Majority
The judgment of Fauteux C.J. and of Abbott, Martland, Judson, Ritchie, Spence and Pigeon JJ. was delivered by
RITCHIE J.
RITCHIE J.—This is an appeal from a judgment of the Court of Appeal of the Province of Que-
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bec1 dismissing an appeal from a judgment of the Superior Court of Montreal which disallowed the appellant’s declinatory exception whereby it had claimed that, by reason of its status as a sovereign state, it could not be impleaded in the Quebec courts.
The respondent is an architect who claims to have been retained between February 1965 and March 1966 on behalf of the appellant for the purpose of making preliminary studies and preparing sketches in relation to the national pavilion which La République Démocratique du Congo (hereinafter called “The Congo”) proposed to build at “Expo 67”. The respondent’s declaration incorporated by reference an unsigned copy of a contract, pursuant to which he claims to have been employed, and also certain sketches of the proposed pavilion which he claims to have furnished to the appellant. The respondent prepared a bill of $20,000 for services rendered which he subsequently reduced to $12,000 and which was not paid because the Congo decided not to proceed with the pavilion.
The appellant has not denied any of the allegations contained in the declaration and no evidence whatever was called by either party, but the following admissions made on behalf of the respective parties constitute part of the record before this Court:
[TRANSLATION] The defendant admits through counsel that on the dates alleged in the declaration Messrs. Félix Mankwe and Pierre M’Balé were duly accredited Chargés d’Affaires of the Embassy of the Democratic Republic of the Congo in Ottawa, and duly appointed Commissioners General to the Montreal World Exhibition.
Signed: VIZKELETY
The plaintiff admits through counsel that since 1960 the Government of the Democratic Republic of the Congo has been a sovereign state.
Signed: G. GIRARD
The first paragraph of the declaration describes the offer allegedly made by the appellant to retain the respondent’s professional services as follows:
[TRANSLATION] 1. During the period from November 1965 to March 1966, Mr. Félix Mankwe, Chargé
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d’Affaires and Commissioner General for the Democratic Republic of the Congo, Mr. Pierre A. M’Balé, his successor in those duties, and the Deputy Minister of Foreign Affairs of the Democratic Republic of the Congo, in Montreal, on behalf of the said country, did request the professional services of plaintiff, an architect in Montreal, to carry out preliminary studies and prepare sketches in relation to the Pavilion which that country proposed to build at Expo 67.
It is common ground that the term “Expo 67” as used in the declaration refers to the exhibition defined in s. 2(f) of the Canadian World Exhibition Corporation Act, 1962-63 (Can.), c. 12, as follows:
2. (f) Exhibition means the Canadian Universal and International Exhibition, Montreal, 1967, for which registration was granted by the Council of the Bureau of International Exhibitions on November 13, 1962.
Mr. Justice Leduc in the Superior Court and the three judges who sat on the Court of Appeal, were all of opinion that the contract in question was entered into by the Congo as a private commercial transaction and that it did not bear the character of an act of state or an act done for the public purpose of a foreign sovereign state.
Mr. Justice Leduc expressed his finding in this regard in the following terms:
[TRANSLATION] WHEREAS the defendant, by requesting plaintiff’s services through its Chargés d’Affaires, duly accredited to the governing body of Expo 67, did not perform an act jure imperii (acte de puissance publique) but an act jure gestionis (acte de gestion d’une nature privée);
WHEREAS, although the Democratic Republic of the Congo is a sovereign State, the contractual relations between the parties were purely of a private nature;…
Accepting the finding that the contractual relations between the parties were of a purely private nature, Mr. Justice Owen proceeded to pose the problem as he understood it in the following terms:
The problem raised by this appeal is whether under conditions existing today our courts will continue to apply the doctrine or theory of absolute
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sovereign immunity or whether the time has come to apply a doctrine or theory of qualified or restrictive sovereign immunity.
In my opinion we should abandon the doctrine of absolute sovereign immunity and adopt a theory of restrictive sovereign immunity.
Stated briefly, the theory of sovereign immunity recognizes the classical doctrine that a foreign sovereign cannot, without his consent, be impleaded in the courts of another sovereign state, whereas according to the theory of restrictive sovereign immunity, which has been accepted by the United States State Department and consequently by the courts of that country, the immunity of the foreign sovereign is recognized only with regard to sovereign or public acts (jure imperii) but not with respect to private acts (jure gestionis).
It accordingly appears to me, with all respect for the views of others, that the problem so dramatically posed by Mr. Justice Owen can only arise in this case if the judges of the Court of Appeal were right in adopting, without discussion, the finding of the learned trial judge that when the appellant employed the respondent to prepare sketches of the national pavilion which it proposed to build at a duly authorized international exhibition, it was not performing a public act of a sovereign state but rather one of a purely private nature.
The record indicates that the judges of the Court of Appeal simply accepted this finding of the trial judge and did not pause to consider the material upon which it was based. In fact, in his reasons for judgment, Mr. Justice Leduc disposes of the matter in one paragraph where he says:
[TRANSLATION] In the circumstances there is no doubt that this was a private act, since it is a Montreal architect claiming from defendant, his principal, the minimum payment for his professional services, as the result of jure gestionis acts (actes de gestion) performed by the latter’s Chargés d’Affaires, duly accredited not only to the sovereign power of Canada, but also to the Commissioners General of the 1967 World Exhibition.
As I have indicated, the material before this Court is in my view, limited to the terms of the
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respondent’s declaration and the admissions made on behalf of the parties, all of which is to be read against the background of the Canadian World Exhibition Corporation Act, supra, which incorporated the agency created by the Government of Canada for the purposes of planning, organizing, holding and administering the Canadian Universal and International Exhibition.
This record discloses nothing more than that the contract here in question was made in pursuance of the desire of a foreign sovereign state to construct a national pavilion at an international exhibition and to be thereby represented at that exhibition which was registered by the Council of the Bureau of International Exhibitions and which was to be held (in the words of s. 3(1) of the Canadian World Exhibition Corporation Act, supra) “in connection with the celebration of the centennial of Confederation in Canada in a manner in keeping with its national and historical significance.”
Mr. Justice Leduc, and consequently the Court of Appeal, adopted the view that the nature of the transaction here at issue was to be determined entirely on the basis that the respondent was a Montreal architect claiming against his employer and that the matter was therefore a purely private one. Considered from the point of view of the architect, it may well be that the contract was a purely commercial one, but, even if the theory of restrictive sovereign immunity were applicable, the question to be determined would not be whether the contractor was engaged in a private act of commerce, but whether or not the Government of the Congo, acting as a visiting sovereign state through its duly accredited diplomatic representatives, was engaged in the performance of a public sovereign act of state.
I think that it is of particular significance that the request for the respondent’s services was made not only by the duly accredited diplomatic representatives of the Congo who were Commissioners General of the Exhibition, but also by the representative of the Department of Foreign Affairs of that country. (See declaration, para. 1). This makes it plain to me that in preparing for the construction of its national pavilion, a department of the Government of a foreign state, together with its duly accredited diplomatic representatives,
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were engaged in the performance of a public sovereign act of state on behalf of their country and that the employment of the respondent was a step taken in the performance of that sovereign act. It therefore follows in my view that the appellant could not be impleaded in the courts of this country even if the so-called doctrine of restrictive sovereign immunity had been adopted in our courts, and it is therefore unnecessary for the determination of this appeal to answer the question posed by Mr. Justice Owen and so fully considered by the Court of Appeal. In an area of the law which has been so widely canvassed by legal commentators and which has been the subject of varying judicial opinions in different countries, I think it would be undesirable to add further obiter dicta to those which have already been pronounced and I am accordingly content to rest my opinion on the ground that the appellant’s employment of the respondent was in the performance of a sovereign act of state.
There is more than a suggestion in the reasons for judgment of the Court of Appeal that in determining whether the act of a foreign sovereign is public or private, the burden of proof lies upon the sovereign to show that the act was a public one if it is to be granted sovereign immunity. As I have indicated, there is no dispute as to the facts in the present case and in my view, to the extent that it may have any bearing on the determination of this appeal, the question of whether the contract in question was purely private and commercial or whether it was a public act done on behalf of a sovereign state for state purposes, is one which should be decided on the record as a whole without placing the burden of rebutting any presumption on either party.
Reference was made in the reasons for judgment of Mr. Justice Owen to the judgment of Mr. Justice Reid in Allan Construction v. Venezuela[2], where the Court was considering a contract for the construction of a pavilion at “Expo 67” and it was held that as the contract was a purely private and commercial one, the government of the foreign sovereign state there in question was subject to the jurisdiction of the Quebec courts.
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In that case there was ample evidence that the foreign state in question intended to incorporate in its pavilion a restaurant with the right to sell alcoholic liquor and to sell the products of Venezuela. I do not find it necessary for the purpose of the present case to comment on the conclusion drawn by the learned trial judge from his finding that the contract was a commercial one; here there is no evidence of a commercial venture and in the view which I take of the matter I see no basis upon which the appellant should be required to assume the negative burden of proving that no commercial undertakings were to be associated with its participation in the Exhibition.
Although, as I have indicated, I am content to base my decision on the premise that the appellant’s employment of the respondent was an act done in the performance of a sovereign act of state, I think some consideration should be given to the careful and extensive arguments contained in the reasons for judgment in the Court of Appeal.
In this regard I think it should be pointed out that, as I have indicated, the decisions in the United States, upon which the reasons for judgment of Taschereau and Owen JJ. are clearly based, stem from opinions furnished by the State Department in that country which come to the courts by way of “letters of suggestion” and which are generally regarded as authoritative statements of the foreign policy of that country. In one of these letters, i.e., the Tate Letter, written in 1952 by Professor J.B. Tate who was then the acting legal adviser to the State Department, it was categorically stated that “… it will hereafter be the Department’s policy to follow the restrictive theory of sovereign immunity in the consideration of requests of foreign governments for a grant of sovereign immunity”. This position appears to have been generally accepted in the United States courts although they have some leeway in cases where the State Department refuses to make a suggestion of immunity, and the Victory Transport case[3] is cited by Mr. Justice Owen as an example of an independant judicial acceptance of the theory of restrictive sovereign immunity. It is pointed out, however, that in that
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case Mr. Justice Smith, speaking on behalf of the United States Court of Appeals (second circuit) stated at page 358:
Where, as here, the court has received no communication from the State Department concerning the immunity of the Comisaria General, the court must decide for itself whether it is the established policy of the State Department to recognize claims of immunity of this type.
It is thus clear that in such cases the question to be determined in the United States courts is whether it is the established policy of the State Department to recognize the immunity claimed in any particular case. As no such question arises in this country, I take the view that cases concerning sovereign immunity decided in the courts of the United States in recent years are of little or no authority in Canada.
Although I do not intend to discuss all the relevant cases which have been decided in this Court and have been so fully reviewed by Mr. Justice Brossard, I nevertheless think it desirable to make reference to the case of Saint John et al. v. Fraser-Brace Overseas Corp., et al[4]. This was a case involving liability to municipal taxation of property being used on behalf of the United States Government in the construction of a radar defence system which had been agreed to by the Governments of Canada and the United States. The special nature of the joint project was undoubtedly a circumstance which affected the court’s reasoning but in the course of the very comprehensive reasons for judgment rendered by Mr. Justice Rand, he made a number of statements which are of general application. Amongst these is the following which occurs at page 266:
The general principle of immunity from legal processes in the broadest sense in what may be called the host country of public property of a foreign state has been given its authoritative statement for Canada by Duff C.J. in the Foreign Legations Reference, 1943 S.C.R. 208. There, as here, he was dealing with taxation under general language in which only the interpretation of the statute was in question. The significant aspect of the matter examined by him was that of the theory on which the immunity is to be placed. In the early considerations given it, the idea of exterritoriality, the physical
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projection of one sovereignty within the borders of another, arose probably from one of its earliest examples, that of a public vessel entering a foreign port. But as new contacts and relations between states developed, the multiplied situations appearing rendered necessary a more realistic and flexible conception. On p. 218 of his reasons, after quoting a passage from Vattel on the immunities of an ambassador’s residence, which includes the qualification in the application of the rule, ‘at least in all the ordinary affairs of life’, Duff C.J. observes, on the latter, that it must be read ‘as excluding the fiction of exterritoriality in its extreme form’. The notion was, in his view, finally rejected by the Judicial Committee in Chung Chi Cheung v. The King, 1939 A.C. 160; and reverting to it at p. 230 he repeats: ‘This fiction of exterritoriality must be disregarded.’
…What is substituted is the conception of an invitation by the host state to the visiting state. That is the core of what was laid down by Marshall C.J. in The Schooner Exchange v. M’Faddon et al., (1812) 11 U.S. (7 Cranch) 116, which Duff C.J. adopts. The fundamental attitude which states adopt towards each other is the recognition and observance of individual sovereignty, that is, the acknowledgment of the absolute independence of each; and on this basic footing their intercourse is conducted. When one state admits within its boundaries a foreign sovereign or his representative, the terms of that entry are to be gathered from the circumstance of the invitation and its acceptance. In the language of Marshall C.J. at pp. 139 and 143:
A sovereign committing the interests of his nation with a foreign power, to the care of a person whom he has selected for that purpose, cannot intend to subject his minister in any degree to that power; and, therefore, a consent to receive him, implies a consent that he shall possess those privileges which his principal intended he should retain…
(The) extent (of the implied consent) must be regulated by the nature of the case, and the views under which the parties requiring and conceding it must be supposed to act.
In the absence of something special or unusual, when a visiting sovereign steps upon the foreign soil he does so free from any submission to its immanent law; from that he remains insulated; and the
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recourse against what may be considered to be an infringement of the privileges of the invitation becomes a matter for diplomatic and not legal adjustment. In the language of Marshall C.J. at pp. 138-9, quoted by Duff C.J. at p. 215:
The assent of the sovereign to the very important and extensive exemptions from territorial jurisdiction which are admitted to attach to foreign ministers, is implied from the considerations that, without such exemption, every sovereign would hazard his own dignity by employing a public minister abroad. His minister would owe temporary and local allegiance to a foreign prince, and would be less competent to the objects of his mission. A sovereign committing the interests of his nation with a foreign power, to the care of a person whom he has selected for that purpose, cannot intend to subject his minister in any degree to that power; and, therefore, a consent to receive him, implies a consent that he shall possess those privileges which his principal intended he should retain—privileges which are essential to the dignity of his sovereign, and to the duties he is bound to perform.
On the same page there is a pertinent quotation from Vattel reinforcing the same view which it is unnecessary to reproduce.
Freedom from the coercion of the public law is coextensive with the requirements of the purpose for which the entry is made. In general, the immunity of a sovereign, his ambassadors, ministers and their staffs, together with his and their property, extends to all processes of Courts, all invasions of or interferences with their persons or property, and all applications of coercive public law brought to bear affirmatively, including taxation.
The reasons for judgment of Mr. Justice Rand were expressly endorsed by Mr. Justice Abbott.
Some of the thoughts expressed by Mr. Justice Rand in the Saint John case supra, find an echo in the early English decision in The Charkeih[5], where Sir Robert Phillimore said at page 97:
The object of international law, in this as in other matters, is not to work injustice, not to prevent the enforcement of a just demand, but to substitute negotiations between governments, though they may be dilatory and the issue distant and uncertain, for the ordinary use of courts of justice in cases where such use would lessen the dignity or embarrass the
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functions of the representatives of a foreign state;… It is thus apparent that immunity from the jurisdiction of our courts on the ground of sovereign immunity does not necessarily preclude the enforcement of a just demand through other channels.
I do not find it necessary in the present case to consider the statements made by Lord Atkin in Compania Naviera Vascongardo v. S.S. Cristina[6] and in Rahimtoola v. Nizam of Hyderabad[7], where he expressed the view that sovereign immunity applied in respect of commercial transactions, because I think the present circumstances are governed by the decision of this Court in Flota Maritima Browning de Cuba S.A. v. Republic of Cuba[8], where it was said of the ships whose seizure gave rise to the issue before the Court:
All that can be said is that they are available to be used by the Republic of Cuba for any purpose which its government may select, and it seems to me that ships which are at the disposal of a foreign state and are being supervised for the account of a department of government of that state are to be regarded as ‘public ships of a foreign state’ at least until such time as some decision is made by the sovereign state in question as to the use to which they are to be put.
Similarly in the present case, with the greatest respect for those who hold a different view, I am of opinion that the contract here sought to be enforced to which the appellant’s diplomatic representative and one of its departments of government were parties, was a contract made by a foreign sovereign in the performance of a public act of state and that whatever view be taken of the doctrine of sovereign immunity, it was a matter in respect of which the Republic of the Congo cannot be impleaded in our courts. I would allow this appeal on that ground.
I have proceeded on the assumption that the record before this Court is limited to the respondent’s declaration and the admissions made by the parties, but I think I should deal with the contention advanced on behalf of the respondent
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that judicial notice should be taken of a document entitled “Universal and International Exhibition of 1967 Montreal—General Rules and Regulations”. This document was tendered by the respondent for the first time in this Court and was not mentioned by any of the judges in the courts below, it does not purport to be issued under the authority of any statute or order in council, it is undated, unsigned and was not produced by any witness so that its source is unknown.
The document to which I refer was objected to by counsel on behalf of the appellant but it is suggested that the force of this objection is weakened by the fact that the document is referred to in the appellant’s factum. It is, in my view, important to understand that no act of counsel can be relied upon as enlarging the category of matters of which this Court will take judicial notice.
It is suggested, however, that judicial notice should be taken of the Rules and Regulations in question because mention is made in s. 4(3) of the Canadian World Exhibition Corporation Act, supra, of “The General Rules and Regulations of the Exhibition approved on November 13, 1962 by the Council of the Bureau of International Exhibitions”. There is, however, no evidence whatever that the Rules and Regulations now tendered are the ones referred to in the statute and in any event the reference there made has to do with the by-laws of the Canadian World Exhibition Corporation and can have no bearing on the matter here at issue.
It is further contended that the Rules and Regulations in question are in some fashion to be regarded as a treaty on the ground that “Expo 67” was organized under the umbrella of the constitution relating to international exhibitions of November 22, 1928 as modified by protocol on May 10, 1948. I can find no evidence of the Exhibition having been so organized, (although this may well be the case), but even if the Rules and Regulations are to be regarded as a treaty, this does not of itself convert them into material of which this Court can take judicial notice.
Although no reliance was placed by the Court of Appeal on the argument advanced by the learned trial judge to the effect that the appellant
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had submitted to the authority of the Quebec courts by entering a declinatory exception in accordance with the practice established in that Province, I think it perhaps desirable to state that I cannot accept the proposition that a defendant can be taken to have submitted to the jurisdiction by entering a plea to the effect that it is not subject thereto, and in any event I see no merit in this argument because of the long line of cases which establishes that a sovereign state is not to be held to have submitted to a foreign jurisdiction unless the submission be made in the face of the court, coupled with a request that such jurisdiction be exercised. (See Duff Development Company v. Government of Kelantan[9]).
For all these reasons I would allow this appeal, set aside the judgments of the Court of Appeal and of the Superior Court and allow the declinatory exception. The respondent’s action is accordingly dismissed. The appellant will have its costs throughout.
The judgment of Hall and Laskin JJ. was delivered by
LASKIN J. (dissenting)
LASKIN J. (dissenting)—This appeal arises out of a suit by an architect to recover from the Government of The Democratic Republic of Congo fees for his services. The services were those provided in the planning of a national pavilion which that country proposed to erect on an allotted site as a participant in the Universal and International Exhibition held in Montreal in 1967. Having been impleaded in the Superior Court of Quebec, Montreal District, the Government challenged the suit by a declinatory exception which was dismissed by Leduc J., and the dismissal was affirmed unanimously by the Quebec Court of Appeal[10]. The interlocutory proceedings thus became the vehicle for the determination of the basic issues in the litigation, namely, the immunity of the foreign Government from suit and from the jurisdiction of the Quebec Superior Court.
The reasons upon which Leduc J. and the Quebec Court of Appeal proceeded were not fully concordant. The former purported to find, in a
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formal admission by the foreign Government that it had accredited its Chargé d’Affaires as its Commissioner General to the Montreal Exhibition, that the transaction with the architect amounted to a private law transaction cognizable before the Quebec Superior Court. In taking this view, Leduc J. accepted what he regarded as an evolved distinction in the law of sovereign immunity between public acts of a State and acts of a private character. He also found that invocation by the foreign Government of the processes of the Quebec Code of Civil Procedure amounted to a submission to the jurisdiction of the Superior Court. I take this as meaning that there was a waiver of immunity, assuming it existed, through an attributed consent to be impleaded.
The Quebec Court of Appeal flatly rejected the doctrine of absolute sovereign immunity, applied by this court in Dessaulles v. Republic of Poland[11], and declared for a principle of restrictive sovereign immunity in accordance with developments in the domestic courts of some European countries and consonant with the executive policy of the United States reflected in the Tate Letter of 1952 (26 U.S. Department of State Bulletin 984). It found leeway to depart from this court’s judgment in Dessaulles by referring to allegedly contrary indications in the later judgment in Flota Maritima Browning de Cuba S.A. v. Republic of Cuba[12]. It also went on to hold that it was incumbent on the foreign Government in this case to establish the circumstances in support of its claim of immunity. On the view of Owen J., this followed from the fact that immunity was a derogation from the general rule of domestic jurisdiction; and it also followed, in the view of the court as a whole, from the denial of a rule of absolute immunity. Since the court was of the opinion that no proof had been offered by the foreign Government to establish its claim of immunity, it held that the declinatory exception had been properly dismissed. The court’s position on the burden of proof arising under a doctrine of restrictive immunity relieved it of any need to
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consider the situations in which immunity would be recognized. Its bare references to public and private acts, and to acts jure imperii and acts jure gestionis, left those situations at large.
The one issue in this appeal is whether a claim of immunity, be it on an absolute basis or on a restrictive basis, must be conceded under the declinatory exception taken by the appellant. Before turning to that, I wish to dispose of the alternative ground of waiver of immunity relied on by Leduc J. In my opinion, there is no basis for finding waiver in the facts relied on by the learned judge. Resort to applicable rules of procedure for the purpose of asserting immunity and contesting jurisdiction cannot be converted into a submission to the court’s authority to deal with the merits. English law has been consistent in holding that waiver and submission to jurisdiction on the part of a foreign sovereign State must, to be effective, be made in the face of the court and at the time the court is asked to exercise its jurisdiction: see Duff Development Co. v. Government of Kelantan[13]; Kahan v. Pakistan Federation[14]; a previous agreement to submit, although part of a contract sued upon, is not binding upon the foreign government which may resile from it. Whether or not the time may come when waiver by contractual agreement will be recognized as effective (as proposed, for example, by the Restatement (Second), Foreign Relations Law of the United States (1965), s. 70), the present case may be disposed of on this issue without relying on the English rule, which is also the prevailing rule in the United States. There was here no contractual submission, but, from the outset, a resistance to jurisdiction, subject to the courtesy of an appearance to contest it.
I begin my consideration of the central point in this case by noting that we are not concerned here with any claims to property, tangible or in-
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tangible, by any foreign State or agency thereof. Nor are we concerned with the status of any corporate or other body alleged to be an organ of a foreign State. There is in the present case a formal admission by the respondent that the Democratic Republic of Congo is a sovereign State. This determines its status for the purposes of this case without the necessity of seeking a certificate from the executive. No question is raised as to service of process, and hence only amenability to jurisdiction remains.
There is no doubt that there has been a shift in the positions of the domestic courts of various countries from the doctrine of absolute immunity, which prevailed through the nineteenth century and into the twentieth, to a restrictive doctrine. The Tate Letter enumerates the countries which have departed from the absolute view of immunity, and a recent text-book, O’Connell, International Law (2nd ed. 1970), p. 844 states that “the absolute view is not sanctioned by international law” and that “at the present time only English and perhaps Russian law reflects to any extent the traditional doctrine”. This text-writer’s assessment does not appear to embrace Canadian law (or even that of Australia, which is his base) unless he considers the two countries to be governed by the English rule. For Canada at any rate, the question is one for this court, subject to any binding Canadian treaty on the subject.
The restrictive view adopted in the Tate Letter is, it must be remembered, not a rule of law but a policy guide for the United States State Department. It has legal effect, however, through the conclusive force which the courts of the United States give to a suggestion made to the court by the State Department through the Justice Department that a claim of immunity be “recognized and allowed”: see Compania Espanola de Navegacion Maritima S.A. v. The Navemar[15]; Ex parte Peru[16]. The practice of a “suggestion” by the executive to the courts goes back to the judgment of Mar-
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shall C.J. in The Schooner Exchange v. M’Faddon[17]. I am not aware of any such “suggestion” practice in Canada. The executive here has gone no farther than to certify sovereign status, but, of course, under an absolute doctrine of immunity that would, in a case like the present one, be sufficient.
In the United States, the courts have leeway only where the State Department refuses to make a suggestion of immunity, and they have both granted and refused immunity in such a situation: see Puente v. Spanish National State[18], cert. denied[19] (immunity granted in a suit for legal fees on letter from Spanish Ambassador claiming immunity); Victory Transport Inc. v. Comisaria General de Abastecimientos y Transportes[20], cert. denied[21] (immunity refused in a suit to compel arbitration where agreed to under charterparty entered into by arm of foreign government). The Victory Transport case is apparently the first in which a United States federal court has unequivocally adopted the restrictive view of immunity, which had been a State Department policy even before being formalized in the Tate Letter: see O’Connell, op. cit., supra, at p. 856. There were indications before the Victory Transport case that the courts of the United States would accept the restrictive view as the governing one: see National City Bank of New York v. Republic of China[22], and this now seems to be so.
The position in Great Britain is not, or not yet, clearly in the direction of a restrictive view. The flat assertion of the absolute view in The Cristina[23], by Lord Atkin became a much quoted paragraph in later English and Canadian cases. However, in Sultan of Johore v. Abubakar, Tunku
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Aris Bendahara[24], Viscount Simon said, for the Privy Council, that “Their Lordships do not consider that there has been finally established in England… any absolute rule that a foreign independent sovereign cannot be impleaded in our courts in any circumstances” (at p. 1268). This could well refer, for example, to a probable qualification in respect of the use of property, or to competing claims to some chose in action rather than to a case like the present one where a foreign State is directly impleaded in a contract type of action. It does, however, leave the general question of immunity open to reconsideration.
The House of Lords returned to the issue of immunity in Rahimtoola v. Nizam of Hyderabad[25], which involved a contest between two claimants, one a former personal sovereign and the other a foreign State, in respect of a bank account in England. Viscount Simonds, who delivered the leading judgment, accepted the statement of the absolute view made by Lord Atkin in The Cristina. Lord Denning apart, the other Law Lords in the case proceeded on the same view so far as the issue of immunity concerned the direct impleading of a foreign sovereign or arose out of a claim to property or a chose in action clearly in the control of the foreign government, albeit not beneficially owned by it.
Before considering the views of Lord Denning (to which his colleagues in the case expressly withheld their assent) I wish to examine the decisions of this court on the question. The absolute immunity of a foreign sovereign State itself was recognized by Duff C.J. and by Hudson J. in the course of their reasons in Reference as to Powers to Levy Rates on Foreign Legations and High Commissioners’ Residences[26]. That doctrine was not, however, in issue, and none of the other judges in the case dealt with it in any explicit sense. Similarly, passing references to absolute
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immunity were made in Reference as to Exemption of United States Forces from Canadian Criminal Proceedings[27], as, for example, in the reasons of Rand J. The first direct consideration of the matter was in Dessaulles v. Republic of Poland, already referred to.
That case, like the present one, involved a declinatory exception by the respondent State when it was sued for fees for legal services and for an accounting. An official of the State had instituted disciplinary proceedings against the plaintiff before the Bar Council which was joined as mis-en-cause in his action against Poland. The Quebec Superior Court dismissed the declinatory exception on the ground that the institution of the disciplinary proceedings constituted a submission to the jurisdiction. This view was rejected unanimously by the Quebec Court of Appeal[28], which sustained the declinatory exception. On further appeal to this Court, the judgment of the Court of Appeal was affirmed. In addition to rejecting the contention that there had been a submission to jurisdiction, the Supreme Court was unanimous on the following statement of principle:
[TRANSLATION] There is no doubt that a sovereign state cannot be sued before foreign courts. This principle is founded upon the independence and dignity of states, and international comity has always respected it. The Courts have also adopted it as being the domestic law of all civilized countries.
I make two observations on this statement. First, it is clear that the absolute doctrine is not today part of the domestic law “de tous les pays civilisés”. Second, neither the independence nor the dignity of States, nor international comity require vindication through a doctrine of absolute immunity. Independence as a support for absolute immunity is inconsistent with the absolute territorial jurisdiction of the host State; and dignity, which is a projection of independence or sovereingty, does not impress when regard is had to the submission of States to suit in their own courts. The Supreme Court of the United States has exposed the fraily of these considerations by allowing a counterclaim to be pursued against a
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sovereign State which invoked the jurisdiction of a domestic court: see National City Bank of New York v. Republic of China, supra, at p. 364. Nor is comity any more realistic a foundation for absolute immunity, unless it be through treaty. It is not correct to say, as did Lord Wright in The Cristina, supra at p. 502, that international comity or courtesy has ripened into a general principle of international law that supports absolute immunity. The former rule of practice and reciprocity in this respect has been abandoned. I should observe that another former prop of absolute immunity, that of extraterritoriality, which was in the main used to exclude domestic jurisdiction over foreign public ships, has long been recognized as a spent fiction, ruled out in this Court by Duff C.J. in the Foreign Legations Reference, supra, at p. 230, following the lead of Lord Atkin in Chung Chi Cheung v. The King[29]. Rand J. took the same view in St. John v. Fraser-Brace Overseas Corp[30].
This last-mentioned case has a relevance in principle to the present case in the general considerations upon which Rand J., with whom Abbott J. agreed in a concurring judgment, proceeded. It had to do with a claim to immunity from local taxation of (a) personalty, of which the legal title was in the United States, and (b) leasehold interests, beneficially owned by that foreign State. All the property was used in the construction of a radar defence system in Canada, pursuant to an agreement between Canada and the United States. Although Locke J., with whom Cartwright J. concurred, appeared to accept the principle of absolute immunity in quoting from The Parlement Belge[31], I do not read the reasons of Rand J. as going that far, albeit the Court was unanimous in supporting immunity from the proposed local taxation.
Rand J. felt the need to search for “a more realistic and flexible conception” of immunity
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than extraterritoriality, and found it in the conception of “an invitation by the host State to the visiting State”. On the facts of the case, involving a “visit” for a particular mutual purpose of protection, it was a reasonable conclusion that public taxing legislation should not be applied to property used in the joint venture, especially when “the work carried on by either Government on its own land would be untaxable”. It is in this context that I read two passages in his reasons that, ex facie, indicate a fixed immunity so far as court proceedings are concerned. The two passages are as follows ([1958] S.C.R. 263, at p. 268):
In the absence of something special or unusual, when a visiting sovereign steps upon the foreign soil he does so free from any submission to its immanent law; from that he remains insulated; and the recourse against what may be considered to be an infringement of the privileges of the invitation becomes a matter for diplomatic and not legal adjustment.
Freedom from the coercion of the public law is coextensive with the requirements of the purpose for which the entry is made. In general, the immunity of a sovereign, his ambassadors, ministers and their staffs, together with his and their property, extends to all processes of Courts, all invasions of or interferences with their persons or property, and all applications of coercive public law brought to bear affirmatively, including taxation.
These passages are immediately followed by others which seem to me to support the limited view I take of what I have quoted. Further, what Rand J. says in those following passages points up, in my view, the fact that time and events have removed the underpinnings of the judgment of this court in Dessaulles. He puts the matter in this way (at pp. 268-269):
It is obvious that the life of every state is, under the swift transformations of these days, becoming deeply implicated with that of the others in a de facto society of nations. If in 1767 Lord Mansfield, as in Heathfield v. Chilton, (1767), 4 Burr. 2015, 98 E.R. 50, could say, “The law of nations will be carried as far in England, as any where”, in this country, in the 20th century, in the presence of the
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United Nations and the multiplicity of impacts with which technical developments have entwined the entire globe, we cannot say anything less.
In the language of Sir Alexander Cockburn quoted by Lord Atkin in Chung Chi Cheung, ([1939] A.C. 160. at p. 172) in the absence of precise precedent we must seek the rule which “reason and good sense… would prescribe”. In this we are not to disregard the practical consideration, if not the necessity, of that “general assent and reciprocity”, of which Lord Macmillan speaks in Compania Naviera Vascongardo v. The “Cristina” et al, [1938] A.C. 485 at 497,… But to say that precedent is now required for every proposed application to matter which differs only in accidentals, that new concrete instances must be left to legislation or convention, would be a virtual repudiation of the concept of inherent adaptability which has maintained the life of the common law, and a retrograde step in evolving the rules of international intercourse. However slowly and meticulously they are to be fashioned they must be permitted to meet the necessities of increasing international involvements. It is the essence of the principle of precedent that new applications are to be determined according to their total elements including assumptions and attitudes, and in the international sphere the whole field of the behaviour of states, whether exhibited in actual conduct, conventions, arbitrations or adjudications, is pertinent to the determination of each issue.
This court did not embark upon any general inquiry into immunity in the Flota Maritima case, supra; and if the Quebec Court of Appeal found any support there for its enunciation of a doctrine of restrictive immunity, it must have been only in that part of the judgment of Ritchie J., speaking for the majority of the Court, in which he reserved opinion on immunity in respect of property of a foreign State used only for commercial purposes. The same reservation was made by Locke J., although he adopted the absolute view of immunity expressed by Lord Atkin in The Cristina, supra. Ritchie J. quoted the same sentences from The Cristina, but without indicating his approval thereof.
I refer now to Lord Denning’s canvass of general principle in the Rahimtoola case. It will suffice to quote one passage, a summarizing one,
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which, to put it briefly, would substitute function for status as the determinant of immunity; it is in these words:
…it seems to me that at the present time sovereign immunity should not depend on whether a foreign government is impleaded, directly or indirectly, but rather on the nature of the dispute. Not on whether “conflicting rights have to be decided,” but on the nature of the conflict. Is it properly cognizable by our courts or not? If the dispute brings into question, for instance, the legislative or international transactions of a foreign government, or the policy of its executive, the court should grant immunity if asked to do so, because it does offend the dignity of a foreign sovereign to have the merits of such a dispute canvassed in the domestic courts of another country: but if the dispute concerns, for instance, the commercial transactions of a foreign government (whether carried on by its own departments or agencies or by setting up separate legal entities), and it arises properly within the territorial jurisdiction of our courts, there is no ground for granting immunity.
The considerations which, in my view, make it preferable to consider immunity from the standpoint of function rather than status do not rest simply on a rejection of the factors which had formerly been said to underlie it. Affirmatively, there is the simple matter of justice to a plaintiff; there is the reasonableness of recognizing equal accessibility to domestic courts by those engaged in transnational activities, although one of the parties to a transaction may be a foreign State or an agency thereof; there is the promotion of international legal order by making certain disputes which involve a foreign State amenable to judicial processes, even though they be domestic; and, of course, the expansion of the range of activities and services in which the various States today are engaged has blurred the distinction between governmental and non-governmental functions or acts (or between so-called public and private domains of activity), so as to make it unjust to rely on status alone to determine immunity from the consequences of State action.
A shift from status to function means, of course, the substitution of a loose formula for a precise one, but it is dictated by factors and conditions
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which have impressive support from scholars as well as judges, and also in the practice of States as reflected in the restrictive doctrine adopted by their domestic courts and as reflected as well in the negotiation of treaties providing for waiver of immunity, as, for example, in commercial matters: see Sucharitkul, State Immunities and Trading Activities in International Law (1959); Falk, The Role of Domestic Courts in the International Legal Order (1964), Chap. VII; Hendry, Sovereign Immunities from the Jurisdiction of the Courts, (1958) 36 Can. Bar Rev. 145; Simmonds, The Limits of Sovereign Jurisdictional Immunity, (1965) 11 McGill L.J. 291; Lauterpacht, The Problem of Jurisdictional Immunities of Foreign States, (1951) 28 Brit. Y.B. Int’l.L. 220; Comment, The Jurisdictional Immunity of Foreign Sovereigns (1954), 63 Yale L.J. 1148.
I note the general terms in which Lord Denning illustrated those classes of functions to which immunity should continue to attach. Another classification was proposed by the United States Court of Appeals for the Second Circuit in its reasons for judgment in the Victory Transport case, supra; it is as follows (at p. 360 of 336 F.2d):
…we are disposed to deny a claim of sovereign immunity that has not been “recognized and allowed” by the State Department unless it is plain that the activity in question falls within one of the categories of strictly political or public acts about which sovereigns have traditionally been quite sensitive. Such acts are generally limited to the following categories:
(1) internal administrative acts, such as expulsion of an alien.
(2) legislative acts, such as nationalization.
(3) acts concerning the armed forces.
(4) acts concerning diplomatic activity.
(5) public loans.
We do not think that the restrictive theory adopted by the State Department requires sacrificing the interests of private litigants to international comity in other than these limited categories. Should diplomacy require enlargement of these categories, the
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State Department can file a suggestion of immunity with the court. Should diplomacy require contraction of these categories, the State Department can issue a new or clarifying policy pronouncement.
The need for distinctions “to render unto Caesar the things that are Caesar’s” is obvious, and the two proposed classifications are useful aids. I resist the temptation in this case to add a classification of my own of activities in respect of which immunity should continue to attach; and the more so because the issue of initial jurisdiction raised by the declinatory exception, if it be taken to comprehend immunity on a restrictive basis, requires a conclusion only on whether the transaction in this case is so clearly within the claim of immunity as to make any further inquiry superfluous. For this purpose, I turn to the particular facts out of which the present litigation has arisen, so far as they can be gleaned from a rather sparse record and relevant legislation.
Montreal Expo, to give the Exhibition its popular name, was organized under the umbrella of the Convention relating to International Exhibitions of November 22, 1928, as modified by a Protocol of May 10, 1948, to which Canada is a party. Article 5 provides that the host country must address invitations for participation by foreign countries through the diplomatic channel. Prior to this, it must have applied to the international authority, constituted by the Convention, to register the Exhibition, and it must contemporaneously have filed certain information and documents, including copies of the general regulations that will be operative. Canada fulfilled these requirements, found in Article 8 of the Convention, and established an administration for Expo under the Canadian World Exhibition Corporation Act, 1962-63 (Can.), c. 12. This Special Act provided for a board of directors of the Corporation (in whose appointment the Governments of Canada and of Quebec shared) under a responsible federal Minister.
Certain provisions of the federal statute are especially relevant to the issue in this case. Subject to an exception that is immaterial here, the Corpo-
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ration was declared, by s. 7(1) to be for all purposes of the Act an agent of the Crown. Section 7(4) was as follows:
Actions, suits or other legal proceedings in respect of any right or obligation acquired or incurred by the Corporation on behalf of Her Majesty, whether in its name or in the name of Her Majesty, may be brought or taken by or against the Corporation in the name of the Corporation in any court that would have jurisdiction if the Corporation were not an agent of Her Majesty.
Among the powers of the Corporation, set out in s. 9, were the acquisition of property for the construction, maintenance and operation of the Exhibition, and the making of construction contracts; these powers were, however, qualified by limitations on the amounts of expenditures on any contract or any property acquisition unless the approval of the Government of Canada was obtained for exceeding the limitations. A key provision was s. 10, obliging the Corporation to secure the approval of the Governments of Canada and of Quebec of its overall plan for the Exhibition.
I note that the Act defines “Exhibition” in s. 2 (f) to mean “the Canadian Universal and International Exhibition, Montreal 1967, for which registration was accorded by the Council of the Bureau of International Exhibitions on November 13, 1962”. My reason for drawing attention to this definition is to give context to a document produced at the hearing in this court, entitled “General Rules and Regulations, The Universal and International Exhibition of 1967, Montreal (Quebec, Canada)”. I take this to be the document of general regulations filed with the international authority, pursuant to Article 8 of the Convention relating to International Exhibitions.
Objection to its production in this Court was taken by the appellant foreign Government. It was entitled to take this objection in so far as the document was tendered to form part of the record. Although it may be arguable that judicial notice should be taken of the general rules and regulations, as being incorporated into the treaty and statutory regime under which Expo was organized and conducted, it would be taking the
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parties by surprise to apply them, whether in their factual or legal bearing on the question of immunity, without giving the parties previous notice so as to enable them to make representations on the relevancy and effect of the general rules and regulations.
Notwithstanding the objection to production of the general rules and regulations, counsel for the appellant in the Factum filed on the appeal to this Court referred to them in submitting that Congo’s participation was for a “public purpose”. I quote from p. 19 of the Factum:
We respectfully submit that the Congo participated in Expo 67, pursuant to an invitation from the Government of Canada, through diplomatic channels, for the purposes and objects cited in the Paris Convention and in the general rules and regulations of the Exhibition. The Congo’s pursuit of the purposes and objects of Expo 67 to “endeavour to attain unity among men”, and “to show the spiritual and material aspirations of the world”, certainly constitutes involvement by a Sovereign state in public purposes in the traditional sense.
Counsel for the respondent had an opposite purpose in view in offering the document. It appears therefore that both parties considered it relevant to the issue of immunity on a restrictive basis, and this issue cannot be resolved on the record that is now before this Court. That record consists only of the declaration or claim, the declinatory exception, and two formal admissions to which reference has already been made. If the immunity claimed herein is to be tested on a restrictive basis, as I think it should be, there is, in my opinion, not enough in the record upon which a ready affirmation of immunity can be founded. The case must certainly proceed further for the claim to immunity to be determined.
In viewing the matter from the standpoint of an issue of restrictive immunity, I have taken a broader view of the declinatory exception than its terms, strictly speaking, justify. As set out in the Case in Appeal, the declinatory exception is a peremptory assertion of immunity as a sovereign State. There is nothing in the exception as framed to indicate any claim to immunity based on a restrictive theory. Such a claim might have been open if Congo had invoked art. 165 C.C.P.
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rather than art. 163 and 164. Had it done so, it would be conceding jurisdiction in the Superior Court to determine whether it was entitled to immunity under a restrictive theory. However, by reason of the way in which Congo proceeded and of the stand it took, this Court is faced, as were the courts below, with an unqualified contention that a sovereign State cannot as such be impleaded regardless of the activity in which it is engaged and out of which a suit against it is brought in a foreign domestic court.
To allow the declinatory exception is thus to reaffirm the doctrine of absolute immunity. I have made plain my opinion that the doctrine is spent. If so, it would be wrong to revive it on any view of a deficiency of evidence to overcome any suggested presumption that when a sovereign State acts through an accredited diplomatic representative any ensuing transaction with a private person is for a so-called public purpose. At this stage of the action there is no question of requiring evidence from the plaintiff or from Congo to negate or establish immunity on a restrictive basis. That comes later. Hence, I need not now be concerned with fixing any burden of proof. The only question is whether the action should be throttled at its inception or whether it should be allowed to proceed. Since, in my view, jurisdiction which is invoked as here cannot be effectively repudiated ab initio on the basis of unqualified immunity, I am of opinion that the action should proceed.
I am fortified in this opinion on my view that even if the declinatory exception is read to claim immunity on a restrictive basis (as the appellant urged alternatively in its Factum and in argument), there is no factual basis on which it can be allowed at this stage of the action.
I would dismiss the appeal with costs.
Appeal allowed with costs, HALL AND LASKIN J.J. dissenting.
Solicitor for the appellant: B. Vizkelety, Montreal.
Solicitor for the respondent: R. Beaulé, Montreal.
Footnotes
- [1] [1969] Que. Q.B. 818, 5 D.L.R. (3d) 128.
- [2] [1968] Que. R.P. 145, [1968] Que. S.C. 523.
- [3] (1964), 336 F. 2d 354.
- [4] [1958] S.C.R. 263, 13 D.L.R. (2d) 177.
- [5] (1873), L.R. 4 A. & E. 59, 28 L.T. 513.
- [6] [1938] A.C. 485, [1938] 1 All E.R. 719.
- [7] [1958] A.C. 379 at 394, [1957] 3 All E.R. 441.
- [8] [1962] S.C.R. 598, 34 D.L.R. (2d) 628, 83 C.R.T.C. 219.
- [9] [1924] AC. 797.
- [10] [1969] Que. Q.B. 818, 5 D.L.R. (3d) 128.
- [11] [1944] S.C.R. 275, [1944] 4 D.L.R. 1.
- [12] [1962] S.C.R. 598, 34 D.L.R. (2d) 628, 83 C.R.T.C. 219.
- [13] [1924] A.C. 797.
- [14] 14 [1951] 2 K.B. 1003, [1951] 2 T.L.R. 697
- [15] (1938), 303 U.S. 68 at 74.
- [16] (1943), 318 U.S. 578 at 588.
- [17] (1812), 7 Cranch 116 at 147.
- [18] (1941), 116 F. 2d 43.
- [19] (1941), 314 U.S. 627.
- [20] (1964), 336 F. 2d 354.
- [21] (1965), 381 U.S. 934.
- [22] (1955), 348 U.S. 356.
- [23] [1938] A.C. 485 at 490, [1938] 1 All E.R. 719.
- [24] [1952] 1 All E.R. 1261, [1952] A.C. 318.
- [25] [1958] A.C. 379, [1957] 3 All E.R. 441.
- [26] [1943] S.C.R. 208 [1943] 2 D.L.R. 481.
- [27] [1943] S.C.R. 483, 80 C.C.C. 161, [1943] 4 D.L.R. 11.
- [28] [1943] Que. K.B. 224.
- [29] [1939] A.C. 160 at 174, [1938] 4 All E.R. 786.
- [30] [1958] S.C.R. 263 at 267, 13 D.L.R. (2d) 177.
- [31] (1880), 5 P.D. 197.
Cases cited
- Canadian World Exhibition Corporation Act Canadian World Exhibition Corporation Act, supra
- National City Bank of New York v. Republic of China National City Bank of New York v. Republic of China, supra, at p. 364 p. 364
- The Cristina The Cristina, supra at p. 502 p. 502
- the Foreign Legations Reference the Foreign Legations Reference, supra, at p. 230 p. 230
- The Municipality of the City and County of Saint-John et al. v. Fraser-Brace Overseas Corp scr-1958-263 p 268
- A.C. 160 A.C. 160
- Compania Naviera Vascongardo v. The “Cristina” et al A.C. 485 497
- Flota Maritima Flota Maritima case, supra
- the Victory Transport the Victory Transport case, supra
Statutes and regulations cited
-
Unresolved citations
- s. 2(f)
- s. 3(1) of the Canadian World Exhibition Corporation Act
- s. 4(3) of the Canadian World Exhibition Corporation Act
- s. 70
- s. 7(1)
- Section 7(4)
- s. 9
- s. 10
- s. 2