Section 4 of the Power Commission Act (Nova Scotia) provided that the Nova Scotia Power Commission ("NSPC") "shall continue as a body corporate and as agent of Her Majesty The Queen in right of the province" under the name of "Nova Scotia Power Corporation". The respondent, which had acquired the undertaking of NSPC, sought to establish that NSPC was not an agent of the Crown, so that purported elections made by NSPC under s. 21 of the Act, to step up the capital cost of the depreciable assets transferred to the taxpayer pursuant to s. 85(5.1) of the Act, would be valid.
Pelletier J.A. noted (at p. 5096) that a finding that an entity is a Crown agency does not automatically lead to the conclusion that the entity enjoys Crown immunity (under s. 17 of the Interpretation Act or otherwise) and indicated (at p. 5096) that:
"Once a corporation is found to be an agent of the Crown, the question of Crown immunity turns on the scope of the corporation's mandate and whether, on the facts, it was acting within that mandate."
Here, NSPC had acquired and operated the assets pursuant to its objects of developing for Nova Scotia the maximum use of power on an economic and efficient basis with the result that the questions put to the Court should be answered on the basis that NSPC was acting within its authorize purpose so as to benefit from Crown immunity.