TMR Energy Ltd. v. State Property Fund of Ukraine

• Jurisdiction: Federal Jurisdiction (Canada)
• Court: Court of Appeal (Canada)
• Judge: Décary, Nadon and Sexton, JJ.A.
• Citation: (2005), 329 N.R. 355 (FCA),2005 FCA 28
• Date: 24 January 2005

TMR Energy v. State Prop. Fund (2005), 329 N.R. 355 (FCA)

MLB headnote and full text

Temp. Cite: [2005] N.R. TBEd. FE.001

TMR Energy Limited, a duly constituted legal person incorporated under the laws of Cyprus (appellant/applicant) v. State Property Fund of Ukraine, an organ of the State of Ukraine (respondent/respondent) and Antk Antonov (respondent/intervener) and State of Ukraine (respondent/intervener)

(A-496-04; A-497-04; 2005 FCA 28)

Indexed As: TMR Energy Ltd. v. State Property Fund of Ukraine

Federal Court of Appeal

Décary, Nadon and Sexton, JJ.A.

January 24, 2005.

Summary:

The State of Ukraine owned an aircraft which was held by Antonov, a state enter­prise, under the "right of full econ­omic management", a legal concept pecu­liar to former Soviet states. TMR Energy, a private Cypriot company, obtained an arbitral award in Stockholm, Sweden, against State Prop­erty Fund of Ukraine (SPF), an organ of the State of Ukraine. TMR com­menced proceed­ings to enforce its arbitral award.

A Prothonotary of the Federal Court (Mor­neau), in January 2003, issued an ex parte order recognizing the arbitral award and allowing enforcement of the award as if it was a judgment of the Federal Court. TMR thereafter obtained a writ of seizure and sale pursuant to the court's order and caused the aircraft to be seized in New­foundland. Both SPF and Antonov filed objec­tions to the seizure that were held to be effective by the Sheriff of Newfound­land under the New­found­land Judgment Enforce­ment Act. TMR then moved to have the court determine the validity of the seizure.

A Prothonotary of the Federal Court (Tabib), in December 2003, in a decision reported 244 F.T.R. 1, held that the court had jurisdic­tion to register the arbitral award and that the registration order and seizure being valid, the property was subject to judicial sale under the Judgment Enforce­ment Act (NL). SPF and Antonov filed an ap­peal from the order of Prothonotary Tabib and the State of Ukraine sought leave to intervene in the appeal. Motions for direc­tions ensued. On March 24, 2004, the State of Ukraine, SPF and Antonov moved under Federal Court Rule 399 for an order declar­ing that Prothonotary Morneau's order of January 2003 was issued without jurisdiction (the rule 399 motions). On July 7, 2004, TMR moved for an ex parte nunc pro tunc or­der registering, recognizing and enforcing the award as of January 17, 2003 (the nunc pro tunc motion).

The Federal Court, per Martineau, J., on September 22, 2004, granted the rule 399 motions and set aside the ex parte order made by Prothonotary Morneau in January 2003, for lack of jurisdiction. The court held that this jurisdictional error could not be cured by either rule 56 or the de facto doc­trine. Martineau, J., also denied TMR's re­quest for an ex parte nunc pro tunc order registering, recognizing, and enforcing the award as of January 2003. TMR appealed both orders.

The Federal Court of Appeal dismissed the appeal. With respect to the appeal from the rule 399 motions, the court agreed that the Prothonotary's order dated January 17, 2003 had to be set aside for want of jurisdiction. Further, neither rule 56 nor the de facto doctrine could be invoked to save the valid­ity of the order. The court refused to grant an ex parte nunc pro tunc order where TMR had not fully disclosed to the Prothonotary the impediments to the registration, recogni­tion and enforcement of the award.

Courts - Topic 2532

Registrars and prothonotaries - Jurisdiction - Enforcement of foreign judgments - The State of Ukraine owned an aircraft which was held by Antonov, a state enter­prise - TMR Energy, a private Cypriot company, ob­tained an arbitral award in Stockholm, Sweden, against State Property Fund of Ukraine (SPF), an organ of the State of Ukraine - TMR com­menced proceedings to en­force its arbitral award - A Prothonotary of the Federal Court (Morneau), in January 2003, issued an ex parte order recognizing the arbitral award and allowing enforce­ment of the award as if it was a judgment of the Federal Court - Over a year later and following a number of other proceed­ings, the SPF, the State of Ukraine and Antonov moved under Federal Court Rule 399 for an order de­claring that Pro­thono­tary Morneau's order of January 2003 was issued without juris­diction - The motions judge allowed the application - TMR ap­pealed - The Federal Court of Appeal dis­missed the appeal, agreeing that the pro­thonotary's order should be set aside - Firstly, although there was a lengthy delay in bringing the rule 399 motion, it was not out of time, in the circumstances of this case - As to the merit of the appeal, the court held that a prothonotary did not have the authority to dispose of an application for registration, recognition or enforcement of a foreign judgment brought under rules 326 to 334 - Further, the prothonotary's order could not be cured by the application of rule 56 which dealt with non-compli­ance with the Rules (i.e., a lack of jurisdic­tion could not be cured by rule 56) - Last­ly, the order could not be cured by the de facto doctrine - See paragraphs 32 to 61.

Practice - Topic 8

General principles and definitions - Effect of noncompliance with rules - [See Courts - Topic 2532 ].

Practice - Topic 3059

Applications and motions - General - Duty of disclosure on ex parte applications and motions - The State of Ukraine owned an air­craft which was held by Antonov, a state enter­prise - TMR Energy, a private Cypriot company, obtained an arbitral award in Stockholm, Sweden, against State Property Fund of Ukraine (SPF), an organ of the State of Ukraine - TMR com­menced pro­ceedings to enforce its arbitral award - A Prothonotary of the Federal Court (Mor­neau), in January 2003, issued an ex parte order recognizing the arbitral award and allowing enforcement of the award as if it was a judgment of the Federal Court - Over a year later and following a num­ber of other proceedings, the SPF, the State of Ukraine and Antonov moved under Federal Court Rule 399 for an order de­claring that Prothonotary Morneau's order of January 2003 was issued without juris­diction - A case management judge set aside the pro­thonotary's order for lack of juris­dic­tion and refused TMR's request for an ex parte order nunc pro tunc, registering, recogniz­ing, and enforcing the award on the basis of the record as of January 2003 - TMR ap­pealed - The Federal Court of Appeal dis­missed the appeal, agreeing that TMR failed in its duty of full disclos­ure of all relevant facts (i.e., TMR had not fully disclosed to the Prothonotary the impedi­ments to the regis­tration, recog­nition and enforcement of the award) - See para­graphs 62 to 70.

Practice - Topic 3131

Applications and motions - Motions - Ex parte motions - [ Practice - Topic 3059 ].

Cases Noticed:

Blueberry River Indian Band and Doig River Indian Band v. Canada (Minister of Indian Affairs and Northern Develop­ment) et al. (1999), 189 F.T.R. 111 (T.D.), refd to. [para. 32].

First Canadians' Constitution Draft Com­mittee et al. v. Canada (2004), 317 N.R. 352; 2004 FCA 93, refd to. [para. 35].

Vaughan v. Canada (2000), 184 F.T.R. 97 (T.D.), refd to. [para. 41].

Harkness v. Bell's Asbestos and Engineer­ing Ltd., [1966] 3 All E.R. 843 (C.A.), refd to. [para. 46].

Canadian Pacific Ltd. and Canadian Na­tional Railway Co. v. Canadian Transport Commission, [1988] F.C. 437; 13 F.T.R. 52 (T.D.), refd to. [para. 48].

Coppard v. Customs and Excise Commis­sioner, [2003] EWCA Civil 511 (Eng. C.A.), refd to. [para. 49].

Iscar Ltd. v. Hertel (Karl) GmbH, [1989] 3 F.C. 479; 27 F.T.R. 186 (T.D.), refd to. [para. 51].

Gibb v. Nigeria et al. (2003), 341 A.R. 339; 20 Alta.L.R.(4th) 190 (Q.B.), refd to. [para. 52].

Anlaby v. Praetorius (1888), 20 Q.B.D. 764 (Eng. C.A.), refd to. [para. 52].

Foster v. Chubb Insurance Co. of Canada, 1998 CarswellOnt 2531 (Gen. Div.), refd to. [para. 53].

McGrath v. St. Phillip's (1985), 51 Nfld. & P.E.I.R. 276; 150 A.P.R. 276 (Nfld. C.A.), refd to. [para. 54].

Prenor Trust Co. of Canada v. Seawood Enterprises Ltd. (1993), 121 N.S.R.(2d) 149; 335 A.P.R. 149; 16 C.P.C.(3d) 30 (C.A.), refd to. [para. 55].

Fawdry & Co. v. Murfitt, [2002] EWCA Civ. 643 (Eng. C.A.), refd to. [para. 58].

United States of America v. Friedland, [1996] O.J. No. 4399 (Gen. Div.), refd to. [para. 64].

Norsk Hydro Asa v. State Property Fund of Ukraine and others, [2002] EWHC 2120 (Comm.), refd to. [para. 67].

Statutes Noticed:

Federal Court Rules, 1998, rule 56 [para. 45]; rule 399 [para. 31].

Counsel:

Richard Desgagnes, François Fontaine, Azim Hussain and Brian Daley, for the appellant (applicant);

George J. Pollock and Louis-Martin O'Neill, for the respondent (respondent);

Thomas G. Heintzman, Q.C., and David E. Platts, for the respondent (intervenor), Antk Antonov;

Frank Newbould, Q.C., and Lubomir Kozak, Q.C., for the respondent (intervenor), State of Ukraine.

Solicitors of Record:

Ogilvy Renault, Montreal, Quebec, for the appellant (applicant);

Davies Ward Phillips & Vineberg LLP, Montreal, Quebec, for the respondent (respondent);

McCarthy Tetrault LLP, Toronto, Ontario and Montreal, Quebec, for the respondent (intervenor), Antk Antonov;

Borden Ladner Gervais LLP, Toronto, Ontario, for the respondent (intervenor), State of Ukraine.

This appeal was heard on January 10 and 11, 2005, in Toronto, Ontario, before Dé­cary, Nadon and Sexton, JJ.A., of the Fed­er­al Court of Appeal. The following decision was delivered for the court by Décary, J.A., in Ottawa, Ontario, on January 24, 2005.