The King Can Do No Wrong

1991-01-01

THEKINGCANDONOWRONG

by
FrançoisM.Grenier
*
LEGERROBICRICHARD,Lawyers,
ROBIC,Patent&TrademarkAgents
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InEngland,asinotherCommonwealthcountries(includingCanadawhich
recognizesherMajestytheQueenastheformalheadofState),the
governmentiscommonlyreferredtoas”theCrown”.Canadahavinga
federalsystem,thedivisibilityoftheCrownwaslegallyrecognizedandwe
thereforehavetheCrowninrightofCanadaandtheCrowninrightofeach
oftheprovinces.Ineachcase,theCrownenjoysthepowers,privilegesand
traditionalimmunitiesoftheCrown.
UndertheCommonLaw,theCrownwasentitledtoawiderangeofsuch
privilegesandimmunities.Thetitleofthepresentarticlereferstooneofthe
mostfamousimmunitiesoftheCrown:theimmunityfrombeingsuedforthe
tortuousactsofitsagentsorservants.TheCrownalsobenefitsfromanother
importanttraditionalimmunity:astatutewillnotbeapplicabletotheCrown
unlessthereisaclearstatementtothateffectinsaidstatute.
Eventhoughitisimmunetoactionsintortandfromtheapplicationof
statutes,itisrecognizedthattheCrownactingthroughitsParliamentor
legislaturesisfreetoadoptlawsapplicabletoitself.However,intheabsence
ofaclearstatementtothateffect,astatutewillnotbeapplicabletothe
Crown.TheFederalCourtofCanadarecentlygaveanexampleofthe
applicationoftheseprinciples.

Anindividual,ownerofapatentofinvention,suedbeforetheFederalCourt
ofCanadaONTARIO-HYDRO,HYDRO-QUÉBECandTHENEWBRUNSWICK
ELECTRICPOWERCOMMISSION,allegingthatthethreeprovincialCrown
corporationsinchargeoftheproductionandtransportationofelectricity
withintheirprovince,hadinfringedhispatent.Section54ofthePatentAct
(R.S.C.(1985),c.P-4)providesfortheconcurrentjurisdictionoftheprovincial
andfederalcourtsinmattersofpatentinfringement.TheFederalCourtof

©LEGERROBICRICHARD,1991.
*Lawyer,FrançoisM.GrenierisaseniorpartnerinthelawfirmLEGERROBICRICHARD,g.p.and
inthepatentandtrademarkagencyfirmROBIC,g.p.Publication46.

Canadawascreatedbystatuteandanyjurisdictiongiventoitmustbe
clearlyexpressedintheFederalCourtAct(R.S.C.1985,c.F-7).
Thethreedefendantsdidnotraisetheabsenceofjurisdictionratione
materiae,i.e.onthesubject-matterbeforetheCourt,patentofinvention.
ThedefendantsclaimedthatasCrownagents,theycouldnotbesuedinthe
FederalCourtofCanadaastherewasnoclearenactmentintheFederal
CourtActorPatentActgivingjurisdictionrationepersonaetotheFederal
Court.TheissuewasstatedasfollowsbytheHonourableMr.JusticeDubéat
p.2and3ofhisjudgment(YoussefHannaDablehvsOntario-Hydro,
Hydro-QuébecandTheNewBrunswickElectricPowerCommission,an
unreporteddecisiondatedOctober4,1990):
“Throughouttheyears,federalandprovinciallawshavebeen
enactedtoestablishCrownliabilitytotortactions,buttheacts
varyineachjurisdiction.Intheinstantcase,theobjectionsraised
bythethreeallegedCrowncorporationsarenotratione
materiae,asthisCourthasclearlyconcurrentjurisdictionin
mattersofpatentinfringement.Thechallengeisratione
personae:thedefendantsclaimthattheymayonlybesuedin
tort(patentinfringement)intheirownrespectivesupremecourts.
Theplaintiffallegesthatthethreedefendantsareprovincial
Crowncorporations.Hogg,inhisConstitutionalLawofCanada,
2ded.(Totonto[sic]:Carswell,1985),atpage232,pointsoutthat
“theimmunityoftheCrownfromstatutes,likeotherCrown
privileges,extendstopubliccorporationsthatare’agentsofthe
Crown'”.Arethethreedefendantcorporations”Crownagents’
suchthattheymaybenefitfromCrownimmunity,withtheresult
thattheymayonlybesuedforpatentinfringementintheirown
respectivesupremecourts?Theanswersvaryineachcase.”

Mr.JusticeDubéwasthereforeobligedtoreviewtherightsofthedefendants
onanindividualbasis.
IntheCaseofTHENEWBRUNSWICKELECTRICPOWERCOMMISSION,Mr.
JusticeDubéfoundthatitwascreatedbytheElectricPowerAct(R.S.N.B.
1973c.E-5),inwhichSection5describestheCommissionasaCrown
corporationandanagentoftheCrown.HealsofoundthattheProceedings
AgainsttheCrownAct(R.S.N.B.1973c.P-18)ofNewBrunswickstipulatesin
Section6thatallproceedingsagainsttheCrown(definedasincludinga
Crowncorporation)mustbeinstitutedintheCourtofQueen’sBenchofNew
Brunswick.Withrespecttothisdefendant,Mr.JusticeDubéconcluded:

“Inotherwords,theFederalCourt,beingastatutoryCourt,and
thetraditionalCrownimmunitybeingimpliedunlessotherwise
expressed,nowordsofexclusionarenecessarytotakea
provincialCrowncorporationwhichisaCrownagentoutofthe
FederalCourtjurisdiction,whereasexpresswordswouldbe
necessarytobringsuchCrownagentswithinthisCourt’sambit.
Therefore,anactionintortagainstaprovincialCrown,ora
provincialCrownwhichisanagentoftheCrown,mustbe
launchedinaprovincialCourt,unlessastatuteexpresslyprovides
forFederalCourtjurisdictionrationepersonaeovertheCrown,as
wellasrationemateriaeoverthesubject-matter.”

WithrespecttoONTARIO-HYDRO,Mr.JusticeDubéfoundthatthe
ProceedingsAgainsttheCrownAct(R.S.O.1980c.393)definetheCrownto
meanonly”HerMajestytheQueeninrightofOntario”.Section3ofthe
OntarioCrownAgencyAct(R.S.O.1980c.106)explicitlyexcludesONTARIO-
HYDROfromtheAct.Therefore,Mr.JusticeDubéfound:
“Thus,thesestatutoryprovisionsclearlyindicatethatOntario
HydroisneithertheCrownwithinthedefinitionfoundinthe
ProceedingsAgainsttheCrownAct,noraCrownagentunder
theCrownAgencyAct.AsthePowerCorporationActdefines
OntarioHydroasacorporation,itisasueableentity.Forthe
abovereasons,OntarioHydromaynotclaimthebenefitof
Crownimmunity,foritisnotaCrownagent.Therefore,the
jurisprudentialtrilogyreferredtoearlierdoesnotapplytothis
defendantcorporation.”

Mr.JusticeDubéfoundthattheFederalCourtofCanadahadjurisdictionto
entertainanactionintortrelatingtopatentinfringementagainstthe
defendantONTARIO-HYDRO.
Finally,withrespecttoHYDRO-QUÉBEC,Mr.JusticeDubéfoundthatunder
Section13oftheLoisurHydro-Québec(L.Q.1988,c.H-5),HYDRO-QUÉBEC
wasaCrowncorporationandanagentoftheCrowninrightoftheProvince
ofQuebec.Evenwithoutaspecificactprovidingthatallactionsagainstthe
Crownhadtobeinstitutedbeforeprovincialcourts,Mr.JusticeDubé
recognizedtheimmunityandthattheCrownwasnotboundbyastatute
(theFederalCourtAct)inwhichitwasnotexpresslymentionedthatitwill
applytotheCrown.TheactionagainstHYDRO-QUÉBECwasalsodismissed.

ThisjudgmentisofsomeimportanceforthelegalcommunityinCanada.In
thiscase,threedefendantswereallegedlyinfringingapatentofinventionby
reasonofworkingtogetherunderanagreementconcerningthe
maintenanceoftheir”Candu”reactors.ByreasonofthedecisionofMr.

JusticeDubé,inordertopossiblyobtainthesameremedy,theplaintiffwill
nowhavetosueTHENEWBRUNSWICKELECTRICPOWERCOMMISSIONinthe
SupremeCourtofNewBrunswickandHYDRO-QUÉBECintheSuperiorCourtof
theProvinceofQuebecandmaintainhisactionintheFederalCourtagainst
ONTARIO-HYDRO,threeseparatecasesforbasicallythesamecauseof
action.Mr.JusticeDubérecognizedthattheproceedingswereinstituted
beforetheFederalCourtofCanadabytheplaintiff,obviouslytoavoidthe
multiplicityofactions.However,asrecognizedbyMr.JusticeDubé,
conveniancealonedoesnotcreatejurisdiction.
Itshouldalsoberememberedthatpre-trialmotionstodismissareargued
withoutanyevidenceadducedbeforetheCourt.Thefactsallegedinthe
StatementofClaimare,forthepurposeofsuchamotion,presumedtobe
true.Aplaintiffbeingindoubtastotheexactlegalnatureandstatusofthe
potentialdefendantshouldmakeacompleteinquirytothisendandifthe
plaintiffisoftheviewthatadefendantisnotaCrownagent,heshould
clearlyallegeinhisStatementofClaimthelegalnatureofstatusofthe
corporationheissuingandofitsrelationshipwiththeCrown.

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