Canadian Planning v. Libya, 2015 ONSC 2188
COURT FILE NO.: 13-44192
DATE: 2015-04-30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Canadian Planning And Design Consultants Inc.
Applicant
(Respondent on Cross-Motion)
- and -
State Of Libya aka Libya aka People’s Bureau Of The Great Socialist People’s Libyan Arab Jamahiriya-Canada aka The Great Socialist People’s Libyan Arab Jamahiriya-Canada aka Embassy Of Libya In Canada aka Embassy Of Libya aka Libyan Embassy Canada
Respondents
(Applicants on Cross-Motion)
- and -
Royal Bank of Canada
Garnishee
- and –
Attorney General of Canada
Amicus Curiae
Jennifer King, Malcolm Ruby and John Adair for the Applicant, Canadian Planning
John Melia and Jennifer Radford for the Respondents, Libya
Catherine Francis, for the Garnishee, RBC
Jacqueline Dais-Visca, for the
Amicus Curiae, Canada
HEARD: April 2, 2015
RULING NO. 2 ON MOTION
[1] This case concerns issues of diplomatic immunity, state immunity and the right of a private debtor to recover judgment against bank accounts held by another state within Canada’s borders.
[2] This is the second ruling on motions related to Notices of Garnishment that have been served on the Royal Bank of Canada (“RBC”) in relation to Libyan bank accounts held in Canada. The first ruling was released on March 11, 2015 (“the first ruling”) and is cited at 2015 ONSC 1638.
[3] This second ruling deals with a Foreign Relations Certificate dated March 30, 2015, and the impact that this certificate has on these proceedings.
BACKGROUND
[4] Canadian Planning and Design Consultants (“Canadian Planning”) is a Canadian corporation who made a monetary claim against the State of Libya (“Libya”) for breach of contract arising out of a Hospital Management Agreement from 2007. In that agreement, both parties agreed that any disputes would be settled at the International Chamber of Commerce International Court of Arbitration in Paris (“ICC”). A dispute arose, and both parties submitted to the jurisdiction of the ICC for the purpose of arguing the dispute on its merits.
[5] On May 4, 2012, the ICC ordered Libya to pay damages to Canadian Planning for lost profit. The current value of this judgment is approximately $11 million Canadian dollars. Despite the fact that Libya submitted to the jurisdiction of the ICC, Libya has failed to pay the judgment.
[6] Canadian Planning brought an application seeking an order to permit them to enforce the ICC judgment in Canada. On June 20, 2014, Justice Parayeski of the Ontario Superior Court of Justice issued a recognition and enforcement order. Despite having been served with the application, Libya was not present for this hearing. The recognition and enforcement order stated that Libya “has, by implication, waived its immunity from attachment, execution, seizure, and forfeiture within the meaning of Section 12(1) (a) of the State Immunity Act, R.S.C. 1985, c. S-18”.
[7] Libya appealed the recognition and enforcement order. On December 19, 2014, the Ontario Court of Appeal found that there was no basis to interfere with the order on procedural fairness grounds and dismissed the appeal. The court stated that the appropriate procedure to raise this issue was by way of a motion to set aside the order pursuant to Rule 38.11. Libya subsequently brought a motion to set aside Justice Parayeski’s order, which will likely be heard later this year.
[8] On December 22, 2014 and January 12, 2015, the Department of Justice wrote to the Civil Enforcement Office. The letters enclosed a certificate that had been issued by Department of Foreign Affairs, Trade and Development (“DFATD”) pursuant to s.11 (a) and (c) of the Foreign Missions and International Organizations Act, S.C. 1991, c. 41 (“Foreign Missions Act”). The DFATD certificate stated that several named bank accounts were the “diplomatic property of Libya” and that the accounts “continue to enjoy privileges and immunities under the Foreign Missions and International Organizations Act”. In their letters to the court, the Department of Justice letter stated that the DFATD certificate was prima facie proof that the accounts were immune from enforcement and attachment. (For reasons set out in the first ruling, this court found that that the DFATD certificate, on its own, is not enough to confer immunity on the bank accounts).
[9] On December 29, 2014, the court issued Notices of Garnishment (“the original Notices of Garnishment”) naming the State of Libya as the debtor. On January 6, 2015, Canadian Planning served the original Notices of Garnishment on RBC bank accounts in Ottawa. Libya has paid the $20,000 costs order from the appeal on this matter out of one of the garnished bank accounts.
[10] On January 9, 2015, Canadian Planning obtained an order amending the style of cause in the recognition and enforcement order. The amendment added the Libyan Embassy as a defendant to the Application (as one of the aliases for the State of Libya).
[11] On January 26, 2015, Canadian Planning served Notices of Withdrawal of the Original Notices of Garnishment. Canadian Planning then attempted to withdraw the original Notices of Garnishment and replace them with the new Notices of Garnishment in order to reflect the amended title of proceedings. In light of the correspondence that it had received from the Department of Justice, the Civil Enforcement Office would not accept any further documents for filing, including the Notice of Withdrawal of Garnishment and the new Notices of Garnishment.
[12] On the original return date on February 6, 2015, the parties sought the following:
i) Libya sought an order quashing the original Notices of Garnishment; an order directing that no new Notices of Garnishment be issued; and an order restraining Canadian Planning from any further enforcement attempts in respect of the bank accounts.
i) Canadian Planning sought a declaration that the original Notices of Garnishment are valid; and a direction from the court to permit the issuance of new, amended Notices of Garnishment that reflect the amended style of cause in the proceedings.
[13] In the first ruling in respect of those motions, this court concluded as follows:
- Procedurally, if a “competent authority” of the State of Libya provides a court with “due assurances” that a bank account’s funds are for the sovereign purposes of the functioning of the embassy, the court must be satisfied with those assurances unless Canadian Planning can prove that the funds are for another purpose (i.e. for a commercial purpose). If Libya asserts that these bank accounts exist for the proper functioning of its embassy, and Canadian Planning has no evidence to the contrary, the court must be satisfied with these assurances and provide the immunities due to such bank accounts at international law. The court is not entitled to inquire further into the use of the bank accounts, because doing so would be an undue interference into the affairs of the sending state, contrary to international law.
45... I will provide the parties with a further opportunity to provide a declaration or additional sworn evidence regarding the nature of the bank accounts. Once the court has received that evidence, the parties may provide additional submissions as to the nature of the bank accounts.
[14] Following the release of the first ruling, Libya filed a statutory declaration of the Libyan ambassador in Canada, Fathi Mohammed Baja. This document affirms that the garnished bank accounts are used for diplomatic purposes.
[15] Canadian Planning then sought a further adjournment in order to provide evidence that the bank accounts are not purely for a diplomatic purpose, in an attempt to displace the immunity. Canadian Planning brought motions, returnable April 2, 2015, for the following relief:
a) A declaration that either the Libyan ambassador submit to cross-examination with respect to his March 12, 2015 declaration or the court will assign no weight to his declaration;
b) Production of the RBC file with respect to the garnished bank accounts (from RBC or from Libya);
c) The opportunity to cross-examine RBC’s affiant, Mary Burke-Cameron, on her February 2, 2015 affidavit; and
d) Disclosure from other third parties that had dealings with Libya in Canada.
[16] Libya brought cross-motions, also returnable on April 2, 2015, seeking to strike the affidavit filed in support of Canadian Planning’s motions, and dismissing the motions.
[17] In the meantime, this court received a certificate from the Minister of Foreign Affairs dated March 30, 2015 (“the Minister’s certificate”). The Minister’s certificate stated, in part, the following:
FOREIGN RELATIONS CERTIFICATE
WHEREAS the Honourable Justice C. D. Braid in Reasons for Judgment dated March 11, 2015, rendered in Ontario Superior Court of Justice Application bearing Court File No. 13-44192 requested additional evidence as to the diplomatic status of certain bank accounts owned by the Embassy of Libya;
AND WHEREAS Canada and Libya enjoy diplomatic relations;
AND WHEREAS the Government of Canada has delivered to the Ontario Superior Court of Justice a Certificate dated November 12, 2014 pursuant to paragraphs 11(a) and 11(e) of the Foreign Missions and International Organizations Act, SC 1991, c.41 certifying among other things, the continuance of the mission of Libya established in Canada since May 2001 and continuing to exist since then with the consent of the Government of Canada;
AND WHEREAS the Government of Libya consented to the establishment by Canada of a diplomatic mission which diplomatic mission continues to exist in Libya with the consent of the Government of Libya;
AND WHEREAS, by mutually consenting to the establishment of diplomatic missions, Canada and Libya have thereby undertaken international legal obligations to provide diplomatic privileges and immunities to each other’s missions;
AND WHEREAS customary international law and Article 25 of the Vienna Convention on Diplomatic Relations obliges Canada to accord diplomatic missions full facilities for the performance of these functions;
AND WHEREAS diplomatic missions require bank accounts to fulfill, at a minimum, the purposes provided for in Article Three of the Vienna Convention on Diplomatic Relations and Article Five of the Vienna Convention on Consular Relations;
AND WHEREAS such accounts may be necessary for the diplomatic missions to, inter alia, pay salaries and rents, make purchases for the mission, receive funds for services provided, make foreign exchange payments and provide consular assistance to nationals of the sending state;
AND WHEREAS Libya is obliged to provide reciprocal protections to the accounts of the Embassy of Canada in Libya;
AND WHEREAS the Government of Canada is satisfied that certain Libyan Embassy bank accounts in Canada are being used for the diplomatic purposes of the Embassy of Libya; I, Rob Nicholson, Minister of Foreign Affairs in the Government of Canada, hereby certify as follows:
- The Department of Foreign Affairs, Trade and Development has determined that the following bank accounts are the bank accounts of the Embassy of Libya, used by the Embassy of Libya for diplomatic purposes which enjoy the privileges and immunities accorded to embassy bank accounts under customary international law. [emphasis added]
[This paragraph was followed by a list of bank accounts held at the RBC and the Toronto Dominion Bank].
[18] The Minister’s certificate is signed by The Honourable Rob Nicholson, Minister of Foreign Affairs of Canada.
[19] On April 2, 2015, the Attorney General of Canada (“Canada”) attended as amicus curiae and provided submissions regarding the Minister’s certificate. I also received preliminary submissions from Canadian Planning regarding the motions for production and from Libya regarding the Minister’s certificate. After hearing some submissions, it became apparent that this court would benefit from written submissions on certain issues. The parties also agreed that the impact of the Minister’s certificate should be determined as a threshold issue before the remainder of the motion is determined. As such, written submissions from Libya, Canadian Planning, and RBC were received by this court. If this court agrees with the arguments advanced by Canada and Libya, the Minister’s certificate may be dispositive of all issues on these motions.
ISSUES
[20] The following issues must be determined by this court on this motion:
A. What is the framework that the court must use to determine the ultimate issues on the motions regarding the Notices of Garnishment?
B. Does the Minister’s certificate remove the opportunity for Canadian Planning to allege that the accounts fall into a “commercial purpose” or other exception?
ANALYSIS
A. What is the framework that the court must use to determine the ultimate issues on the motions regarding the Notices of Garnishment?
[21] As the Supreme Court of Canada stated in R. v. Hape, (2007 SCC 26, at para 53), this court should rely on international law to the extent it is uncontradicted by Parliament. By its silence on bank account immunities in the Foreign Missions Act, Parliament has left this court to decide the issue according to common law and international law maxims. Doing so does not encroach on Parliament’s role, since Parliament is free to retract its silence by providing clear statutory language on the issue.
[22] Consequently, employing international law as an interpretive aid to fill any gaps in the Foreign Missions Act is appropriate. This is discussed at greater length in the first ruling issued March 11, 2015.
[23] Immunity of embassy bank accounts has formed the central issue of number of cases decided internationally. Scholarly commentary ensued. As a result, rules have emerged that provide a legal framework for handling immunity issues, upon which this court can and will rely in its attempt to reach a determination.
[24] Customary international law dictates that funds of a foreign State held in an embassy bank account in the host State for diplomatic or sovereign purposes will be immune from attachment and execution (Ernest Mason Satow, Satow's diplomatic practice, 6th ed. (Oxford: OUP, 2009) at page 104). Some states, including most Western states, allow an exception for accounts that a judgment creditor proves are not used or intended for diplomatic or sovereign purposes. There is little dispute over this general rule. However, the limits, scope, and content of exceptions to the rule (and how courts should treat mixed-use accounts) is still unsettled.
[25] The analysis required to determine whether a court should permit garnishment of embassy bank accounts must follow the framework established at international law. In my view, the court must determine three questions in the following order:
i) Does the foreign State have a diplomatic relationship with Canada?
ii) Has the foreign State provided assurances that the bank account is for a diplomatic purpose?
iii) Has the creditor proved that the bank accounts are in fact not for a diplomatic purpose, but for another purpose (such as for a commercial purpose)?
i) Step 1: Diplomatic Relations
[26] The court had previously received the DFATD certificate, which was provided as evidentiary proof of the fact that Canada and Libya enjoy diplomatic relations. The court has now received a Foreign Relations Certificate of March 30, 2015 signed by the Minister of Foreign Affairs, the Honourable Rob Nicholson.
[27] Certificates from the Minister of Foreign Affairs are rarely filed with the courts. Chateau-Gai Wines Ltd. v. Canada (Attorney General) (1970) 1970 CanLII 1693 (CA EXC), 14 D.L.R. (3d) 411 (Exchequer Court of Canada) [Chateau-Gai], aff’d 1974 CanLII 135 (SCC), [1975] 1 S.C.R. 190, is the leading case regarding the use of such a certificate in a court proceeding. In that case, the Supreme Court of Canada recognized that a certificate from the appropriate Minister is “conclusive proof that an agreement exists” between Canada and a foreign State (Chateau-Gai, at p.199).
[28] Canada’s executive branch will determine whether to engage in a diplomatic relationship with the foreign State. The decision to enter into foreign relations with another State is within the discretion of the executive, and is clearly not reviewable by the judicial branch (Khadr v. Canada (Prime Minister), 2010 SCC 3, [2010] 1 S.C.R. 44 at paras 34-35). Any rights a foreign State may have in a host State are contingent upon this relationship, thereby enshrining Crown prerogative and protecting the executive’s wide latitude to conduct its affairs as it sees fit, without fear of judicial review.
[29] The DFATD certificate and the Minister’s certificate provide conclusive proof that Canada and Libya enjoy diplomatic relations. Insofar as the Minister’s certificate speaks to the agreement between Canada and another government, it is the exercise of Crown Prerogative. Canadian Planning cannot challenge the exercise of that Crown Prerogative except by an application for judicial review to the Federal Court. This court does not have jurisdiction to conduct such a review.
[30] The executive is entitled to inform the court of the existence of diplomatic relations with a specific State, or lack thereof. A certificate, as was issued here, is sufficient proof of this state of affairs.
[31] If the answer to this first question is positive, Canada is bound by the Vienna Convention on Diplomatic Relations, 18 April 1961, UN Doc. A/Conf.20/13; U.N.T.S. Vol 500, p. 95 (“Vienna Convention”) and other provisions of international law. Canada may wish to extend privileges and immunities beyond those proffered in the Vienna Convention. A bilateral treaty with the foreign State could accomplish this goal. However, there is no evidence of such a bilateral treaty in the present case.
[32] In application to the case at bar, this court takes the DFATD certificate and the Minister’s certificate as conclusive proof of the existence of a diplomatic relationship between Canada and Libya.
ii) Step 2: Assurances of a diplomatic purpose
[33] Once it is clear that there is a diplomatic relationship between the two States, the court should, according to customary international law, review the nature of the accounts at issue, and should move on to the second step of the test: whether the sending State has provided due assurances that the funds are held in the embassy account for sovereign or diplomatic purposes.
[34] The foreign State does not need to prove that the bank account is for a diplomatic purpose; all that is necessary at international law is an “assurance” from a competent authority that the accounts are for sovereign or diplomatic purposes (The Philippine Embassy Bank Account Case, (1977) 65 ILR 146 (Fed Const Ct) (Germany) at p.188-189; Netherlands v. Azeta BV (1998), 128 ILR 688 (Dist. Ct. of Rotterdam) [Netherlands v. Azeta] at part 3.2).
[35] International law requires that this statement must be respected without further proof, unless the creditor can prove the contrary, as doing otherwise would be an unacceptable interference with the internal affairs of a foreign State (Philippine Embassy Bank Account case, supra; Netherlands v. Azeta, supra, at part 3.2; Liberian Eastern Timber Corp v. Government of the Republic of Liberia, 659 F. Supp. 606 (D DC 1987) [LETCO] at page 608; Eileen Denza, Diplomatic Law: Commentary on the Vienna Convention on Diplomatic Relations, 3rd Ed. (Oxford: Oxford, 2008) at page 157; Vienna Convention, supra, at Article 25.
[36] The jurisprudence does not explicitly discuss who may be a competent authority to provide assurances about the nature of embassy bank account funds. However, it appears that in every case, assurances have come from the embassy itself, the Ambassador, or another representative of the foreign State (see particularly Alcom Ltd v. Republic of Colombia, [1984] 1 AC 580 (HL) [Alcom] at page 604). In the case before the court, both Libya and RBC concede that there have been no cases internationally wherein the due assurances have come from the host State.
[37] In the case at bar, the Ambassador for Libya has provided assurances that the bank account is for a sovereign purpose. Following the release of the first ruling, the Libyan Ambassador provided a statutory declaration to the court stating that the funds held in the bank accounts at issue “exist and are utilized for the sovereign and diplomatic purposes of the proper functioning of the Libyan Embassy in Canada”. This court takes this statutory declaration to be the due assurances from a competent authority necessary to create a presumption of diplomatic immunity over the bank accounts.
[38] This ruling will address the significance of the Minister’s certificate in more detail below. Essentially, this court must determine whether the receipt of the Minister’s certificate effectively ends the enquiry.
iii) Step 3: Rebutting the Presumption of a Diplomatic Purpose
[39] In the past, the inquiry would have stopped after the second step. Until the early 20th century, most national courts were barred at international law from assuming jurisdiction over a foreign State in relation to any claim whatsoever, be it substantive or enforcement. This approach is known as the absolute immunity theory (Philippine Embasssy Bank Account Case, supra, at page 598; Hazel Fox. and Philippa Webb, The Law of State Immunity, 3rd ed. (Oxford: Oxford University Press, 2013) at 32. Later, as States began to engage in commercial transactions in the nature of a private person, States began to recognize certain exceptions to this rule, and so a “restrictive immunity” approach developed.
[40] The House of Lords in Alcom, supra, categorized jurisdiction over foreign States into two distinct but related branches: “adjudicative jurisdiction,” relating to jurisdiction over a foreign state during a trial proceeding, and “enforcement jurisdiction”, which referred to the ability of national courts to compel payment of debts pursuant to a judgment. The restrictive immunity doctrine does not apply only to what the House of Lords termed “adjudicative jurisdiction”, but also to judicial enforcement activities (Alcom, at p. 599-600).
[41] Alcom wholly adopted the reasoning in The Philippine Embassy Bank Account Case, and held that the scope of exceptions to foreign State immunity in the execution and attachment context would be far more limited than that for trial proceedings, “since preventive measures and measures of forced execution generally have a much more direct and drastic impact on the exercise of sovereignty by the foreign State than do judicial judgments.” (The Philippine Embassy Bank Account Case, at p. 166, Alcom, at page 599).
[42] So, while there will be a different standard applied to assessing immunity from jurisdiction over trial proceedings as compared to immunity from execution and attachment, the concept of restrictive immunity applies to both.
[43] Since the Philippine Embassy Bank Account Case, the courts and legislatures of many States have recognized that the general rule of diplomatic immunity for bank accounts is subject to certain exceptions. In Condor and Filvem v. Minister of Justice, 33 I.L.M. 596 (1994) the court reviewed State practice and found that restrictive (or functional) immunity in the area of provisional measures or execution has been affirmed, for example, by the French Court of Cassation, the German Constitutional Court, the Swiss Federal Court and the Appellate Court of the Hague. Likewise, the principle of restrictive immunity for execution permeates the recent laws of the United Kingdom, the United States, Canada, South Africa, Pakistan, Singapore and Australia (at part (3), page 601).
[44] Courts in the following cases recognized the existence of an exception to diplomatic immunity of bank accounts: Philippine Embassy Bank Account Case, supra; LETCO supra; Alcom, supra; SerVaas Incorporated v. Rafidian Bank & Ors, [2012] UKSC 40; Netherlands v. Azeta; MK v. State Secretary for Justice, 1988 NYIL 439, 94 ILR 357; Birch Shipping v. Embassy of United Republic Tanzania, 507 F. Supp. 311 - Dist. Court 1980; Iraq v. Dumez, Civil Court of Brussels, 106 ILR 285; Banamar-Capizzi v. Embassy of the Republic of Algeria, Italian Court of Cassation, Case No 2085 (1989), 87 ILR 56; Foxworth v. Permanent Mission of Republic of Uganda, 769 F Supp 761 (SD NY 1992); Cicippio v. Islamic Republic of Iran, 18 F. Supp. 2s 62 (D DC 1998).
[45] Restrictive immunity is characterized as a strong but rebuttable presumption in favour of diplomatic immunity for embassy bank accounts (Fox and Webb, supra, at page 506, 520; see also Iraq v. Vinci Constructions, Court of Appeal of Brussels (9th Chamber) 2002, 127 ILR 101, at part 1, page 105):
State practice as discussed in relation to proof of the use or intended use of State property for commercial purposes continues in general to apply a presumption that State property is in use for sovereign purposes unless the contrary is proved.
[46] Canada also follows the restrictive immunity approach. In Amaratunga v. Northwest Atlantic Fisheries Organization, 2013 SCC 66, [2013] 3 S.C.R. 866 [Amaratunga] at para 28: “Canada has adopted a restrictive approach to state immunity and rejected the absolute approach under which states had historically enjoyed immunity in all circumstances.” While this decision addressed immunity to jurisdiction during a trial proceeding, there is nothing to suggest Canada would not follow the general approach of Western countries in employing restrictive immunity for enforcement activities as well.
[47] In Alcom, the court identified similar principles to Canadian law with respect to incorporating international law. Lord Diplock stated that the presence of an international law rule on restrictive immunity “makes it highly unlikely that Parliament intended to require United Kingdom courts to act contrary to international law unless the clear language of the statute compels such a conclusion” (Alcom, supra at page 600).
[48] Here, Canada’s legislation does not provide as extensive instruction as that of the United Kingdom, but the principles remain the same. Canada should give effect to international law to the extent Parliament has not instructed otherwise. That international law provides a creditor with the opportunity to rebut the presumption of immunity in appropriate circumstances.
[49] If this court determines that it can proceed to the third question, this court will need to determine whether Canadian Planning has sufficient evidence to displace the mantle of immunity, and whether the court has the authority to compel production of information from third parties in order to assist Canadian Planning in their search for that evidence. In analyzing international cases, it appears that the creditor has rarely displaced the mantle of immunity. There is no set test to determine what proportion of the account’s activity must be commercial or non-diplomatic before the cloak of immunity is removed.
B. Does the Minister’s certificate remove the opportunity for Canadian Planning to allege that the accounts fall into a “commercial purpose” or other exception?
[50] As noted above, the Minister’s certificate was validly issued. The issuance of the certificate is non-justiciable. This court must determine, however, the effect of the Minister’s certificate.
[51] Libya and RBC argue that Copello v. Canada (Minister of Foreign Affairs), [2003] F.C.J. No. 1056 (Federal Court of Appeal) [Copello] stands for the proposition that, where a statute is silent, courts ought to interpret any and all legal vacuums as permitting exclusive Crown prerogative. In Copello, the Department of Foreign Affairs and International Trade of Canada asked a diplomatic representative of the embassy of Italy to leave Canada after he allegedly behaved badly in two instances. The Italian embassy assented to the request, but the individual sought judicial review of the Department’s decision. The primary issue was justiciability.
[52] The Federal Court of Appeal noted that Article 9 of the Vienna Convention was not specifically incorporated into the Foreign Missions Act, but that “it accurately describes the customary international law” to the effect that a host state may at any time notify a sending state that a member of the latter’s diplomatic personnel is not acceptable, at which point the sending State shall recall or terminate that person (Ibid, paras 19-20).
[53] In Copello, the Motions Judge held that the exclusion of Article 9 can only mean that Parliament intended that the expulsion of diplomats remain in the sphere of the Crown prerogative in the conduct of foreign affairs by Canada, and immune from judicial review” (at para 21). The Federal Court of Appeal upheld that analysis.
[54] Since Parliament did not specifically adopt Article 9 of the Vienna Convention or provide any other rule for ousting diplomatic personnel, the operative law remains the existing common law and customary international law. That existing law was clearly preferred by Parliament, as it left the issue of dealing with the removal of diplomats wholly to the discretion of the host State’s executive.
[55] In contrast, the customary international law in the case at bar does not leave the immunity of embassy bank accounts wholly in the hands of the host State’s executive branch. Rather, the jurisprudence applies the framework that is set out above and directs that the analysis be conducted using the restrictive immunity approach. Therefore, the decision in Copello cannot support the proposition that, merely because the Foreign Missions Act is silent with respect to diplomatic bank accounts, the designation of diplomatic bank accounts is wholly within the discretion of Canada’s executive.
[56] It is appropriate for this court to determine the significance of the Minister’s certificate. In essence, does a Minister’s certificate create a blanket or absolute immunity such that the court is not entitled to inquire further? Can the Minister’s certificate have greater authority than the declarations of the Libyan Ambassador?
[57] In Chateau-Gai, supra, the Attorney General of Canada relied on a certificate that was signed by the Secretary of State for External Affairs in the Government of Canada, which certified that Canada and France had entered into a Trade Agreement in 1933. Since this is the leading case on the issue of the Minister’s certificate, it is helpful to examine the court’s commentary regarding the authority to issue such a certificate and the significance that attaches to it.
[58] The Exchequer Court of Canada held that the certificate should be accepted by the court as conclusive proof that the agreement did come into force as a binding international agreement between Canada and another sovereign power. The court noted that questions within the realm of responsibility of the executive arm of government are questions with regard to which the court should accept, from the appropriate Minister, a certificate as to Canada’s position. The court gave additional examples of questions that can be determined by such a certificate including “whether a person in Canada is entitled to diplomatic privileges as being an ambassador of a foreign power” [emphasis added] (Chateau-Gai at para.28).
[59] The Supreme Court of Canada did not specifically adopt the examples the Exchequer Court enumerated, of questions within the realm of responsibility of the executive arm of government. It is notable that the Supreme Court held that a Minister’s certificate should be taken as conclusive proof that signatories to an agreement had the authority of the government they represent; however, the certificate does not have the authority to determine the effect of the agreement (Chateau-Gai, at p.199):
In the case at bar, I do not consider it necessary to decide whether one should go so far as to say that a certificate from the appropriate Minister is conclusive proof that an agreement exists. It is certain that such a certificate has this result as regards the value of the signatories’ powers and the authority of the government they represent (Duff Development Co. v. Government of Kelantan). I am inclined to the opinion that the question of whether the treaty is in force, as opposed to what its effect should be, is also wholly within the province of the public authority. [emphasis added]
[60] The certificate in the Chateau-Gai case did not take the additional step of stating that certain bank accounts were for a diplomatic purpose for that foreign state. I am not aware of any case where the court has examined whether a certificate from the Minister for Canada is conclusive proof that a bank account of a foreign power is entitled to diplomatic immunity, and thereby ending the inquiry.
[61] The Minister’s certificate itself recognizes that the privileges and immunities over a diplomatic bank account are granted by the customary international law:
“AND WHEREAS the Government of Canada is satisfied that certain Libyan Embassy bank accounts in Canada are being used for the diplomatic purposes of the Embassy of Libya; I, Rob Nicholson, Minister of Foreign Affairs in the Government of Canada, hereby certify as follows:
- The Department of Foreign Affairs, Trade and Development has determined that the following bank accounts are the bank accounts of the Embassy of Libya, used by the Embassy of Libya for diplomatic purposes which enjoy the privileges and immunities accorded to embassy bank accounts under customary international law”. [emphasis added]
[62] Customary international law recognizes that bank accounts that are used for diplomatic purposes enjoy full immunity from execution. However, there are exceptions, as discussed above.
[63] Although the Minister’s certificate states that the Government of Canada is “satisfied” that certain Libyan Embassy bank accounts in Canada are being used for the diplomatic purposes of the Embassy of Libya, this statement does not carry any greater weight than that of the declaration of the Ambassador. This court, and the Government of Canada, is still bound to follow international law.
[64] I find that the Minister’s certificate is conclusive proof that Canada and Libya have a diplomatic relationship. As stated by the Supreme Court of Canada in Chateau-Gai: “the question of whether the treaty is in force, as opposed to what its effect should be, is wholly within the province of the public authority.” The Minister’s certificate can certify the existence of the relationship but it is for the court to determine what privileges arise from the existence of the relationship. As the Minister’s certificate itself recognizes, the immunity afforded to diplomatic bank accounts arises out of customary international law.
[65] In international jurisprudence, the due assurances have always been made by the representative of the visiting country. This makes good sense as the diplomat would be best suited to speak to the nature and use of the bank account. As far as I am aware, no case has ever considered whether the host country could certify the true nature of the bank account. In my view, a certificate from the host country can have no greater power than the solemn declaration of the ambassador of the visiting country.
[66] The Minister’s certificate cannot remove the opportunity for Canadian Planning to allege that the accounts fall into a “commercial purpose” or other exception. To suggest that the Foreign Relations Certificate must end the inquiry would run contrary to international law.
[67] If Canada wishes to adopt an absolute immunity approach, it is entitled to do so by passing legislation. For example, Canada could pass legislation declaring that there will be no exceptions to immunity over bank accounts, thus adopting an absolute immunity approach. States such as China continue to adopt the absolute immunity approach, which Canada is free to follow. Canada could also enter into a bilateral treaty with a foreign State specifically detailing their departure from restrictive immunity. No evidence of such a treaty was brought before this court. There are mechanisms for Canada to end this court’s inquiry into the nature of the bank accounts, as Canada urges; but not through the Minister’s certificate.
CONCLUSION
[68] In the result, the Minister’s certificate is not dispositive of all issues on these motions. The Minister’s certificate is conclusive proof of the existence of a diplomatic relationship between Canada and Libya, but it does not end the enquiry regarding the immunity of the bank accounts. Canadian Planning must be given the opportunity to introduce evidence of a commercial (or other) purpose. This court will continue to assess the nature of the bank accounts, within the parameters established by customary international law.
[69] The next return date for this motion is May 5, 2015. In light of the fact that the Minister’s certificate is not dispositive of the motions, counsel shall continue their submissions regarding the motions for production and cross-examination on that date.
Braid J.
Released: April 30, 2015
CITATION: Canadian Planning v. Libya, 2015 ONSC 2188
COURT FILE NO.: 13-44192
DATE: 2015-04-30
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
CANADIAN PLANNING AND DESIGN CONSULTANTS INC.
Applicant
- and –
STATE OF LIBYA aka LIBYA aka PEOPLE’S BUREAU OF THE GREAT SOCIALIST PEOPLE’S LIBYAN ARAB JAMAHIRIYA-CANADA aka THE GREAT SOCIALIST PEOPLE’S LIBYAN ARAB JAMAHIRIYA-CANADA aka EMBASSY OF LIBYA IN CANADA aka EMBASSY OF LIBYA aka LIBYAN EMBASSY CANADA
Respondents
- and –
ROYAL BANK OF CANADA
Garnishee
- and –
ATTORNEY GENERAL OF CANADA
Amicus Curiae
RULING ON MOTION
Braid J.
Released: April 30, 2015