Canada Post Corp. v. G3 Worldwide (Canada) Inc. c.o.b. Spring and Spring Canada

[Indexed as: Canada Post Corp. v. G3 Worldwide (Canada) Inc.]

85 O.R. (3d) 241

Court of Appeal for Ontario,

Weiler, Feldman and MacFarland JJ.A.

May 8, 2007

Civil procedure -- Application -- Appellant violating Canada Post's exclusive privilege to collect and deliver international mail contrary to s. 14(1) of Canada Post Corporation Act -- Proceedings by Canada Post for injunction to restrain appellant from continuing to violate Act being properly brought by way of application -- No relevant material facts being in dispute -- Canada Post Corporation Act, R.S.C. 1985, c. C-10, s. 14.

Equity -- Equitable defences -- Canada Post bringing application for injunction to restrain appellant from violating Canada Post's exclusive privilege to collect and deliver international mail contrary to Canada Post Corporation Act -- Appellant not having right to raise equitable defences of laches, delay and/or estoppel -- Equitable defences not being available against Crown or its agents to prevent operation of statutory scheme -- Canada Post Corporation Act, R.S.C. 1985, c. C-10.

Remedies -- Availability -- Appellant violating Canada Post's exclusive privilege to collect and deliver international mail contrary to s. 14(1) of Canada Post Corporation Act -- Fact that Act sets out penalty for breach and does not specifically give Canada Post right to seek injunction for breach not precluding Canada Post from seeking to enforce its privilege through civil proceedings -- Canada Post Corporation Act, R.S.C. 1985, c. C-10, ss. 14, 60.

Pursuant to s. 14(1) of the Canada Post Corporation Act, the respondent enjoys an exclusive privilege over collecting, transmitting and delivering mail within Canada. The appellant carried on the business of collecting, transmitting and delivering international mail from senders in Canada to overseas locations. It was not seriously disputed that those activities violated s. 14(1) of the Act. The respondent brought an application for a declaration to that effect and for an injunction restraining the appellant from continuing to violate s. 14(1). The appellant brought a motion to quash the notice of application on the basis that the respondent could not seek to enforce its statutory privilege by way of civil proceedings. The motion was dismissed. The application proceeded for hearing. The application judge rejected the appellant's argument that the application should be converted into an action and that it was entitled to raise the equitable defences of estoppel, laches and delay. The respondent was granted a permanent injunction. The appellant appealed both the decision of the motion judge and the decision of the application judge.

Held, the appeal should be dismissed.

There was nothing in the Act which specifically gave the respondent the right to seek an injunction for a breach of s. 14(1), nor was there anything that prohibited such a proceeding. The fact that the Act provided for a penalty for breach of the statutory privilege did not preclude the respondent from bringing civil proceedings to enforce the privilege. Where a statute provides a specific right, the recipient of that right must have the ability to enforce it. [page242]

The application judge correctly determined that the proceeding could be brought by way of application. There were no relevant material facts in dispute that would preclude the matter proceeding by way of application.

The application judge was also correct in ruling that the appellant could not raise the equitable defences of laches, delay and/or estoppel in the application. Where legislation has an obvious policy character, the requirement for compliance with the legislation cannot be extinguished by the passage of time without action to enforce the legislation. The Act was a public policy statute. Therefore, the appellant could not rely on the respondent's delay in bringing proceedings against it to defend the application.

APPEAL from the order of Farley J., 2005 46078 (ON SC), [2005] O.J. No. 5320, 261 D.L.R. (4th) 244 (S.C.J.), dismissing a motion to quash a notice of application, and from the order of Morawetz J., [2006] O.J. No. 2035, 148 A.C.W.S. (3d) 569 (S.C.J.), granting a permanent injunction.

Cases referred to Société canadienne des postes v. Postpar Inc., [1988] Q.J. No. 1726, [1988] R.J.Q. 2740 (S.C. (Civ. Div.)); Institut National des Appellations d'Origine des Vins et Eaux-de-Vie v. Chateau-Gai Wines Ltd., 1974 135 (SCC), [1975] 1 S.C.R. 190, [1974] S.C.J. No. 48, 51 D.L.R. (3d) 120, apld Canada v. Saskatchewan Wheat Pool, 1983 21 (SCC), [1983] 1 S.C.R. 205, [1983] S.C.J. No. 14, 143 D.L.R. (3d) 9, 45 N.R. 425, [1983] 3 W.W.R. 97, 23 C.C.L.T. 121 (sub nom. Saskatchewan Wheat Pool v. R.); Consignia plc v. Hays and Another, 2001 WL 1479742 (Ch); Kenora (Town) Hydro Electric Commission v. Vacationland Dairy Co-operative Ltd., 1994 105 (SCC), [1994] 1 S.C.R. 80, [1994] S.C.J. No. 3, 110 D.L.R. (4th) 449, 162 N.R. 241; Mount Sinai Hospital Center v. Québec (Minister of Health and Social Services), [2001] 2 S.C.R. 281, [2001] S.C.J. No. 43, 200 D.L.R. (4th) 193, 271 N.R. 104, 2001 SCC 41; Seneca College of Applied Arts and Technology v. Bhadauria, 1981 29 (SCC), [1981] 2 S.C.R. 181, [1981] S.C.J. No. 76, 124 D.L.R. (3d) 193, 37 N.R. 455, 14 B.L.R. 157, 17 C.C.L.T. 106, 81 C.L.L.C. Â14,117, 22 C.P.C. 130, distd Other cases referred to Canada Post Corp. v. Key Mail Canada Inc. (2005), 2005 30837 (ON CA), 77 O.R. (3d) 294, [2005] O.J. No. 3653, 202 O.A.C. 158, 259 D.L.R. (4th) 309 (C.A.); Ex Parte Island Records Ltd., [1978] Ch. 122, [1978] 3 All E.R. 824, [1978] 3 W.L.R. 23 (C.A.); Keays v. Honda Canada Inc. (2006), 2006 33191 (ON CA), 82 O.R. (3d) 161, [2006] O.J. No. 3891, 274 D.L.R. (4th) 107 (C.A.) [Leave to appeal to S.C.C. granted [2006] S.C.C.A. No. 470]; Sturdy Truck Body (1972) Ltd. v. Canada, 1995 19006 (FC), [1995] F.C.J. No. 720, 95 F.T.R. 270 (T.D.) Statutes referred to British Telecommunications Act 1981 (U.K.), 1981, c. 38, ss. 59(2), 66 Canada Post Corporation Act, R.S.C. 1985, c. C-10, ss. 5, 14(1), 48-60 Human Rights Code, R.S.O. 1990, c. H.19

Brian J. Gover and Brendan Van Niejenhuis, for appellant. Robb C. Heintzman, R. Brendan Bissell and Marina E. Sampson, for respondent. [page243]

The judgment of the court was delivered by

MACFARLAND J.A.: --

Overview

[1] The parties to this appeal are not strangers. In a judgment rendered September 2, 2005, this court concluded that, pursuant to s. 14(1) of the Canada Post Corporation Act, R.S.C. 1985, c. C-10 (the "Act"), Canada Post Corporation ("CP") enjoys an exclusive privilege over "collecting", "transmitting" and "delivering" mail within Canada. See Canada Post Corp. v. Key Mail Canada Inc. (2005), 2005 30837 (ON CA), 77 O.R. (3d) 294, [2005] O.J. No. 3653, 259 D.L.R. (4th) 309 (C.A.) at para. 11. The appellant in the present appeal -- G3 Worldwide (Canada) Inc. c.o.b. Spring and Spring Canada Spring ("Spring") -- participated in the Key Mail appeal as an intervenor.

[2] CP alleges that Spring carries on the business of collecting, transmitting and delivering international mail, including letters, from senders in Canada to overseas locations. CP says that these activities violate the exclusive privilege which Parliament has granted to it. Therefore, CP brought an application in which it sought:

a) a declaration that the operations of [Spring] involving the collection, transmittal and delivery of letters violate the exclusive privilege granted [CP] in section 14 of the [Act];

b) an injunction restraining [Spring] and its servants, agents and employees from carrying on, directly or indirectly, such operations within Canada and, in particular, from collecting, transmitting or delivering letters within Canada; [and]

c) an Order that [Spring] account for all revenue arising from its operations in Canada relating to the collection, transmission and delivery of letters and directing a reference to determine the quantum of damages arising from such accounting[.]

[3] It is not seriously disputed that the activities in which Spring is engaged, and which are the subject of CP's application, [^1] violate s. 14(1) of the Act as it has been interpreted by this court. However, Spring asserts that CP cannot seek to enforce its privilege by way of civil proceedings and that CP has no cause of action. Spring therefore brought a motion to quash CP's notice of [page244] application. In an order dated October 29, 2005, Farley J. dismissed Spring's motion.

[4] CP's application then proceeded for hearing before Morawetz J. where he addressed whether CP was entitled to an injunction against Spring. Spring argued that the application should be converted into an action and that it was entitled to raise the equitable defences of estoppel, laches and delay. These defences, if successful, would in effect nullify s. 14(1) and permit Spring to continue to carry on its business activities. In an order dated May 24, 2006, Morawetz J. dismissed both of Spring's arguments and granted CP the permanent injunction that it sought. [^2]

[5] As a result of these proceedings, there are now two appeals before this court. Spring appeals both the decision of the motion judge (the "motion appeal") and that of the application judge (the "application appeal"). Briefly, Spring asserts that the motion judge erred in failing to quash CP's notice of application, that the application judge erred when he failed to convert CP's application to an action, and that the application judge erred when he determined that Spring could not avail itself of equitable defences to CP's injunction. For the reasons that follow, I would not give effect to any of Spring's grounds of appeal.

Facts

[6] CP is a Crown corporation established to provide universal mail service in Canada -- a lightly populated, but geographically vast country. CP is required to provide mail service to all points in Canada, however remote, at reasonable cost, but in a financially viable way. CP charges a uniform rate for its various classes of service. This uniform rate has been a tradition of the Canadian postal administration since it began, and remains a core component of CP's system. See Key Mail, supra, at para. 19.

[7] However, many Canadian communities cannot be served economically. Hence, CP needs to engage in the lucrative letter mail business and Parliament has granted it an exclusive privilege respecting the collection, transmission and delivery of letters. As the respondent notes, the exclusive privilege granted to CP enables it to provide ordinary mail service throughout the country at the uniform rate despite its many geographical challenges. This is because the relatively low cost of providing services to the 80 per cent of the population that lives largely in dense urban centres within 150 kilometres of the southern border with the United States offsets the relatively high cost of providing such services to [page245] the remaining 20 per cent of the population that lives throughout the more remote parts of Canada.

[8] Spring is ultimately owned by the postal administrations of the United Kingdom, the Netherlands and Singapore. It carries on the business of collecting, transmitting and delivering international mail, including letters, from senders in Canada to overseas locations. Spring's operations focus on the largest corporate and institutional mailers in Canada, who reside in the more densely populated and easily serviceable areas of the country. Spring does not serve the more remote areas of Canada where the costs are high in relation to the revenue generated. Unlike CP, Spring is not required to bear the high cost of providing services to the more remote regions of Canada.

[9] In 2003, CP advised Spring that its operations violated s. 14(1) of the Act and, if it would not voluntarily restrict its activities, CP would commence legal action. Spring refused to curtail its operations and the application was started in November 2004.

[10] For the purpose of the application, CP accepted as correct Spring's assertion that CP had been aware of the impugned operations from 1990 (when the operations were conducted by Spring's predecessor, TNT) until TNT's assets were sold to Spring in 2001. During this time, CP took no action against TNT.

Analysis

[11] The overall issues which subsume both appeals are:

(a) Does CP have a cause of action against Spring for infringement of CP's exclusive statutory privilege wherein it can seek the remedy of injunction; and

(b) If the answer to the first question is "yes", then is Spring able to raise, in its defence, the equitable doctrines of delay, laches and estoppel?

The motion appeal

[12] On the motion to strike CP's application, the appellant argued that CP has no cause of action and that s. 14 of the Act does not permit CP to enforce its exclusive privilege by way of civil proceedings. In saying this, the appellant relied heavily on the decisions of the Supreme Court of Canada in Canada v. Saskatchewan Wheat Pool, 1983 21 (SCC), [1983] 1 S.C.R. 205, [1983] S.C.J. No. 14, 143 D.L.R. (3d) 9 and Seneca College of Applied Arts and Technology v. Bhadauria, 1981 29 (SCC), [1981] 2 S.C.R. 181, [1981] S.C.J. No. 76, 124 D.L.R. (3d) 193. The appellant now repeats these arguments on appeal. [page246]

[13] With respect to Saskatchewan Wheat Pool, the appellant submits that the Supreme Court made a policy decision to not recognize a tort of statutory breach and held instead that proof of a breach of statute can only serve as evidence that the standard of care in a negligence action has been breached. The respondent takes the position that Saskatchewan Wheat Pool simply has no application in this case. Saskatchewan Wheat Pool, it says, is about breach of a statutory duty of care and negligence -- neither of which are relevant here. [^3] After carefully considering Saskatchewan Wheat Pool, the motion judge agreed that case was not a bar to CP's application.

[14] In my view, the motion judge's and the respondent's positions are correct. The issue before the court in Saskatchewan Wheat Pool was stated by Dickson J. at p. 207 S.C.R., pp. 9-10 D.L.R. as follows:

This case raises the difficult issue of the relation of a breach of statutory duty to a civil cause of action. Where "A" has breached a statutory duty causing injury to "B", does "B" have a civil cause of action against "A"? If so, is "A's" liability absolute, in the sense that it exists independently of fault, or is "A" free from liability if the failure to perform the duty is through no fault of his? In these proceedings the Canadian Wheat Board (the Board) is seeking to recover damages from the Saskatchewan Wheat Pool (the Pool) for delivery of infested grain out of a terminal elevator contrary to s. 86(c) of the Canada Grain Act, 1970-71-72 (Can.), c. 7.

By contrast, the case before this court has nothing to do with a breach of any statutory duty of care. It is not a negligence case.

[15] With respect to Bhadauria, the appellant argues that the Act provides a complete code, which includes remedies for its breach and, in such circumstances, no civil action lies to enforce the duties and rights created or protected by the Act. In Bhadauria, Chief Justice Laskin stated at p. 183 S.C.R., pp. 194-95 D.L.R.:

In my opinion, the attempt of the respondent to hold the judgment in her favour on the ground that a right of action springs directly from a breach of the Ontario Human Rights Code cannot succeed. The reason lies in the comprehensiveness of the Code in its administrative and adjudicative features, the latter including a wide right of appeal to the Courts on both fact and law. [page247]

[16] The appellant submits that in many ways the Act is similar to the Ontario Human Rights Code, R.S.O. 1990, c. H.19 (the "Code") and is a complete code within the meaning of Bhadauria. It submits that CP cannot bring an action in respect of its exclusive privilege because the Act does not expressly contemplate such action. [^4] The motion judge rejected this submission; he concluded at para. 21 that the Ontario Human Rights Code is "quite different in nature and intent than the Act". As Laskin C.J.C. noted at p. 188 S.C.R., p. 198 D.L.R. of Bhadauria:

In addition to the complaint procedure and the possibility of a board of inquiry and judicial scrutiny thereafter, the Code . . . provides for summary conviction penalties for contravention of the Code and a conviction may be followed by an application to a Judge of the Ontario Supreme Court by the Minister for an injunction to restrain the continuance of the violation of the Code. However . . . prosecution depends upon the previous consent thereto in writing by the Minister.

The comprehensiveness of the Code is obvious from this recital of its substantive and enforcement provisions. There is a possibility of a breakdown in full enforcement if the Minister refuses to appoint a board of inquiry where a complaint cannot be settled and, further, whether penalties on prosecution will be sought also depends on action by the Minister. I do not, however, regard this as supporting . . . the contention that the Code itself gives or envisages a civil cause of action, whether by way of election of remedy or otherwise.

[17] The Act sets out a number of specific offences in ss. 48 through 60. Section 56 specifically deals with the exclusive privilege and provides:

56. Every person who, in violation of the exclusive privilege of the Corporation under section 14, collects, transmits or delivers to the addressee thereof, or undertakes to collect, transmit or deliver to the addressee thereof, any letter within Canada, or receives or has in his possession within Canada any letter for the purpose of so transmitting or delivering it, commits an offence in respect of each such letter.

[18] Section 60 of the Act sets out the penalty provisions for breach of the Act in the following language:

60. Every person who contravenes any provision of this Act or the regulations or who commits an offence under any of sections 48 to 59

(a) is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years; or

(b) is guilty of an offence punishable on summary conviction. [page248]

[19] There is nothing in the Act which specifically gives CP the right to seek an injunction for breach of s. 14(1), nor is there anything that prohibits such a proceeding. The appellant argues that where an Act provides a penalty for a specific breach, that is the only remedy contemplated by Parliament.

[20] What is required in such circumstances is a review of the statute to see if one can determine -- without engaging in speculation or guesswork -- Parliament's unexpressed intent. In Saskatchewan Wheat Pool, Chief Justice Laskin stated the issue at p. 226 S.C.R., p. 24 D.L.R.:

Assuming that Parliament is competent constitutionally to provide that anyone injured by a breach of the Canada Grain Act shall have a remedy by civil action, the fact is that Parliament has not done so. Parliament has said that an offender shall suffer certain specified penalties for his statutory breach. We must refrain from conjecture as to Parliament's unexpressed intent. The most we can do in determining whether the breach shall have any other legal consequences is to examine what is expressed. In professing to construe the Act in order to conclude whether Parliament intended a private right of action, we are likely to engage in a process which Glanville Williams aptly described as "looking for what is not there"[.]

[21] Having undertaken the required analysis in this case, I cannot agree with the appellant's submissions on this point.

[22] While the Act provides a penalty for breach of the statutory privilege, it is necessary to consider the statute as a whole, including its objects, which are set out in s. 5:

5(1) The objects of the Corporation are

(a) to establish and operate a postal service for the collection, transmission and delivery of messages, information, funds and goods both within Canada and between Canada and places outside Canada;

(b) to manufacture and provide such products and to provide such services as are, in the opinion of the Corporation, necessary or incidental to the postal service provided by the Corporation; and

(c) to provide to or on behalf of departments and agencies of, and corporations owned, controlled or operated by, the Government of Canada or any provincial, regional or municipal government in Canada or to any person services that, in the opinion of the Corporation, are capable of being conveniently provided in the course of carrying out the other objects of the Corporation.

(2) While maintaining basic customary postal service, the Corporation, in carrying out its objects, shall have regard to

(a) the desirability of improving and extending its products and services in the light of developments in the field of communications;

(b) the need to conduct its operations on a self- sustaining financial basis while providing a standard of service that will meet the needs of the people of Canada and that is similar with respect to communities of the same size; [page249]

(c) the need to conduct its operations in such a manner as will best provide for the security of mail;

(d) the desirability of utilizing the human resources of the Corporation in a manner that will both attain the objects of the Corporation and ensure the commitment and dedication of its employees to the attainment of those objects; and

(e) the need to maintain a corporate identity program approved by the Governor in Council that reflects the role of the Corporation as an institution of the Government of Canada.

[23] The purpose of the statutory privilege can only be to enable CP to fulfill its statutory mandate or realize its objects. It is meant to be self-sustaining financially while at the same time providing similar standards of service throughout our vast country. Profits are realized in densely populated areas which subsidize the services provided in the more sparsely populated areas.

[24] If a competitor like Spring seeks to take for itself a part of CP's business in the densely populated areas it will interfere with CP's profit-making ability in these areas. Spring does not seek to carry on its business in the sparsely populated areas; it only carries on business in the major centres. While the penalty set out in s. 60 will penalize for breach of the statute by way of criminal sanction, that remedy alone is not sufficient to restore CP's exclusive privilege. Without more, a party like Spring would be able to carry on in breach of the exclusive privilege granted to CP merely by paying whatever fine or other penalty may be meted out for the breach.

[25] Where a statute provides a specific right, as it does in s. 14, the recipient of that right must have the ability to enforce it. That, in my view, is a matter of common sense as well as the law. Where there is a right there must be a remedy. As Lord Denning observed in Ex Parte Island Records Ltd., [1978] Ch. 122, [1978] 3 All E.R. 824 (C.A.), at p. 136 Ch.:

It is no answer for the defendant to say: "It is a crime: and so you cannot sue me." It would be a sorry state of the law if a man could excuse himself by such a plea -- and thus cause special damage with impunity.

[26] There is one Canadian authority on point: Société canadienne des postes v. Postpar Inc., [1988] Q.J. No. 1726, [1988] R.J.Q. 2740 (S.C. (Civ. Div.)), of which this court approved in Key Mail. In relation to the purpose or object of the Act, Halperin J. stated in Postpar at para. 45 that:

the dominant and controlling aim of the [Act] is what the text itself discloses, namely to provide through a Crown corporation a universal postal service throughout Canada with the object of providing a standard of service that will meet the needs of the people of Canada at rates that are fair and reasonable, and yet so far as possible sufficient to defray the cost of operations. [page250]

[27] The facts in Postpar are remarkably similar to the facts in this case. Postpar Inc. offered the public a postal service limited geographically more or less to the greater Montréal area. This service included the collection of letters, usually in bundles, from the premises of businesses and professional firms, and their delivery to addresses which included private households within the region for a fee that was inferior to the prevailing CP tariff.

[28] The same arguments were made in Postpar that are advanced here. At para. 16 the court summarized those issues in the following language:

counsel for Postpar made an oral application for the dismissal for these proceedings, firstly on the ground of inordinate delay on the part of Canada Post in having launched them, and secondly, on the ground that injunctive relief is not available to the plaintiff since the Postal Act contemplates specific penal remedies for the infractions alleged.

[29] CP brought injunction proceedings against Postpar, seeking to enjoin it from violating its exclusive privilege under the Act. As in this appeal, counsel for Postpar sought to dismiss CP's application. Using much the same arguments as are advanced by Spring before this court, Postpar argued that injunctive relief was not available to CP because the Act contemplates specific penal remedies for the infractions alleged and because CP had inordinately delayed in bringing the application.

[30] In dismissing Postpar's arguments, Halperin J. stated at para. 29 after reviewing the Canadian law and authorities:

I would therefore conclude that [CP] has the necessary standing or legal interest in bringing these proceedings, and this notwithstanding the penal sanctions prescribed by [the Act].

[31] The submissions of the appellant to the contrary, I conclude that Postpar was correctly decided.

[32] Finally, the appellant also pointed this court to an English decision that considered similar issues to those under appeal. In Consignia plc v. Hays plc and Another, 2001 WL 1479742 (Ch), Consignia (a private successor in title to the Post Office) brought an action claiming damages from Hays for distributing mail contrary to Consignia's exclusive privilege under s. 66 of the British Telecommunications Act 1981 (U.K.), 1981, c.38. Section 66(1) of this Act provided, "Subject to the following provisions of this Part, the Post Office shall have throughout the United Kingdom the exclusive privilege of conveying letters from one place to another and of performing all the incidental services of receiving, collecting and delivering letters." Jacob J. of the Chancery Division held, however, that s. 66(1) did not confer on Consignia a civil cause of action. [page251]

[33] In my view, Consignia does not assist the appellant as it can readily be distinguished from the appeal before this court. The legislative history with respect to the British Telecommunications Act 1981 indicates that the English Parliament had clearly turned its mind to the question of how the exclusive privilege conveyed by the British Act ought to be enforced. The same cannot be said of the Canadian Parliament in enacting the Canada Post Act.

[34] Moreover, although the court in Consignia heard and rejected the argument that a civil remedy was necessary to ensure economically viable universal service, I do not think that argument was of the same force in Consignia as it is in the present case. Not only is the geography of the two countries quite different, but the Canadian legislation also specifically requires CP to "conduct its operations on a self- sustaining financial basis while providing a standard of service that will meet the needs of the people in Canada". The British Act has no equivalent provision. The closest it comes is s. 59(2), which only provides that in exercising its powers, the Post Office shall have regard to "efficiency and economy" and "the social, industrial and commercial needs of the United Kingdom with respect to matters that are subserved by its powers".

[35] In the result, therefore, I would dismiss the motion appeal.

[36] However, before moving to the application appeal, I note the appellant's objections to the motion judge's reasons, which it says amount to a finding that every statutory right is remediable through civil proceedings, unless Parliament provides otherwise. With respect, in my view, the reasons of the motion judge cannot be interpreted in the manner the appellant suggests. At para. 10 of the motion judge's reasons he stated:

It seems to me that if a natural person has a right of some particular nature, that natural person would be able to resort to civil law proceeding to protect that right from being inappropriately damaged by others, unless that capacity to protect has been taken away, usurped or otherwise rendered nugatory.

[37] And later at para. 23:

In the result, I would dismiss the motion of Spring as I have concluded that the Act does not preclude [CP] from attempting to obtain "a civil injunction, declaration and a reference on the issue of damages" and that its pursuit thereof is not an attempt to enforce the criminal law by way of civil proceedings.

[38] And finally at para. 15:

Each statute must be viewed in context. It is important not to import subconsciously views expressed when dealing with other statutes into the analysis without questioning whether these views are truly applicable to the statute in question. [page252]

[39] In my view, Farley J. did not say that every statutory right is remediable through civil proceedings unless Parliament provides otherwise. It is apparent from a fair reading of his reasons that he was focused only on the particular statute before him.

The application appeal

[40] Having concluded that CP has the right to seek an injunction against anyone who breaches or infringes s. 14(1), the only issues remaining are:

(1) whether that right must be brought by way of an action rather than an application; and

(2) whether, in either case, the appellant may raise the equitable defences of laches, delay and/or estoppel.

Action or application?

[41] The application judge correctly determined that CP's proceeding against Spring could be brought by way of application. In my view, there are no relevant material facts in dispute which would preclude this matter proceeding by way of application. In other words, there are no relevant material facts in dispute in respect of Spring's violation of CP's exclusive privilege as provided in s. 14(1) of the Act. All relevant facts necessary for the determination of this application including the proposed defences have been conceded by CP. For instance, CP accepts as correct for the purposes of the application that it has been aware of Spring's (or its predecessor TNT's) operations since 1990, but took no steps to stop these operations until the application and related proceedings began in 2002. Further, given this court's decision in Key Mail, there can be no dispute that Spring's operations violate s. 14(1) of the Act. This "fact", although disputed in Spring's factum, was not seriously argued.

Equitable defences

[42] The issue then comes down to whether the equitable defences invoked by Spring can prevent the issuance of an injunction. In my view they cannot. With respect to the use that Spring can make of CP's delay, the Supreme Court of Canada's judgment in Institute National des Appellations d'Origine des Vins et Eaux de-Vie v. Chateau-Gai Wines Ltd., 1974 135 (SCC), [1975] 1 S.C.R. 190, [1974] S.C.J. No. 48, 51 D.L.R. (3d) 120, at p. 207 S.C.R., p. 130 D.L.R., was clear that where legislation has an obvious public policy character, complying with the legislation cannot [page253] be extinguished by the passage of time without action to enforce the legislation. Put another way, as articulated by the application judge at para. 24 of his judgment:

[T]he law as stated in Chateau-Gai is that equitable defences cannot be applied against the Crown or its agents to prevent the operation of a statutory scheme which imposes an express statutory duty.

[43] Considering the objects and purpose of the Act, it cannot be doubted that it is a public policy statute. Therefore, Spring cannot rely on CP's delay in bringing proceedings against it (or TNT) to defend against the application.

[44] Further, the law is clear that estoppel cannot apply against the Crown or its agents to prevent the operation of a statute:

The Courts in recent years have allowed some claims of estoppel to proceed against the Crown. Yet, it is quickly apparent when reading these decisions that estoppel can only lie against the Crown when an exercise of non-statutory discretion is involved. When interpreting a statute or acting pursuant to a legislative provision, all the authorities agree that estoppel cannot lie against the Crown[.]

See Sturdy Truck Body (1972) Ltd. v. Canada, 1995 19006 (FC), [1995] F.C.J. No. 720, 95 F.T.R. 270 (T.D.), at para. 10.

[45] The appellant relies on Kenora (Town) Hydro Electric Commission v. Vacationland Dairy Co-operative Ltd., 1994 105 (SCC), [1994] 1 S.C.R. 80, [1994] S.C.J. No. 3 and Mount Sinai Hospital Center v. Québec (Minister of Health and Social Services), 2001 SCC 41, [2001] 2 S.C.R. 281, [2001] S.C.J. No. 43 to support its contention that the equitable defences of laches and estoppel can be asserted against CP. I am in agreement with the respondent that the appellant's reliance on these cases is misplaced. The statutory provisions in these cases bear no close resemblance to the statutory provisions before this court and the facts of these cases differ significantly from those in the case at bar.

[46] For all these reasons, I am of the view that the appellant cannot use equitable defences to prevent the issuance of a permanent injunction restraining its infringement of s. 14(1) of the Act.

[47] I would dismiss the application appeal.

[48] Counsel have agreed on the quantum of costs for these appeals. In accordance with that agreement, costs are awarded to the respondent in the sum of $25,000, inclusive of disbursements and GST.

Appeal dismissed. [page254]

[^1]: While Spring's Canadian operations deal with several types of products, including express (or carrier) services, parcels and packages, and letters sent by Canadian businesses and instututions to international addresses, this application only relates to Spring's operations in international mail outbound from Canada.

[^2]: A trial of an issue was directed to address the issue of damages.

[^3]: I note that CP also argues that, in addition to basing its application on the fact that Spring's activities violate s. 14(1) of the Act, it can rely on the tort of interference with economic interests for the relief sought in its notice of application. Without question, CP's nottice of application seeks only a declaration that Spring's activities violate s. 14(1) of the Act, an injunction to restrain those activities, and an accounting. While Spring's conduct may support a common law tort claim for interference with economic interests, no such claim was pleaded. To make this claim would require an admendment to the Notice of Application. Therefore, the sole issue before this court is whether the infrigement of s. 14(1) gives rise to a cause of action.

[^4]: For further discussion see this court's decision in Keays v. Honda Canada Inc. (2006), 2006 33191 (ON CA), 82 O.R. (3d) 161, [2006] O.J. No. 3891, 274 D.L.R. (4th) 107 (C.A.), leave to appeal to S.C.C. granted [2006] S.C.C.A. No. 470.