06/15/2012 12:04 EDT | Updated 08/15/2012 05:12 EDT

Can the Crown be prosecuted for a crime? Quebec case will test the question

QUEBEC - In a legal case that will test elements of the Crown's status in Canada, the Queen's former representative in Quebec is invoking sovereign privilege to avoid going to trial on fraud charges.

The Monarchist League of Canada calls it a first in the Commonwealth and a historic chance for the judiciary to weigh in on just how far the Crown's power extends.

The league says it's remaining neutral in the case and says it believes nobody is above the law — not even royalty and its representatives.

The lawyer for Lise Thibault, Quebec's former lieutenant-governor, will argue that his client benefits from a sovereign immunity that should stop the Crown's criminal case from going further. The rare legal argument will be heard later this summer.

Lawyer Marc Labelle says his argument will center on a little-used common-law statute that states that "the Queen can do no wrong" — in other words, that the Crown's prosecution cannot prosecute the Crown.

Thibault has pleaded not guilty to two counts each of breach of trust, fraud and creating false or counterfeit documents. Earlier this year, a judge ordered her to stand trial.

Labelle says the expenses were incurred during her time as the Queen's representative and should be subject to sovereign immunity.

"What we're invoking is a sort of privilege," Labelle told reporters. "The logic being that Her Majesty, the Queen, cannot prosecute herself."

Thibault was not present as her lawyer appeared briefly Friday before Justice Richard Grenier and afterwards told reporters he'll spend the next two months doing more research.

Labelle says he hasn't found any Canadian precedent where a representative of the Queen invoked this privilege for criminal charges.

"To my knowledge this is the first time this principle is tested in the Commonwealth," said Etienne Boisvert, a spokesman for the monarchist league.

"We're swimming in uncharted waters."

Boisvert said the Queen-can-do-no-wrong principle dates back to the Middle Ages and the current fight will test its application in modern court cases.

The Crown helped create the institutions of governance in the Commonwealth, including the courts and Parliament. To this day it holds the constitutional power to keep them in check and prevent abuses. Now this case will test whether it can be prosecuted by those same institutions.

"Many legal opinions have been given," Boisvert said. "Let's let the judge determine which of these arguments should prevail."

He added his view, however, that: "Nobody is above the law. Not even the Queen."

In a 2007 joint report, the auditors-general of Quebec and Canada concluded that Thibault was reimbursed for expenses totalling $700,000 that were not related to her mandate.

The motion will be heard in Quebec Superior Court on Aug. 23.