Date: 20150304
Docket:
T-1734-14
Citation:
2015 FC 276
Ottawa, Ontario, March 4, 2015
PRESENT: The Honourable Mr. Justice O'Reilly
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BETWEEN:
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ALEXANDR SIN
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Plaintiff
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and
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HER MAJESTY THE QUEEN
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Defendant
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ORDER AND REASONS
I.
Overview
[1]
The plaintiff, Mr Alexandr Sin, a citizen of Russia, applied for permanent residence in Canada as an investor. Before his application had been
processed, the Government of Canada introduced legislation terminating pending
investor applications (Economic Action Plan Act No 1, amending the Immigration
and Refugee Protection Act, SC 2001, c 27, s 87.5; provisions cited are set
out in an Annex). The legislation provides that applicants have no legal
recourse against the Government of Canada in respect of their terminated
applications.
[2]
Nevertheless, Mr Sin commenced an action
claiming compensation for his out-of-pocket expenses and damages for loss of
opportunity. He relies heavily on bilateral treaties that protect the rights of
investors. He maintains that these treaties continue to protect his interests,
notwithstanding the legislation that appears to bar his claim. In his suit, Mr
Sin seeks to represent a class of similarly situated investors.
[3]
The defendant has presented a motion to strike
Mr Sin’s claim on the basis that it is plain and obvious that it cannot
succeed. Mr Sin asks me to dismiss the motion and to allow his parallel motion requesting
permission to notify prospective members of the proposed class action.
[4]
In the circumstances, I must allow the defendant’s
motion. Mr Sin’s claim cannot succeed; it follows that his request for
pre-certification notice cannot be granted.
II.
Background
[5]
In 2014, the Government of Canada terminated all
applications for permanent residence from foreign investors that had not been
approved prior to February 11, 2014 (s 87.5(1)). Mr Sin’s application was
caught by that provision.
[6]
The legislation specifically provides that
applicants whose applications were terminated will be refunded their
application fees and any monies that had been invested (ss 87.5(3), (4)).
Further, it stipulated that applicants had no recourse or indemnity for the
termination of their applications (s 87.5(7)).
III.
Is it plain and obvious that Mr Sin’s claim
cannot succeed?
[7]
Mr Sin argues that his claim is viable primarily
because the legislation cited above must be read alongside international
agreements protecting the rights of investors, particularly the Canada-Russia Foreign
Investment Promotion and Protection Agreement. That agreement, and others like
it, provides that investments cannot be expropriated directly or indirectly
without compensation. Further, they permit aggrieved investors to seek redress
in the domestic courts of the states in which investments were made.
[8]
According to Mr Sin, his investment in Canada was indirectly expropriated without compensation given that, through the termination of his
application for permanent residence, he lost one of the benefits of his
investment, namely his chance at achieving permanent resident status in Canada. Returning his application fees and his investment will not compensate for that loss
so, he submits, he should be allowed to seek a remedy in this Court.
[9]
Mr Sin maintains that the legislation conflicts
with international agreements. Accordingly, he argues that the legislation
should be interpreted in a manner that respects Canada’s obligations under
international law, including international investment treaties. Since
Parliament did not expressly state that it was overriding international
treaties, s 87.5(7) should be read down so as to protect the rights of
investors under those instruments. Mr Sin submits that Parliament could not
have silently and obliquely nullified dozens of international agreements
protecting the rights of investors. He contends that Parliament could only have
done so through unambiguous language.
[10]
In my view, however, the legislation terminating
investors’ opportunities to obtain permanent resident status through investment
does not conflict with the international agreements cited by Mr Sin. As such,
Parliament did not need to state expressly that it was vitiating Canada’s international responsibilities.
[11]
First, the agreements do not protect the rights
Mr Sin seeks to assert here. Mr Sin points to the broad definition of “indirect expropriation” set out in many agreements
and maintain that the legislation subjects investors and entrepreneurs to “a measure or series of measures . . . that have an effect
equivalent to direct expropriation”.
[12]
However, in my view, Mr Sin and other investors
were not subjected to any measures equivalent to expropriation. They lost the
opportunity to attempt to achieve permanent resident status in Canada as members of the prescribed class of investors, but they certainly did not suffer
expropriation of their investments, or any equivalent loss. Mr Sin was unable
to identify any provision in the agreements that would suggest that the
termination of an application for permanent residence by an investor, who
received compensation in respect of his application and investment, amounts to
uncompensated expropriation, either directly or indirectly. Accordingly, in my
view, the provisions enacted by Parliament that terminate investors’ permanent
residence applications and limit the extent to which they can seek compensation
for the termination of their applications simply do not conflict with those
agreements. There is no need, therefore, to read down the legislation to
accommodate Canada’s obligations under international law (as was required in Reference
as to Powers to Levy Rates on Foreign Legations [1943] S.C.R. 208).
[13]
Second, the international agreements cited by Mr
Sin have not been incorporated into Canadian domestic law. Mr Sin argues that
international agreements that do not conflict with domestic law are
self-implementing – they do not need to be brought into force through Canadian legislation.
He also notes that when the agreements were brought into force they did not
conflict with, and therefore should be considered part of, Canadian domestic
law.
[14]
I would first note that the agreements might
well have been in force as between the contracting parties. However, that is
not enough to make them part of Canadian law. That would require implementation
by statute (Janssen Inc v Teva Canada Limited, 2015 FCA 36, at para 14).
[15]
In addition, even if the agreements were
interpreted in the manner Mr Sin urges, they would directly conflict with the
legislation described above, which expressly denies Mr Sin and similarly
situated investors any remedy beyond compensation for their investment and
ancillary fees. Therefore, in light of s 87.5(7), the agreements cannot be
regarded as being part of Canadian domestic law. Further, while courts will generally
strive to avoid interpreting domestic law in a manner that would violate Canada’s international obligations, they must do so where, as here, “the wording of the statute clearly compels that result . . .”
(R v Hape, [2007] 2 S.C.R. 292, at para 53).
[16]
As a result, I must conclude that Mr Sin’s
statement of claim does not disclose a cause of action. In the event that I were
to grant the defendant’s motion, Mr Sin requested permission to amend his
statement of claim. However, he did not offer to amend any substantive aspects
of his claim; he merely sought permission to identify the specific subsections
of the international agreements on which he was relying. No such amendment
would serve to overcome the obstacles to Mr Sin’s action identified above.
Therefore, I would not provide Mr Sin an opportunity to amend his statement of
claim.
[17]
It follows that I must also dismiss Mr Sin’s
request to issue a pre-certification notice to potential class members.
IV.
Conclusion and Disposition
[18]
For the reasons set out above, I find that it is
plain and obvious that Mr Sin’s claim cannot succeed. Therefore, I must grant
the defendant’s motion to strike and dismiss the plaintiff’s motion for
pre-certification notice, with costs to the defendant in respect of both
motions.
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