Crown Trust Co. and Greymac Trust Co. v. Ontario, Taylor, Touche, Ross Ltd., Shuve, Woods Gordon and Central Trust Co. et al.

• Jurisdiction: Ontario
• Judge: Henry, Craig and Sirois, JJ.
• Citation: (1986), 14 O.A.C. 137 (DC),1986 CanLII 2725 (ON SC),54 OR (2d) 79,26 DLR (4th) 41,[1986] OJ No 2374 (QL),14 OAC 137
• Court: Superior Court of Justice of Ontario (Canada)
• Date: 27 February 1986

Crown Trust v. Ont. (1986), 14 O.A.C. 137 (DC)

MLB headnote and full text

Crown Trust Company, Greymac Trust Company, Greymac Credit Corporation and Rosenberg v. Her Majesty The Queen in right of Ontario, Attorney General of Ontario, Lieutenant Governor-In-Council for the Province of Ontario, Elgie, Minister of Consumer and Commercial Relations, Crosbie, Deputy Minister of Consumer and Commercial Relations, Thompson, Registrar Loan and Trust Corporations Act, Shuve, Taylor, Woods Gordon, Touche, Ross Limited, Biddell, MacDonald, Central Trust Company and Canada Deposit Insurance Company

(1850/83)

Indexed As: Crown Trust Co. and Greymac Trust Co. v. Ontario, Taylor, Touche, Ross Ltd., Shuve, Woods Gordon and Central Trust Co. et al.

Ontario Divisional Court

Henry, Craig and Sirois, JJ.

February 28, 1986.

Summary:

The Province of Ontario enacted legislation which authorized the government, through the Registrar under the Loan and Trust Corporations Act, to assume control of the assets and business of Crown Trust Company and Greymac Trust Company for reasons related to the public interest. The two trust companies sued the government, the Registrar and the Registrar's agents for a declaration that the legislation was invalid as being contrary to ss. 7 and 8 of the Canadian Charter of Rights and Freedoms. The trust companies also claimed damages against all the defendants for alleged trespass and conversion of their assets. The Registrar's agents applied to strike out the statement of claim as against them. The trial judge dismissed the application. The agents appealed.

The Ontario Divisional Court allowed the appeal. The Divisional Court struck out the statement of claim and dismissed the action as against the agents.

Constitutional Law - Topic 115

De facto doctrine - The Ontario Divisional Court discussed the de facto doctrine, in the context of determining whether officials charged with enforcement of legislation that is later declared invalid are liable for acts done while the impugned legislation remained in force - See paragraphs 39 to 45.

Crown - Topic 2448

Liability of Crown arising from enforcement of statutes - When liable - Unconstitutional statutes - Amendments to the Loan and Trust Corporations Act etc. enabled the government, through the Registrar, to assume control of the affairs of two trust companies - The trust companies sued, among others, the Registrar's agents for a declaration that the legislation was invalid and for damages for trespass and conversion of the companies' assets - The Ontario Divisional Court held that where the impugned legislation was not yet declared invalid, no cause of action existed against the Registrar's agents when acting within the scope of the legislation, absent any allegation of wrongful conduct, bad faith, negligence or collateral purpose - See paragraphs 33 to 34.

Crown - Topic 2448

Liability of Crown arising from enforcement of statutes - When liable - Unconstitutional statutes - Amendments to the Loan and Trust Corporations Act etc. enabled the government, through the Registrar, to assume control of the affairs of two trust companies - The trust companies sued, among others, the Registrar's agents for a declaration that the legislation was invalid and for damages for trespass and conversion of the companies' assets - The Ontario Divisional Court held that even assuming that the legislation was invalid, the Registrar's agents were immune from action by s. 146(3) of the Act, the common law rule of immunity and by the application of the de facto doctrine - See paragraphs 35 to 53.

Crown - Topic 4544

Actions by and against Crown in right of a province - Capacity of Crown to be sued - Statutory immunity - Re acts done pursuant to an ultra vires statute - Legislation enabled the Ontario government, through the Registrar, to assume control of two trust companies - The companies sued the government, the Registrar and his agents for a declaration that the legislation was invalid and for damages for trespass and conversion of the companies' assets - The Ontario Divisional Court held that even assuming that the legislation was invalid, the Registrar's agents were immune from action by s. 146(3) of the Loan and Trust Corporations Act, the common law rule of immunity and by the application of the de facto doctrine - The court held that an official charged with the enforcement of legislation that is later held to be invalid ought not to be held liable for conduct which would, in the absence of the legislation, be other wise tortious - See paragraphs 35 to 53.

Cases Noticed:

Operation Dismantle Inc. et al. v. Canada et al. (1985), 59 N.R. 1 (S.C.C.), refd to. [para. 33].

Hoffmann-La Roche et al. v. Secretary of State for Trade and Industry, [1975] A.C. 295; [1974] 2 All E.R. 1128 (H.L.), refd to. [para. 33].

Central Canada Potash Co. Ltd. et al. v. Government of Saskatchewan et al., [1979] 1 S.C.R. 42; 88 D.L.R.(3d) 609; 23 N.R. 481, consd. [paras. 33, 37].

Gladstone Petroleum Ltd. v. Husky Oil (Alberta) Ltd., [1982] 6 W.W.R. 577; 18 Sask.R. 273 (Sask. C.A.), refd to. [para. 33].

Zigler v. Hunter (1983), 75 C.P.R.(2d) 163 (F.C.T.D.), refd to. [para. 33].

Manitoba Language Rights Reference, [1985] 4 W.W.R. 385; 59 N.R. 321; 35 Man.R.(2d) 83 (S.C.C.), consd. [para. 37].

Amax Potash Ltd. v. Province of Saskatchewan, [1977] 2 S.C.R. 576; 11 N.R. 222 (S.C.C.), consd. [para. 48].

Antill Ranger - Deacon v. Grimshaw (1955), 93 C.L.R. 104, consd. [para. 50].

Statutes Noticed:

Loan and Trust Corporations Amendment Act, S.O. 1982, c. 62, sect. 158a(1) [paras. 7-8].

Loan and Trust Corporations Act, R.S.O. 1980, c. 249, sect. 146(3) [paras. 12, 26, 30, 35-36, 51, 53]; sect. 159(1) [para. 9]; sect. 159(3) [paras. 10-11].

Crown Trust Company Act 1983, S.O. 1983, c. 7, generally [paras. 1314]; sect. 3(2) [para. 15]; sect. 10 [para. 16].

Central Trust Company Act 1983, S.O. 1983, c. 64, generally [para. 19].

Authors and Works Noticed:

Constantineau, Albert, The De Facto Doctrine (1910) [paras. 39-40].

Counsel:

A. Lenczner and J. Brown, for Central Trust, appellant;

S. Simpson and J. Meyers, for J. David Taylor and Touche, Ross Limited, appellants;

W.G. Horton, for Ainsley St. Clair Shuve and Woods Gordon, appellants;

J. Polika, for Her Majesty The Queen in Right of Ontario, The Attorney-General of Ontario and Robert G. Elgie, M.D., Ministry of Consumer and Commercial Relations;

R. Carr, for the respondents.

This appeal was heard before Henry, Craig and Sirois, JJ., of the Ontario Divisional Court on February 27, 1986. The decision of the Divisional Court was delivered orally by Henry, J., on February 28, 1986 and released on March 17, 1986.