A-320-80
F. H. Sparling, in his quality as inspector appoint
ed pursuant to an application to the Restrictive
Trade Practices Commission under section 114 of
the Canada Corporations Act for an order direct
ing an investigation of Canadian Javelin Limited
(Appellant)
v.
The Honourable Joseph Roberts Smallwood
(Respondent) (Applicant in the Trial Division)
and
Luc-A. Couture, Q.C., in his quality as member
and Vice-Chairman of the Restrictive Trade Prac
tices Commission and R. S. MacLellan, Q.C., in
his quality as member of the Restrictive Trade
Practices Commission (Respondents on the
application in the Trial Division)
Court of Appeal, Pratte and Le Damn JJ. and
Lalande D.J.—Montreal, December 3 and 5,
1980.
Practice — Evidence — Prerogative of the Crown — Appel
lant appointed inspector under s. 114(2) of the Canada Corpo
rations Act to conduct an investigation of Canadian Javelin
Limited — Subpoena issued to respondent, a former Premier
and Minister of Newfoundland, requiring him to give evidence
— Respondent applied for injunction — Appeal from decision
granting injunction — Whether respondent can invoke pre
rogative of the Crown — Canada Corporations Act, R.S.C.
1970, c. C-32, s. 114(2),(10), as amended.
The appellant was appointed an inspector under subsection
114(2) of the Canada Corporations Act to conduct an investi
gation regarding Canadian Javelin Limited. Respondent Small-
wood, a former Premier and Minister of Newfoundland, after
being served with an order of subpoena requiring him to give
evidence in connection with that investigation, applied to the
Trial Division for an injunction enjoining the appellant as well
as the other respondents from acting upon that subpoena. The
Court granted the injunction, hence this appeal. Respondent
Smallwood submits that (1) the appellant has no right to
inquire into the affairs of the Province of Newfoundland, (2) he
is not a compellable witness being entitled to invoke the pre
rogative of the Crown and of the Ministers of the Crown and
(3) in any event, any testimony by him would violate Crown
privilege.
Held, the appeal is allowed. The grounds advanced by the
respondent must be rejected. (1) Nothing in the record indi
cates that the appellant exceeded or intends to exceed his
mandate. The mere fact that he might oblige a former Minister
of a province to testify as to facts known by him in his capacity
as Minister, does not change the object of the inquiry and
transform it into an inquiry in the administration of that
province. (2) The prerogative of the Crown to refuse to testify
at an inquiry can only be invoked by a Minister or other person
acting for the Crown in proceedings in which he is a party or
witness, in his capacity as Minister or representative of the
Crown. The prerogative cannot be invoked by a former Minis
ter who, in his private capacity, is ordered to testify at an
inquiry. (3) In his capacity as Premier and Minister of his
Province, the respondent may have been involved in many
matters and may have known of many things, the divulgation of
which would constitute neither a violation of Crown privilege or
of Cabinet secrecy nor a breach of his oath of office. The
opposite view is wrong in law.
Attorney General of the Province of Quebec v. Attorney
General of Canada [1979] 1 S.C.R. 218, referred to.
APPEAL.
COUNSEL:
F. Garneau for appellant.
J. R. Nuss, Q.C. and B. Riordan for respond
ent (applicant in the Trial Division).
SOLICITORS:
Desjardins, Ducharme, Desjardins &
Bourque, Montreal, for appellant.
Ahern, Nuss & Drymer, Montreal, for
respondent (applicant in the Trial Division).
The following are the reasons for judgment
delivered orally in English by
PRATTE J.: On May 17, 1977, the appellant was
appointed an inspector, under subsection 114(2) of
the Canada Corporations Act, R.S.C. 1970, c.
C-32 [as amended by R.S.C. 1970 (1st Supp.), c.
10, s. 12], to conduct an investigation of a com
pany named "Canadian Javelin Limited". The
operative part of the order appointing the appel
lant reads as follows:
The Commission hereby orders that an investigation be
conducted of the affairs and management of Canadian Javelin
Limited from the date of its incorporation including, without
limiting the generality of the foregoing, the investigation of its
source and disposition of capital funds, its maintenance of
corporate books and accounting records, its disclosure of finan
cial information to shareholders, its compliance with statutory
obligations, its acquisition, operation and disposition of its
assets and of those of its affiliated companies, the disposition of
its shares and of those of its affiliated companies, and its
dealing with affiliated companies, and that Mr. Frederick H.
Sparling, Director, Corporations Branch, Department of Con
sumer and Corporate Affairs, be appointed as inspector for that
purpose.
On April 25, 1980, on the application of the
appellant, the respondent Couture, a member of
the Restrictive Trade Practices Commission,
issued an order of subpoena under subsection
114(10) of the Canada Corporations Act requiring
the respondent Smallwood to attend before R. S.
MacLellan, another member of the Commission,
or any person named by him, to give evidence upon
oath in connection with the investigation of
Canadian Javelin Limited.
The respondent Smallwood is the Honourable
Joseph Roberts Smallwood, a former Premier and
Minister of the Province of Newfoundland. After
being served with the order of subpoena, Mr.
Smallwood applied to the Trial Division for an
injunction enjoining the appellant as well as
Messrs. Couture and MacLellan from acting upon
that subpoena. In support of his application, he
filed an affidavit containing the following asser
tions:
5. In my dealings with Canadian Javelin Limited and/or in
dealings with third parties involving matters affecting the said
Canadian Javelin Limited, I have acted solely in the capacity as
representative of Her Majesty the Queen in right of the Prov
ince of Newfoundland holding the office of Premier, and/or
Minister of Finance, and/or Minister of Economic Develop
ment, and/or Minister of Justice and/or Attorney General;
6. Any evidence which I may be called upon to give or
documents which I may be called upon to produce before the
said R. S. MacLellan, Q.C., can relate only to matters arising
out of the carrying out of my duties and responsibilities as
representative of Her Majesty the Queen in right of the Prov
ince of Newfoundland;
7. Any testimony under oath which I may be called upon to
make or any documentation I may be called upon to produce
before the said R. S. MacLellan, Q.C., would result in a
violation of Crown Privilege, a breach of my oath of office as
Minister of Her Majesty the Queen in right of the Province of
Newfoundland and/or a violation of the doctrine of Cabinet
Secrecy;
8. I shall be obliged to decline to reply to any questions put to
me and shall be obliged to decline to produce any documents
which may deal with matters relating to the exercise of my
duties and responsibilities as a Minister of Her Majesty the
Queen in right of the Province of Newfoundland;
9. The giving of testimony and/or the production of documents
by me in the proposed examination would disclose a confidence
of the Executive Council of the Province of Newfoundland;
10. Moreover, Respondent Luc A. Couture in his quality as
member and Vice-Chairman of the Restrictive Trade Practices
Commission and Respondent R. S. MacLellan in his quality as
member of the Restrictive Trade Practices Commission being a
"Federal Board, Commission or other Tribunal" as defined in s.
2(g) of the Federal Court Act (R.S.C. 1970, c. 10 (2nd supp.),
as amended), have no right to inquire into the affairs and/or
dealings of Her Majesty the Queen in right of the Province of
Newfoundland as performed by her Ministers;
The Trial Division granted Mr. Smallwood's
application and issued an injunction in the follow
ing terms:
THIS COURT DOTH ORDER AND ADJUDGE that each and
every one of the respondents as well as any other persons who
shall have notice of this injunction be and is hereby restrained
from endeavouring to compel the attendance by JOSEPH
ROBERTS SMALLWOOD to be questioned as a witness before the
respondent R. S. MACLELLAN . or the respondent LUC -A.
COUTURE or any members of the Restrictive Trade Practices
Commission for the purpose of questioning the said JOSEPH
ROBERTS SMALLWOOD with respect to or pertaining to any
matter in which he was involved or of which he had knowledge
in his capacity as Premier of the Province of Newfoundland.
AND IT IS FURTHER ORDERED that the applicant do file a
statement of claim in this matter within ten days and serve such
statement of claim on the respondents forthwith.
AND IT IS FURTHER ORDERED that this injunction shall
remain in force until judgment has been pronounced in the
action to be commenced by the statement of claim aforesaid.
This is the judgment against which this appeal is
directed. That judgment, according to Mr. Nuss,
counsel for Mr. Smallwood, may be supported on
the following grounds:
(1) The appellant is merely an inspector
appointed under a federal statute who, as such,
has no right to inquire into the affairs of Her
Majesty the Queen in right of the Province of
Newfoundland.
(2) Mr. Smallwood is not a compellable witness
in this matter because, being a former Minister
of the Crown, he is entitled to invoke the pre
rogative of the Crown and of Ministers of the
Crown not to be compelled either to give discov
ery in a civil action or to testify in an inquiry.
(3) In any event, any testimony under oath that
Mr. Smallwood might be called upon to give
would result in a violation of Crown privilege
(or public interest immunity), a breach of his
oath of office and a violation of the doctrine of
Cabinet secrecy.
It is apparent, in my view, that the first of those
three grounds must be rejected. The material filed
in support of the application shows that the appel
lant Sparling was appointed to conduct an investi
gation of Canadian Javelin Limited and nothing in
the record indicates that he exceeded or intends to
exceed that mandate. The mere fact that, in the
course of his investigation he might oblige a
former Minister of a province to testify as to facts
known by him in his capacity as Minister, would
not change the object of the inquiry and transform
it into an inquiry in the administration of that
province.
I do not see any merit, either, in the second
reason put forward by Mr. Nuss to support the
judgment of the Trial Division. True, in certain
circumstances a Minister of the Crown has the
right to invoke the prerogative of the Crown and
refuse to testify at an inquiry (see Attorney Gener
al of the Province of Quebec v. Attorney General
of Canada [1979] 1 S.C.R. 218 at pages 244, 245
and 246), and Mr. Nuss may be right in asserting
that that prerogative, in so far as it belongs to the
Crown in right of a province, is not taken away by
the Canada Corporations Act. However, as that
prerogative is a prerogative of the Crown, it can
only be invoked, in my opinion, by a Minister or
other person acting for the Crown in proceedings
in which he is a party or witness, in his capacity as
Minister or representative of the Crown. The pre
rogative cannot be invoked by a former Minister
who, in his private capacity, is ordered to testify at
an inquiry.
Finally, I am of opinion that the third ground
advanced by Mr. Nuss in support of the judgment
must also be rejected. That judgment is obviously
based on the view that Mr. Smallwood has the
right to refuse to answer any question "with
respect to or pertaining to any matter in which he
was involved or of which he had knowledge in his
capacity as Premier ... of Newfoundland." I con
sider that view to be wrong in law and it is worth
noting that Mr. Nuss was unable to refer us to any
authority supporting it. The truth is that Mr.
Smallwood, in his capacity as Premier and Minis-
ter of his Province, may have been involved in
many matters and may have known of many
things, the divulgation of which would constitute
neither a violation of Crown privilege or of Cabi
net secrecy nor a breach of his oath of office.
I am of the view, therefore, that the judgment of
the Trial Division cannot stand since it orders the
appellant to refrain from doing things that he may
lawfully do.
The last submission made by Mr. Nuss was
that, if the appeal were to succeed, the Court
should substitute for the injunction pronounced by
the Trial Division another injunction expressed in
narrower terms. I do not agree. We do not know
what questions will be put to Mr. Smallwood and
there is no reason to believe that the appellant
intends to force him to testify on matters that he
could lawfully refuse to reveal. In those circum
stances, I do not see any reason at this time to
issue an injunction.
I would, for those reasons, allow the appeal with
costs, set aside the judgment of the Trial Division
and dismiss with costs the application for an
injunction.
* * *
LE DAIN J. concurred.
* * *
LALANDE D.J. concurred.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.