DATE: 20060119

DOCKET: C43406

COURT OF APPEAL FOR ONTARIO

RE:

CROTEAU, 4049705 CANADA INC. and 3782484 CANADA INC. (Respondents (Applicants in Application)) – and – FEDERAL TRADE COMMISSION (Appellant (Respondent to Application))

BEFORE:

SIMMONS, MACFARLAND AND LAFORME JJ.A.

COUNSEL:

Malcolm N. Ruby

for the appellant

David Hurren

for the respondent

HEARD:

January 11, 2006

On appeal from the judgment of Justice C. Anne Tucker of the Superior Court of Justice dated March 16, 2005.

E N D O R S E M E N T

[1] The main issue on appeal is whether the application judge erred in holding that the appellant was served with the notice of application in compliance with the provisions of the State Immunity Act (the “SIA”), R.S.C. 1985, c. S-18.

[2] In our view, even if the letter enclosing the March 15, 2005 certificate delivered by the Department of Foreign Affairs and International Trade (the “certificate”) was not properly before the court, the certificate itself was admissible in evidence under s. 14 of the SIA. Moreover, assuming that the statement in the certificate that the appellant is an integral part of the government of the United States exceeded the scope of s. 14 of the SIA, we conclude that there was no evidence in the record before the trial judge capable of supporting a finding that the appellant was an “agency of a foreign state” within the meaning of s. 2 of the SIA. Accordingly, a finding that the appellant was properly served in accordance with s. 9(3) of the SIA was not available.

[3] In particular, the 90^th^ Anniversary Symposium paper filed by the respondents was downloaded from the appellant’s internet website and did not meet the requirements of rule 39 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Further, the statement by the appellant (in a Request for International Judicial Assistance filed in another proceeding) indicating that the appellant is “an independent agency of the United States government that is responsible for consumer protection matters” is equivocal on the issue of whether the appellant is an “agency of a foreign state” within the meaning of s. 2 of the SIA.

[4] Before this court, the respondents sought to support the finding that the appellant is an agency of a foreign state by pointing out that the appellant can sue and be sued in its own name and by filing extracts from four sections of the appellant’s constating statute (the “FTC statute”) that the respondents assert establish the appellant’s independence from the United States government.

[5] The extract from the section of the FTC statute relating to the appellant’s ability to sue establishes only that it can sue and be sued in its own name in certain circumstances. Moreover, it appears that, in some instances, the Attorney General on behalf of the appellant may sue or defend. In any event, in our view, the fact that the appellant may be able to sue and be sued in its own name is not conclusive on the central issue of whether the appellant is a “legal entity that is an organ of the foreign state but that is separate from the foreign state”.

[6] Finally, we note that the FTC statute is a foreign statute and that no opinion evidence was filed to support the respondents’ interpretation of that act. On our review of the extracts from the sections of the FTC statute relied on by the respondents, they do not establish that the appellant is an agency of a foreign state within the meaning of s. 2 of the SIA. In the result, we are not satisfied that the respondents met the onus of proving that the appellant was properly served in accordance with s. 9(3) of the SIA. The application judge’s finding that service was proper must therefore be set aside.

[7] Further, even if the respondents had established that the appellant is an agency of a foreign state within the meaning of s. 2 of the SIA and that the appellant was served with the notice of application in compliance with the provisions of s. 9(3) the SIA, we conclude that the judgment in this matter must be set aside. Section 10 of the SIA stipulates:

Where … service of an originating document has been made on a foreign state in accordance with subsection … 9(3) … and the state has failed to take … the initial step required … no further step toward judgment may be taken in the proceedings except after the expiration of at least sixty days following the date of service of the originating document.

[8] Under s. 2 of the SIA, “foreign state” is defined to include “any agency of the foreign state”. Accordingly, since the respondent purported to effect service of the notice of application on the appellant on February 23, 2005, and since less than sixty days had elapsed between February 23, 2005 and March 16, 2005 (the date on which judgment was granted), even if the respondents had established that the appellant is an agency of a foreign state, the respondents were not entitled to obtain judgment on March 16, 2005.

[9] Based on the foregoing reasons, the appeal is allowed and the judgment dated March 16, 2005 is set aside. Costs of the appeal are to the appellant, fixed in the amount of $5000 inclusive of disbursements and applicable G.S.T.

“Janet Simmons J.A.”

“J. MacFarland J.A.”

“H.S. LaForme J.A.”