporations are c lea r l y d i f ferent iated from departmental organizations by v i rtue of t he i r having boards of management with substantial powers of d i rect ion and a corresponding diminution of min i s ter ia l re spons ib i l i t y . Unlike normal government departments and departmental corporations, proprietary corporations function pr imari ly in spheres of active economic endeavour - finance, production, commerce and industry - and are normally expected to finance themselves, once they are f i rmly on t he i r feet , from the sale of goods and services. The government is not expected under the F.A.A. to approve or even see the annual operating budgets of proprietary corporat ions, 7 ! but must approve the i r annual capital budgets.72 This means that while the government supervises the capital proposals and general pol icy of proprietary corporations, the persons entrusted with the management of these corporations have a free hand as far as day-to-day operations are concerned. Consequently these corporations enjoy the greatest degree of f i n a n c i a l , administrative and operational autonomy. It is said that th i s r e l a t i ve independence from Parliament and government is necessary to establ i sh an environment which w i l l attract businessmen to the management of an entrepreneurial a c t i v i t y on behalf of the publ ic, to protect the commercial secrecy of competitive crown corporations and to f a c i l i t a t e business management in the marketplace.73 Like agency corporations, proprietary corporations must produce annual reports.74 (d) Unclass i f ied Crown Corporations I t has already been noted that by the use of the word " includes" in the statutory de f in i t i on of crown corporations, crown corporations are - 13 -not l imited to those organizations appearing in Schedules B, C, and D of the F.A.A. and using the de f i n i t i on of crown corporation herein enunciated, another set of crown corporations is d i scern ib le. These are referred to as other or unclass i f ied crown corporat ions . 7 5 They may be set up by spec i f i c Acts of Parliament or may be acquired by the government of Canada as going concerns. Wholly-owned subsidiaries of departmental, agency and proprietary corporations, which are not l i s t ed in any of the schedules to the F.A.A., also f a l l under th i s category. 7 6 A l l unclass i f ied crown corporations are not subject to the provisions of Part VIII of the F.A.A. and are governed by the i r acts or other documents of incorporation. A pa r t i a l l i s t of unc lass i f ied crown corporations appears as Appendix D. VI. JURIDICAL FORMS OF PUBLIC CORPORATIONS Publ ic or crown corporations take two j u r i d i c a l or legal forms depending on the mode of the i r creation. (a) Statutory Corporations These crown corporations are created by spec i f i c acts of Parliament or statutes. The incorporating statutes spell out the object ives, powers and other mundane matters incidental to the operation of the corporations and generally provide for the organization of the corporations. Statutory corporations pass under various names and t i t l e s -Boards, Commissions, Councils and A u t h o r i t i e s , 7 7 and form the largest portion of crown corporations. Examples of these corporations would include Atomic Energy Control Board, National Harbours Board, National Ba t t l e f i e l d s Commission, Northern Canada Power Commission, National Research Counci l, Canada Counci l , St. Lawrence Seaway Authority and A t l an t i c Pi lotage - 14 -Authority. (b) Commercial Companies These corporations d i f f e r from statutory corporations in that they are not created by spec i f i c Acts of Parliament but are incorporated under the Canada Business Corporations Act (or i t s predecessors). ( i ) Crown Companies Crown companies are wholly-owned by the Government of Canada 7 8 and are incorporated pursuant to a general power such as that found in the Defence Production A c t 7 9 or pursuant to a company formation power contained in an Act of Parliament sett ing up a statutory crown corporation. For example, section 27(1) of the St. Lawrence Seaway Authority A c t , 8 0 provides that the St. Lawrence Seaway Authority, a statutory corporation, may, with the approval of the Governor in Counci l , procure the incorporation of any one or more corporations for the purpose of undertaking or carrying out any acts or things that the Authority i s authorized to undertake or carry out . 8 * Atomic Energy of Canada L t d . , Canadian Arsenals L td . , Defence Construction (1951) L td . , Uranium Canada L t d . , Eldorado Aviat ion L t d . , and Eldorado Nuclear Ltd. are examples of crown companies. Nationalized companies l i k e Canadair Ltd. and De Havil land A i r c r a f t of Canada Ltd. are included in th i s sub-set. ( i i ) Semi-Public or Mixed Enterprise Companies Somewhere along the l ine between purely private corporations and crown or public corporations l i e the mixed enterprise companies. There is no universal ly accepted de f in i t i on of a mixed enterprise company.82 However, the term "mixed enterprise company" is normally used to describe an enterprise the capital of which has been subscribed in part by private - 15 -interests and in part by Government and in which the Government has a measure of control by i t s possession of a r ight to nominate a spec i f i c number of directors.83 But these corporations re f lect d i ve r s i t i e s both in the extent of governmental ownership and the nature of the partnerships consumated.84 In some cases, the state part ic ipates only with pr ivate corporations or f i rms^ 5 while in others ownership is shared between the government and the general public,86 and in yet others the federal government, provincial governments and private investors a l l part ic ipate.87 Appendix E gives some of the better known mixed enterprise corporations.88 Like crown companies, mixed enterprise companies are general ly8 9 incorporated under corporation statutes and this explains the i r inc lus ion under the sub-heading 'commercial companies.' It i s , however, apparent that mixed enterprise corporations are not s t r i c t l y crown or public corporations and for that reason, f a l l outside the province of the present discussion. Further reference to them i s , therefore, to be treated as an inev i table digression. ( i i i ) Advantages of the Commercial Company Form R.F. Cranston and K.K. P u n ' 9 0 note a tendency or trend for government to part ic ipate in economic a c t i v i t i e s in much the same way or manner as ordinary ind iv iduals . Rather than adopting the form of statutory corporation, many government enterprises currently u t i l i z e the legal form of an ordinary private corporation, that i s , the commercial company form, wherein the shareholder or the most prominent shareholder, is the government. These observations are made with respect to Great B r i t a i n but are equally applicable in Canada. The commercial company form offers the fol lowing advantages for government enterpr ise;-- 16 -there is no need for special l eg i s l a t i on to create such an ent i t y . This is pa r t i cu la r l y important in times of emergency or c r i s i s when conditions may not be conducive to parliament-ary s i t t i ng s or where a delay in ca l l i n g parliament may cause irreparable damage. In Canada, during the Second World War, th i r ty - th ree crown companies were established to assist in the War e f f o r t . 9 1 It allows for par t ic ipat ion by private interests through the sale of shares. Some doubts are raised about th i s advantage by the fact that the Canada Development Corporation, a statutory corporation, is a mixed enterprise, in which both the federal government and members of the general public are shareholders. Also, in 1936, an amendment to i t s constituent act made the Bank of Canada, a statutory corporation, a mixed corporation whose shares were to be held part ly by the government and part ly by the general publ ic. This arrangement, however, lasted for only a short period before a further amendment resulted in a l l the shares being held by the government.92 The result is that any legal form of public corporation may allow for the part ic ipat ion in the enterprise by private interests . Government enterprises in the form of commercial companies are more f l e x i b l e than statutory corportions in that there is no need for l eg i s l a t i on to change the i r memorandum and - 17 -a r t i c l e s of association or other legal documents. (d) It is also contended that commercial companies are in a more competitive position and are less l i k e l y to attract opposition by acquiring the appearance of being in a favoured posit ion with respect to such matters as procurement of f inanc ia l assistance. 94 This advantage is less than obvious. I I. NATURE OF ACTIVITIES CARRIED ON BY CROWN CORPORATIONS Crown corporations are engaged in a plethora of a c t i v i t i e s 9 5 which are d i v i s i b l e into two broad ca tego r i e s . 9 5 (a) Economic or Commercial A c t i v i t i e s These include banking and insurance, o i l production, manufacturing real estate business, transportation and communications, e l e c t r i c power generation, mining, r e t a i l and wholesale trade. Economic and commercial a c t i v i t i e s while predominantly national in terms of operational f i e l d , sometimes s p i l l over into the international market-place. A i r Canada, the Canadian Broadcasting Corporation and Petro-Canada, among others, are empowered by t he i r constituent acts to engage into international or transnational t r an sac t i on s . 9 7 In a reciprocal fashion, foreign public corporations operate in the Canadian market. Economic and commercial a c t i v i t i e s are es sent ia l l y the preserve of agency and proprietary corporations. (b) Non-Commercial or Other A c t i v i t i e s Under th i s category are research and management, administrative and supervisory or regulatory a c t i v i t i e s . They are p r i nc ipa l l y undertaken - 18 -by departmental corporations. The purpose of elucidating the nature of a c t i v i t i e s carried on by crown corporations is not to indulge in i d le verbiage but to highl ight a seemingly commonplace, but important factor , namely; that crown corporations do not function in a vacuum or a void but in a v o l a t i l e world of legal relat ionships and engagements, r ights and duties and re spons ib i l i t i e s and interest s , a l l s t r i v i ng for legal recognition and protection. The s igni f icance of t h i s , i f not already c lear , is disclosed in the fol lowing section. VII I. INTEREST GROUPS Since crown corporations do not function in a vacuum, they necessari ly come into contact with a wide variety of persons both within and without Canada and enter into mult i - facetted legal re lat ionships. They enter into contracts, commit torts and other delinquencies, making the issue of legal l i a b i l i t y very urgent. The taxpayer, the universal guarantor of the crown corporation,98 cannot j u s t i f i a b l y be relegated to a posit ion of obscurity. Consequently, any meaningful analysis of the legal status or aspects of crown corporations must take cognizance of the interests of those persons who are in one form or the other affected by the a c t i v i t i e s or operations of crown corporations, and an abstract analysis is therefore rendered obsolete and is eluded. For the purposes of th i s essay the fol lowing interest groups are i d e n t i f i a b l e : -(a) The Taxpayers The Canadian taxpayers, by providing the funds u t i l i z e d by crown corporations, are in effect the shareholders of these corporations, though they have no share ce r t i f i ca te s .99 Unlike shareholders in private - 19 -corporations who have lega l l y recognized and enforceable personal proprietary rights in the i r shares and are ent i t l ed to a p ro f i t or dividend as and when i t is a v a i l a b l e , ! 0 0 taxpayers as shareholders in crown corporations, do not as such have a lega l l y recognized and enforceable r ight a r i s ing from the i r contribution to the funds that form the l i f e - l i n e of crown corporation and do not ant ic ipate a personal return on the i r m o n e y . B u t that is not to say that taxpayers are without any interest worthy of legal recognition and protection and by force of th i s statement, i t is contended that, l i k e shareholders in private corporations, taxpayers are, in law, ent i t l ed to expect that the i r money is not diss ipated in unauthorized ventures or undertakings or does not form the object of private appropriation by those in charge of the corporations. Lord Denning, i no in Tarn!in v. Hannaford, c sa id, in connection with the protection of the taxpayer's i n teres t s ; -". . . in th i s corporation . . . there are no shareholders to subscribe the capital or have any voice in i t s a f f a i r s . The money which the corporation needs is not raised by the issue of shares but by borrowing; 103 and i t s borrowing is not guaranteed by debentures, but is guaranteed by the Treasury. If i t cannot pay, the loss f a l l s on the consolidated fund . . .; that is to say, on the taxpayer. There are no shareholders to elect directors or to f i x t he i r remuneration. There are no pro f i t s to be made or d i s t r ibuted. The duty of the corporation is to make revenue and expenditure balance one another, taking, of course, one year with another, but not to make p ro f i t s . If i t should make losses and be unable to pay i t s debts, i t s property is l i a b l e to execution, but i t is not l i ab l e to be wound up at the suit of any credi tor . The taxpayer would, no doubt, be expected to come to i t s rescue before creditors stepped i n . Indeed, the taxpayer is the universal guarantor of the corporation. But for him i t could not have acquired i t s business at a l l , nor could i t now continue for a s ingle day. It is his guarantee that has rendered shares, debentures and such l i k e a l l unnecessary. He i s c lea r l y ent i t led to have his interest protected against extravagance or mismanagement." 104 This issue in Tamlin v. Hannaford, which was decided in the af f i rmat ive, - 20 -was whether or not the B r i t i s h Transport Commission, a public corporation, was bound by the Rent Rest r ic t ion Act. The case, as can be gathered from the above quotation, considered a number of aspects of the public corporation, but the reader i s , at th i s stage, requested to concentrate his attention on the question of taxpayer protection and in th i s respect the pr inc ip les therein embodied are as equally applicable in Canada as they are in B r i t a i n . Taxpayers as well as other members of the general public have interests also as users of the goods and services produced and offered by public corporations; they are the benef ic iar ies of the a c t i v i t i e s of public corporations. Therefore, v i r t u a l l y everyone in the land is concerned in seeing that public corporations are properly run and th i s ca l l s for a high degree of probity on the party of management. (b) Creditors, Suppliers and Others In the f i r s t place, c red i to r s , suppliers and a l l manner of persons having dealings with crown corporations have an interest in ensuring that the i r contracts or other engagements are given legal force and that in case of a dispute they should be able to obtain an adjudication thereon with a minimum of obstacles. It is desirable for the proper conduct of business that persons who contract with crown corporations for business purposes should have the same power of appealing to Her Majesty's Courts in the matter of the construction of such contracts or other legal contentions as any subject might have against his fel low s u b j e c t . ^ This would seem to rule out the appl ication of Crown immunities, pr iv i leges and prerogatives to crown corporations. In the second place, creditors need the assurance that any money lent to crown corporations w i l l be used for the purposes for which i t is intended - 21 -and not diverted into dubious channels. Unless duties are imposed on management, creditors must look to divine or other equally uncertain powers. (c) Victims of Delinquencies Committed by Public Corporations These include victims of t o r t s , breaches of contracts, unpaid employees and other equally unfortunate persons. Since as was noted, public corporations operate on the international plane, the issue of legal l i a b i l i t y in respect of the aforesaid misdeeds trancends Canadian f ront ie r s and bounces into the international arena, thus necessitating an examination of the international legal status of the public corporation. The persons that have been label led victims of crown corporation delinquency are en t i t l ed to expect that wrongs done to them are expeditiously remedied and that the i r way to redress is not unnecessarily hampered. Galipeault J . in C.B.C. v. C y r 1 0 6 while dealing with the issue of whether garnishee proceedings could be taken against a crown corporation, had the occasion to revert to some of the inconveniences that may be subjected to victims of crown corporation wrongdoings when he sa id ; -". . . i t would be strange that the Legislature should have given i t [the C.B.C] the power to retain the services of techn ica l , professional and other o f f i cer s and clerks and necessary employees, should declare i t to be a body corporate with capacity to contract, to sue and be sued, not in the name of His Majesty the King but in i t s own name, and at the same time should deprive those contracting with i t of the i r recourse and of the ordinary procedure to establ ish the i r r i ght s . " 107 And further on he added;-" I f the contention of the appellant were sustained, i t would be necessary for an employee hired by the Commission [the C.B.C] which f ixed his remuneration, each time that he wished to claim his salary, to proceed by way of pet i t ion of r i ght . Nothing, I bel ieve, w i l l support the contention . . . Parliament, in declaring that the corporation may be sued, would at the same time be denying an employee the right to recover his wages, would be - 22 -taking away with one hand what i t gave with the other." 108 Indeed, i t sounds absurd. Gal ipeault J . confined himself to employees but as has already been shown, the range of potential victims extends further than t h a t . 1 0 9 IX. OBJECT OF RESEARCH The position taken in th is work is that the interests of the groups above referred to, are real and therefore worthy of legal recognition and protect ion. The object of th i s work, therefore, is to analyse, in a h i s t o r i ca l context, the extent to which the courts have vindicated or given legal recognition and protection to the interests of these groups and to suggest possible solutions where any par t i cu la r approach by the courts, i n re la t ion to these interest groups, is considered wanting. It w i l l , in pa r t i cu la r , be pointed out that by a process of ident i fy ing crown corporations with the crown, the courts have sought to confer crown immunities, pr iv i leges and other advantages upon crown corporations to the detriment and inconvenience of those dealing with or having claims against, crown corporations. This has been the case especial ly in the f i e l d s of to r t s and international law and in the area of procedures. This work w i l l further show that there is a v i r tua l absence of j u d i c i a l consideration of the legal duties and re spons ib i l i t i e s of those entrusted with the management of crown corporations and of the question of creditor protect ion. This does not mean that directors and managers of crown corporations should be l e f t to the i r own devices or that those who provide funds to these corporations should be helpless spectators to the i r money being diverted into unauthorized channels. It w i l l be argued that no legal pr inc ip le requires the a t t r ibut ion of - 23 -crown advantages to crown corporations and i t w i l l be suggested that there i s a need on the part of the leg i s la ture to provide c lear and posit ive solutions to the above issues and problems. - 24 -PART TWO SUBSTANTIVE LEGAL LIABILITY OF CROWN CORPORATIONS I. INTRODUCTION In attempting to analyse the issue of the substantive legal l i a b i l i t y of public or crown corporations one comes face to face with the interests of the victims of crown corporation delinquency as well as those of c red i tor s , suppliers and other persons having dealings with crown corporations. The question that i s , in e f fec t , being asked i s : Is A i r Canada lega l l y l i a b l e to 'A ' i f one of i t s a i r c r a f t f l i e s into A's house or to 'B ' i f i t f a i l s to pay for fuel supplied to i t on c red i t , by B? This is only a hypothetical case and the issue of the legal l i a b i l i t y of crown corporations manifests i t s e l f in a variety of ways, but i t suff ices for a statement of the general nature of the problem. Before tack l ing the main issue or problem, a few preliminary observations are pertinent. I I. THE DUAL NATURE OF CROWN CORPORATIONS Wi l l s J . in the case of G i lbert v. T r i n i t y House Corporation* sa id ; -"The contention that there may be certain purposes in respect of which the T r i n i t y House must be regarded as a private corporation, and other purposes in respect of which i t must be regarded as a great department of state, appears to me s ingu lar ly untenable. The common law furnishes no such instance of a composite person or corporation, and I can hardly conceive that any such person or corporation can have that duplicate capacity vested in them by statute . . . .I am c lear that at common law there is no instance of any person or body having two d i s t i nc t capacit ies - in one of which there is no l i a b i l i t y to be sued because the person or body i s the direct representative of the crown, and in the other there is a l i a b i l i t y to be sued because the capacity is that of a pr ivate corporation or person." 2 The facts of that case were as fo l lows: A beacon vested in the T r i n i t y House Corporation, a statutory public corporation, having become p a r t i a l l y destroyed, the corporation licensed one G r i f f i t h s to remove i t , and in so - 25 -doing he negligently l e f t an iron stump s t ick ing up under water. The p l a i n t i f f s brought an action to recover damages caused thereby to t h e i r ship. The Defendant corporation contended that as crown servants entrusted with the performance of public functions, they were not l i a b l e . This is the contention that Wi l l s J . rejected and accordingly the Defendant corporation was held l i a b l e f o r G r i f f i t h s ' negligence. The decision in th i s case i s , no doubt, commendable, for i t is in accord with the protection of the interests above referred to , and takes the posit ion that w i l l ult imately be advocated for in th i s essay, that i s , i f a crown corporation commits any wrong, ju s t i ce demands that i t answers for i t s misdeed in the same way and to the same extent as an ordinary person or corporation would do so. Unfortunately, subsequent cases 3 and wr i t i ng s 4 have proved Wi l l s J . wrong insofar as he purports to deny the dual nature of crown corporations and the courts have confused an otherwise clear case of legal l i a b i l i t y on the part of crown corporations. For example, in In re Oriental Holdings  Pty. Ltd.,5 i t was held that the V i c t o r i a Railways Commissioners were en t i t l ed to crown p r i o r i t y in payment of a debt owed to them by a company in l i qu ida t i on . The debt arose out of a sale of coal by the commissioners to the company. But in V i c to r i a Railways Commissioners v. Herbert, 6 a question arose as to whether the commissioners were bound by rent r e s t r i c t i o n l e g i s l a t i on . The court held that the commissioners were not en t i t l ed to crown immunity from statute and were therefore bound by rent r e s t r i c t i o n l e g i s l a t i on . These two cases involving the same public corporation, the V i c t o r i a Railways Commissioners, show that a public corporation may have a public status in r ight of which i t can claim the benefit of crown immunities, pr iv i leges and prerogatives and in the process escape legal l i a b i l i t y ; and a private and independent status in right of - 26 -which i t may not claim any such immunities, pr iv i leges and prerogatives and shoulders i t s re spons ib i l i t i e s l i k e a private corporation. The dual nature of public corporations may also be conveniently gathered from some of the better known pronouncements on public corporations: "The public corporation is a hybrid organism, showing some of the features of a government department and some of the features of a business company, and standing outside the ordinary framework of central and local government." 7 Of Sydney Harbour Trust Commissioners, G r i f f i t h C.J. observed; ". . . that the Sydney Harbour Trust may be regarded in one sense, as a department of the Government of New South Wales. But, in another sense, I think that the commissioners are an independent corporation. . ." 8 Equally applicable is President Frankl in D. Roosevelt 's c la s s i ca l formulation of the concept of the public corporation as, "A corporation clothed with the power of government, but possessed of the f l e x i b i l i t y and i n i t i a t i v e of a private enterpr ise." 9 In Formea Chemicals Ltd. v. Polymer Corporation Ltd. (now Polysar Ltd.),10 McLennan J.A. considered the issue whether the Respondent public corporation was l i a b l e in an action for damages for infringement of a patent and in holding that i t was not, added;-" It is only f a i r to say that to a l l outward appearances so far as i t s contacts with the public are concerned, the respondent does not exhibit any difference from an ordinary trading corporation, but in view of the statutes to which I have referred (11) . . . i t is apparent that the crown or rather the government of Canada is in the business, through the respondent of manufacturing and s e l l i n g synthetic rubber products." 12 McLennan J.A., while conceding the dual nature of Polysar L td . , gave weight to public status of the corporation thus enabling the corporation to escape legal l i a b i l i t y . - 27 -(a) Publ ic Status The factors that constitute a public corporation a public a u t h o r i t y 1 4 are not hard to discover. Frank M i l l i g an , in one of the most recent a r t i c l e s 1 5 on the topic under consideration outlines some of these factors , in re lat ion to the Canada Council, a statutory publ ic corporation engaged in support of research in humanities and social sciences, among other things, as fo l lows: members of the council are appointed by the government, and removed by the same authority at w i l l ; i f s revenues are provided each year by parliamentary appropriations; i t must report each year to parliament and i t s accounts are audited by the Auditor General of Canada. Save for s l i ght v a r i a t i o n s 1 6 depending on the c l a s s i f i c a t i o n of public corporations, the above factors are true of other crown corporations. One might also add that crown corporations are generally exempt from income t a x . 1 7 This is part ly on the basis that public corporations are essent ia l ly part of the state function and that a state does not tax i t s e l f . The appointment of public o f f i c i a l s to Boards of Crown corporations 1 ^ i s further testimony to the public status of these corporations. It is in th is sense that public corporations have been described as "governments in m i n i a t u r e " . 1 9 In substance, therefore, public corporations are part of the government, whose functions now involve a multitude of social and economic a c t i v i t i e s and undertakings.20 It is now contended that were i t not for the public status of public corporations, no issue, be i t substantive or procedural, would pa r t i cu l a r l y ar ise in re lat ion to these corporations; they would be treated just l i k e any other corporations to which, through instruct ion in company or corporate law, we have been accustomed. When a court of law denies legal l i a b i l i t y of a public corporation or attr ibutes a procedural advantage to a crown corporation, by one of those notorious devices such as 'emanation of the - 28 -crown' or ' s h ie ld of the crown', i t i s , consciously or unconsciously, but very often the l a t t e r , asserting the public status of the corporation. It is in effect saying that i f the ultimate public authority, the government, i s not l i a b l e in a par t i cu la r instance or enjoys a certa in advantage or p r i v i l ege , then a public corporation, being also a public authority a lbe i t lesser one, should not be lega l l y l i a b l e in that instance or should also enjoy that advantage or p r i v i l ege . Whether that approach is desirable or not remains to be seen, (b) Pr ivate Independent Status Public corporations are separate legal ent i t ie s and have many of the qua l i t i e s which belong to corporations of other kinds.21 They own property, carry on business, borrow and lend money, just as any other corporation may do. They are thus correct ly approximated to private companies. This is the i r private and independent status. When l i a b i l i t y for misdeeds or ev i l s of public corporations is established, i t i s th i s status that is being asserted and the protection of victims of crown corporation wrong-doing demands that the private status of these corporations be vindicated to the exclusion of the public status. I I I . LACK OF A WELL DOCUMENTED LAW OF PUBLIC CORPORATIONS As i f the dual nature of public corporations is-not a s u f f i c i en t problem to contend with, one must also wrestle with the absence of a well documented law of public corporations. Any doubts that may be entertained about the v a l i d i t y of th is assertion are dispel led by the revelation that v i r t u a l l y a l l law schools do not teach 'pub l ic corporations ' as a separate subject. Neither have legal t reat i se writers considered the subject of public - 29 -crown corporations worthy of serious attent ion. As examples, L.C.B. Gower treats the subject in nine pages,22 H.W.R. Wade in eight pages,23 Peter Hogg in ten pages,24 and H. Street devotes nineteen pages to the subject.25 i t is not intended to doubt the a b i l i t y of these learned writers and publ ic i s t s or to confuse quantity with qual i ty or vice versa, but to drive home the point that not much may be obtained from a reading of ten or twenty pages of a book. Limited and scattered information and chance remarks may also be found in books canvassing the wider subject of public enterprise.26 Legal and other per iodicals provide some useful information and are referred to in appropriate instances herein. Ages may be spent in searching law l i b ra r y catalogues but not more than a few books, ent i re ly devoted to public or crown corporations, w i l l be found. W. Friedmann's "The Public Corporat ion " 2 7 was compiled in 1954 and is ipso facto outdated. Further, i t is a comparative analysis of public corporations in th i r teen countr ies 2 ^ and consequently is devoid of deta i l on any par t i cu la r aspect of public corporations. C.A. Ashley and R.G. Smails in "Canadian Crown Corporat ions '^ 9 give a descr ipt ive account of numerous crown corporations, but even th i s descr ipt ive account i s to a substantial degree outdated. The Legis lature has not made the task any easier. A federal crown corporations Act is nowhere in existence. Part VIII of the Financial Administration A c t 3 0 only deals with the f inanc ia l administration and control and public or parliamentary accountabi l i ty of crown corporations. The Acts creating crown corporations bas ica l l y amplify such matters as are provided for in the F.A.A. The diminutive Government Companies Operation A c t 3 l i s a repl ica of the F.A.A. only that i t deals with crown, companies, while the F.A.A. deals with both crown companies and statutory - 30 -crown corporations. In re la t ion to crown companies, which are incorporated under general corporation or company statutes, one is tempted to jump to the conclusion that the i r legal l i a b i l i t y is the same as that of t he i r counterparts in the private sector, but the public status of these crown companies mi l i ta tes against such a conclusion and rules out a wholesale appl icat ion of ordinary company law pr inc ip les . Apart from the sources of information referred to above, one must resort to decided cases and other j ud i c i a l pronouncements. This then is the state of our l i t e r a r y and legal arsenal; i t might have been in better shape and order, but i t is not. The problems appear insurmountable but a start may as well be made. IV. CROWN IMMUNITIES, PRIVILEGES, PREROGATIVES AND IMMUNITY FROM SUIT (a) A Br ief History of Crown Proceedings In England, pr ior to the thirteenth century, the King or monarch could not be sued in any court whatsoever. 3 2 This absolutist and monarchical notion was based on the feudal p r inc ip le that a lord could not be sued i n his own courts. Just as no lord could be sued in the court which he held to t ry the cases of his tenants, so the King, at the apex of the feudal pyramid and subject to the j u r i s d i c t i o n of no other court, was not suab le . 3 3 Moreover, to use the language of early commentators, the sovereign was the fountain of jus t i ce and of honour; the writs commanded in his name, and through his Attorney-General he guarded the public interest against v io la to r s . So in exempting the sovereign from legal l i a b i l i t y i t was thought that private interests were being subjected to public needs and that th i s was desirable. This purported vindicat ion of public needs and interests is i l l u s t r a t e d by the Austral ian case of Repatriation Commission - 31 -v. Kirkland.34 In that case the issue for determination was whether property vested in the commission was l i a b l e to be d i s t ra ined. The commission, a statutory corporation, was established by the Austral ian So ld ier s ' Repatriation Act, 1920 and was charged with the administration of that Act. The High Court of Aust ra l ia held that the commission was en t i t l ed , in respect pf property vested in i t pursuant to the said Act, to the same pr iv i leges and immunities as the crown would have had i f the property had been vested in i t and therefore the goods vested in the commission were not l i a b l e to be d i s t ra ined; Higgins J . observing;-"This exceptional pr iv i lege enjoyed by the crown, th i s exemption from d i s t ress , is not to be regarded as an unreasonable survival of despotism; l i k e other pr iv i leges attached to the crown prerogative, i t is a recognition of the pr inc ip le that a l l private interests are subordinate to the public needs. As John Locke put the matter, the prerogative of the King consists of a discret ionary power of acting for the public good . . . the pr iv i leges which i t carr ies enure to the benefit of the people as a whole. . ." 35 Inroads began to appear in the feudal pr inc ip le that the King was not suable, fo r in the course of the th irteenth century subjects with claims against the King presented them informally to him whereupon he might refer them to his c ou r t s . 3 6 With the reign of Edward I, a standard procedure of presenting claims against the King by pet i t ion of right was introduced. This turn of events is attr ibutable to the claim that the King was not regarded as above the Law, and that on the contrary he was regarded as under a duty - a lbe i t an unenforceable one - to give the same redress to a subject whom he had wronged as his subjects were bound to give each o t he r . 3 7 The procedure, on the Pet i t ion of Right, was that each pet i t ion was referred by the King to the commissioners for the purpose of inquir ing into the facts alleged in the pe t i t i on . If the facts found by the commissioners raised - 32 -questions of law which were appropriate for decision by the ordinary courts, then the King would plead to the questions of law and the pet i t ion would be handed over to the appropriate court to be t r i e d . The pet i t ion of r ight procedure had serious disadvantages. In the f i r s t place a great deal depended on the commissioners' view of the facts and perception of the law. In the second place, disputes were referred to the court as a matter of grace and a royal f i a t was necessary before the pet i t i on could be transferred to the c o u r t s . 3 8 A subject prejudiced by a royal refusal to consider a pet i t ion was remedi less . 3 9 Th i rd ly , the procedure was cumbersome and time-consuming.40 Fourthly, when the case came up for hearing the crown and the subject were on an unequal foot ing. The King 's 'garland of prerogatives ' included a number of pr iv i leges in pleading and procedure. For example, no execution could be made against the crown and the subject, even i f successful, had to rely on the King 's good w i l l i f he were to obtain the sa t i s fac t ion to which the court had held him e n t i t l e d . 4 1 A pet i t ion of r ight was avai lable in respect of a l l proprietary actions; i t was used not merely for recovery of land but also on a claim for damages in respect of an interference with an easement. 4 2 It also lay for the determination of a claim to a corody 4 3 and for the recovery of c h a t t e l s . 4 4 It has been said that, the courts, while holding the crown l i a b l e for breaches of contract, refused to hold i t l i ab le in t o r t . 4 5 This immunity from tor t is supposedly based on the well known adage "The King can do no wrong." In fact th i s maxim o r i g i na l l y meant that the King was not pr iv i leged to commit i l l e g a l a c t s 4 5 but has been corrupted by s the courts and legal writers into an altogether undesirable meaning, namely, that the crown is not l i ab l e in t o r t . The true meaning of that maxim is - 33 -that the King 's courts had no j u r i s d i c t i o n over the King because they were created by and subject to him. The pr inc ip le of n o n - l i a b i l i t y in tort is to be interpreted as one of j u r i s d i c t i o n rather than l i t e r a l fact for "the view advanced today is that th i s aff irmation derived from that lack of j u r i s d i c t i o n , which I take to mean as d i s t i n c t from affect ing the qual i ty of an act done, and not from the imposs ib i l i t y , in exist ing legal contemplation of a t t r ibut ing wrong to h i m . " 4 7 Even allowing for the perverted interpretat ion of the maxim, the King can do no wrong, i t is not correct to say that the pet i t ion of right did not l i e for t o r t s . The examples given above, namely, recovery of land, claim for damages for interference with an easement and actions for recovery of chat te l s , would be covered by the modern actions of trespass, nuisance and detinue, which are, without c a v i l , tor t actions. The correct rule is that a pet i t ion of right would not l i e for those torts normally outside the province of a real a c t i on . 4 ^ Therefore, reference to the immunity of the crown from tort actions is to be understood accordingly. From the f i f teenth unt i l the nineteenth century, the pet i t ion of r ight f e l l into v i r tua l disuse largely because of i t s complicated procedure and i t was superseded by other less d i l a to ry remedies and w r i t s . 4 9 'Traverse of o f f i c e ' and 'monstrans de d r o i t ' were better remedies to enforce r ights of feudal tenure, while the pet i t ion for a writ of l i be r te and the pet i t ion to the barons of the Exchequer were better remedies to enforce payment of deb t s . 5 0 The nineteenth century saw a revival of the pet i t ion of r ight . Traverse of o f f i ce and monstrans de droit were becoming obsolete as the vestiges of feudal tenure disappeared. The pet i t ion for a writ of l i b e r t e , which had been used extensively by the Treasury for the settlement of - 34 -accounts, and the d i rect pet i t ion to the barons of the Exchequer had also become obsolete with changes in the f i s c a l machinery of the state.51 There was a large increase in government contracts, disputes over which contractors sought to se t t le by pet i t ion of r ight . But i t was obvious that the rules of procedure on a pet i t ion of r ight , which had been unaltered fo r four hundred years, were not suited to nineteenth century conditions. Complaints by contractors thus led to the passing of the Pet i t ion of Right Act,52 which introduced a simpler procedure by way of a l ternat ive to that of the fourteenth century.53 Now the opportunity was r ipe for an ascertainment of the scope of the revived pet i t ion of r i ght . Was i t avai lable as a remedy in contract and to r t generally? One view was that i t was avai lable whenever i t was just and equitable that an individual should be compensated,54 another held that i t lay only when property was being recovered.55 The f i r s t view was rejected by the courts in 1848.56 The l i a b i l i t y of the crown in contract was f i rmly established in 1874 in Thomas v. Reg. 5 7 where Blackburn J . strongly rejected the plea of the crown that the pet i t ion of r ight did not l i e to claim damages for breach of contract and held that i t did so l i e . As far as tort ious l i a b i l i t y was concerned, the courts s t i l l remained unmoved, and quoting the decadent maxim that ' the King can do no wrong', held that he, the King, could neither commit nor authorise the commission of a tort.58 i n Feather v. Reg.,59 Cockburn C.J. is quoted as having s tated;-" . . . the only cases in which the pet i t ion of r ight is open to the subject are, where the lands or goods or money of a subject have found the i r way into the possession of the crown, and the purpose of the pet i t ion is to obtain r e s t i t u t i on , or i f r e s t i tu t i on cannot be given, compensation in money, or where the claims ar ise out of a contract, as for goods supplied to the crown or to the public serv ice. " 60 - 35 -And f i f t y - f i v e years l a t e r , Viscount Dunedin, in Attorney General v. De Keyser's Royal Hotel L td . , confirmed th i s posit ion when, speaking of the pet i t i on of r i ght , he sa id ; -" . . . i t w i l l l i e when in consequence of what has been l ega l l y done any result ing obl igat ion emerges on behalf of the subject. The pet i t ion of right does no more and no less than to allow the subject in such cases to sue the crown. It is otherwise when the obl igat ion arises from t o r t . . ." 61 The exclusion of claims in to r t from enforcement by pet i t ion of r ight e f f e c t i ve l y freed the crown from most l i a b i l i t y in t o r t , for no other remedy was avai lable for the purpose. In the currency of th is period of v a c i l l a t i o n and o s c i l l a t i o n , that i s , between the fourteenth and nineteenth centuries, a number of crown advantages, pr iv i leges and immunities, affect ing both the substantive l i a b i l i t y of the crown as well as procedural aspects of crown proceedings, were evolved. For example, at common law, no statute binds the crown unless the crown is expressly named therein, with the exception that the crown is bound by necessary implication in cases where the purpose of the statute would be wholly frustrated unless the crown were bound.62 This rule of immunity from statute, which was developed in a unitary English system poses problems when applied to a federal state l i k e Canada. One such problem is whether the crown in right of a province is en t i t l ed to claim immunity from federal l e g i s l a t i on . This problem was considered by the Supreme Court of Canada in The Queen in Right of Alberta v. Canadian Transport Commission ( C . T . C ) . 6 3 In that case the Government of Alberta acquired control of Pac i f i c Western A i r l i n e s Ltd. (P.W.A.), a public company by purchasing over 99% of i t s issued common shares and a l l of i t s preferred shares. The C .T .C , the regulatory authority under the Aeronautics Act, took the posit ion that the Government of Alberta was obliged to notify the commission - 36 -and seek i t s approval of th i s acquis i t ion under the provisions of sections 19 and 20 of the A i r Carr ier Regulations, SOR/72-145, enacted by the commission under the powers conferred on i t by the Aeronautics Act. The Government of Alberta contested the authority of the C.T.C. to require i t to comply with sections 19 and 20 of the Regulations. To resolve th i s dispute the commission stated the fol lowing question to the Federal Court of Appeal: "Is Her Majesty in Right of the Province of Alberta a person subject to the provisions of sections 19 and 20 of the A i r Carr ier Regulations and the j u r i s d i c t i o n of the commission concerning the acquis i t ion of cont ro l l i ng interest in P.W.A. Ltd.?" On appeal to the Supreme Court of Canada from the Federal Court of Appeal's aff i rmative answer to the question, i t was held that the Government of Alberta was not bound by sections 19 and 20 of the A i r Carr ier Regulations. The chief j u s t i ce based his judgement on the common law pr inc ip le enunciated above. Although in th i s case the crown in r ight of a province was afforded immunity from federal l e g i s l a t i on , the court did not decide that in a l l cases the crown in r ight of a province must be afforded such immunity. In fact the Chief Just ice suggested that in view of Canada's const i tut ional arrangement, the notion of the i n d i v i s i b i l i t y of the crown should be abandoned.64 Immunity from statute in turn affects the l i a b i l i t y of the crown in respect of taxes, rates and other charges 6 5 and other l i a b i l i t i e s imposed by statute. The procedural advantages are in respect of such matters as venue or forum, discovery, debt p r i o r i t y , enforcement of judgements, l im i ta t i on of actions and immunity from restra int and are discussed in part three. It is certain that the p r i v i l eges , immunities, prerogatives and - 37 -advantages referred to above were devised under and for a system of personal government or government by mere delegation.66 They were evolved for the benefit of the crown in a d irect and personal sense. However, with the establishment of const i tut ional monarchy in the seventeenth and eighteenth centuries, a d i s t i nc t i on between the King in his public and pr ivate capacit ies could be perceived p la in l y , but no legal acknowledgement of th i s was made.67 It began to be apparent that crown advantages enured less for the benefit of the monarch than of the public government of the country and there was a strong tendency to subst itute any public authority for the crown in the relevant rules.68 i n consequence, the crown, as the personi f icat ion of the English State, was accorded a l l the immunities and prerogatives o r i g i na l l y personal to the K i n g . 6 9 It has been observed, in th i s respect, that , "only out of the sixteenth century metaphysical concepts of the nature of the state did the King 's personal prerogatives become the sovereign immunity of the s t a t e " 7 0 and "the result i s that from a few and apparently simple rules re la t ing to the King, there has grown up an extensive department of public l a w . " 7 1 Crown immunities and prerogatives were also extended to public o f f i c i a l s or servants acting in the i r o f f i c i a l c apac i t y . 7 2 The j u s t i f i c a t i o n for th is extension is that the business of government requires that o f f i c i a l s be given powers which are not accorded to private ind iv idua l s ; and when exercis ing those powers, i t i s pla in that those o f f i c i a l s are not subject to 'ord inary ' law; the state cannot be equal in a l l respects to i t s subjects because i t has to govern. 7 3 Canada being a monarchy, the Federal government, subject to the modifications contained in the B r i t i s h North America Act, enjoys a l l the prerogatives and pr iv i leges of the B r i t i s h crown. 7 4 So do the - 38 -prov inc ia l Executives. What has been given above is a br ief statement of the law up to and inc luding, the nineteenth century when crown or public corporations made t he i r debut on the legal scene in Canada, as d i s t i nc t and separate legal i n s t i t u t i on s . How did the courts, j u r i s t s and writers react to th is new s i tuat ion? (b) Crown Corporations Appear on the Scene When crown corporations made the i r appearance in the second half of the nineteenth century and substant ia l ly mul t ip l ied in the f i r s t half of the present century, the courts were ca l led upon to adjudicate on the legal l i a b i l i t y of these corporations in a number of legal spheres - t o r t s , contract, l i a b i l i t y to tax, rates and other charges, to take but a few examples. The courts had to decide whether these corporations were ent i t l ed to the benefit of crown advantages or whether they were to be treated as separate and d i s t i nc t legal en t i t i e s unaffected by crown prerogatives and pr i v i leges . Put i t another way; the courts were torn between giving p r i o r i t y to the public status of crown corporations and vindicating the private independent status of the same. ( i ) Semi-Public Corporations or Mixed Enterprise Companies Mixed enterprise companies can be disposed of in summary form. The controversy in re lat ion to these corporations hinged upon two views: Did the state confer i t s pr iv i leges and immunities on a mixed enterprise corporation? or, did the state, by going into partnership with trading in teres t s , reduce i t s e l f to the status of i t s partner or partners? The controversy was sealed as far back as 1824 in the case of The Bank of the  United States v. P lanters ' Bank of Georg i a . 7 5 In that case Marshall C .J . sa id ; -- 39 -" I t i s , we think, a sound p r i nc i p l e , that when a government becomes a partner in any trading company, i t divests i t s e l f , so fa r as concerns the transactions of that company, of i t s sovereign character, and takes on that of a private c i t i z e n . Instead of communicating to the company i t s pr iv i leges and i t s prerogatives, i t descends to a level with those with whom i t associates i t s e l f , and takes the character which belongs to i t s associates, and to the business which is to be transacted." 76 The pr inc ip le enunciated by Marshall C .J . , while s t r i c t l y speaking, i s American, is equally applicable in the Canadian s i tuat ion and has survived the tests of time and bad j ud i c i a l weather. 7 7 There appears to be no reported case in which crown prerogatives have been attr ibuted to a mixed enterprise company. ( i i ) Contract As has already been noted, the case of Thomas v. R.7^ established the contractual l i a b i l i t y of the crown. When faced with the issue of the substantive l i a b i l i t y of crown corporations in contract, the courts had, therefore, no excuse to deny l i a b i l i t y . One of the ea r l i e s t reported cases involving a public corporation is Graham & Others v. His  Majesty 's Commissioners of Public Works and Bu i l d i n g s . 7 9 In th i s case the p l a i n t i f f s entered into a contract with the defendants, a public corporation, whereby the p l a i n t i f f s undertook to construct a post o f f i ce for the defendants. While the construction work was in progress, the defendants served upon the p l a i n t i f f s a written notice wrongfully determining and repudiating the contract and preventing the p l a i n t i f f s from executing and performing the same. Subsequently the defendants wrongfully entered upon the land upon which the post o f f i ce was being erected, seized plant and bui lding materials thereon belonging to the p l a i n t i f f s and wrongfully deprived the p l a i n t i f f s of the same by refusing to given them up on demand. The p l a i n t i f f s claimed damages for the above wrongful acts of the - 40 -defendants. In denying l i a b i l i t y , the defendants contended that the contract was entered into by the defendants as servants and agents of the crown and on behalf of the crown as a department of the Government. The court had no d i f f i c u l t y in giving judgment for the p l a i n t i f f s . Ridley J . held the commissioners l i a b l e for damages for breach of contract "because the commissioners must be taken to have made the contract spec ia l l y themselves and not as agents of the c rown; " 8 0 and Phi l l imore J . "because the commissioners are in a posit ion of servants of the crown who may be sued on the i r contracts. " 8 1 Phi l l imore J . also added that the mere fact of the commissioners' being incorporated without reservation conferred the pr iv i lege of suing and the l i a b i l i t y to be sued. 8 2 In Roper and Another v. The Commissioners of His Majesty's Works and  Publ ic Bu i l d i n g s , 8 3 Shearman J . held that an action for breach of a tenancy agreement was maintainable against the commissioners. 8^ The purpose of these two cases is to show that as far as the substantive l i a b i l i t y of public or crown corporations was concerned, there was no ground for ext r i cat ing these corporations from such l i a b i l i t y by way of crown prerogatives or pr iv i leges . Subsequent cases 8 5 have confirmed the contractual l i a b i l i t y of crown corporations. But th is is not to say that no other problems are posed by crown corporations in the matter of contract. F i r s t l y , the procedural advantages of the crown, which are sought to be applied to crown corporations, cover a l l actions, whether they are in contract or other f i e l d s of law. Secondly, in the international sphere, the l i a b i l i t y of the crown in contract has not been as accepted as i t has been in the national arena. Third ly, crown corporations, being public author i t ies , may be subject to pol icy and administrative direct ions of a competent authority. For - 41 -example, the Atomic Energy Control Board is enjoined to comply with any general or special d i rect ion given by the appropriate Minister with respect to the carrying out of i t s purposes.86 In the exercise of administrative supervision, i t may happen that the Minister orders the cancel lat ion of a certain contract entered into by a crown corporation and in such a case, the issue arises whether th i s i s , from the standpoint of the corporation, a case of imposs ib i l i ty or force majeure which excuses from performance.87 w. Friedmann reports that no case of th i s kind appears to have come before the courts,88 but the recent House of Lords case of C. Czarnikow Ltd. v. Central a Handalu Zagranicznego 'Rolimpex'89 i s not far removed from this type of s i tuat ion . The facts of the C. Czarnikow case are as fol lows: In 1974 the Pol i sh state estimated that for the season 1974-75 enough sugar would be produced by the state to provide for domestic requirements and for export of a large quantity of sugar. Accordingly, the state authorised the respondent (Rolimpex) to enter into contracts with purchasers for the export from Poland of 200,000 metric tons of sugar. Rolimpex, a separate legal personal ity, was a state trading organisation entrusted with the export and import of essential commodities such as sugar and was under the supervision of, and f i n anc i a l l y accountable to , the Minister of Foreign trade and shipping. Pursuant to the state author isat ion, Rolimpex entered, in advance of harvest, into two contracts with C. Czarnikow, an English company, for the sale to i t of 17,000 metric tons of sugar. The contracts were subject to the Rules of the London Refined Sugar Associat ion. By r. 18(a) of the Rules, i f del ivery in accordance with the contracts was prevented 'by Government intervention . . . or any [other] cause of force majeure . . . beyond the s e l l e r ' s c o n t r o l ' , the contracts were to become void without - 42 -payment of a penalty on compliance with the procedure specif ied in r. 18(a). Following bad weather in the autumn of 1974 the y i e l d of sugar for the 1974-75 season f e l l below the estimated amount and was i n su f f i c i en t to provide for both domestic requirements and for export under the contracts entered into by Rolimpex. On 5th November the Pol ish government, without consulting Rolimpex, decided to impose an immediate ban on the export of sugar and to revoke export l icences already granted. On the same day a decree was signed by the Minister of Foreign Trade and Shipping giving legal effect to the ban from that date. Because of the ban, fu l f i lment of the f i r s t contract with Czarnikow was completely prevented and fu l f i lment of the second contract was partly prevented. Czarnikow claimed against Rolimpex for damages for non del ivery. Rolimpex contended that i t was exempt from l i a b i l i t y on the ground of force majeure by 'Government intervention beyond [ i t s ] con t ro l ' within r. 18(a) of the Rules. The House of Lords held that because Rolimpex had been prevented by 'government intervent ion ' from performing i t s obligations under the contracts i t was ent i t led to rely on r. 18(a) of the Rules to excuse i t from l i a b i l i t y for that f a i l u r e . The s igni f icance of th i s case is that i t appears a public corporation may set up government intervention or orders from a superior authority as ground for escaping contractual l i a b i l i t y . It i s , however, interest ing to note that using the very public status of such corporations, a t o t a l l y d i f ferent result may be reached. In the Czarnikow case counsel for Czarnikow argued that Rolimpex was, in fact , part of the Pol ish government, that i s , part of the structure of state administration, and that therefore the ban caused by the intervention of that government could not be recognized as being 'beyond the s e l l e r ' s cont ro l ' within the - 43 -meaning of those words in r. 18(a); and that accordingly i t followed that Rolimpex could not be excused on the ground of force majeure from f u l f i l l i n g i t s obl igat ions. As Lord Salmon admitted, th is was a most s k i l l f u l argument 9 0 and had i t not been for the factual findings by the a rb i t ra to r that Rolimpex was 'not so c losely connected with the Government of Poland as to be precluded from rely ing on the ban as government i n te rvent ion ' , Lord Salmon would have been prepared to buy counsel 's argument. The reasons for the factual f inding that Rolimpex was not so c lose ly connected with the government of Poland, and was therefore not an organ or department of the Pol i sh state, were that Rolimpex was a separate legal personality and that although i t was under the general supervision of the Minister of Foreign Trade and Shipping, i t generally made i t s own decisions about i t s business and had substantial freedom in i t s day-to-day a c t i v i t i e s . It is submitted that i f Rolimpex had been less independent and consequently an organ or department of the Pol ish state, Lord Salmon would have held i t not ent i t led to re ly on government intervention as an excuse for not f u l f i l l i n g i t s obl igations under the contract for the government cannot claim that i t has been prevented by i t s e l f from performing an o b l i g a t i o n . 9 ! One of the solutions suggested to th i s problem is the incorporation of safeguarding provisions in the terms of the con t r a c t . 9 2 Where such provisions are not made, i t would c lear ly undermine confidence in commercial standing of public corporations i f they were to be excused from performance or damages for non-performance by rel iance on a superior order. The rule proposed here is that a court should not excuse a public corporation from contractual l i a b i l i t y , unless a private corporation would have been excused from such l i a b i l i t y under s imi la r conditions and circumstances. This is the - 44 -only sure way of protecting those persons contracting with public corporations against an injurious appl icat ion of the elusive and often u n i n t e l l i g i b l e concept of public good and interest . ( i i i ) Other L i a b i l i t i e s With respect to other forms of legal l i a b i l i t y which were not well established at the time public or crown corporations made the i r debut, judges and academic j u r i s t s , evidently try ing to force new situations into old categories, responded to the new challenge by fastening on the now notorious slogans and expressions, v i z : 'emanation or shield of the crown',93 'department of government',94 ' incorporated public department',95 ' the hands of the crown',96 ' instrumental i ty of the crown or government',97 'organ of the crown',98 to mention but some. A l l these phrases and slogans have two things in common; they are impressive but highly imprecise.99 N 0 wonder wiser heads have c r i t i c i s e d them. In Smith v. Canadian Broadcasting Co rpo ra t i on , 1 0 0 Judson J . , referr ing to the expression 'emanation of the crown' sa id: "The language of the law and not the language of sp i r i tua l i sm should be used to describe these public corporations. In International Railway Co. v. Niagara Parks Commission, 1 0 2 the issue was whether the Niagara Parks Commission, a public corporation, was l i a b l e to be sued for breach of contract otherwise than by pet i t ion of r ight in the exchequer court. The court held that an action would l i e against the Commission for breach of contract, the pet i t ion of right not being the sole recourse, and Luxmore L.J . observed, in respect of the use of the expression 'emanation of the crown';-"Their Lordships are unable to appreciate the precise meaning intended to be attr ibuted to th i s phrase by the courts below . . . The word 'emanation' i s hardly applicable to a person or body - 45 -having corporate capacity. Its primary meaning is ' that which issues or proceeds from some source' and is commonly used to describe the physical properties of substances (e.g. radium) which give out emanations of recognizable character . . . Their Lordships are of the opinion that i t would avoid obscurity in future i f the words agent or servant were used in preference to the inappropriate and undefined word 'emanation. ' " 103 Other judges have concurred with Luxmore L . J . 1 0 4 and F.R. S c o t t 1 0 5 refers to the expression as "the ghostly notion of the 'emanation of the crown' . . . fortunately exorcised by the Privy Council in International Railway Co. v. Niagara Parks Commission." 1 0^ In coining the phrases and expressions above l i s t ed the courts have been considering those s ituations or cases in which i t has been sought to confer or deny a part icu lar a t t r ibute , pr iv i lege or advantage of the crown to a crown corporation and the results have depended on whether the corporation in question is or is not an emanation, department, instrumental ity or organ of the crown, or is within or without the shield of the crown. Some of the questions that the courts have had to consider include the fol lowing: Is the corporation l i a b l e to pay rates and taxes? Is the corporation l i a b l e to pay income tax? Do the corporation 's debts enjoy crown p r i o r i t y in bankruptcy or winding up of i t s debtors? Or is the crown v icar ious ly l i a b l e for the torts of the corporations ' servants? (c) The Real Issue Unearthed Buried beneath the phrases adverted to above is a c lear legal issue, and now one must use the language of law and not the language of sp i r i tua l i sm. Where some immunity or other advantage is claimed for a crown or public corporation by reference to a special posit ion which the law accords to the crown, the real legal issue or question to be decided, whatever may be the language in which for convenience or by reason of ignorance, i t may be expressed, is not, as W.H. Moore has f a l se l y suggested, - 46 -"Who and what are covered by the shield of the crown?"-'-07 or as K i t t o J . has r i ght l y disputed, "whether the corporation is the crown or part of the c r o w n " ; 1 0 8 but is whether the nature of the relat ionship between the corporation and the crown ent i t l e s the corporation to the par t i cu la r crown at t r ibute or advantage which is c l a i m e d . 1 0 9 In determining whether the nature of the relat ionship between the corporation and the crown ent i t l e s the former to a part icu lar crown a t t r i bu te , a further and basic question must be asked; who can claim crown advantages? or in respect of which classes of persons or bodies can the pr inc ip le of crown prerogatives be a p p l i e d ? 1 1 0 A look at the decided cases w i l l help ident i f y the category of persons or bodies en t i t l ed to the benefit of crown prerogatives and pr i v i leges . In Bank Voor Handel En  Scheepvaart v. Administrator of Hungarian P r o p e r t y 1 1 1 the facts were these: After the enemy invasion of Holland in 1940, gold in London belonging to a Dutch banking corporation (the Appellant Bank) was transferred to the Custodian of Enemy Property, who sold i t , investing and reinvesting the proceeds of sale and p ro f i t s . These investments were subsequently transferred to the Administrator of Hungarian Property (the respondent) i n the erroneous be l ie f that they were the property of a Hungarian nat ional. After the War the Appellant Bank obtained judgment for the recovery of the proceeds of sale, together with the interest or other p ro f i t s earned. The question then arose as to whether the bank was also en t i t l ed to recover a sum equivalent to an amount assessed on the Custodian as income tax in respect of the income of the invested proceeds of sale and paid to him. The Appellant Bank contended that the custodian was a servant of the crown and therefore shared the crown's immunity from income tax which arose from the fact that the crown was not named in the Income Tax Acts. It - 47 -was beyond argument or controversy that i f the custodian could claim immunity from income.tax, then the Appellant Bank was ent i t led to the amount paid as tax. The issue properly stated was whether the custodian was a servant of the crown who could plead immunity or i f not, whether he was a person in consimil i casu with such a crown servant. The court held that the custodian was a servant or agent of the crown, that i f the custodian had asserted crown immunity he would not have been obliged to pay the tax in question and that th i s being so, the Appellant Bank was en t i t l ed to claim the amount paid as income tax. The court s p e c i f i c a l l y considered the issue of the category of persons who could, in th i s par t i cu la r case, that is taxat ion, claim crown immunity and came up with the fo l lowing; ( i ) the sovereign personally. ( i i ) servants and agents of the crown in the i r representative capacity. ( i i i ) persons who are not crown servants or agents but who, for certain l imited purposes are considered to be in ' cons imi l i casu' with such servants or agents. 112 In Wynyard Investments Proprietary Ltd. v. Commissioner for Railways (N.S.W.)j 1 1^ the commissioner, a public corporation, being seised in fee of certain premises at Wynyard Railway Stat ion, Sydney, leased them to one Co l l in s for a term of f i ve years. Later the interest of Col l ins was assigned to the appellant company. Upon expiry of the term the appellant company held over without the consent of the commissioner, who immediately in s t i tu ted proceedings in a court of petty sessions under the Landlord and Tenant Act, 1899-1948 (N.S.W.) to recover possession of the premises. It was objected on behalf of the Appellant company on the hearing of such proceedings that the commissioner was bound by the provisions of the Landlord and Tenant (Amendment) Act, 1948-1952 (N.S.W.), he not being the - 48 -crown in r ight of the State of New South Wales within the meaning of section 5 1 1 4 of such Act, and that as he had f a i l ed to comply with i t s provis ions, notably that requiring the giving of a notice to quit , the information should be dismissed. This objection was overruled, and the commissioner, having otherwise made out his case, was adjudged ent i t l ed to possession. On appeal, the High Court of Aus t ra l ia held that the commissioner represented the crown as i t s servant or agent and that in such representative capacity was not bound by the Landlord and Tenant (Amendment) Act. K i t t o J . added, ". . . the immunity of the crown can never inure for the benefit of a subject. Whoever asserts i t must assert i t on behalf and fo r the benefit of the c r o w n . " 1 1 5 The appeal was dismissed. At th i s juncture, we are, by a systematic inquiry, going beyond the mere recording of events, and without seeking refuge in v i r t u a l l y meaningless phrases and slogans, in a posit ion to ascertain the nature of the relationships en t i t l i n g crown corporations to crown advantages and the range or category of bodies en t i t l ed to the benefit of the same. The relat ionships so far established are those, not unfamil iar to the general law, of master-servant and pr incipal-agent, and the category of bodies-servants, agents and those bodies or persons in consimil i casu with such servants or agents. To th i s one may add the relat ionship of t rustee-benefic iary. A caveat should be entered at th i s stage. The kind of relat ionship which w i l l su f f i ce to confer a crown attr ibute or advantage on a crown corporation in a part icu lar case w i l l vary according to the kind of at t r ibute which is claimed. If what is claimed is immunity from rates and taxes on land i t might be su f f i c i en t to establ ish that the corporation held - 49 -i t s land merely as trustee for the c rown, 1 1 6 and i t i s also usually enough to show that the corporation i s a servant of the c rown. 1 1 7 When a p l a i n t i f f seeks to hold the crown l i a b l e under a contract made by a corporation, then i t w i l l be necessary to establ ish that the corporation entered into the contract as an agent of the crown. But i f i t is sought to hold the crown v icar ious ly l i ab l e for torts committed by a corporation 's servants, then neither the trust nor generally the bare agency re lat ionship w i l l do; i t w i l l be necessary for the p l a i n t i f f to establ ish that the corporation is a servant of the crown so that the corporation 's servants are in truth crown servants . 1 1 ^ As Peter Hogg 1 1 9 has pointed out, the master-servant relat ionship is the one which provides the only route to crown at t r ibutes , because the facts seldom give support to the existence of a trust or even a bare agency, and also because of the existence of the master-servant relat ionship generally does suf f i ce to en t i t l e the servant to enjoy the attr ibutes of the master. But even af ter unearthing the legal issue, one question s t i l l remains to be considered and answered. It is c lear that there is neither a service contract, nor a contract of agency nor a deed of t r u s t , executed between the crown and public corporations. 1^° What then constitutes a crown corporations a servant, agent or trustee of the crown? (d) C r i t e r i a for Determining Whether or Not a Crown Corporation i s a  Servant, Agent or Trustee of the Crown In determining whether or not a crown or public corporation is a servant, agent or trustee of the crown, two s ituations must be considered. F i r s t l y , the s i tuat ion where l eg i s l a t i on creating the corporation does not contain any express statement of the extent to which the corporation is to be regarded as an agent or servant or trustee of the crown, that i s , where - 50 -there is no express extension of the relevant crown prerogatives and pr iv i leges to the corporation; and secondly, the s i tuat ion where l eg i s l a t i on sett ing up the corporation contains some statement as to the status of the corporation. The f i r s t of these two s ituations is analysed f i r s t , ( i ) Where the Legis lature i s S i l ent Where the leg i s la ture has been s i l en t as to the status of the corporation in issue, the question whether a public corporation is a crown servant or agent or trustee has been decided by reference to a number of c r i t e r i on or tests - Financial autonomy, right of appointment of members or d i rectors of the corporation by the crown, incorporation, benefit flowing to the crown, whether property of the corporation is vested in the crown, whether the corporation is incorporated as a commercial company under ordinary company l e g i s l a t i o n , nature of functions performed by the corporation and the nature and degree of control exercised over the corporation by the crown or representatives of the crown. 1 These tests are discussed hereunder. (a) Financial autonomy test According to th i s t e s t , i f the funds used by the corporation are received from, and to be returned to, and audited by, the government, I OO then the corporation is an agent or servant of the crown. " In Grain  Elevators Board of V i c to r i a v. Dunmunkle, Latham C.J. considered "the fact that f inanc ia l control is in the crown - that revenues of an authority go into the consolidated revenue and that i t s revenue is made out of the consolidated revenue - is another element which helps to show the ident i ty of an authority with the c r o w n . " 1 2 4 The case of Quebec Liquor  Commission v. Moore 1 ^ involved the l i a b i l i t y of the commission for injury caused to one Moore by the act of one of the commission's employees. - 51 -In holding the commission an instrumental ity (which in effect means servant) of the government and therefore not l i ab l e in t o r t , Duff J . , r e l i e d , inter a l i a , on the fact that a l l the money received by the commission was at the d i scret ion of the Provincia l Treasurer, was remissible to him, and, on receipt by him, became part of the consolidated funds of the Province of Quebec. On the other hand, i f a corporation has su f f i c ient d iscret ion to spend i t s money, within the l im i t s of i t s general purposes 1 2 6 o r i f -jt does not pay i t s receipts into the general revenue of the state, i t is generally not considered a servant or agent of the crown and does not partake of crown pr iv i leges and immunites. In Metropolitan Meat Industry Board v.  Sheedy, 1 2 7 the Appellant Board which had been created by statute, claimed p r i o r i t y as to a debt due to i t by a company in process of l i qu ida t i on . The Board had been formed for certain purposes in connection with the administration of slaughter houses and based i t s claim to p r i o r i t y on the contention that i t was a servant of the crown. One of the grounds for denying the Board the crown servant status was that i t did not pay i t s receipts into the general revenue of the state and that the charges i t levied went into i t s own fund. This test cannot be very helpful in the Canadian s i tuat ion since v i r t u a l l y a l l the funds u t i l i s e d by crown corporations are provided by the government and most of the statutory corporations and a good number of crown companies are audited by the Auditor General. Further, s. 71(4) of the F.A.A. empowers the appropriate Minister and the Minister of Finance, with the approval of the Governor in Counci l, to d irect a corporation to pay to the Receiver General so much of the money administered by i t as is considered to be in excess of the amount required for purposes of the - 52 -corporation. If the f inanc ia l autonomy test were to be used, v i r t u a l l y a l l Canadian crown corporations would be found servants of the crown. This f inanc ia l autonomy test has also been c r i t i c i s e d by W. Friedman 1^ 8 who considers i t misconceived, meaningless and incapable of any pract ica l appl icat ion in modern circumstances. "The fact is that modern publ ic author it ies are both independent and subject to government contro l . It is of the very essence of the conception of a public corporation, in both the B r i t i s h and American legal systems, that i t should have i t s own funds and be autonomous for purposes of management, e f f i c iency , auditing and accounting, but that i t should be responsible to Parliament as i t s 'shareholder" representing the nation . . . . Far reaching f i nanc ia l d i sc ret ion and autonomy go together with accountabi l i ty to the Minister and Parliament. There are many differences of degree, some due to technical reasons, but the existence of separate funds and independent budgeting and accounting in no way excludes min i s te r ia l control over revenue. This makes the consolidated fund test meaning less . " 1 2 9 (b) Appointment and dismissal of members or d i rectors of the  corporation by the crown or i t s representatives It is sometimes contended that the appointment and dismissal of members or directors of the Board of the corporation by the crown or i t s representatives, is a factor showing that a corporation is a servant or agent of the c rown. 1 3 0 In Canada where a l l members and directors of boards of public corporations (excepting some subsidiaries of crown corporations) are appointed and dismissed either by the Governor in Council or the appropriate Minister, th i s test cannot be taken seriously unless one wants to christen a l l crown corporations servants, agents and trustees of the crown. If i t i s desired, as is the case here, to make a public - 53 -corporation answerable for i t s misdeeds, without sheltering under the ' s h i e l d of the crown', th is test must be rejected. i (c) Vesting of the corporation 's property in the crown Notwithstanding that public or crown corporations are separate legal e n t i t i e s , a common provision appears in the statutes creating departmental, agency and proprietary corporations in the fol lowing words:-"Property acquired by the corporation is the property of Her Majesty and t i t l e thereto may be vested in the name of Her Majesty or in the name of the corporation." 132 A s imi la r provision was interpreted in Quebec Liquor Commission v. 1 ^ Moore as one of the factors showing that the commission was a servant of the government of Quebec. If accepted as v a l i d , th i s test would be most relevant in those cases where property of the corporation is sought to be taxed, for the corporation would argue that i t is holding the property as trustee for the crown and therefore not l i a b l e to be taxed by v irtue of section 125 of the B r i t i s h North America A c t . 1 3 4 But as N. Tennant 1 3 5 has fortunately pointed out, in a general s en se , 1 3 6 no legal p r inc ip le requires a f inding that a crown corporation is a servant or agent of the crown on account of the above quoted provis ion. (d) 'Benefit for the crown' test G. Sawer 1 3 7 traces the 'benef i t for the crown' tes t to the case of Bank Voor Handel En Scheepvaart v. Administrator of Hungarian  P r o p e r t y . 1 3 8 According to th i s t e s t , i f a par t i cu la r immunity or p r i v i lege claimed by a crown corporation w i l l operate to bring some benefit to the crown, then for that purpose the corporation w i l l be treated as a servant or agent of the crown and therefore en t i t l ed to that immunity or p r i v i l ege . In the Bank Voor Handel case, the detai led facts of which have already been s t a t e d , 1 3 9 the Administrator had held property of aliens - 54 -during the War, on trusts which could f i n a l l y be determined only after conclusion of the peace t rea t i e s ; un t i l then, i t was possible that some or a l l of the property would eventually go to the owner, or to the crown, or t o the crown's subjects, under reparation arrangements. The issue was whether the Administrator had properly paid income tax on the proceeds of the property while i t s ultimate destination was s t i l l doubtful. The House of Lords in a voluminous judgement, held that the crown had a su f f i c i en t interest in the property to invoke i t s immunity from tax i f i t chose to and for the purpose of asserting the crown's in teres t , the Custodian of Enemy Property was a servant or agent of the crown. This test is most unsatisfactory. Insofar as 'crown' means government, i t is quite delusory to ta lk as i f any i den t i f i ab le person or even group of persons constitutes the 'crown'. The money in the Bank Voor Handel case would not go to the Monarch, but to the Treasury for the general purposes of government. One cannot answer the question whether a crown interest i s involved independently of the question whether the corporation is a servant or agent of the crown; the re lat ionship between the crown and the corporation is the very thing which establishes a crown interest and not vice versa and so a benefit to or interest of, the crown cannot be a proper t e s t . 1 4 0 (e) Incorporation In determining whether a crown corporation i s a servant, agent or trustee of the crown and consequently ent i t led to crown advantages, the fact of incorporation and the attendant legal separateness of the ent i t y , has been viewed as evidence showing an intention on the part of the leg i s la ture to cut the corporation ad r i f t from the crown and to deny the corporation the advantages c la imed. 1 ^ 1 In Michaud v. C.N.R. - 55 -Co . 1 4 ^ the issue was whether the C.N.R. Co., a crown corporation, could be sued without recourse to the pet i t ion of right procedure. The New Brunswick Supreme Court, Appeal D i v i s i on , held that i t could be so sued and Hazen C.J. remarked;-" . . . i t certa in ly seems to me that i t was the intention of Parliament create the company a corporation as a legal ent i ty separate and d i s t i nc t from the crown ... and place i t in exactly the same posit ion so far as i t s r ights and l i a b i l i t i e s were con-cerned as other companies ... I cannot help coming to the conces -sion that i t f u l l y intended that the corporation created by the Act should in a l l respects stand in a s imi la r posit ion before the courts of the country as any other private corporation would."143 Other c a s e s 1 4 4 have suggested that incorporation by i t s e l f is not a su f f i c i en t test of legal autonomy so as to remove the shield of the crown or take away crown immunities. W.H. Moore 1 4 5 adds that i t is possible to regard incorporation as being purely for convenience of administration - an o f f i c i a l existence devoid of legal incidence and consequence. Evaluation of the merits of th is test requires noting a few things. F i r s t l y , i t is neither necessary nor usual for any commission or other body of public functionaries to be incorporated unless such incorporation is considered necessary for the e f fect i ve discharge of i t s functions. Secondly incorporation is necessary when a public body needs su f f i c ient managerial freedom of movement and has to enter into su f f i c i en t transactions to make i d f i i t s separate legal ident i ty a commercial and managerial necessity. There is therefore l i t t l e sense in a provision s t ipu lat ing that such incorporated bodies are capable of suing and being sued unless the i r r ights and obligations should correspond. It is in th i s respect that the approach taken by some courts of detaching public corporation from the crown should be preferred. The suggestion by W. Friedmann 1 4 7 and G. Sawer 1 4 8 that unless there is some more conclusive te s t , there should be a - 56 -presumption in favour of f u l l l i a b i l i t y and separateness from the government whenever a public authority is incorporated, is equally welcome. The reason, using the incorporation te s t , for denying a crown corporation, crown status, is therefore, not merely because Lord Halisbury, L . C . 1 4 9 said ". . . i t seems to me impossible to dispute that once the company is l ega l l y incorporated i t must be treated l i k e any other independent person with i t s rights and l i a b i l i t i e s appropriate to i t s e l f ; " but because those engaged in transactions with crown corporations are l ega l l y ent i t led to expect that any disputes ar i s ing from those transactions w i l l be sett led without any leverage on the part of the corporations ar i s ing from the i r claim to being servants or agents of the crown, (f) Nature of functions test The nature of functions performed by a crown corporation, as a test for determining the legal status of crown corporations, has i t s or ig ins in the case of Mersey Docks and Harbours Board Trustees v. G i b b s . 1 5 0 In that case the Board was sued by the owner of a ship and owner of cargo on board the ship for damage done to the ship and to the cargo through the ship s t r i k ing a bank of mud situated at the entrance of a dock, owned by the Board. The damage was caused owing to the negligence of the servants of the Board. The House of Lords held the Board l i ab l e and stated that, the proper rule of construction of statutes empowering publ ic bodies to execute and maintain public works is that, in the absence of words in the statute to show a contrary in tent ion, the leg i s la ture intended that the authority created by statute should have the same duties, and that i t s funds should be subject to the same l i a b i l i t i e s , as the general law would impose on a private person doing the same things. Blackburn J . formulated the nature of functions test in the fol lowing words;-- 57 -" I t is well observed . . . of corporations, l i k e the present formed for trading and other pro f i tab le purposes, that though such corporations may act without reward to themselves, yet in t he i r very nature they are subst itut ions on a large scale for ind iv idual enterprise. We think that in the absence of anything in the statutes (which create such corporations) showing a contrary intention in the l eg i s l a tu re , the true rule of construction i s that the leg i s la ture intended that the l i a b i l i t y of corporations thus substituted for indiv iduals should, to the extent of the i r corporate funds, be co-extensive with that imposed by the general law on owners of s imi la r works." 151 The appl icat ion of the nature of functions test requires asking the question; Is the corporation in question performing governmental functions 1 CO or is i t merely a substitute for private enterprise? I f the corporation is engaged in the so-cal led inal ienable government functions, then i t is a servant or agent of the crown. If, on the other hand, i t performs those functions formerly undertaken by private enterprise i t i s not such servant or agent. The t e s t , as formulated by Blackburn J . , has one pos it ive aspect, namely, that insofar as public corporations exercise functions of an e s sent ia l l y commercial character, i t i s generally desirable that they should have the legal rights and duties of private legal persons. That would go a long way towards protecting the interests of those who enter into commercial transactions with public corporations. But there is no reason why a d i f ferent approach should be taken when the corporation is engaged in al legedly primary and inal ienable governmental functions. One th ing, i t is not clear what a government function i s . Hoggins J . I C O in Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd. ° described such a function as one ". . . without which a c i v i l i z e d state cannot be conceived, a function with which the state cannot part" . This descr ipt ion would probably include the administration of j u s t i ce and po l i ce , the defence of the country and the conduct of foreign a f f a i r s . On the other - 58 -hand, Latham C . J . , in the Unform Tax c a s e 1 5 4 argued that, "there is no universal or even general opinion as to what are the essential functions ... or a c t i v i t i e s of the state. Some would l i m i t them to the administration of ju s t i ce and pol ice and necessary associated a c t i v i t i e s . There are those who object to State action in re lat ion to health, education and the development of natural resources. On the other hand, many would regard the provision of soc ia l services as an essential function of government . . . It is not for a court to impose upon any parliament any p o l i t i c a l doctrine as to what are and what are not functions of government, or to attempt the impossible task of d i s t ingu ish ing, within functions of government, between essential and non- essential or between normal or abnormal. There is no sure basis for such a d i s t i n c t i on . Only the f i rm establishment of some p o l i t i c a l doctrine as an obligatory dogma could bring about certainty in such a s p h e r e . " 1 5 5 The same idea was expressed by Douglas J . in New York v.  U.S. (Stratoga Springs C a s e ) 1 5 5 when he conceded that, "a s tate ' s project is as much a legit imate governmental a c t i v i t y whether i t i s t r a d i t i o n a l , or akin to private enterpr ise, or conducted for p r o f i t . . . What might have been viewed in an ea r l i e r day as an improvident or even dangerous extension of state a c t i v i t i e s may today be deemed i nd i s pen sab l e . " 1 ^ The d i s t i n c t i on between governmental and non-governmental functions, upon which the nature of functions test is premised cannot threfore be placed on sound or log ica l basis. Any a c t i v i t y may I CO become a function of government i f parliament so determines and the existence of crown corporations is but an extension and widenning of governmental functions. Further, i t is very misleading to proceed as i f c o l l e c t i v i s t enterprises are ever mere substitutes for private enterpr ise; government - 59 -intervention is usually undertaken to achieve further, i f not d i f f e ren t , purposes from those pursued by private e n t e r p r i s e . 1 5 9 Public corporations have been set up to sat i s fy needs of the Canadian society, things which were thought desirable but which would not be undertaken by the pr ivate sector at a l l or to the extent required by Canadians. 1 6 0 It i s thus apparent that many of the functions exercised by public corporations are not a subst itute for private enterprise but the outcome of new conceptions of social re spons ib i l i t y . The Central Mortgage and Housing Corporation, for example, exercises some of the functions of a private mortgage company, but i t also discharges a social respons ib i l i ty of providing low-cost accommodation to the low income population and senior c i t i zens and others, and is bound in i t s a c t i v i t i e s to give p r i o r i t y to socia l pol icy considerations. The Canadian Broadcasting Corporation provides broadcasting services in i solated or remote a r e a s , 1 6 1 areas in which the private sector would not be interested; and Northern Canada Power Commission cannot charge prices in excess of i t s cost of production for the I C O power i t supplies. In the f i na l analys is, the nature of functions test does not give an adequate j u s t i f i c a t i o n for separating public corporations between two legal types, with d i f ferent legal r ights and duties; i t is outmoded and should be abandoned. 1 6 3 (g) Control or independent d i scret ion test Most w r i t e r s 1 6 4 are in agreement that the control or independent d i scret ion tes t , is the most cruc ia l and sat i s factory test in determining whether or not a crown corporation is a servant or agent of the crown. If the corporation is able to exercise i t s powers with considerable freedom from min i s ter ia l contro l , then i t is not a crown servant or - 60 -a g e n t . 1 6 5 In Fox v. Government of Newfoundland, 1 5 5 the Pr ivy Council in denying crown p r i o r i t y to the debts of an education board, emphasized the degree of independent d i scret ion which the board in question possessed, and in Metropolitan Meat Industry Board v. Sheedy, 1 5 7 the fact that the Board had a high degree of independent d iscret ion in exercis ing the i r functions "without consulting the direct represtatives of the crown" was treated by the court as evidence that the Board was not a servant or agent of the crown. On the other hand, i f the corporation is control led by the Minister in much the same way as a government department, then i t is a servant or agent of the c r own . 1 6 8 Since a l l crown corporations are subject to min i s te r ia l or cabinet contro l , the question must be one of degree and not simply con t ro l . " The mere fact that some administrative control i s exercised over a body w i l l not of course deprive i t of i t s persona and make i t the mere instrument of the central government: i t is of the nature of government to control i t s subjects without reproducing the private re lat ion of pr inc ipal and a g e n t . " 1 7 0 One then must determine the degree of control necessary to const itute a crown corporation a crown servant or agent. W.H. Moore formulates the extent of such control in these terms:-"The question is whether the central government exercises such a general d i rect ion and control over the body in re lat ion to i t s functions as to deprive i t of any w i l l of i t s own, and to make i t the mere instrument of the co l l e c t i ve w i l l of the s tate. " 171 The courts that have had the occasion to express views on th i s matter have set an equally high degree by requiring that such control as is requis i te to const itute a corporation a servant or agent of the crown must be a b s o l u t e , 1 7 2 comp le te , 1 7 3 or that the corporation must "at every - 61 -tu rn , at every s t a g e " 1 7 4 be under contro l . In The City of Hal i fax v.  Hal i fax Harbour Commission 1 7 5 the commission was assessed for business tax in respect of property i t occupied. It was contended by the commission that i t was using and occupying property as the agent or servant of the government of Canada and therefore exempt from such taxation by v i rtue of s. 125 of the B.N.A.A. The Supreme Court of Canada held that the re lat ion of the commissioners to the crown in respect of the i r occupation of the harbour property was of such character as to const itute that occupation an occupation ' f o r the crown' and therefore the commission was not assessable for tax. This was based on the degree of control exercised over the commissioners, who were said to be "at every step . . . under the control of the minister . . . and the Governor in C o u n c i l " 1 7 6 and ". . . subject at every turn . . . to the control of the Governor representing His Majesty . . . or the M i n i s t e r . 1 , 1 7 7 This type of control was derived from a number of factors - appointment of commissioners by the Governor in Counci l , the tenure of o f f i ce was "during pleasure", the Governor in Council determined the remuneration of the commissioners, expenditure of a l l revenue of the commission was subject to supervision and control of the Min i s ter , borrowing was to be approved by the Governor in Council, and by-laws of the commission required confirmation by the Governor in Council. Such a high degree of contro l , insofar as i t seeks to detach crown corporations from the crown and in the process establ ish the i r independent l i a b i l i t y would be welcome as a protective mechanism for those wronged by crown corporations, but as G. Sawer 1 7 8 has c lea r l y pointed out, both W.H. Moore and the courts in the above quoted cases, overstate the amount of ' serv i tude ' or the degree of control needed to bring or take a corporation within or without the shield of the crown. Agency and proprietary - 62 -corporations engaged in commercial a c t i v i t i e s as well as departmental corporations engaged in special ised f i e l d s l i k e research and a r t , cannot, unless one were to part with pract ica l r e a l i t y , be said to be at every turn and at every stage under the control of the appropriate Minister or the Governor in Council. A certain amount of administrative, f inanc ia l or commercial, and operational freedom or autonomy is a necessity. As Peter Hogg has suggested, i t is not possible to specify what degree of control i s required to make a public corporation a servant or agent of the c r o w n ; 1 7 9 the issue depends on the circumstances of each par t i cu la r case taking into account the other tests outl ined above, together with any other relevant con s ide ra t i on s . 1 8 0 A d i s t i nc t i on is made between de facto and de jure contro l . The degree of control which is in fact exercised over a public corporation at any given time is i r re levant; i t is the degree of control which the executive is l ega l l y ent i t led to exercise which is r e l e v a n t . 1 8 1 In R. v.  Achtem 1 8 2 the issue was whether the Alberta Housing Corporation was an agency of the Government of the Province of Alberta. The accused in that case had been convicted of paying a reward to a government o f f i c i a l , namely, the Executive Director of the Corporation, contrary to s. 110(1)(b) of the Criminal Code of Canada. It was conceded that i f the corporation was an agent or 'emanation or arm' to use the language of the court in that case, of the Government of A lberta, then the appellant was r i gh t l y convicted. It was therefore necessary to determine whether the corporation was such an agent, emanation or arm. In deciding that the corporation was an agency of the government, and thus dismissing the appeal, McDermid J.A. re iterated that " i n considering the nature and degree of control i t is not only in fact what control was exercised but the control that would lawful ly be - 63 -e x e r c i s e d . " 1 8 3 He proceeded to f ind such de jure control in the Alberta Housing A c t , 1 8 4 which provides for the establishment of the Alberta Housing Corporation. (h) General observation The plenitude of tests and c r i t e r i a by which, in the absence of express statutory ind icat ion, the status of a public corporation has been determined, is not an indicat ion of certainty of result . Although the control test has been singled out as a more sat i s factory te s t , there is no agreement that any of the tests gives a conclusive answer; the answer may depend on the respective weight given by the court to any one or several of the above mentioned t e s t s . 1 8 5 Nor is i t c lear whether the tests l a i d down are of general appl ication or are to be confined to a part icu lar issue before the court. And as the foregoing discussion has shown some of the tests are vague and based on shaky ground. The result is disconcerting for the publ ic, pract i t ioner and j u r i s t a l i k e . 1 8 7 Those situations in which there is some statutory indicat ion of the status of the corporation w i l l now be considered. ( i i ) Where Leg is lat ion Contains Some Statement as to the Status of the  Corporation When the issue of the legal status of a statutory body is in question, the pr inc ipal consideration one must have regard to is the language of the part icu lar statute under which the body is I Q Q established. 0 0 There is nothing in law to prevent the leg i s lature from const i tut ing a corporation a servant or agent of the crown or from conferring crown immunities and pr iv i leges to a crown c o r p o r a t i o n . 1 8 9 A great deal of private and public time and money would be saved i f the parliamentary draftsmen were permitted to deal with each case by c lear and - 64 -e x p l i c i t language. For example, i f p r i v i lege is desired i t would be appropriate to provide that, " f o r a l l purposes of th i s Act the corporation shal l have and may exercise a l l the powers, p r i v i leges , rights and remedies of the crown" and i f avoidance of p r i v i lege i s sought, i t would be useful to provide that; "the corporation shal l not be deemed to represent the crown for any purpose whatsoever. " 1 9 0 Unfortunately, in most cases, l e g i s l a t i on in question does not e x p l i c i t l y deal with the issue of the legal status of crown co rpo ra t i on s 1 9 1 and the courts have been faced with the task of interpret ing provisions of statutes which are far from being e x p l i c i t but which, that notwithstanding, have been considered as, in some way or another, ind icat ing the status of these corporations. In Wynyard  Investments Proprietary Ltd. v. Commissioner for Railways (N.S.W.) 1 9 2 s. 4(2) of the Transport (Divis ion of Functions) Act, 1932-1955 (N.S.W.), which provides that " for the purpose of any Act the Commissioner for Railways shal l be deemed a statutory body representing the crown" was construed by the court as meaning that the commissioner was a servant or agent of the crown and therefore not bound by the Landlord and Tenant (Amendment) Act 1899-1948 (N.S.W.). But in Rural Bank of New South Males v.  Hayes , 1 9 3 the bank, a public corporation, was held to be bound by the very section in question in the Wynyard Investments case, that i s , s. 62 of the Landlord and Tenant (Amendment) Act, the court saying; "A corporate lessor which is not the crown is bound by the Act, and i t is nothing to the point that land of which the corporation is the lessor is held on behalf of the Government." 1 9^ In State E l e c t r i c i t y Commission of V i c to r i a v.  Mayor, Counci l lors and Cit izens of the C i t y of South Melbourne, 1 9 5 the respondent sued the appellant commission claiming rates imposed under the - 65 -provisions of the Local Government Act, 1958 in respect of lands within the City of South Melbourne. The State E l e c t r i c i t y Commission Act, 1958 provided that the e l e c t r i c i t y undertaking was conducted by the commission 'on behalf of Her M a j e s t y . ' 1 9 6 On appeal, the commission contended i t was exempt from rates because the lands in respect of which rates were assessed were the property of Her Majesty used for public purposes, by v irtue of the aforementioned provis ion. The issue then was whether or not the lands rated were the property of Her Majesty. The court rejected the appellant commission's contention and held that the land vested in the commission was not the property of Her Majesty. In effect the court rejected the phrase 'on behalf of Her Majesty' as i n su f f i c i en t to establ ish the relat ionship of trustee and beneficiary between the commission and the crown. The court also observed a strong tendency in modern authorit ies to regard a statutory corporation formed to carry on public functions as d i s t i n c t from the crown unless Parliament has, by express provis ion, given i t the character of the crown. The provisions, in statutes creating public corporations, establ ishing the power to sue and the l i a b i l i t y to be sued on the part of corporations, have been interpreted as evidence of separation of the corporations from the crown; a corporation which may sue and be used in i t s corporate name does not partake of crown p re roga t i ve s . 1 9 8 In C.B.C. v. C y r , 1 9 9 a case in which a crown corporation sought to res i s t garnishee proceedings, the Quebec court of King 's Bench, Appeal s ide, held that in view of the provisions of the statute creating the C.B.C, declaring i t to be a corporation having capacity to sue and be sued i n i t s name, the C.B.C could not claim to be exempt from court proceedings as an agent or emanation of the crown. Hence the corporation was bound to make a declaration in - 66 -reply to a writ of attachment by a garnishment in respect of i t s employee. But in Oatway v. Canadian Wheat B o a r d 2 0 0 and International Railway Co. v. Niagara Parks Commission, 2 0 1 the Manitoba Court of Appeal and the Ontario Court of Appeal, respect ively, rejected as evidence of separation from the crown, the provisions establ ishing the power to sue and the l i a b i l i t y to be sued, in corporate name. In the two cases the Canadian Wheat Board and the Niagara Parks Commission were held to be servants or emanations of the crown. The Statute Law Amendment A c t , 2 0 2 in 1950, threw some l i gh t on the quetion of the legal status of crown corporations. That Act, which affected seventeen statutes, sixteen statutory crown co rpo ra t i on s 2 0 3 and a l l crown companies, introduced a uniform provision to the following e f f e c t ; -"The corporation i s , for a l l purposes . . . an agent of Her Majesty, and i t s powers under th i s Act may be exercised only as an agent of Her Majesty." 204 This provision has since 1950 been reproduced in statutes creating departmental, agency and proprietary co rpo ra t i on s , 2 0 5 but does not appear in statutes establ ishing unc lass i f ied corporations. It remains to be considered whether the above provision provides a last word as regards the status of crown corporation, and cases decided after 1950 would be useful in th i s respect. In C.B.C. v. Attorney General fo r O n t a r i o 2 0 6 the C.B.C. was charged before a magistrate with v io lat ing the Lord 's Day Act by operating a broadcasting station on the Lord 's Day. The corporation applied before a judge in chambers for a writ of prohib i t ion to prevent any further proceedings and to quash the summons on the ground that the Act did not apply to Her Majesty and therefore did not apply to the corporation, being an agent of Her Ma je s t y . 2 0 8 The appl icat ion was refused by the Chief Just ice of the High Court, and his - 67 -judgment was affirmed by the Ontario Court of Appeal. On appeal to the Supreme Court of Canada, the court held that the Lord 's Day Act did not apply to the C.B.C., and therefore the corporation was ent i t led to the wr i t of prohib it ion as applied for. The Supreme Court of Canada also held in B.V.D. v. The Queen^ 9 that the crown as p r i n c i pa l , could sue the appellant company to recover money owed by the appellant company to the Commodities Prices S t ab i l i z a t i on Corporation, an agent of the crown. These two cases show that once the statutory agency relat ionship is establ ished, then the corporation i s ent i t led to the benefit of crown prerogatives and that the crown, in i t s own name, may enforce a right accruing to i t s agent. However, other cases decided after 1950 , 2 1 0 tend to show that the mere establishment of a statutory relat ionship of agency does not ind icate that the corporation as a servant or agent of the crown is ent i t led to a l l the attr ibutes of the crown. In Marcel Langlois v. Canadian Commercial Co rpo r a t i on , 2 1 1 the corporation was sued for damages for breach of contract. Interest on damages was allowed against the corporation pursuant to the general law of Quebec. It was contended for the corporation that i t p i p was an agent of the crown, that the crown may not be charged with interest on any pr inc ipal sum, except by v i rtue of a statutory provision or i t s own consent, that the corporation was in the same posit ion as the crown pi o and therefore interest should not be allowed. The Supreme Court rejected these contentions and held that the corporation was in the same posit ion as any other private corporation, notwithstanding that i t was constituted an agent of Her Majesty. In Alberta Government Telephones v. S e l k , 2 1 4 Crossley J . had th i s to say;-"The consideration, therefore, is whether or not the Alberta Government Telephones can exercise crown prerogatives that have been in existence for many centuries. In reading s. 39(1), 215 - 68 -the only help we have is to the effect that the commission i s an agent of the crown in the right of the Province. This section does not s pec i f i c a l l y state that the commission has any prerogative whatever. . ." Whereas pr ior to 1950 the Canadian courts were pr imari ly engaged in seeking to establ ish a relat ionship of master-servant, principal-agent or t rustee-benef ic iary and to grant or deny crown attr ibutes according to whether a desired relat ionship was establ ished, now the courts have to determine whether the mere fact that a relat ionship has been established by statute is su f f i c ient to confer onto the corporation a l l the crown at t r ibutes . Of course one does not forget that in respect of unclass i f ied crown corporations, no such relat ionship is established. In respect of these unclass i f ied corporations, one may interpret the s i lence of the leg i s la ture as an indicat ion of an intent to disassociate these corporations from the crown, or as a negligent omission in which case i t may s t i l l be necessary, using the various tests and c r i t e r i a already outlined to determine the status of these corporations. The Supreme Court of Canada has held in two recent c a s e s 2 1 6 that whether or not a part icu lar body is an agent of the crown depends upon the nature and degree of control which the crown exercises over i t . In Canada, therefore, the control test is the most cruc ia l test in determining whether a desired relat ionship between the crown and a crown corporation is established. But as has been shown above, i t is not enough to establ ish merely that a crown corporation is an agent or servant of the crown in order to attract crown att r ibutes. What then should guide the courts as to the determination of the legal status of crown corporations? It is submitted that in a l l cases the determining factor in seeking to establ i sh the legal status of a crown corporation must have reference to the - 69 -interests sought to be protected or considered by the judges and other legal technocrats worthy of legal protection. This is the only meaningful solut ion or approach to the problem since as has been demonstrated above, neither the tests used in absence of express statutory indicat ion nor the express provisions that a corporation is a servant or agent of the crown are conclusive in determining the legal status of a crown corporation. Crown advantages should be upheld only when there are objective purposes to be served thereby and should be denied i f no purpose is served by the i r being upheld. Bearing in mind the interest groups introduced in the introductory part of th i s essay, one is able to ra t iona l i se the decisions made after 1950. pi 7 For example, C.B.C. v. Attorney General fo r Ontario involved the criminal l i a b i l i t y of the C.B.C. for broadcasting on the Lord 's Day. The court held the C.B.C. not bound by the Lord 's Day Act, as a servant or agent of the crown. This decision in no way prejudices the interest groups mentioned in the introductory part; a contrary decision would, on the other hand, have affected mi l l ions of Canadians by depriving them of broadcasting pi o services on Sundays. In B.V.D. Co. Ltd. v. The Queen, the crown sought, as p r i n c i pa l , to recover money owed to i t s agent, a crown corporation. The decision that the crown could so recover the money did not adversely affect anyone whose interests are deemed worthy of protect ion; on the contrary, i t was only appropriate that the taxpayers' money should not be l e f t to private appropriation. S im i l a r l y , in R. v. Achtem 2 1 9 the holding that the Alberta Housing Corporation was an agent of the crown sustained the conviction of the appellant for paying a reward to a government o f f i c i a l , namely, the executive d i rector of the corporation. The court, in e f fec t , but without so saying, held that crown corporations should - 70 -not be the object or subject of corrupt practices and this is des irable. On the other hand, in Marcel Langlois v. Canadian Commercial 990 Corporation , the court refused to give par t i cu la r legal incidence to the statutory relat ionship of agency. The claim in th is case was for interest on damages for breach of contract and the Supreme Court of Canada held that such interest was recoverable. So the appellant, a private l i t i g a n t , was protected against a public authority. In the same s p i r i t , in National Harbours Board v. Langelier and O t h e r s , 2 2 1 an inter locutory injunction was granted agaist the Board to restra in i t from carrying out certa in works on the St. Lawrence r i v e r , which would have in jur ious ly affected the properties of the respondents, notwithstanding that the Board 999 was constituted an agent of the crown*-" and that the crown is generally immune from res t ra int . But as the following discussion of the tort ious l i a b i l i t y of crown corporations w i l l , in part, show, i t is not possible to ra t iona l i se a l l the cases in the fashion that the above f i ve cases have been rat iona l i sed. V. TORTIOUS LIABILITY OF CROWN CORPORATIONS The two most important prerogatives by exception have, since the feudal period, been that the crown is not l i a b l e for tort and is not in general bound by any statute unless named t h e r e i n . 2 2 4 The rule against tort ious l i a b i l i t y in practice exempts the state from l i a b i l i t y to the subject for the wrongful acts of i t s o f f i cer s and servants, while that of exemption from statutes operates, in general, in rather a d i f ferent way. From the fact that statute law deals in the main with matters of public regulation or administration and with matters of revenue, the rule works out p r a c t i c a l l y to t h i s : that the property of the central government is exempt - 71 -from administrative regulation and especia l ly from taxing Acts, and that the functions of central government are exercised independently of and not subject to the f i s c a l or administrative regulations imposed by statutes or by the several subordinate author it ies created and empowered by these ppc. statutes. The rule of exemption from statute, therefore, does not affect the subject or individual in any direct sense and th i s is the reason why i t is not discussed in any d e t a i l . On the other hand, the fact that the rule against tort ious l i a b i l i t y of the crown, d i rec t l y and in a real sense, affects the subject or i nd i v idua l , c a l l s for a detai led examination of the same, in an attempt to analyse how the courts have reacted to the interests of the groups already outl ined. (a) The Posit ion Pr io r to 1953 ( i ) Tortious l i a b i l i t y of crown corporations denied The rule in Canada, pr ior to 1953, was that the crown i t s e l f could not be sued in tort and crown assets could not be reached, i nd i r e c t l y , by suing in t o r t , a department of government or an o f f i c i a l of the c r o w n . 2 2 5 As to a government department, there was the added barr ier that, not being a legal ent i t y , i t could not be sued. The courts, both in Canada and England extended the crown's immunity from tort actions to crown corporations vide the relationships of master and servant, and pr inc ipal and agent. Using the tests already discussed, the courts held in a number of pp7 cases, c / that i f a corporation in question was a servant or agent of the crown, then i t was not l i a b l e to be sued in t o r t . Thus McTague J.A. in Gooderham and Worts Ltd. v. C .B .C . 2 2 8 confidently stated; " I t seems pretty de f i n i t e l y established that the crown or an emanation of the crown cannot be successful ly sued in tort . . . " The courts, as has already been pointed out, used such expressions as 'emanation or shield of the crown', - 72 -'department of government', ' s tate instrumental i ty ' or 'hands of the crown' i n order to convey the relat ionships of master-servant and pr ic ipa l -agent. In Quebec Liquor Commission v. Moore , 2 2 9 the commission was held not l i a b l e in to r t for injury caused to Moore by the action of the commission's employee because the commission was an instrumentality of the government. In the Austral ian case of Marks v. Forests Commission, 2 3 0 the V ic tor ian commission was held not l i a b l e for injury caused to a member of the general public by the negligence of one of the drivers of the commission part ly because i t was largely control led by a Minister and was therefore a government department. It is c lear that in thus denying the tort ious l i a b i l i t y of crown corporations, the courts paid no regard to the interests of those who were wronged by the actions of these corporations. The individual was thus without any remedy at a l l . What is not c lear is whether the courts ever addressed themselves to these interests or whether they so did but did not consider those interests worthy of legal protect ion. However, in the United Kingdom the crown's immunity, pr ior to 1947, was mitigated by the crown, as a matter of grace, 'standing behind' any servant who committed a tort in the course of his employment. If the injured person was successful in suing the servant, who was personally l i a b l e , the crown would sat i s fy the judgment. 0 1 This practice was the result of a moral and not legal duty for as Viscount Simon pointed out in Adams and Others v.  Nay ! o r , 2 3 2 where an action in respect of a tor t was brought against a servant of the crown, the issues to be t r i ed were those between the parties and the court was not concerned with the fact that the crown, which was not a party, might stand behind the defendant. The practice had also other d e f e c t s , 2 3 3 namely;-.. • . . - 73 -(a) the p l a i n t i f f might not know the ident i ty of the servant who injured him, in that case he had no one to sue; (b) the crown might dispufe that the tortfeasor was i t s servant, or that he was acting in the course of his employment; in that case the injured party could not obtain a j ud i c i a l decision on the question; (c) more s i gn i f i c an t l y , the crown's practice provided no machinery for recovering damages from the crown in s i tuat ions where a private employer would be l i ab l e d i rec t l y rather than v icar ious ly . 234 Because the practice rested on a moral but not legal duty, and by virtue of the defects in the practice pointed out above, victims of tort ious wrongs largely remained without redress, and in Canada there is no evidence of such pract ice. As has been intimated, a servant of the crown who committed a tor t was personally l i a b l e to the injured v ict im and th i s was so even i f the to r t was committed in the course of his employment. 2 3 5 The pr inc ip le was stated as early as 1865 by Cockburn J . in Feather v. The Queen ° in these words;-"But in our opinion no authority is needed to establ ish that a servant of the crown is responsible in law for a tort ious act done to a fel low subject, though done by the authority of the crown - a posit ion which appears to us to rest on pr inc ip les which are too well sett led to admit of question, and which are a l i ke essential to uphold the dignity of the crown on the one hand, and the r ights and l i b e r t i e s of the subject on the other." According to th i s p r i nc ip le , only, the servant who actual ly committed a to r t was personally l i a b l e . A min i s ter , departmental head or other superior servant was not l i a b l e for the torts of a subordinate, for the superior is a fe l low servant and not the mas te r . 2 3 7 The l i a b i l i t y was thus direct and not v icar ious. Further disregarding the necessity to provide r e l i e f to those injured by crown corporations, the courts refused to apply the above pr inc ip le or - 74 -rule to crown corporations. One of the reasons was that since there was no contractual relat ionship between the crown and the corporations, then the corporations could not, in s t r i c t accuracy, be described as s e r v a n t s . 2 3 8 This argument is se l f -contrad ictory for i t was the same relat ionship that was used to ident i fy the corporations with the crown and at t r ibute crown prerogatives to the former. Closer analysis shows that i f th i s argument is taken to i t s log ica l conclusion i t gives the fol lowing resu l t : for purposes of immunity from tort actions, a crown corporation is a servant of the crown, but for purposes of personal l i a b i l i t y in to r t such a corporation is not a servant of the crown. Secondly, i t has been argued that a public corporation has no personal capacity but only a representative one and therefore i t could not be sued without necessarily involving the c r o w n . 2 3 9 It has no private property to sat i s fy a judgment and in view of the rule that state property is never avai lable to sat i s fy a judgment against a servant personally, no action in tort could be brought against such a c o r p o r a t i o n . 2 4 0 It is submitted that th i s second argument is lega l l y untenable for a corporation, whether public or pr ivate, has i t s own personality separate from the crown or i t s shareholders and there is no legal requirement that i t s property be that of the crown or i t s share-holders. This argument, i f maintained, would make public corporations immune from a l l actions, whether founded in to r t or contract or any other branch of l a w . 2 4 1 This cannot be the case. A th i rd reason for not applying the rule of personal l i a b i l i t y to crown corporations was that since a corporation is an abstract ion, i t could not be held to have actual ly committed a t o r t . 2 4 2 But a case can be made out that i f i t could be shown that the corporation had actual ly committed the ?43 to r t or was d i r ec t l y privy to i t , i t could be held l i ab l e therefor. - 75 -An example would be where the governing body passed a resolution ordering the commission of the t o r t . 2 4 4 Also, in the same way as a Minister was not l i a b l e for torts of his subordinates, a crown corporation was not l i a b l e for the torts of i t s employees for these employees were not servants of the corporation but servants of the crown, the rule being that a person employed by a crown servant in his o f f i c i a l capacity is not a servant of that crown servant but i s himself a servant of the c r own ; 2 4 5 the superior is a fe l low servant and not master. 2 ^ 6 I f the courts had been serious about providing redress to injured v ict ims, the obstacle posed by the fact that a corporation is an abstraction could have been overcome by u t i l i z i n g the pr inc ip le l a i d down in Lennard's Carrying Co. v. A s i a t i c Petroleum Co. L t d . 2 4 7 In that case a company which owned a ship was seeking to take advantage of the l im i ta t ion of l i a b i l i t y under section 502 of the Merchant Shipping Act 1894. This l im i ta t i on is avai lable only where injury is caused without the owner's ' actual fau l t or p r i vy . ' The loss resulted from the default of Lennard, i t s managing d i rector , and in holding the company l i a b l e , Viscount Haldane L.C., in del iver ing the judgment of the Houe of Lords, sa id ; -"My Lords, a corporation is an abstraction. It has no mind of i t s own any more than i t has a body of i t s own; i t s active and d i rect ing w i l l must consequently be sought in the person of somebody who for some purposes may be cal led an agent, but who is rea l l y the d i rect ing mind and w i l l of the corporation, the very ego and centre of the personality of the corporation . . . If Mr. Lennard was the d i rect ing mind of the company, then his action must, unless a corporation is not to be l i ab l e at a l l , have been an action which was the action of the company i t s e l f within the meaning of section 502. . . It must be upon the true construction of that section in such a case as the present one that the fau l t or p r i v i t y is the fau l t or p r i v i t y of somebody who is not merely a servant or agent for whom the company is responsible upon the footing respondeat superior, but somebody for whom the company is l i a b l e because his action is the very action of the company i t s e l f . " 248 - 76 -On the authority of th i s case i t can no longer be contended that a corporation is not capable of personally committing a wrong and i t was possible to hold crown corporations personally l i a b l e for the i r t o r t s . Further, as Ful l agar J . in Commonwealth v. B o g l e 2 4 9 observed, there is no r ea l i t y in the idea of an incorporated public authority being a fe l low servant of the crown with the ' i nd iv idua l servants' employed by i t ; p e n and as G. Sawer has suggested, the d i f f i c u l t y disappears i f the corporation is thought of as an agent, for an agent may employ servants to carry on the agency, and those servants are not fel low servants of the i r p r i n c i pa l . In such a case a corporation would be l i a b l e for the actions of i t s servants in the course of the i r employment. U l t ra Vires It is t r i t e law that no act or omission by the crown or i t s servants gives r i se to l i a b i l i t y in to r t unless i t is committed without legal a u t h o r i t y . 2 5 1 A governmental act may be authorized either by statute or by prerogative, and i f so, then i t i s not t o r t i o u s . 2 5 2 This does not always mean that a person who is injured by the act w i l l go uncompensated, for the part icu lar statute or prerogative may provide for the payment of compensation; but in such a case the claim for compensation is founded on statute or prerogative as the case may be, and not on the law of t o r t s . 2 5 3 Relying on th i s ru le , statutory crown corporations have attempted to res i s t tort ious l i a b i l i t y by arguing that since the i r powers are derived from statute, the exercise of those powers cannot be the subject of an action at the suit of indiv iduals who allege that they have been i n j u r e d ; 2 5 4 that a crown corporation in the exercise of statutory - 77 -powers is incapable of doing a wrongful act and that any wrongful act must be deemed u l t ra vires the corporation, for which the corporation is not l i a b l e . 2 5 5 In the I r i sh case of Wheeler v. Publ ic Works  Commissioners 2 5 5 , Pal les C.B. is quoted as having sa id; - "Now i f a corporation be constituted for the sole purpose of doing acts for the crown, i t is prima fac ie outside i t s powers to do anything, except for the crown, and as in law a wrongful act cannot be done for the crown, such a corporation i s not capable of doing such a wrongful act in i t s corporate capacity. In such a case, therefore, the wrongful act cannot be deemed that of the corporation. . ." In East Suffolk River Catchment Board v. Kent and Anothe r , 2 5 7 owing to a very high t i de , a breach was made in a sea wa l l , as a consequence of which the respondents' land was flooded. The appellants in the exercise of t he i r statutory powers undertook to repair the w a l l , but carr ied out the work so i n e f f i c i e n t l y that the flooding continued for 178 days, thereby causing serious damage to the respondents' pastureland. It appeared from the evidence that by the exercise of reasonable s k i l l , the breach in the wall might have been repaired in 14 days. The issue was whether the Board was l i a b l e for the damage. The House of Lords held in favour of the appellant board, saying that where a statutory authority is entrusted with a mere power, i t cannot be made l i a b l e for any damage sustained by a member of pep the public by reason of a f a i l u r e to exercise the power. Lord Romer s p e c i f i c a l l y stated that i f in the exercise of i t s d i scret ion the authority embarks upon an execution of that power, the only duty owed to any member of the public is not thereby to add to the damages which that person would have suffered had the authority done nothing. So long as the authority exercises i t s d i scret ion honestly, i t can determine the method by which, and the time - 78 -during which, the power shal l be exercised, and i t cannot be made l i a b l e f o r any damage that would have been avoided i f i t had exercised i t s d iscret ion in a more reasonable way. But as w i l l be demonstrated in the fol lowing subsection, other courts and judges have rejected rel iance on statutory provisions as a ground f o r escaping tort ious l i a b i l i t y on the part of publ ic corporations. ( i i ) Tortious l i a b i l i t y of crown corportions established The courts, in a number of c a s e s , 2 5 9 concerned that members of the public should not be exposed to unreasonable r isks - even from public bodies, - have held public corporations l i a b l e for the i r tor t s or those of t he i r servants or employees. In Managers of the Metropolitan Asylum  D i s t r i c t v. H i l l , 2 6 0 the appellants were incorporated by the Metropolitan Poor Act, 1867 , 2 6 1 for the purpose of providing hospitals for the reception of the sick poor of the Metropolis. The respondents brought an action against the appellants, a l leging that the appellants had erected a certa in hospital near the i r propert ies, for the reception of persons suffer ing from small pox and other infect ious and contagious disorders, which was a nuisance, and had carr ied on the said hospital so as to be a nuisance. The appellants defended the action on the basis that they were simply carrying out orders of the local government board which had statutory power to establ ish hospitals in metropolitan areas. "What had been done was done under statutory authority and therefore not the subject of an action at the suit of indiv iduals who alleged that they were injured by i t . . . . [ i t was the] intention of Parliament that private inconvenience must be submitted to , in consideration of the great public benefit that was to result from i t . " 2 6 2 The court overruled the above objections holding that the appellants - 79 -could not set up the statute nor the orders of the local government board under i t , as an answer to the action or to prevent an injunction issuing to res t ra in the Board from continuing the nuisance. Lord Blackburn noted that on those who seek to establ ish that the leg i s la ture intended to take away the private rights of ind iv idua l s , l i e s the burden of shewing that such an intention appears by express word s ; 2 6 3 a n c| |_orc| s e iborne observed that the appellants were obliged, in order to succeed, to prove that they had a statutory authority to create a nuisance for the purpose of and as OR A inc idental to the maintenance of a small pox hosp i ta l . H And in Great Central Railway Co. v. H e w l e t t , 2 6 5 Lord Parker considered i t a well sett led pr inc ip le of law that where statutory powers are conferred, they must be exercised with reasonable care, so that i f those who exercise them could by reasonable precaution have prevented an injury which is occasioned, and was l i k e l y to be occasioned, by the i r exercise, damages for negligence may be recovered. In Mersey Docks and Harbours Board Trustees v. G i b b s , 2 6 7 a case involving the l i a b i l i t y of the Board for damage caused to the ship and cargo beloning to the respondents, the Board argued that as public trustees or trustees for public purposes they were not in the i r corporate capacity l i a b l e to make compensation for damage sustained by individuals from the neglect of t he i r servants and agents to perform duties imposed on the corporation, or at a l l events the duty of the Board was l imited to that of exercis ing due care in the choice of the i r o f f i c e r s ; and that i f they had properly selected the i r o f f i c e r s , any ev i l which ensued must be the fau l t of the o f f i ce r s and redress should be sought from such o f f i ce r s . They also r e l i ed on the statutory defence. The court rejected these arguments and held the Board l i a b l e to the owner of the ship and the owner of the cargo - 80 -thereon. S im i l a r l y , in G i lbert v. T r i n i t y House Co rpo ra t i on , 2 6 8 the facts of which have already been given, the court rejected the contention of the corporation that i t s employees were not i t s servants, but servants of the crown, and was therefore not l i a b l e for the i r negligence. The court held that the corporation was not a servant of the crown and was l i a b l e for the actions of one G r i f f i t h s , which resulted in damage to the p l a i n t i f f ' s ship. The u l t ra vires defence was also emphatically rejected by the Supreme Court of Canada in National Harbours Board v. Langelier & O t h e r s , 2 6 9 which observed that i f a corporation commits a wrongful act, i t is l i a b l e therefor and i t cannot escape l i a b i l i t y by al leging that i t is not responsible for anything done outside i t s corporate powers and that th i s i s true whether i t is purporting to act as a crown agent or not. Martland J . 970 r i gh t l y pointed out that a contrary rule would lead to the conclusion that no subject threatened with an unlawful act by a corporate crown agent would have any recourse to the courts against such a corporation to prevent i t and continued;-"I am not prepared to accept the proposition enunciated in Wheeler  v. Public Works Commissioners [271] . . . that a corporation constituted for the sole purpose of doing acts for the crown is not capable of doing a wrongful act in i t s corporate capacity, unless that statement is to be l imited in i t s meaning to say that such a wrongful act is not authorised by i t s corporate powers. Otherwise the statement subscribes to the theory that a corporation cannot be made l i a b l e in tor t because i t s corporate powers do not authorize i t to commit a wrong. In my opinion i f a corporation, in the purported carrying out of i t s corporate purposes, commits a wrongful act, i t is l i ab le therefore and i t cannot escape l i a b i l i t y by a l leg ing that i t is not responsible fo r anything done outside i t s corporate powers." 272 The foregoing discussion shows that the cases are equally divided, one set refusing to give redress to those injured by crown corporations and the - 81 -other holding crown corporations l i a b l e for the i r tort ious actions. This i s the state of the law prior to 1953 and the posit ion after 1953 w i l l be considered next. (b) From 1953 to the Present Day The Canadian leg i s l a tu re , in 1953, passed the Crown L i a b i l i t y A c t 2 7 3 which f i n a l l y established the l i a b i l i t y of the crown for torts of i t s s e r v a n t s . 2 7 4 Thus the feudal concept that the King can do no wrong, was, as fa r as tort ious l i a b i l i t y is concerned, reduced to no more than h i s t o r i c a l value. The Canadian Act fol lowing the United Kingdom Crown Proceedings Act 1947 , 2 7 5 which made the crown v icar ious ly l i ab l e for to r t s committed by i t s servants or a gen t s , 2 7 6 and d i r e c t l y l i ab le for breach of employer's d u t i e s , 2 7 7 occupier ' s d u t i e s 2 7 8 and statutory ?7Q duties. Now, for purposes of tort ious l i a b i l i t y , i t matters not whether a crown corporation is or is not a servant of the crown. If i t is a servant of the crown, then the crown is v icar ious ly l i a b l e for i t s t o r t s . 2 8 0 The case of B.V.D. Co. Ltd. v. The Queen 2 8 1 established that the crown, as p r i n c i p a l , could sue in respect of a right accruing to a crown corporation. One is therefore en t i t l ed , on ordinary agency pr inc ip les , to assume that the crown can l ikewise be sued as p r i n c i pa l , fo r the acts or omissions, of i t s agent, a crown corporation. I f , on the other hand, a crown corporation is not a servant or agent of the crown, i t is l i a b l e to the same extent as any other c o r p o r a t i o n . 2 8 2 But one problem arises in those cases where the corporation is not a servant of the crown: If l i a b i l i t y is established and the corporation is not, out of i t s corporate funds, able to pay the damages, should the government be ca l led upon to pay or is the l i a b i l i t y of the government, as shareholder, l imited to the amount invested in the - 82 -corporation? Under ordinary pr inciples of company law, the shareholders of the company are not as such l i a b l e for i t s debts. In the case of a company l imi ted by shares, each member is l i a b l e to contribute, when cal led upon to do so, the f u l l nominal value of the shares held by him in so far as th i s has not already been paid by him or any pr ior holder of those shares; and in the case of a company l imited by guarantee, each member is l i a b l e to contribute a specif ied amount to the assets of the company in the event of i t s being wound up while he is a member. 2 8 3 In short, the l i a b i l i t y of the members is l im i ted . There appears to be no good reason why such a rule should be extended to crown corporations fo r , as the Royal Commission on Government Organization observed, H i t is inconceivable, in terms of p o l i t i c a l r e a l i t i e s , that the government would ever claim a l imited l i a b i l i t y and permit the organization to be forced into l i qu ida t i on . And A.G. I r v i n e 2 8 5 notes that, in pract ice, the government does not set a l im i t to the f inanc ia l l i a b i l i t i e s to th i rd parties ar i s ing from the operations of i t s crown corporations and that whenever a corporation could not meet i t s l i a b i l i t i e s from i t s own resources, the government has always provided the funds required to pay the claims of th i rd part ies. This approach is indeed commendable for i t ensures that a judgment-creditor is not l e f t with an empty judgment. One case, decided after 1953, by the Ontario Court of Appeal, appears to be incomprehensible. It is the case of Formea Chemicals Ltd. v. Polymer  Corporation L t d . , 2 8 6 and involved the interpretat ion of section 3(6) of the Crown L i a b i l i t y Act which preserves the immunity of the crown from actions in tort with respect to anything done or omitted to be done in the - 83 -exercise of any prerogative power and in the exercise of any statutory power or authority conferred on the crown. In that case, the appel lant ' s action was for damages for infringement of a patent by the respondent, a crown corporation and for an injunction restra in ing the respondent from continuing to infr inge the same. The issue was whether the action was maintainable against the respondent which was admitted to be an agent of the crown by v i r tue of section 3(1) of the Government Companies Operation Act; which provides that "Every company is for a l l i t s purposes an agent of Her Majesty and i t s powers may be exercised only as such an agent of Her Majety." The court held that since at common law an action for infringement of a patent, being an action in t o r t , was not maintainable against the crown nor against an agent of the crown acting in a representative capacity, the respondent was not l i a b l e , the case f a l l i n g within the immunity of s. 3(6) of the Crown L i a b i l i t y Act. In the words of McLennan J .A . ; -" I f i t were not for the exception contained in s. 3(6) an action would l i e against the respondent for infringement. As I understand s. 3(6) the immunity of the crown from actions in t o r t remains with respect to anything done or omitted (1) in the exercise of any prerogative power of the crown and (2) in the exercise of any statutory power or authority conferred on the crown. What is complained of in th i s case was done, i f at a l l , in the exercise of a power conferred on the crown by the Government Companies Operation Act. P r io r to the proclamation declaring the Act applied to the Respondent, the crown did not have power to manufacture and se l l synthetic rubber products. The real ef fect of s. 3(1) of the Government Companies Operation Act is to confer a statutory power on the crown in r ight of Canada to engage in that business. Therefore, s. 3(6) applies and the remedy conferred by s. 3(1) [of the Crown L i a b i l i t y Act] is not ava i l ab le . " 287 It is submitted that th i s case was wrongly decided for neither does s. 3(1) of the Government Companies Operation Act have the alleged effect nor does i t , as the court suggested, confer a statutory power on the corporation to - 84 -infr inge a patent or commit a wrong for that matter. If the reasoning of the court is maintained, i t would mean that a l l crown corporations carrying on functions not ' t r a d i t i o n a l l y ' undertaken by the crown would be free from a l l l i a b i l i t y . Therefore the appl icat ion of section 3(6) of the Crown L i a b i l i t y Act was misconceived;^ 0 0 and one can only hope that in future th i s case w i l l be overruled by the Supreme Court of Canada. The legal position as of the present is that the crown's immunity from tor t actions has largely been removed; so crown corporations can no longer hide under the shield of the crown, but crown immunities and advantages, which affect and inconvenience the i nd i v i dua l , s t i l l remain in the internat ional sphere and in the area of procedures. These have also been claimed by public corporations and w i l l be considered in that order. VI. INTERNATIONAL LEGAL STATUS OF PUBLIC CORPORATIONS As in national legal systems, states have, in the international legal order, enjoyed a position of advantage over indiv iduals and other legal e n t i t i e s , as fa r as substantive legal l i a b i l i t y is concerned. This has been the result of the appl icat ion of the doctrine of sovereign immunity, (a) The Doctrine of Sovereign Immunity The doctrine of sovereign immunity, which is based on international law, states that a sovereign state cannot, against i t s w i l l , be impleaded e i ther d i r e c t l y by being served in personam or i nd i r ec t l y by proceeding against i t s property, in courts and tr ibunals of another sovereign s t a t e . 2 8 9 In the Porto Alexandre C a s e , 2 9 0 salvage services were rendered to a ship owned by the Portugese government by three Liverpool tugs. In an action for remuneration for the said services the defendant contended that as the vessel was the property of the Portugese government, - 85 -i t could not be proceeded against and th i s contention was upheld by the court. The Canadian case of Dessaulles v. Republic of P o l a n d 2 9 1 involved a declinatory exception by the respondent state when sued for fees for legal services. The Supreme Court of Canada upheld the exception and restated the doctrine that a sovereign state cannot be sued before foreign c o u r t s . 2 9 2 Unlike in national legal systems, where an early d i s t i nc t i on was made between contractual and tort ious l i a b i l i t y of the government, no such d i s t i n c t i on was made in the international sphere and the state was not suable in the f i e l d s of contract, tor t and in respect of other legal wrongs. (b) The J u s t i f i c a t i o n for Sovereign Immunity The maxim "Par in parem non habet imperium" (each state must respect the d ign i ty, equality and independence of another state) provides the j u s t i f i c a t i o n for the rule of sovereign immunity. According to th is maxim the assumption of j u r i s d i c t i on over foreign states is contrary to the i r d ignity and as such inconsistent with international courtesy and the amity of international re lat ions . It is beneath the dignity of a sovereign state to submit to the j u r i s d i c t i o n of an a l ien court and no state or government should be faced with the a l ternat ive of e ither submitting to such indignity or losing i t s property in default of appearance. 2 9 5 In French Republic v. Board of Supervisors of Jefferson County , 2 9 6 the Kentucky Court of Appeals sa id ; -". . . i f one nation enters the t e r r i t o r y of another with i t s consent, fo r the purpose of mutual intercourse, i t does so with the implied understanding that i t does not intend to degrade i t s dignity by placing i t s e l f or i t s sovereign rights within the j u r i s d i c t i o n of the other. . ." It is also said that one of the consequences of independence and - 86 -e q u a l i t y " ' of states is the duty of municipal courts to abstain from exercis ing the i r j u r i s d i c t i on over foreign s t a t e s . 2 9 8 A l l states are independent and equally sovereign and therefore no state is amenable to the courts of another. It is further argued, as a basis for sovereign immunity, that impleading a foreign state and consequently levying execution in the case of a successful action might lead to bel l igerant action on the part of the impleaded state and would produce undesirable consequences for the state of j u r i s d i c t i o n . "The reason is that i f the courts here entertained the claim and in consequence gave judgment against the foreign sovereign, they could be ca l led upon to enforce i t by execution against i t s property. Such execution might imperil our relat ions with that country and lead to repercussions impossible to f o r e s e e . " 2 9 9 (c) The Appl icat ion of the Doctrine of Sovereign Immunity to Public  Corporations The same process, of ident i fy ing public corporations with governments or states, fo r the purposes of conferr ing, i n te rna l l y , attr ibutes of the state to these corporations, has been transplanted into the international arena almost wholesale. Thus, in attempting to establ ish the special relat ionships necessary to attract sovereign immunity, the courts have described a public corporation as an 'emanation', ' a rm ' , ' a l t e r ego ' , 'organ' or a 'department', 'mere instrument' or 'part and parce l ' of the government or s t a t e . 3 0 0 The tests used in determining whether or not the requis i te relat ionship is established are the now fami l i a r ones -statutory ind icat ion, incorporation, f inanc ia l dependence, appointment of members, nature of functions and contro l . One may add that guidance may be sought in views of the government with which the corporation claims to have the desired re lat ionsh ip. It has been held that a c e r t i f i c a t e of the - 87 -ambassador or other appropriate representtive of a government saying whether or not a body is a department, arm or a l t e r ego of the state is of much w e i g h t . 3 0 1 It is weighty because the ambassador or other representative speaks, so i t is assumed, with knowledge of his country and i t s laws, but inconclusive in the sense that he may apply a t e s t , which the courts of the state of j u r i s d i c t i o n , would not consider decisive or conclusive. As with internal immunities, the cases dealing with sovereign immunity are equally div ided, one set holding that public corporations, as agents, servants and departments of government, are ent i t led to the benefit of sovereign immunity, and another refusing to apply the doctrine of sovreign immunity to public corporations. The result has been to place those with claims against public corporations in a state of uncertainty since one cannot t e l l before hand which way a par t i cu la r decision w i l l go. Some cases w i l l serve to i l l u s t r a t e th i s undesirable state of the law. In Baccus S.R.L. v. Serv ic io Nacional Del T r i g o , 3 0 2 the defendant was a public corporation set up by the Spanish government and engaged in the regulation of production and d i s t r i bu t i on of wheat and s imi lar products. It was under the supervision and control of the Spanish Ministry of Agr icu l ture. The p l a i n t i f f s and the defendant entered into two c . i . f . contracts for the sale by the l a t t e r to the former of a specif ied quantity of rye. When disputes arose the p l a i n t i f f s issued a writ claiming damages for breach of contract. Subsequently a summons was issued on behalf of the defendant praying that a l l further proceedings in the action be stayed on the ground that the defendant was a department of the state of Spain and therefore ent i t led to sovereign immunity. It was argued on behalf of the defendant that a legal - 88 -ent i ty is not necessarily separate from the state and that there can be a department of state which is incorporated; that i t does not thereby cease to be a department of state and that i f i t is a department of state which is incorporated, there must be a r ight to claim sovereign immunity, i f i t is imp leaded. 3 0 3 The Court of Appeal upheld the defendant's arguments and held that the defendant was a department of the State of Spain notwithstanding that i t was a corporate body and a separate ent i ty , and was therefore ent i t led to claim sovereign immunity. In the words of Parker L . J . , "There is no ground in English law for thinking that the mere const i tut ion of a body as a legal personality with the right to make contracts and sue and be sued is wholly inconsistent with i t being a department of s t a t e . " 3 0 4 In Re Investigations of World Arrangements, 3 0 5 immunity was granted to the Anglo-Iranian Oi l Company (now B.P.) on the ground that i t was indist inguishable from the B r i t i s h government which owned a majority of i t s voting stock and that the production and refinement of o i l - the reasons for which the B r i t i s h government had acquired control of i t - was an es sent ia l l y governmental a c t i v i t y since i t was concerned with the needs of the navy . 3 0 6 In the United States, the courts have, to a large extent, been rel ieved of the burden of t ry ing to ident i fy public corporations with the governments concerned. Section 1603 of the Foreign Sovereign Immunities Act, 1976 defines a foreign state as including an 'agency' or ' i n s t rumenta l i ty ' of a foreign state. An agency or instrumentality is further defined, inter a l i a , as an ent i ty "which is a separate legal person, corporate or otherwise and which is an organ of a foreign state or subdivision thereof or a majority of whose shares or other ownership interest is owned by a foreign state or - 89 -p o l i t i c a l sub-divis ion t h e r e o f . " 3 0 7 It is not, however, c lear what is meant by "and which is an organ of the foreign s ta te . " The Act does not o f fe r any guidance. What is c lear is that the Legis lature adopted the language of the decided cases and as has already been pointed out the expression 'organ of the state ' i s meant to convey a relat ionship of master-servant, principal-agent or t rustee-benef ic iary, depending on the context and nature of the case in issue. The U.K. State Immunity Act, 1978 defines a state as including the government and any department of government. 3 0 8 Excluded from the de f i n i t i on is "any ent i ty (separate ent i ty ) which is d i s t i nc t from the executive organs of the government of the state and capable of suing and being s u e d . " 3 0 9 I f the Act had stopped there, i t would have completely excluded public corporations from the ambit of the doctrine of sovereign immunity. This progressive move is thwarted by the further and vague provision that a separate ent i ty is immune i f "the proceedings relate to anything done by i t in the exercise of sovereign authority and the circumstances are such that a state would have been immune." 3 1 0 Pa r t i cu l a r l y vague is the expression " i n the exercise of sovereign author ity" and one can only hope that the courts w i l l have the occasion to consider the section with a view to c l a r i f y i n g i t s meaning. Canada does not have a State Immunity Act or anything along the l ines of the United States Foreign Sovereign Immunities Act and cases dealing with sovereign immunity, as applied to public corporations are rare. It is disputable whether provisions const i tut ing public corporations to be agents of the crown would be taken as an indicat ion that the corporations so const ituted are ent i t l ed to the benefit of sovereign immunity. 3 1 1 At any rate, international law does not grant or refuse immunity according to - 90 -the immunities granted i n t e r n a l l y . 3 1 2 The issue of sovereign immunity of a Canadian public corporation was considered in the English case of Mellenger v. New Brunswick Development  Co rpo r a t i on . 3 1 3 This was an action for breach of contract and i t was contended on behalf of the defendant corporation that the corporation was an arm of the government of New Brunswick and could not be sued in a foreign country. The court sustained the contention holding that the corporation was an arm or a l t e r ego of the government of New Brunswick and therefore en t i t l ed to immunity from suit in B r i t i s h courts. Whether the Canadian courts w i l l , when adjudicating on foreign public corporations, take th i s approach, is not a matter that can be stated with certa inty. On the other hand, another l ine of c a s e s 3 1 4 has refused to confer sovereign immunity on public corporations, preferr ing to treat them as separate and d i s t i nc t from the state and outside the province of state immunities and advantages. In Trendtex Trading Corporation v. Central Bank  of N i g e r i a , 3 1 5 the Bank issued a Letter of Credit drawn on Midland Bank in London in favour of the p l a i n t i f f , a Swiss company to pay for cement sold by the p l a i n t i f f to an English company. The Bank assured the p l a i n t i f f that the Letter of Credit was r e l i a b l e . The p l a i n t i f f purchased the cement, sold i t to the English company and shipped i t to N iger ia. The Bank then refused to pay and the p l a i n t i f f brought an action on the Letter. The Bank's defence was that, as an arm or department of the government of N iger ia, i t was insulated from suit by sovereign immunity. The court, reject ing the argument, held that the Bank, which had been created as a separate legal ent i ty with no c lear expression of intent that i t should have governmental status, was not an emanation, arm, a l te r ego or department of the State of Nigeria and was therefore not en t i t l ed to claim immunity from su i t . - 91 -United States v. Deutsches Kal isyndikat G e s e l l s c h a f t 3 1 6 involved a corporation formed and control led by the French government for the purpose of explo i t ing potash in Alasace. It was held that a suit against the corporation was not a suit against a government merely because i t had been incorporated by d i rect ion of the government and used as a governmental agent and i t s stock was owned solely by the government. 3 1 7 In Ulen & Co. v. Pol ish National Economic Bank , 3 1 8 a bank created by the Republic of Poland as a state i n s t i t u t i o n , but as a separate legal person, whose stock was owned by the state, mun ic ipa l i t i e s , and state and municipal enterprises was held not immune from suit on interest coupons attached to bonds issued by i t and guaranteed by the Pol i sh government because i t had commercial objectives and "since i t is a person quite d i f ferent from the Pol ish government." And Singleton L . J . in a dissenting judgment in the Baccus S.R.L. case lamented;-"I cannot f ind that i t has been almost universal ly recognised that i f a government sets up a legal en t i t y , something which may contract on i t s own behalf as a l imited company does in th i s country, i t can succeed in a claim for sovereign immunity in respect of the a c t i v i t i e s of that company or en t i t y . " 319 (d) Res t r i c t i ve Sovereign Immunity The doctrine of sovereign immunity as o r i g i na l l y evolved did not dist inguish between commercial and non-commercial a c t i v i t i e s of the state. The state was absolutely immune from suit in a foreign court and hence the doctrine has been referred to as the doctrine of absolute sovereign immunity, in contrast to the newer and reformed doctrine of r e s t r i c t i v e , re l a t i ve or l imited immunity. The modern doctrine of r e s t r i c t i v e immunity, which has, to a large extent, replaced the absolut ist doctr ine, grants immunity in respect of acts of a governmental nature, jure imper i i , but no immunity in respect of acts of a commercial or private nature, jure - 92 -gest ion i s , and has found a place in a great number of c a s e s , 3 2 0 a 'Tate L e t t e r ' , 3 2 1 convent ions , 3 2 2 and Acts of P a r l i a m e n t . 3 2 3 The doctrine of r e s t r i c t i v e sovereign immunity is the result of the encroachment, by governments or states, upon many forms of a c t i v i t y not t r a d i t i o n a l l y within the i r sphere, and corresponds, in point of timne, with the emergence of public corporations. The pr inc ip le of absolute immunity as o r i g i na l l y applied by the courts was intended to cover the p o l i t i c a l a c t i v i t i e s of the state in the s t r i c t sense of the word and has therefore become obsolete and productive of i n ju s t i ce and inconvenience at a time when the operations of the state are increasingly extending into commercial, i ndus t r ia l and s imi la r spheres. It i s not c lear whether Canada has joined the ranks of those states that adhere to the r e s t r i c t i v e doctr ine. In the case of Government of the  Democratic Republic of the Congo v. Venne, ^ the majority of whose decision has been c r i t i c i s e d as ". . . somewhat ambiguous as no attempt i s made to c l a r i f y the law," the Supreme Court of Canada had the opportunity to determine the fate of the r e s t r i c t i v e immunity doctrine in the Canadian context, but let go that opportunity on the pretext that such determination was not necessary for determining the issues before the court. In that case the p l a i n t i f f sued the Republic of Congo for fees for professional services rendered in preparing plans for the construction of a pav i l ion at Expo '67. The Quebec Court of Appeal affirmed the dismissal of the defendant's declinatory exception based on the doctrine of absolute immunity. The Supreme Court of Canada, on appeal, reversed that decision holding that since the request for the respondent's services was made not only by the duly accredited diplomatic representative of the appellant, but also by the representative of the Department of Foreign A f fa i r s of the - 93 -appellant country, i t was pla in the transaction involved a public sovereign act of state on behalf of the country and the employment of the respondent was a step in the performance of that sovereign act; and accordingly, even i f the doctrine of r e s t r i c t i v e immunity prevai led, the appellant, a foreign government, could not be impleaded in the Canadian courts. However, as can be gathered from the above case, the Quebec courts have taken the lead and have adopted the r e s t r i c t i v e view of sovereign immunity. 3 2 6 On the federal l e v e l , the question is s t i l l 327 open. c-' From the foregoing discussion, i t is possible to state the doctrine of sovereign immunity as fo l l ows ; - "The doctrine of sovereign immunity, grants immunity from su i t , in a foreign country, to a foreign state or government or i t s departments or other p o l i t i c a l subdivisions and to a corporation or other legal ent i ty set up by that government to perform governmental or public functions and which may be regarded as a servant or agent of that government." I t has been noted that the r e s t r i c t i v e theory of sovereign immunity seeks to draw a d i s t i nc t i on between acts of a state which are done jure imperii and acts done by i t jure gestionis and accords the foreign state and i t s agencies no immunity either in actions personam or in actions in rem in respect of transactions under the second head. But how is one to d ist inguish governmental, public or sovereign acts from commercial or pr ivate acts of a government? It is submitted that the expansion of the scope of governmental a c t i v i t i e s implies a corresponding widenning of the reach of public or governmental purpose, and the attempt, imp l i c i t in the r e s t r i c t i v e view of sovereign immunity, to apply the test of 'proper ' or ' t r ue ' governmental functions must be rejected as outmoded and i l l o g i c a l in - 94 -modern circumstances. Lauterpacht refers to the d i s t i nc t i on between acts jure imperii and acts jure gestionis as "the d i s t i nc t i on which experience has proved to be impracticable and productive of u n c e r t a i n t y . " 3 2 9 Stephenson L . J . says of the same, ". . . the d i s t i nc t i on between the two categories has been found d i f f i c u l t to d r a w , " 3 3 0 and W. Friedman wr i tes ; -"The d i f f i c u l t y is how to f ind a reasonably precise d i s t i n c t i on between acts of the one and the other kind in view of the many diverse ways in which governments may engage in economic and commercial a c t i v i t i e s . For th i s reason, neither the functional test (Does the state act in i t s sovereign capacity?) nor the tes t of the forms of the transaction i s sat i s factory. Any government a c t i v i t y may f u l f i l ' sovereign ' purposes." 331 The impropriety of the d i s t i nc t i on which has cost the doctrine of r e s t r i c t i v e immunity i t s respect, is further exposed by the inconsistencies to be found in cases that have sought to make the d i s t i n c t i on . Courts of d i f ferent countries - and occas iofnal ly of the same country - have treated the same kind of a c t i v i t y in d i f ferent way s . 3 3 2 For example, the same transaction that was held in Government of the Democratic Republic of the  Congo v. Venne, 3 3 3 to involve a public sovereign act, was held in A l lan  Construction Ltd. v. Government of Venezue la 3 3 4 to be a private and commercial transaction. Various c r i t e r i on have been offered for dist inguishing between sovereign and commercial acts, v i z ; - 'nature of the d i s p u t e ' ; 3 3 5 ' i n t r i n s i c nature of the t r a n s a c t i o n ' ; 3 3 6 'hard core of an i r reducib le 007 minimum of government a c t i v i t i e s ' , and ' s t r i c t l y p o l i t i c a l or public acts about which sovereigns have t r a d i t i o n a l l y been quite sens i t ive. 0 0 A l l these c r i t e r i a and tests miss the fundamental problem - the i n a b i l i t y to appreciate the process by which an economic, trading or commercial a c t i v i t y of a state ceases to be a publ ic, governmental or sovereign act, - 9 5 -fo r as the U.S. Supreme Court in Ber i zz i Brothers v. Steamship Pesaro argued;-"We know of no international usage which regards the maintenance and advancement of economic welfare of the people in time of peace as any less a public purpose than the maintenance of a naval f o rce . " 339 The concept of commercial, non-sovereign acts or acts of less essential a c t i v i t y requires value judgments which rest on p o l i t i c a l assumptions as to the proper sphere of state a c t i v i t y and of p r i o r i t i e s in state po l i c i e s . To the economists an extensive public sector might be viewed as a step forward in developing economies. Thus, in a real sense a l l acts jure gestionis are acts jure imper i i . ™ I f any d i s t i nc t i on must be made, i t must be between commercial and non-commercial a c t i v i t i e s of the state. This would avoid the fa l l ac ious c r i t e r i on of sovereignty, but th i s too is of cosmetic value only. The person seeking redress from the government or governmental in s t i tu t ions i s not interested in the description of the a c t i v i t y from which his claim ar i ses , but in compenstion for the loss he has suffered, and no legal p r inc ip le requires that he be compensated in respect of one kind of a c t i v i t y and not the other. Despite i t s imperfections, the doctrine of r e s t r i c t i v e immunity is benef ic ia l in the one sense that i t opens the door to intending l i t i g an t s in respect of the so-cal led private or commercial a c t i v i t i e s of public corporations in part icu lar and the state in general. It is in th i s sense that one should appreciate the remarks of the court in the Trendtex 3d1 case 1 that the modern pr inc ip le of r e s t r i c t i v e immunity is consonant with j u s t i c e , comity and good sense. The modern doctrine is thus a step i n the r ight d i rect ion. - 96 -(e) Suggestions Although "the jurisprudence has also adopted i t as being the domestic law of a l l c i v i l i z e d n a t i o n s , " 3 4 2 the doctrine of sovereign immunity has i t s roots in international law, which is theoret i ca l l y premised on the consensus of nations. This must be taken into account in any attempt that seeks to modify or a l t e r the doctrine. It is suggested that the doctrine of sovereign immunity should altogether be done away with; that a sovereign state and a l l i t s organs, arms, instrumental i t ies, departments and corporations should be made l i a b l e in respect of claims ar i s ing out of contract, tor t or other f i e l d s of law i r respect ive of whether the claim in issue arises out of an act jure imperii or jure gest ionis. The theoret ical underpinnings of the doctrine of sovereign immunity are, as has already been intimated, to be found in the d ign i ty, equality and independence of states. It is now contended, as a reason for the abo l i t ion of the doctr ine, that time and events have eroded and f a l s i f i e d these very foundations of the doctrine and that i t is no longer necessary or desirable that state a c t i v i t y in a l l i t s forms be hedged about with special exonerations and be fenced off from the process of the law by the a t t r ibut ion of perverse and inappropriate notions of sovereign d ign i ty , equal ity and independence. 3 4 3 The rule of immunity was evolved in the days when no action lay against the sovereign in any circumstances. It was thought to offend the dignity of a sovereign and to impinge upon his independence i f subjects were allowed to sue him in his own courts. Likewise, he would be offended i f he were sued in the courts of another country. But states have long vacated that p o s i t i o n , 3 4 4 and therefore, the attempt to transpose into the - 97 -international domain, the t rad i t i ona l claim of the sovereign state to be above the law and to claim before i t s own courts a pr iv i leged position compared to that enjoyed by the subjects, appears to be very inappropriate. The dignity of foreign states is no more impaired by the i r being subject to the law of a foreign country than i t is by the i r submission to the i r own law and courts. A state does not derogate from the dignity of another by subjecting i t to the normal operations of the law on a footing of equal ity with the state within which i t concludes a contract, commits a tort or other legal wrong. It is in fact more in keeping with the dignity of a sovereign state to submit i t s e l f to the rule of law than to claim to be above i t , 3 4 5 and "Insofar as the j u r i s d i c t i ona l immunity of foreign states is assumed to be based on t he i r d ign i ty , the time has probably come for abandoning what is now no more than an incantation a l ien to the conception of the rule of law, national and internat iona l , and to the true posit ion of the state in modern society. " 346 The equality of states is not impaired i f a l l states are suable in foreign courts; the factors which v i t i a t e such equality - wealth, m i l i t a r y prowess, level of s c i e n t i f i c and technological attainment, e tc . , have nothing to do with the issue of states being l i a b l e to suit in a l ien courts, and no state would r isk the consequences of war by reason only that i t s department or corporation has been inconvenienced by suit in a foreign court. Independence of a state, in the sense of the right to exercise, within i t s t e r r i t o r y , and to the exclusion of any other state, the functions 347 of a state, ' i s not negated by subjecting i t to suit in a foreign court. Therefore, neither d ign i ty, equal i ty, independence of states nor internat ional comity requires v indicat ion through a doctrine of sovereign immunity. Another reason for abolishing the doctrine of sovereign immunity is - 98 -that a claim to immunity is inconsistent with the notion of a state under the rule of law and is productive of i n j u s t i ce . It has been pointed out that ". . . the object of international law . . . is not to work i n j u s t i c e , nor to prevent the enforcement of a just demand. . . , 1 , 3 4 8 but i t i s c lear that the doctrine of sovereign immunity is doing just that. A consequence of the doctrine of immunity is that in protecting sovereign bodies from ind ign i t ies and disadvantages of adverse j ud i c i a l process, i t i s operating to deprive the other persons of the benefits and advantages of that process in re lat ion to rights which they possess and which would otherwise be susceptible of enforcement. 3 4 9 The cases which have been considered and in which immunity has been upheld attest to th i s fact . The posit ion has been aptly summed up by Professor Lauterpacht as fo l lows; -" I t s (the doctr ine ' s ) abandonment is required not only by the expansion of the a c t i v i t i e s of states and the in jus t i ce and inconvenience result ing from the disregard of these developments in re lat ion to claims of ind iv iduals . At a period in which, in enlightened communities, the securing of the rights of the indiv idual in a l l t he i r respects, against the state has become a matter of special and s i gn i f i cant e f f o r t , there is no longer a d i spos i t ion to to lerate the in ju s t i ce which may arise whenever the state - our own or a foreign state -screens i t s e l f behind the sh ie ld of immunity in order to defeat a legit imate claim . . . a claim to immunity consists in an unwarranted - and often petty -refusal to sa t i s f y what would otherwise be a good claim. It amounts, in f ac t , to a denial of j u s t i ce . . . It is th i s essential incompat ib i l i ty of the doctrine of j u r i s d i c t i ona l immunity with the pr inc ip le of the subjection of the sovereign state to the rule of law, which explains the strength - we might say, the vehemence - of the opposition to the maintenance of that doctr ine. " 350 No single nation can change rules of international law and as Professor D.M. McRae has correct ly pointed out, states, in the i r self i shness, w i l l obviously res i s t any attempt to do away with the doctrine of sovereign o n immunity and to pin l i a b i l i t y on them, 3 1 but i t is our duty as legal technocrats to educate po l i t i c i an s on what the law should be and what i t - 99 -should achieve. At one time i t was beyond any imagination that the sovereign could be sued and now a sovereign state may be sued in a foreign country in respects of acts jure gest ionis. There is no reason why the state cannot f i n a l l y be made l i a b l e in respect of a l l i t s a c t i v i t i e s . With respect to rules of international law, the modif iction of which requires the consensus of a great number of states, the f i r s t step has always to be taken by some state, otherwise international would be s t a t i c . In re lat ion to sovereign immunity, Canada should take the lead in abolishing the doctrine of sovereing immunity and i f other states are s u f f i c i en t l y convinced of the impropriety of the doctrine, they w i l l fol low su i t . In the meantime the courts should s t r i v e , as far as possible, to cu r t a i l the appl icat ion of the rule of immunity to state bodies. - 100 -PART THREE PROCEDURAL ASPECTS OF CROWN CORPORATIONS I. INTRODUCTION Although in national legal systems crown immunities and prerogatives, a f fect ing the substantive l i a b i l i t y of the crown and i t s agencies, have largely been removed, there s t i l l remain various procedural prerogatives! which place the crown as l i t i g a n t in a highly pr iv i leged posit ion v i s -a -v i s the c i t i zen.2 The procedural prerogatives apply in respect of a l l types of actions by and against the crown; no d i s t i n c t i on was or is made between contract and tor t actions. The courts also attempted to confer procedural prerogatives of the crown upon crown corporations and as with substantive crown prerogatives and immunities, two approaches are d i scern ib le , one holding crown corporation as being covered within the sh ie l f of the crown and the other holding them completely independent and not affected by crown prerogatives. Some of these procedural prerogatives or advantages in l i t i g a t i o n are examined below. II. FORUM OR VENUE It is a well-recognized pr iv i lege of the crown to choose i t s own cou r t . 3 This means that the crown may, in general, choose i t s own forum and sue in whatever court i t pleases. 4 On the other hand, c i t i zens seeking redress from the crown have, since 1877 when the Exchequer Court of Canada was established, been res t r i c ted in the i r choice of forum. Section 17 of the Exchequer Court Ac t 5 provides that the court has exclusive or ig ina l j u r i s d i c t i o n in a l l cases in which the lands, goods, or money of the subject are in possession of the crown or in which the claim arises out of a contract entered into by or on behalf of the crown. Therefore, pr io r - 101 -to 1950, i f a case f a l l i n g under section 17 of the Exchequer Court Act arose, and acrown corporation was involved, i t was necessary to determine whether the corporation was a servant or agent of the crown. The tests used were those already discussed. I f the corportion was declared to be an agent or servant of the crown and thus en t i t l ed to the legal immunities and advantages of the crown, an aggrieved c i t i z e n had to pet i t ion the Governor General in order to carry his case before the Exchequer Court. 6 In Oatway v. Canadian Wheat Board, 7 the Canadian Wheat Board, a crown corporation, was sued by a farmer without a f i a t from the crown. The Board contended that i t was an instrument of the government of Canada or a department of the government of Canada or an emanation of the crown or servant or agent of the crown and that i t was ent i t led to the benefit of a l l the r ights , pr iv i leges and prerogatives of the crown, and therefore the court had no j u r i s d i c t i o n to t ry the action commenced without a f i a t . The Manitoba Court of Appeal upheld the contention holding that the mere fact that an agent of the crown is a corporate body whose statute of incorporation provides that i t may sue or be sued did not give the right to bring an action against i t in the ordinary way. 8 The Ontario Court of Appeal also held i n International Railway Co. v. Niagara Parks  Commission, 9 that the Commission, as an emanation of the crown could be proceeded against only by pet i t ion of r ight.1° Other cases , 1 1 did not consider crown corporations ent i t led to the procedural advantages of the crown. In Gooderham & Worts Ltd. v.  C.B.C. , 1 2 the C.B.C. was sued for spec i f i c performance of a lease and for damages for breach of contract. The C.B.C. contended that as an emanation of the crown i t could only be proceeded against in the Exchequer Court by pet i t ion of r ight . The Ontario Court of Appeal held that in view - 102 -of the wide powers of contract conferred on the corporation by i t s creating s tatute, wherein i t was declared to be a body corporate with power to sue and be sued, the corporation was not immune to actions in ordinary courts for breach of contract. Therefore, the court had j u r i s d i c t i on to hear the act ion. Riddel J.A. b r i e f l y stated his reason thus:-"My reason, shortly stated, is that a corporation given f u l l power to contract, and contract ing, is l i ab l e to have i t s contracts dealt with by the ordinary courts . . . " 1 3 Yeats & Yeats v. Central Mortgage and Housing Corporat ion, 1 4 involved an action for breach of contract against the defendant corporation in a provincia l court. The t r i a l judge held that the corporation being a servant and agent of the crown, could not be sued in the Supreme Court of Alberta. The Appellate Div i s ion affirmed the decis ion. A further appeal was made to the Supreme Court of Canada. The Central Mortgage and Housing Corporation Act provided as fo l lows; -s. 5(1) The corporation is for a l l purposes an agent of His Majesty . . . and i t s powers may be exercised by i t only as such agent; (2) The corporation may on behalf of His Majesty, enter into contracts in the name of His Majesty or in the name of the corporation; (3) (4) Where the corporation has acquired or incurred a r ight or obl igat ion in the name of the corporation, i t may sue or be sued therefor in the name of the corporation. The Supreme Court of Canada held that the Central Mortgage and Housing Corporation, having entered in the name of the corporation into a contract under s. 5(2) of the Act, was subject to the j u r i s d i c t i o n of the Supreme Court of Alberta in respect of any obl igat ion a r i s i g out of that contract by v i rtue of s. 5(4), and the Exchequer Court Act was not applicable becaue th i s was a claim against the corporation only and not against the crown. It - 103 -is submitted that however desirable the decision of the court might be, s. 5(4) on which the court re l ied in no way says that the corporation is not en t i t l ed to crown prerogatives; on the contrary, s. 5(1) and (2) is c lear that the corporation only acts in a representative capacity and i f the establishment of an agency relat ionship is anything to go by, the corporation should have been ent i t l ed to the pr iv i lege claimed. The result of the foregoing cases is confusion and uncertainty. The aggrieved party, in the absence of express statutory provis ion, had no sure way of deciding whether his case was maintainable only in the Exchequer Court by pet i t ion of right or could be heard in provincial court s . I 5 And as the Yeats case shows, even where a corporation was expressly declared to be an agent of the crown, this did not necessarily mean that actions against i t were to be heard in the Exchequer Court. The uncertainty in the law was, to a large extent, removed in 1950 by the Statute Law Amendment Act,16 which introduced a uniform provision in the statutes const i tut ing departmental, agency and proprietary corporations and in the Government Companies Operation Act, thus;-"Act ions, suits or other legal proceedings in respect of any r ight or obl igat ion acquired or incurred by the corporation on behalf of Her Majesty, whether in i t s name or in the name of Her Majesty may be (a) brought or taken against the corporation without the Governor General 's f i a t or (b) brought or taken by the corporation in the name of the corporation in any court that would have j u r i s d i c t i o n i f the corporation were not an agent of Her Majesty." The effect of th i s provision is that crown corporations can sue and be sued in provincial courts of competent j u r i s d i c t i o n without a f i a t of the Governor General,17 and has been reproduced in acts creating departmental, agency and proprietary corporations passed af ter 1950. - 104 -The Crown L i a b i l i t y A c t 1 8 passed in 1953, established the l i a b i l i t y of the crown in t o r t , * 9 and conferred exclusive or ig inal j u r i s d i c t i o n on the Exchequer Court in respect of claims ar i s ing in tort.20 However, section 23 of that Act provides that section 7(1) (which confers exclusive j u r i s d i c t i o n on the Exchequer Court) does not apply to or in respect of a cause of action ar i s ing in tort brought or taken in a court other than the Exchequer Court of Canada against an agency of the crown in accordance with any act of Parliament that authorizes such actions, suits or other legal proceedings to be so brought or taken; but that a l l the remaining provisions of the Act apply to and in respect of such actions, suits or other legal proceedings. The meaning of th i s section is that i f a statute const i tut ing a crown corporation s p e c i f i c a l l y provides that i t may sue or be sued in t o r t , in a provincial court, then section 7(1) of the Crown L i a b i l i t y Act is made inoperat ive. 2 * The question then becomes one of interpretat ion. The uniform provision alluded to above provides that "Act ions, suits or other legal proceedings in respect of any r ight or obl igat ion acquired or incurred by the corporation . . . " may be brought or taken by or against the corporation in a provincial court; and the issue has been whether such a provision covers tor t actions. In Formea Chemicals Ltd. v. Polymer Corporation L t d . , 2 2 the Ontario Court of Appeal raised a quaere as to whether an action for infringement of a patent, would f a l l within the exclusive or ig inal j u r i s d i c t i o n of the Exchequer Court. The action was dismissed on other grounds but McLennan J.A. sa id, o b i t e r ; - 2 3 " I f s. 3(3) [24] of the Government Companies Operation Act does not include actions in t o r t , then th i s court has no j u r i s d i c t i o n to hear the case and the proper forum is the Exchequer Court. I say i t may be an obstacle in the - 105 -appel lant ' s way because i t appears doubtful that the words 'actions . . . in respect' of any r ight or obl igation acquired or incurred ' are apt words to use with reference to an action in t o r t . " On the other hand, in Smith v. C.B.C. ,25 a n action in tort was brought in the Ontario High Court against the C.B.C, which moved that the action be dismissed on the ground that the corporation was suable only in contract and not in t o r t . The issue was whether the word "ob l i gat ion " appearing in the statute creating the C.B.C. included tort l i a b i l i t y . Judson J.26 held that the word ' ob l i ga t i on ' included not only a duty ar i s ing out of contract but also a duty or l i a b i l i t y ar i s ing from an actionable wrong and therefore the action was maintainable against the C.B.C. In Lougheed v. C.B.C,27 the issue was whether l i a b i l i t y in to r t for defamation constituted an "ob l igat ion incurred" by the C.B.C. within the meaning of section 40(2) of the Broadcasting Act.28 The Alberta Supreme Court held that 'any ob l i ga t i on ' includes a duty or l i a b i l i t y ar i s ing from an actionable tort.29 Unless the Supreme Court of Canada or parliament provides a c lear so lut ion, the posit ion w i l l s t i l l remain uncertain as far as tort actions against crown corporations are concerned. I I I. NOTICE OF CLAIM A tort claim against a crown corporation may be defeated by the f a i l u r e to give the statutory notice of claim. Section 10(1) of the Crown L i a b i l i t y Act requires that notice of a tort claim against the crown be served by a claimant, at least 90 days before the commencement of proceedings, on the Deputy Attorney General of Canada together with su f f i c ient deta i l s of the cla im. This provision is made applicable to crown corporations by section - 106 -23 of the same A c t . 3 0 Section 23 refers to "an agency of the crown", but that phrase is not defined in the Act. It i s , therefore, not c lear whether the provisions of section 10(1) apply only to those corporations which have been expressly constituted agencies of the crown or whether they apply to other types of crown corporations. In Baton Broadcasting Ltd. v. C.B.C., 3 1 in which the p l a i n t i f f claimed an injunction to restra in the C.B.C. from making use of a f i l m i l l e g a l l y obtained from the p l a i n t i f f , the Ontario High Court observed that the language of section 23 of the Crown L i a b i l i t y Act does not reveal an intention to place a l l crown corporations or agencies upon the same footing as the crown in right of Canada so as to make applicable to a l l such agencies the provisions respecting notice that apply to the crown i t s e l f . 3 2 In that case, the C.B.C. had set up the f a i l u r e on the part of the p l a i n t i f f to give the statutory notice as a defence to the act ion. While conceding that the p l a i n t i f f ' s claim for damages would be defeated for lack of notice since the C.B.C. was, by statute, constituted an agent of the crown, 3 3 the court held that since the more important branch of the p l a i n t i f f ' s claim was the equitable r e l i e f of an injunct ion, a motion to stay perpetually or to dismiss the action for f a i l u re to comply with section 10(1) of the Crown L i a b i l i t y Act would be dismissed. The court considered the claim for an injunction as outside the scheme of the Crown L i a b i l i t y Act which deals pr imar i ly with tor t actions, and also re l i ed on section 40(4) of the Broadcasting Act, which provides that: "Actions, suits or other legal proceedings in respect of any r ight or obl igation acquired or incurred by the corporation . . . may . . .be brought or taken by or against the corporation in any court that would have j u r i s d i c t i o n i f the corporation were not an agent of Her Majesty." 34 The case above discussed does not lay down any general pr inc ip les with - 107 -respect to the appl icat ion of section 10(1) of the Crown L i a b i l i t y Act to crown corporations. A l l i t decided was that on the facts of the case, that section was not applicable to the C.B.C. which is by statute constituted an agent of the crown, respecting an action for an injunct ion. But that section was held applicable with respect to the claim for damages. Depending on what a par t i cu la r court intends to achieve, i t is possible that section 10(1) of the Crown L i a b i l i t y Act may be held applicable to a crown corporation, which is not expressly declared to be an agent of the crown, but which, using the common law tests already discussed, is adjudicated to be such an agent. IV. IMMUNITY FROM RESTRAINT ". . . Perhaps the most unfortunate aspect of our present law is that i t would seem that no inter locutory r e l i e f can be obtained to restra in any unlawful act done by the crown or i t s servants acting in that beha l f " 3 5 The effect of th i s is that an indiv idual whose rights are threatened by an unlawful act of the crown or i t s servants cannot, by injunct ion, restra in such unlawful act. This rule of immunity from rest ra int was in Banner Investment Ltd. v.  Saskatchewan Telecommunications, 3 6 applied to a crown corporation. That case involved an appl icat ion for an injunction to restra in the defendant crown corporation from demolishing a building on expropriated land. The defendant crown corporation was, by statute, designated a crown agent. By section 17(2) of the Proceedings Against the Crown Act (Saskatchewan)-^ the crown in r ight of the province is not subject to being enjoined. Johnson J . held that i f the crown as pr inc ipal is not subject to being enjoined by an in junct ion, i t follows that an agent of the - 108 -crown created by statute acting under i t s statutory authority is not subject to such enjoinment either.38 The above case is in sharp con f l i c t with the Supreme Court case of National Harbours Board v. Langelier & Other s . 3 9 In that case, by a pe t i t i on for an interlocutory injunct ion, the respondents, owners of properties boardering on the St. Lawrence River, asked that the National Harbours Board be restrained from carrying out certain works on the r i ve r which, i t was claimed, would in jur ious ly affect the i r respective properties. The Board moved by way of declinatory exception that, being an agent of the crown, 4 0 i t was not subject to injunct ion. The exception was dismissed at t r i a l and th i s judgment was affirmed by the Court of Appeal (Quebec). The Board was granted leave to appeal to the Supreme Court. The Supreme Court held that i f a corporation can be held l i a b l e c i v i l l y in damages for wrongs which i t has committed or ordered, i t i s obvious that a person threatened with the commission of an unlawful act by a corporate crown agent can seek the assistance of the court to prevent the corporation from doing that which i t is not authorized to do as a crown agent. The appellant board could not prevent the court from inqu i r i g into the legal j u s t i f i c a t i o n for i t s conduct merely by saying that because i t is an agent of the crown i t is immune from r e s t r a i n t . 4 1 It is said that immunity from rest ra int is essential because the crown might in an emergency want to override the law, leaving i t to parliament to decide whether to r a t i f y ex post facto, and that i t would be prevented from so doing by interlocutory i n j u n c t i o n . 4 2 This ignores the prerogative rights of the crown in an emergency and takes no account of the fact that injunction is a discretionary remedy. The ends of ju s t i ce would be better served by making injunctions avai lable against the crown and i t s agents or - 109 -servants. To withhold an injunction say, against a crown corporation, even where i t s act is p la in ly i l l e g a l , i f i t merely purports to be acting on behalf of the crown, is pa r t i cu la r l y objectionable. V. LIMITATION OF ACTIONS (a) Proceedings by the crown and i t s Agencies At common law, the rule is that in proceedings by the crown, the defendant may not plead the statutes of l i m i t a t i o n . 4 3 This is based on the maxim "Nullum tempus occurr i t Regi" (no lapse of time prejudices the Crown), but Peter Hogg 4 4 argues that th i s exemption from l im i ta t i on laws is simply an application of the rule that statutes do not bind the crown except by express words or necessary i m p l i c a t i o n . 4 5 This posit ion of advantage has been extended to public corporations. In Public  Works Commissioners v. Pontypridd Masonic Hall C o . , 4 6 the p l a i n t i f f s , a public corporation, having rented a hal l from the defendant, made an over-payment of rent and sued to recover the same. The defendant pleaded l im i t a t i o n . It was held that, although the p l a i n t i f f s were incorporated, they were in fact acting as agents of the crown and nominal p l a i n t i f f s in the action suing as representatives of the crown, and that the statute of l imi tat ions did not apply. In Canada there is no general federal l eg i s l a t i on governing l im i ta t i on of act ions, but Saskatchewan, New Brunswick and Ontario have L imitat ion Acts which, subject to certain exceptions, expressly bind the crown to l im i ta t i on periods which affect natural persons. 4 7 The result is that on the federal l e v e l , the crown in right of Canada and i t s agencies may be able to bring actions after any period of time unless a spec i f i c act of Parliament prescribes a l im i ta t ion p e r i o d . 4 8 - 110 -(b) Proceedings Against the Crown and i t s Agencies The rule that the crown is not generally bound by a statute except by express words or necessary impl icat ion does not prevent the crown from taking advantage of a statute of l im i ta t i on as a defence to proceedings brought against i t , for the rule applies only when a statute might operate to the prejudice of the crown. 4 9 Thus the crown has considerable leverage over i t s subjects and enjoys the best of both worlds. As i f that is not su f f i c i en t ground for concern, i t has further been thought necessary to protect the crown and other public bodies, including crown corporations, by imposing in many ju r i sd i c t i on s a shorter time within which suits may be brought against the crown and i t s agencies. 5 0 The United Kingdom Public Authorit ies Act, 1893 once provided a l im i ta t i on period of s ix months for actions against public authorit ies and s. 21 of the L imitat ion Act, 1939 increased the period to one year. However, in 1945 the Law Reform (Limitation of Actions) Act in s. 1 repealed th i s special period of l im i t a t i o n , along with other provisions providing special periods of l im i t a t i on or other pr iv i leges for public author i t ies . The Ontario Public Authorit ies Protection A c t 5 1 provides that ; -"No act ion, prosecution or other proceeding l i e s or shall be in s t i tu ted against any person for an act done in pursuance or execution or intended execution of any statutory duty or other public duty alleged neglect or default in the execution of any such duty or authority, or in respect of any alleged neglect or default in the execution of any such duty or authority, unless i t is commenced within s ix months next after the cause of action arose, or, in the case of continuance of injury or damage, within s i x months after the ceasing thereof." 52 This provision was applied to a crown corporation in Berard ine l l i v. Ontario Housing Coprporat ion. 5 3 The action was for damages ar i s ing from an alleged neglect of the corporation to remove ice form the common area surrounding i t s housing units , of which the p l a i n t i f f was a tenant. The - I l l -p l a i n t i f f sl ipped and f e l l on a patch of ice located on the common area. The court held that the corporation was a public authority and was ent i t l ed to the protection of the s ix month l im i ta t i on period in accordance with the above section for i t s f a i l u r e to remove the snow and ice from the common area of i t s housing developments.54 This is just one example of the kind of i n ju s t i ce that can be i n f l i c t e d on an indiv idual by the appl icat ion of d i f ferent standards for the crown and crown agencies on the one hand and other en t i t i e s on the other. With respect to proceedings against the crown in r ight of Canada under the Crown L i a b i l i t y Act, the law of the province in which the cause of action accrues governs.55 The appl icat ion of crown l im i ta t i on advantages to crown corporations is d i f f i c u l t to j u s t i f y . It i s obvious that the crown is a huge organization which has to make and to meet a large number of claims of various kinds, making problems of invest igation inev i tab le . The appl ication of Imitation provisions may produce undesirable results with respect to the administration of revenue leg is lat ion.56 i t would not be in the public interest i f the co l lec t ion of taxes and duties, and the recovery of penalties and for fe i tures were barred a f ter a period of time. But public or crown corporations are no d i f fe rent , in th i s respect, from private organizations and have no unique character i s t ic s which j u s t i f y special treatment in the matter of l im i ta t i on of actions. VI. DISCOVERY AND INTERROGATORIES One of the crown's procedural prerogatives that a crown corporation, as an agent of the crown, may claim is immunity from discovery. The crown enjoys the prerogative r ight to refuse to give discovery or to submit to - 112 -oral examination for discovery,57 a n c | th i s r ight is not surrendered by the voluntary entry of the crown into an action as a party, accompanied by a submission to the Rules of court of the j u r i s d i c t i o n of the action.58 The general p r inc ip le is that a prerogative of the crown cannot be taken away except by express words of statute.59 In the United Kingdom, discovery and interrogatories are now avai lable by v i r tue of spec i f i c statutory provision.60 However, as in Canada, crown pr i v i l ege is avai lable to the crown whenever the disclosure of a document or the answer to an interrogatory would be injur ious to the public interest.61 But as was pointed out in the Canadian case of Homestake  Mining Co. v. Taxagulf Potash Co.,62 the crown pr iv i lege is not absolute. In that case a public servant was ca l led as a witness in an action between private l i t i g a n t s . The responsible minister objected, arguing that the disclosure of the public servant 's evidence would be injur ious to public interest . The Saskatchewan Court of Appeal, rely ing on the Supreme Court case of R. v. S n i de r , 6 3 held that the crown pr iv i lege to exclude evidence is not absolute; the courts must balance public interest in harm not being done to province or public service with public interest in seeing the administration of ju s t i ce not f rust rated. Despite th i s modification the rule against discovery and interrogator ies is s t i l l objectionable for as G. Sawer 6 4 has correct ly pointed out, i t prevents a p l a i n t i f f from f u l l y presenting his case to court. This is especia l ly so in view of the fact that discovery and interrogator ies have always been avai lable to the crown against a subject.65 - 113 -VII. DEBT PRIORITY In absence of statutory provis ion, where the r ight of the crown and the r ight of the subject, with respect to the payment of a debt of equal degree come into competition, the crown's r ight prevails.66 This rule was a f f i rmat i ve ly stated as far back as 1807 in the case of R. v. Wells,67 by MacDonald C.B., in the following terms;-"I take i t to be an incontrovert ib le rule of law, that where the King 's and the subject ' s t i t l e concur, the King 's shal l be preferred. The books are f u l l of instances to that e f fec t . " 68 In the Queen in Right of Prince Edward Islands v. J.A. Hughes, 6 9 crown p r i o r i t y was claimed in respect of sales tax and the issue was whether the crown's claim took p r i o r i t y over judgment cred i tors . The court held that even apart from s t a t u t e , 7 0 the crown has p r i o r i t y over judgment creditors as creditors.of equal degree. The rule has, however, been qua l i f i ed . In The Queen v. Workmen's Compensation Board and the C i ty of Edmonton,71 the Alberta Court of Appeal held that the crown is not en t i t l ed to p r i o r i t y of payment by v i r tue of i t s prerogative in respect of a debt ar i s ing out of ordinary business transactions between the crown and a commercial concern. And in Alberta Government Telephones v. S e l k , 7 2 Crossley D.C.J, said; " P r i o r i t y over other creditors with respect to s t r i c t l y commercial debts does not seem to be one of the prerogatives avai lable to an agent of the c rown. " 7 3 This qua l i f i c a t i on of the rule seems to be based on the fact that the crown did not t r a d i t i o n a l l y engage in commercial a c t i v i t i e s and therefore the rule cannot be applied to new s ituat ions which were not contemplated when the rule was evolved. In accordance with a trend that is eas i ly noticeable in th i s work, the courts have not been consistent in the i r approach to claims by public corporations to be ent i t l ed to the royal prerogative of p r i o r i t y in payment - 114 -of debts. In In Re Oriental Holdings Pty. L t d . , 7 4 i t was held that the V ic to r ian Railway Commissioners, a public corporation, were ent i t led to crown p r i o r i t y in payment of a debt owed to them by a company in l i qu ida t i on . The debt arose out of a sale of coal by the commissioners to the company, an obviously commercial transact ion. On the other hand in Fox  v. Government of Newfound!and, 7 5 the Pr ivy Council denied crown p r i o r i t y to the debts of an education board, one of the reasons being that the board had, within the l im i t s of general educational purposes, an independent d i scret ion as to the appl icat ion of money paid to i t . In Metropolitan Meat Industry Board v. Sheedy, 7 6 the appellant Board, which had been formed for certa in purposes in connection with the administration of slaughter houses, claimed p r i o r i t y as to a debt due to i t by a company in process of l i qu ida t i on . The claim to immunity was based on the contention that i t was a servant of the crown. The Pr ivy Council dismissed the contention holding that the Board was not acting as a servant of the crown and was, therefore, not ent i t l ed to the pr iv i lege . c l a imed . 7 7 The Canadian case of Alberta Government Telephones v.  S e l k , 7 8 involved the determination of the issue whether a provincial crown corporation could exercise the crown's prerogative of p r i o r i t y with respect to payment of debts. The Alberta D i s t r i c t Court held that although the Alberta Government Telephones was, by statute, constituted an agent of the crown, i t did not enjoy any rights of p r i o r i t y over other creditors with respect to debts owing to i t and ar i s ing out of ordinary mercantile transactions. VI I I . ENFORCEMENT OF JUDGMENTS At common law ". . . no execution can issue against the crown. The - 115 -pet i t ioner remains dependent upon a combination of good w i l l and the moral pressure he may hope to secure from public o p i n i o n . " 7 9 This rule which is based on the notion that interference with public property would hamper the state in the performance of i t s public duties,80 has now found expression in statutory enactments.81 The rule i s , in Canada, applicable to crown corporation by v i rtue of the Crown L i a b i l i t y Act82 and by v i r tue of spec i f i c statutes creating public corporations.83 According to the above rat ionale for the rule of immunity from execution, i t may seem embarrassing for the state i f i t s property or that of i t s agencies is made l i a b l e to execution, but th i s is the very reason why the state should meet i t s obligations expeditiously - to avoid embarrassment. Further, i t is fa l se to ta lk of the state as i f i t i s something d i f ferent from the c i t i z en s ; the state is made up of individuals and i f the state goes on inconveniencing i t s c i t i z en s , i t ceases to be acting in public interest . H. S t r e e t 8 4 records precedent in France where an unsat isf ied judgment creditor of certa in administrative bodies can enforce execution and sale, the property chosen being that the sale of which is least prejud ic ia l to the public in teres t . Such an approach is at least more meaningful than the blanket cover approach adopted in Canada and should be adopted with respect to crown corporations. IX. GENERAL COMMENTS The l i s t of crown prerogatives, immunities and pr iv i leges that can conceivably be claimed by public or crown corporations is endless but i t i s f e l t that the examples above given are su f f i c i en t to i l l u s t r a t e the point that the concept of the public corporate person has been so interwoven with the concept of the crown that the prerogatives and advantages of the crown - 116 -have blocked the development of a coherent system of l i a b i l i t y , 8 5 to the prejudice and inconvenience of the ordinary c i t i z e n . As the foregoing discussion has demonstrated, a l i t i g a n t seeking r e l i e f or redress from a public corporation is at every stage put at a disadvantage. If he establishes the r ight to sue the corporation, his claim may be defeated by the f a i l u r e to give the statutory notice in time or by l im i t a t i on provisions. If he goes over that, he may not obtain inter locutory r e l e i f and th i s could be fa ta l to his claim as the Banner Investment case shows. His case may not be f u l l y presented to court as a result of the appl ication of the prerogative of the crown to refuse to submit to oral examination or make discovery. And enforcement of a judgment against a public corporation may prove a tedious process. Legal conservatism has v i s i b l y taken i t s t o l l in the area of procedure. Ancient ru les , designed for a t o t a l l y d i f ferent type of society and government, remain to bedevil the sound administration of ju s t i ce in a modern state. The prerogatives referred to above are elaboratins of the general medieval rule that, in a l l cases where the King 's r ight and that of a subject con f l i c ted , the King 's was preferred. Developed as part of the King 's personal prerogative r ights , they are inappropriate to the present publ ic and executive concept of the crown. 8 6 One can scarcely imagine any idea more ant i thet i ca l to the basic tenets of democratic government than that which holds that the c i t i z en s , at whose pleasure and for whose benefit the government and i t s agencies ex i s t , cannot enforce the i r rights against t he i r representatives when they have been wronged by them. The f u l l rea l i sa t ion of the c i t i z e n ' s r ights ca l l s for reform on the general p r inc ip le that no crown immunities are tolerable unless the i r retention can be af f i rmat ive ly proved to be necessary in the public - 117 -i n t e r e s t . 8 7 The cases referred to above show that the courts, which have wavered from one posit ion to another, cannot be re l ied on in th i s rspect. Therefore what is envisaged is parliamentary intervention. Parliament should proceed on the basis of equality between legal en t i t i e s whether governmental or not and specify in par t i cu la r cases the special advantages thought to be essential to a par t i cu la r public authority. - 118 -PART FOUR DIRECTORS' DUTIES AND CREDITOR PROTECTION I. INTRODUCTION It is neither practicable nor desirable that the general body of taxpayers, the persons who provide the funds that form the l i f e l ine of public corporations, act ive ly manage the a f fa i r s of these corporations. So, for each corporation, a set of men or women, to whom the general term ' d i r ec to r s ' may be applied, is appointed and charged with the management and administration of the a f fa i r s of the corporation.! These men and women are trustees and agents of the corporations; they are trustees of the assets which have come into the i r hands or which are under the i r contro l , and they are agents in the transactions which they enter into on behalf of these corporations. But they are also public trustees, for i f one l i f t s the vei l of incorporation, one w i l l ult imately f ind out that the money, property, and other assets, passing under the description 'corporation assets ' are in truth public assets. 2 And these public assets are quite substant ia l , for in 1977-78, out of tota l government assets of over $74 b i l l i o n , the share control led by crown corporations amounted to $29 b i l l i o n . 3 Referring to crown corporations, the Royal Commission on Government Organization 4 sa id, " . . . the term that best describes these organiza-tions is one that was once widely employed but has f a l l en into disuse: the public trust 's. For, in essence, they involve the appointment, by the government, of a board of trustees to whom is delegated the management of a public undertaking, within l im i t s of public policy as defined in broad terms by Parliament and the government." The posit ion of these directors i s , however, d i f ferent from that of ordinary trustees whose duty is to preserve the trust property and not to risk i t . Directors, in most cases, have to - 119 -carry on business and this necessarily involves r i s k s . 5 In th i s respect they resemble directors managing corporations in the pr ivte sector. I f d irectors of public corporations are perceived as public agents and public trustees, then the taxpayers and other benef ic iar ies of the a c t i v i t i e s of public corporations have legit imate expectations that not only w i l l the directors execute the i r duties with care, s k i l l and di l igence but also that in so executing those duties and re spons ib i l i t i e s they w i l l act honestly and in good fa i th with a view to the best interests of Canada and of the corporation. Directors have an obl igation to see that things go r i ght , that the funds in the i r control are not misapplied or mismanaged and that the organizations they manage and administer are not converted into avenues for private enrichment. Creditors of public corporations expect that the assets of the corporations, to. which they must look for repayment of the i r debts, w i l l be preserved, save only to the extent that such assets have been depleted in the legit imate businesses of the corporations. I I. POLITICAL CONTROL AND PUBLIC ACCOUNTABILITY The absence of shareholders in public corporations, in the sense we understand them with respect to private sector corporations, renders control of directors by members through general meetings i r r e l e van t . 5 The vacuum thus l e f t is f i l l e d by the government and parliament. Since crown corporations are instruments of government pol icy, the government has a respons ib i l i ty to ensure that i t s po l i c ies are properly carr ied out. This enta i l s some control over those entrusted with the management of these corporations. S im i l a r l y , there must be, at least in p r i nc ip le , ample f a c i l i t y for the exercise of control over the a c t i v i t i e s of crown - 120 -corporations by Parliament in i t s capacity as representative of the tax-payers. This necessity for parliamentary control was recognised as early as 1921 by Arthur Meighen, then Prime Minister, when he remarked, in respect of the Canadian National Railways, thus;-". . . 1 know that i t is a fact that the board of directors of the Canadian National Railway are dealing v i r t u a l l y with funds of the people of Canada. I know that parliament alone, is responsible to the people for the d ispos i t ion of the money raised by taxat ion; consequently I know that there must be ample f a c i l i t y for the exercise of control that goes with and is inseparable from that re spons ib i l i t y . " 7 The above two forms of control are directed towards directors of crown corporations and i f e f fect ive would go a considerble way towards ensuring that the a f f a i r s of crown corporations are properly run. (a) Government Supervision and Control of Public Corporations One method of government control over public corporations is through the power to appoint and remove members of the board of d i rectors . This power is normally conferred on the Governbr-in-Council. ( i ) Appointment of d i rectors A perusal of the acts const i tut ing crown corporations shows an absence of c lear guidelines regarding the appointment of d i rectors . Although the government in the Blue Paper stated that, " I t is the government's be l ie f that crown corporations w i l l operate at peak e f f i c iency only when boards of directors operate at peak e f f i c i e n c y , " 8 in most cases no standards or qua l i f i ca t ions are set as regards the appointment of board members.9 The trust placed in the boards of directors cannot be maintained unless care is taken in select ing directors and only through the appointment of board members with experience, competence and demonstrated capab i l i ty can one expect responsive guidance and sound managerial d i r e c t i o n . * 0 It is useless to ta lk of e f f i c iency , s k i l l and di l igence - 12.1 -and honesty when in the f i r s t place no effort is made to ensure that those appointed as directors are capable of achieving such feats. Since, in most cases,H no c r i t e r i a for appointment are given there is room for the consideration of factors other than demonstrated competence in the. appointment of board members. In fact J.T. Stevens 1 2 reports that "the c r i t e r i a for appointment are frequently more for p o l i t i c a l reasons than for demonstrated managerial a b i l i t y . Depending on the spec i f ics set down in the statute, cabinet can just eas i ly appoint or dismiss a chief commissioner or president." There i s also Ottawa's practice of appointing senior government o f f i c i a l s to the boards of crown corporat ions . 1 3 It is d i f f i c u l t to see how a senior government o f f i c i a l can serve on the board of a crown corporation when he must also serve in his own departmental capacity as advisor on f inanc ia l and operating decisions that involve the co rpora t ion . 1 4 This con f l i c t of duties may also manifest i t s e l f in the fact that the o f f i c i a l , in his capacity as d i rector , may be placed in a posit ion where he is compelled to jo in in an opinion that may be opposed to that of his p o l i t i c a l chief. As J.E. Hodgetts 1 5 has pointed out, such administrative ambivalence is neither healthy, necessary, or feas ib le . This results from the lack of c lear guidelines as to the appointment of board members. ( i i ) Dismissal of d i rectors With respect to the exercise of the power of dismissal, two s ituat ions are d i scern ib le. In the f i r s t one, the statutes governing the corporations do not specify any grounds for dismissal; the tenure of o f f i ce is stated to be 'at pleasure' either of the responsible minister or more usually the Governor- in-Counci l . 1 6 In the second, 'permanent i n c a p a c i t y ' 1 7 and ' c a u s e ' 1 8 are specif ied as conditions precedent - 122 -to the exercise of the power of d ismissal . The conferral of unlimited powers of dismissal is l i ab l e to be abused by those in whom the powers are reposed and means the complete dependence by the directors on the good w i l l of those repositories of the powers of dismissal. This may have an i nh ib i t i ng effect on freedom of action on the part of d i rectors, ( i i i ) Suggestions If the public is to have any confidence in the management of crown corporations, i t is essential that there be no suspicion of nepotism or p o l i t i c a l jobbery. Crown corporation directorships should not be turned into rewards for p o l i t i c a l favour ites. Also, i f directors are to act f ree l y and e f f i c i e n t l y , they must have security of tenure. For these reasons, i t is suggested that c lear standards and qua l i f i ca t ions for appointment of d irectors should be established and services of directors must only be terminated on grounds of d i s a b i l i t y , insolvency, neglect, misconduct or other su f f i c ient ground or by expiry of the contract term, i f any is spec i f ied. ( iv) The Power of Direct ion In private sector corporations, where the main objective is the maximization of return on investments, the directors have a c lear idea of what is expected of them. Public corporations, on the other hand, are not p ro f i t making bodies. Although directors of public corporations must execute t he i r duties e f f i c i e n t l y , they must also pay regard to broad pol icy objectives. This makes the i r role broader and more complex. 1 9 jo provide means whereby government can on a continuous basis, communicate broad pol icy objectives to the corporations, a power of d i rect ion has been conferred on the Governor-in-Council or the appropriate Minister with - 123 -respect to some crown corporations.20 This power is usually in th is form: "the corporation shal l comply with any d i rect ion given to i t by the Governor-in-Council or Minister with respect to the exercise of i t s powers."21 The Royal Commission on Government 0rganization22 and the Blue Paper23 recommended that the power of d i rect ion be extended to a l l crown corporations. The d i rect i ve power, as an instrument for making the corporation conform to the government's de f in i t i on of national pol icy may provide an outlet for irresponsible and excessive interference in the a f fa i r s of the corporations.24 To provide a safeguard against such an eventual ity, the Lambert Commission25 and the Blue Paper26 recommended that d i rect ives issued to crown corporations be tabled in Parliament for scrutiny and debate. (v) Other forms of government control In addition to the powers of appointment and dismissal of d i rector s , the Governor-in-Council has powers in respect of the following matters;-(a) approval of by-laws passed by the boards. (b) authorizing a l l expenditure in excess of a f ixed miximum. (c) approving contracts and expenditures on capital account which involve large outlays. (d) approving short term loans or advances to the corporations. [27] The responsible Minister is also given certain powers. In conjunction with the Minister of Finance he is empowered to direct a corporation to pay to the Receiver General so much of the money administered by i t as is considered in excess of the amount required for the purposes of the corpor-at ion. 28 The Minister is normally ent i t led to request from the - 124 -corporation such detai led accounts, books and papers as he may require, and i t is through the Minister that each corporation reports annually to Pariiament. (b) Parliamentary Control and Public Accountabi l i ty Parliamentary control over crown corporations has been del iberately re s t r i c ted in pursuit of the ea r l i e r ideal of managerial autonomy and freedom from partisan pressure. 2 9 Parliament is in a posit ion to discuss annual reports of crown corporations when they are tabled but in practice these reports receive no examination by parliament at a l l . 3 0 Parliament may also a l te r or change the powers given to a crown corporation and has an opportunity to examine the capital budgets of crown corporations which are annually l a i d before Parl iament. 31 (c) General Observations While p o l i t i c a l control and public accountabi l ity of crown corporations are useful instruments of contro l , they are not very e f fect i ve in ensuring that the interests of those affected by the a c t i v i t i e s of crown corporations are adequately protected. The Governor-in-Council may dismiss a d irector of a crown corporation for misconduct or may direct that directors of public corporations shall carry on the i r duties in a way that the Governor-in-Council considers desirable and in the national interest . Parliament may also consider the annual reports and capita l budgets of public corporations and may even change the objectives and powers of these corporations. But these controls do not touch on the legal duties of directors and the legal sanctions avai lable against the directors for breach of the i r legal duties. While to the p o l i t i c a l s c i en t i s t , p o l i t i c a l control and public accountabi l i ty would seem very important aspects of the administration of public corporations, to the lawyer, they are less than adequate. - 125 -I I I. JUDICIAL CONTROLS (a) U l t ra Vires Doctrine As public author i t ies , forming part of public administrt ion, public corporations are subject to the supervisory powers which the courts as guardians of the law of the land exercise over administrative bodies. The courts w i l l intervene where a public authority has exceeded the terms of i t s enabling statute, or has been prompted by motives a l ien to the administrative purpose for which the power was g i v en . 3 2 Excess and abuse of power by public corporations can be checked by the courts. The general pr inc ip le that a legal person created by statute can execute only those functions that i t is expressly or by necessary impl icat ion empowered to do by i t s constituent statute, was the subject of consideration in the Canadian case of Rattenbury v. Land Settlement  Board. 3 3 The facts of the case were that the defendant, a body incorporated by the B r i t i s h Columbia Land Settlement and Development Act, took proceedings under that Act with respect to lands of which the p l a i n t i f f was the registered owner and penalty taxes provided for by the Act were imposed. The p l a i n t i f f sued the defendant attacking the said l eg i s l a t i on as u l t r a v i res , as providing for indi rect taxation and claimed damages, an injunct ion, an account and a decree adjudging the p l a i n t i f f and his lands absolutely freed from a l l past and pending proceedings. Although the p l a i n t i f f ' s claim was unsuccessful the Supreme Court held that the defendant board was l i a b l e to be sued in respect of any u l t ra vires transactions and Newcombe J . observed that ". . . i t is common practice founded upon general p r i nc i p l e , that the court w i l l interfere to restrain u l t ra vires or i l l e g a l acts by a statutory body . . . To th i s extent, in my view, the action is properly const ituted; indeed, upon th i s point the authority is - 126 -c onc l u s i v e . " 3 4 So s t r i c t is the u l t ra vires rule as applied to public authorit ies that where an act of a public corporation is wholly u l t r a v i res , the court may inter fere even though no damage to the public is shown. In the Austra l ian case of Helicopter U t i l i t i e s Pty. Ltd. v. Austral ian National A i r l i n e s Commission, 3 5 the defendant commission, a public corporation, successful ly tendered for the hire to the commonwealth of helicopters and crew to accompany the Austra l ian National Antarct ic Research Expedition on a voyage to the Antarct ic . The p l a i n t i f f company which had supplied helicopters for use by the commonwealth in respect of a previous Antarct ic expedition and on th i s occasion had placed the only other tender, sought an inter locutory injunction to restra in the commission from carrying out the contract for the hire of the hel icopters, on the ground that the commission had no power to make such a contract. Although the r e l i e f sought was not given on the ground that the p l a i n t i f f company lacked locus standi to maintain the act ion, the court held that the proposed charter of the hel icopters was u l t ra v i res. Jacobs J . observed;-" . . . i t seems to me that the carrying on by a statutory corporation of a business which i t is not empowered by i t s statute to carry on is i t s e l f a public wrong and that the court may in such case in ter fe re , even though in some cases in i t s d iscret ion i t may decline to in ter fere. . . It seems to me that where the act is wholly u l t ra vires the Attorney General can always seek an injunct ion, even though no damage to the public is shown. It i s an injury and a mischief to the public that a public corporation should exceed i t s power and the court is not bound, except in the exercise of a special d i scret ion to go further. " 36 Despite the str ictness of the u l t ra vires doctrine, the doctrine is not as e f fect i ve as i t sounds. A major problem in re lat ion to the challenging of actions by public corporations is the question of locus standi. Also the fact that the powers conferred on public corporations are sometimes stated - 127 -w i d e l y 3 7 reduces the ef f i cacy of the u l t r a vires doctrine as a tool for ensuring that the directors of public corporations properly run the a f f a i r s of these corporations, ( i ) Locus standi As a public corporation has no members or shareholders, those who normally seek to rest ra in a corporation from acting u l t r a v ires w i l l not be there to do s o . 3 8 In the Austra l ian case of Logan Downs Pty. v.  Federal Commissioner of Taxa t i on , 3 9 the High Court of Aus t ra l i a held that a mere taxpayer did not have standing to seek a declaration that cer ta in powers to be exercised by the Wool Board were i n va l i d . This explains the paucity of author i t ies on th i s aspect. The few author i t ies that are ava i lab le mostly result from su its by business en t i t i e s that are threatened with competition by the a c t i v i t i e s of public corporations.40 L.C.B. Gower^1 vaguely states that the u l t ra vires point may be raised by t h i r d part ies when the i r interests are s u f f i c i e n t l y af fected. However, the.correct legal pos it ion i s that; "A c la im that a public corporation incorporated by statute fo r public purposes i s exceeding i t s powers i s a claim which o rd ina r i l y f a l l s to be made by the Attorney-General e i the r on his own motion or on the re la t ion of a member of the publ ic."42 This i s part of the general rule that an action to rest ra in an injury to the public must be brought in the name of the Attorney-General.43 The only two exceptions to th i s rule are:-44 1. Where the interference with the public right is such that some pr ivate r ight of the p l a i n t i f f is at the same time interfered with, fo r example, where an obstruction is so placed in a highway that the owner of premises abutting upon the highway is spec ia l l y affected by reason that the obstruction interferes with his pr ivate r ight to access from and to his premises to and from the highway. As applied to public corporations, a p l a i n t i f f would - 128 -have to show that the excess of authority by a public corporation interferes with some private right of h is. 2. Where no private r ight is interfered with, but the p l a i n t i f f , in his public r ight , suffers special damage peculiar to himself from the interference with the public r i ght . In Helicopter U t i l i t i e s Pty. Ltd. v. Austral ian National A i r l i ne s  Commission, 4 5 a case considered above, the court held that the commercial interests of the p l a i n t i f f company were not su f f i c ient to bring the company within any of the above exceptions since the Attorney-General had declined to issue his f i a t fo r an information in his name on the re lat ion of the p l a i n t i f f company. Unless the Attorney-General becomes aware of any excess of power by a public corporation and is w i l l i n g to act or a case f a l l s within the two exceptions noted above, there appears to be no other way of restraining u l t r a vires a c t i v i t i e s . Probably one would revert to min i s ter ia l or cabinet cont ro l , for as the Royal Commission on Government Organization remarked, ". . . The concentration of the shareholders' interests in one person - the Minister - means that the managing board must work, so to speak, under the eye of a shareholders' meeting in continuous s e s s i on . " 4 6 But even th i s is an overstatement; the responsible Minister does not exercise such continuous survei l lance; he has to be informed. ( i i ) Width of statutory powers The mandatory statutory duties of a public corporation and permissive statutory powers incidental thereto (corresponding to the 'objects clause' in the memorandum of association of a registered company) are sometimes so widely drawn as to make the u l t ra vires doctrine nugatory as a means of exercising j u d i c i a l control over the a c t i v i t i e s of the - 129 -corporation.47 when powers are so extravagantly conferred i t becomes d i f f i c u l t to establ ish an u l t ra vires act. This is i l l u s t r a t ed by Charles  Roberts & Co. Ltd. v. B r i t i s h Railways Board,48 i n which a declaration that the Railways Board was not empowered to manufacture railway tank wagons with a view to the i r sale to an o i l company for use on the Board's railways was refused. The Board was obliged by statute "to provide railway services in Great B r i t a i n and, in connection with the provision of r a i l services, to provide such other services and f a c i l i t i e s as appear to the Board to be expedient,"49 and the Board was empowered, subject to the Act, to "do a l l other things which in the opinion of the Board are necessary to f a c i l i t a t e the proper carrying on of the i r bus iness . " 5 0 The Board might also "construct, manufacture, produce, purchase, maintain and repair anything required for the purposes of the bus iness . " 5 1 The court held that the provision of wagons raised questions of expediency and of what was incidental to the Board's business and of these questions the Board was the best judge. It could not be said as a matter of law that the manufacture of tank wagons for sale could never be required for the purposes of the Board's business. The u l t ra vires doctrine, therefore, provides an unrel iable tool in the hands of someone seeking to restra in certain a c t i v i t i e s of a public corporation in the absence of express statutory p r o h i b i t i o n . 5 2 Further, while the corporation can be prevented from acting u l t ra v i res , i t i s d i f f i c u l t to ensure by j u d i c i a l remedies that the corporation w i l l provide the services that i t is required to provide under i t s enabling statute. Although the corporations are placed under a duty to perform certain functions, the duty is usually expressed in very general terms so that the only appropriate remedy - mandamus - could rarely be used to - 130 -enforce the du t y . 5 3 As applied to private corporations in memorandum of association j u r i s d i c t i o n s , the u l t ra vires doctrine states that a company, which owes i t s incorporation to statutory authority, cannot va l i d l y engage in any a c t i v i t i e s outside the powers expressly or i m p l i c i t l y conferred upon i t by i t s statute or memorandum of association. Any purported a c t i v i t y in excess of those powers w i l l be inef fect i ve even i f agreed to by a l l the members, and any action done u l t ra vires is not generally binding on the company. 5 4 The doctrine has been seriously undermined, bas ica l l y because i t is a nuisance insofar as i t prevents a company from changing i t s a c t i v i t i e s in a d i rect ion upon which a l l are agreed and which is considered bene f i c i a l . As a result of ef forts by businessmen, assisted by the i r lawyers, to evade the doctr ine, the whole object of the doctr ine, namely investor and creditor protect ion, has been f rust rated. The doctrine has now ceased to be a protection to anyone and has become merely a trap for the unwary th i rd party and a nuisance to the company i t s e l f . 5 5 "In consequence the doctrine of u l t ra vires is an i l l u s o r y protection for the shareholders and yet may be a p i t f a l l for t h i rd parties dealing with the company . . . We consider that, as now applied to companies, the u l t ra vires doctrine . . . i s . . . a cause of unnecessary p r o l i x i t y and vexation." 56 In f ac t , in B r i t i s h Columbia the doctrine has been abolished and a company has the power and capacity of a natural person of f u l l c apac i t y . 5 7 The issue then arises whether the doctrine of u l t r a vires as applied to publ ic corporations should be abolished as B r i t i s h Columbia has done with respect to private corporations. Here one must stress the fundamental difference between private corporations and public corporations. The former are motivated by the lust for p ro f i t and as long as the corporation does not commit a breach of the law, i t is of l i t t l e s ignif icance how those prof i t s - 131 -are made. A doctrine of u l t ra vires may conveniently be dispensed with. The l a t t e r are instruments of national or public po l icy; they perform those functions which are considered soc i a l l y desirable. A doctrine of u l t r a v ires is therefore appropriate to ensure that public corporations confine themselves to the objectives outl ined by parliament in the constituent acts. What is therefore advocated is not an abo l i t ion of the doctrine of u l t ra v i re s , but a thorough re-examination of the objectives and powers of public corporations to ensure that they are properly and concisely stated and an active and v i g i l an t role on the part of the o f f i ce of the Attorney-General with a view to checking any excesses of power by public corporations, (b) D i rectors ' Duties While the u l t ra vires doctrine has a bearing on the d i rectors ' duties -in effect i t states that directors of public corporations have a duty to exercise the powers conferred on them for the purposes for which they are given, i t i s , as has been shown above, an inef fect i ve protective t o o l . Further, the doctrine is too narrow to cover most s ituations that may be referred to as d i rector s ' misconduct. In the f i r s t place, the doctrine does not concern i t s e l f with the question whether directors actual ly perform the i r duties or perform them with due care, s k i l l and d i l igence. It is not enough that directors do not exceed the i r powers; they must pos i t i ve ly perform the i r duties exercis ing care, s k i l l and d i l igence. Secondly, the u l t r a vires doctrine does not deal with con f l i c t of interest s i tuat ions. The directors while, to a l l outward appearances, within the i r powers, may turn the corporations they manage into avenues for private p r o f i t . Therefore these directors must be governed by a l l rules of conscientious fairness and honesty of purpose which the law provides as guides for those - 132 -who are under f iduc iary obl igat ions. The suggestion here made is that the f iduc iary duties and duties of care and s k i l l which the common law imposes on directors of private sector corporations be applied, subject to necessary qual i f icat ions,58 to directors of public corporations. ( i ) Fiduciary duties of loya l ty and good f a i t h Under common law, each d i rector , ind iv idua l l y owes f iduc ia ry duties to the company of which he is a d i rector. These duties are owed to the company alone and not to individual members as such,59 and are not res t r i c ted to directors properly ca l l ed , but equally apply to any o f f i c i a l s of the company who are authorized to act on i t s behalf, and in par t i cu la r those acting in a managerial capacity.60 (a) Bona Fides The general pr inc ip le is that directors must act "bona f ide in what they consider - not what a court may consider - is in the best interests of the company and not for any co l l a te ra l purpose." 6 1 I f directors act in the i r own interests or those of th i rd parties without considering whether i t i s in the best interests of the company, they are in breach of the i r d u t y . 6 2 There has been considerable controversy as to what is meant by "best interests of the company" since the company is an abstraction. L.C.B. Gower suggests that these include interests of members, present and future, of the company. 6 3 The case of Hogg v. Cramphorn Ltd. & Others 6 4 suggests that the interests of employees are not included. On the other hand, the B r i t i s h Columbia Supreme Court case of Teck Corporation Ltd. v.  M i l l a r , 6 5 recognizes that the interests of the employees and the interests of the corporation are not necessarily mutually exclusive. In - 133 -that case Berger J . stated: "I appreciate that i t would be a breach of the i r duty for directors to disregard the interests of a company's shareholders in order to confer a benefit on i t s employees . . . But i f they observe a decent respect for other interests ly ing beyond those of the company's shareholders in the s t r i c t sense, that w i l l not, in my view, leave directors open to the charge that they have f a i l e d in t he i r f iduc iary duty to the company." 66 The Blue Paper, which also recommended that the common law f iduc ia ry duties and duties of care and s k i l l , which have been largely codified,67 be applied to directors of crown corporat ions 5 8 sought to solve the "best interests of the company" problem by providing, in the Draft Leg i s la t i ve Proposals, that each director shall "act honestly and in good f a i t h with a view to the best interests of Canada and, insofar as i t i s not incompatible with the best interests of Canada, the best interests of the crown corporation."69 However, the Crown Corporations B i l l , 7 0 which was f i r s t introduced on November 26, 1979 by the shor t - l i ved Tory Government, omitted the 'best interests of Canada' part. In the absence of express statutory provis ion, and since there are no shareholders in publ ic corporations, directors of public corporations should have regard for the interests of taxpayers, employees and creditors of public corporations as well as interests of benef ic iar ies of the a c t i v i t i e s of these corporations, (b) Proper Purpose Directors have a duty to exercise the i r powers bona f ide for the par t i cu la r purpose for which they are conferred and in a manner contemplated by those who give i t , and not for some extraneous purpose or consideration.71 Directors w i l l be l i a b l e i f they exercise the i r powers for the purpose of maintaining the i r control of the corporation, and th i s is so even i f they honestly believe i t to be in the best interests of the corporation.72 - 134 -(c) Unfettered Discret ion A d i rector is not permitted to fe t te r his d i s c r e t i o n . 7 3 This means that a d i rector must come to board discussions without commitments one way or the other. He must have an open mind and must not se l l himself to a par t i cu la r interest ; he is a d i rector of the corporation. In th i s connection directors cannot va l i d l y contract e ither with one another or with th i rd parties as to how they shall vote at future board meetings. This is so even though there is no improper motive or purpose and no pro f i t reaped by the directors under the c o n t r a c t . 7 4 (d) Conf l i c t of Duty and Interest As f i duc i a r i e s , d irectors must not place themselves in a posit ion in which there is a con f l i c t between the i r duties to the corporation and t h e i r personal interests . Good fa i th must be exhibited, and the law w i l l not permit a f iduc iary to place himself in a s i tuat ion in which his judgment i s l i k e l y to be b i a sed . 7 5 ( i ) Contracts with the corporation Under common law, the posit ion of directors may inval idate any contract which the board of directors enters into on behalf of the company with one of the i r number. 7 6 The contract, thus entered into, unless accompanied by e f fect i ve disclosure is voidable at the instance of the company. 7 7 The rule as to contracts applies not only to those contracts entered into d i rec t l y with the directors but also to those in which they are in one way or another interested, however i nd i rec t l y . ( i i ) Secret p r o f i t s , commissions and bribes A d i rector has a duty of not making undisclosed or secret p ro f i t s in the execution of his o f f i ce and is l i a b l e to account to the corporation - 135 -for such p ro f i t s . The pr inc ip le applies not only to payments in the nature of bribes made to directors in the hope of influencing the i r judgment, but also to any benefit which they would not have reaped but for some use of t he i r special position.78 ( i i i ) Abuse of confidence Directors are not permitted, either during or after the i r service with the corporation, to use for the i r own purposes anything entrusted to them for use on behalf of the corporation. This requirement is not res t r i c ted to property in the s t r i c t sense, i t also covers trade secrets and conf ident ia l i n fo rmat ion . 7 9 ( i i ) Duties of care and s k i l l The common law duties of care, d i l igence and s k i l l , which l i k e the f iduc iary duties are owed to the corporation and not to individual members, were reduced by Romer J . after reviewing the then exist ing author i t ies , in Re C i ty Equitable Insurance C o . , 8 0 to three propositions, v i z ; -(1) A d i rector need not exhibit in the performance of his duties a greater degree of s k i l l than may reasonably be expected from a person of his knowledge and experience. 81 (2) A d i rector is not bound to give his continuous attention to the a f fa i r s of his company. His duties are of an intermittent nature to be performed at periodical board meetings, and at meetings of any committee of the board upon which he happens to be placed. He i s not bound to attend a l l such meetings, though he ought to attend whenever in the circumstances he is reasonably able to do so. This proposition does not apply to managing or service d i rector s , but only to those holding ordinary outside directorships and from whom nothing more is expected than attendance at meetings. (3) In respect of a l l duties that, having regard to the exigencies of business and a r t i c l e s of associat ion, may properly be l e f t to some other o f f i c i a l , a d i rector i s , in the absence of grounds for suspicion, j u s t i f i e d in t rus t ing that o f f i c i a l to perform such duties honestly. 82 - 136 -Since directors are not required to possess any part icu lar accomplishments and since the successful running of the business of the corporation requires a measure of s k i l l , ignorant directors must obviously rely on expert o f f i c i a l s . These o f f i c i a l s are agents and servants of the corporation, and not of the d i rector s , and therefore the directors are not responsible for t he i r misconduct. ( i i i ) Remedies avai lable for breach of d i rec to r s ' duties Depending on the nature of the breach, a breach by a d i rector of his duties may lead to an order for one of the following;-83 (a) Injunction or declarat ion An injunction or declaration is usually employed where a breach is threatened but has not yet occurred. An injunction may be permanent or temporary, and may also be appropriate where the breach has already occurred but is l i k e l y to continue. (b) Damages or compensation Damages are the appropriate remedy for breach of the duties of care and s k i l l . Compensation is granted to compel re s t i tu t i on for loss suffered by a d i rec to r ' s breach of f iduc iary duties. (c) Restoration of the corporation 's property Any property of the corporation in the hands of d i rectors , i f unlawfully acquired, may be recovered. This is subject to i t s being traceable. (d) Rescission of contracts An agreement with the company which breaches the rules re lat ing to contracts in which directors are interested may be avoided, provided that r e s t i t u t i o in integrum is possible. - 137 -(e) Accounting for secret p ro f i t s This l i a b i l i t y may arise out of a contract made between a d i rector and the corporation or as a result of some contract or arrangement between a d i rector and a th i rd party, and in neither does recovery depend on proof of any loss suffered by the company.84 ( iv) Appl icat ion of d i rec to r s ' duties to d irectors of public  corporations What is given above is a skeleton of the common law f iduc iary duties and duties of care and s k i l l together with the remedies avai lable for breach of those d u t i e s . 8 5 The purpose is not to rewrite those duties and remedies but to show that they are appropriate for appl icat ion to d irectors of public corporations. If applied to those directors they would ensure that the a f fa i r s of public corporations are properly run and that d irectors are lega l l y accountable for the i r misconduct. With respect to remedies, since public corporations are public author i t ies , any measures taken against maladministration by parliament and government are es sent ia l l y of a p o l i t i c a l , administrative and d i s c ip l i na ry charac te r . 8 5 Therefore something more is required. A d i rector may be dismissed, but he must also make good his misfeasance or non-feasance preceding his dismissal. In re la t ion to crown companies formed under general company l e g i s l a t i o n , i t is log ica l to assume that the above duties apply to them, but with rspect to statutory corporations, no such assumption can readi ly be made. The only j u d i c i a l pronouncement on th i s matter is to be found in Tamlin v. Hannaford. 8 7 In that case Lord Denning in referr ing to B r i t i s h Transport Commission, a statutory corporation, sa id; " It has many of the qua l i t ie s which belong to corporations of other kinds to which we have been accustomed. . . i t is directed by a group of men whose duty i t is to see that [ i t s ] powers are properly u sed . " 8 8 There is no further - 138 -elaboration. It is possible that Lord Denning was referr ing to the u l t r a v ires doctrine and not to the directors duties discussed above. In fact the statement that " i t has, fo r instance, defined powers which i t cannot exceed", preceding the above quotation bears out the conclusion that Lord Denning was not referr ing to d i rec to r s ' f iduc iary duties and duties of care and s k i l l . The Government Blue Paper seems to have proceeded on the assumption that the above common law duties apply to directors of publ ic corporat ions . 8 9 The assumption seems reasonable but is not supported by author i t ies . The pos i t ion, then, is that, save for crown companies f a l l i n g under the regime of general corporation l e g i s l a t i o n , there is a gap with respect to the duties of directors of public corporations. That there are v i r t u a l l y no reported cases on th i s subject is testimony to th i s assertion. And th i s i s the raison d 'etre necessitating the appl icat ion of the common law duties, as now cod i f ied, to directors and o f f i cer s of public corporations. It i s rather unfortunate that the Conservative Government, which introduced the Crown Corporations B i l l , 9 0 that incorporates the suggestion here made, did not l i v e to see the B i l l passed into law. But one hopes that the L iberal Government, which issued the Blue Paper in 1977, which also recommended that the common law duties be applied to directors of publ ic corporations, w i l l soon take up the matter. One of the solutions would be to amend the Canada Business Corporations Act so as to make i t possible for the relevant provisions to be applied to public corporations. Another so lut ion, which is preferable, would be to introduce a separate b i l l dealing s p e c i f i c a l l y with crown or public corporations, to deal generally with a l l those matters which have, in the course of th i s work, been considered as i na r t i cu la te and in respect of which - 139 -l e g i s l a t i v e consideration has been advocated fo r . ( v i i ) Locus standi The Government Blue Paper proposed that the Attorney-General of Canada, in addition to any other r ight he has as the f i r s t legal o f f i c e r , be given the power or right to enforce directors duties or to restra in d irectors from acting in breach of t he i r duties.91 As in the case of the u l t ra vires doctrine, the Attorney-General suffers from the constraint of information, but no change is suggested for i t is neither reasonable nor desirable that a taxpayer ipso facto be given the right to go to court to enforce d i rectors ' duties. A conferment of such a right would only lead to confusion and chaos. IV. CREDITOR PROTECTION The urgency of the issue of creditor protection is lost by a number of factors . In the f i r s t place, v i r t u a l l y a l l public corporations rely on the Government of Canada for appropriations or loans to finance capital projects and operations.92 in the words of A.G. Irv ine, "crown corporations have . . . been neither designed nor used to raise capita l from the public."93 Therefore, in most cases, the interests of shareholder and cred i tor are merged indist inguishably in the government.94 In the second place, even in those cases where the constituent acts give authority to crown corporations to obtain financing from capital markets,95 there is l i t t l e cause for concern. For one thing, these borrowing powers have rarely been used96 and for another, as these powers are conferred subject to the approval of the Governor-in-Council, in most cases the government w i l l guarantee the borrowing.97 Crown companies incorporated under company l eg i s l a t i on have authority - 140 -to borrow from private sources and the Government Blue Paper 9 8 proposed that the borrowing powers of crown corporations be expanded by allowing a l l agency and proprietry corporations access to private capital markets, subject to authorization by the Minister of Finance and approval by the Governor-in-Council. These expanded borrowing powers are considered as necessary to provide increased f l e x i b i l i t y to crown corporations in t h e i r f inancing, to expose the commercial a c t i v i t i e s of crown corporations more to market d i sc ip l ines and to cu r t a i l the cash drain on the Consolidated Revenue Fund that results from corporations borrowing from the government." In such cases, and noting that the ordinary rules governing the maintenance of capi ta l of private sector corporations are by t he i r nature inappl icable to public corporations, i t may seem necessary to provide some kind of protection to cred i tors . However, d irectors and o f f i c i a l s of public corporations acting in accordance with the duties outlined above, and the appl icat ion of the u l t ra vires doctr ine, despite i t s minimized value, provide adequate protection to cred i tors . Further, government guarantee of borrowing by public corporations and the practice by the government of providing funds required to pay claims of th i rd parties in those instances where a corporation is unable to meet i t s l i a b i l i t i e s from i t s own resources,!0° provide added insurance. Therefore, beyond these forms of creditor protect ion, no further protection is immediately necessary. Such further protection would be necessary i f a su f f i c ient number of reported cases were avai lable to show that creditors have been substant ia l ly prejudiced. As far as the present research has ascertained, no such cases are ava i lab le. And this tends to confirm the observation by the Royal Commission on Government Organization that, " . . . i t is . . . inconceivable in terms of p o l i t i c a l r e a l i t i e s , that the government would ever claim a - 141 -l imited l i a b i l i t y and permit the organization to be forced into l i qu ida t ion by i t s creditors . - 142 -. PART FIVE  SUMMARY AND CONCLUSIONS I. PART ONE In Part One of th is essay, taxpayers, creditors and suppliers of crown corporations, and victims of wrongs committed by crown corporations were i den t i f i ed as interest groups most d i r ec t l y affected by the a c t i v i t i e s and operations of crown corporations. The object of research was stated to be an analysis of the extent to which the courts have given legal recognition and protection to the interests of those groups. I I. PARTS TWO AND THREE The discussion in Parts Two and Three has shown that the f u l l r ea l i za t i on and protection of those interests has been blocked or hindered by the public status of crown corporations. Because crown corporations are public authorit ies charged with the performance of public functions, they have been able to claim immunities, pr iv i leges and other advantages pertaining to the ultimate public authority, the crown, and to escape legal l i a b i l i t y or in some way inconvenience the ordinary c i t i z en in the process, (a) Contractual L i a b i l i t y With respect to contractual l i a b i l i t y , although the case of Thomas v. £,! f i rmly established the crown's l i a b i l i t y in contract and therefore crown corportions cannot, as such, claim a pr iv i leged pos i t ion, there remains the problem, ar i s ing from the public status of these corporations of whether a pol icy d i r e c t i ve , given by a competent authority, which interferes with a contract made by a crown corporation with th i rd parties can be set up as a defence to an action for breach of that contractual commitment. The case of C. Czarnikow Ltd. v. Centrala Handlu Zagranicznego 'Ro l impex ' , 2 - 143 -shows that such intervention may provide a good defence. As a measure of protecting the c i t i zenry against an injurious appl ication of the elusive concept of public good, i t has been proposed that courts should not excuse a publ ic corporation from contractual l i a b i l i t y , unless a private corporation would be excused from such l i a b i l i t y under comparable conditions and circumstances. 3 (b) Tortious L i a b i l i t y Pr ior to the passing of the Crown L i a b i l i t y Act in 1953, the crown in Canada was not l i a b l e in t o r t . This immunity from tort ious l i a b i l i t y was extended to those crown corporations which were considered as agents or servants of the crown or covered within the shield of the crown. However, the Crown L i a b i l i t y Act removed the crown's immunity from tort ious l i a b i l i t y . 4 The only problem with respect to tort ious l i a b i l i t y has been caused by the judgment in Formea Chemicals Ltd. v. Polymer Corporation  L t d . 5 That case involved the interpretat ion of section 3(6) of the Crown L i a b i l i t y Act, which preserves the immunity of the crown from actions in to r t with respect to anything done or omitted to be done in the exercise of any prerogative or statutory power conferred on the crown. The Ontario Court of Appeal construed that section as ext r icat ing the respondent crown corporation from l i a b i l i t y to pay damages for infringement of a patent. As has already been contended, 6 th i s case was badly decided and one can only look to the Supreme Court of Canada for remedial act ion. (c) International Legal Status In the international domain, an indiv idual seeking redress from a crown corporation has to contend with the doctrine of sovereign immunity which has been applied to those corporations answering the descriptions of 'emanation' ' a rm ' , ' a l t e r ego', ' o rgan ' , 'department', or ' i n s t rumenta l i ty ' of the - 144 -government or state. Some of the rigours of the doctrine have been mitigated in those countries that subscribe to a r e s t r i c t i v e view of sovereign immunity. The doctrine of sovereign immunity in i t s res t r i c ted or l imi ted form accords immunity to a state or i t s corporations in respect of acts of a public or governmental nature and not in respect of acts of a commercial or private nature. That i t is d i f f i c u l t to f ind a reasonably precise d i s t i nc t i on between acts of the one and the other kind in view of the many diverse ways in which governments may engage in economic and commercial a c t i v i t i e s , has already been pointed out. 7 Even i f that d i s t i nc t i on were i n t e l l i g i b l e , the person seeking redress from the government or governmental bodies is not interested in the description of the a c t i v i t y from which his claim ar i ses , but in compensation for the loss he has suffered. No legal pr inc ip le requires that he be compensated in respect of one type of a c t i v i t y and not the other. It has been suggested that the doctrine of sovereign immunity should altogether be abolished. This flows from the fact that the theoret ica l foundations of the doctrine -d ign i ty , equal i ty, and independence of states - have been eroded, and from the fact that a claim to immunity is inconsistent with the notion of the state under the rule of law. 8 (d) Procedural Aspects Part Three demonstrated that even with respect to procedural matters, the appl icat ion of ancient rules designed for a t o t a l l y d i f ferent type of society and government, s t i l l remains to bedevil the sound administration of ju s t i ce in a modern state. At every stage in the proceedings a l i t i g a n t seeking r e l i e f or redress from a public corporation is put at a disadvantage. This is because crown corporations coming under the shield of the crown enjoy pr iv i leges with respect to such matters as forum, re s t ra in t , - 145 -l im i ta t i on of actions, discovery and interrogatories and enforcement of judgments. (e) Conclusions for Parts Two and Three Up to th i s point, i t is evident that the concept of the public corporate person has been so interwoven with the concept of the crown that the prerogatives, immunities and advantages of the crown have frustrated the development of a coherent system of l i a b i l i t y . Courts have conferred crown advantages upon crown corporations depending on whether or not the corporation in issue is a servant, agent or trustee of the crown, but without ascertaining whether any superior public purpose is served thereby, or whether any public detriment is precipitated by placing a public corporation on an equal footing with private corporations. In short, no concept, with respect to the proper appl icat ion of pr inc ip le of crown prerogative and immunity, is d i scern ib le . It has been said that crown pr iv i leges should not be regarded as unreasonable survivals of despotism but must be interpreted as a recognition of the pr inc ip le that a l l pr ivate interests are subordinate to public needs. 9 This essay has shown, that in f ac t , crown pr iv i leges are unreasonable survivals of the past and even i f they were not, "publ ic need" is too wide a concept to provide a meaningful c r i t e r i on for the appl ication of the pr inc ip le of crown prerogative and immunity. Crown immunities and advantages, both substantive and procedural, originated in a feudal background as prerogatives personal to the King and were reinforced by theories of divine r ight of Kings and of sovere ignty. 1 0 They are thus inappropriate to the present public and executive concept of the crown. Yet, Canada, heedless of the reasons for the functioning of these immunities, has nevertheless adopted them. This is - 146 -unfortunate. It is more unfortunate i f these immunities are conferred on public corporations. One cannot but adopt the words of Lord Denning in Tamlin v.  Hannaford.H He held that the B r i t i s h Transport Commission, a public corporation, i s , ". . . in the eye of the law . . . i t s own master and i s answerable as f u l l y as any other person or corporation. It is not the crown and has none of the immunities or p r i v i lege of the crown.. . . It i s , of course, a public authority and i t s purposes, no doubt, are public purposes, but i t is not a government department nor do i t s powers f a l l within the province of government."12 Therefore, the fact that crown corporations are public authorit ies does not, in legal theory, necessarily require that they be accorded the attr ibutes of the crown. It may well be that there are public benefits or purposes served by the concept of crown immunity as applied to the crown and crown corporations. For example, i t would not, as has been pointed out, 13 be in the public interest i f the co l lec t ion of taxes, duties and other charges by the crown were barred by l im i ta t i on provisions. In t h i s case i t may be necessary to relax l im i ta t i on law in favour of the crown. But i f i t is desired to vindicate some public purpose by a pr inc ip le of crown immunity, nothing is simpler than for the leg i s lature to provide so in c lear and unambiguous words. In the i r general appl icat ion, crown immunities are one and in a l l objectionable and should be abolished. The courts should be authorized to act on the assumption of formal equality between legal ent i t ie s whether government or not, and the leg i s la ture should specify, in part icu lar cases, the special advantages thought essential to a part icu lar author i ty . I 4 Save for compelling reasons which should be made c lear , a l l public - 147 -corporations should be regarded as outside the sphere of governmental immunities and pr iv i leges . This i s the best approach to the protection of the interests of those affected by the a c t i v i t i e s of these corporations. Since, as the decided cases have shown, the courts cannot be re l ied upon to carry out the above proposal, one must look to parliament. The pr inc ip le to guide parliament is that of equality before the law of those who engage in comparable transactions or a presumption in favour of subjecting a public corporation to the same law as a private person. The crown corporation should be given exactly what i t requires in order to carry out i t s functions and no more. In the same way as parliament specif ies in the corporation 's const itut ing statute the powers which the corporation requires, i t should also specify any crown immunities or pr iv i leges which the corporation also requires. And i f none are required, that should also be stated for the avoidance of doubt. In fact such an approach has taken root in the United Kingdom. Section 28(1) of the Iron and Steel Act provides that ; -" I t i s hereby declared for the avoidance of doubt that . . . neither the Board nor the Agency are to be regarded as the servant or agent of the crown or as enjoying the status, immunity or p r i v i l ege of the crown. . ." 15 I I I. SUMMARY AND CONCLUSION FOR PART FOUR Part Four deals with the issues of d i rector s ' legal duties and creditor protect ion. Taxpayers, who provide the bulk of the funds that enable publ ic corporations to perform the i r functions, are ent i t led to expect that not only do directors execute the i r duties with care, s k i l l and dilegence, but also that in so doing they act honestly and in good f a i t h with a view to the best interests of Canada and of the corporations. S im i l a r l y , creditors - 148 -expect that corporate funds are not misapplied or mismanaged. Neither p o l i t i c a l accountabi l i ty nor j ud i c i a l control through the doctrine of u l t ra vires is su f f i c ient to ensure that the af fa i r s of crown corporations are properly run and that the interests of taxpayers are s u f f i c i e n t l y protected. In the f i r s t place, any measures taken by parliament and government against maladministration are of p o l i t i c a l , administrative and d i s c ip l i na ry character. They do not provide legal sanctions. In the second place, the ef f icacy of the u l t ra vires doctrine is reduced by the fact that the powers conferred on public corporations are often so widely drawn as to make the doctrine nugatory as a means of exercis ing j ud i c i a l control over the a c t i v i t i e s of public corporations. It has, therefore, been proposed that the f iduc iary duties and duties of care and s k i l l which the common law imposes on directors of private sector corporations, together with the legal sanctions or remedies available for breach of those duties, be applied, insofar as the circumstances of public corporations admit, to directors of the l a t t e r corporations. IV. GENERAL OBSERVATION The proposals and suggestions above made ca l l for l e g i s l a t i ve act ion. It may well be that i t is too much to expect that a l l the problems alluded to w i l l be solved at once and in one all-embracing Act of Parliament. But i t is c lear that gone are the Second World War days when crown corporations were perceived as ad hoc and transient in s t i tu t ions designed only for the par t i cu la r requirements of the time. In the current politico-economic order, i t is no longer good enough to respond naively to the p ro l i fe ra t ion of governmental a c t i v i t i e s ; public corporations are an integral part of the state structure. Therefore, some immediate action along the l ines above suggested is ca l led for . - 149 -FOOTNOTES - PART ONE 1. Friedmann, W., "Government (Public) Enterpr i se" , Vo l . 13, International Encyclopedia of Comparative Law, Chapter 13, New York, Oceana, 1972, p. 86; Brownlie, I., "P r inc ip le s of Public International Law", Oxford, Clarendon, 1966, p. 277; Royal Commission on Government Organization Report, Vo l . 5, Ottawa, Queen's P r i n t e r , 1963, p. 54; Scott, F.R., "Administrative Law 1923-1947", (1948), 26 Can. Bar Rev. 268 at p. 270; Tupper, A., "The State in Business", (1979), Vo l . 22, No. 1, Can. Pub. Adm. 124; Scott, L . J . , in Royster v. Cavey, [1947] 1 K.B. 204 at p. 210; Curr ie , A.W., "The Board of Transport Commissioners as an Administrative  Body", in Canadian Publ ic Administration, Hodgetts, J .E . & Corbett, D.C. (ed.), p. 222; Robinson, T.R. & Auld, D.A.L., "The Government Sector in  the 1970's - Economic Context For a Tax System", The White Paper on Taxation, The Planning Association of Canada, p. 1. 2. G. Treves, "Publ ic and Private Enterprise in I t a l y " , in Publ ic and  Pr ivate Enterprise in Mixed Economies, Friedmann, W. (ed.), New York, Columbia Univ. Press, 1974, p. 43; T.W. P r i ce , "The Publ ic Corporation  in South A f r i c a " , in The Public Corporation - A Comparative Symposium,  Friedmann W., (ed.), Toronto, Carswel l , 1954, 302 at p. 303; A. Tupper, "The State in Business", op. c i t . , p. 131; Scott, F.R., "Administrative  Law", op. c i t . , pp. 283-85. 3. Friedmann, W., "Government (Public) Enterpr i se " , op. c i t . , p. 35; Friedmann, W., "The Public Corporation in Great B r i t a i n " , in The Publ ic  Corporation, W. Friedmann (ed.), 162 at p. 175. 4. Friedmann, W., "Government (Public) Enterpr i se" , op. c i t . , p. 86. 5. Blakeney, A.B., "Saskatchewan Crown Corporations" in Canadian Publ ic  Administration, Hodgetts J .E. & Corbett, D.C. (ed.), Toronto, MacMillan, 1960, p. 212, and in The Public Corporation, Friedman, W. (ed.), p. 93. 6. Crown Corporations, D i rect ion, Control , Accountabi l i ty. Government of  Canada Proposals, Pr ivy Council O f f i c e , Minister of Supply and Services, Canada, 1977 (hereinafter referred to as the "Government Blue Paper") p. 11; Ashley, C.A. & Smails, R.G.H., "Canadian Crown Corporations, Some  Aspects of Their Administration and~Control", Toronto, MacMillan, 1965, p. 4; Hodgetts J . E . , "Respons ib i l i ty of the Government Corporation to  the Governing Body", Proceeding of the 5th Annual Conference of the In s t i tu te of Publ ic Administrt ion of Canada, p. 389. 7. For a detai led account of the h i s to r i ca l development of public or crown corporations, see Ashley & Smails, "Canadian Crown Corporations", op. c i t . , chapt. 1; Hodgetts, J . E . , "The Publ ic Corporation in Canada", in The Public Corporation, Friedmann, W. (ed.), op. c i t . , pp. 51-55; The Government Blue Paper, pp. 11-13. - 150 -FOOTNOTES - PART ONE, continued 8. G r i f f i t h , J.A.G., "Publ ic Corporations as Crown Servants", (1952), Vol . 9, No. 2 U.T.L.J. T69": 9. P r i ce , T.W., "The Public Corportion in South A f r i c a " , op. c i t . p. 302. 10. Hogg, P.W., " L i a b i l i t y of the Crown in Au s t ra l i a , New Zealand and the  United Kingdom", Melbourne, The Law Book Co., 1971, pp. 9 & 10. 11. P r i ce , T.W., "The Publ ic Corporation in South A f r i c a " , op. c i t . p. 302. 12. 23-24 E l i z I I , c. 33, 1974-75. 13. e.g., B r i t i s h Columbia Companies Act. 14. P r i ce , T.W., "The Publ ic Corporation i n South A f r i c a " , op. c i t . p. 302. 15. e.g., B.C. Hydro, B.C.R.I.C., Ontario Hydro. 16. e.g., International Bank for Reconstruction and Development (World Bank), International Finance Corporation, Inter-American Development Bank, European Investment Bank, Afr ican Development Bank, Eurofina, Eurochemic, and the International Mosel Company. 17. Sawer, G., "Crown L i a b i l i t y in Tort and the Exercise of D i scret ions " , (1951), 5 Res. Jud. 14 at p. 17. 18. H.J. Lask i , "The Respons ib i l i ty of the State of England", (1919), 32 Harv. L.R. 447 at p. 472. See also, Friedmann, W., "Legal Status of  Incorporated Publ ic Author i t i e s " , 22 A.L .J . 7; Sawer, G., "Shield of  the Crown Revis i ted" (1957-58), 1 Melbourne Univ. L.R. 137 at p. 146; Moore, W.H., " L i a b i l i t y for Acts of Publ ic Servants", (1907), 23 L.Q.R. 12 at p. 18. 19. [1967] 61 D.L.R. (2d) 475. 20. S. 19 Patent Act, R.S.C., 1970, c. P-4. 21. [1967] 61 D.L.R. (2d) 475 at p. 487. See also, The Truculent, [1952] P. 1; Wil l iams, Webb & Taylor, J J . in Wynyard Investment Proprietary  Ltd. v. Commissioner for Railways (N.S.W.) (1955), 93 C.L.R. 376 at p. 393. 22. Wilmer, J . , in The Truculent, [1952] P. 1. 23. See, for example, Hazen, C.J. in Michaud v. C.N.R. Co., [1924] 3 D.L.R. 1 (New Brunswick Supreme Court, Appeal Div is ion) at p. 4 where he said of the C.N.R. Co., a Crown Corporation; " . . . i t seems to me that i t was the intention of parliament to create the company a corporation as - 151 -FOOTNOTES - PART ONE, continued a legal ent i ty separate and d i s t i n c t from the crown . . . " ; and Denning L .J . in Tarn!in v. Hannaford, [1950] 1 K.B. 18 at p. 24. 24. [1897] A.C. 22 especia l ly at pp. 30 and 51. 25. Friedmann, W., "The Publ ic Corporation in Great B r i t a i n " , op. c i t . at p. 163 says that the term 'publ ic corporat ion 1 f i r s t appeared in Great B r i t a i n in 1926 in a report on broadcasting. The origins of the term in Canada are far from clear but is often used in l i t e r a tu re dealing with the subject. See for example Hodgetts, J . E . , "The Publ ic  Corporation in Canada", op. c i t . 26. Gower, L.C.B., "The Pr inc ip le s of Modern Company Law", London, Stevens, 3rd Edn., 1969, p. 13. 27. M i l l e r , A.S. & Ferrara, R.C., "Publ ic and Pr ivate Enterprise in U.S.:  Co-existence in an Unsteady Equi l ib i rum" in Publ ic and Pr ivate  Enterprise in Mixed Economies, Friedmann, W. (ed.) 291 at p. 296; see also Friedmann, M., "The Corporate Clout" , Newsweek, May 5, 1980, p. 82; Scott, F.R., "Administrative Law, 1923-1947", op. c i t . p. 284-85. 28. Government Blue Paper, p. 41; I rv ine, A.G., "The Delegation of  Authority to Crown Corporations", (1971), 14 Can. Pub. Adm. 556 at pp. 557-8 & 563-5. These sources of funds may be in the nature of subsidies or grants, loans and advances. Indirect sources include taxation benef its, loan guarantees and l icens ing advantages. 29. The Government Blue Paper, pp. 18 & 21. Section 4 of the Draft Leg i s la t i ve Proposals on the Control, Direction and Accountabi l ity of Crown Corporations, which appear as Appendix A of the Government Blue Paper, i s more spec i f i c and provides as fo l l ows ; -4. " I t is hereby declared that every crown corporation i s constituted an instrument for advancing the national interests of Canada and that in order to best advance those national interests i t i s the duty of the directors of every crown corporation when managing the crown corporation to take into consideration the national interests of Canada . . . and . . to pursue those corporate po l i c ies that best advance such national i n te res t s . " See also, s. 8 Crown Corporations B i l l , 1979, B i l l C-27; Tupper, A., "The State in Business", op. c i t . pp. 141 & 142; Royal Commission on  Government Organization Report, Vo l . 5, op. c i t . p. 56. 30. Friedmann, W., "The Publ ic Corporation in Great B r i t a i n " , op. c i t . p. 163. 31. "The Pr inc ip les of Modern Company Law", op. c i t . p. 224. - 152 -FOOTNOTES - PART ONE, continued 32. Ashley & Smails, "Canadian Crown Corporations", op. c i t . p. 4; Hodgetts, J . E . , "The Publ ic Corporation in Canada", op. c i t . p. 53; I rv ine, A.G., "The Delegation of Authority to Crown Corporations", op. c i t . p. 570. 33. "The P o l i t i c a l Economy of the Parastata ls " 5 Eastern A f r i ca Law Review 9. 34. "The A p p l i c a b i l i t y of the Companies Code, 1963 (Act 179) to Publ ic  Corporations" (1973), 10 Univ. of Ghana L .J . 65. ; 35. e.g., Atomic Energy of Canada L td . , Canadian Arsenals L td . , Canadian Patents and Development L td . , Defence Construction (1951) L td. , Uranium Canada L td . , Eldorado Aviat ion L td . , Eldorado Nuclear L td . , and Polysar Ltd. 36. Friedmann, W., "The Public Corporation in Great B r i t a i n " , op. c i t . p. 162. 37. Ib id, pp. 164-165. 38. As has been already pointed out, public corporations may be incorporated under the Canada Business Corporations Act. 39. See also, s. 66(1) Financial Administration Act, R.S.C., 1970, c. F-10. 40. See also, Robson, W.A., in "Problems of Nationalised Industr ies " , London, 1952 pp. 27-35. 41. Ashley & Smails, "Canadian Crown Corporations", op. c i t . p. 3. 42. R.S.C., 1970, c. F-10. 43. Ashley & Smails, "Canadian Crown Corporations", op. c i t . p. 3. 44. The Government Blue Paper, pp. 17 & 37. 45. Ashley & Smails, "Canadian Crown Corporations", op. c i t . p. 3. 46. S. 70(1) F.A.A. 47. S. 70(2) F.A.A. 48. S. 3(9) North Canada Power Commission Act, R.S.C., 1970, c. N-21; S. 5(5) Central Mortgage and Housing Corporation Act, R.S.C., 1970, c. C-16; s. 21 St. Lawrence Seaway Authority Act, R.S.C., 1970; C. S - l ; S. 4(2) Canadian Commercial Corporation Act, R.S.C., 1970, c. C-6; S. 4(5) Agr icu l tura l S t ab i l i z a t i on Act, R.S.C., 1970, c. A-9; S. 7 Atomic Energy Control Act, R.S.C., 1970, c. A-19. - 153 -FOOTNOTES - PART ONE, continued 49. The Government Blue Paper, p. 37. 50. S. 2(1) of the Draft Leg i s l a t i ve Proposals defines a crown corporation as fo l lows; -"'Crown corporation 1 means a corporation named in Schedule B, Schedule C or Schedule D to the Financial Administration Act . " 51. Public or crown corporations are set up to achieve broad pol icy object ives; they perform public functions and while p ro f i t s are legit imate in appropriate cases, they are not the pr inc ipal object. In the case of proprietary corporations which are o rd inar i l y required to operate without appropriations, th i s means that the implementation of broad pol icy objectives is to be carr ied out, as much as possible within commercial d i s c i p l i ne s , but the pursuit of commercial goals i s not intended to override the broad s o c i a l , cu l tura l and economic goals. See also Tarn!in v. Hannaford op. c i t . p. 23. 52. P r i ce , T.W., "The Publ ic Corporation in South A f r i c a " op. c i t . p. 303; comes close to th i s de f i n i t i on when he writes ". . . [they are] ' p ub l i c ' because they are subject to a certain l imited degree of p o l i t i c a l or governmental finance and cont ro l , and 'corporat ions ' because they are otherwise autonomous bodies. . ." 53. S. 66(1) F.A.A. 54. Hodgetts, J .E . , "The Publ ic Corporation in Canada", op. c i t . p. 56. 55. See Appendix A. 56. S. 66(3)(a) F.A.A. 57. Royal Commission on Government Organization Report, Vol . 5 op. c i t . p. 68. 58. Ashley & Smails, "Canadian Crown Corporations", op. c i t . pp. 99-100. 59. Minutes of Proceedings and Evidence of the Standing Committee on Public Accounts, House of Commons, Issue No. 33, Tuesday, May 17, 1977 (Pr int ing & Publ ishing, Supply and Services Canada, Ottawa). 33A:8. 60. The Government Blue Paper, p. 15. 61. See Appendix B. 62. S. 66(3)(b) F.A.A. 63. Hodgetts, J .E . , "The Publ ic Corporation in Canada", op. c i t . p. 56. 64. S. 70(1) F.A.A. - 154 -FOOTNOTES - PART ONE, continued 65. S. 70(2) F.A.A. 66. S. 75 F.A.A. 67. S. 73 F.A.A. 68. The Government Blue Paper, p. 15. 69. See Appendix C. 70. S. 66(3)(c)( i ) 7 ( i i ) F.A.A. 71. The Government Blue Paper, p. 15. 72. S. 70(2) F.A.A. 73. The Government Blue Paper, p. 16. 74. S. 70 F.A.A. 75. Ashley & Smails, "Canadian Crown Corportions" op. c i t . p. 161; Stevens, J .T. , "The Business of Government: An Introduction to Canadian Publ ic  Administrat ion", Toronto & M c G i l l , McGraw-Hill Ryerson, 1978, p. 121. 76. For a detai led description of some of these corporations, see Ashley & Smails, "Canadian Crown Corporations", op. c i t . pp. 161-337. 77. Royal Commission on Government Organization Report, Vo l . 5, op. c i t . p. 56. 78. S. 2. Government Companies Operation Act, R.S.C., 1970, c. G-7. 79. S. 6(1) of the Defence Production Act, R.S.C., 1970, c. D-2 provides, in part, "The Minister may, i f he considers that the carrying out of the purposes or provisions of th i s act is l i k e l y to be f a c i l i t a t e d thereby . . . procure the incorportion of any one or more corporations for the purpose of undertaking or carrying out any acts or things that the Minister i s authorised to undertake or carry out under th i s Act. " 80. R.S.C., 1970, c. S - l . 81. See also, S. 18 A i r Canada Act, R.S.C., 1970, c. A - l l ; S. 10(2) Atomic Energy Control Act, R.S.C, 1970 c. A-19; s. 17(1) National Research Council Act, R.S.C, 1970, c. N-14. 82. Tupper, A., "The State in Business" op. c i t . p. 131. 83. Kyle, P.R., "The Government Director and His Conf l i c t i ng Dut ies" , (1973-75) 7 V.U.L.R. 75 at p. 77; Tupper, A., "The State in Business" - 155 -FOOTNOTES - PART ONE, continued op. c i t . pp. 131-132; Shonfield A., "Modern Capital ism; The Changing  Balance of Publ ic and Pr ivate Power", London, Oxford, 1965, p. 82; Musolf, L.D., "Mixed Enterprise: A Developmental Perspective", Lexington, Heath & Co., 1972, p. 5. 84. Tupper, A., The State in Business", op. c i t . p. 132. 85. e.g., Telesat Canada. 86. e.g., Canada Development Corporation. 87. See for example Syncrude Canada, in which the governments of Canada, Alberta and Ontario and private o i l companies are shareholders. 88. For a complete l i s t of a l l corporations in which the federal government has an interest see, Minutes of the Proceeding and Evidence of the Standing Committee on PUblic Accounts, House of Commons, Issue No. 33, Tuesday, May 17, 1977, Ottawa, Pr int ing and Publishing, Supply and Services Canada, Appendix 'A-220 '. See also Schedules I, II & III to the Crown Corporations B i l l , 1979, B i l l C-27. 89. For an exception, see the Canada Development Corporation. 90. "Government as Entrepreneur and Planner: Aspects of Recent Industr ial  Strategy in B r i t a i n " , 9 C a l i f . Western International L.J. 70 at pp. 80-81. 91. The Government Blue Paper, p. 12; Scott, F.R., "Administrative Law  1923-1947", op. c i t . p. 283; Hodgetts, J . E . , "The Publ ic Corporation in  Canada",~op. c i t . p. 52. S imi lar companies were set up in Great B r i t a i n ; see Se l l a r , W., "Government Corporations" Part I (1946), 24 Can. Bar Rev. 393 at p. 402. 92. Ashley & Smails, "Canadian Crown Corporations", op. c i t . p. 18. 93. See also Kyle, P.R., "The Government Director and His Conf l i c t ing  Dut ies" , op. c i t . p. 76. 94. Cranston, R.F. & P u r i , K.K., "Government as Entrepreneur and Planner:  Aspects of Recent Industiral Strategy in B r i t a i n " , op. c i t . p. 81. 95. Tupper, A., "The State in Business", op. c i t . p. 127; Lamont, F.D., "Emerging Neo-Mercantilism in Canadian Po l i c y : State Enterprises and  Foreign Direct Investment", 8 Vand. Journal of Transnational Law 121 at pp. 128-130. 96. For a four - fo ld categorization of these a c t i v i t i e s , see Hodgetts, J .E . , "The Publ ic Corporation in Canada", op. c i t . pp. 56-58. - 156 -FOOTNOTES - PART ONE, continued 97. S. 13(1 )(d) A i r Canada Act, R.S.C., 1970, c. A - l l , s. 39(l)-(d) Broadcasting Act, R.S.C, 1970, c. B - l l ; s. 3 Petro-Canada Act, 23-24 E l i z . I I, c. 61. See also Teleglobe Canada, and Atomic Energy of Canada Ltd. 98. Denning, L . J . , in Tarn!in v. Hannaford, [1950] 1 K.B. 18 at p. 23. 99. The B r i t i s h Columbia Resources Investment Corporation, a provincial crown corporation, i s a unique form of crown corporation, in that B r i t i s h Columbians personally hold shares therein and consequently have share c e r t i f i c a t e s . The Clark government had a s imi lar design for Petro-Canada. 100. Gower, L.C.B., "The Pr inc ip les of Modern Company Law", op. c i t . chap. 16, pp. 343-371 especia l ly at pp. 344-347. 101. Denning, L . J . , in Tarn!in v. Hannaford, op. c i t . p. 23. 102. [1950] 1 K.B. 18. 103. As has already been noted, sources of funds are not l imited to borrowing but include grants and appropriations. 104. [1950] 1 K.B. 18 at p. 23. 105. Ph i l l imore, J . , in Graham v. Publ ic Works Commissioners, [1901] 2 K.B. 781 at pp. 789-90; McTague, J.A., in Gooderham & Worts Ltd. v. C.B.C, [1939] 4 D.L.R. 241 at p. 245. 106. [1939] 4 D.L.R. 233. 107. Ib id, p. 235-36. 108. Ib id, p. 238. 109. Friedmann, W., in "Legal Status of Incorporated Publ ic Au tho r i t i e s " , 22 A .L . J . 7 at p. 8, expresses the same idea when he says "I believe i t to be an unquestionable p r inc ip le of legal pol icy in a modern democratic society in which public and private enterprise operate side by side that i f a state d i r ec t l y or i nd i r ec t l y engages in a c t i v i t i e s which may, through contract, torts or in other ways interfere with the l i f e and secur i ty of the private c i t i z e n , i t should as far as possible be made lega l l y responsible to the same extent as private legal persons." So too does Scott, F.R. in "Administrative Law, 1923-1947", op. c i t . p. 282 when he wr i tes , " I f the state creates r i sks of damage i t should assume these r i sks as f u l l y as any private person." - 157 -FOOTNOTES - PART TWO 1. (1886), 17 Q.B. 795. 2. Ib id, p. 803. 3. Formea Chemicals Ltd. v. Polymer Corporation L t d . , [1967] 61 D.L.R. (2d) 475; B.V.D. v. The Queen, [1955] S.C.R. 787; Bank Voor Handel En  Scheepvaart v. Administrator of Hungarian Property, L1954J A.C. 584 (H.L.); Wynyard Investments Pty. Ltd. v. Commissioner for Railways (N.S.W.) (1955), 93 C.L.R. 376; Re C.B.C. Assessment, L1938J 4 D.L.R. 764 (Ont. C.A.); Oatway v. Canadian Wheat Board,~TT944] 3 W.W.R. 337 (Man. C.A.); International Railway Co. v. Niagara Parks Commission, [1941] 3 D.L.R. 385 (P.C.); The C i ty of Hal i fax v. Hal i fax Harbour  Commission, [1935] S.C.R. 215; C.B.C. v. Attorney-General fo r Ontario, L1959J S.C.R. 188; Repatriation Commission v. Kirk!and (1923), 32 C.L.R. 1; Gooderham~& Worts Ltd. v. C.B.C., L1939] 4 D.L.R. 241 (Ont. C.A.); Peccini v. Lonegan & Toronto & Northrn Ontario Railway  Commission, [1934] 4 D.L.R. 776; Quebec Liquor Commission v. Moore, L1924J 4 D.L.R. 901; Sanitary Commissioner for G ib ra l to r y. O r f i l a (1890), App. Cas. 40; Bainbridge v. Postmaster-General, L1906] 1 K.B. 178. 4. M i l l i g an , F., "The Canada Council as a Publ ic Body" (1979), Vo l . 22, No. 2, Canadian Public Administration, 269 at pp. 270-271; Hogg, P., " L i a b i l i t y of the Crown in Au s t ra l i a , New Zealand and the United  Kingdom," Melbourne, The Law Book Co., 1971, pp. 210-211; The~Royal  Commission on Government Organization Report, Vol. 5, Ottawa, Queen's P r i n te r , 1963, p. 56; T r e i t e l , G.H., "Crow~Proceedings: Some Recent  Developments", [1957] Publ ic Law 231 at p. 328; Treves G., "Publ ic and  Pr ivate Enterprise in I t a l y " in Public and Pr ivate Enterprise in Mixed  Economies, Friedmann, W., (ed.) 43 at p. 51; E l i a s , T.0., "Publ ic and  Pr ivate Enterprise in N iger ia " in Public and Pr ivate Enterprise in  Mixed Economies, Friedmann, W., (ed.), 87 at p. 92; Scott, F.R., "Administrat ive Law 1923-1947", (1948), 26 Can. Bar Rev. 268 at pp. 282 & 284; Street, H., "Governmental L i a b i l i t y . A Comparative Study", London, Cambridge University Press, 1953, p. 29. 5. [1931] V.L.R. 279. 6. [1949] V.L.R. 211. 7. Wade, H.W.R., "Administrat ive Law", London, Clarendon Press, 2nd Edn., 1967, p. 33. 8. Sydney Harbour Trust Commissioners v. Ryan (1911), 13 C.L.R. 358. 9. Message to Congress, Apr i l 10, 1933 recommending the Creation of the Tennesse Valley Authority (T.V.A.), a public corporation which has been described as the most important and successful public enterprise in a non-socia l i s t system - Friedmann, W., "Legal Aspects of Incorporated Public Au tho r i t i e s " , 22 A.L .J . 7 at p. 8. - 158 -FOOTNOTES - PART TWO, continued 10. [1967] 61 D.L.R. (2d) 475. 11. S. 3 Crown L i a b i l i t y Act, R.S.C., 1970, c. C-38; s. 3 Government Companies Operation Act, R.S.C, 1970, c. G-7. 12. [1967] 61 D.L.R. (2d) 475 at p. 480. 13. See also Rural Bank of New South Wales v. Hayes (1951), 84 C.L.R. 140; Morrison, H., "Government and Parliament", London, Oxford Univers ity Press, 1926, p. 292; Gower, L.C.B., "The P r inc ip le s of Modern Company  Law", London, Stevens, 3rd. Edn., 1969, p. 234. 14. Gower, L.C.B., "The P r inc ip le s of Modern Company Law", op. c i t . p. 234; Lord Denning in Tamlin v. Hannaford, [1950] 1 K.B. 18 at p. 24. 15. "The Canada Council as a Publ ic Body" (1979), Vol . 22, No. 2, Canadian Public Administration, 269 at p. 270. 16. For example, s ix of the proprietary corporations and most of the unc lass i f ied crown corporations are audited by private auditors. 17. S. 149(l)(d) Income Tax Act, R.S.C., 1970, c. 1-5. But s. 27 of the Income Tax Act removes from that exemption a number of proprietary coporations, e.g., A i r Canada, C.N.R. Co., and Cape Breton Development Corporation, which are deemed to be private corporations. The exemption is also removed in respect of the i r subs id iar ies. 18. Stevens, T . J . , The Business of Government: An Introduction to Canadian  Publ ic Administrat ion", Toronto & Montreal, McGraw-Hill Ryerson L td . , 1978, at p. 122, wr i tes , "Senior public servants such ad deputy ministers, assistant deputy min is ters , directors-general and other public o f f i c i a l s are frequently appointed to boards of d i rec to r s . " He c i te s three deputy ministers on Petro-Canada board. See a lso, Royal  Commission on Government Organization Report, Vol . 5, op. c i t . p. 57; Ashley & Smails, "Canadian Crown Corporations: Some Aspects of Their  Administration and Cont ro l " , Toronto, MacMillan, 1965, chap. 2, especia l ly at p. 26; Tennant, N.B., "Servants of the Crown" (1932), 10 Can. Bar Rev. 155 at p. 162. 19. Scott, F.R., "Administrative Law 1923-1947", op. c i t . p. 282. 20. Friedmann, W., "Government (Public) Enterpr i se " , Vol . 13, International Encyclopedia of Comparative Law, chap. 13, New York, Oceana, 1972, p. 45. 21. Denning, L . J . , in Tamlin v. Hannaford, op. c i t . pp. 23-24; F. M i l l i g an , "The Canada Council as a Publ ic Body, op. c i t . pp. 270-271; E l i a s , T.O., "Pub l ic and Pr ivate Enterprise in N i ge r i a " , op. c i t . p. 92. 22. "The P r inc ip le s of Modern Company Law", op. c i t . pp. 234-243. - 159 -FOOTNOTES - PART TWO, continued 23. "Administrative Law", London, Clarendon, 2nd. Edn., 1967, pp. 33-41. 24. " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the United  Kingdom", op. c i t . pp. 204-214. 25. "Governmental L i a b i l i t y . A Comparative Study", op. c i t . pp. 26-44. 26. See, for example, Yoshitake, K., "An Introduction to Publ ic Enterprise  in Japan", London, Sage, 1973; Shonfield, A., "Modern Capital ism. The  Changing Balance of Publ ic and Pr ivate Powers", London, Oxford University Press, 1965; Pozen, R.C., "Legal Choices for State  Enterprise in the Third World", New York, New York Univers ity Press, 1976; Friedmann, W., (ed.), "Publ ic and Pr ivate Enterprise in Mixed  Economies", op. c i t . ; Friedmann, W., "Government (Public) Enterpr i ses " , op. c i t . ; "Publ ic Enterprises and Development in Arab Countries: Legal  and Managerial Aspects", International Centre for Law in Development, New York, 1978; Friedmann, W. & Garner, J . F . , "Government Enterpr i se" , London, Stevens, 1970. 27. Toronto, Carswell, 1954. 28. Au s t r a l i a , Canada, France, Germany, Great B r i t a i n , India, I s rae l , I ta ly , New Zealand, South A f r i c a , Sweden, U.S.A. and U.S.S.R. 29. Toronto, Macmillan, 1965. 30. R.S.C., 1970, c. F-10, ss. 66-78. 31. R.S.C, 1970, c. G-7. 32. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 1; Hogg, P., " L i a b i l i t y of the Crown in Aus t ra l i a , New Zealand and the  United Kingdom", op. c i t . p. 3; "Sovereign Immunity: The L i a b i l i t y of  Government and i t s O f f i c i a l s " , The National Association of Attorneys-General Committee on the Off ice of the Attorney-General, U.S.A., Revised Edn. November, 1976, p. 1; Linstead, S.G., "The Law of Crown  P r i v i l ege in Canada and Elsewhere", M.A. Thesis, Carleton Univers i ty, 1968; National Library of Canada, 1968, p. 14. 33. Rand, J . in C.B.C. v. Attorney-General f o r Ontario, [1959] S.C.R. 188 at pp. 196 & 198; Street, H., "Governmental LiaFTTity. A Comparative  Study", op. c i t . p. 1. 34. (1923), 32 C.L.R. 1. 35. Ib id, pp. 11-12. 36. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 1. - 160 -FOOTNOTES - PART TWO, continued 37. Hogg, P., " L i a b i l i t y of the Crown in Au s t ra l i a , New Zealand and the  United Kingdom", op. c i t . p. 3; C.B.C. v. A.G. for Ontario, op. c i t . p. 196; "Sovereign Immunity: The L i a b i l i t y of Government and i t s  O f f i c i a l s " , op. c i t . p. l . 38. LInstead, S.G., "The Law of Crown P r i v i l ege in Canada and Elsewhere", op. c i t . p. 14. 39. Street, H., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 3. " 40. Hogg, P., L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 3. 41. Linstead, S.G., "The Law of Crown P r i v i l e ge in Canada and Elsewhere", op. c i t . pp. 14-15; Hogg, P., "The L i a b i l i t y of the Crown in Aus t ra l i a ,  New Zealand and the United Kingdom", op. c i t . p. 3. 42. C l i f t o n ' s case, Y.B. 22 Ed. I l l , 12. 43. Y.B. 5 Ed. IV, 37. 44. Staunford, W., "Exposit ion of the King ' s Prerogatives", London, 1567, p. 72. 45. Formea Chemicals Ltd. v. Polymer Corporation L t d . , [1967] 61 D.L.R. (2d^ 475 at p. 478; Feather v. Regina (1865), "FIT & S 257 at p. 295-6; Johnstone v. Pedlar, L1921J 2 A.C. Zb2; Linstead, G.S., "The Law of  Crown P r i v i l ege in Canada and Elsewhere", op. c i t . pp. 14-15. 46. Eh r l i ch , L., "Proceedings Against the Crown (1216-1377)", Oxford Studies in Social and Legal History, Vol. VI, No. 12, Oxford 1921, pp. 42 and 127; J a f f e , L.L., " J ud i c i a l Control of Administrative Ac t ion " , Boston, L i t t l e Brown, 1965, p. 199. 47. Rand, J . , in C.B.C. v. A.G. for Ontario, op. c i t . p. 196. 48. Street, H. Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 2. 49. Ib id, pp. 2-3; Hogg, P., "The L i a b i l i t y of the Crown in Au s t ra l i a , New  Zealand and the United Kingdom", pp. 3-4^ 50. E h r i l i c h , L., "Proceedings Against the Crown, (1216-1377)", op. c i t . pp. 175-176; Street, H., "Governmental L i a b i l i t y . A Comparative  Study", op. c i t . p. 2; Hogg, P., "The L i a b i l i t y of the Crown in  Au s t ra l i a , New Zealand and the United Kingdom", op. c i t . p. 4. 51. Holdsworth 9. A history of English Lw, 3rd. edn., 8; Clode, W.B., "The Law and Pract ice of the Pe t i t i on of Right Under Pe t i t i on of Right Act, - 161 -FOOTNOTES - PART TWO, continued 1860", London, W. Clowes, 1887, p. 2; Hogg, P., "The L i a b i l i t y of the  Crown in Au s t ra l i a , New Zealand and the United Kingdom", op. c i t . p. 4; Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 3. 52. 23 & 24 V i c t . c. 34. 53. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 3. 54. Anstey, T.C., Letter to Lord Cottenham as to the Pe t i t i on of Right, London, 1845, p. 8; Manning, J . , "Exchequer P rac t i ce " , London, 1827, p. 84. 55. Halsbury's Law of England, Vol . 9, London, 2nd edn. 1933, p. 688; Robertson, G.S., "The Law and Pract ice of C i v i l Proceedings by and  Against the Crown and Departments of the Government", London, Stevens, 1908, p. 311. 56. Baron de Bode v. Reg., [1848] 13 Q.B. 364 at p. 378. 57. (1874), L.R. 10 Q.B. 31. 58. Viscount Canterbury v. A.G. (1842), 1 Phi 11. 306; Tobin v. Reg. (1864), 16 C.B.N.S. 310; Feather v. Reg. (1865), 6 B. & S. 257. 59. (1865), 6 B. & S. 257. 60. Ib id, p. 294. 61. [1920] A.C. 508 at pp. 530-31. 62. R. v. Cook (1793), 3 T.R. 519; Coomber v. Jus t i ces of Berks (1883), 9 App. Cas. 61; Queen v. Just ices of Kent (1889), 24 Q.B.D. 181; Roberts  v. Ahern (1904) 1 C.L.R. 406; Young v. SS. Scot ia, [1903] A.C. 3UT] Mersey Docks & Harbours Board Trustees v. Cameron, [1864-65] 11 H.L.C. 443; Cooper v. Hawkins, [1904] 2 K.B. 164; Uyriyard Investment Pty. Ltd.  v. Commissioner fo r Railways (N.S.W.) (1955), 93 C.L.R. 376; C.B.C.TT~ A.G. for Ontario, [1959] S.C.R. 188; Province of Bombay v. Municipal  Corporation of Bombay, [1947] A.C. 58; The Queen in Right of Alberta v.  Canadin Transport Commission, [1977] 74 D.L.R. (3d) 257. The general common law p r inc ip le has been narrowed down by s. 16 of the Federal Interpretation Act, which provides that , "No enactment i s binding on Her Majesty or affects Her Majesty or Her Majesty 's r ights or pre-rogatives in any manner, except only as therein mentioned or referred to . It therefore seems that in Canada, the "necessary impl icat ion " i s excluded and for the crown to be bound by a statute, i t must be expressly mentioned or referred to there in. See Laskin, C.J.C. in The  Queen in Right of Alberta v. Canadian Transport Commission, [1977] 75 D.L.R. (3d) 257 at pp. 257-268. ~ - 162 -FOOTNOTES - PART TWO, continued 63. [1977] 75 D.L.R. (3d) 257. 64. Ib id, p. 264. For a detai led discussion of th i s problem see McNair, C.H.H., "Crown Immunity from Statute - Prov inc ia l Governments and  Federal Leg i s la t ion " (1978), 56 Can. Bar Rev. 145. 65. Bank Voor Handel En Scheepvaart v. Administrator of Hungarian Property, L1954J A.C. 584; The City of Hal i fax v. Hal i fax Harbour Commission, [1935] S.C.R. 215; Re C.B.C. Assessment, [1938] 4 D.L.R. 764; Mersey  Docks & Harbours Board Trustees v. Cameron, [1864-65] 11 H.L.C. 443. 66. Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants" (1907), 23 L.Q.R. 12 at p. 14. 67. Street, H., "Government L i a b i l i t y . A Comparative Study", op. c i t . p. 3; Sawer, G. "Shield of the Crown Revis i ted" (1957-58), 1 M.U.L.R. 137. 68. Sawer, G.,"Shield of the Crown Rev i s i t ed " , op. c i t . p. 137. 69. Street, H., "Governmental L i a b i l i t y . A Comprative Study", op. c i t . p. 3. 70. Watkins, "The State as Party L i t i g a n t " , 12 John Hopkins U. Studies in the History of P o l i t i a l Science, Series XLV, No. 1, 1927, quoted in "Sovereign Immunity: The L i a b i l i t y of Government and i t s O f f i c i a l s " , op. c i t . p. 1. 71. Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 14. 72. McKenzie-Kennedy v. A i r Counci l , [1927] 2 K.B. 517. 73. Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 2. 74. Maritime Bank v. The Queen (1890), 17 S.C.R. 657, The Queen v. The Bank  of Nova Scotia (1882-86), 11 S.C.R. 1. 75. (U.S. 1824), 9 Wheat 904. 76. Ib id, p. 907. 77. It was affirmed by Mr. Just ice Sutherland in Ohio v. Helvering,  Commissioner of Internal Revenue (1933), 292 U.S. 360 at pp. 368-369. See also Friedmann, W., "Governmental (Public) Enterpr i se " , op. c i t . p. 40. 78. (1874), L.R. 10 Q.B. 31. 79. [1901] 2 K.B. 781. - 163 -FOOTNOTES - PART TWO, continued 80. Ib id , p. 789. 81. Ib id, p. 790. 82. Ib id, p. 791. 83. [1915] 1 K.B. 45. 84. Ib id, p. 52. 85. Gooderham & Worts Ltd. v. C .B .C , [1939] 4 D.L.R. 241; International  Railway Co. v. Niagra Parks Commission, [1941] 3 D.L.R. 385; Yeats &  Yeats v. Central Mortgage and Housing Corporation, [1950] S.C.R. 513; Marcel Langlois v. Canadian Commercial Corporation, [1956] S.C.R. 954. 86. S. 7. Atomic Energy Control Act, R.S.C., 1970, c. A-19. 87. Friedmann, W., "Governmental (Public) Enterpr i se " , op. c i t . p. 40. 88. Ib id, p. 40. 89. [1978] 2 A l l E.R. 1043 (H.L.). 90. Ib id, p. 1052. 91. On closer analysis i t appears that Counsel 's s k i l f u l rgument was bound to f a i l even i f the factual f indings had been d i f fe rent . I f 'Rolimpex' was not a separate legal ent i ty or personality but rather part of the Pol ish Government, i t would not, according to Lord Salmon, have been able to re ly on government intervention as ground for escaping l i a b i l i t y , but then i t might have successful ly put forward the doctrine of Sovereign Immunity as a defence to the suit for damages for breach of contract. The doctrine of Sovereign Immunity i s discussed in Section VI of th i s part. 92. Friedmann, W., Governmental (Public) Enterprise, op. c i t . p. 40. 93. Re C.B.C Assessment, op. c i t . ; C.B.C. V. Cyr, [1939] 4 D.L.R. 233; G i lbe r t v. T r i n i t y House Corporation (1886), "17 Q.B. 795; Mersey Docks  and Harbours Board Trustees v. Cameron, op. c i t ; T e r r i t o r i a l Aux i l i a r y  Forces Association v. Nichols, [1949J 1 K.B. 35 at p. 45; Sawer, G., "Sh ie ld of the Crown Rev i s i ted " , op. c i t . p. 137; Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 16; Tennant, N.B., ""Servants of the Crown", op. c i t . p. 166. 94. Marks v. Forests Commission, [1936] V.L.R. 344; State E l e c t r i c i t y  Commission of V i c t o r i a v. Mayor, Counci l lors & C i t i zens of the C i ty of  Melbourne (1968-69), 42 A.L.J.R. 179. 95. Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 12. - 164 -FOOTNOTES - PART TWO, continued 96. Ib id, p. 20. 97. Heiner y. Scott (1914), 19 C.L.R. 381; Quebec Liquor Commission v.  Moore, [1924J 4 D.L.R. 901; National Harbours Board v. Langel ier, [1969] S.C.R. 60; Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 16; Scott, F.R., "Administrat ive Law, 1923-1947", op. cTtf. p. 282; Tennant, N.B., "Servants of the Crown", op. c i t . p. 159. 98. Mellenger v. New Brunswick Development Corporation, [1971] 1 W.W.R. 604; Baccus S.R.L. v. Serv ic io Nacional Del Tr igo, [1957] 1 Q.B. 438. 99. Although they have frequently been used by the courts, no attempt has been made to define them. 100. [1953] 1 D.L.R. 500. 101. Ib id, p. 512. 102. [1941] 3 D.L.R. 385 (P.C.). 103. Ib id, p. 393. 104. See, for example, Marti and, J . in National Harbours Board v. Langel ier, [1969] S.C.R. 60 at p. 71; Denning, L.J, in Tarn!in v. Hannaford, [1950] 1 K.B. 18 at p. 22; Wil l iams, Webb, Taylor, J J . in Wynyard Investment  Pry. Ltd. v. Commissioner fo r Railways (N.S.W.) (1955), 93 C.L.R. 376 at p. 382. 105. "Administrat ive Law, 1923-47", op. c i t . p. 282. 106. [1941] A.C. 328. 107. " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 16. 108. K i t t o , J . in Wynyard Investment Pty. Ltd. v. Commissioner for Riys. (N.S.W.), op. c i t . pp. 392-93. See also Hogg, P., " L i a b i l i t y of the  Crown in Au s t r a l i a , New Zealand and the United Kingdom", op. c i t . p. 109. Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 205; Scott, F.R., "Administrat ive Law,  1923-47", op. c i t . p. 284; Tennant, N.B., "Servants of the Crown", op. c i t . p. 158; K i t t o , J . in Wynyard Investment Pty. Ltd. v. Commissioner  f o r Riys. (N.S.W.), op. c i t . pp. 392-95; Lord Morton, Lord Reid and Lor Keith in Bank Voor Handel En Scheepyaart v. Administrator of Hungarian  Property, L1954] A.C. 584 at pp. 607, 615 & 635 respect ive ly; Lord Watson in Coomber v. The Ju s t i ce of the County of Bershire (1893), 9 App. Cas. 61 at p. 74; Mersey Docks & Harbours Board Trustees v.  Cameron (1865), 11 H.L.C. 443 at pp. 504-505. - 165 -FOOTNOTES - PART TWO, continued 110. See, for example, Lord Tucker and Lord Asquith in Bank Voor Handel En  Scheepvaart v. Administrator of Hungarian Property, op. c i t . pp. 627-29 and 629-32 respect ively. 111. [1954] A.C. 584. 112. Lord Tucker, i b i d , p. 627 gives owners or occupiers of property exc lus ive ly used for purposes of government as examples of persons in cons imi l i casu with servants or agents of the crown. See also Lord Asquith, pp. 630-31. 113. (1955), 93 C.L.R. 376. 114. S. 5 of the Landlord and Tennant (Amendment) Act provided;- "This Act shal l not bind (a The Crown in r ight of the commonwealth or of the Stctt6• • • 115. (1955), 93 C.L.R. 376 at p. 395. 116. Grain Elevators Board v. Dunmunkle Corporation (1946), 73 D.L.R. 70, at pp. 74-75; Launceton Corporation v. Hydro-Electr ic Commission (1959), 10 C.L.R. 654 at p. 658. 117. Hogg, P., L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 205. 118. Ib id, pp. 205-206. 119. Ib id, p. 206. 120. Lord Keith in Bank Voor Handel En Scheepvaart v. Administrator of  Hungarian Property, op. c i t . p. 636; Tennant, N.B., "Servants of the  Crown", op. c i t . p. 158; T r e i t e l , G.H., "Crown Proceedings: Some Recent  Developments", [1957] Publ ic Law 321 at p. 327; G r i f f i t h , J.A. i n , "Publ ic Corporations as Crown Servants" (1952), Vo l . IX, No. 2 U.T.L.J. 169 at p. 185 says, "The re lat ionship of the public corporation to the crown i s not to be found in any private agreement, but in a public Act of Parliament. It i s a mater of status, not contract. " 121. G r i f f i t h , J.A., "Pub l i c Corporations as Crown Servants", op. c i t . pp. 182-189; Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . pp. 29-31; T r e i t e l , G.H., "Crown Proceedings: Some Recent  Developments", op. c i t . pp. 327-330; Hogg, P., L i a b i l i t y of the Crown  i n Au s t r a l i a , New Zealand and the United Kingdom", op. c i t . pp. 207-210; Friedmann, W., "Legal Aspects of Incorporated Publ ic Author i t i e s " , 22 A .L . J . 7 at pp. 9-16; S e l l a r , W., "Government Corporations", Parts I & I I, 24 Can. Bar Rev. 393 & 489 at pp. 394-402, 489-506; Scott, F.R., "Administrative Law, 1923-47", op. c i t . p. 284; Moore, W.H., " L i a b i l i t y  fo r Acts of Publ ic Servants", op. c i t . pp. 16-27; Sawer, G., "Shie ld of  the Crown Rev i s i ted " , op.~c i t . pp. 140-150; Tennant, N.B., "Servants of  the Crown", op. c i t . pp. 158-171. - 166 -FOOTNOTES - PART TWO, continued 122. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 29; Scott, F.R., "Administrat ive Law, 1923-47", op. c r t T p . 284; Friedmann, W., "Legal Aspects of Incorporated Publ ic Au tho r i t i e s " , op. c i t . p. 11. 123. (1946) 73 C.L.R. 70. 124. Ib id, p. 76. 125. ]1924] 4 D.L.R. 901; In re Oriental Holding Pty. L t d . , [1931] V.L.R. 279. 126. Fox v. Government of Newfoundland, [1898] A.C. 667. 127. [1927] A.C. 899. 128. "Legal Aspects of Incorporated Publ ic Au tho r i t i e s " , op. c i t . 129. Ib id, pp. 11-12; See also Tennant, N.B., "Servants of the Crown", op. c i t . pp. 160-161. 130. Quebec Liquor Commission v. Moore, op. c i t . ; Scott, F.R., "Administrat ive Law, 1923-47", op. c i t . p. 284; Friedmann, W., "Legal  Aspects of Incorporated Publ ic Au tho r i t i e s " , op. c i t . p. 10; Sawer, G., "Sh ie ld of the Crown Rev i s i ted " , op. c i t . p. 142. 131. Tennant, N.B., "Servants of the Crown", op. c i t . p. 160. 132. See, fo r example, s. 3(3) Canada Deposit Insurance Corporation Act ; R.S.C, 1970, c. C-3. 133. [1924] 4 D.L.R. 901. 134. Re C.B.C Assessment, op. c i t . ; The C i t y of Hal i fax v. Hal i fax Harbour  Commission, op. c i t . 135. "Servants of the Crown", op. c i t . p. 160. 136. That i s , apart from the question of taxat ion. 137. "Shield of the Crown Rev i s i ted " , op. c i t . pp. 145-46. 138. [1954] A.C. 584. 139. Supra, p. 45. 140. Sawer, G., "Sh ie ld of the Crown Rev i s i t ed " , op. c i t . p. 146. 141. International Railway Co. v. Niagara Parks Commission, op. c i t . , Michaud v. C.N.R. Co., L1924J 3 D.L.R. 1; C.B.C v. Cyr, [1939] 4 D.L.R. 233. - 167 -FOOTNOTES - PART TWO, continued 142. [1924] 3 D.L.R. 1. 143. Ib id, pp. 4-5. 144. Repatr iat ion Commission v. Kirkland (1923), 32 C.L.R. 1 at p. 15; Metropolitan Meat Industry Board v. Sheedy, op. c i t . p. 905; Roper v.  Commissioners of Publ ic Works , [1915] 1 K.B. 45; Publ ic Works  Commissioners v. Pontypridd Masonic Hall Co., [1920J 2 K.B. 233. 145. " L i a b i l i t y for Acts of Publ ic Servants", op. c i t . p. 20. 146. Friedmann, W., "Legal Aspects of Incorporated Publ ic Au tho r i t i e s " , op. c i t . p. 10. 147. Ib id, p. 11. 148. Sawer, G., "Sh ie ld of the Crown Rev i s i ted " , op. c i t . p. 148. 149. Salomon v. Salomon & Co., [1897] A.C. 22 at p. 30. 150. [1861-73] A l l E.R. 397; (1866), L.R., 1 H.L. 687. 151. Ib id, pp. 402-403, 707. 152. Mr. Just ice Lowe in Marks v. Forests Commission, [1936] V.L.R. 344 at p. 350; Repatr iat ion Commission v. K i rk land, op. c i t . ; R. v. Achtem (1980), 19 A.R. 338; Tamlin v. Hannaford, op. c i t . ; Moore, W.H., L i a i b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 20; Friedmann, W., "Legal Aspects of Incorporated Publ ic Au tho r i t i e s " , op. c i t , pp. 10-12; Se l l a r , W., "Government Corporations", op. c i t . pp. 394-489; Scott, F.R., "Administrative Law> 1923-47", op. c i t . p. 384; Sawer, G., "Shield~of the Crown Rev i s i ted " , op. c i t . p. 141. 153. (1920), 28 C.L.R. 129 at p. 170; see also K i t t o , J . , in Wynyard  Investment Pty. Ltd. v. Commissioner fo r Rlys. (N.S.W.), op. c i t . p. 154. (1942) 65 C.L.R. 373. 155. Ib id, p. 423. 156. (1945), 326 U.S. 572. 157. Ib id, p. 591. 158. Latham, C.J. in the Uniform Tax case (1942), 65 C.L.R. 373 at p. 423; G r i f f i t h , J.A., "Pub l ic Corporations as Crown Servants", op. c i t . p. 184. - 168 -FOOTNOTES - PART TWO, continued 159. Sawer, G. "Sh ie ld of the Crown Rev i s i t ed " , op. c i t . p. 144; Merret, A . J . & Sykes, A., "F inancia l Control of State Industry", The Banker, Ap r i l 1962, p. 233; I rv ine, A.G., "The Delegation of Authority to Crown  Corporations" (1971), 14 Can. Pub. Adm. 556 at p. 564. 160. Lamont, F.D., "Emerging Neo-Mercantilism in Canadian Po l i cy : State  Enterprises and Foreign Direct Investment", 8 Vanderbilt Journal of Transnational Law 121 at p. 128; Thomas L. Lefebure, House of Commons Debates, 1978, p. 2488. 161. It i s also required to provide radio and te l ev i s i on services in both o f f i c i a l languages across the nation. 162. See also A i r Canada, Farm Credit Corporation. 163. Friedmann, W., "Legal Aspects of Incorporated Publ ic Au tho r i t i e s " , op. c i t . p. 15. 164. Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 24; Friedmann, W., "Legal Aspects of Incorporated Publ ic Au tho r i t i e s " , op. c i t . p. 12; T r e i t e l , G.H., "Crown Proceedings: Some Recent  Developments", op. c i t . p. 327; Street, H., "Government L i a b i l i t y . A  Comparative Study", op. c i t . p. 30; Hogg, P., " L i a b i l i t y of the Crown  in Au s t r a l i a , New Zealand and the United Kingdom", op. c i t . p. 207. 165. Gooderham & Worts Ltd. v. C .B .C, [1939] 4 D.L.R. 241 at p. 242. 166. [1898] A.C. 667. 167. [1927] A.C. 899. 168. Sanitary Commissioners for G ib ra l ta r v. O r f i l a (1890), 15 App. Cas. 400; Wynyard Investment Pty. Ltd. v. Commissioner fo r Riys. (N.S.W.) op. c i t . ; Bank Voor Handel En Scheepvaart v. Administrator of Hungarian  Property, op. c i t . ; International Railway Co. y. Niagara Parks  Commission, op. c i t ; The C i ty of Hal i fax v. Hal i fax Harbour Commission, op. c i t . ; Oatway v. Canadian Wheat Board, [1944] 3 W.W.R. 337; Repatr iat ion Commission v. K i rk land, op. c i t . ; Marks v. Forests  Commission, op. c i t . ; R. v. Achtem, op. c i t . 169. " . . . the quetion whether a person or corporation i s a servant of the crown or not depends upon the degree of control the crown through i t s ministers can exercise over him in the performance of his du t i e s . . . . " Per Wil l iams, Webb, Taylor, J J . in Wynyard Investment Pty. L td . v.  Commissioner for Railways (N.S.W.), op. c i t . p. 391. See also Lord Reid in Bank Voor Handel En Scheepvaart v. Administrator of Hungarian  Property, op. c i t . pp. 616-17; Martland, J . in F i d e l i t y Insurance Co.  of Canada v. Workers' Compensation Board, [1980J 102 D.L.R. (3d) 255 at p. 256. - 169 -FOOTNOTES - PART TWO, continued 170. Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 24. 171. " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 24. 172. Oatway v. Canadian Wheat Board, op. c i t . 173. Wynyard Investment Pty. L td . v. Commissioner for Riys. (N.S.W.), op. c i t . p. 391; Bank Voor Handel En Scheepvaart v. Administratory of  Hungarian Pty. , op. c i t . pp. 616-17; Sanitary Commissioner for  G ib ra l t o r v. O r f i l a , op. c i t . 174. The City of Hal i fax v. Hal i fax Harbour Commission, op. c i t . pp. 223 & 236. 175. [1935] S.C.R. 215. 176. Ib id, p. 223. 177. Ib id, p. 226. 178. "Shie ld of the Crown Rev i s i ted " , op. c i t . p. 142. 179. " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the United  Kingdom", op. c i t . p. 208. 180. For example, the interests that are sought to be protected. 181. Bank Voor Handel En Scheepvaart v. Administrator of Hungarian Pty . , op. c i t . p. 617; Wynyard Investment Pty. Ltd. v. Commissioner for Riys. (N.S.W.), op. c i t . p. 391; E l e c t r i c i t y Commission (N.S.W.) v. Austra l ian United Press (1954), 55 S.R. (N.S.W.) 118 at p. 126; Sawer, G., "Sh ie ld of the Crown Rev i s i t ed " , op. c i t . p. 144; Hogg, P., " L i a b i l i t y of the Crown in Au s t ra l i a , New Zealand and the United  Kingdom", op. c i t . pp. 208-209. 182. (1980), 19 A.R. 338. 183. Ib id, p. 347. 184. Statutes of A lberta, 1967, c. 34. 185. Friedmann, W., "Legal Aspect of Incorporated Publ ic Au tho r i t i e s " , op. c i t . p. 10; Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 29. Various tests are considered in Tarn!in v. Hannaford, op. c i t . ; Quebec Liquor Commission v. Moore, op. c i t . ; The City of  Hal i fax v. Hal i fax Harbour Commission, op. c i t . and R. v. Achtem, op. c i t . 186. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . pp. 28-29. - 170 -FOOTNOTES - PART TWO, continued 187. Friedmann, W., "Legal Aspects of.Incorporated Publ ic Au tho r i t i e s " , op. c i t . p. 10. 188. Mersey Docks & Harbours Board Trustees v. Gibbs, op. c i t . ; State E l e c t r i c i t y Commission of V i c t o r i a v. The City of Melbourne, op. c i t . ; Quebec Liquor Commission v. Moore, op. c i t . ; Ke i fer & Ke i fer v. ^ con s t r uc t i on Finance Corporation (1939), 306 U.S. 381; Southampton anH Tt.rhin F loat ing Bridge & Road Co. v. Southampton Board of Health Statute " , 5 A .L .J . 216 at p. 221; Se l l a r , W., "Government  Corporations", op. c i t . p. 506. 189. Tennant, N.B., "Servants of the Crown", 10 Can. Bar Rev. 155 at pp. 158-159. 190. Sawer, G., "Shie ld of the Crown Rev i s i t ed " , op. c i t . p. 145. 191. Ib id, p. 145; Street, H., "Governmental L i a i b l i t y . A Comparative  Study", op. c i t . pp. 28-29; T r e i t e l , G.H., "Crown Proceedings: Some  Recent Developments", op. c i t . p. 329. 192. (1955), 93 C.L.R. 376. 193. (1951), 84 C.L.R. 140. 194. Ib id, p. 152. 195. [1968-69] 42 A.L.J.R. 179. 196. S. 21(1). 197. [1968-69] 42 A.L.J.R. 179 at p. 180. 198. Michaud v. C.N.R. Co., op. c i t ; Alberta Government Telephones v. Selk, op. c i t . ; Yeat & Yeats v. Central Mortgage and Housing Corporation, op. c i t . ; National Harbours Board v. Langel ier, op. c i t . 199. [1939] 4 D.L.R. 233. 200. [1944] 3 W.W.R. 337. 201. [1940] O.R. 33. 202. 14 Geo. VI, c. 51 (1950). 203. Canadian Overseas Telecommunications Corporation (now Teleglobe Canada), Northwest Te r r i to r i e s Power Commission, Canadian Commercial - 171 -FOOTNOTES - PART TWO, continued Corporation, Atomic Energy Control Board, Industr ial Development Bank, F isher ies Prices Support Board, Export Credits Insurance Corporation, Agr icu l tura l Prices Support Board, The Surplus Crown Assets Corporation, Director of Veterans' Lands, C.B.C, Canadian Wheat Board, Research Council, Canadian Farm Loan Board and the Federal D i s t r i c t Commission. 204. See, for example, s. 3(2) Canadian Deposit Insurance Corporation Act, R.S.C, 1970, c. C-3; s. 3(1) Government Companies Opertion Act, R.S.C, 1970, c. G-7. 205. The C.N.R. Co. Act, R.S.C, 1970, c. C-10 i s an exception. 206. [1959] S.C.R. 189. 207. R.S.C., 1970, c. L-13. 208. S. 40(1) Broadcasting Act, R.S.C, 1970, c B - l l . 209. [1955] S.C.R. 787. 210. National Harbours Board v. Langel ier, op. c i t . ; Alberta Government  Telephones v. Selk, op. c i t . ; Yeats & Yeats v. C.M.H.C, op. c i t . ; Marcel Langlois v. Canadian Commercial Corporation, op. c i t . ; Bank Voor  Handel En Scheepvaart v. Administrator of Hungarian Property, op. c i t . p. 607; Formea Chemicals Ltd. v. Polymer Corporation L t d . , op. c i t . 211. [1956] S.C.R. 594. 212. S. 3(5) Canadian Commercial Corporation Act, R.S.C, 1970, c. C-6. 213. [1956] S.C.R. 594 at p. 595. 214. [1974] 4 W.W.R. 205. 215. Alberta Government Telephones Act, R.S.A., 1970, c. 12. 216. Westeel-Rosco Ltd. v. Board of Governors of South Saskatchewan Hospital  Centre, [1977] S.C.R. 238, F i d e l i t y Insurance Co. of Canada v. Workers'  Compensation Board (1980), D.L.R. (3d) 255. 217. [1959] S.C.R. 189. 218. [1955] S.C.R. 787. 219. (1980), 19 A.R. 338. 220. [1956] S.C.R. 954. 221. [1969] S.C.R. 60. - 172 -FOOTNOTES - PART TWO, continued 222. S. 3(2) National Harbours Board Act, R.S.C, 1970, c. N-8. 223. Banner Investments Ltd. v. Saskatchewan Telecommunications (1977), 78 D.L.R. (3d) 127. 224. Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants, op. c i t . pp. 14-15. See also supra, p. 12. 225. Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 15. 226. Marti and, J . in National Harbours Board v. Langel ier, op. c i t . pp. 71-72. 227. Peccini v. Lonegan & Toronto & Northern Ontario Railway Commission, [1934] 4 D.L.R. 776; Bainbridge v. Postmaster-General, L1906J 1 K.B. 178; Sanitary Commissioner fo r G ib ra l ta r v. O r f i l a (1890), 15 App. cas. 40; Quebec Liquor Commission v. Moore, op. c i t . ; Marks v. Forests  Commission, op. c i t . ; Roper v. The Commissioners of His Majesty rs Works  and Public" Bui ld ings, op. c i t . 228. (1939), 4 D.L.R. 241 at p. 242. 229. (1924), 4 D.L.R. 901. 230. [1936] V.L.R. 344. 231. Scott, L .J . in Royster v. Cavey, [1947] 1 K.B. 204 at pp. 206-207; Viscount, Simon in Adams v. Naylor, [1946] A.C. 543 (H.L.) at p. 550; Hogg, P., " L i a b i l i t y of the Crown in Au s t ra l i a , New Zealand and the  United Kingdom", op. c i t . p. 62; Will iams, G., "Crown Proceedings", pp. 1.7-19. 232. [1946] A .C 543 at p. 550; See also Royster v. Cavey, op. c i t . 233. Wil l iams, G., "Crown Proceedings", op. c i t . pp. 17-19. 234. Royster v. Cavey, op. c i t . 235. McKenzie-Kennedy v. A i r Counci l , op. c i t . ; Royster v. Cavyey, op. c i t . ; Adams v. Naylor, op. c i t . ; Bainbridge v. Postmaster-General, op. c i t . ; Formea Chemicals Ltd. v. Polymer Corporation L t d . , op. c i t . at pp. 484-85; Johnstone v. Pedlar, L1921] 2 A.C. 262; Dicey, A.V., " Introduction  to the Study of the Law of the Const i tut ion " , London, MacMillan, 10th Ed., 1959, p. 193; Hogg, P., " L i a b i l i t y oT the Crown in Au s t ra l i a , New  Zealand and the United Kingdom", op. c i t . p. 109. 236. (1865), 6 B. & S. 257 at p. 297. 237. Bainbridge v. Postmaster-General, op. c i t . - 173 -FOOTNOTES - PART TWO, continued 238. T r e i t e l , G.H., "Crown Proceedings: Some Recent Developments", op. c i t . p. 327. 239. Ib id, p. 331; Wi l l iams, G., "Crown Proceedings", op. c i t . p. 21. 240. Wil l iams, G., "Crown Proceedings", op. c i t . p. 21. 241. Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 110. 242. Atk in , L . J . , McKenzie-Kennedy v. A i r Counci l , op. c i t . pp. 532-33. 243. Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom, op. c i t . p. 109; T r e i t e l , G.H., "Crown ProceedingsT  Some Recent Developments", op. c i t . 331; Street, H., "Governmental - L i a b i l i t y . A Comparative Study", op. c i t . p. 32. 244. Atk in , L . J . , in McKenzie-Kennedy v. A i r Counci l , op. c i t . pp. 532-33. 245. Canterbury v. Attorney-General, [1842] 1 Ph. 306 at p. 324; National  Harbours Board v. Langel ier, op. c i t . p. 73; McKenzie-Kennedy v. A i r  Counci l , op. c i t . pp. 532-33. 246. Bainbridge v. Post-master General, op. c i t . 247. [1915] A.C. 705. 248. Ib id, pp. 713-14; see also H.M.S. Truculent, [1952] P. 1; The Lady  Gwendolen, [1965] P. 294 (C7A7)~ 249. [1953] Argus, L.R. 229 at p. 243, see also Wells, J.A. in Formea  Chemicals Ltd. v. Polymer Corporation L t d . , op. c i t . at pp. 484-85. 250. "Shie ld of the Crown Rev i s i ted " , op. c i t . p. 142. 251. Geddis v. Proprietors of Bann Reservoir (1878), 3 App. cas. 430 at p. 455; Evershed, M.R., in Pride of Derby v. B r i t i s h Celenese L t d . , [1953] 1 Ch. 149 at p. 163; The Hammersmith Rly. Co. v. Brand, L.R. 4 H.L. 171; East Suffolk River Catchment Board v. Kent, U941J A.C. 74; Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the United  Kingdom", op. c i t . p. 72. 252. Burmah O i l Co. Ltd. v. Lord Advocate, [1965] A.C. 75. 253. Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 72. 254. Managers of the Metropolitan Asylum D i s t r i c t v. H i l l & Others (1881), 6 App. cas. 193; Mersey Docks and Harbour Board Trustees v. Gibbs, op. c i t . ; Pride of Derby v. B r i t i s h Celenese L td . , op. c i t . - 174 -FOOTNOTES - PART TWO, continued 255. Wheeler v. Publ ic Works Commissioners, [1903] 2 I.R. 202 at p. 256. [1903] 2 I.R. 202 at p. 229. 257. [1941] A.C. 74. 258. Ib id , p. 102. 259. Mersey Docks and Harbour Board Trustees v. Gibbs, op. c i t . ; Michaud v.  C.N.R. Co., op. c i t . ; G i lber t v. T r i n i t y House Corporation, op. c i t . ; McKenzie-Kennedy v. A i r Counci l , op. c i t . ; Fisher v. Ruisiip-Northwood  UrEan D i s t r i c t Council and Middlesex County Counci l , U945J 1 K.B. 584 (C.A); Pride of Derbey v. B r i t i s h Celenese L t d . , op. c i t . ; National  Harbours Board v. Langel ier, op. c i t . 260. (1881), 6 App. Cas. 193. 261. 30 V i c t , c 6. 262. (1881), 6 App. Cas. 193 at p. 199. 263. Ib id, pp. 202-206; see also Lord Watson at pp. 209-216; Pride of Derbey  v. B r i t i s h Celenese L t d . , op. c i t . 264. (1881), 6 App. Cas. 193 at p. 199. 265. [1916] 2 A.C. 511 at p. 519. 266. See also Attorney-General of Canada v. Hal l e t & Carey L t d . , [1952] A.C. 427 at 450; Ross-Clunis v. Papadopoullas, [1958] 1 W.W.R. 546. 267. [1861-73] A l l E.R. 397. 268. (1886), 17 Q.B.D. 759. 269. [1969] S.C.R.. 60. 270. Ib id, p. 64. 271. [1903] 2 I.R. 202 at p. 229. 272. [1969] S.C.R. 60 at p. 72. See also Atk in , L .J . in McKenzie-Kennedy v.  A i r Counci l , op. c i t at p. 533 where he says, "The further objection that any to r t would be u l t ra v ires the corporation is of quite d i f ferent character, and must depend on the duties of the corporation and the circumstances of the par t i cu la r act complained of. I do not think that the doctrine of u l t ra vires would be of universal appl icat ion to every to r t or that i t would be to the crown's advantage that i t should." - 175 -FOOTNOTES - PART TWO, continued 273. R.S.C, 1970, c. C-38. 274. S. 3(1). 275. 10 & 11 Geo. VI c. 44. 276. S. 2 ( l ) ( a ) . 277. S. 2 ( l ) (b ) . 278. S. 2 ( l ) ( c ) . 279. S. 2(2). 280. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . pp. 31-32; T r e i t e l , G.H., "Crown Proceedings: Some Recent Developments", op. c i t . p. 330. 281. [1955] S.C.R. 787. 282. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 31. 283. Gower, L.C.B., "The Pr inc ip les of Modern Company Law", op. c i t . pp. 71-72. 284. Op. c i t p. 69 ( vo l . 5). 285. "The Delegation of Authority to Crown Corporations", op. c i t . p. 568. 286. [1967] 61 D.L.R. (2d) 475. 287. Ib id, p. 482. 288. See Wells, J.A. (dissenting) at pp. 484-85. 289. The Parliament Beige (1880), 5 P.D. 197; Campania Naviera Vascongado v.  SS. C r i s t i n a , L1938J A.C. 485; The Canadian Conqueror (1962), 33 D.L.R. (2d) 628; Trendtex Trading Corporation v. Central Bank of N iger ia, [1977] 2 W.L.R. 356 (C.A.); Primp Congreso Del Part ido, [1978]~Q7B. 500; s. 1 State Immunity Act, 1978 (U.K.); s. 1604 Foreign Sovereign Immunities Act, 1976 (U.S.A.). 290. [1920] P. 30 ( C A . ) . 291. [1944] 4 D.L.R. 1. 292. Ib id, p. 7. It should be noted that as o r i g i n a l l y evolved, the doctrine admitted of three expections, v i z . , - 176 -FOOTNOTES - PART TWO, continued 1. cases in which the foreign state waived i t s immunity 2. cases in which r ights in property acquired by succession in the host state were in issue 3. cases involving immovable property s i tuate in the state of j u r i s d i c t i o n . However, with the passage of time and change in circumstances other exceptions to the doctrine have appeared. For these exceptions see Caste l , J .G. , "Exemptions from J u r i s d i c t i o n in Canadian Courts", 9 Canadian Yearbook of International Law 159 at pp. 161-162; Foreign Immunities Act, 1976 (U.S.A.), s. 1605; State Imnunity Act, 1978 (U.K.), ss. 3-11 and s. 14; Thai-Europe Tapioca Service L td . v.  Government of Pakistan, Directorate of Agr i cu l tu ra l Supplies, U975] 1 W.L.R. 1485 at pp. 1490-91. ; 293. Baccus S.R.L. v. Serv ic io Nacional Del Tr igo, [1957] 1 Q.B. 438; The  Porto Alexandre, op. c i t . ; Dessaulles v. Republic of Poland, op. c i t . ; Mellenger v. New Brunswick Development Corporation, [1971] 1 W.W.R. 604; Government of the Democractic Republic of the Congo v. Venne (1972), 22 D.L.R. (2d) 669. 294. Kraj ina v. The Tass Agency & Another, [1949] 2 A l l E.R. 247. 295. Juan Ysmael & Co. Inc. v. Government of the Republic of Indonesia, L1954J 3 A l l E.R. 236. 296. (1923), 20 Ky. 18. See also The Parlement Beige, op. c i t . p. 207. 297. A l l states are deemed equal i r respect ive of t he i r s i ze , power, wealth or technological attainment. 298. See B re t t , L . J . , in The Parlement Beige, op. c i t . p. 214; Lord McMillan in The C r i s t i n a , op. c i t . p. 498; Dessaulles v. Republic of Poland, op. c i t . 299. Lord Denning in Thai-Europe Tapioca Service Ltd. v. Government of  Pakistan, op. c i t . p. 1490. See also Isbrandtsen Tankers Inc. v.  President of India, [1971] 446 F. 2d. 1198 at p. 1200 where the Court of Appeals of the Second C i r cu i t in New York summed up the posit ion thus; "A j u d i c i a l decision against the government of a foreign nation could conceivably cause severe international repercussions, the f u l l consequences of which the courts are in no posit ion to pred ict . " 300. Mellenger v. New Brunswick Development Corporation, op. c i t . ; Baccus  S. .L. v. Serv ic io Nacional Del Tr igo, op. c i t . ; Kraj ina v. The Tass  Agency, op. c i t . ; Trendtex Trading Corporation v. Central Bank of  N iger ia , op. c i t . - 177 -FOOTNOTES - PART TWO, continued 301. Kraj ina v. The Tass Agency, op. c i t . p. 247. 302. [1957] 1 Q.B. 438. 303. Ib id, p. 450. 304. Ib id, p. 472. 305. 13 F.R.D. 280 (1952). 306. See also Cohen, L .J . in Krajina v. The Tass Agency, op. c i t . at p. 284 where he sa id, ". . . i t i s c lear from our Acts of Parliament that we do not consider the fact that a government department may have a separate legal j u r i s t i c existence as necessarily incompatible with i t being a department of state for which immunity can be claimed." 307. S. 1603(b)(i) and ( i i ) . 308. S. 14(l)(b) and (c). 309. S. 14(1). 310. S. 14(2). 311. Alberta Government Telephones v. Selk, op. c i t . 312. Trendtex Trading Corporation v. Central Bank of N iger ia , op. c i t . p. 370. 313. [1971] 1 W.W.R. 604. 314. Ulen & Co. v. Pol i sh National Bank, 24 N.Y. 2d. 201; Coale v. Societe  Co-op Suisse Pes Charbons Basle D.C. (1921), 21 Fed. 2d. 180; U.S. v.  Deutches Kal isyndikat Gesellscha"ft~Tl929), 31 Fed. 2d. 199; Hannes v.  Kingdom of Roumania Monopolies In s t i tute (1940), 260 A.D. 189, 20 N.Y. 2d. 824; C. Czanikow Ltd. v. Centrala Handlu Zagranicznego 'Rolimpex', [1978] 2 A l l E.R. 1043; Trendtex case. 315. [1977] 2 W.L.R. 356. 316. (1929), 31 Fed. 2d. 199. 317. Ib id, p. 202. 318. (1940), 24 N.Y. 2d. 201. 319. Baccus S.R.L. v. Serv ic io Nacional Del Tr igo, op. c i t . p. 461. 320. See, for example, The Schooner Exchange (1812), 7 Cranch 116; The - 178 -FOOTNOTES - PART TWO, continued Charkieh (1873), L.R. 4 A & E 59; The Parlement Beige, op. c i t . ; Penthouse Studios Inc. v. Venezuela (1970), 8 D.L.RT (3d) 685 (Que. C.A.); Rahimtoola v. Nizam of Hyderbad, [1958] A.C. 379; Thai-Europe  case, op. c i t . at p. 1491; The Phi H i pine Admiral, [1976] 2 W.L.R. 214 espec ia l ly at pp. 232-33; A l f red Dunhill of London Inc. v. Republic of  Cuba, May 24, 1976, Supreme Court of U.S.; Trendtex case, op. c i t . 321. 26 U.S. Department of State B u l l e t i n , 984. 322. European Convention on State Immunity, 1972, Brussels Convention of 1926, 176 L.N.T.S. 199. 323. State Immunity Act, 1978 (U.K.), Foreign Sovereign Immunities Act, 1976 (U.S.A.). 324. (1972), 22 D.L.R. (2d) 669 (Supreme Court, Canada). 325. Caste l , J .G. , "Exemptions from J u r i s d i c t i o n in Canadian Courts", op. c i t . p. 170. 326. See also, A l lan Construction Ltd. v. Government of Venezuela, [1968] Que P.R. 145; Penthouse Studios Inc. v. Venezuela, op. c i t . 327. Caste l , J .G. , "Exemptions from J u r i s d i c t i o n in Canadian Courts", op. c i t . p. 170. 328. This i s an improvement on Denning, L . J . ' s words in the Trendtex case, op. c i t . at p. 370. 329. "The Problem of Ju r i s d i c t i ona l Immunities of Foreign States " , 28 B r i t i s h Yearbook of International Law, 220 at p. 240. 330. Trendtex case, op. c i t . p. 376. 331. "Governmental (Public) Enterpr i se " , op. c i t . p. 79. 332. See the cases quoted by Lauterpacht, "The Problem of Ju r i s d i c t i ona l  Immunities of Foreign States " , op. c i t . pp. 222-25. 333. (1972), 22 D.L.R. (2d) 669. 334. [1968] Que. P.R. 145. 335. Lord Denning in Rahimtoola v. Nizam of Hyderbad, op. c i t . p. 422. 336. Shaw, L.J . in the Trendtex case, op. c i t . p. 389; s. 1603(d) Foreign Sovereign Immunities Act, 1976 (U.S.). 337. Friedmann, W., "Governmental (Public) Enterpr i se " , op. c i t . p. 80. - 179 -FOOTNOTES - PART'TWO, continued 338. Victory Transport Inc. v. Comisaria General de Abastecimentos y  Transportes (1964), 336 F. 2d. 354. Such acts are l imited to the fol lowing categories; (1) internal administrative acts, such as expulsion of an a l i en . (2) l e g i s l a t i v e acts, such as nat iona l i za t ion . (3) acts concerning the armed forces. (4) acts concerning diplomatic a c t i v i t y . (5) public loans. 339. (1926), 271 U.S. 562. 340. Lauterpacht, H., "The Problem of Ju r i s d i c t i ona l Immunities of Foreign  States " , op. c i t . p. 224. 341. Op. c i t . pp. 367, 380, 385 and 386; see also Laskin, J . in Government  of the Democratic Republic of the Congo v. Venne, op. c i t . p. 687. 342. Dessaulles v. Republic of Poland, op. c i t . p. 7. 343. Shaw, L .J . in the Trendtex case, op. c i t . pp. 385-86. 344. See, for example, Crown Proceedings Act, 1947 (U.K.); Crown L i a b i l i t y Act, R.S.C, 1970, c. C-38. 345. Denning, L . J . , in Rahimtoola v. Nizam of Hyderbad, op. c i t . 346. Lauterpacht, H., "The Problem of Ju r i s d i c t i ona l Immunities of Foreign  States " , op. c i t . p. 232. 347. The Island of Palmas case (1928), R.I.A.A. i i , 829. 348. S i r Robert Phi l l imore in The Charkieh, op. c i t . at p. 97. 349. Shaw, L . J . , in the Trendtex case, op. c i t . p. 384. 350. "The Problem of Ju r i s d i c t i ona l Immunities of Foreign States " , op. c i t . pp. 235-36. 351. This transpired in the course of a discussion I had with Professor D.M. McRae on the subject of sovereign immunity of public corporations. - 180 -FOOTNOTES - PART THREE 1. See, for example, Friedmann, W., "Legal Aspects of Incorporated Publ ic  Au tho r i t i e s " , 22 A.L .J . 7 at pp. 7-8; Scott, F.R., "Administrat ie Law,  1923-1947", 26 Can. Bar Rev. 268 at p. 281; Sawer, G., "Shield of the  Crown Rev i s i ted " , 1 M.V.L.R. 137; Moore, W.H., " L i a b i l i t y for Acts of  Publ ic Servants", 23 L.Q.R. 12 at p. 14; 8 Halsbury's Laws of England, 4th Ed. paras. 955-972, pp. 609-620. 2. Scott, F.R., "Administrative Law, 1923-1947", op. c i t . p. 281. 3. C.N.R. Co. v. Northwest Telephone Co., [1961] S.C.R. 178 at p. 182; Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 14. 4. 8 Halsbury's Laws of England, op. c i t . para. 963. 5. R.S.C., 1970, c E - l l . 6. Hodgetts, J .E . , "The Publ ic Corporation in Canada" in "The Publ ic  Corporation. A Comparative Symposium", Friedmann, W. (Ed.), 51 at pp. 67-68. 7. (1944), 3 W.W.R. 337 (Man. C.A.). 8. Ib id, p. 344. 9. [1940] O.R. 33. 10. This decision was, however, overruled by the Privy Council in International Railway Co. v. Niagara Parks Commission, [1941] 3 D.L.R. 385. 11. Michaud v. C.N.R. Co., [1924] 3 D.L.R. 1; Gooderham & Worts L td . v.  C.B.C. (1939), 4 D.L.R. 241; International Railway Co. v. Niagara Parks  Commission (1941), 3 D.L.R. 385; Yeats & Yeats v. Central Mortgage and  Housing Corporation, [1950] S.C.R. 513; C.N.R. Co. v. Northwest  Telephone Co., op. c i t . 12. (1939), 4 D.L.R. 241. 13. Ib id, p. 242. 14. [1950] S.C.R. 513. 15. Scott, F.R., "Administrat ive Law, 1923-1947", op. c i t . p. 281. 16. 14 Geo. VI, c. 51. 17. Hodgetts, J .E . , "The Publ ic Corporation in Canada", op. c i t . p. 68. 18. R.S.C, 1970, c. C-38. - 181 -FOOTNOTES - PART THREE, continued 19. S. 3. 20. S. 7(1). 21. Lougheed v. C.B.C. (1978), 86 D.L.R. (3d) 229. 22. (1967), 61 D.L.R. (2d) 475. 23. Ib id, p. 482; see also Stokes v. Leaves (1918), 40 D.L.R. 23. 24. Government Companies Operation Act, R.S.C, 1970, c. G-7, provides; "Actions, suits or other legal proceedings in respect of any right or obl igat ion acquired or incurred by a company . . . may be brought or taken by or against the company in the name of the company in any court that would have j u r i s d i c t i o n i f the company were not an agent of Her Majesty." 25. [1953] 1 D.L.R. 510. 26. Ib id, p. 512. 27. (1978), 86 D.L.R. (3d) 229. 28. R.S.C., 1970, c. B - l l . 29. See also Wells, J.A. in Formea Chemicals L td. v. Polymer Corporation  L t d . , op. c i t . p. 493. 30. Baton Broadcasting Ltd. v. C.B.C. (1966), 56 D.L.R. (2d) 215 (Ont. High Court) at pp. 225 & 226 and the unreported cases of Walsh v. C.B.C. and Fisher & Gostick v. C.B.C. quoted therein at p. 224. 31. (1966), 56 D.L.R. (2d) 215. 32. Ib id, pp. 227-28. 33. Ib id, p. 225. 34. Ib id, pp. 227-28. 35. De Smith, S.A., " J ud i c i a l Review of Administrative Ac t i on " , London, Stevens, 2d. Ed., 1968 p. 464; s. 21 Crown Proceedings Act, 1947 (U.K.); Attorney-General fo r Ontario v. Toronto Junction Recreation  Club (1904), 8 Ont. L.R. 440; Underhi l l v. M in i s ter of Food, [1950] 1 A l l E.R. 591; International General E l e c t r i c Co. of New York v.  Commissioners of Customs and Excise, L1962J 2 A l l E.R. 398; Melbourne  v. McQuesten, L1940] O.W.N. 311. - 182 -FOOTNOTES - PART THREE, continued 36. (1977), 78 D.L.R. (3d.) 127. 37. R.S.S., 1965, c. 87. 38. (1977), 78 D.L.R. (3d.) 127 at p. 128. 39. [1969] S.C.R. 60. 40. S. 3(2) National Harbours Board Act, R.S.C, 1970, c. N-8. 41. [1969] S.C.R. 60 at pp. 73-74; see also Rattenbury v. Land Settlement  Board (1929), 1 D.L.R. 242; Baton Broadcasting Ltd. v. C.B.C. (1966)," 56 D.L.R. (2d) 215. 42. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 142. 43. Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 31. 44. Ib id, p. 31. 45. S. 16 Interprett ion Act, R.S.C, 1970, c. 1-23; The Queen in Right of  Alberta v. Canadian Transport Commission (1977), 75 D.L.R. (3d) 257. 46. [1920] 2 K.B. 233. 47. S. 2(a) L imitat ion of Actions Act, R.S.S., 1978, c. L-15; s. 1(a) L imitat ion of Actions Act, R.S.N.B., 1973, c. L-8; Ss. 1(a), 3, 16 & 41 Limitat ions Act, R.S.O., 1970, c. 246. 48. Wil l iams, J.S., "L imi tat ion of Actions in Canada", Toronto, Butterworths, 1972, pp. 166-170. 49. Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . p. 31. 50. Wil l iams, J.S., "L imitat ion of Actions in Canada", op. c i t . p. 170. 51. R.S.C, 1970, c. 374. 52. S. 11. 53. (1977), 75 D.L.R. (3d) 348. 54. See also, G r i f f i t h s v. Smith & Others, [1941] A.C. 70; Administrator of  Austr ian Property v. Russian Bank for Foreign Trade (1931), 48 T.L.R. 37 at p. 39. 55. S. 19(1) Crown L i a b i l i t y Act. - 183 -FOOTNOTES - PART THREE, continued 56. Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and the  United Kingdom", op. c i t . pp. 35-36. 57. Central Canaa Potash Co. Ltd. and A.G. of Canada v. A.G. of Saskatchewan, Min i s ter of Mineral Resources of Saskatchewan and GoFernment of Saskatchewan, L1974J 4 W.W.R. 179 (Sask. Q. Bench); Street, H., "Governmental~Liabil ity. A Comparative Study", op. c i t . p. 166; Hogg, P., " L i a b i l i t y of the Crown in Au s t r a l i a , New Zealand and  the United Kingdom", op. c i t . pp. 28-29; Crombie v. The King, [.1923] D.L.R. 542. 58. Central Canada Potash Co. Ltd. & Another v. A.G. for Saskatchewan &  Others, op. c i t . 59. Therberge v. Laudry (1876), 2 App. Cas. 102 at p. 106. 60. S. 28 Crown Proceedings Act, 1947 (U.K.). 61. S. 28(1) Crown Proceedings Act, 1947 (U.K.); Duncan y. Camel! L iard &  Co. L t d . , [1942] A.C. 625; Thomas v. The Queen (1874), 10 Q.B. 31 at p. 44; R. v. Snider, [1954] 4 D.L.R. 483. 62. (1977), 76 D.L.R. (3d) 521 (C.A. Sask.). 63. [1954] 4 D.L.R. 483. 64. "Shield of the Crown Rev i s i ted " , op. c i t . p. 138. 65. Tomline v. R. (1879), 4 Ex. D. 252; A.G. v. Newcastle-Upon-Tyne  Corporation, [1897] 2 Q.b. 384. 66. Re Henley & Co. (1879), 9 Ch. D. 469 at pp. 481-82; Commissioners of  Taxation for N.S.W. v. Palmer, [1907] A.C. 179 at p. 182; The Queen in  Right of P.E.I, v. J.A. Hughes (1977), 77 D.L.R. (3d) 92 at p. 93; Maritime Bank v. The Queen, [1890] 17 S.C.R. 657; The Queen v. The Bank  of Nova Scot ia, L1882-"8"6"T~H S.C.R. 1. 67. (1807), 16 East 278. 68. Ib id, pp. 281-82. 69. (1977), 77 D.L.R. (3d) 92. 70. S. 18 Revenue Tax Act, R.S.P.E.I., 1974, c. R-14. 71. (1968), 40 D.L.R. (2d) 243. 72. [1974] 4 W.W.R. 205. 73. Ib id, p. 211. - 184 - • FOOTNOTES - PART THREE, continued 74. [1931] V.L.R. 279. 75. [1898] A.C. 667. 76. [1927] A.C. 899. 77. Ib id, p. 905. 78. [1974] 4 W.W.R. 205. 79. Lask i , H.J., "The Respons ib i l i ty of the State of England" (1919), 32 Harv. L. Rev. 447 at p. 455. 80. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 182. 81. S. 17(1) Crown L i a b i l i t y Act; S. 25(4) Crown Proceedings Act, 1947, U.K.). 82. S. 23. 83. See, for example, S. 40(1) National Harbours Board Act, R.S.C, 1970, c. N-8. 84. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . pp. 182-183. 85. Scott, F.R., "Administrative Law, 1923-1947", op. c i t . p. 281. 86. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 165; Sawer, G., "Shie ld of the Crown Rev i s i ted " , op. c i t . p. 138. 87. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 165; Moore, W.H., " L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 12. - 185 -FOOTNOTES - PART FOUR 1. See, for example, s. 12 Petro Canada Act, 23-24 E l i z . II c . 61 (1975); s. 12 Canada Deposit Insurance Corporation Act, R.S.C, 1970, c. C-3; s. 33(1) Crown Corporations B i l l , 1979, B i l l C-27. 2. M i l l i g an , F., "The Canada Council as a Publ ic Body" (1979), Vol . 22 No. 2, Canadian Public Administration 269 at pp. 284-89. 3. The Lambert Commission Report, 1979, p. 328. 4. Royal Commission on Government Organization Report, Vol . 5, p. 59. 5. L indley, W.B., "A Treatise on the law of Companies", London, Sweet and Maxwell, 6th Ed., 1902, p. 519. 6. Gower, L.C.B., '"The Pr inc ip les of Modern Company Law", op. c i t . p. 237; Friedmann, W., "Governmental (Public) Enterpr i se" , op. c i t . p. 23. 7. House of Commons Debates, 1921, p. 1178. 8. The Government Blue Paper, op. c i t . p. 27. 9. See, for example, s. 8(1) Petro Canada Act; s. 6(1) Teleglobe Canada Act; s. 3 Agr icu l tura l S t b i l i z a t i o n Act. 10. The Lambert Commission Report, 1979, p. 339; Royal Commission on Government Organization Report, Vol. 5, op. c i t . pp. 62-63. 11. Two of the few exceptions are provided by s. 6(2) of the Bank of Canada Act which provides that the Governor and Deputy-Governor shall be 'men of proven f inanc ia l experience ', and s. 6(1) of the Canada Deposit Insurance Corporation Act which provides that the chairman of the Board of Directors i s to be a 'person of proven f inanc ia l a b i l i t y ' . 12. "The Business of Government", op. c i t . pp. 121-122; Ashley, C.A. & Smails, R.G.H., "Canadian Crown Corporations", op. c i t . pp. 20-26. 13. Tupper, A., "The State in Business", op. c i t . p. 136; Ashley, C.A. & Smails, R.G.H., "Canadian Crown Corporations", op. c i t . pp. 25-26; Lambert Commission Report, 1979, p. 34; Royal Commission on Government Organization Report, Vol. 5, p. 63; Hodgetts, J .E . , "The Publ ic  Corporation in Canada", op. c i t . pp. 75-76. 14. Lambert Commission Report, 1979, p. 340. 15. "The Publ ic Corporation in Canada", op. c i t . p. 70. 16. See, for exampel, s. 4(2) Canadian Fi lm Development Corportion Act ; Hodgetts, J . E . , "The Publ ic Corporation in Canada", op. c i t . p. 74. 17. S. 10(3) Bank of Canada Act. - 186 -FOOTNOTES - PART FOUR, continued 18. S. 3(3) Canadian Wheat Board Act. 19. The Government Blue Paper, op. c i t . p. 27. 20. See, for example, s. 7(2) Petro Canada Act; s. 3(9) Teleglobe Canada Act; s. 4(5) Agr icu l tura l S t ab i l i z a t i on Act; s. 11(1) Canadian Wheat Board Act. 21. See, for example, s. 3(9) Teleglobe Canada Act. 22. Report, Vol . 5, p. 61. 23. Op. c i t . pp. 22-24. 24. Turkson, R.B., "M in i s t e r i a l Control of Publ ic Corporations in Ghana  1957-72", U.G.L.J. 83 at p. 94. 25. Lambert Commission Report, 1979 p. 338. 26. Op. c i t . p. 23. 27. Hodgetts, J .E . , "The Publ ic Corporation in Canada", op. c i t . p. 71. 28. S. 71(4) F.A.A. 29. Hodgetts, J .E . , "The Publ ic Corporation in Canada", op. c i t . p. 72. 30. Hodgetts, J .E . , "The Publ ic Corporations in Canada" in "Government  Enterprise: A Comparative Study , Friedmann, W. & Garner, J .F. (ed.), p. 226. 31. S. 70 F.A.A. 32. Friedmann, W., "The Publ ic Corporation in Great B r i t a i n " , op. c i t . p. 180. 33. [1929] S.C.R. 52. 34. Ib id, p. 63. See also Nireaha Tamaki v. Baker, [1901] A.C. 561 at 575-76; Tobin v. Reg., [1864] 16 C.B.N.S. 310; Musgrove v. Pul ido (1879), 5 App. Cas. 102; Tarn!in v. Hannaford, op. c i t . p. 23; Smith v. London  Transport Executive, [1951] A.C. 555 (H.L.); Garner, J . F . , " P u b l i c "  Corporations in tHe United Kingdom" in "Government Enterprise. A  Comparative Study", Friedmann & Garner (ed.), 3 at pp. 12, 19; Gower, L.C.B., "The Pr inc ip le s of Modern Company Law", op. c i t . p. 239; Turkson, R.B., "M in i s te r i a l Control of Publ ic Corporations in Ghana,  1957-72", op. c i t . p. 88; Friedmann, W., "The Publ ic Corporation in  Great B r i t a i n " , op. c i t . pp. 179-80; Zines, L., "Federal Publ ic  Corporations in Aus t ra l i a " in "Government Enterprise: A Comparative  Study", Friedmann & Garner (ed.) 227 at p. 239; Charles Roberts & Co. - 187 -FOOTNOTES - PART FOUR, continued Ltd. v. B r i t i s h Railways Board, [1965] 1 W.L.R. 396 at p. 401; A.G. v.  Great Eastern Railway Co., [1880] 5 A.C. 473 at p. 486. 35. (1963), 80 W.N. (N.S.W.) 48. 36. Ib id, p. 53. See also The Commonwealth v. Austra l ian Shipping Board (1926), 39 C.L.R. 1, in which a su it was successful ly brought by the commonwealth Attorney-General on the re la t ion of the Secretary to the New South Wales Chamber of Manufactures against the Austral ian Commonwealth Shipping Board, a statutory public corporation, for a declarat ion that the Board had no power to enter into an agreement with a municipal council to supply, de l iver and erect on municipal land f i f t een turbo-alternator sets. 37. See, for example, s. 7 Petro Canada Act. 38. Gower, L.C.B., "The P r inc ip le s of Modern Company Law", op. c i t . p. 239; Friedmann, W., "The Publ ic Corporation in Great B r i t a i n " , op. c i t . p. 181. 39. [1965] A.L.R. 954 at p. 958. 40. The commonwealth v. Austral ian Shipping Board, op. c i t . ; Helicopter  U t i l i t i e s v. Austra l ian National A i r l i n e s Commission, op. c i t . 41. "The Pr inc ip le s of Modern Company Law", op. c i t . p. 239, footnote no. 42. Jacobs, J . in Helicopter U t i l i t i e s v. Austra l ian National A i r l i n e s  Commission, op. c i t . p. 53; The Commonwealth v. Austra l ian Shipping  Board, op. c i t . p. 8. 43. Helicopter U t i l i t i e s v. Austra l ian National A i r l i n e s Commission, op. c i t . p. 53; London County Council v. Attorney-General, [1902] A.C. 168. 44. Bovce v. Paddington Borough Counci l , [1903] 1 Ch. 109; Helicopter U t i l i t i e s v. Austra l ian Nat i onaTT i r l ines Commission, op., c i t . p. 53. 45. (1963), 80 W.N. (N.S.W.) 48. 46. Royal Commission on Government Organization Report, Vol . 5, p. 70. 47 Garner, J .F . , "Pub l ic Corporations in the United Kingdom", op. c i t . p. 12- Drake, C.B., "The Publ ic Corporation as an Organ of Government Po l i c y " , in "Government Enterprise: A Comparative Study . Friedmann & ( Q H ) ?K „t p. Ah, Gower. L.C.B.. "The Pr inc ip le s of Modern Company Law", op. c i t . p. 239. - 188 -FOOTNOTES - PART FOUR, continued 48. [1965] 1 W.L.R. 396. 49. Transport Act, 1962, s. 3(1) (U.K.). 50. Ib id, s. 14(1). 51. Ib id, s. 13(1). 52. Drake, CD . , "The Publ ic Corporation as an Organ of Government P o l i c y " , op. c i t . p. 47. 53. Ib id, p. 47; Zines, L., "Federal Publ ic Corporations in Au s t r a l i a " , op. c i t . p. 241; Friedmann, W., "The Publ ic Corporation in Great B r i t a i n " , op. c i t . p. 183. 54. Ashbury Railway Carriage & Iron Co. Ltd. v. Riche, [1875] L.R. 7 H.L. 55. Gower, L.C.B., "The P r inc ip le s of Modern Company Law", op. c i t . Chapter 5, espec ia l ly at p. 98. 56. Cohen Committee Report (U.K.) Cmd. 6659/194, para. 12. 57. S. 23, B r i t i s h Columbia Companies Act, 1973, ( B . C C A . ) . 58. For example, duties re la t ing to ins ider Trading have no relevance to public corporations. 59. Percival v. Wright, [1902] 2 Ch. 421. But see Gething & Others v.  K i l ne r & Others, [1972] 1 A l l E.R. 1166. 60. Gower, L.C.B., "The Pr inc ip le s of Modern Company Law", op. c i t . p. 518; s. 158 B . C C A . ; s. 117 Canada Business Corporations Act (C.B.C.A.). 61. Lord Green, M.R. in In Re Smith and Fawcett L td . , [1942] Ch. 304 at p. 306; The Sun Trust Co. Ltd. v. Begin, [1937] STCR. 305 at p. 307; Levin v. Clark, L1962J N.S.W.R. 686 at p. 700; Hogg v. Cramphorn Ltd. &  Others, L196TJ 1 Ch. 254. 62. Re W. & M. Roith L t d . , [1967] 1 W.L.R. 432. 63. "The P r inc ip le s of Modern Company Law", op. c i t . pp. 521-22; see also, Park v. Daily News L td . , [1962J lThT 927. 64. [1967] 1 Ch. 254; see also Park v. Dai ly News L t d . , op. c i t . at p. 963. 65. [1973] 2 W.L.R. 385. 66. Ib id, p. 413. - 189 -FOOTNOTES - PART FOUR, continued 67. See, for example, ss. 141, 143, 146 B . C C A . ; ss. 115 and 117 C.B.C.A. 68. The Government Blue Paper, op. c i t . pp. 27-29. 69. S. 20(1) Draft Leg i s la t i ve Proposals on the Control , Direct ion and Accountabi l i ty of Crown Corporations, Appendix A to the Government Blue Paper. 70. S. 44, B i l l C-27, 1979. 71. The Sun Trust Co. Ltd. v. Begin, op. c i t . p. 308; Clark v. Workman, [1902] 1 I.R. 107. 72. Hogg v. Cramphorn Ltd. & Others, op. c i t . pp. 268-69. 73. Clark v. Workman, op. c i t . ; Gower, L.C.B., "The Pr inc ip le s of Modern  Company Law", op. c i t . pp. 525-26. 74. Gower, L.C.B., "The Pr inc ip les of Modern Company Law", op. c i t . p. 525. 75. Ib id, p. 526. 76. Aberdeen Railway Co. v. B l a i k i e Brothers, [1843-60] A l l E.R. 249; Boult ing & Another v. Associat ion of Cinematograph, Telev is ion and  A l l i e d Technicians, L1963] 2 Q.B. 606 at p. 626. 77. See, s. 115 C.B.C.A.; ss. 143, 144 C C C A . ; s. 43(8) B i l l C-27, 1979. 78. Regal (Hastings) Ltd. v. Gu l l i v e r , [1942] 1 A l l E.R. 378; Canadian Aero  Services Ltd. v. O'Malley & OtheTs, [1974] S.C.R. 592; Industr ial  Development Consultants v. CooTeyT [1972] 2 A l l E.R. 162. 79. Gower, L.C.B., "The Pr inc ip le s of Modern Company Law", op. c i t . pp. 546-47. 80. [1925] Ch. 407. 81. S. 117(b) C.B.C.A.; s. 141(l)(b) B . C C A . ; s. 44(1)(b) B i l l C-27, 1979. 82. S. 118(4) C.B.C.A.; s. 44(5) B i l l C-27, 1979. 83. Gower, L.C.B., "The Pr inc ip les of Modern Company Law", op. c i t . pp. 552-57. 84. Regal (Hastings) L td . v. Gu l l i v e r , op. c i t . 85. For a detai led account of those duties and remedies see, Gower, L.C.B., "The Pr inc ip le s of Modern Company Law", op. c i t . chap. 23; Wainberg, J.M. & Wainberg, M.I., "Duties and Respons ib i l i t ie s of Directors in  Canada", 3d. Ed., 1975, (CCH Canadian L td . ) ; Beck, S.M. & Others, "Business Associations Casebook", Toronto, Richad de Boo L td . , 1979. - 190 -FOOTNOTES - PART FOUR, continued 86. Friedmann, W., "The Publ ic Corporation in Great B r i t a i n " , op. c i t . p. 181; s. 44(3) B i l l C-27. 87. [1950] 1 K.B. 18. 88. Ib id, pp. 22-23. 89. Op. c i t . pp. 27-28. 90. B i l l C-27, 1979. 91. S. 23 Draft Leg i s la t i ve Proposals on the Control , Direct ion and Accountabi l i ty of Crown Corporations, Appendix A to the Government Blue Paper. Of course the corporation can i t s e l f sue to enforce d i rec to r s ' dut ies, but since the corporation o rd ina r i l y acts through i t s d i rec to r s , i t becomes necessary to establ ish some other means of enforcing those duties. 92. The Government Blue Paper, op. c i t . p. 41; I rv ine, A.G., "The  Delegation of Authority to Crown Corporations", op. c i t . p. 563; s. 72 F.A.A. 93. "The Delegation of Authority to Crown Corporations", op. c i t . p. 563. 94. Royal Commission on Government Organization Report, Vol . 5, p. 70. 95. See, for example, s. 13 St. Lawrence Seaway Authority Act; s. 13 Petro Canada Act. 96. The Government Blue Paper, op. c i t . p. 41. 97. I rv ine, A.G., "The Delegation of Authority to Crown Corporations", op. c i t . p. 563. 98. The Government Blue Paper, op. c i t . pp. 41-42; s. 7 Draft Leg i s la t i ve Proposals on the Control, Direction and Accountabi l i ty of Crown Corporations, Appendix A to the Government Blue Paper; s. 22 B i l l C-27, 1979. 99. The Government Blue Paper, op. c i t . p. 42. 100. I rv ine, A.G., "The Delegation of Authority to Crown Corporations", op. c i t . p. 568. 101. Royal Commission on Government Organization Report, Vol. 5, p. 69. -191 -FOOTNOTES - PART FIVE 1. (1874), L.R. 10 Q.B. 31. 2. [1978] 2 A l l E.R. 1043. 3. See, supra, p. 43. 4. S. 3(1) Crown L i a b i l i t y Act. 5. [1967] 61 D.L.R. (2d) 475. 6. See, supra, p. 83. 7. See, supra, p. 93. 8. See, supra, pp. 95-98. 9. Higgins, J . in Repatriation Commission v. K i rk land, op. c i t . pp. 11-12. 10. Street, H., "Governmental L i a b i l i t y . A Comparative Study", op. c i t . p. 185. 11. [1950] 1 K.B. 18. 12. Ib id, p. 24. 13. See, supra, p. 110. 14. Sawer, G., " Sh ie l f of the Crown Rev i s i ted " , op. c i t . p. 138; Friedmann, W., "The Planned State and the Rule of Law", Parts 1 and 2 (1948-49), A.L .J . 162 and 207 at pp. 207-212; Hogg, P., " L i a b i l i t y of the Crown in  Au s t r a l i a , New Zealand and the United Kingdom", op. c i t . pp. 213-14; Moore, W.H., L i a b i l i t y fo r Acts of Publ ic Servants", op. c i t . p. 12; Friedmann, W., "Legal Aspects of Incorporated Publ ic Au tho r i t i e s " , op. c i t . pp. 14-16; Friedmann, H., "Governmental (Public) Corporations", op. c i t . p. 42. 15. See also s. 13(2) National Health Act, 1942 (U.K.). - 192 -BIBLIOGRAPHY BOOKS Ashley, C.A. & Smails, R.G.H., "Canadian Crown Corporations. Some Aspects of Their Administration and Contro l " , Toronto, The MacMillan Co. of Canada L t d . , 1965. 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Central Bank of N iger ia, [1977] 2 W.L.R. 356 (C.A.). The Truculent, [1952] P. 1. Ulen & Co. v. Pol ish Ntional Economic Bank 24 N.Y. 2d 201. Underhi l l v Minister of Food, [1959] 1 A l l E.R. 591. Uniform Tax Case (1942), 65 C.L.R. 373. United States v. Deutches Kal isyndikat Gesel lschaft (1929), 13 Fed. 2d 199. United States v. P lanters ' Bank of Georgia (1824), 9 Wheat 904. V i c t o r i a Railways Commissioners v. Gree l i sh , [1947] V.L.R. 423. V i c t o r i a Railways Commissioners v. Herbert, [1949] V.L.R. 211. V ictory Transport Inc. v. Comisaria General de Abastecimentos Y Transportes (1964), 336 F. 2d 354. Westeel-Rosco Ltd. v. Board of Governors of South Saskatchewan Hospital  Centre, [1977] 2 S.C.R. 238. Wheeler v. Commissioner of Publ ic Works in I reland, [1903] 2 I.R. 202. Wynyard Investment Proprietary Ltd. v. Commissioner for Railways (N.S.W.) (1955), 93 C.L.R. 376. - 208 -Yeats and Yeats v. Central Mortgage and Housing Corporation, [1950] S.C.R. 513. Young v. S.S. Scot ia, [1903] A.C. 501. - 209 -STATUTES Agr icu l tura l S t ab i l i z a t i on Act, R.S.C, 1970, c. A-9. A i r Canada Act, R.S.C, 1970, c. A - l l . Atomic Energy Control Act, R.S.C, 1970, c. A-19. B r i t i s h Columbia Companies Act, 1973. B r i t i s h North America Act. Broadcasting Act, R.S.C, 1970, c. B - l l . Canada Business Corporations Act, 23-24, E l i z . I I , c. 33 (1974-75). Canada Council Act, R.S.C, 1970, c. C-2. Canada Deposit Insurance Corporation Act, R.S.C, 1970, c. C-3. Canada Commercial Corporation Act, R.S.C, 1970, c. C-6. Canadian Fi lm Development Act, R.S.C, 1970, c. C-8. Canadian Wheat Board Act, R.S.C, 1970, c. C-12. Central Mortgage and Housing Corporation Act, R.S.C, 1970, c. C-16. Crown L i a b i l i t y Act, R.S.C, 1970, c. C-38. Crown Proceedings Act, 1947, 10 & 11, Geo. VI, c. 44 (U.K.). Defence Production Act, R.S.C, 1970, c. D-2. Exchequer Court Act, R.S.C, 1970, c. E - l l . Financia l Administration Act, R.S.C, 1970, c. F-10. Foreign Sovereign Immunities Act, 1976 (U.S.). Government Companies Operation Act, R.S.C, 1970, c. G-7. Income Tax Act, R.S.C, 1970, c. 1-5. Interpretation Act, R.S.C, 1970, c. 1-23. L imitat ion of Actions Act, R.S.S., 1978, c. L-15. L imitat ion of Actions Act, R.S.N.B., 1973, c. L-8. Limitat ions Act, R.S.O., 1970, c. 246. - 210 -Lord 's Day Act, R.S.C., 1970, c. L-13. National Harbours Board Act, R.S.C., 1970, c. N-8. National Research Council Act, R.S.C, 1970, c. N-14. Northern Canada Power Commission Act, R.S.C, 1970, c. N-21. Patent Act, R.S.C, 1970, c. P-4. Pe t i t i on of Right Act, R.S.C, 1970, c. P-12. Petro-Canada Act. Publ ic Author it ies Protection Act, R.S.C, 1970, c. 374. St. Lawrence Seaway Authority Act, R.S.C, 1970, c. S - l . State Immunity Act, 1978 (U.K.). Statute Law Amendment Act (1950), 14 Geo. V i , c. 51. Teleglobe Canada Act, R.S.C, 1970, c. C - l l , 23-24, E l i z . I I, c. 77, 1974-75-76. The Crown Corporations B i l l , B i l l C-27, 1979. - 211 -OFFICIAL REPORTS AND PAPERS, etc. A i r Canada Inquiry Report, 1975, by Estey W.Z., Commissioner, Information Canada, Ottawa, 1975. Crown Corporation: D i rect ion, Control, Accountabi l i ty. Government of Canada Proposals (The Government Blue Paper), Privy Council O f f i ce , Min ister of Supply and Services Canada, 1977. Royal Commission on Financial Management and Accountabi l i ty (The Lambert Commission) Report, 1979, Min ister of Supply and Services Canada, 1979. Royal Commission on Government Organization Report, Vo l . 5, The Organization of the Government of Canada, 1963, Queen's P r i n t e r , Ottawa, Canada 1963. The Tate Le t te r , 26 U.S. Department of State B u l l e t i n , 984. - 212 -APPENDIX A DEPARTMENTAL CROWN CORPORATIONS (SCHEDULE 'B ' F.A. ACT) Agr icu l tura l S tab i l i z a t i on Board Atomic Energy Control Board Director of Sold ier Settlement The D i rector , Veterans' Land Act Economic Council of Canada Fisheries Prices Support Board Medical Research Council Municipal Development and Loan Board National Museums of Canada National Research Council Science Council of Canada Unemployment Insurance Commission - 213 -APPENDIX B AGENCY CROWN CORPORATIONS (SCHEDULE ' C F.A. ACT) Atomic Energy of Canada Limited Canadian Arsenals Limited Canadian Commercial Corporation Canadian Dairy Commission Canadian Fi lm Development Corporation Canadian Livestock Feed Board Canaian National (West Indies) Steamships Limited Canadian Patents and Development Limited Canadian Sa l t f i s h Corporation Centennial Commission Crown Assets Disposal Corporation Defence Construction (1951) Limited Loto Canada Inc. The National Ba t t l e f i e l d s Commission National Capital Commission National Harbours Board Northern Canada Power Commission Royal Canadian Mint Uranium Canada Limited - 214 -APPENDIX C PROPRIETARY CROWN CORPORATIONS (SCHEDULE 'D' F.A. ACT A i r Canada Canada Deposit Insurance Corporation Canadian Broadcasting Corporation Canadian National Railways Cape Breton Development Corporation Central Mortgage and Housing Corporation Eldorado Aviat ion Limited Eldorado Nuclear Limited Export Development Corporation Farm Credit corporation Federal business Development Bank (formerly Industrial Development Bank) Federal Mortgage Exchange Corporation Freshwater Fish Marketing Corporation Northern Transportation Company Limited Petro Canada Pi lotage Author i t ies : A t l an t i c Pi lotage Authority Laurentian Pi lotage Authority Great Lakes Pilotage Authority Pac i f i c Pi lotage Authority - 215 -PROPRIETARY CROWN CORPORATIONS CONTINUED St. Lawrence Seaway Authority The Seaway International Bridge Corporation Limited Teleglobe Canada (formerly Canadian Overseas Telecommunications Corporation) - 216 -APPENDIX D UNCLASSIFIED GOVERNMENT CORPORATIONS Bank of Canada Canada Council Canadair Limited The Canadian Wheat Board The de Havil land A i r c ra f t of Canada Limited Dungarvon Forestry Project Inc. Federl Insolvency Trustee Agency Harbour Commissions B e l l e v i l l e Harbour Commission Fraser River Harbour Commission Hamilton Harbour Commissioners Lakehead Harbour Commission Nanaimo Harbour Commission North Fraser Harbour Commission Oshawa Harbour Commission Port Alberni Harbour Commission Toronto Harbour Commissioners Windsor Harbour Commission Winnipeg and St. Boniface Harbour Commission Hockey Canada Inc. National Arts Centre Corporation National Sports and Recreation Centre Inc. Opcan Publ ic Works Land Company Limited 207 Queens Quay West Ltd. - 217 -UNCLASSIFIED GOVERNMENT CORPORATIONS (CONTINUED) Radio Engineering Products Limited Sport Par t i c ipat ion Canada Inc. Standards Council of Canada - 218 -APPENDIX E  MIXED ENTERPRISE CORPORATIONS Abenaki Motel Ltd. Association for the Export of Canadian Books Blue Water Bridge Authority Canada Book Design Committee Inc. Canada Development Cororation Canadian A r c t i c Producers Limited Canadian Colour and Fashion Trend Service Canarctic Shipping Company Limited Consolidated Computer Inc. Crane Cove Oyster Farm Ltd. Fashion Canada Footwear and Leather Ins t i tute of Canada La Societe Inter-port du Quebec La Societe du pare industr ie l et commercial aeroportuaire de Mirabel Metropolitan Area Growth Investments Limited Mohawk St. Regis Lacrosse Ltd. Nanisivik Mines Limited New Brunswick Multiplex Corporation Limited Newfoundland and Labrador Development Corporation Ltd. POS P i l o t Plant Corporation - 219 -MIXED ENTERPRISE CORPORATIONS (CONTINUED) Saint John Harbour Bridge Authority Shong Way Shi Corporation Limited Telesat Canada Thousand Islands Bridge Authority Sources 1. Minutes of Proceedings and Evidence of the Standing Committee on Publ ic Accounts (House of Commons) Issue No. 33, Tuesday May 17, 1977, Appendix PA-220. 2. Financial Administration Act. 

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