ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 12-53997

DATE: 2013 July 17

BETWEEN:

SANDRA ROY

Plaintiff/Responding Party

– and –

DEPARTMENT OF INTERNATIONAL RELATIONS AND COOPERATION AND HIGH COMMISSION FOR THE REPUBLIC OF SOUTH AFRICA (AS REPRESENTATIVE TO CANADA)

Defendants/Moving Parties

M. Layton, for the Responding Party

C. Hofley, for the Moving Parties

HEARD: July 3, 2013 at Ottawa

TRANMER J.

REASONS ON MOTION

NATURE OF THE MOTION

[1] In his letter dated August 16, 2012 and before this Court, Mr. Hofley stated that he acts for the Republic of South Africa. He submits that the named defendants are not legal entities and cannot be sued as such.

[2] He moves for three items of relief:

1. An order to set aside the plaintiff’s noting of the defendants in default; and either,

2. An order pursuant to Rule 21.01(1)(b) striking out the Statement of Claim against the defendants on the ground that it discloses no reasonable cause of action; or

3. An order pursuant to Rule 21.01(3)(a) and s.106 of the Courts of Justice Act staying or dismissing the action against the defendants on the ground that the court is without jurisdiction to hear the subject matter of the action.

[3] If successful on his motion to set aside, and unsuccessful on the other two claims for relief, Mr. Hofley seeks an order allowing the defendants additional time for the filing of a defence to the action.

SETTING ASIDE THE NOTING IN DEFAULT

[4] Affidavit evidence is admissible on this aspect of the Motion.

[5] The plaintiff commenced employment at the High Commission for South Africa in Ottawa on November 28, 1988. The T4s issued in respect of this employment are in the name of South African High Commission. Her termination letter dated July 30, 2010, and a letter of reference dated January 13, 2012 are on the letterhead of High Commission for the Republic of South Africa.

[6] The plaintiff has brought an action in the nature of wrongful dismissal. The Statement of Claim was issued April 4, 2012. As it appears on the certificate issued under the State Immunity Act, the Statement of Claim was “transmitted to the appropriate authority of the Government of the Republic of South Africa on May 11, 2012.”

[7] By letter dated August 16, 2012, counsel for the Republic of South Africa wrote to plaintiff's counsel advising that his client did not accept that proper service and notice had been provided to the Republic of South Africa and further that the named defendants were not legal entities. Counsel indicated that the Republic of South Africa would not respond to the claim and asked that it be withdrawn. He indicated that any attempt to obtain default judgment would be vigorously opposed.

[8] Counsel for the plaintiff responded on August 17, 2012, indicating that the plaintiff was in the process of requesting default judgment unless provided with a defence.

[9] By letter dated August 21, 2012, counsel for the Republic of South Africa repeated that it did not accept that proper service and notice had been provided to the Republic of South Africa. He repeated that the named defendants were not legal entities. He repeated that his client would not respond to the claim and asserted that default judgment could not be ordered against a party that is not a legal entity. He asked that the claim be withdrawn and indicated that if the claim was not withdrawn, he would proceed to bring a Rule 21 motion to strike out the Statement of Claim on the ground that it disclosed no reasonable cause of action. He requested notice of any proceeding to default judgment.

[10] By letter dated August 23, 2012, counsel for the plaintiff indicated her willingness to correct any misnaming of the defendants. She asked counsel to provide the proper name of the appropriate legal entity as defendant so that she could correct the error.

[11] By letter dated August 31, 2012, counsel for the Republic of South Africa maintained his position that the action had been commenced against the wrong legal party. He indicated that his client would dispute any attempt to add or substitute a new party. He also asserted that his client was immune from the jurisdiction of any court in Canada by virtue of the State Immunity Act save for limited exceptions which did not apply.

[12] On September 6, 2012, the plaintiff noted the defendants in default.

[13] On October 23, 2012, the plaintiff delivered to counsel for the Republic of South Africa her motion for default judgment returnable on January 10, 2013.

[14] Counsel for the Republic of South Africa appeared in court on January 10, 2013. The motion for default judgment was adjourned.

[15] The within Notice of Motion is dated April 2, 2013. It was originally returnable June 6, 2013, but was heard by this court on July 3, 2013.

[16] Counsel for the plaintiff points out that no Statement of Defence has been delivered by the named defendants.

POSITION OF MOVING PARTY

[17] Mr. Hofley asserts that the parties were engaged in correspondence concerning the capacity of the parties sued and sovereign immunity. The plaintiff noted the named defendants in default without notice, and within six days of the third letter written by Mr. Hofley in 15 days.

[18] Counsel, submits that there was little delay between service of the Statement of Claim and his correspondence. He states that his letters demonstrated an intent to defend based on the capacity of the parties named as defendants and sovereign immunity. He states that the claim is a complicated one. The damages claimed are in the order of $1,000,000. The identity of the parties and the immunity issues are complex.

[19] Mr. Hofley submits that the noting in default deprived his client of the ability to seek relief in respect of the substantive issues it raised in its correspondence pursuant either to Rule 17 or s.4(3) of the State Immunity Act.

POSITION OF THE PLAINTIFF

[20] The plaintiff strongly resists an order setting aside the noting of default. Counsel points out that the claim was served pursuant to the State Immunity Act on May 11, 2012. She asserts the defendants and the Republic of South Africa were aware of the claim and chose to do nothing about it until counsel appeared on the default judgment motion on January 10, 2013.

[21] Counsel submits that the behaviour of the defendant parties dictates against the relief sought in that there is no Statement of Defence delivered as yet. The within motion was not brought until April 2, 2013. She further asserts that in her cross-examination of the representative of the moving party, the only defence position indicated was with respect to the parties and immunity issues. There was no indication of an intention to defend on the merits of the claim.

[22] Counsel submits that the length of the delay the court should consider runs from May 11, 2012 to the default judgment motion heard January 10, 2013, a period of eight months.

[23] Counsel points out that the moving party could have dealt with the parties and immunity issues under Rule 17 and s. 4(3) of the Act without attorning to the jurisdiction of this court.

[24] Counsel submits that the claim is not complex, simply a wrongful dismissal claim brought by a long-term employee.

ANALYSIS

[25] Counsel agree that the test is set out in Nobosoft Corp. v No Borders Inc. 2007 ONCA 444. The factors for the court to consider are:

1. the behaviour of the parties,
2. the length of the defendant's delay in seeking to respond to the plaintiff's claim,
3. the reasons for the delay, and
4. the complexity and value of the claim involved.

[26] Counsel corresponded on August 16, 17, 21, 23 and 31, 2012. Counsel for the plaintiff, in her letter of August 23, 2012, sought to correct the misnaming of the defendants and asked Mr. Hofley for the correct name. He responded on August 31, but did not directly answer this question. He sought the withdrawal of the claim. The plaintiff noted the defendants in default on September 6, 2012 without further notice. Counsel for the plaintiff has still not moved to amend the name of the parties. Mr. Hofley did not move under either Rule 17 or s. 4 (3) of the Act.

[27] I find there was no delay in seeking to respond to the claim in the correspondence between August 16 and August 31, 2012. The capacity of the named defendants and the immunity issues are substantive defences. The latter issue is complex, both factually and legally.

[28] The relief sought is discretionary. It is clear that the Republic of South Africa took issue with the capacity of the parties and state immunity in good time. The abrupt noting of default could reasonably be viewed as the plaintiff's response to the Republic of South Africa not answering the direct question that was asked in the plaintiff's letter of August 23, 2012.

[29] The parties were in the course of intense discussions back and forth on significant legal issues as I have indicated. If this motion had been brought in September or October or even November of 2012, it could have been an easy decision for the court to order setting aside of the noting of default.

[30] On these facts, the question arises as to whether it matters that the motion to set aside was not brought until April 2013. There is no evidence before me as to why it was not brought sooner.

[31] On the facts before me, I find there was a continuing intention to defend on the part of the Republic of South Africa on the issues raised in its correspondence. There is no evidence that it abandoned that intention. I find that the delay is not inordinate. The capacity of the defendants and the sovereign immunity issues are complex and the damages claimed are high.

[32] In Nobosoft, the court indicated that it is error for a court to inquire only as to whether there was an intent to defend formed by the defendant before the expiry of the time for delivery of a defence. In fact, in that case, there was evidence that the defendant formed an intention not to defend so as not to attorn to the jurisdiction of the court.

[33] I find no evidence of prejudice to the plaintiff has occurred.

[34] There is prejudice to the defendants or the Republic of South Africa in that the consequences of the noting in default preclude it from litigating the parties and immunity issues.

[35] The Ontario Court of Appeal in Nobosoft agreed with the comments of Molloy, J. in McNeill, as do I, “motions to extend the time for delivery of pleadings and to relieve against defaults are frequently made and are typically granted on an almost routine basis. Usually, opposing counsel will consent to such relief as a matter of professional courtesy. Where there is opposition to a motion of this kind, it is usually related to additional terms which are sought as a condition to the indulgence being granted or to issues of costs… It is not in the interests of justice to strike pleadings or grant judgments based solely on technical defaults. Rather, the court will always strive to see that issues between litigants are resolved on their merits whenever that can be done with fairness to the parties.” (Nobosoft, para. 7).

[36] I have considered all of the cases cited to me by both counsel.

[37] In considering the full context and factual matrix of the case before me, this, in my view, is an appropriate case to set aside the noting of default and I so order.

RULE 21.01(1)(b) – MOTION TO STRIKE OUT STATEMENT OF CLAIM as disclosing no reasonable cause of action

[38] Both counsel made oral submissions that affidavit evidence may be considered on this motion. Rule 21.01(2)(b) states that no evidence is admissible on this motion. I gave counsel a further opportunity to consider this issue and they both filed written submissions which I have considered. I find that I am bound by Rule 21.01(2)(b) and that no evidence is admissible on this motion.

[39] The law is clear that I must take the facts alleged in the Statement of Claim as true unless they are patently ridiculous or incapable of proof. The court should read the pleadings generously making allowances for drafting deficiencies. The essential question on this motion is whether it is plain and obvious that the pleadings disclose no reasonable cause of action (Transamerica Life v. ING 2003 9923 (ON CA), [2003] O.J. No. 4656, para. 38, 36). The relief sought will only be granted if it is clear, or plain, obvious and beyond doubt that the plaintiff cannot succeed (Telezone v AG (2007), 2007 52788 (ON SC), 88 O.R. (3d) 173, para.25).

POSITION OF THE MOVING PARTY

[40] It is submitted that the named defendants are not legal entities capable of being sued. It is further submitted that the jurisdiction of this court does not touch upon the Republic of South Africa on the basis of the State Immunity Act.

[41] Counsel submits that the onus is on the plaintiff to demonstrate that the defendants are legal entities.

[42] He further submits that the activity in issue and the proceedings are sovereign in nature and that the plaintiff has not satisfied its burden to establish that the commercial activity exception applies.

POSITION OF THE PLAINTIFF

[43] Counsel submits that the Republic of South Africa knew that it had been sued. There is authority to amend the parties’ identity after the expiration of a limitation.

[44] Counsel submits that the commercial activity exception does apply.

[45] Alternatively, counsel submits that the jurisprudence on the issue of employment claims and sovereign immunity and the commercial activity exception is muddy and should not be determined on motions such as this.

[46] Counsel submits that it is not plain and obvious that the plaintiff cannot succeed in her claims.

ANALYSIS

[47] I turn first to the Statement of Claim and take the facts pleaded as true.

[48] The plaintiff commenced employment with the Embassy of South Africa on November 28, 1988. The named defendants are organizations whose main role in Canada is to facilitate and promote government-to-government relations with the appointed countries, to promote trade and investment relations and to provide assistance to either South Africans visiting Canada or Canadians visiting South Africa. The defendants collectively were the plaintiff's employer. When she commenced her employment, the plaintiff was an administrative clerk. In 1990, she was promoted to consular clerk. At the time of her termination, she was employed as assistant consular for immigration. In this latter role, she was responsible for the intake and processing of all visa and permit applications, diplomatic protocol, maintenance orders, pension and outstanding revenue matters, custom declarations, birth, marriage and death certificate process, e-mail inquiries and personal interviews. She held a senior professional position with the defendants.

[49] The reasons given for her termination were that immigration and consular services have been largely consolidated and will be done from Toronto. Ottawa retained responsibility for Nunavut, Newfoundland and Labrador, New Brunswick, Nova Scotia, Prince Edward Island, and the greater Ottawa area. The South African High Commission reduced the number of consular assistants for immigration from two to one. The plaintiff had performed the duties of consular assistant for approximately 19 years. She had the most seniority of the two consular assistants employed to support the South African High Commission’s immigration function.

[50] I must take it as fact that the plaintiff’s employers were collectively the defendants which she has named in the Statement of Claim. No law has been brought to my attention that indicates this is not or cannot be true. Accordingly, I cannot strike the Statement of Claim on the basis that the named defendants are non-legal entities without capacity to be sued.

[51] Under section 3 of the State Immunity Act, a foreign state is immune from the jurisdiction of any court in Canada. Section 5 of the Act provides an exception to this community “in any proceedings that relate to any commercial activity of the foreign state.”

[52] I have reviewed the cases relied upon by counsel most carefully. They are cited at Schedule A to these my reasons. The onus is on the plaintiff to establish that the commercial activity exception applies (Greco; DCMA).

[53] The cases indicate that I must consider, firstly, what is the nature of the activity in question and secondly, are the proceedings in the case related to that activity.

[54] The cases indicate that the commercial activity exception does not apply to certification proceedings (Can. Labour Code; DCMA), wrongful dismissal claims arising for security reasons (Can. Labour Code) or touching management of personnel issues (Greco), or employees holding the status of consul general appointed to establish a consulate for St. Lucia in Toronto, to be St. Lucia's principal representative in Toronto and to be responsible for carrying on all normal consular activities in Toronto (Butcher).

[55] The cases indicate that the commercial activity exception does apply to an employee who is a cashier, simply collecting fees and scanning applications (Zachary), an employee hired to assist math teachers in the schools of a foreign state (Kais), to enforce money owed under a contract of employment (Greco), and to enforce money owed under a contract that required severance payment to be made upon the plaintiff's position being declared redundant (Lovell).

[56] When I consider the plaintiff's description of her employment at paragraph 7 of the Statement of Claim and her characterization of it as a senior professional position at paragraph 28c, I find that she is clearly not an employee in the same role as the plaintiff in Butcher (para.18). The reasons given for the termination are clearly not security based, nor do they indicate a situation as existed in Greco, as particularly described by Justice Charbonneau at paragraph 6 of his decision. I find that the allegation that the plaintiff was targeted for termination because of illness does not touch on any sovereign affair of the Republic of South Africa, but rather is an employee issue most closely related to commercial activity. The same can be said for the reason given for the termination, namely that immigration and consular services have been largely consolidated.

[57] I find it is not clear, plain or obvious and beyond doubt, that the plaintiff cannot succeed in her claim.

[58] Accordingly, this aspect of the motion before me is dismissed.

Rule 21.01(3)(a) and s.6 Courts of Justice Act motion to strike on the grounds the court has no jurisdiction over the subject matter of the action

[59] On this aspect of the motion, affidavit evidence is admissible.

[60] The materials indicate that the plaintiff's T4s were issued by South African High Commission and the letter of termination and a letter of reference were authored by High Commission for the Republic of South Africa. That being the case, I cannot find that it is plain and obvious the named defendants are not legal entities.

[61] On the question of sovereign immunity and the commercial activity exception, Mr. Hofley emphatically points out there is inconsistency between the allegations made in the Statement of Claim concerning the plaintiff's job responsibilities and those made in her affidavit where, he says, she seeks to minimize her job responsibilities to simply those of the clerical nature. In her affidavit, she sets out that her position was an administrative position. She states that she did not have access to sensitive or diplomatic materials. She says that she was not a diplomat or a civil servant of the Government of the Republic of South Africa. She points out that she was not allowed into the high commission unless in the company of a foreign services officer. She said she did not participate in the creation of government policy or its administration. She carried out directions. She was not privy to political deliberations. She could not speak for the government in its decision-making, lobbying or legislative work. Attached to her affidavit is a letter of reference provided to her by the High Commission for the Republic of South Africa. It states that her role was an administrative and client service driven role. Her tasks included receiving, capturing, and dispatching applications for visa, work and study permits; assisting the consular attache with civic matters relating to passport applications, birth registration, obtaining of birth, death and/or marriage certificates for South African citizens living in Canada. She also answered telephones, directed calls and messages; compiled, copied, sorted and filed records pertaining to the above noted. She operated office machines, such as photocopiers. She also sorted and routed incoming mail and forwarded correspondence and prepared outgoing mail on behalf of the consular attaché. Also, she was given the responsibility to liaise with the Canadian government on protocol issues and made travel arrangements for office personnel.

[62] Based on this evidence, I cannot find that it is clear, plain, obvious and beyond doubt that the plaintiff would not fall within the commercial activity exception contemplated by the State Immunity Act.

[63] Accordingly, this aspect of the motion is as well dismissed.

SUMMARY

[64] The motion to set aside the noting of default is allowed and the noting in default is set aside. The Defendants shall have 30 days to file their Statement of Defence.

[65] The motions under Rule 21.01(1)(b) and under Rule 21.01(3) and s.106 of the Courts of Justice Act are dismissed.

[66] If the parties cannot agree upon costs, then they may make written submissions to me in that regard limited to two pages plus the cost outline. The plaintiff shall deliver her submissions within five days hereof. The defendants shall have three days to respond.

The Honourable Mr. Justice Gary W. Tranmer

Released: ** July 17, 2013**

SCHEDULE ‘A’

1.

United States of America v. Public Service Alliance of Canada et al. (hereinafter Re Canada Labour Code) (1992), 1992 54 (SCC), 91 D.L.R. (4th) 449 (SCC)

2.

Greco v. Holy See (State of the Vatican City), [1999] O.J. No. 2467, appeal allowed in part [2000] O.J. No. 5293 (On. Sup. Ct.)

3.

Defense Contract Management Agency – Americas (Canada) v. Public Service Alliance of Canada, 2013 ONSC 2005 (On. Sup. Ct.)

4.

Butcher v. Saint Lucia [1998] O.J. No. 2026 (On. Ct. Jus.), leave to appeal dismissed [1999] O.J. S.C.C.A. No. 322

5.

Zakhary v. United States of America, (2012) 15690 (ON LA)

6.

Sandra McDonald v. Embassy of the United States of America, (2012) Justice Polowin of the Ontario Superior Court of Justice

7.

Kais v. Abu Dhabi Education Council et al, (2011) 75 (ONSCJ)

8.

Lovell v. New Zealand Tourism Board, (1992) 1502 (BCSC)

COURT FILE NO.: 12-53997

DATE: 2013 July 17

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

SANDRA ROY

Plaintiff/Responding Party

– and –

DEPARTMENT OF INTERNATIONAL RELATIONS AND COOPERATION AND HIGH COMMISSION FOR THE REPUBLIC OF SOUTH AFRICA (AS REPRESENTATIVE TO CANADA)

Defendants/Moving Parties

REASONS ON MOTION

Tranmer J.

Released: ** July 17, 2013**