A-1736-83
Attorney General of Canada and Minister of Com
munications (Appellants) (Defendants)
v.
Lount Corporation, Atlific Inc., and Satel Con
sultants Limited (Respondents) (Plaintiffs)
Court of Appeal, Heald, Urie and Ryan JJ.—
Ottawa, May 15 and June 10, 1985.
Broadcasting — Appeal from trial judgment declaring
parabolic dish antenna ("earth station") and log-periodic
antennae used in hotel exempt from licensing and certification
requirements of Radio and Broadcasting Acts — Respondents'
unlicensed radio apparatus receiving satellite signals carrying
television programming of Home Box Office, Showtime Enter
tainment and WTBS — S. 3(3) of Radio Act exempting certain
radio apparatus from licensing and certification requirements
if intended only for reception of "broadcasting" and
not "broadcasting receiving undertaking" — "Broadcasting"
defined as radiocommunication in which transmissions intend
ed for direct reception by general public — Trial Judge finding
transmissions intended for direct reception by general public,
as foreseeable consequence of not encoding signals for pro
grams having mass appeal beamed across large portion of
North America — Trial Judge not erring in weighing all
factors in reaching conclusion — Installation not "undertak-
ing" within meaning of "broadcasting receiving undertaking"
in s. 3(3) — Installation merely incidental amenity provided as
part of whole hotel undertaking — R. v. Communicomp Data
Ltd. (1974), 53 D.L.R. (3d) 673 (Ont. Cty. CO distinguished as
here no fee levied for use of installation — Radio Act, R.S.C.
1970, c. R-1, ss. 2(1), 3(1),(3) — Broadcasting Act, R.S.C.
1970, c. B-11, ss. 2, 29(3).
This is an appeal from the trial judgment declaring that a
Manitoba hotel's television receiving equipment, consisting of a
parabolic dish antenna or "earth station" and two log-periodic
antennae, with their ancillary equipment, are exempt from the
licensing and certification requirements of the Broadcasting
Act and the Radio Act. The appellants' primary concern is the
unlicensed use of earth station receivers. The respondents con
tend that while Parliament has the constitutional power to
require them to be licensed, it has failed to exercise that power.
The equipment is "radio apparatus" within the definition of
that expression in section 2 of the Radio Act. Subsection 3(1)
of the Radio Act prohibits the installation of a radio apparatus
except in accordance with licensing and certification require
ments. The earth station was beamed to receive signals trans-
mitted from communications satellites, particularly signals
carrying the television programming of Home Box Office Inc.
(HBO), Showtime Entertainment (Showtime) and WTBS. The
radio apparatus was not licensed. The respondents argue that
they are exempt from the offence created by subsection 29(3)
of the Broadcasting Act by virtue of subsection 3(3) of the
Radio Act. Subsection 3(3) provides that any radio apparatus
that is capable only of receiving radiocommunications and that
is not a broadcasting receiving undertaking is exempt from the
requirements of subsection (1) if it is intended only for the
reception of broadcasting. The respondents can only avail
themselves of the exemptions provided by subsection 3(3) if the
transmissions their radio apparatus receive are "broadcasting"
and if what they do is not an "undertaking". The Trial Judge
held that the earth station with its ancillary equipment, and the
two log-periodic antennae with their ancillary equipment, were
two distinct systems of radio apparatus.
Held, the appeal should be dismissed.
The question of whether the radio apparatus is one or two
systems is a question of fact. There is evidence supporting the
Trial Judge's finding so it is unnecessary to examine his
reasons. Little turns on this issue.
"Broadcasting" is defined in both Acts as meaning any
radiocommunication in which the transmissions are intended
for direct reception by the general public. Witnesses for HBO
and Showtime testified that their companies' transmissions are
intended to be received only by subscribers who pay fees to and
receive programs through licensed or affiliated cable compa
nies. Neither company scrambles its signal for economic rea
sons, but both transmit warnings that their transmissions are
not for the public at large. Any person possessing radio
apparatus of the kind used or similar to that used by the
respondents can receive the signal. The programs have mass
appeal and are beamed across a large portion of North Ameri-
ca. The Trial Judge held that the transmissions were intended
for direct reception by the general public because that is the
wholly foreseeable and known consequence of the companies'
conduct. The appellants argued that the Trial Judge interpreted
"intended" as meaning "capable". When a person transmitting
signals knows that he cannot limit reception to a certain
segment of the public, he cannot intend only that limited public
to receive them. The Trial Judge was entitled to weigh the
expressed intent of HBO and Showtime in relation to other
facts, such as the technical possibility of encoding the signals at
some additional cost, and to conclude that the expressed inten
tion being incapable of fulfillment, the transmissions must have
been "intended for direct reception by the general public". The
Trial Judge did not specifically make any finding as to the
witnesses' credibility. He weighed all of the testimony, viva
voce and documentary, to adjudicate the issue. Becker v. The
Queen, [1983] 1 F.C. 459 (C.A.) is distinguishable. There the
Trial Judge, having accepted the plaintiff's evidence as cred
ible, was not entitled, nor was the Court of Appeal, to treat it
as other than credible for the purpose of determining whether
the plaintiff's stated intention was his real intention.
The installation is not an "undertaking" within the meaning
of that word in the term "broadcasting receiving undertaking".
It is merely an incidental amenity provided as part of the whole
hotel undertaking. The use made of the installation was not a
commercial one in the direct sense, and only in the indirect
sense because it formed part of the whole undertaking of the
respondents. The respondents' radio apparatus does not there
fore require a licence.
The case of R. v. Communicomp Data Ltd. (1974), 53
D.L.R. (3d) 673 (Ont. Cty. Ct.) is distinguishable. The under
taking in the Communicomp case differed from the case at bar
as there either a flat fee or rental fee was charged for the use of
the installation. Such a system was held to be an undertaking.
Here no fee or charge was levied.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Becker v. The Queen, [1983] 1 F.C. 459 (C.A.); R. v.
Communicomp Data Ltd. (1974), 53 D.L.R. (3d) 673
(Ont. Cty. Ct.); Imperial Tobacco Ltd v Attorney-Gen
eral, [1980] 1 All ER 866 (H.L.); Royal Bank of Canada
v. Deputy Minister of National Revenue—Customs and
Excise, [1981] 2 S.C.R. 139.
COUNSEL:
Eric A. Bowie, Q.C. and Peter K. Doody for
appellants (defendants).
Jack Greenstein, Q.C. for respondents (plain-
tiffs).
SOLICITORS:
Deputy Attorney General of Canada for
appellants (defendants).
Doheny, MacKenzie, Grivakes, Gervais et Le
Moyne, Montreal, for respondents (plaintiffs).
The following are the reasons for judgment
rendered in English by
URIE J.: This appeal, which was heard together
with Appeal No. A-1776-83, is from a judgment of
the Trial Division [[1984] 1 F.C. 332] wherein it
was declared that none of the radio apparatus
located at the Holiday Inn, Pembina Highway,
Winnipeg, Manitoba, consisting of earth station
receiving equipment designed to receive satellite
signals and log-periodic equipment designed to
receive local off-air television signals, were subject
to the requirement of a licence under the Broad
casting Act [R.S.C. 1970, c. B-11] or a licence or
technical construction and operating certificate
under the Radio Act [R.S.C. 1970, c. R-1]. The
judgment dismissed the counterclaims of all three
appellants.
There is substantial agreement on the basic facts
as set forth in the following excerpt from the
reasons for judgment of the learned Trial Judge,
Muldoon J. [at pages 334-337]:
In the southern sector of the City of Winnipeg, in Manitoba,
on Pembina Highway, there is a hotel, a Holiday Inn. It is
owned and operated by the plaintiffs Lount Corporation and
Atlific Inc. Atop and within that hotel there is certain television
receiving equipment. It is leased to Lount Corporation and
Atlific Inc. (hereinafter particularly referred to as: Lount) by
their fellow plaintiff SaTel Consultants Limited (hereinafter
particularly referred to as: SaTel).
That equipment consists, in part, of a so-called "earth sta
tion": a parabolic dish antenna of approximately 3.65 metres
(12 feet) in diameter with feedhorn placed on the hotel roof,
and connecting cable running to a rack of three VR-3X satellite
receivers manufactured by Microwave Associates Communica
tion which are located in the elevator penthouse of the hotel
building. Running from these three receivers there is coaxial
cable which joins a trunk coaxial line to each floor of the hotel
and thence cable lines to each guest room, in which there is a
television set producing intelligible pictures and sound.
There is a second part of the hotel's television receiving
equipment which was disclosed by the plaintiffs in response to
the defendants' demand for particulars and, accordingly,
deemed to be described in the pleadings, and subsequently
admitted by the defendants. This part of the equipment consists
of two log-periodic antennae mounted on a single mast on the
roof and connecting cable running to a rack of four television
signal processors of a type known as Benevac, Mark 3SA, also
located in the elevator penthouse. Running from these four
processors there is a coaxial cable which joins the earlier
mentioned coaxial trunk line to each floor of the hotel and
thence the same earlier mentioned cable lines to each guest
room of the hotel connected to the same television set produc-
ing intelligible pictures and sound as was earlier mentioned.
This system of equipment is that which is commonly called a
master antenna television or MATV and it is the same as, or
similar to the roof-top antennae seen on many houses.
The parabolic dish antenna is clearly visible in the photo
graphs received as Exhibits 7, 9 and 10: and the two log-period
ic antennae on a single mast are quite visible in the photo
graphs received as Exhibits 7, 8 and 10. The three VR-3X
satellite receiver units, and the four Mark 3SA television signal
processors, are mounted in vertical racks, side by side, together
with a television monitor, all clearly shown in the photograph
which is Exhibit 6. The actual equipment mentioned above and
shown in the photographs is professionally described in the
report (Ex. 14) prepared by the witness Hubert J. Schlafly. An
exposition of electromagnetic fields and waves, antennae and
satellite communications is provided in the report (Ex. 15)
prepared by the witness Dr. K. G. Balmain.
The plaintiffs admit that the above-mentioned equipment
leased to Lount by SaTel is "radio apparatus", within the
definition of that expression in section 2 of the Radio Act,
R.S.C. 1970, c. R-1. However, the plaintiffs contend that the
earth station with its ancillary equipment, and the two log-peri
odic antennae with their ancillary equipment, each constitute a
separate and distinct set of radio apparatus as that term is
defined in section 2 of the Radio Act. That term appears in
subsection (1), thus:
2. (1) ...
"radio apparatus" means a reasonably complete and sufficient
combination of distinct appliances intended for or capable of
being used for radiocommunication;
The parties are in substantial agreement about the capabili
ties and use of the plaintiffs' radio equipment. The apparatus
constituting the earth station with its parabolic antenna is
capable of receiving radiocommunication signals transmitted by
radio transmitters located on communication satellites operat
ing in a synchronous orbit above the earth's equator, at a radius
of about 6.6 Earth radii or 42,055 kilometres. The plaintiffs'
witness, Mr. Hubert J. Schlafly, characterized such an orbit as
"geostationary" (Ex. 14), and the defendants' witness Dr.
Keith G. Balmain, explained (Ex. 15) that "at this radius a
satellite's rotational period around the earth is 24 hours, so if
the satellite is moving from west to east above the equator, it
appears to be stationary when viewed from the earth". On the
other hand, the two log-periodic antennae are capable of receiv
ing radiocommunication signals transmitted "over-the-air" by
local conventional television broadcasting stations. In both
kinds of equipment the ancillary electronic components stored
in the racks within the elevator penthouse of the hotel are
capable of translating the respective signals received from the
respective distinctively configured and differently specialized
antennae on the roof, into intelligible pictures and sounds at the
television sets in each guest room. "Translating" here does not
mean decoding, for the evidence discloses, and the parties are in
agreement, that neither the signals received from the satellite to
which the parabolic antenna is directed, nor those received at
the log-periodic antenna from the local broadcasting stations,
are in any way "scrambled" or encoded. Those signals have
been, and still are, transmitted in the clear to anyone who has
use of the kind of apparatus which is emplaced on and in the
Holiday Inn at 1330 Pembina Highway, in Winnipeg.
The plaintiffs have been using the parabolic antenna and its
rack of ancillary electronic appliances to receive radiocommu-
nication signals transmitted in the 3.7 to 4.2 Gigacycles per
second (gigahertz or GHz) band from a satellite (Satcom 1)
owned by RCA American Communications Inc. (RCA Ameri-
com) of the United States of America. The area of reception of
the satellite's downlink signal—its so-called "footprint"—
extends into Canada. In particular, the plaintiffs' parabolic
antenna has been tuned to receive satellite signals carrying the
television programming of Home Box Office Inc. (HBO),
Showtime Entertainment (Showtime) and WTBS. HBO, as the
parties agree by their pleadings, is a wholly owned subsidiary of
Time Inc. Likewise, Showtime is a joint venture of subsidiary
corporations of Viacom International Inc. and Teleprompter
Inc., while WTBS is a subsidiary of Turner Communications
Inc. All of those corporations are incorporated pursuant to laws
in force within the United States of America and they are all
resident in that country.
I
The first issue requiring resolution is whether
the respondents' radio apparatus (and it was
conceded here as it was at trial that both kinds of
equipment involved herein are "radio apparatus"
within the definition of that term in the Radio
Act)' consists of (a) the earth station with its
ancillary equipment as one, distinct system and (b)
the two log-periodic antennae with their ancillary
equipment (MATV) as another separate, distinct
system. Mr. Justice Muldoon found [at page 338]
that "they are two distinct systems of radio
apparatus which merely utilize a common 'high-
way', the cable which carries their respective
received signals to the television sets throughout
the hotel". The question is really one of fact. There
is certainly evidence supporting the finding so that
I do not find it necessary to examine that evidence
nor the Trial Judge's reasons for reaching his
conclusion. Suffice it to say that I am unable to
agree with counsel for the appellants that the
learned Judge employed the wrong test in deciding
as he did. I do not read his reasons as utilizing a
test. Rather, as I see it, he decided that on a
proper appreciation of the evidence, particularly
that of the witness Schlafly taken as a whole, the
MATV system and the earth station receiving
equipment were separate, distinct systems utilizing
a common coaxial cable to deliver their respective
'2.(1) In this Act
"radio apparatus" means a reasonably complete and suffi
cient combination of distinct appliances intended for or
capable of being used for radiocommunication;
signals to the "display device" (the television set)
in the various guest rooms in the hotel. The rea
sons given by the witness for using a common
cable support Muldoon J.'s finding as I see it. I
would not, as a consequence, interfere with that
finding.
II
It is my view that little turns on whether the
respondents' radio apparatus consists of one or two
systems. It was quite apparent from the argument
in this Court that the appellants' primary concern
is the unlicensed use of earth station receivers, i.e.
parabolic dish antennae beamed to receive radio-
communication signals transmitted by transmitters
on communications satellites. The respondents
contend that while undoubtedly Parliament has
the constitutional power to require them to be
licensed, it failed to exercise that power. The
appellants, of course, say that it has and points to
the Radio Act, R.S.C. 1970, c. R-1 and amend
ments thereto and to the Broadcasting Act, R.S.C.
1970, c. B-11 and amendments thereto. The fol
lowing definitions appear in identical terms in
section 2 of each Act:
2. (1) ...
"broadcasting" means any radiocommunication in which the
transmissions are intended for direct reception by the general
public;
"broadcasting undertaking" includes a broadcasting transmit
ting undertaking, a broadcasting receiving undertaking and a
network operation located in whole or in part within Canada
or on a ship or aircraft registered in Canada;
"radio apparatus" [already set out above]
... "radio" ["radiocommunication" in the Broadcasting Act]
means any transmission, emission or reception of signs, sig
nals, writing, images, sounds or intelligence of any nature by
means of electromagnetic waves of frequencies lower than
3,000 Gigacycles per second propagated in space without
artificial guide;
Subsection 3(1) of the Radio Act provides:
3. (1) Subject to subsections (2) and (3), no person shall
(a) establish a radio station, or
(b) install, operate or have in his possession a radio apparatus
at any place in Canada or on board any
(c) ship or vessel that is registered or licensed under the
Canada Shipping Act or owned or under the direction or
control of Her Majesty in right of Canada or a province,
(d) aircraft registered in Canada, or
(e) spacecraft under the direction or control of Her Majesty
in right of Canada or a province, a citizen or resident of
Canada or a corporation incorporated or resident in Canada,
except under and in accordance with a licence and, to the
extent that it is a broadcasting undertaking, except under and
in accordance with a technical construction and operating
certificate, issued by the Minister under this Act.
It is admitted that the respondents' radio
apparatus has not been granted a licence to oper
ate a radio apparatus or a technical construction
and operating certificate as a broadcasting receiv
ing undertaking under subsection 3(1). Since it is
common ground that the respondents' equipment
is "radio apparatus" within the definition of that
term in the Acts, which is receiving radiocommu-
nications and is unlicensed, the appellants' say that
the respondents have committed the offence creat
ed by subsection 29(3) of the Broadcasting Act
unless they can bring themselves within the
exempting provisions of subsection 3(3) of the
Radio Act.
29....
(3) Every person who carries on a broadcasting undertaking
without a valid and subsisting broadcasting licence therefor, or
who, being the holder of a broadcasting licence, operates a
broadcasting undertaking as part of a network other than in
accordance with the conditions of such licence, is guilty of an
offence and is liable on summary conviction to a fine not
exceeding one thousand dollars for each day that the offence
continues.
3....
(3) Any radio station or radio apparatus that is capable only
of receiving radiocommunications and that is not a broadcast
ing receiving undertaking is exempt from the requirements of
subsection (1) if it is intended only for the reception of
(a) broadcasting; or
(b) broadcasting and any class of radiocommunication, other
than broadcasting, prescribed by the Minister.
The respondents agree that they can only avail
themselves of the exemptions provided by subsec
tion 3(3) if the transmissions their radio apparatus
receive are "broadcasting" and if what they do is
not an "undertaking" within the meaning of
"broadcasting receiving undertaking" as it appears
in that subsection.
III
Is what the respondents receive on their radio
apparatus "broadcasting"? It is undisputed that
the transmissions which the respondents MATV
apparatus receive are "broadcasting". The appel
lants strongly contend, however, that the satellite
transmissions are not because they are not trans
missions "intended for direct reception by the gen
eral public" as the statutory definition of the term
requires. At the same time, they take the plainly
contradictory position that the respondents operate
a broadcasting receiving station. In the view that I
take of the matter it is unnecessary to resolve this
contradiction so that I return to the essence of the
appellants' argument.
As was earlier indicated, the Trial Judge found
that the respondents' parabolic antenna has been
tuned to receive satellite signals carrying the
television programming of Home Box Office Inc.
[hereinafter sometimes referred to as HBO],
Showtime Entertainment and WTBS. Witnesses
from the two former organizations testified at trial
that their companies' respective transmissions are
intended to be received only by subscribers who
pay fees to and receive programs through licensed
or affiliated cable television enterprises. The
money paid by the cable television companies to
Home Box Office and Showtime is the only source
of revenues for these companies from their satellite
television distribution operations. Neither com
pany scrambles or encodes its signal at the present
time so that any person possessing radio apparatus
of the kind used or similar to that used by the
respondents, can receive the signal. Each had
taken the business decision not to invest in encod
ing devices to the date of trial due to what was
deemed to be the uneconomic cost thereof. Both
transmit warnings that their transmissions are not
for the public at large and unauthorized reception
or distribution thereof are unlawful. On these facts
can it be said that their transmissions "are intend
ed for direct reception by the general public? Mr.
Justice Muldoon found as follows [at page 351:]
But, when the originators of those transmissions say that the
transmissions are not intended for such direct reception, what
do they mean? After all, they know full well that their trans
missions can be directly received by the general public. Indeed,
they both include warnings and disclaimers in their programs,
HBO also sends cease and desist letters, and both are contem
plating, if not actively planning, the encoding of their signals so
as to deny intelligible reception to persons who are not sub
scribers. Clearly, they do not wish to provide their transmis
sions for direct reception by the general public, but they
continue knowingly to transmit signals which are easily avail
able for direct reception by the general public. Plainly they
desire and hope that their transmissions will not be directly
received by that sector of the general public who decline to
subscribe to their affiliates' cable television service. Plainly also
their business objective is to protect their affiliates' interests in
augmenting the number of subscribers among the general
public, to the exclusion of non-subscribers. Can one then con
clude that their transmissions are not intended for direct recep
tion by the general public? [Emphasis added.]
In all the circumstances of this case the choice and expres
sion of the word "intended" in the testimony of Miss Procope
and Mr. Redpath are not legally conclusive of the issue. In the
first place, as the plaintiffs plead in their answer and statement
of defence to the counterclaim, and as the evidence amply
discloses, the transmissions are neither scrambled nor encoded
so that anyone utilizing standard TVRO earth station equip
ment can directly receive them. Secondly, the programs have
mass appeal, are not limited in content nor directed to any
particular segment of the general public but are formulated so
as to attract as wide an audience as possible. Thirdly, the
transmissions are widely dispersed in an extensive "footprint"
which permits direct reception not merely in the United States,
but also in parts of Mexico and Canada.
He then held [at page 353]:
The transmissions of Showtime and HBO must be found to be
intended for direct reception by the general public, even though
that result is not really desired by them, because that is the
wholly foreseeable and, indeed, known consequence of their
conduct. Accordingly, their signals are "radiocommunication in
which the transmissions are intended for direct reception by the
general public". That which the plaintiffs receive from HBO
and Showtime is therefore "broadcasting" as defined in the
Radio Act and in the Broadcasting Act.
It is the appellants' contention the Trial Judge
erred because his interpretation ascribed no mean
ing to the word "intended". Rather, it was said, he
interpreted the word as reading "capable of being
directly received by the general public". In coun
sel's view that ignores the plain meaning of
"intended".
I cannot agree. I find it difficult to accept the
proposition that a person transmitting television
signals, the reception of which he knows cannot be
limited to a particular segment of the public, can
be said to have intended that only that limited
segment receive them. The best that can be said, it
seems to me, is that by his warnings he hopes that
others in the general public will be deterred from
receiving the transmissions. Put another way, he
simply disregards his inability to accomplish what
he intends, in the hope that those not to be includ
ed among the receivers will be few in number.
Therefore, notwithstanding the intent of HBO and
Showtime as expressed through their employees,
the Trial Judge was entitled, in my view, to weigh
that evidence in relation to other acknowledged
facts (including that which disclosed that it was
technically quite possible to encode the signals so
that they could be received only by cable company
subscribers although at some additional cost to the
transmitter) and reach the conclusion that the
expressed intention to limit the receiving public
being incapable of fulfillment, the transmissions
must have been "intended for direct reception by
the general public" because they were receivable
by that part of the general public limited only by
possession of an appropriate earth station.
In so finding I reject the submission of counsel
for the appellants that to support the Trial Judge's
conclusion, there must have been a finding that the
witnesses direct testimony as to their corporate
employers' intention was not credible. The Trial
Judge made no specific finding as to credibility
one way or the other. What he did, in my view,
was to carry out the duty that he was called upon
to perform, viz., to weigh all of the testimony, viva
voce and documentary, and decide the issue upon
which he was called to adjudicate. That might or
might not involve a finding as to the credibility of
the witnesses. In either event, his duty was to
weigh the whole of the evidence objectively,
including the weighing of the subjective evidence
of the witnesses from HBO and Showtime. In this
case, the assessment of all of the evidence led him
to conclude that the intention of the appellants, as
expressed by the witnesses, could not be accepted.
To reach that conclusion did not require that he
specifically make an adverse finding as to their
credibility. Clearly, the Trial Judge having
weighed their evidence and, as well, other relevant
evidence, concluded, without making a finding as
to credibility, that the actual intention of the two
corporate entities, on the facts, could not have
been that which the witnesses testified that it was.
In that respect it differed from the situation in
Becker v. The Queen, [1983] 1 F.C. 459 (C.A.)
where Le Dain J. found that the Trial Judge
having accepted the plaintiff's evidence as cred
ible, neither this Court nor the Trial Judge was
entitled to treat it as other than credible for the
purpose of determining whether or not the inten
tion with which the plaintiff said he went into a
purchase was his real intention. That is not what
Muldoon J. did here so that I am of the opinion
that the reasoning in Becker has no application in
this case.
For those reasons I am of the opinion that the
learned Judge did not err in concluding that the
transmissions are intended for direct reception by
the general public and is, therefore, "broadcast-
ing" within the meaning of that term in the two
Acts.
IV
The next issue then is, to determine whether or
not the receiver of the signal, the respondents,
engaged in an "undertaking" within the meaning
of that word as used in the term "broadcasting
receiving undertaking".
Counsel for the appellants argued, and counsel
for the respondents did not disagree, that the word
"undertaking" as used in the definition here in
issue, has a commercial connotation. The appel
lants say that the respondents' system is part of the
total package of services offered to guests of the
hotel and it does not lose its commercial aspect
merely because a separate charge for the service is
not levied. On the other hand, the respondents say
that while the hotel itself as a whole is an under
taking having a definite commercial aspect, the
television service as provided by it is not. In that
respect it differs from the hotel's restaurant, coffee
shop, news stand, or cocktail lounge which are
each individual profit centres. Their respective
businesses are separately accounted for. They each
have a distinct and recognizable investment with
concomitant risks and invididually calculable prof
its or losses. In contrast, the television service
provided for the guests is akin to the provision of
heating, water, linens, furniture, towels and soap
and elevator service. They are part of the hotel
undertaking not generating separately accountable
receipts although the expenses relating thereto
must be closely accounted for as part of the total
hotel operation to ensure that the room rents
chargeable to guests reflect their costs. Presum
ably, both for accounting and tax purposes they
are, depending on their nature, chargeable as
expenses or as capital assets. In the case of the
whole television service, including the MATV and
earth station systems, both are capitalized and the
cost thereof amortized in the same way as other
furniture, fixtures and equipment of the hotel.
Assistance in the resolution of this problem may
usefully begin by resort to dictionaries. The Short
er Oxford Dictionary, 3rd edition, defines the
word as:
Undertaking .. .
2. Something undertaken or attempted; an enterprise ....
The Living Webster Encyclopedic Dictionary,
defines it as:
•
"n. The act of one who undertakes any task or responsibility; a
task, enterprise, or something undertaken ...."
Harrap's New Shorter French and English Dic
tionary translates the word as:
"2. entreprise (commerciale, industrielle)."
In the Canadian Law Dictionary it is defined as:
undertaking: In relation to a corporation ... or business, the
term denotes its whole enterprise. [Emphasis added.]
Both counsel referred to and relied upon what
was said by Shapiro C.C.J. in R. v. Communicomp
Data Ltd. (1974), 53 D.L.R. (3d) 673 (Ont. Cty.
Ct.), at page 680:
The matter becomes an "undertaking" when there is a commer
cial aspect about it, as was the case here. Roget's Thesaurus
equates "undertaking" with "enterprise", "business", "work".
And in this respect the defendant's receiving differs from the
home T.V. set in that the programme does not just stop on the
receipt, but is for some financial consideration passed on to
other persons. As Lacourcière, J., in R. v. Ontario Labour
Relations Board, Ex p. Northern Electric Co. Ltd., [1970] 2
O.R. 654, 11 D.L.R. (3d) 640 [affirmed [1971] 1 O.R. 121, 14
D.L.R. (3d) 537], has pointed out, "undertaking" should be
considered in the light of the use one makes of a particular
installation. He cites a dictionary definition "as inter alia, 'a
task, enterprise, etc.' ". He then lists a number of references in
which the word has been judicially considered.
I certainly do not take issue with those com
ments particularly when related to the dictionary
definitions earlier set out. However, on the basis of
what Lacourcière J. pointed out namely, that
"undertaking should be considered in the light of
the use one makes of a particular installation," the
undertaking of the respondent corporation in the
Communicomp case differed markedly from that
in the case at bar. The owner of the installation in
the former case charged the owner/tenants of the
condominium/apartment complex for whom the
broadcasting receiving undertaking was operated,
a flat fee upon installation in the case of a con
dominium owner without payment of a further
rental fee and in the case of a tenant of an
apartment, a monthly fee without any initial fee.
Judge Shapiro on those facts found that the system
was an undertaking for the purposes of determin
ing whether or not Communicomp was a broad
casting receiving undertaking.
No such fee or charge was levied against room
occupants at the Holiday Inn and to my mind
makes this case distinguishable from the Com-
municomp case on the facts. The use made of the
installation in this case was not, as I see it, a
commercial one in the direct sense and only in the
indirect sense because it formed a part of the
whole undertaking of the respondents. It is not,
therefore, an "undertaking" within the meaning of
that word in the term "broadcasting receiving
undertaking". It is merely an incidental amenity
provided as part of the whole hotel undertaking.
The respondents' radio apparatus is not, therefore,
one requiring either a licence or a technical con
struction and operating certificate, being exempted
therefrom by subsection 3(3) of the Radio Act.
My opinion is not affected by the appellants'
reliance on Imperial Tobacco Ltd v Attorney-
General, [1980] 1 All ER 866 (H.L.) and Royal
Bank of Canada v. Deputy Minister of National
Revenue—Customs and Excise, [1981] 2 S.C.R.
139 neither of which, in my view, have any
application in the circumstances of this case.
I would dismiss the appeal with costs.
HEALS J.: I concur.
RYAN J.: I concur.
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.