Newfoundland (Attorney General) v. Churchill Falls (Labrador) Corp. et al., (1983) 49 Nfld. & P.E.I.R. 181 (NFTD)

• Judge: Goodridge, J.
• Court: Supreme Court of Newfoundland and Labrador (Canada)
• Case Date: June 13, 1983
• Jurisdiction: Newfoundland and Labrador
• Citations: (1983), 49 Nfld. & P.E.I.R. 181 (NFTD)

Nfld. v. Churchill Falls (1983), 49 Nfld. & P.E.I.R. 181 (NFTD);

    145 A.P.R. 181

MLB headnote and full text

Attorney General of Newfoundland v. Churchill Falls (Labrador) Corporation Limited, Quebec Hydro-Electric Commission, Royal Trust Company and General Trust of Canada

Indexed As: Newfoundland (Attorney General) v. Churchill Falls (Labrador) Corp. et al.

Newfoundland Supreme Court

Trial Division

Goodridge, J.

June 13, 1983

Summary:

In 1961 pursuant to the Churchill Falls (Labrador) Corporation Limited (Lease) Act (Lease Act) the Government of Newfoundland leased to Churchill Falls (Labrador) Corporation Limited (CFLCo) for 99 years the right to exploit the hydro-electric potential of Churchill Falls in Labrador and to sell the electricity generated. The lease, which under the Lease Act had the force of law, provided in clause 2(e): "Provided that upon the request of the Government consumers of electricity in the province shall be given priority where it is feasible and economic to do so." In 1967 the construction of the hydro-electric facility began. In 1969 Hydro-Quebec agreed with CFLCo to buy all the power produced, except that clause 6.6 of the power contract gave CFLCo the right to recapture 300MW of the 5700MW capacity. Clause 6.6 was intended, with the acquiescence of the Government of Newfoundland, to limit the potential claim of the Government under Clause 2 (e) of the lease. The Government represented that 300MW would be sufficient for its needs and both CFLCo and Hydro-Quebec relied on the representation. By 1974 the government realized that its power needs were greater than anticipated and in 1976 by order-in-council requested CFLCo to supply 800MW to the Government, beginning in 1983, relying on the proviso of Clause 2(e) of the lease. CFLCo refused, because of its contractual commitment to sell all but 300MW to Hydro-Quebec.

The Attorney General of Newfoundland brought an action against CFLCo, Hydro-Quebec (owner of one-third of the CFLC CFLCo shares) and Royal Trust and General Trust (trustees under the mortgage trust deeds providing the financial structure for the project) claiming a declaration that the government was entitled to request 800MW of power from CFLCo and that CFLCo was obliged to comply.

The Newfoundland Supreme Court, Trial Division, dismissed the application for three reasons. Firstly, the proviso in Clause 2(e) of the lease provided only that the Newfoundland consumer at the request of the Government was entitled to a right of first refusal to purchase all energy available for sale and not then otherwise committed, when it was feasible and economic for CFLCo to supply the power and for the Newfoundland consumer to buy it. Because all of the available power, except for the 300MW, was already sold to Hydro-Quebec, no power was available for the Newfoundland consumer. Secondly, the proviso contemplated that CFLCo upon the Government's request would be bound to enter an agreement with an unknown third party and such an agreement to agree was unenforceable where the price, terms and conditions had not been ascertained and there was no way to ascertain them. Thirdly, the Government did not prove that it would be feasible and economic either to the Newfoundland consumer or to CFLCo for CFLCo to supply 800MW to Newfoundland.

See Re Upper Churchill Water Rights Reversion Act (1984), 47 Nfld. & P.E.I.R. 125; 139 A.P.R. 125; 54 N.R. 268, for a judgment of the Supreme Court of Canada ruling that the attempt by the Province of Newfoundland to expropriate the interest of CFLCo in the Churchill Falls development and repeal the Lease Act was ultra vires.

Arbitration - Topic 2505

Stay of proceedings - Arbitration clause - Effect of - On jurisdiction of courts - The Newfoundland Supreme Court, Trial Division, stated that the parties to a contract cannot preclude the jurisdiction of the court by an arbitration clause - The court stated that an action will not be dismissed on the basis of an arbitration clause in a contract upon which the action is based; although the action may be stayed pending use of the arbitration process - See paragraph 711.

Arbitration - Topic 2511

Stay of proceedings - Bars to stay - Taking a step in the proceedings - The Newfoundland Supreme Court, Trial Division, held that if a party does anything more than apply for a stay as his initial step in an action after filing an appearance, he is deemed to have acceded to the court's jurisdiction - The court held that a party which participated in interlocutory proceedings and pleaded to the plaintiff's statement of claim was deemed to have waived its right to arbitration - See paragraphs 712 to 717.

Arbitration - Topic 2513

Stay of proceedings - Bar to stay - Waiver - The Newfoundland Supreme Court, Trial Division, held that a party to an action on a contract containing an arbitration clause waived its right to arbitration by participating in interlocutory proceedings and pleading to the plaintiff's statement of claim - See paragraphs 712 to 717.

Conflict of Laws - Topic 7230

Contracts - Choice of law - By parties - Effect on non-parties - The Province of Newfoundland brought an action against Churchill Falls (Labrador) Co. which placed in issue the effect of a power contract between CFLCo and Hydro-Quebec - The contract stipulated that Quebec law governed its interpretation - The Newfoundland Supreme Court, Trial Division, held that it had jurisdiction to determine the issues arising out of the contract, but must do so according to Quebec law, where proved - See paragraphs 1086 to 1093.

Conflict of Laws - Topic 7286

Contracts - Jurisdiction - Choice of forum by parties - Effect on non-parties - The Province of Newfoundland brought an action against Churchill Falls (Labrador) Co. which placed in issue the effect of a power contract between CFLCo and Hydro-Quebec - The contract stipulated that only Quebec courts had jurisdiction to determine disputes under the contract - The Newfoundland Supreme Court, Trial Division, held that the choice of forum clause was not binding on Newfoundland, which was not a party to the contract - See paragraphs 1086 to 1093.

Conflict of Laws - Topic 9621

Evidence - Proof of foreign law - General - The Newfoundland Supreme Court, Trial Division, held that foreign law is a question of fact, which must be specifically pleaded and proved by the party relying upon it - The court held that in the absence of proof foreign law is presumed to be the same as the law of the forum - See paragraphs 847, 1246, 1252.

Conflict of Laws - Topic 9623

Evidence - Proof of foreign law - Burden of proof - The Newfoundland Supreme Court, Trial Division, held that foreign law must be specifically pleaded and proved by the party relying on it - The court held that in the absence of proof foreign law is presumed to be the same as the law of the forum - See paragraph 847.

Contracts - Topic 262

Classification of contracts - Statutory contract - What constitutes - A Newfoundland statute provided that a lease by the Province of Newfoundland to a corporation of the right to exploit the hydro-electric potential of Churchill Falls and sell the electricity generated was to "have the force and effect of law for all purposes" - The Newfoundland Supreme Court, Trial Division, held that the lease was a statutory contract and was in the nature of a private act - See paragraphs 214 to 233.

Contracts - Topic 264

Classification of contracts - Statutory contract - Effect of - The Newfoundland Supreme Court, Trial Division, held that a statutory contract was binding not only upon the parties to the contract, but also upon third parties - See paragraphs 214 to 223.

Contracts - Topic 266

Classification of contracts - Statutory contract - Interpretation - A Newfoundland statute provided that a lease by the Province of Newfoundland to a corporation of the right to exploit the hydro-electric potential of Churchill Falls and sell the electricity generated was to "have the force and effect of law for all purposes" - The Newfoundland Supreme Court, Trial Division, discussed whether such a statutory contract, which was in the nature of a private act, should be construed according to contractual or statutory interpretation rules - The court held that the parts which affected the public should be construed according to statutory construction rules, while those which affected only the parties should be construed ac cording to contractual construction rules - See paragraphs 254 to 264.

Contracts - Topic 1444

Formation - Agreements which are not contracts - Agreements to agree - Newfoundland leased to CFLCo the right to exploit Churchill Falls and sell the power, but in a proviso reserved priority to the power to the Newfoundland consumers - The Newfoundland Supreme Court, Trial Division, held that the proviso required a future agreement between CFLCo and Newfoundland consumers, but no terms of such a contract were set out or ascertainable - The court held that such an agreement to agree was void - See paragraphs 493, 745 - 828.

Contracts - Topic 2051

Terms - Implied terms - General - The Newfoundland Supreme Court, Trial Division, discussed the purpose of and the conditions for implying a term in a contract - See paragraphs 897 to 983.

Contracts - Topic 2067

Terms - Implied terms - Statutory contracts - The Newfoundland Supreme Court, Trial Division, discussed the problem of implying a term in a statutory contract, particularly where there is no parallel implication in the act authorizing the statutory contract - See paragraphs 944 to 983.

Contracts - Topic 2106

Terms - Express terms - Provisos - The Newfoundland Supreme Court generally discussed the nature and effect of a proviso and in construing the words "provided that" noted their various and sometimes conflicting possible meanings - See paragraphs 296 to 330.

Contracts - Topic 5307

Impossibility or frustration of performance - Frustration - Caused by party's own act - The Newfoundland Supreme Court, Trial Division, held that a party to a contract may not plead frustration from an occurrence caused by the party itself, such as where a person makes conflicting and incompatible agreements with two different people - See paragraphs 682 to 687, 875, 1130 to 1145, 1230 to 1253.

Contracts - Topic 5310

Impossibility or frustration of performance - Frustration - Force majeure - Defined - The Newfoundland Supreme Court, Trial Division, discussed what constitutes force majeure or a fortuitous event for the purpose of frustration of a contract - In particular the court considered whether the request of the Newfoundland Government for electric power from Churchill Falls (Labrador) Co. in purported exercise of its rights under a lease to CFLCo constituted force majeure justifying CFLCo in withholding power contracted to be supplied to Hydro-Quebec - The court held that the request was an acta imperii (an act of government authority or a public or sovereign act), as opposed to an acta gestionis (a private act) and constituted force majeure under the contract with Hydro-Quebec - See paragraphs 1094 to 1229.

Contracts - Topic 7404

Interpretation - General principles - Ordinary meaning (Golden Rule) - General - The Newfoundland Supreme Court, Trial Division, referred to rule of construction that the grammatical and ordinary sense of words should be adhered to unless that would lead to some absurdity or some repugnance or inconsistency with the rest of the instrument, in which case the words should be construed to avoid the absurdity or inconsistency - The court stated that interpreting contractual words in a way which defies economic reality constitutes absurdity - See paragraphs 194 to 199, 269 to 284.

Contracts - Topic 7426

Interpretation - Ambiguity - What constitutes - A contract gave a lessee "the right to transmit throughout the province any electric power generated ... and to export from the province such power: provided that upon the request of the government consumers of electricity in the province shall be given priority where it is feasible and economic to do so" - The Newfoundland Supreme Court, Trial Division, noted the several ambiguities of the provision - See paragraphs 178 to 212.

Contracts - Topic 7430

Interpretation - Ambiguity - Admissibility of extrinsic evidence - Origins of contract - The Newfoundland Supreme Court, Trial Division, held that evidence of negotiations or of the parties intentions is inadmissible; although evidence of a factual background known to the parties at or before the date of the contract, including evidence of the genesis and aim of the transaction, is admissible - See paragraphs 294 to 295.

Contracts - Topic 7430

Interpretation - Ambiguity - Admissibility of extrinsic evidence - Acts of the parties - The Newfoundland Supreme Court, Trial Division, held that acts of the parties under a contract may not be used to construe the contract, but could create an estoppel - See paragraphs 285 to 293, 417 to 422, 501 to 536.

Contracts - Topic 7433

Interpretation - Ambiguity - Contra proferentem rule - The Newfoundland Supreme Court, Trial Division, discussed the contra proferentem rule in the interpretation of statutes and held that it applied to the interpretation of private statutes - See paragraphs 234 to 253, 375 to 382.

Contracts - Topic 7470

Interpretation - Words - Same terms in contract - The Newfoundland Supreme Court, Trial Division, noted the general rule that, where the same expression is used more than once, then prima facie the inference is that the expression has the same meaning wherever used - See paragraphs 265 to 268, 349 to 357.

Contracts - Topic 7480

Interpretation - Words - Permissive words - "May" - A lease provided that, if the lessee failed to perform, the lessor "may" refer the matter to a court - There was also an arbitration clause for settlement of disputes - The Newfoundland Supreme Court, Trial Division, held that the right of the lessor to refer breaches to the court was an option, not mandatory - See paragraphs 700 to 704.

Crown - Topic 4801

Actions by Attorney General - General - The Newfoundland Supreme Court, Trial Division, held that the Attorney General of Newfoundland had standing to bring an action on behalf of the Crown in right of the province to enforce the government's rights under a lease - See paragraphs 615 to 626.

Deeds and Documents - Topic 2569

Operation and interpretation - Interpretation - Implied terms - The Newfoundland Supreme Court, Trial Division, held that a term should not be implied in a deed unless the contract, if any, upon which the deed is made requires it - See paragraphs 967 to 973.

Estoppel - Topic 1

General principles - Nature of estoppel - The Newfoundland Supreme Court, Trial Division, set out the nature of estoppel - See paragraph 539.

Estoppel - Topic 1004

Estoppel by conduct - Against Crown - Newfoundland in a statutory lease gave CFLCo the right to harness and exploit the electric power potential at Churchill Falls, but reserved priority of the Newfoundland consumer to the power - Newfoundland then acquiesced in the CFLCo-Hydro-Quebec power contract providing that only 300MW could be withheld for Newfoundland's use - The Newfoundland Supreme Court, Trial Division, held that Newfoundland was not estopped from claiming more than 300MW by its acquiescence, because estoppel could not defeat the legislative intent respecting the power reservation expressed in the lease - See paragraphs 501 to 559, 574, 694 to 697.

Estoppel - Topic 1387

Estoppel by conduct - Circumstances where doctrine inapplicable - To limit exercise of statutory power - The Newfoundland Supreme Court, Trial Division, held that the Government of Newfoundland could not be estopped by its acquiescence from asserting a right expressed in a statutory lease - See paragraphs 501 to 559, 574, 694 to 697.

Estoppel - Topic 2204

Estoppel by deed - General - Against Crown - The Newfoundland Supreme Court, Trial Division, held that estoppel by deed does lie against the Crown - See paragraph 540.

Evidence - Topic 2112

Admissions - Judicial - Pleadings - General - The Newfoundland Supreme Court, Trial Division, held that pleadings and arguments on the pleadings do not constitute admissions - See paragraph 852.

Evidence - Topic 2430

Presumptions - Foreign law - The Newfoundland Supreme Court, Trial Division, held that in Newfoundland the law of Quebec is presumed to be the same as the law of Newfoundland unless the contrary is proved - See paragraphs 847, 1246, 1252.

Evidence - Topic 2702

Inspection or view out of court - In determining litigation between the Province of Newfoundland and Churchill Falls (Labrador) Co. respecting the right of the province to reserve 800MW of power from the sale of power from CFLCo to Hydro-Quebec, which would involve the construction of transmission lines from Labrador to Newfoundland, a judge of the Newfoundland Supreme Court, Trial Division, took an aerial view of the proposed transmission route, the Churchill Falls development and the transmission lines to Quebec - See paragraphs 74 to 93.

Evidence - Topic 3776

Documentary evidence - Public documents - Pleadings - General - The Newfoundland Supreme Court, Trial Division, held that pleadings in one cause are admissible in evidence in subsequent proceedings to prove the institution and subject matter of the cause but are generally inadmissible even as against parties or privies as proof of the facts stated in them - See paragraph 839.

Evidence - Topic 3779

Documentary evidence - Public documents - Pleadings - Foreign pleadings - The Newfoundland Supreme Court, Trial Division, held that pleadings in an action in one jurisdiction are admissible as evidence in proceedings in another jurisdiction to prove the institution and subject matter of the cause, but are generally inadmissible even as against parties or privies as proof of the facts stated in them - See paragraph 839.

International Law - Topic 200

Sovereignty - Incidents of immunity - General - The Newfoundland Supreme Court, Trial Division, discussed the sovereign immunity of states (including provinces of Canada) - The court distinguished between an acta imperii (an public or sovereign act) over which a foreign court has no jurisdiction and an acta gestionis or private act, for which a state may be sued in a foreign court - See paragraphs 1178 to 1279.

International Law - Topic 2201

Sovereignty - Incidents of - Immunity - Acta imperii - The Newfoundland Supreme Court, Trial Division, discussed the notion of an acta imperii or public or sovereign act, for which a state may not be sued in a foreign court - See paragraphs 1185 to 1229 - The court held that the formal request by the Lieutenant Governor in Council of Newfoundland for power from Churchill Falls (Labrador) Co. pursuant to a provincial statute was an acta imperii or sovereign act - See paragraphs 1209 to 1210.

International Law - Topic 2202

Sovereignty - Incidents of - Immunity - Acta gestionis - The Newfoundland Supreme Court, Trial Division, discussed the notion of an acta gestionis or private act by a state (such as a commercial transaction), for which the state may be sued in a foreign court - See paragraphs 1185 to 1229.

Practice - Topic 49

Actions - Commencement of - General principles - Requirement of existing cause of action - The Newfoundland Supreme Court, Trial Division, held that a cause of action must exist when the writ is issued, but where the facts subsequently develop or evolve, current evidence is admissible at trial - A writ was issued in 1976 in an action in which the issue of whether it was "feasible and economic" to supply power from Labrador to Newfoundland was central - The court considered at the trial in 1981 and 1982 current evidence about what was feasible and economic and did not restrict the evidence to the situation as it was in 1976 - See paragraphs 627 to 662.

Practice - Topic 1307

Pleadings - General principles - Alternative or inconsistent pleadings - The Newfoundland Supreme Court, Trial Division, held that inconsistent or alternative pleas were permissible - See paragraph 853.

Practice - Topic 3559

Evidence - Fluid or evolving circumstances - In 1976 Newfoundland brought an action against Churchill Falls (Labrador) Co. claiming entitlement to power - One of the issues was whether it was "feasible or economic" to deliver power from Labrador to Newfoundland - The Newfoundland Supreme Court, Trial Division, at the trial in 1981 and 1982 considered current evidence of what was feasible and economic and did not restrict the parties to evidence of the situation as it was in 1976 - See paragraphs 627 to 662.

Practice - Topic 5652

Judgments and orders - Declaratory judgments - When available - Newfoundland brought an action against Churchill Falls (Labrador) Co. for a declaration that it was entitled to 800 MW of power - The Newfoundland Supreme Court, Trial Division, in exercising its discretion to grant a declaratory order stated that an action for a declaration was appropriate in the circumstances, particularly where several years had elapsed since issuance of the writ and where an action for specific performance might have even more impact - See paragraphs 589 to 614.

Statutes - Topic 8703

Private or special statutes - General - What constitutes private statute - The Province of Newfoundland passed the Lease Act, which authorized a lease from Newfoundland to Churchill Falls (Labrador) Co. of the right to exploit the hydro-electric potential of Churchill Falls in Labrador and sell the electricity generated - The Newfoundland Supreme Court, Trial Division, held that the Lease Act was in the nature of a private act, especially with regard to its interpretation - See paragraphs 224 to 233.

Statutes - Topic 8705

Private or special statutes - General - Interpretation - Contra proferentem rule - The Newfoundland Supreme Court Trial Division, held that the contra proferentem rule applies to private statutes - See paragraphs 234 to 253.

Waiver - Topic 1008

Contracts - Merger - Newfoundland leased to Churchill Falls (Labrador) Co. the right to exploit the power potential of Churchill Falls and sell the electricity generated, reserving priority of the Newfoundland consumer to the power - Other subsequent leases concerned the power site, the roads, transmission lines and the airport, none of which mentioned the reservation of power - It was submitted that the reservation of power was lost through the merger of the main lease with the subsequent ones - The Newfoundland Supreme Court, Trial Division, held that there was no merger, because the subsequent leases were merely support leases designed to give rights ancilliary to those in the main lease - See paragraphs 560 to 566.

Words and Phrases

Feasible and econimic - In leasing the right to exploit the power potential of Churchill Falls the Province of Newfoundland reserved power for the Newfoundland consumer if it was "feasible and economic" to do so - The Newfoundland Supreme Court, Trial Division, construed the words "feasible and economic", ruling that the transmission of power from Labrador to Newfoundland must be feasible and economic to both parties - See paragraphs 425 to 469, 1046 to 1070.

Words and Phrases

Priority - In leasing the right to exploit the power potential of Churchill Falls the Province of Newfoundland reserved "priority" to the power for the Newfoundland consumer if it was "feasible and economic" to do so - The Newfoundland Supreme Court, Trial Division, discussed the meaning of the word "priority" in the circumstances - See paragraphs 358 to 424, 473.

Words and Phrases

Provided that - The Province of Newfoundland leased the right to exploit and sell the power from Churchill Falls, "provided that upon the request of the government consumers of electricity in the province shall be given priority where it is feasible and economic to do so" - The Newfoundland Supreme Court, Trial Division, construed the meaning of the proviso, including the words "provided that" - See paragraphs 305 to 330.

Cases Noticed:

Sussex Peerage Case (1844), 8 E.R. 1034, appld. [para. 194].

Brown & Sons v. The Russian Ship Alina (1880), 42 L.T. 517, consd. [para. 196].

R. v. The Judge of the City of London Court, [1982] 1 Q.B. 273, consd. [para. 197].

St. Hyacinth Gas Company v. St. Hyacinth Hydraulic Power Company (1895), 25 S.C.R. 168, appld. [para. 227].

Ex parte Eton College (1850), 20 L.J. Ch. 1, appld. [paras. 239, 256].

Parker v. Great Western Railway (1884), 135 E.R. 107, appld. [para. 240].

Re New Brunswick and Canada Railway Company (1878), 17 N.B.R. 667 (C.A.), appld. [para. 241].

Altrinsham v. Cheshire (1885), 15 Q.B.C. 597, appld. [paras. 242, 256].

Stourbridge v. Wheeley (1831), 109 E.R. 1336, appld. [para. 243].

Tanner v. Oldman, [1896] 1 Q.B. 60, refd to. [para. 245].

Stevenson v. Reliance Petroleum Limited and Canadian General Insurance Company, [1956] S.C.R. 936; [1954] 4 D.L.R. 730, appld. [para. 253].

Davis & Sons, Ltd. v. Taff Vale Railway Co., [1895] A.C. 542, appld. [para. 257].

Wolf Company v. R. (1921), 43 S.C.R. 141, appld. [para. 266].

Ballantyne v. Edwards, [1939] 3 D.L.R. 554, appld. [para. 266].

Schuler A.G. v. Wickman Machine Tool Sales Ltd., [1974] A.C. 235, appld. [para. 273].

Prenn v. Simmonds, [1971] 3 All E.R. 237, appld. [paras. 275, 413].

Holmes v. Bradfield R.D.C., [1949] 2 K.B.1, appld. [para. 279].

Nokes v. Doncaster Amalgamated Colliers, [1940] A.C. 1014, appld. [para. 280].

Re Labrador Boundary, [1927] 2 D.L.R. 401, consd. [para. 286].

Miller v. Whitworth, [1970] 1 All E.R. 796, appld. [para. 289].

Amalgamated Investment and Property Company Limited v. Texas Commerce International Bank Limited, [1981] 3 All E.R. 577, appld. [para. 289].

Prenn v. Simmonds, [1971] 3 All E.R. 237, appld. [para. 294].

Attorney General to the Prince of Wales v. Collom, [1916] 2 K.B. 198, consd. [para. 538].

Moorgate Mercantile v. Twitchings, [1975] 3 All E.R. 314, appld. [para. 539].

Attorney General of Victoria v. Ettershank (1875), L.R. 6 P.C. 354, consd. [para. 541].

Davenport v. R. (1877), 3 App. Cas. 115, consd. [para. 541].

R. v. Paulson, [1921] 1 A.C. 271, consd. [para. 541].

British Columbia Hospital Corporation v. District of Kent, [1925] 3 D.L.R. 171, consd. [para. 541].

Queen Victoria and Niagara Falls Park Commissioners v. International Railway Company (1928), 63 O.L.R. 49, consd. [para. 541].

Verreault & Fils v. The Attorney General of Quebec and others, [1977] 1 S.C.R. 41, consd. [para. 542].

DeCosmos v. R., [1883] B.C.R. Pt. II 26, appld. [para. 548].

Attorney General v. DeKeyser's Royal Hotel, [1920] A.C. 508, appld. [para. 551].

Leggott v. Barrett (1880), 15 Ch. D. 306 (C.A.), dist. [para. 563].

Russian Commercial & Industrial Bank v. British Bank for Foreign Trade Limited, [1921] 2 A.C. 438, appld. [para. 590].

Hugh W. Simmonds Limited v. Foster, [1955] S.C.R. 324, appld. [para. 590].

McMurray Homes Ltd. v. New Town of Fort McMurray, [1976] 5 W.W.R. 442, appld. [para. 590].

Grand Junction Water Works Company v. Hampton Urban Council, [1898] 2 Ch. 331, consd. [para. 604].

Attorney General v. Commercial Cable Company (1911), 9 Nfld. L.R. 464, appld. [para. 623].

Cornish v. Boles (1914), 31 O.L.R. 505 (Ont. C.A.), appld. [para. 630].

Petrie v. Rideout, [1923] 1 D.L.R. 585 (N.S. App. Div.), appld. [para. 630].

Ex rel. Anderson v. Hawrelak (1965), 53 W.W.R.(N.S.) 257 (Alta. C.A.), appld. [para. 630].

Stirling v. Maitland (1864), 122 E.R. 1047, appld. [para. 686].

Southern Foundries (1926) Ltd. v. Shirlaw, [1940] A.C. 710, appld. [para. 686].

Culina v. Giuliani et al. (1971), 22 D.L.R.(3d) 210, appld. [para. 687].

Thomson v. McPherson (1912), 2 O.W.N. 791, consd. [para. 795].

House v. Brown (1907), 14 O.L.R. 500, consd. [para. 796].

Logan v. Mesurier (1847), 13 E.R. 628, consd. [para. 797].

May & Butcher, Limited v. R., [1934] 2 K.B. 17, consd. [para. 799].

Foley v. Classique Coaches Limited, [1934] 2 K.B. 1, consd. [para. 799].

Hillas & Co., Ltd. v. Arcos, Ltd. (1932), 147 L.T. 503, consd. [para. 802].

Boileau v. Rutlin (1848), 154 E.R. 657, appld. [para. 839].

Kleeners Pty. Ltd. v. Lee Tim (1961), 78 W.N. (N.S.W.) 746, appld. [para. 839].

Austin v. Austin, [1905] V.L.R. 564, appld. [para. 839].

Khan v. Goleccha International Ltd., [1980] 2 All E.R. 259, dist. [para. 865].

Torquay Hotel v. Cousins, [1969] 2 Ch. 106, dist. [para. 871].

Seward v. Vera Cruz (1884), 10 App. Cas. 59, appld. [paras. 941, 992].

Reigate v. Union Manufacturing Company (Ramsbottom) Limited and Another, [1918] 1 K.B. 592, appld. [para. 945].

Liverpool City Council v. Irwin, [1977] A.C. 239, appld. [para. 946].

The Moorcock (1889), 14 P.D. 64, appld. [para. 947].

Stirling v. Maitland and Another (1864), 122 E.R. 1043, consd. [para. 964].

Southern Foundries (1926) Limited v. Shirlaw, [1940] A.C. 701, consd. [para. 964].

Gregory v. Canadian Improvement Company, 5 Themis 10, consd. [paras. 1136, 1233].

Otis Elevator Company v. A. Viglione and Bross Inc., [1981] J.E. 92, consd. [para. 1161].

Atlantic Paper Stock Limited v. St. Anne-Nackawic, [1976] 1 S.C.R. 580, consd. [para. 1164].

Dessaulles v. Republic of Poland, [1944] S.C.R. 275, consd. [para. 1187].

Republic of the Congo v. Venne, [1971] S.C.R. 997, consd. [para. 1188].

Zodiak International Products Inc. v. The Polish People's Republic, [1977] C.A. 366, consd. [para. 1189].

Congreso del Partido, [1981] 2 All E.R. 1064, consd. [para. 1190].

Statutes Noticed:

British Newfoundland Corporation Limited - Churchill Falls (Labrador) Corp. Limited Act, S.N. 1966, sect. 2 [para. 724].

Churchill Falls (Labrador) Corporation Limited (Lease) Act, S.N. 1961, c. 51, sect. 3, sect. 4, [para. 18]; sect. 7(b) [para. 725].

Department of Justice Act, R.S.N. 1970, c. 85, sect. 10 [para. 618].

Interpretation Act, R.S.N. 1970, c. 182 sect. 5(1) [para. 226]; sect. 14 [para. 231].

Judicature Act, R.S.N. 1970, c. 187, sect. 179 [para. 706].

Newfoundland & Labrador Hydro Act, S.N. 1975, c. 3, sect. 15 [para. 721].

Quebec Civil Code, Art. 17(24) [para. 1110]; art. 1016, art. 1017, art. 1020 [para. 1255]; art. 1022 [para. 1107]; art. 1024 [para. 1255]; art. 1071, art. 1072 [para. 1111].

Rules of Court (Nfld.), O. 24, rule 5, [para. 593].

Authors and Works Noticed:

Black's Law Dictionary [paras. 305, 364].

Chitty on Contracts (24th Ed. 1977), para. 704 [para. 276].

Craies, Statute Law (7th Ed. 1971), pp. 10 [para. 252]; 557 [para. 224]; 559 [para. 225].

Driedger, E.A., The Construction of Statutes (1974), c. 1 [para. 199].

Griffith and Street, Principles of Administrative Law (3rd Ed. 1963), p. 271 [para. 542].

Halsbury's Laws of England (2nd Ed.), vol. 31, p. 500 [para. 953].

Halsbury's Laws of England (3rd Ed.), vol. 22, p. 749 [para. 592, 604]; 747 [para. 608].

Halsbury's Laws of England (4th Ed.), vol. 9, para. 351 [para. 904]; vol. 9, para. 355 [para. 959]; vol. 8, para. 794 [para. 847]; vol. 17, para. 195 [para. 839].

Maxwell, The Interpretation of Statutes (10th Ed.), pp. 303-304 [para. 244].

Mazeaud and Mazeaud, Lecois de droit civil, vol. 2, p. 528 [para. 1127].

Mignault, P.B., Droit civil canadien (1901) [para. 1119].

Osborne's Concise Law Dictionary (6th Ed. 1976) [paras. 237, 1152].

Phipson on Evidence (12th Ed. 1976), pp. 37 [para. 1020]; 53 [para. 1029].

Stroud's Judicial Dictionary (3rd Ed.), [para. 307].

Webster's New Collegiate Dictionary [paras. 365, 763].

Counsel:

James R. Chalker, Q.C., Keith Mercer and James L. Thistle, for the plaintiff;

John Sopinka, Q.C., and David Russell, for the first defendant;

George Finlayson, Q.C., and Thomas Heintzman, Q.C., for the second defendant;

Clyde K. Wells, Q.C., for the third defendant;

Robert Wells, Q.C., for the fourth defendant.

This case was heard in 1981 and 1982 before Goodridge, J., of the Newfoundland Supreme Court, Trial Division, who delivered the following judgment on June 13, 1983:

INDEX
-		[PARAGRAPH NUMBER]
A. Introduction		1
Part 1:	The Churchill Falls	1
Part 2:	Statutory History	6
Part 3:	Electrical development in the Province from 1952	33
Part 4:	The beginning of the controversy	50
B. THE ISSUES		65
Part 5:	General	65
Part 6:	The parties	99
Part 7:	The relief sought in the Statement of Claim.	111
Part 8:	The defence of CFLCo (1)	135
Part 9:	The defence of Hydro-Quebec	143
Part 10:	The defence of the Royal Trust (1)	160
Part 11:	The defence of General Trust	165
Part 12:	The issues generally	168
C. Decision on Legal Questions		178
Part 13:	Is Clause 2(e) ambiguous	178
Part 14:	Rules of Construction	213
-	--1. Does the Lease have the force of law?	214
-	--2. Is the Lease Act a private act?	224
-	--3. The contra proferentem rule	234
-	--4. Statutory or contractual rule	254
-	--5. Similar expressions have similar meaning	265
-	--6. Economic reality and absurdity	269
-	--7. Acts of the parties	285
-	--8. The origins of the Lease as an aid to interpretation	294
-	--9. Provisos not restrictive	296
Part 15:	The interpretation of Clause 2(e)	301
-	--1. Clause 2(e)	301
-	--2. "Provided that ..."	305
-	--3. Upon the request of the Government	331
-	--4. Consumer of electricity in the Province	339
-	--5. "Shall be given"	349
-	--6. Priority	358
-	--7. Feasible and economic	425
-	--8. "To do so"	458
-	--9. Conclusion	470
Part 16:	When may requests be made?	475
Part 17:	Has the Government power to make the request	481
Part 18:	CFLCo participation in Government request	498
Part 19:	Waiver, Estoppel and Merger	501
-	--1. The facts	501
-	--2. Does estoppel or waiver operate against the Government	537
-	--3. Merger	560
Part 20:	The Consent	567
Part 21:	The Financial Agreement	575
Part 22:	Declaratory Relief	589
Part 23:	Right of Attorney General to bring action	615
Part 24:	Must the cause of action have existed before 1976?	627
Part 25:	Force majeure under the Lease	663
Part 26:	The Lease - Part IV Clauses 4 and 9	700
Part 27:	Other Legislation	719
Part 28:	Agreement to agree	745
Part 29:	Quebec proceeding	829
Part 30:	The Defence of CFLCo (2)	887
Part 31:	The defence of the Royal Trust	897
Part 32:	Voting Trust Agreement No. 2	984
D. Feasible and Economic		990
Part 33:	General observation	990
Part 34:	Onus of Proof	1019
Part 35:	CFLCo's Price	1045
Part 36:	Quebec Law	1071
Part 37:	Quebec Law - Newfoundland forum	1086
Part 38:	Quebec Law - Force Majeure	1094
Part 39:	Quebec Law - May force majeure be pleaded by CFLCo	1230
Part 40:	Quebec Law - Implied term	1254
Part 41:	1976	1267
Part 42:	Conclusion	1268
APPENDIX "A" - Order-in-Council		-
APPENDIX "B" - The Transmittal Letter		-
APPENDIX "C" - The CFLCo Reply		-
APPENDIX "D" - Recapture Provisions		-
APPENDIX "E" - Definitions		-
APPENDIX "F" - Witnesses		-
APPENDIX "G" - Exhibits		-
APPENDIX "H" - Index		-