DATE: 20010402

DOCKET: C35507

COURT OF APPEAL FOR ONTARIO

FINLAYSON, CARTHY and AUSTIN JJ.A.

BETWEEN:

TAGHREED HUSSIEN ROSHDY (FORMERLY SULTAN)

Patrick J. Monahan and Jacqueline Asselin, for the appellant

Applicant (Appellant)

• and -

TORKY IBRAHIM SULTAN

No one appearing for the respondent

Respondent (Respondent)

Anne M. Turley, for the Attorney General of Canada

Heard: February 22, 2001

On appeal from the order of Justice Paul F. Lalonde dated November 22, 2000.

FINLAYSON and CARTHY JJ.A.:

Background

[1] This is an appeal from the order of the Honourable Mr. Justice Lalonde dated November 22, 2000 wherein he set aside his order of November 20, 2000 and ruled that he had no jurisdiction to make an order attaching funds the respondent was to receive from the United Nations Compensation Commission (“UNCC”) via the Federal Government.

[2] By Divorce Judgment dated June 27, 1995, Chilcott J. ordered the respondent (husband) to pay to the appellant (wife) child support for two children, as well as a lump sum spousal support award. The support order was filed with the Director, Family Responsibility Office (“FRO”) pursuant to the Family Responsibility and Support Enforcement Arrears Act, 1996, S.O. 1996, c. 31. The Director’s Statement of Arrears sworn on October 17, 2000 shows that the respondent was $123,195.73 in arrears of child and spousal support at that time.

[3] The respondent is living in Egypt and has no assets in Canada. Egypt is not a “reciprocating state” and, as a result, his assets in Egypt are not subject to enforcement.

[4] The funds in issue in this case originate from the United Nations Compensation Fund (the “Fund”) established for the benefit of individuals, governments and corporations affected by the Iraqi invasion and occupation of Kuwait in 1990.

[5] The Fund was created in 1991 by United Nations Security Council Resolution 687 and was established by the Secretary-General as a special account of the United Nations, operated in accordance with the United Nations Financial Regulations and Rules (Report of the Secretary-General Pursuant to Paragraph 19 of Security Resolution 687 (1991), at 2, para 3, U.N. Doc. S/22559 (1991), adopted by S.C. Res. 692, U.N. SCOR, 46^th Sess., Res & Dec., U.N. Doc. S/RES/692 (1991)).

[6] National governments act as intermediaries between the UNCC and individuals who have a claim against the government of Iraq. Where an individual’s claim for compensation is accepted by the UNCC, the national government is responsible for distributing the funds, which it receives from the UNCC, to their national.

[7] In the case of Canadian nationals, where claims are accepted the UNCC forwards the compensation monies to the Government of Canada at a designated bank account in Washington, D.C. The Canadian embassy in Washington notifies the financial section of the Department of Foreign Affairs and International Trade (the “Department”) of the transfer of the compensation funds to a special purpose account established under section 21 of the Financial Administration Act, R.S.C 1985, c. F-11. The Department, after recording the transfer, issues a payment voucher in U.S. funds for each claimant on behalf of whom Canada submitted a claim.

[8] A claim for compensation was submitted to the UNCC by Canada on behalf of the respondent. The claim was accepted by the UNCC and in accordance with the procedures described above, monies in respect of the award to the respondent were paid to Canada.

[9] By Notice of Motion dated October 19, 2000, the Director, FRO, on behalf of the appellant, sought an order restraining the Department from paying to the respondent monies which he was entitled to receive from the UNCC.

[10] The Attorney General of Canada filed a factum in response to FRO’s motion. Counsel for FRO then consented to an order dismissing the motion without costs, which was issued on November 9, 2000 by Blishen J.

[11] On November 20, 2000, appellant’s counsel brought an ex parte motion before Lalonde J. and obtained an order restraining the Department from paying out the monies from the UNCC to the respondent, and requiring the Department to send the monies to the appellant’s counsel to hold, pending further court order.

[12] By Notice of Motion dated November 21, 2000, the Attorney General of Canada sought an order to set aside the order of Lalonde J. on the basis that the order was made without jurisdiction.

[13] The Attorney General’s motion was heard by Lalonde J. on November 22, 2000. By order of the same date, Lalonde J. set aside his November 20, 2000 order. He ruled that he had no jurisdiction to erode the immunity given to the Crown from mandamus and specific performance. He also ruled that funds coming from the United Nations could not be attached.

[14] Before this Court, it was the appellant’s submission that an order appointing a receiver of amounts to be paid by the Crown is not an order against the Crown and, thus, the common law rule that the Crown is not subject to garnishment or other mandatory orders has no application in cases where a receiver is appointed in respect of amounts to be paid by the Crown.

[15] According to the appellant, there are no relevant statutory provisions dealing in any way with the funds to be paid to the respondent by the UNCC and there can thus be no basis for the assertion that Parliament has abrogated or impaired the jurisdiction of the Superior Court to use the doctrine of equitable execution to appoint a receiver in respect of the funds in issue. Furthermore, it was argued that there are no decisions of the United Nations or its officials which oust or limit the jurisdiction of the Superior Court to appoint a receiver in respect of the funds that are at issue in this appeal.

[16] Accordingly, the appellant requested that the appeal against the decision setting aside the original order of Lalonde J. be allowed, and sought a new order appointing a receiver in respect of the funds to be paid by the Crown to the respondent.

Analysis

[17] In the proceedings before this Court, counsel for the appellant wife and counsel for the Attorney General of Canada were in agreement that based on the provisions of the Financial Administration Act [the “FAA”], there exists no impediment to this Court granting the order sought by the appellant.

[18] In section 2 of the FAA, the term “public money” is defined as meaning all money belonging to Canada received or collected by the Receiver General or any other public officer in his official capacity or any person authorized to receive or collect such money, and includes, inter alia:

all money that is paid to or received or collected by a public officer under or pursuant to any Act, trust, treaty, undertaking or contract, and is to be disbursed for a purpose specified in or pursuant to that Act, trust, treaty, undertaking or contract.

[19] Section 21(1) of the FAA provides that public money received for a special purpose and paid into the Consolidated Revenue Fund may be paid out of the Consolidated Revenue Fund for that purpose.

[20] Accordingly, once the funds from the UNCC are forwarded to Canada, that money can be conceived of as belonging to Canada. Once this has occurred, the Government of Canada is in a position to consent to the distribution of this money in a manner that it believes to be proper and lawful. It is on this basis that counsel for the Attorney General has conceded that the funds from the UNCC can be paid out to the appellant, as a receiver.

[21] We accept the submission of the appellant that s. 21 of the FAA does not deal in any way with the jurisdiction of the Court to appoint a receiver under s. 101 of the Courts of Justice Act, R.S.O. 1990, c. C-43, and, thus, cannot be taken to have narrowed or abrogated that jurisdiction. Furthermore, upon the appointment of a receiver pursuant to s. 101, the receiver will stand in the place of the judgment debtor to receive money payable to the debtor. Payment of the UNCC funds to the appellant will be, in law, a valid payment to the respondent. Thus, the payment of the funds to the appellant, as a receiver appointed under s. 101 of the Courts of Justice Act, will be entirely consistent with the requirements of s. 21 of the FAA.

[22] In addition, it appears that the United Nations is content that the monies it supplied to Canada for distribution to the respondent husband as compensation for damages suffered during the Gulf War are properly payable to the appellant wife in discharge of his responsibility to her under a court order of the Superior Court of Justice of Ontario.

[23] As is implicit from the letter of November 22, 2000 from the Deputy Executive Secretary of the United Nations to counsel for Canada, the United Nations claims no property in the money and the treaty immunity has no application. This, thus, invokes the Financial Administration Act, which, as explained above, authorizes the procedures leading to the appointment of a receiver.

[24] The respondent husband did not appear at this hearing. We are satisfied that he has been given timely notice of each step of this appeal and, despite his protestations in writing to the contrary, the respondent husband is fully aware of the nature of these proceedings and the relief that is being sought from this court on this day. We believe his failure to appear in person or by counsel is deliberate.

[25] Accordingly, we conclude that the Attorney General is in a position to concede the payment of the UNCC funds to a receiver, as requested by the appellant. The appeal is therefore allowed in the form of the order submitted, which is attached as a schedule to these reasons.

Signed: “G.D. Finlayson J.A.”

“J.J. Carthy J.A.”

AUSTIN J.A. (dissenting):

[26] I dissent. The arrangement proposed is, in my view, simply a device, apparently with the cooperation of the Canadian Government and of the United Nations Organization, to circumvent the immunity of that latter organization for the benefit of the appellant. In my view, this court should not assist such a device.

Signed: “Austin J.A.”

SCHEDULE A

The appeal be allowed with costs against the Attorney General of Canada in the amount of $1,600.21, and it is hereby ordered as follows:

(a) the appellant, Taghreed Roshdy, is hereby appointed as receiver of the funds in the amount of $47,354.86 U.S. (the “Remaining Funds”) being paid to the respondent, Torky Ibrahim Sultan, from the United Nations Compensation Commission through the Department of Foreign Affairs and International Trade, Oceans, Environmental and Economic Law Division;

(b) the appellant, in her capacity as receiver, is hereby empowered to act in the stead of the respondent Sultan in respect of the Remaining Funds, and the appellant is hereby empowered to avail herself of any and all entitlements the respondent Sultan may have to the Remaining Funds; and

(c) payment of the Remaining Funds to the appellant, in her capacity as receiver, by the Department of Foreign Affairs and International Trade on behalf of the UNCC effects payment to the respondent Sultan and discharges the Department from any obligations to the respondent Sultan with respect to the Remaining Funds.