Canadian Planning and Design Consultants Inc. v. Libya (State), 2015 ONCA 661

• Judge: Cronk, Hourigan and Benotto, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 24, 2015
• Jurisdiction: Ontario
• Citations: 2015 ONCA 661;(2015), 340 O.A.C. 98 (CA)

Cdn. Planning & Design v. Libya (2015), 340 O.A.C. 98 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. SE.029

Canadian Planning and Design Consultants Inc. (applicant/appellant) v. 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 (respondent/respondent in appeal) and Royal Bank of Canada (garnishee/respondent/respondent in appeal) and Attorney General of Canada (intervenor)

(C60679; 2015 ONCA 661)

Indexed As: Canadian Planning and Design Consultants Inc. v. Libya (State)

Ontario Court of Appeal

Cronk, Hourigan and Benotto, JJ.A.

September 29, 2015.

Summary:

The International Chamber of Commerce International Court of Arbitration in Paris (the ICC) ordered Libya to pay damages to Canadian Planning and Design Consultants Inc. for breach of contract. The award, with interest and costs, exceeded approximately $11 million. Canadian Planning applied in the Ontario Superior Court of Justice for a registration and enforcement order concerning the ICC arbitral award. The Superior Court issued the requested order (the "REO") which provided that the ICC award was recognized and enforced as an order of the Superior Court. Libya was not present at the registration and enforcement hearing. It appealed from the REO, asserting procedural unfairness.

The Ontario Court of Appeal, in a decision reported at [2014] O.A.C. Uned. 822, dismissed the appeal.

The Ontario Superior Court issued notices of garnishment naming Libya as the debtor. Canadian Planning served the notices on the Royal Bank of Canada in respect of bank accounts held by the Libyan Embassy in Ottawa. In the meantime Libya moved to set aside the REO pursuant to rule 38.11. Its rule 38.11 motion had yet to be heard. Libya sought to quash the notices of garnishment.

The Ontario Superior Court, in a decision with neutral citation 2015 ONSC 3541, quashed the notices of garnishment. The motion judge held that the garnished bank accounts enjoyed diplomatic immunity and were therefore immune from attachment. Canadian Planning appealed from the motion judge's order.

The Ontario Court of Appeal, per MacFarland, J.A., granted a stay of the motion judge's order pending determination of the appeal.

The Ontario Court of Appeal held that the hearing of the appeal on the merits was premature having regard to Libya's pending rule 38.11 motion in the Superior Court. The appeal was therefore adjourned sine die. The stay order was continued.

Courts - Topic 2283

Jurisdiction - Bars - Premature matters - The International Chamber of Commerce International Court of Arbitration in Paris (the ICC) ordered Libya to pay damages to Canadian Planning and Design Consultants Inc. for breach of contract - The award, with interest and costs, exceeded approximately $11 million - Canadian Planning applied in the Ontario Superior Court of Justice for a registration and enforcement order concerning the ICC arbitral award - The Superior Court issued the requested order (the "REO") which provided that the ICC award was recognized and enforced as an order of the Superior Court - The Superior Court issued notices of garnishment naming Libya as the debtor - Canadian Planning served the notices on the Royal Bank of Canada in respect of bank accounts held by the Libyan Embassy in Ottawa - Libya moved to set aside the REO pursuant to rule 38.11 - Its rule 38.11 motion had yet to be heard - Libya sought to quash the notices of garnishment - The motion judge quashed the notices of garnishment - Canadian Planning appealed from the motion judge's order - The Ontario Court of Appeal held that the hearing of the appeal on the merits was premature having regard to Libya's pending rule 38.11 motion in the Superior Court - The rule 38.11 motion was highly relevant to the issues on the appeal - Depending on the outcome of the rule 38.11 motion and associated proceedings the appeal might be rendered moot - It was also not an efficient or appropriate use of judicial resources to have two different courts determining the merits of the same issues in what was essentially the same litigation, especially where multiple appeals to the Court of Appeal might result - The interests of judicial economy and the avoidance of the detrimental risk of inconsistent rulings favoured the adjournment of the appeal - See paragraphs 25 to 65.

Evidence - Topic 2200

Special modes of proof - Judicial notice - General - [See Practice - Topic 8961 ].

International Law - Topic 2205

Sovereignty - Incidents of - Immunity - Property of sovereign state - The International Chamber of Commerce International Court of Arbitration in Paris (the ICC) ordered Libya to pay damages to Canadian Planning and Design Consultants Inc. for breach of contract - The award, with interest and costs, exceeded approximately $11 million - The Ontario Superior Court of Justice issued a registration and enforcement order (REO) which provided that the ICC award was recognized and enforced as an order of the Superior Court - The Superior Court issued notices of garnishment naming Libya as the debtor - Canadian Planning served the notices on the Royal Bank of Canada in respect of bank accounts held by the Libyan Embassy in Ottawa - A motion judge quashed the notices of garnishment - Canadian Planning appealed from the motion judge's order - MacFarland, J.A., granted a stay of the motion judge's order pending the appeal (the "stay order") - The Ontario Court of Appeal held that the hearing of the appeal on the merits was premature having regard to Libya's pending motion in the Superior Court to set aside the REO - The court adjourned the appeal sine die and ordered that the stay order was continued - Libya and RBC had opposed the continuation of the stay order - They submitted that the garnishments and the stay order constituted, in effect, an improper injunction contrary to s. 11 of the State Immunity Act (SIA) - The court noted that s. 12(1)(a) of the SIA provided that the property of a foreign state located in Canada was immune from attachment and execution except where "the state has, either explicitly or by implication waived its immunity from attachment [or] execution" - The existence, nature and scope of any waiver of immunity by Libya were live issues in this case - The court concluded that "Sections 11 and 12(1)(a) of the SIA must be interpreted in a manner that promotes internal harmony in the statute and does not create conflict ... read together, the sections provide that if a foreign state elects to waive its protection against attachment and execution under s. 12, it foregoes its right under s. 11 to be protected from injunctive relief that is ordered in the context of attachment or execution proceedings. To hold otherwise would be to interpret the sections in a manner that places them in conflict. Therefore, until the waiver issues are determined, the prohibition in s. 11 cannot operate to prevent a continuation of the Stay Order" - See paragraphs 72 to 74.

International Law - Topic 6068

International relations - International agreements, United Nations Security Council resolutions, etc. - Vienna Convention on Diplomatic Relations - The International Chamber of Commerce International Court of Arbitration in Paris (the ICC) ordered Libya to pay damages to Canadian Planning and Design Consultants Inc. for breach of contract - The award, with interest and costs, exceeded approximately $11 million - The Ontario Superior Court of Justice issued a registration and enforcement order (REO) which provided that the ICC award was recognized and enforced as an order of the Superior Court - The Superior Court issued notices of garnishment naming Libya as the debtor - Canadian Planning served the notices on the Royal Bank of Canada in respect of bank accounts held by the Libyan Embassy in Ottawa - A motion judge quashed the notices of garnishment - Canadian Planning appealed from the motion judge's order - MacFarland, J.A., granted a stay of the motion judge's order pending the appeal (the "stay order") - The Ontario Court of Appeal held that the hearing of the appeal on the merits was premature having regard to Libya's pending motion in the Superior Court to set aside the REO - The court adjourned the appeal sine die and ordered that the stay order was continued - The Attorney General had opposed the continuation of the stay order on the ground that it would be a breach of Canada's obligation under article 25 of the Vienna Convention on Diplomatic Relations to "accord full facilities for the performance of the functions of the mission" - The court rejected the argument - There was no evidence that the continued operation of the stay order would violate Canada's obligation under that article - The accounts had been subject to the garnishment notices for several months and there was nothing to suggest that this had rendered the Libyan Embassy unable to perform its functions - See paragraph 75.

Practice - Topic 8954

Appeals - Stay of proceedings pending appeal - What constitutes irreparable harm - [See Practice - Topic 8958 ].

Practice - Topic 8958

Appeals - Stay of proceedings pending appeal - Balance of convenience and justice - The International Chamber of Commerce International Court of Arbitration in Paris (the ICC) ordered Libya to pay damages to Canadian Planning and Design Consultants Inc. for breach of contract - The award, with interest and costs, exceeded approximately $11 million - The Ontario Superior Court of Justice issued a registration and enforcement order (REO) which provided that the ICC award was recognized and enforced as an order of the Superior Court - The Superior Court issued notices of garnishment naming Libya as the debtor - Canadian Planning served the notices on the Royal Bank of Canada in respect of bank accounts held by the Libyan Embassy in Ottawa - A motion judge quashed the notices of garnishment - Canadian Planning appealed from the motion judge's order - MacFarland, J.A., granted a stay of the motion judge's order pending the appeal (the "stay order") - The Ontario Court of Appeal held that the hearing of the appeal on the merits was premature having regard to Libya's pending motion in the Superior Court to set aside the REO - The court adjourned the appeal sine die - The court also ordered that the stay order was continued - First, there was a serious issue to be determined about whether the accounts were subject to execution - Second, Canadian Planning would suffer irreparable harm if the stay order was not continued - There was a real risk that the funds could be removed from the accounts if the stay was lifted - Finally, the same considerations that caused MacFarland, J.A., to conclude that the balance of convenience favoured the granting of a stay militated in favour of the continuation of the stay order - The court recognized that MacFarland, J.A., had contemplated a stay order of short duration - However, even if the stay had to continue for a number of months, there was no evidence to suggest that the Libyan Embassy could not continue to function properly - See paragraphs 76 to 82.

Practice - Topic 8961

Appeals - Stay of proceedings pending appeal - Effect of - The International Chamber of Commerce International Court of Arbitration in Paris (the ICC) ordered Libya to pay damages to Canadian Planning and Design Consultants Inc. for breach of contract - The award, with interest and costs, exceeded approximately $11 million - The Ontario Superior Court of Justice issued a registration and enforcement order (REO) which provided that the ICC award was recognized and enforced as an order of the Superior Court - The Superior Court issued notices of garnishment naming Libya as the debtor - Canadian Planning served the notices on the Royal Bank of Canada in respect of bank accounts held by the Libyan Embassy in Ottawa - A motion judge quashed the notices of garnishment - Canadian Planning appealed from the motion judge's order - MacFarland, J.A., granted a stay of the motion judge's order pending the appeal (the "stay order") - The Ontario Court of Appeal held that the hearing of the appeal on the merits was premature having regard to Libya's pending motion in the Superior Court to set aside the REO - The court adjourned the appeal sine die and ordered that the stay order was continued - Libya and RBC had opposed the continuation of the stay order - They argued that the court ought to presume that the freezing of Libya's RBC bank accounts had impaired Libya's ability to continue to operate its embassy in Canada and fulfill its diplomatic role - However, the impairment of embassy operations as a consequence of the freezing of its bank accounts was not a fact that was capable of judicial notice and could not be presumed by the court - There was no evidence that Libya's ability to operate its embassy had been adversely affected by the notices of garnishment or the stay order - See paragraph 71.

Practice - Topic 9135

Appeals - Hearing of appeal - Adjournment - [See Courts - Topic 2283 ].

Statutes - Topic 2617

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Harmonization of statutes (incl. presumption of coherence) - [See International Law - Topic 2205 ].

Cases Noticed:

Korea Data Systems (USA) Inc. v. Aamazing Technologies Inc. et al., [2012] O.A.C. Uned. 618; 29 C.P.C.(7th) 51; 2012 ONCA 756, refd to. [para. 53].

EOG Resources Canada Inc. v. Saskitoba Farms Ltd. et al., [2013] Man.R.(2d) Uned. 52; 2013 MBCA 99, refd to. [para. 54].

Ludlow v. Ludlow (2011), 262 Man.R.(2d) 261; 507 W.A.C. 261; 2011 MBCA 29, refd to. [para. 54].

Alcom Ltd. v. Republic of Colombia, [1984] A.C. 580 (H.L.), dist. [para. 55].

Cannock v. Fleguel (2008), 242 O.A.C. 221; 303 D.L.R.(4th) 542; 2008 ONCA 758, refd to. [para. 57].

Liberian Eastern Timber Corp. v. Government of Republic of Liberia (1987), 659 F. Supp. 606 (D.C.), refd to. [para. 68].

Philippine Embassy Bank Account Case, December 13, 1977, Federal Republic of Germany, Federal Constitutional Court, refd to. [para. 68].

R. v. Tapaquon, [1993] 4 S.C.R. 535; 159 N.R. 321; 116 Sask.R. 81; 59 W.A.C. 81, refd to. [para. 73].

RJR-MacDonald Inc. et Imperial Tobacco Ltd. v. Canada (Procureur général), [1995] 3 S.C.R. 199; 187 N.R. 1, refd to. [para. 80].

Counsel:

John J. Adair and David Quayat, for the appellant;

John I.G. Melia, Jennifer L. Radford and Katherine Humphries, for the respondent, the State of Libya;

Catherine M. Francis, for the respondent, Royal Bank of Canada;

Jacqueline M. Dais-Visca and Jessica M. Winbaum, for the intervener, the Attorney General of Canada.

This appeal was heard on September 24, 2015, before Cronk, Hourigan and Benotto, JJ.A., of the Ontario Court of Appeal. The Court of Appeal released the following judgment on September 29, 2015.