A-712-79
Jolana Schavernoch (née Kostrinsky), of the City
of Montreal (Applicant)
v.
Foreign Claims Commission, Attorney General of
Canada, Secretary of State for External Affairs of
Canada, and Minister of Finance of Canada
(Mis -en-cause)
Court of Appeal, Pratte and Le Dain JJ. and
Lalande D.J.—Montreal, June 11; Ottawa, June
24, 1980.
Judicial review — Foreign claims — Application to review
and set aside decision of the Foreign Claims Commission that
applicant was not eligible to receive an award because her
dominant nationality or citizenship was that of Czechoslovakia
— Foreign Claims Fund was established for settlement of
Canadian citizens' claims for their property that was national
ized in Czechoslovakia — Applicant was a citizen of Czecho-
slovakia when her property was taken, but she claimed to be a
Canadian citizen by birth — Whether Commission erred in law
in deciding that applicant was not eligible for an award —
Application dismissed — Foreign Claims (Czechoslovakia)
Settlement Regulations, SOR/73-681, ss. 2, 4(1), 7, 9, 10 —
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28
Appropriation Act No. 9, 1966, S.C. 1966-67, c. 55, Vote 22a.
This is an application to review and set aside the decision of
the Foreign Claims Commission that the applicant was not
eligible to receive an award out of the Foreign Claims Fund.
Canada received a lump sum from Czechoslovakia for settle
ment of Canadian citizens' claims for their property that was
nationalized by Czechoslovakia. The agreement between the
two States made no provision for compensation of persons of
dual nationality. At the time that measures were taken against
her property, the applicant was a citizen of Czechoslovakia but
she also claimed to have been a citizen of Canada by birth. The
Commission decided that she was not eligible to receive an
award because at the time her property was taken, her domi
nant nationality or citizenship was that of Czechoslovakia. The
question is whether provisions of the Agreement and of the
Regulations exclude claimants whose dominant nationality or
citizenship was at any of the relevant times that of
Czechoslovakia.
Held, the application is dismissed. The Regulations provide
for compensation out of a limited fund in respect of claims that
were espoused by Canada and settled by international agree
ment. The Agreement only contemplated claims that could be
espoused by Canada. In view of the fact that the amount
available for compensation under the Regulations is limited to
the amount received in settlement of the claims contemplated
by the Agreement, the definition of "claim" in the Regulations
should be construed as necessarily excluding a claim which
Canada would not recognize itself as having the right to
espouse because the dominant nationality of the claimant at the
time the property was taken was that of Czechoslovakia. The
Commission did not err in law in deciding that the applicant
was ineligible to receive an award.
APPLICATION for judicial review.
COUNSEL:
J. H. Grey and M. L. Klein, Q.C. for
applicant.
P. M. 011ivier, Q.C. and J.-M. Aubry for
mis -en-cause.
SOLICITORS:
Klein, Roth, Simon & Dayan, Montreal, for
applicant.
Deputy Attorney General of Canada for
mis -en-cause.
The following are the reasons for judgment
rendered in English by
LE RAIN J.: This is a section 28 application to
review and set aside the decision of the Foreign
Claims Commission, pursuant to section 7 of the
Foreign Claims (Czechoslovakia) Settlement
Regulations, (SOR/73-681, November 7, 1973)
that the applicant is not eligible to receive an
award out of the Foreign Claims Fund. In earlier
proceedings, upon an application to quash for lack
of jurisdiction, the Court held that the Commis
sion's conclusion to this effect, contained in its
report and recommendation of November 20, 1979
to the Secretary of State for External Affairs and
to the Minister of Finance, was a decision within
the meaning of section 28 of the Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, because of its
effect under the Regulations.'
The Regulations provide for awards of compen
sation in respect of claims by Canadian citizens for
property that was nationalized or otherwise taken
over in Czechoslovakia before April 18, 1973. The
1 This judgment was rendered on the assumption that the
Regulations were validly adopted pursuant to Vote 22a of
Appropriation Act No. 9, 1966, and I make the same assump
tion in the present case.
claims were espoused by the Government of
Canada in negotiations with the Government of
Czechoslovakia and were settled by an agreement
between the two Governments (hereinafter
referred to as "the Agreement") which was signed
on April 18, 1973 and came into force by an
exchange of letters on June 22, 1973. The Canadi-
an Government received the lump sum of $3,250,-
000 in full and final settlement of the claims
covered by the Agreement. This sum was credited
to the Foreign Claims Fund, which had been
established pursuant to Vote 22a of Appropriation
Act No. 9, 1966, S.C. 1966-67, c. 55. The Foreign
Claims Commission was appointed under Part I of
the Inquiries Act, R.S.C. 1970, c. I-13, by Order
in Council P.C. 1970-2077 to inquire into and
report upon claims for which compensation may be
paid out of the Foreign Claims Fund. The Order in
Council provided "that the Commissioners be
authorized, subject to such regulations as may be
made by the Governor in Council, to inquire into
all particular claims described in paragraph (a)
and be required to report on such claims to the
Secretary of State for External Affairs and the
Minister of Finance, stating whether in their opin
ion each claimant is eligible to receive a payment
out of the Fund, the reasons for their opinion and
their recommendation as to the amount that
should be paid in respect of each such claim." The
duty of the Commission in respect of the Canadian
claims against Czechoslovakia is prescribed by
section 7 of the Regulations as follows:
7. (1) The Chief Commissioner shall report to the Minister
and to the Minister of Finance on each claim considered by the
Commission, stating
(a) whether the claimant is eligible to receive an award; and
(b) the amount of the award that, in the opinion of the
Commission, should be made to the claimant.
The essential criteria of eligibility for an award
appear to be contained in the definitions of
"claim" and "Canadian citizen" in section 2 of the
Regulations and in subsection 4(1) of the Regula
tions, which prescribe the material times at which
one must have been a Canadian citizen. These
provisions are as follows:
2....
"claim" means a claim by a Canadian citizen against the
Government of Czechoslovakia or Czechoslovak natural or
juridical persons in respect of property, rights and interests in
Czechoslovakia affected before April 18, 1973 by Czecho-
slovak measures of nationalization, expropriation, taking
under administration or any other similar legislative or ad
ministrative measures; (réclamation)
"Canadian citizen" means
(a) a person who is a Canadian citizen within the meaning of
the Canadian Citizenship Act, or
(b) a corporation that is incorporated under the laws of
Canada and that
(i) is controlled or substantially owned by persons
described in paragraph (a), or
(ii) is actively carrying on business in Canada; (citoyen
canadien)
4. (1) In order to be eligible to receive an award in respect of
a claim, a claimant must have been a Canadian citizen from
the time the claim arose or the time he obtained title to it until
June 22, 1973 and, where a claimant obtained title to a claim
after the time it arose, each of his predecessors in title must
have been a Canadian citizen during the time he held title to it.
The applicant was a citizen of Czechoslovakia at
the time the measures were taken against her
property, but she claims to have been also a
Canadian citizen at this time by reason of having
been born in Canada in 1901. The Commission
reviewed the conflicting evidence as to her place of
birth and as to whether she might have lost her
Canadian citizenship by marriage to a Czecho-
slovak national, and assuming that she was a
Canadian citizen at the time her property was
taken, decided that she was not eligible to receive
an award because at that time her dominant
nationality or citizenship was that of Czechoslo-
vakia. The Commission's reasons for this conclu
sion are in the following passage in paragraph 6 of
its report and recommendation:
In the event, however, the Commission finds it unnecessary
to come to conclusions in regard to place of birth and marital
status because it emerged clearly from the evidence given at the
Hearing that, assuming Mrs. Shavernoch [sic] to have been
born in Canada, she acquired upon her birth two nationalities
or citizenships: that of Canada and that of Hungary, which
latter nationality or citizenship, by reason of the inclusion of a
part of Hungary in newly-formed Czechoslovakia immediately
following the end of World War I, became that of Czechoslo-
vakia. Even if she did not lose Canadian citizenship by reason
of marriage to Ivan Shavernoch [sic] her dominant citizenship
was at all relevant times, up to and including the date of the
affectation of her property, that of Czechoslovakia by reason of
residence, family ties, language, education and the other con
siderations that are ordinarily applied in determining dominant
nationality where dual nationality is held. Conversely, at all
relevant times her Canadian nationality was submerged,
depending only upon her stated birth in Canada as a child of
foreign nationals who, after a short sojourn in Canada,
returned as such to their native land. As far as the Czechos-
lovak authorities were concerned, they were dealing in 1948
with the properties as those of ordinary Czechoslovak citizens
residing and carrying on business in Czechoslovakia and, by all
the indications, permanently domiciled there. The resulting
situation may be summed up by saying that, although the
Foreign Claims (Czechoslovakia) Settlement Regulations
refer, without intrinsic qualification, to Canadian citizens, what
happened to Mrs. Shavernoch [sic] in Czechoslovakia hap
pened to her qua Czechoslovak citizen and not qua Canadian
citizen. It is relevant to note that under the principles of
international law and Canadian practice, Canada does not
espouse the claim of a dual national off Canada and another
country against that other country where the dominant nation
ality of the dual national is that of the other country and he or
she is domiciled there and to all intents and purposes primarily
a citizen thereof.
The issue is whether the Commission erred in
law in deciding, as it did, that the applicant was
not eligible for an award because her dominant
nationality or citizenship at the time her property
was taken was that of Czechoslovakia.
It is necessary first to consider the nature of the
Commission's decision as to eligibility. In my opin
ion the word "eligibile" connotes or implies that
eligibility will be determined in accordance with
criteria or conditions prescribed by the Regula
tions, and not that the Commission will have a
discretion as to who should be considered eligible
for an award. The issue, then, is whether the
provisions which have been quoted above are to be
construed as necessarily excluding claimants
whose dominant nationality or citizenship was at
any of the relevant times that of Czechoslovakia.
The Regulations provide for compensation out
of a limited fund in respect of claims that were
espoused by Canada and settled by international
agreement. Although Article II of the Agreement,
which defines "Canadian claims", does not make
explicit provision for the case of dual nationality, it
could not have been intended by the parties to
cover claims which would be recognized by the
principles of international law and practice accept
ed by Canada as claims which Canada did not
have the right to espouse. The Commission found
as a fact that "Canada does not espouse the claim
of a dual national of Canada and another country
against that other country where the dominant
nationality of the dual national is that of the other
country and he or she is domiciled there and to all
intents and purposes primarily a citizen thereof."
This conclusion finds support in the record in the
following statement made by Ambassador Max
Wershof in the course of the negotiations with
Czechoslovakia:
During the working party discussions, the Czech side made
reference to what is in effect the question of Dual Nationality
and indicated that some claimants were to be rejected on the
ground that they were still Czech citizens under Czech law at
the date of taking. The Canadian side cannot, of course, accept
this consequence of dual nationality as it is in our view neither
reasonable nor realistic in the context of claims negotiations
with Canada. The Czech proposition would disqualify many
Canadian claimants who in fact have resided in Canada contin
uously for a long period of years, thus affirming that their real
connection is with Canada rather than Czechoslovakia. I might
add that although this question has been mentioned by other
Socialist States during claims negotiations, in no case did it
become a substantial issue. The Canadian side feels that the
doctrine of dominant nationality must govern in this kind of
negotiation.
That the Agreement only contemplated claims
that could be espoused by Canada and that its
effect was to settle or extinguish such claims as
between the two States is indicated in Article IV
of the Agreement which reads as follows:
1. Payment in full of the sum set out in Article I shall discharge
the Government of Czechoslovakia and Czechoslovak natural
and juridical persons from obligations in respect of all matters
covered by this Agreement; the Government of Canada will
then consider as completely settled, all claims covered by this
Agreement whether or not they have been brought to the
attention of the Government of Czechoslovakia.
2. The Government of Canada shall not in future present to the
Government of Czechoslovakia on behalf of Canadian natural
or juridical persons any claim for which provision for settle
ment is made in this Agreement, nor will it support any such
claim.
Canada accepted the lump sum of $3,250,000 in
settlement of the claims, and the total amount of
compensation payable out of the Foreign Claims
Fund in respect of claims is limited by the Regula
tions to the amount received under the Agreement,
together with interest thereon, as indicated in
sections 9 and 10 of the Regulations as follows:
9. Awards in respect of claims shall be paid out of that part
of the Fund consisting of moneys received from the Czecho-
slovak Government under Article I of the Agreement and
credited to the Fund pursuant to paragraph (b) of the Vote and
any interest credited to the Fund in respect of those moneys.
10. Where the moneys in that part of the Fund described in
section 9 are insufficient to pay in full all awards that the
Minister and the Minister of Finance determine may be paid
out of that part,
(a) a payment shall be made in respect of each award equal
to either the full amount thereof or one thousand dollars,
whichever is the lesser; and
(b) the balance of awards not paid in full shall be paid on a
pro rata basis from any moneys remaining in that part of the
Fund.
Article V of the Agreement provides that the
distribution of the lump sum "shall be at the
exclusive discretion and within the exclusive
competence of the Government of Canada", and
Vote 22a of Appropriation Act No. 9, 1966 which
authorized the establishment of the Foreign
Claims Fund as a special account in the Con
solidated Revenue Fund, authorized the Minister
of Finance to provide for payment out of the Fund
"in accordance with regulations of the Governor in
Council which regulations may, inter alia, provide
for the determination of the nature of claims for
compensation that may be made, the persons to
whom compensation may be paid, and the manner
and time for the submission of claims, the calcula
tion (including any weighted or pro rata distribu
tion) of the amount of the payments by the Minis
ter of Finance and the Secretary of State for
External Affairs .... " Certainly on the basis of
these provisions it was open to the Government to
establish a class of claims for compensation out of
the Fund different from or wider than that con
templated by the Agreement. In view, however, of
the fact that the amount available for compensa
tion under the Regulations is limited to the
amount received in settlement and discharge of the
claims contemplated by the Agreement, I do not
think it is reasonable to ascribe such an intention
to the Regulations since it could have the effect of
causing a serious injustice to the claimants con-
templated by the Agreement. Because of this rela
tionship between the Agreement and the Regula
tions, the definition of "claim" in the Regulations
should in my opinion be construed as necessarily
excluding a claim which Canada would not recog
nize itself as having the right to espouse because
the dominant nationality of the claimant at the
time the property was taken was that of
Czechoslovakia.
For these reasons I am of the opinion that the
Commission did not err in law in deciding that the
applicant was ineligible to receive an award, and
the section 28 application should accordingly be
dismissed.
* * *
PRATTE J.: I agree.
* * *
LALANDE D.J.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.