Secretary of State for Canada v Rothschild,

Date03 May 1946
Docket NumberCase No. 106
CourtSupreme Court (Canada)
Canada, Exchequer Court of Canada.
Supreme Court of Canada.

(Thorson, J.)

(Rinfret, C.J.C., Kerwin, Hudson, Rand and Estey, JJ.)

Case No. 106
Secretary of State for Canada.
and
Rothschild.

Belligerent Occupation — Effect of — On Enemy Character — Company Domiciled in Occupied Territory — Transfer of Functions to Non-Enemy Territory — Enemy Character.

Enemy Character — Of Corporation — Company Incorporated in Occupied Territory — Transfer of functions to Non-Enemy Territory — Residence of Company.

The Facts.—In 1939 a Netherlands bank known as N.V. Commissie- en- Handelsbank, referred to in the judgment as “Coha”, deposited with the Royal Bank of Canada in Montreal, in the form of shares, warrants payable to bearer. The shares were of the Royal Dutch Company. At the time of the deposit nothing was said or done which would indicate any ownership or interest in such securities other than that of the Netherlands Bank itself. These securities remained in the possession of the Royal Bank, which paid the income therefrom to, or to the order of “Coha”, until the Netherlands were occupied by German forces on May 10, 1940. Meanwhile Canada had declared war on Germany and comprehensive regulations had been made preventing trade with Germany and vesting enemy property in Canada in the Custodian of Enemy Property. On May 11, 1940, these Regulations were made applicable to the Netherlands. As required by these Regulations, on August 29, 1940, the Royal Bank notified the custodian of Enemy Property of the securities held by them in “Coha”: this form completed by the Bank showing that the securities were held for N.V. Commissie- en- Handelsbank, Holland. But prior to this, on July 31, 1940, the Royal Bank had advised the Custodian that the respondents, Baron Rothschild and his wife, claimed ownership and wished to get possession of the securities in question. After prolonged investigation the Custodian admitted respondents' claim and was prepared to release the securities subject to a commission of 2%, which he claimed under s. 44 (1) of the Trading with the Enemy Regulations providing that he may make a charge “against all property investigated … by him.” The respondents refused to pay this commission and contended that these provisions applied only to enemy property, and that once it had been established that the securities belonged to them at all material times, the property never vested in the Custodian, and therefore the investigation conducted by the Custodian was...

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