Smith v Canadian Javelin Ltd et Al,

• Date: 01 March 1976
• Court: Superior Court of Justice of Ontario (Canada)

Canada, Ontario High Court.

(Cory J.)

Smith

and

Canadian Javelin Ltd. et al.

Sovereign immunity Agency of a foreign State Whether entitled to immunity Exceptions to the rule of sovereign immunity The law of Canada

Summary: The facts:The Securities and Exchange Commission (SEC) was an agency of the United States Government. SEC instituted proceedings and obtained a judgment in a New York court against Canadian Javelin Ltd. in respect of a violation of American securities legislation. The plaintiff, a shareholder and director of Canadian Javelin Ltd., commenced an action challenging the legality and validity of the New York judgment. He alleged that the New York judgment was given on the basis of a purported consent by Canadian Javelin Ltd. given by persons who had no authority to give it. SEC was impleaded as a defendant. It applied for dismissal of the action against it on the grounds of sovereign immunity.

Held:The application was allowed. The agency of a foreign State could only be sued in Ontario in certain limited cases such as actions concerning commercial transactions or property in Ontario. SEC was entitled to sovereign immunity in respect of acts performed in pursuance of United States legislation.

The text of the judgment of the Court commences on the following page.

Cory, J.:This is an application brought on behalf of the defendant Securities and Exchange Commission (hereinafter referred to as SEC) to (a) dismiss the action as against it on the ground that the Commission is an authorized agent of an independent State and, consequently, entitled to sovereign immunity, or (b) granting leave to the defendant to enter a conditional appearance.

The plaintiff is a shareholder and director of the defendant Canadian Javelin Limited. In para. 3 of the statement of claim, the defendant SEC is referred to as an agency of the Government of the United States of America capable of suing and being sued .

In the year 1973, the defendant SEC commenced a civil action in the United States District Court, Southern, District of New York, against Canadian Javelin, John C. Doyle and William M. Wismer alleging breaches of security legislation of the United States.

On July 17th, Mr. Justice McMahon of the United States District Court granted a judgment against Canadian Javelin. It is alleged that the judgment enjoined Canadian Javelin from engaging in unlawful acts such as dealing in securities in any way other than in compliance with the appropriate securities...