Factum 01

No. S004040 Vancouver Registry In The Supreme Court Of British Columbia Between: Tracy Kapoustin, Nicholas Kapoustin By His Guardian Ad Litem Tracy Kapoustin And Michael Kapoustin, Plaintiffs And: The Republic Of Bulgaria Et Al., Defendants And: Michael Kapoustin, Respondent And No. S005440 Vancouver Registry In The Supreme Court Of British Columbia Between: "LifeChoice International Ad", Dimitar Hristov, Borislav Marinov, Radka Petrova, LifeChoice BANQ1 Corporation On Behalf Of Themselves And All Others Similarly Situated, Plaintiffs And: The Republic Of Bulgaria Et Al., And Michael Kapoustin, Respondent

FACTUM Comes now Michael Kapoustin the Respondent ("Respondent"), and presents this Factum for the purpose of clarifying those facts and law that are material to establish jurisdiction of this Court over the Defendant, Republic of Bulgaria ("Defendant") et al.. This Factum together with the affidavits and other evidence as filed are to assist in the Court's assessment of the facts and evidence in circumstances where, as a practical matter, the Respondent/Plaintiff finds himself is obstructed by a defendant in the exercise of a fundamental right to appear at this civil proceeding to give evidence against employees, agencies or instrumentalities of a foreign government. The lawful interests and rights of plaintiffs named in action No. S004040 and those of any member of the sub-class identified in action No. S005440, are affected by the outcome hearing. This Factum is organised as follows. VOLUME I. BACKGROUND.....................................................................................................................................4 SECTION A ISSUES ..........................................................................................................................................................4 Chapter 1 The Problems.........................................................................................................................................4 Part I Plaintiffs Applications To Be Set................................................................................................................. ..............4 Part II Issues....................................................................................................................................................................... .4

Chapter 2 Pleadings...............................................................................................................................................5 Part I Introduction.................................................................................................................................................. .............5 Part II The Factum ........................................................................................................................................ .....................6 Part III The Originating Process ................................................................................................................................ .........6 Part IV Statements of Claim - Need to Amend.................................................................................................... ..............11 Part V Reliance - Leave To Enter Evidence.................................................................................................................... ...12

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Part VI Application To Be Decided On Basis Of Evidence Or Pleadings............................................................... ...........13

Chapter 3 Plaintiffs Applications.........................................................................................................................13 Part I In Proprio Persona -Rule 40(47) and 40(40) or 59(4)............................................................................ ..................13 Part II In Forma Pauperis - B.C. Regulation 221/90................................................................................................... .......14

SECTION B THE RELEVANT PARTIES................................................................................................................................14 Chapter 1 The Defendant Foreign State...............................................................................................................14 Part I Government of the Republic of Bulgaria................................................................................................... ..............14 Part II British Columbia Plaintiffs ............................................................................................................................ ........16 Part III British Columbia Defendant To Add......................................................................................................... ............16 The Ministry of the Attorney General - British Columbia...................................................................................... .......16

Chapter 2 Others Action No. S005440.................................................................................................................17 Part I British Columbia Plaintiffs....................................................................................................................... ...............17

SECTION C DEFENDANT'S EVIDENCE ON APPLICATION .......................................................................................................17 Part I Affidavits........................................................................................................................................................ .........17

SECTION D PLAINTIFFS' EVIDENCE...................................................................................................................................18 Chapter 1 Affidavits..............................................................................................................................................18 VOLUME II. THE APPLICATIONS AT BAR ARGUMENT AND ANALYSIS AD EXITUM.........................................................................................................18 SECTION A PLAINTIFFS/APPLICANT TO RULE 13(10) (NEW APPLICATION) 14(6) SERVICE INVALID..........................................18 Chapter 1 Positions -Use of Rule 11, Rules of Court Statute Barred...................................................................18 Part I Plaintiff/Applicant................................................................................................................................... ................18

Chapter 2 The Application....................................................................................................................................18 Part I Context....................................................................................................................................................... .............18 Part II The Common Law v. Statues. Which are Substantive?....................................................................................... ....19 Part III Old v. New Common Law............................................................................................................. .......................20

Chapter 3 Facts and Analysis...............................................................................................................................20 Part I Common to Both Actions ................................................................................................................... ....................20 Part II Particular to Action No. S004040 ................................................................................................................. .........24 Part III Facts Particular to Action No. S005440............................................................................................. ...................27

Chapter 4 Argument..............................................................................................................................................30 Part I Plaintiff/Applicant................................................................................................................................... ................30 Part II Defendant/Respondent - Anticipated ......................................................................................................... ............34

Chapter 5 Evidence...............................................................................................................................................35 Part I Plaintiff/Applicant................................................................................................................................... ................35 Part II Defendant/Respondent ....................................................................................................................... ...................35 Part III Plaintiffs Dispute Defendant's Evidence of Service - Relief Sought..................................................................... .35

SECTION B DEFENDANT'S APPLICATIONS - IMMUNITY - JURISDICTION SIMPLICITER - FORMA NON CONVENIENS..........................36 Chapter 1 Positions - Utility Of State Immunity To The Case At Bar..................................................................36 Part I Defendant/Applicant ........................................................................................................................................... ....36 Part II Plaintiff/Respondent....................................................................................................................................... ........39

Chapter 2 Doctrine Of Sovereign Immunity.........................................................................................................41 Part I Absolute Immunity................................................................................................................................... ...............41 Part II The Common Law ............................................................................................................................................. ....41 Part III Statutory Codification ............................................................................................................................... ...........45

Chapter 3 The Evolution of State Immunity ........................................................................................................45 Part I The United States ................................................................................................................................................... .45 Part II The United Kingdom ...................................................................................................................................... .......46 Part III Canada .................................................................................................................................................. ...............47 Part IV Conclusion................................................................................................................................................... .........49

Chapter 4 Assertions ............................................................................................................................................49 Part I Waiving Immunity Under s. 4 of the Immunity Act....................................................................................... ..........49 Part II Commercial Activities, s. 2 and s. 5 of the Immunity Act..................................................................................... ..52 Part III Personal Injury and Property damage, s. 6 of the Immunity Act Claims Framed In Tort................................. ......56 Part IV Criminal Proceedings , s. 18 of the Immunity Act................................................................................................ .58

Chapter 5 Analysis of "Good and Arguable " ......................................................................................................60 Chapter 6 Plaintiffs Claims..................................................................................................................................68 Part I Conspiracy............................................................................................................................................................ ...68 Part II Negligence or Fraudulent Misrepresentation................................................................................................ ..........73

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Part III Contracts....................................................................................................................................................... ........73

SECTION C ISSUES OF JURISDICTION.................................................................................................................................73 Chapter 1 Generally ............................................................................................................................................73 Part I Respondent................................................................................................................................................... ...........73 Jurisdiction, Simpliciter as of Right ................................................................................................................... ..........74

Chapter 2 Argument .............................................................................................................................................74 Part I Respondent................................................................................................................................................... ...........74 Part II Salient Facts As Set Out In Kapoustin Affidavit(S)..................................................................................... ...........74

SECTION D RULE 13(10) - SERVICE EX JURIS - JURISDICTION SIMPLICITER.........................................................................75 Chapter 1 Doctrine of Rule 13(10), Jurisdiction Simpliciter...............................................................................75 Chapter 2 Defendant Bulgaria Applications........................................................................................................76 Part I Position ............................................................................................................................................................... ....76 Part II Applications' Context ......................................................................................................................... ...................76 Part III Respondent's Position ...................................................................................................................... ....................77 Part IV Doctrine Argument 13(10)....................................................................................................................... .............77 Part V Analysis .............................................................................................................................................................. ...77 Part VI Respondent's Evidence................................................................................................................... ......................80 Part VII Prima Facie Case ................................................................................................................................... .............80 Part VIII Conclusions.................................................................................................................................................. ......81

SECTION E RULE 14(6) JURISDICTION FORUM NON CONVENIENS........................................................................................81 Chapter 1 Doctrine of Jurisdiction Forma non Convenienes..............................................................................82 Part I Argument Jurisdiction Non Conveniens .................................................................................................................. 82

Chapter 2 Defendant Bulgaria's Application -.....................................................................................................85 Part I Position................................................................................................................................................................. ...85

Chapter 3 Argument..............................................................................................................................................85 Part I Respondents Position .......................................................................................................................................... ....85 Part II Respondent's Analysis ............................................................................................................................... ............87 Part III Argument............................................................................................................................................ ..................88 Part IV Analysis of Factual Circumstance ............................................................................................................ ............93 1) Where each party resides............................................................................................................................ ..............94 2) Where each party carries on business. ............................................................................................... ......................95 3) Where the cause of action arose. ......................................................................................................................... .....96 4) Where the loss or damage occurred. ...................................................................................................... ..................97 5) Any juridical advantage to the plaintiff . .......................................................................................................... ........97 6) Any juridical disadvantage to the defendant.......................................................................................... ...................98 7) Convenience or inconvenience to potential witnesses. ........................................................................................... ..98 8) Costs of litigation in this jurisdiction. ........................................................................................................... ...........98 9) The applicable substantive law ................................................................................................................ ................99 10) Difficulty in proving foreign law, if necessary. ...................................................................................... ..............101 11) Whether there are parallel proceedings in any other jurisdiction..................................................................... .....101 Part V Defence Defendant ...................................................................................................................................... ........103 Part VI Conclusion................................................................................................................................................ ..........104

VOLUME III. AUTHORITIES...............................................................................................................................104

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Volume I.

BACKGROUND

Section AIssues Chapter 1The Problems Part IPlaintiffs Applications To Be Set [1]

There exist issues before the Master in (1) conflicts of law as to proper service of notice and documents - Hague Convention (2) conflicts of law as to proper service of notice and documents - Class Proceedings Act (3) conflicts of law in proceeding in absentia of the Respondent - Charter Rights (4) Plaintiffs' request to add parties and amend their statements of claim - Generally (5) Plaintiffs' request in S005440 to add names and addresses of sub-class members resident in the province together with those outside the province and to amend their pleadings on the discovery of new facts (6) Respondent's s. 24(1) Charter compliant and Application for Leave to Appeal , in forma pauperis, to the British Columbia Court of Appeal - Generally (7) Respondents s. 34(1) and 24(1) Charter complaint against the Ministry of the Attorney General, the Attorney General and its addition as a defendant to action S004040 - Charter Rights - (8) leave to plaintiffs to enter evidence to show a "good arguable cause" and "prima facie case" (9) conflicts of law, the Master to determine the applicable law, "lex loci delecti" if in conflict with "lex fori" - are issues to be dealt with in both actions and may well give cause to this Court to adjourn this hearing until such time as one or all of these issues are first decided after court is more fully disposed of all the facts and particularly the time necessary to the interests of justice.

[2]

Should the Master find the Court not seized by such matters or alternatively chooses to not exercise his discretionary powers to consider one or all of the interconnected issues, then the Respondent has, to the best of his limited ability and knowledge prepared this Factum and must rely on it to speak for him and to anticipate the variety of arguments that may be raised by the learned counsel for the Defendant.

Part IIIssues [3]

The Defendant pleads as "discursive" the statements of claim, in what "can be understood." The Respondent has no illusions as to his skills as a litigant. However, the personal injury and permanent physical impairments to his son and mother are real enough and what is ultimately at issue in these proceedings for all the parties will become whether there should ultimately be substantial damages for the plaintiffs injuries, loss of property, and long term economic damages suffered from those injuries, such as earning capacity. The Supreme Court has made it plain, that for the latter there is such a head of damage: Andrews et al. v. Grand & Toy (Alberta) Ltd. et al. , [1978] 2 S.C.R. 229; 19 N.R. 50; 8 A.R. 182; [1978] 1 W.W.R. 577; 83 D.L.R.(3d) 452, 469-70.

[4]

If the claims against the defendants as framed in tort, say of alleged conspiracy or malice are absent, then at the very least it is the law of negligence that must predominate and be applied.

[5]

The Respondent believes, for what its worth, that the personal injury issues now before the Court must transcend questions of social utility for they ultimately must involve justice. Mr. Wilbur F. Bowker, the former Dean of the Faculty of Law, University of Alberta, and apparently a noted tort scholar, and member of the Board of the Alberta Institute of Law Research and Reform writing in an article in (1964), 3 Alta. L. Rev. at pp. 197-201, the learned Dean says at pages 200-201:

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"Everyone recognises the difficulty of determining quantum in almost any case of personal injuries, but here it seems no exaggeration to say there is no rational basis at all. The main reason, however, is more fundamental. In the law of negligence the purpose of an award to a plaintiff is compensation for loss he has suffered." [Emphasis added - Mine] [6]

The complexity of the proceedings before the Master requires a careful consideration of numerous authorities that might lend substance to the plaintiffs claims and this Respondent's pleadings as a layman. The authorities on this subject are not exhaustive, and there appears no where in the available case law noticed an action having the same factual circumstances and legal consequences as having ever been commenced in Canada.

[7]

The plaintiffs in both actions rely on those exceptions to immunity to be found in s. 4 through s. 7 and s. 18 of the State Immunity Act, R.S.C. 1985, c. S-18 ("Immunity Act") and Rule 13(1) Rules of the Court ("Rules") applicable case law on the subject as follows later.

[8]

The main issues before the Court in these proceedings turn on questions of whether the complaints at issue in the two law suits of the plaintiffs have (1) any "apparent connection at all with the Province of British Columbia", jurisdiction simpliciter, (2) if the jurisdiction should be declined for a more convenient and appropriate forum, jurisdiction forum non conveniens, and finally (3) if sect. 3 of the Immunity Act confirms the general immunity that the Defendant Bulgaria relies on to protect it from the jurisdiction of courts in Canada. The answer to these issues lay in the same facts - the conduct of the Defendant Bulgaria since the proceedings commenced, its commercial activities between 1991 and 1995 and the personal injury or property loss suffered in the province, all activities that affect the province and plaintiff in or connected to the province having placed their reliance on Canadian law.

[9]

At issue in these applications is whether Canadian citizens in Canada are entitled to the protection and benefit of the laws of Canada, when as has been alleged, they are engaged in commercial activities with a foreign state or they have claimed personal injury and damages framed in tort from that state. The Bulgaria government claims immunity from Canadian laws and, as a consequence, from any order of a Court of Canada on the ground that it is a sovereign nation. To resolve that issue, consideration must now be given to the provisions of the said State Immunity Act , S.C. 1980-81-82-83, c. 95 (now R.S.C. 1985, c. S-18), which govern the compellability of foreign states to the jurisdiction of Canadian courts.

[10]

Before proceeding it is worth reminding the Court of the effect in granting immunity to the Defendant Bulgaria or any state, is to deprive Canadian citizens of their right to the protection under Canadian law, a right enjoyed by all other Canadians. Case law on the subject expresses this as a regrettable but necessary result, of Canada's commitment to policies of international comity and reciprocity. At any time that sovereign immunity is asserted, as is the instance case, the inevitable result is that in certain cases the domestic parties will be left without legal recourse.

[11]

However, there are exceptions to that immunity the Respondent asserts as present and prevailing in the two actions presently at Bar and will attempt to prove those exceptions.

Chapter 2Pleadings Part IIntroduction

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[12]

The Master is required by the applicant (Defendant Bulgaria) to examine and resolve the controversy of jurisdiction in both law suits as captioned above. Available case law on such applications appears to require the Master to consider not only the pleadings, but the plaintiffs evidence to establish a prima facie case that there exits a triable issue of the plaintiffs' complaints connected to British Columbia, the truth of which may be later determined by a proper court and jury if so charged.

[13]

The success of the plaintiffs in these pre-trial proceedings rely heavily on the Respondent demonstrating not only their having a right to proceed in law, but that there exists a real probability for success at trial. That task is onerous and requires particular attention to numerous issues that normally would be proceeded at trial before the trier of those issues. Alas that is not the case here.

[14]

It is therefore reasonable and necessary for the Respondent to devote some space in his discussions to visiting the authorities on issues of interpretation and doctrine. This is in the frail hope it might assist the Master in understanding the Respondent's reasoning and how he came to the arguments in this Factum on various issues now before the Bar.

Part IIThe Factum [15]

The applicable law and nature of facts relevant to both actions are sufficiently common to one Factum to pursue both causes.

[16]

The Factum attempts to provide as logical and ordered a display of the facts and law as it seemed reasonable and necessary.

[17]

The Factum attempts an analysis of case law and relevant facts and evidence marshalled by plaintiffs in both actions and accompanied by a careful consideration of the historic, legislative, theoretical and contextual development of "restricted immunity", and jurisprudence on the subject as it has developed over the last years.

[18]

The factual matrix and evidence, when examined with relevant case law appears to bring the plaintiffs causes of action in both law suits within the ambit of sect. 4 to sect. 7 and sect. 18 exceptions of the State Immunity Act, and therefore within the jurisdiction of this court.

[19]

The Factum deals with the plaintiffs material evidence as now before the Court in Volumes I to III of the Respondent/Plaintiff (Kapoustin) Affidavit No. 15. Copies of this evidence had at all times been in possession of the defendants.

[20]

The evidential materials filed are relevant and objectively compelling to the issues of a connection of the jurisdiction of British Columbia and the various claims framed in tort and alleged breaches of contract against the Defendant Bulgaria, the Minister of Finance, its' representatives, employees, officers, officials, and those of other agencies or instrumentalities.

[21]

A close examination of the facts will make readily apparent that the connection of the plaintiffs claims and the defendants to the Canadian judicial system is, when examined against the evidence, an obvious one.

[22]

The plaintiffs, by necessity must rely on facts, evidence and the available case law as displayed in this Factum. The facts and evidence support the plaintiffs collective desire to elaborate and clarify the "discursive," if in fact they are, statements of claim.

Part IIIThe Originating Process

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[23]

The Respondent asks the Court consider this Factum's discourse on the "modern" context of the common law as provided and find in it a possible solution to the plaintiffs Statements of Claim, replete with their overlapping causes of action and overlapping heads of damage, and that is for the Court to do something about the overlaps, and not to abolish one of the causes of action or heads of damage. The Respondent has noticed no instance in case law where a possible overlap is offered as a reason to deny a head of damage.

[24]

As to the Defendant's assertions that the origination processes were discursive and difficult to comprehend the Respondent only adds the alternative. That while the plaintiffs assertions may be unorthodox in style and novel as to the claim and questions it poses, it should still properly be considered at a full trial.

[25]

Even a discursive pleading may contain some fragment of real substance to be traversed.

[26]

It is observable from the Defendant Bulgaria's applications to this Court, and its written pleadings, that the no defendant has traversed a single issue of fact on the basis of the plaintiffs originating process as they stand nor has this applicant/defendant traversed the truth of new facts or evidence as submitted to the it and its counsel in Vancouver.

[27]

The Defendant's applications seem to rest on the island of immunity and its isolation as far as possible from the material facts and evidence in these proceedings. It relies heavily on its geography relevant to Canada and its ability to deny a voice to the absent plaintiffs.

[28]

What follows is a summing up of what is asserted in the two statements of claim. The facts and particulars are best adduced from the affidavits and documents. First Claim of Kapoustin et al. v. Republic of Bulgaria.

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[29]

What follows are those facts and circumstances material to the present proceeding before the Bar as may be summarised from the endorsed Writs, Statement of Claims, affidavits, documents and applicable international law and legislation of both Canada and the Republic of Bulgaria.

[30]

Plaintiffs allege and rely on the various written authorities and the affidavits of Michael Kapoustin and Dimitar Hristov to prove that the Defendant government of the Republic of Bulgaria from on or about 1949 to on or about 1996 was directly engaged in, inter alia, the commercial activities of pharmaceutical research and development, manufacturing, private labelling, distribution and licensing for export.

[31]

Plaintiffs further alleged that from on or about October 1991 to September 1995 the Defendant Republic of Bulgaria ("Bulgaria") solicited the Plaintiffs in the British Columbia and succeeded to induce them to enter into joint commercial activities with the Defendant Bulgaria that exclusively extended the Defendant's commercial activities into British Columbia, Canada and elsewhere as connected to the province. Plaintiffs rely on the affidavit of Michael Kapoustin and evidence of the written representations of the Defendant Bulgaria as attached.

[32]

The law suit alleges and Plaintiffs will prove at trial that, inter alia, the representations of the Defendant Bulgaria Canada to the Plaintiffs later proved to be materially false and fraudulent.

[33]

Plaintiffs further have alleged in the law suit and will prove at trial that on or about May 1995 the Defendant Bulgaria began to systematically breach its oral and written agreements and contracts in or connected to the province. Plaintiffs rely on the affidavits of Michael Kapoustin, Ada Gogova, Dimitar Hristov, attorney Anatol Lukanov and written contracts, correspondences, payment transactions, reports and sworn testimonies of Christina and Eugene Zemlyakov and others.

[34]

The fact that the Plaintiff Michael is a Canadian citizen of Russian Jewish origin, Plaintiffs allege this as having a bearing on their claims framed in tort that form a part of the alleged slander or libel and other defamation that they will prove at trial. Plaintiffs rely on the affidavits of Michael Kapoustin, Dimitar Hristov, Anatol Lukanov and the official documents and the reproduced public statements of the Defendant that provide a record of the slanders, libels and other derogatory statements as to the Plaintiff Michael's Jewish faith and an alleged connection to Jewish mysticism or a "pseudo-religious" cult based in British Columbia.

[35]

The Plaintiffs allege their commercial activities with the Defendant Bulgaria included numerous joint venture agreements and contracts in or connected to the province with officials, agencies or instrumentalities or departments of the Defendant government of Bulgaria. These became a matter of public knowledge and discussion as early as December of 1991. As a result, the Plaintiffs became public figures whose early involvement in financing government of Bulgaria scientific research, including its Antarctic polar expeditions in 1992, 1992 and 1994 and involvement in political and financial circles of the federal government of the Republic of Bulgaria was a matter of public discussion and political debate. Plaintiffs rely here on the affidavits of Michael Kapoustin, Anatol Lukanov and Ada Gogova and the agreements, contracts, correspondences with, inter alio, the Defendant's Medical Academy of Sciences, National Oncological Institute, Ministries of Health, Finance and Bulgarian National Bank.

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[36]

Plaintiffs claims assert that they and others in or connected to British Columbia relied on the oral and written promises and contracts of the Defendant Bulgaria and the representations made to them . It is alleged that as a result the Plaintiffs involved themselves and caused others in or connected to British Columbia to become involved in the commercial activities of the Defendant government of Bulgaria. Plaintiffs rely on the affidavits of Michael Kapoustin and Ada Gogova and the written correspondences, transactions, agreements, and contracts with, inter alio, the National Centre for Infectious and Parasitic Diseases; officials of the Defendant, inter alio, Dr. Petrunov, Dr Nenkov and Dr. Shekerdjiiski and Consul Chavdar Mladenov.

[37]

The Plaintiffs have sued the Defendant Bulgaria and will prove at trial that they suffered economic injury as a result of the Defendant's fraud and misrepresentation; deceit; breach of contract; conspiracy in scienter to unlawfully breach its agreements and contracts with the Plaintiffs' and others for the purpose of converting to its own use the Plaintiffs property; breach of fiduciary duty or alternatively, negligence in managing and preserving the Plaintiffs property as placed in the Defendant's care; and negligent misrepresentations on which the Plaintiffs were made to rely when entering agreeing to enter into third conducting that were dependant on their joint commercial activities with the Defendant Bulgaria in or connected to British Columbia.

[38]

The Plaintiffs further allege that the success of their commercial activities business in or connected to British Columbia was dependent on the positive public image of Kapoustin and the Plaintiffs' companies and products produced by the Defendant. Plaintiffs rely on the affidavits of Michael Kapoustin, Anatol Lukanov, Ada Gogova, Dimitar Hristov, Robert Kap and copies of media articles that generally express the positive public image of the Plaintiffs and their companies from 1992 upto on or about February 1995.

[39]

The Plaintiffs as family members have jointly and severally have additional claims framed in tort and have sued the Defendant Bulgaria for personal injury and economic losses resulting from the tort of privacy; conspiracy in scienter to cause personal injury; slander or libel; and defamation, the Defendant Bulgaria having intentionally acted to damage the Plaintiffs' reputation, public stature, dignity and honour in British Columbia and elsewhere. It is claimed the said Defendant has made it impossible for the Plaintiffs to pursue their livelihoods in Canada or elsewhere and have caused the Plaintiffs to experience public humiliation; emotional distress, anxiety and mental anguish. Plaintiffs rely on the Affidavit of Michael Kapoustin and the media articles that document the slander or libel of the Defendant and generally express the resulting damage to the reputation and honour of the Plaintiffs and the public enmity and rancour towards them as a result.

[40]

Family members have sued the Defendant Bulgaria for the personal injury and mental suffering inflicted on the Plaintiffs in British Columbia and leading to the permanent the physical disability of 8 year old Nicholas Kapoustin and his grandmother 70 year old grandmother Tatiana Kap. It is alleged that the character and nature of their mental conflict as caused by, inter alia, the Defendant's slanders or libels; fraudulent misrepresentations and attempted at extortion and threats of harm had as a result manifested in the Plaintiffs a mental conflict and deep depression, emotional anguish and mental distress that proved sufficient to induce diabetes in 8 year old Nicholas and to grossly deteriorate the mental and physical health of his grandmother Tatiana. Plaintiffs rely on the Affidavits of Tracy Kapoustin, Robert Kap and documents evidencing their illnesses and various authorities on the subject of psychosomatic phenomena in the young and aged.

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[41]

Robert Kap the husband of the said Tatiana Kap has brought a Notice of Motion before this Court together with their daughter and the guardian ad litem of Tatiana, Ms. Sofia Kap Jordan, to be joined as Plaintiffs. Their joint and several action arises out of the foresaid claims framed in tort of personal injury and economic harm as a result of the Defendant. The Kaps rely on Rule 5(3), Rules of the Court for joinder of their 1997 claims against the Republic of Bulgaria in Supreme Court action C974299 Vancouver Registry. The Plaintiffs agree to the joinder of Robert and Tatiana Kap by her guardian ad litem Sofia Kap Jordan and rely on the affidavit No. 3 of Robert Kap.

[42]

The Plaintiffs incorporated in their law suit appurtenant references to the February 7 th 1996 arrest of the Plaintiff Kapoustin by the Federal Republic of Germany ("Germany"), the September 2nd 1996 extradition to Bulgaria and the cruel and unusual treatment of the Plaintiff Kapoustin during more than 2 years and 6 months of solitary confinement and 5 years of detention awaiting a conviction in a Bulgaria prison,.

[43]

The foresaid references are made in the law suit to issues not material are particulars of matters in aggravation of the injury and damages. and to help establish to the Court the mind and intent of the Defendant Bulgaria. The law suit does not seek relief or damages at this time for what Michael Kapoustin personally suffered on the territory of the Republic of Bulgaria. Any claims of Michael Kapoustin framed in tort of conspiracy, unlawful imprisonment him; and the continuous personal injury and physical and metal harm he suffered whist in Bulgaria are issues in aggravation and averment of the injury and damages suffered by the other Plaintiffs in British Columbia.

[44]

The law suit makes the common law distinction between jure gestionis and jure imperii, Plaintiffs asserted in their claim that the private acts exception from sovereign immunity which developed at common law was based on a distinction between acts of a state which were in the nature of public functions and acts of a state involving activities of a commercial nature or in the nature of a criminal undertaking of the type as alleged by the Plaintiffs.

[45]

The plaintiffs statement of claim further alleges a number of torts that include among them fraudulent misrepresentation or alternatively negligent misrepresentation during the course of the Defendant Bulgaria's commercial activities as connected to the Plaintiffs and committed in B.C. It is alleged that the Defendant made material misrepresentation st meetings, in correspondences and other documents and when the Defendant had its representatives speak to the plaintiffs, their friends, business associates and other investors in Vancouver. Such misrepresentations originated from the Defendant's representatives, employees, and officials some having visited Vancouver, others were resident in Toronto, Ontario and many more in the Republic of Bulgaria made misrepresentations in respect of telephone conversations, materials delivered by mail or fax to Vancouver. Second Claim of LifeChoice et al, v. Republic of Bulgaria

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[46]

In this law suit the Plaintiffs rely on having issues of fact and of law common to their individual claims. This action arises out of the aforesaid contracts with the Defendant and the individual agreements of each member of the class or sub-class.

[47]

The Plaintiffs have sued the Defendant Bulgaria for damages for deceit; negligent misrepresentation; unlawful interference with the Plaintiffs agreements and commercial activities in or connected to British Columbia and a conspiracy inducing breach of contract.

[48]

The Plaintiffs have sued the Defendant Bulgaria for damages for rendering impossible their commercial activities in or connected to British Columbia. Plaintiffs allege a wilfully illicit and intentionally improper seizure of their private property, information and records as having directly interfered with completion of their agreements in the province.

[49]

Plaintiffs Hristov, Marinov and Petrova have further sued the Defendant Bulgaria on behalf of themselves and others for damages for exerting undue influence on members of their sub-class. Plaintiffs allege that agencies and instrumentalities of the Defendant had breached their fiduciary duty to the Plaintiffs or were alternatively negligence in their duties when conducting the Defendant's commercial activities in or connected to British Columbia and for breaching contracts to which the Plaintiffs claim a lawful interest.

Part IVStatements of Claim - Need to Amend [50]

The applicant (Defendant Bulgaria) has asserted that the endorsed Writ and Statement of Claim in both actions are discursive or difficult to understand.

[51]

However, pleadings may be amended on matters arising since commencement or new pleadings brought subsequent to the statement of claim with allegations made clearer or in the alternative and any matter of fact or point of law amended or newly pleaded. [see: Minnes v. Minnes (1962), 39 W.W.R. 112, 34 D.L.R. (2d) 497 (B.C.C.A.); approved in Hunt v. Carey Canada Inc., supra; see: Bow Valley Resource Services v. Kansa General Insurance Co. (1991), 56 B.C.L.R. (2d) 337 Chief Judge McEachern

[52]

That having been said, it appears as a practical matter and as a result of counsel for the Defendant being unable to understand the statements of claim as they are, to give leave to the plaintiffs to make amendments and to include more for better clarity provide more particulars in the actions for inter alia, slander or libel with malice, misrepresentation, fraud, breach of trust, wilful default or undue influence, deceit and criminal, unlawful imprisonment, making the pleading more in keeping with the requirement of Rule 19, Rules of the Court.

[53]

The case law places the burden on the plaintiffs, it appears therefore reasonable to request this Court to grant the plaintiffs leave to make their amendments to their pleadings to incorporate new facts and parties as discussed later in this Factum. After these submissions plaintiffs intend to file an amended statements of claim and the Respondent suggests that is the correct course. As can be seen case law and the practice of the courts of this province assists on this point, and it is apparent that where a statement of claim or defence as pleaded discloses no reasonable cause of action or defence because some material averment has been omitted or because the pleading is defectively stated or formulated, the court, while striking out the pleading, will usually not dismiss the action or enter judgment, but will give the party leave to amend and if necessary to serve a fresh pleading to correct or cure the defects appearing in the original pleading. Respondent seeks such leave for the plaintiffs

[54]

R. 2(2) allows the Court considerable latitude in addressing issues of this kind: Subject to subrules (3) and (4), where there has been a failure to comply with these rules, the court may

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…… …… (c) allow an amendment to be made under Rule 24, …… (e) make any other order it thinks just. [55]

The proposed amendments or allegations in the alternative are necessary to making the plaintiffs pleadings clearer to the defendants and notify the necessary parties in British Columbia previously unidentified as necessary to these proceedings.

[56]

Amendments are suggested by the Respondent in both actions to meet the requirements of case law on the subject of jurisdiction simpliciter and compliance with the rules on pleading [ Rule 19, Rules of Court] particulars when relying on misrepresentation, fraud, breach of trust, wilful default or undue influence and in the plaintiffs action for libel or slander to include further particulars or the words or phrases the plaintiffs consider defamatory.

[57]

The authorities have clearly indicated that the burden is on the Respondent as plaintiff to adduce a body of evidence so as to prove an arguable case exists on the merits. [see: CRS Forestal v. Boise Cascade Corporation, Vancouver Registry No. C983201, August 13, 1999 (B.C.S.C.), Sigurdson, J; .G.W.L. Properties Ltd. v. W.R. Grace & Company Conn. (1990), 50 B.C.L.R. (2d) 260 (C.A.); Leisure Time Distributors Ltd. v. Calzaturificio S.C.A.R.P.A. - S.P.A. (1996), 5 C.P.C. (4th) 320 (B.C.S.C.) at p. 3; J. Michael Jensen Boat Sales Ltd. v. McAfee (1997) 12 C.P.C. (4th) 210 (B.C.S.C.); Bangkok Bank of Commerce Public Co. v. City Trading Corp. (1997), 13 C.P.C. (4th) 324 (B.C.S.C.). For the court to establish on the merits of the evidence if it has jurisdiction and that such jurisdiction ought to be exercised requires more of the plaintiffs in these two law suits than merely demonstrating a good arguable case on the pleadings. It goes father and requires there be shown that there exits a good arguable case on the facts as put in evidence before this court, sufficiently so that the court could determine whether it has any jurisdiction to adjudicate on the issues raised and support jurisdiction simpliciter. The plaintiff must present an evidentiary basis for the allegations which amounts to a good arguable case.

Part VReliance - Leave To Enter Evidence [58]

In that reliance alone on pleadings or personal opinions of the plaintiffs or others, the Respondent has asks the Court to give the plaintiffs leave to enter the affidavit and documental evidence collected by the plaintiffs as filed and as now placed, with this Factum, before the Court. The Plaintiffs have chosen to rely on these material facts as they are and affidavits as supported by documentary evidence of the facts [see: Affidavit No. 15 Kapoustin - Vol. I -III] as they appear to be and are related to the activities in question, commercial or private, of the Defendant Bulgaria in or connected to British Columbia. [See: Bushnell v. T & N plc (1992) 67 B.C.L.R. (2d) 330 at 336 and 342; Amin Rasheed Shipping v. Kuwait Insurance Co. [1983] 2 All E.R. 884; Spiliada Maritime Corp. v. Cansulex Ltd. [1986] 2 All E.R. 843; Valmet Paper Machinery Inc. v. Hapag-Lloyd AG., unreported, December 23, 1996 (B.C.S.C.) at p.4; Stern v. Dove Audio Inc., unreported, April 15, 1994 (B.C.S.C.) at p. 16; Cook v. Parcel, Mauro, Junltin & Spaanstra, P.C. (1997), 31 B.C.L.R. (3d) 24 (C.A.); CRS Forestal v. Boise Cascade Corporation, Vancouver Registry No. C983201, August 13, 1999 (B.C.S.C.), Sigurdson, J; .G.W.L. Properties Ltd. v. W.R. Grace & Company - Conn. (1990), 50 B.C.L.R. (2d) 260 (C.A.); Leisure Time Distributors Ltd. v. Calzaturificio S.C.A.R.P.A. - S.P.A. (1996), 5 C.P.C. (4th) 320 (B.C.S.C.) at p. 3; J. Michael Jensen Boat Sales Ltd. v. McAfee (1997) 12 C.P.C. (4th) 210 (B.C.S.C.); Bangkok Bank of Commerce Public Co. v. City Trading Corp. (1997), 13 C.P.C. (4th) 324 (B.C.S.C.).

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Part VIApplication To Be Decided On Basis Of Evidence Or Pleadings [59]

At issue before this Court is "jurisprudential controversy" over whether on an application by the Defendant Bulgaria, the Court can determine on the face of the available pleadings alone if it has jurisdiction in the present law suits, or whether evidence is required.

[60]

The Respondent notes this controversy having previously arisen in a in G.W.L. Properties Ltd. v. W.R. Grace & Co. - Conn. (1990), 50 B.C.L.R. (2d) 260 (C.A.) and its suggests that the Court is to decide the application of the Defendant on the basis of evidence. The British Columbia Court of Appeal at page 264 stated: "I am not persuaded that the chambers judge erred in concluding on the evidence before him that a good arguable case had been made out that Grace Conn. had committed a tort within the jurisdiction of this court."

[61]

Respondent notices that it has been pointed out in other cases that in G.W.L. Properties Ltd. v. W.R. Grace & Co. - Conn. the court had before it only a writ of summons with an endorsement, and therefore evidence was required to determine whether the action was one which fell within Rule 13(1) such that this court could find jurisdiction.

[62]

The present cases at bar have endorsed Writs that only provide a concise nature of the claim, and may be served outside British Columbia, subject to Rule 13. It would impossible for the plaintiffs in either law suit to rely on the Writs alone to prove to this Court that they have a good arguable case. The Plaintiffs must and therefore have resorted to providing the Court with evidence.

[63]

In action No. S004040 the court has before it a statement of claim that is fairly detailed and runs on for a number of pages and prepared by the Plaintiffs. The Respondent has admitted to the Court that the allegations contained in the statement of claim, while not brief as is so often is the case, are most likely discursive as the counsel for the Defendant has noticed. As a result the Defendants are provided further and better particulars in the two notices to admits, and the Court is provided the affidavit No. 15 of the plaintiff Kapoustin totalling 51 pages, along with over 87 documentary exhibits in Volumes I - II.

[64]

The applications of the Defendant and evidence of Dobreva do not traverse the plaintiffs facts, documents or allegations of torts, breaches of contracts and criminal misconduct in the province. Instead Dobreva and the Defendant Bulgaria are demurring and expressly traversing some immaterial averment contained in the Dobreva affidavit when she protests that there exits no connection between criminal proceedings against the Plaintiff Michael Kapoustin in the Republic of Bulgaria, these are not at all alleged as a cause of action in either of the two law suits as endorsed in the Writs or statement of claims[see §IVbelow]. Any references in either of the two statements of claim to actions not material, are particulars of matters in aggravation of the damages.

[65]

Respondent asserts to this Court that there is no conflict among the parties as to the facts and documents at issue, and that if there is any conflict as to the material facts at issue between the parties it is more apparent than real and the issue of whether there is a good arguable case that the action falls within Rule 13(1) may be determined on the basis of the pleadings, the affidavit(s) material, or both [see: McLachlin & Taylor, British Columbia Practice, 2d ed., (1998, Butterworths) at 13-52 to 13-54] that the conflict is more apparent than real,

Chapter 3Plaintiffs Applications Part IIn Proprio Persona -Rule 40(47) and 40(40) or 59(4) [66]

Circumstances for the respondent/plaintiff and this Court are not made easier by the incarceration of the Respondent and his reliance, driven by practical matters and necessity, to plead and give evidence in absentia.

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[67]

The Respondent is relied on by other plaintiffs to give evidence as the key persona and witness to the facts and events deposed. The chronology as to why the Respondent/Plaintiff is unable to appear is examined later in greater detail.

[68]

The Court is requested, in terms of praecipe, to provide an Order to permit the Respondent/Plaintiff to (1) be permitted to plead in writing and give evidence by affidavit for so long a time as the Defendant continues to refuse to conduct the Respondent/Plaintiff to Court (2) that pleading and other argument be exchanged in writing among the parties; or (3) the Court to Order the Respondent/Plaintiff subpoenaed and brought before the Court, or; (4) alternatively Order the Defendant to permit the Respondent/Plaintiff to attend hearings electronically.

[69]

The Master again may not be seized by this application. However, at the Courts discretion and in the event that it were to be considered, the Applicant/Plaintiff then relies on his previous application in terms of praecipe and the required affidavit he has provided with this Factum.

Part IIIn Forma Pauperis - B.C. Regulation 221/90 [70]

It will become apparent, if has not already, that procedural events surrounding the two claims have been each complicated by unusual circumstances, among them the personal financial circumstances of plaintiffs that require them to act pro se and this Respondent/Plaintiff (Kapoustin) to seek a declaration of indigence.

[71]

The Master may again not be seized by this application. However, at the Court's discretion and in the event that it were to be considered, the Applicant/Plaintiff then relies on his previous application in terms of praecipe and the required affidavit he has provided with this Factum.

Section BThe Relevant Parties Chapter 1The Defendant Foreign State Part IGovernment of the Republic of Bulgaria [72]

There is in both actions, as a practical matter one question. Is the Government of the Republic of Bulgaria a proper party to these proceeds?

[73]

From the commercial activities in evidence before the Court it can be sees that, inter alia, the various correspondences, agreements, transactions, primary and third party contracts had all relied on representations and agreements with institutions and officials of the Government of the Republic of Bulgaria.

[74]

It is common knowledge and not disputed by the Defendant Government that its scientific and medical institutions had made agreements and contracts with the a number of plaintiffs in both actions. All plaintiffs relied, as such on contracts with the Defendant's institutions of, inter alio, the Academy of Medicine; the National Oncological Institute; the National Centre for Infectious and Parasitic Diseases; the Infectious Diseases Hospital of Sofia Bulgaria; and the National Centre of Radiobiology and Radiation Protection. All are legislated divisions of the Defendant state and there officials or directors are employees under contract and answerable to the Government of Bulgaria.

[75]

The Plaintiffs' affected their commercial activities, transactions and contracts in or connected to the province with these "alter-egos" of the Defendant Government of Bulgaria.

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[76]

It is not disputed by the Defendant Government that plaintiffs had as well made other agreements with non-scientific commercial organisations. These are joint ventures with Defendant Bulgaria commercial organs, among them "Electronic and Magnetic Products of the City of Plovdiv", the "Rare Metals and Uranium Mines of the City of Tzarimir" and the "Free Trade Zone" of Dragoman and Plovdiv. All are owned and controlled by the Defendant government.

[77]

The plaintiffs have alleged, and the defendant has not yet disputed, that the agreements and contracts at issue are with the Defendant's "Alter Egos". That, further it is not et disputed that these contracts without cause terminated and otherwise breached by, inter alio, the foresaid institutions.

[78]

The plaintiffs have alleged, and the defendant has not yet disputed, that its agencies or individual officials, the tortfeasors, did unlawfully interfere with and exerted undue influence over other contracts, making the rendering of those contracts in or connected to British Columbia impossible.

[79]

The plaintiffs have alleged and the Defendant has not yet denied the individual tortfeasors to be its "alter-egos” and employees. The defendants Stefcho Georgiev, Mario Stoyanov, Kina Dimitrova, Dimitar Shackle, Iveta Anadolska and Emilia Mitkova and others named in both actions are alleged by the plaintiffs to be jointly and severally liable together with the Defendant Bulgaria for the damages and injuries they suffered from the claims framed in tort.

[80]

This plaintiffs reasoning is supported in a discussion of the history of the State Immunity Act and its provisions in an article written by H.L. Molot and M.L. Jewett, The State Immunity Act of Canada (1982), 20 Can. Y.B. Int'l. 79. At page 107 The following description of an agent or agencies of a state may be found there and is helpful in to answer this question: "State agencies may simply be considered as the various means or instrumentalities by which a state acts. Therefore, a foreign state, like the Crown, can only function 'through its organs or agencies, which normally include the persons, representatives, subordinate organs, instrumentalities, corporations and government departments' of which the machinery of government is composed. To the extent that any such instrumentality is an integral part of the state and its machinery of government, it may be said that the acts of the instrumentality are those of the state. Such a body is then simply to be 'regarded as an alter ego or organ of the government' whether separately incorporated or not." [Emphasis Added-Mine]

[81]

Also, in S.A. Williams and A.L.C. de Mestral, An Introduction to International Law (2nd Ed. 1987), at 149-150 reads that: "If an agency is the alter ego of the foreign state and is 'an integral part of the state and its machinery of government it may be said the acts of the instrumentality are those of the state', the state is the only entity that could be sued. However, if an agency is not simply an emanation of the state but has a separate existence the Act recognises that it may be sued in its own right." [Emphasis Added - Mine]

[82]

In Vile et al v. Von Wendt; Zurich Insurance Company, Third Party 26 O.R. (2d) 513 at 516 (High Court of Justice Division, Divisional Court), and in Beaver Lamb & Shearling Co. Ltd. v. Sun Ins. Office of London England et al., [1951] O.R. 401, [1951] O.W.N. 411, [1951] 3 D.L.R. 470, the plaintiff's contention for jurisdiction and for the joinder of a foreign defendant as a necessary and proper party is in substance the same here and it clearly establishes the criteria in determination of who is a "necessary or proper party".

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[83]

The plaintiffs have joint and several allegations common in the two laws suits, and that the same occurrences are contributing factors that give them a right of action against the Defendant government and all of the other defendants jointly and severally, or that at least there is doubt as to which of these are responsible to them for their injury or losses.

[84]

It appears that not only is the Government of the State of Bulgaria one of the entities that can be sued, but possibly the state of Bulgaria is the only entity that need be sued.

Part IIBritish Columbia Plaintiffs [85]

The Plaintiffs, Michael Kapoustin, Tracy Kapoustin and Nicholas Kapoustin by his Guardian Ad Litem Tracy Kapoustin, are a family having at all material times maintained their permanent residence in the Province and their claim is in the right of residents to bring a law suit.

Part IIIBritish Columbia Defendant To Add

The Ministry of the Attorney General - British Columbia

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[86]

Matters that have arisen since the commencement of these proceedings provide cause for the Plaintiffs to seek leave to add the Ministry of the Attorney General of Canada as a party (defendant) in the first Supreme Court action of S004040. Participation of the Attorney General is necessary to see that all matters in the proceeding are effectually adjudicated on issues connected to the subject matter of unlawful imprisonment and defamation by an agent or agency of the Canadian government while acting in that capacity before agents or agencies of the foreign state in this proceeding.

Chapter 2Others Action No. S005440 Part IBritish Columbia Plaintiffs [87]

The Plaintiffs lawsuit is brought pursuant to Rule 5(3), Rules of the Court and they have relied on provisions of the Class Proceedings Act [RSBC 1996] c.50

[88]

In this law suit the Respondent, is a member of one subclass of private and corporate investors resident or doing business in British Columbia and whose claims are in right of residents to bring a law suit jointly or severally on behalf of themselves or others similarly situated.

[89]

The Plaintiffs Dimitar Hristov, Borislav Marinov and Radka Petrova bring their law suit jointly or severally on behalf of themselves or others similarly situated who are members of that sub-class of Plaintiffs not resident in British Columbia in the right of a party to an agreement or contract to have been completed in British Columbia.

[90]

The corporate Plaintiffs LifeChoice International A.D. ("LifeChoice") and LifeChoice BANQ1 Corporation ("BANQ1") bring their law suit on behalf of themselves and other Plaintiffs that are members of a sub-class having entered into an agreement to exchange depositary receipts as issued by BANQ1 with common shares of LifeChoice. The individual agreements were to be completed at the offices of the attorneys for LifeChoice in Vancouver, British Columbia. All members of the sub-class of plaintiffs allege that as a result of their individual agreements they each have a common interest in certain contracts with the Defendant Bulgaria.

Section CDefendant's Evidence On Application Part IAffidavits [91]

The sworn affidavit(s) of one Ms. Maya Dobreva, Minister plenipotentiary & Counsel, Bulgarian Embassy, Ottawa, Canada for the Defendant, Republic of Bulgaria.

[92]

The sworn affidavit of service one Ms. Bidjeva, the Plaintiffs have not been provided a copy of the said affidavit.

[93]

The sworn affidavit of service of one Mr. Gogov, the Plaintiffs have not been provided a copy of the said affidavit.

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Section DPlaintiffs' Evidence Chapter 1Affidavits Sworn Affidavits of plaintiff Michael Kapoustin 1 - 14 and Affidavit 15 with Volumes I - III Sworn Affidavit of plaintiff Mrs. Tracy Coburn Kapoustin Sworn Affidavits of Mr. Robert Kap Sworn Affidavits of Ms. Ada Gogova No. 1, with schedule of sub-class members and No. 2, a statement of facts, on behalf of Plaintiffs LifeChoice et. al. Sworn Affidavits of plaintiff and class member Mr. Dimitar Hristov, No. 1 plus exhibits attached. Sworn Affidavit of Ms. Marianna Radulova Sworn Affidavit of Bulgarian attorney at law Mr. Anatol Lukanov No. 1 Amicus Curae of psychologist, Dr. Margarita Vulcheva Volume II. THE APPLICATIONS AT BAR

Argument and Analysis Ad Exitum Section APlaintiffs/Applicant to Rule 13(10) (New Application) 14(6) Service Invalid Chapter 1Positions -Use of Rule 11, Rules of Court Statute Barred Part IPlaintiff/Applicant [94]

The Master is asked to consider as immediate the issue of the attempted service ex juris of documents to the plaintiffs by the Defendant Bulgaria. It may prove, once the Respondent's argument is heard, that the outcome of this particular controversy will, for the time, being dispose of this Rule 65 hearing and the Defendant's Rule 13(10) and Rule 14(6) applications. The Court adjourning the main issues for a later date.

[95]

The Respondent relies on Rule 65(34) to bring his Rule 13(10) and Rule 14(6) applications before the Court together with those of the Defendant. There are a number of other outstanding applications that the plaintiffs require the Master to as consider. These are reviewed in the last Section of this Factum after discussions on issues of immunity, jurisdiction simpliciter and forum non conveniens.

Chapter 2The Application Part IContext [96]

The Respondent's application is pursuant to Rule 13(10) and Rule (14.6), however it is brought in a statutory as opposed to factual context, jurisdiction simpliciter, as employed by the Defendant. The application seeks to rely on applicable statues to obtain a declaration under Rules 13(10) and 14(6) by this Court to set aside the Defendant's service ex juris to the plaintiffs in Bulgaria of its Notices or other documents. Respondent believes this should be decided first.

[97]

The two initial questions arises out of these two conflicting applications, (1) did the plaintiff have the right to serve a foreign defendant ex juris under Rule 13? (2) did the defendant properly serve, ex juris, a party/plaintiff in a foreign state when relying on Rule 11?

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[98]

Considering the nature of a Rule 65 hearing, and context of this application, it seems reasonable for it to be resolved first as it appears of more immediate concern to first dispose of question (2) prior to proceeding with the Defendant's applications under Rule 13(10) and question (1). The adequacy of the latter (2) will determine the possibility of a hearing of the former (1).

[99]

The first question resolves itself is in favour of the plaintiff, however, it is not determinative of jurisdiction [see: Bushnell v. T&N plc (1992), 67 B.C.L.R. (2d) 330 at 342; [1002] B.C.D. Civ. 3714-03 (C.A.)]. Jurisdiction simpliciter appears dependant on whether there is a real and substantial connection between this court and either the defendants or the subject matters of the litigation [see: Cook v. Parcel, Mauro, Junltin & Spaanstra, P.C. (1997), 31 B.C.L.R. (3d) 24 (C.A.)]. The first question finds its answer in Bushnell supra, the burden falls on the plaintiffs and it follows for the Respondent to provide a detailed exposition on this subject later in this Factum.

[100]

The Respondent finds the answer to the second (2) question is in Ferguson v. Arctic Transportation Ltd. (1995), 101 F.T.R. 16 (TD) ],. The Defendant erred to rely exclusively on Rule 11 or Rule 13, and its expectation that rules supersede the statutes of the Class Proceedings Act [RSBC 1996] c.50. ("Class Proceedings Act") and the Hague Convention on the Service Abroad of Judicial and Extra Judicial Documents in Commercial and Civil Matters ("Hague Convention").

[101]

Service ex juris is a tacky issue. Case law, as the Respondent reads it has it repeatedly falling to the Court to resolve how service ex juris was to have been done. As it can be seen from Kapoustin Affidavit No. 14, this potential controversy is observed and communicated to the Defendant and its counsel in Vancouver.

[102]

The Respondent, in his correspondence expressed concerns that the Court's time would be needless wasted on an issue that the parties might easily resolve among themselves by consent. Whereby avoiding arguments in conflicts of law in "Lex Fori" as opposed "Lex Loci Delecti".

[103]

Events, as they unfolded did not favour compromise on the part of the Defendant Bulgaria. Regrettably, it now falls to the Court to ascertain if the courts rules are to supersede the applicable statute.

Part IIThe Common Law v. Statues. Which are Substantive? [104]

In Driedger on the "Construction of Statutes (3rd Ed. 1994)" and interpretation of those statutes, Professor Sullivan restated in her work that a careful and exhaustive review of the authorities shows the modern rule of interpretation as: "... courts are obliged to determine the meaning of legislation in its total context, having regard to the purpose of the legislation, the consequences of proposed interpretations, the presumptions and special rules of interpretation, as well as admissible external aids. In other words, the courts must consider and take into account all relevant and admissible indicators of legislative meaning. After taking these into account, the court must then adopt an interpretation that is appropriate. An appropriate interpretation is one that can be justified in terms of (a) its plausibility, that is, its compliance with the legislative text; (b) its efficacy, that is, its promotion of the legislative purpose; and (c) its acceptability, that is, the outcome is reasonable and just." (p. 131) [Emphasis Added - Mine]

[105]

The Respondent's view is that a broader interpretation of what is "appropriate" and "reasonable and just" does, in both the present proceedings, meet all three tests suggested by Professor Sullivan. (1) the plaintiffs claims are plausible. (2) they comply with the legislative purpose of the applicable acts cited and (3) any outcome in a Canadian court will be reasonable and just for all the parties.

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[106]

Literature appears to show that the common law traditionally considered statutes as procedural, as contrasted with the position in most civil law countries, such as Bulgaria, where it is traditionally regarded as substantive.

[107]

Common law doctrine appears to be attributed to the 17th century Dutch theorist Ulrich Huber, and his essay "De conflictu legum diversarum in diversis imperiis" (1686), known in England during the reign of William and Mary [see: Edgar H. Ailes, Limitation of Actions and the Conflict of Laws (1933), 31 Mich. L. Rev. 474, at p. 487; and Ernest G. Lorenzen, Huber's De Conflictu Legum (1919), 13 Ill. L. Rev. 375, reprinted in Ernest G. Lorenzen, Selected Articles on the Conflict of Laws (1947), at p. 136].

[108]

By the turn of the nineteenth century that doctrine was firmly established in England and the United States. [see, for example: Huber v. Steiner (1835), 2 Bing. N.C. 202; 132 E.R. 80; Leroux v. Brown (1852), 12 C.B. 801; 138 E.R. 1119; Nash v. Tupper (1803), 1 Caines 402 (N.Y.S.C.); Ernest G. Lorenzen, Story's Commentaries on the Conflict of Laws - One Hundred Years After (1934), 48 Harv. L. Rev. 15, reprinted in Selected Articles , supra, at p. 181] From some selected articles it appears that the commentary of time found 2 main reasons for the ready acceptance of this doctrine in Anglo/American jurisprudence. Important to the present interpretations required by this Court, was the view expressed at the time that foreign litigants should not be granted advantages that were not available to forum litigants, the preference to "lex fori" in conflict situations.

Part IIIOld v. New Common Law [109]

It appears that the reasons forming the basis of the "old" common law rule are now out of place in the "modern" context. The notion that foreign litigants should be denied or alternatively given advantages not available to forum litigants does not sit well with the proposition that the law that defines the character and consequences of the tort is the "lex loci delecti".

[110]

As the Respondent attempts to understand this "Modern Law" it appears that the court takes jurisdiction not to administer local law, say in this instance Canadian law or alternatively Bulgarian law, but for the convenience of litigants, and does so with a view to its responding to modern mobility and the needs of a world or national economic order. The court may choose to apply either law.

[111]

The rule in conflicts of law cases and the principle justification for the rule appears to be a preference for the "lex fori" over the "lex loci delecti"", this is being displaced in this case by statutes designed to stream line such basic conflicts as how to serve documents [the Hague Convention].

[112]

So far as the technical distinction between right and remedy, it appears that Canadian courts have been chipping away on the basis of the relevant policy considerations. This seems to be particularly appropriate in the conflicts of laws field where, as stated earlier, the purpose of substantive/procedural classification is to determine which rules will make the machinery of the forum court, British Columbia, run smoothly as distinguished from those determinative of the rights of both parties.

[113]

Respondent has suggested and practised since the commencement of these proceedings the principal that statues operate with greater openness and fairness in conflict of law issues.

Chapter 3Facts and Analysis Part ICommon to Both Actions

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[114]

As it can be seen from the endorsed ex juris Writs, plaintiffs have relied on Rule 13(1), Rules of the Court that allows for the service without leave of an originating process on a person outside British Columbia with respect to various causes of action or related circumstances which are enumerated in subparagraphs (a) to (q). In this case the Plaintiffs rely on any one or more of the following for jurisdiction of this court and therefore service of the Defendants in Bulgaria: "Rule 13(1) Service of an originating process or other document on a person outside British Columbia may be effected without order if (g) the proceeding is in respect of a breach, committed in British Columbia, of a contract wherever made, even though the breach was preceded or accompanied by a breach, outside British Columbia, which rendered impossible the performance of the part of the contract that ought to have been performed in British Columbia, (h) the proceeding is founded on a tort committed in British Columbia, (j) a person outside British Columbia is a necessary or proper party to a proceeding properly brought against some other person duly served in British Columbia, (o) the claim arises out of goods or merchandise sold or delivered in British Columbia," [Emphasis Added - Mine]

[115]

As to the manner of service - the Plaintiffs further relied on Rule 13(12) as enumerated in subparagraphs (a) to (c) for adequate service of the Defendant government of Bulgaria and other defendants in Bulgaria. "Rule 13(12) A document may be served outside British Columbia (c) in a state that is a contracting state under the Convention, in a manner provided by or permitted under the Convention [see Rule 13(11) "Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters, signed at the Hague on November 15th, 1965" by Canada].

[116]

Plaintiffs method of service to the Government of Bulgaria, as defendant, is consistent first with provisions of the State Immunity Act, R.S., 1985, c. S-18, s.9 c.5, s.27 (the "Immunity Act"). Plaintiffs relied on s. 9(1) subparagraphs (a) and (b) of the Act and the Article 5 of the Convention and fact that the Central Authority of the Defendant Bulgaria agreed to voluntarily accept the originating process: State Immunity Act, R.S., 1985 "Procedure And Relief 9.(1) Service of an originating process on a foreign state, other than an agency of the foreign state, may be made (a) in any manner agreed on by the state; (b) in accordance with any international Convention to which the state is a party; The Convention reads: "Article 5 The Central Authority of the State addressed shall itself serve the document or arrange to have it served by an appropriate agency, either-

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(a) by a method prescribed by its internal law for the service of documents in domestic actions upon persons who are within its territory, or (b) by a particular method requested by the applicant, unless such method is incompatible with the law of the State addressed. Subject to sub-paragraph (b) of the first paragraph of this Article, the document may always be served by delivery to an addressee who accepts it voluntarily." [Emphasis Added - Mine] [117]

As it can be seen. on December 11th, 2000 the Central Authority for the Defendant Bulgaria, the office of the Minister of Justice, deputy Minister Ms. Zlatka Rousseva ("Minister") as she then was, made answer to the endorsed Writs as served and delivered in response to the Plaintiff Kapoustin a written statement of defence dated December 7th, 2000, filed. In answer and defence [see §IIbelow] and as Central Authority for the Republic of Bulgaria, Ms. Rousseva claimed to have conducted a complete investigation of the Plaintiffs complaints' in the law suit and formally set forth the grounds for a defence: the allegations set out in both actions were generally without merit.

[118]

On February 16th 2001 counsel for the Defendant Bulgaria filed appearances to both actions with this Court.

[119]

On February 23rd 2001 counsel for the Defendant Bulgaria relied on provisions of Rule 65, Rules of the Court, and brought Notices of Motion in both actions declaring that this Court has no jurisdiction over the said Defendant or alternatively to have the Court decline its jurisdiction. Counsel for the Defendant Bulgaria relies on provisions of Rules 13(10) and 14(6) Rules of the Court, and Section 3(1) of the State Immunity Act, the Defendant moving to stay the action against it claiming sovereignty and immunity.

[120]

On or about February 28th 2001 the Central Authority of the Defendant had its penitentiary officers serve, on the Plaintiff Kapoustin the Appearances (filed); Notices of Motion and Affidavit of Ms. Dobreva for the Defendant in both actions captioned above.

[121]

Kapoustin protested to prison officials and communicated by letter his argument to the Defendant and its counsel that this method of service was inconsistent with an enactment of the Government of Republic of Bulgaria in its Declarations to Articles 6 and 10 of the Convention that read as follows: "Declaration on Article 6, paragraphs 1 and 2 The Republic of Bulgaria designates the district courts as authorities which are competent to complete the certificate. Article 6 The Central Authority of the State addressed or any authority which it may have designated for that purpose, shall complete a certificate in the form of the model annexed to the present Convention. The certificate shall state that the document has been served and shall include the method, the place and the date of service and the person to whom the document was delivered. If the document has not been served, the certificate shall set out the reasons which have prevented service. Declaration on Article 10 The Republic of Bulgaria objects to the use of the channels of transmission for service mentioned in Article 10 of the Convention. Article 10 Provided the State of destination does not object, the present Convention shall not interfere with -

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a)

the freedom to send judicial documents, by postal channels, directly to the person abroad,

b) the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of Destination, c)

the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination."

[Emphasis Added- Mine] [122]

On February 28, 2001 the Plaintiff Kapoustin delivered to counsel for the Defendant argument that the methods of service ex juris employed by his client in Bulgaria are inconsistent with the applicable statutes of the Hague Convention, this Respondent suggested that the parties should rely on the provisions of Rule 13(12)(b) and (c) due to the declarations and reservations made by the Republic of Bulgaria to Article 6 and Article 10 of the Hague Convention.

[123]

On March 19, 2001 counsel for the Defendant replied to the Respondent by fax and advised it was the Defendant's intention to attorn to and proceed only in accordance with the accepted rules of the legal practice in British Columbia. This Respondent, as a practical matter did then deliver the required Rule 65, Outlines Part II and an affidavit of Bulgarian Attorney Anatol Lukanov for the Plaintiffs, doing so despite the obvious irregularity of the state Defendant to attorn to British Columbia Rules (Rules of Court) as opposed to its [Bulgarian] national law and declarations on the Hague Convention.

[124]

On March 21, 2001 in an attempt to serve the Ministry of Justice as a Respondent under the above captioned causes of action and being the Central Authority for the Republic of Bulgaria under the Hague Convention, the following documents were delivered: (1) the March 15, 2001 letter of Mr. Kapoustin to Mr. Lewis; (2) the March 15, 2001 letter of Mr. Lukanov to Mr. Lewis; (3) the Affidavit No 1 of Attorney Lukanov; (3) the Outline Part II under case S004040; (4) the Outline Part II under case S005440. The documents were refused in person by a Ms. Bidjeva, a deponent for the Defendant under both these actions. In a hand written note the said Bidjeva states she could not accept the documents for the Defendant because they had to be served in a way expressly set out to the Hague Convention according to the reservations and declarations of the Republic of Bulgaria.

[125]

The Plaintiffs later effected service of the documents by registered mail.

[126]

On March 27, 2001 the Respondent communicated his concerns to the Defendant's Central Authority, Ministry of Justice, Department of International Legal Assistance, Director Ms. Bidjeva. Again explaining to the Defendant's agency the relevant Hague Convention and BC Court local rules. Respondent elaborated upon the paradoxes existing in the position of the Defendant due to its dual roles as (1) the "alter ego" of the Defendant Bulgaria; and (2) the Central Authority under the Hague Convention and its [the Ministry] legislated functional independence in that role from the Defendant government. Respondent proposed, due to the conflicting national laws of Canada and Bulgaria, that the litigants defer to the procedures contracted under the Hague Convention to which both countries have agreed, and so permit a more homogenous approach to issues of "lex fori " and evading needless controversy as to what is valid notice before this Court. The plaintiffs expressed their concerns over the inevitable consequences if the Central Authority and Defendant continued to maintain its reasoning that the local rules, "lex fori" of provincial courts, were to be applied on the territory of Bulgaria, despite that they conflicted with Bulgaria national law.

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[127]

Respondent pointed out, that it was further inconsistent with Article 3 of the Hague Convention and unjust conduct to deny the plaintiffs the same proportional procedural advantages it was affording the Defendant ("itself") when refusing to accept extra-judicial documents from the plaintiffs for forwarding to Canada. "Article 3 The authority or judicial officer competent under the laws of the State in which the documents originate shall forward to the Central Authority of the State addressed a request conforming to the model annexed to the present Convention, without any requirement of legislation or other equivalent formality. The document to be served or a copy thereof shall be annexed to the request. The request and the document shall both be furnished in duplicate."

[128]

On June 5th 2001 the Plaintiffs, pursuant to provisions of Rule 31(1), Rules of the Court, submitted a Notice to Admit to counsel for the Defendant in Form 23 requiring the Defendant Bulgaria admit or deny the facts therein. The Plaintiffs provided the Defendant and its counsel in Vancouver detailed particulars of material facts and documents that allege to objectively established that those claims framed in tort and those that allege breach of contract did occur in or are connected to the province and that the Defendant conspired with other defendants to, inter alia, (1) effect the tort complained of as occurring in the province: (2) the tortious conduct having its consequences of personal injury and property loss or damage in the province; (3) that the Defendant was involved in commercial activities that reached into the province; (4) there are torts that occurred in the province connected to the Defendant's commercial activities connected to the province; (5) the Defendant had commercial transactions and numerous contracts with the Plaintiffs in the province; (6) the Defendant had signed numerous contracts and accepted payment in cash, goods and service from the Plaintiffs; (7) the Defendant had breached one or more of its contracts and agreements with the Plaintiffs; (8) the Defendant had made oral and written representations in or connected to the province on which the Plaintiffs and others had relied; (9) that the Defendant directly interfered with commercial activities and contracts in the province; (10) that the Defendant was indebted to the Plaintiffs, and; (11) the Defendant knowingly committed torts of privacy, slander or liable, with malice, to cause injury to the plaintiffs and to further the private agenda of its officials.

[129]

Copies of some of theses exchanges with the Defendant are provided in Vol. I and II of the Respondent's (Kapoustin Affidavit No. 15) affidavit.

Part IIParticular to Action No. S004040 [130]

According to the facts attested to by Ms. Marianna Radulova for the Plaintiffs, the following conclusions can be drawn.

[131]

The Defendant Bulgaria was served on September 7th 2000, the Plaintiffs relied on provisions of Article 5 paragraph 2 of the Hague Convention. The Central Authority for the Defendant Bulgaria had voluntarily accepted service in this action by receiving at its offices the endorsed Writ and Statement of Claim as personally served by Ms. Radulova to the agency for service of the Defendant in Bulgaria. The documents were provided in the Bulgarian and English languages.

[132]

As of October 31st 2000 all defendants named in this law suit and resident in Bulgaria had been severed in Bulgaria and are in default of appearance.

[133]

As of June 25th 2001 the Defendant R.C.M.P. Officer/Diplomatic Attaché Derek A. Doornbos is in default of appearance.

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[134]

The plaintiffs are seeking leave from this Court to add as a party the Ministry of the Attorney General of Canada as a defendant to their amended Writ and Statement of Claim. Leave is sought pursuant to Rules 15 and 24. The cause of action, it is alleged, are within the ambit of s. 32(1) and s. 24(1) of Canada's Charter of Rights and Freedoms and flow from Charter violations.

[135]

On December 11th, 2000 the Defendant Bulgaria, its respondent the Ministry of Justice, Deputy Minister Zlatka Rousseva, delivered to the Respondent/Plaintiff a defence written on December 7th to the endorsed ex juris Writ and Statement of Claim as follows: "With reference to your complaint addressed to the Minister of Justice, in which you point out problems of different nature, an official verification was carried out which established the following: First, your allegation that you are being obstructed in filing motions and complaints as a party to proceedings before….the Supreme Court of Canada….is without merit.

[136]

Allowing for the anticipated argument by counsel for the Defendant, that Minster Rouseeva's statement of December 7th is not a defence, then the alternative must be concluded, and the Defendant remained, as of on or about October 31 st 2000, in default of appearance.

[137]

Allowing for the anticipated argument by counsel for the Defendant, that the service ex juris effected to his client, Government of Bulgaria, the Ministry of Justice, the Plaintiffs then plead the alternative, that they had complied with s. 9(2) of the State Immunity Act, and received confirmation (filed) that on December 19th, 2000 their endorsed Writ, Statement of Claim and Demand of Discovery for Documents had been transmitted by the Government of Canada, Department of Foreign Affairs and International Trade to the Defendant, Government of the Republic of Bulgaria, the Defendant Muravei Radev, Minister of Finance, as he then was.

[138]

If Minister's Rousseva's defence is not a "defence", and the "voluntary acceptance" of the originating process was not "voluntary", the fact of service ex juris pursuant to s. 9(2) of the State Immunity Act still places the Defendant Bulgaria in default of appearance on or about February 3rd 2001.

[139]

On or about January 2nd 2001 Mr. Robert Kap, the father of the Plaintiff Michael Kapoustin filed with this Court a true and correct copy of English and Bulgarian language transcripts of the Defendant's Ministry of Justice response to the Plaintiffs law suit [see § Iabove].

[140]

On or about January 10th, 2001 the Plaintiffs provided the Court a copy of their Reply to the Defendant Bulgaria's Defence in Form 18 (filed) as served on the Defendant pursuant to Rule 23 (Rules). A copy is provided with my affidavit [No. 15 Kapoustin Vol. III, Section A. Item 1.5].

[141]

On or about January 11th, 2001, relying on the provisions of Rule 31(1) (Rules), the Plaintiffs delivered to the Defendant Bulgaria a Notice to Admit in Form 23 requiring the Defendant Bulgaria admit or deny the facts therein, as follows: " ….TAKE NOTICE that unless the Court otherwise orders, if the Party to whom this Notice is directed does not deliver a written statement, as provided in Rule 31 (2) within 14 days after delivery of a copy of this Notice to him or her, then the truth of the facts and authencity of the documents shall be deemed to be admitted. The facts, the admission of which is requested are: 1.

That on 07 September 2000 the Ministry of Justice did voluntarily accept a true copy of the complaint filed against the Republic of Bulgaria

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2.

That on 10 November 2000 Michael Kapoustin, pro se Plaintiff, did complain of the Defendant's interference with him and set out, by reference, the above entitled action as accepted by the Defendant.

3.

On 07 December Deputy Minister of Justice, Zlatka Rousseva, as Respondent for the Defendant Republic of Bulgaria did serve upon the Plaintiffs an appearance and general defence to the allegations set out in the above entitled action which were complained of.

4.

That, as Defendant, the Republic of Bulgaria has voluntarily waived a defence of sovereign immunity agreeing to proceed to trial upon the merits of facts in dispute and relevant law.

The documents, the authencity of which admission is requested are: Exhibit No 1 as attached hereto and made a part thereof to be admitted as a true and correct copy of the Defendant Bulgaria Statement of Defence in response to the Plaintiff's complaint as served by the Respondent Ministry of Justice, Republic of Bulgaria. Exhibit No 2 - as attached hereto and made a part thereof to be admitted as to its veracity of the translation to the English from the Bulgarian language of the aforesaid Exhibit No 1." [142]

The Defendant Bulgaria has yet to traverse any averment therein within the time required by the Notice (filed).

[143]

On April 4th 2001 the following documents were forwarded to Court to be filed as motions in form of praecipe as follows; (1) Form 2 (Rule 64(9)) dated April 4, 2001 asking the Registrar to accept the attached Praecipe in Form 56 and draft Order together with the Plaintiff's Reply in Form 18 (Rule 23(1)); Form 56 (Rule 41(16.3)), dated April 4, 2001 requiring an Order from the Court to enter and accept the Plaintiff's Rule 23 Reply in response to the Statement of Defence for the Defendant Republic of Bulgaria and provided a Form 56A (Rule 41 (16.3)) Draft Order and the Reply in Form 18 (Rule 23(1)) together with a Cover Memorandum in Form 9 (Rule 11(6.1)) in the Bulgarian and English languages bearing the stamp and incoming Ref. No. 94-M-147/11.01.2001 of the Documents Exchange Service of the Ministry of Justice, Central Authority; A Certificate of Service signed by the aforesaid Ms. Radulova as dated March 5, 2001; (2) Form 2 (Rule 64(9)) dated April 4, 2001 asking the Registrar to accept the attached Praecipe in Form 56 and draft Order together with affidavits and an attached Notice to Admit; Form 56 (Rule 41(16.3)), dated April 4, 2001 requiring an Order from the Court to accept as true the facts and documents set out in the Plaintiff's Notice to Admit as served on the Defendant Republic of Bulgaria on January 11, 2001; Form 56A (Rule 41(16.3)) Draft Order and the Notice to Admit in Form 23 (Rule 31(1)) together with a Cover Memorandum in Form 9 (Rule 11(6.1)) in the Bulgarian and English languages bearing the stamp and incoming Ref. No. 94-M-147/11.01.2001 of the Defendant's Documents Exchange Service at the Ministry of Justice; (3) Form 2 (Rule 64(9)) Praecipe dated April 4, 2001 asking the Registrar to accept the attached application in Form 56 and draft Order together with affidavit ; Form 56 (Rule 41(16.3)), dated April 3, 2001 requiring an Order from the Court pursuant to BC REGULATION 221/90 that the Applicant/Plaintiff Michael Kapoustin, be declared indigent; Form 56A (Rule 41(16.3)) Draft Order; Affidavit No. 2 of Michael Kapoustin, dated January 29, 2001. Copies of these are provided in my affidavit [Kapoustin No. 15 Volume III].

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[144]

The Duty Master refused to hear any applications of the foresaid applications, due to the absence and inability of this Respondent/Plaintiff (Kapoustin) to attend to chambers, in proprio persona.

[145]

On April 2nd 2001 the Plaintiffs filed a motion in form of Praecipe Form 56 and paid the required fees. Plaintiffs had requested an Order to extend by 90 days any time fixed by the Rules of the Court for the serving, delivering, filing or amending of any pleading or any other document and to require each party of record to comply with the provisions of the Hague Convention and any reservations and declarations made thereto. The Praecipe is dated January 29, 2001 and is signed by Mr. Robert Kap as power of attorney to pro se Plaintiff Michael Kapoustin. In support of the Order the Plaintiffs provided the Affidavit No 1 of Mr. Robert Kap dated January 2, 2001 as filed on March 29, 2001. Plaintiffs by Praecipe in Form 2 required the Registrar to file their Notice of Change of Address for Delivery , dated March 6, 2001 for Tracy and Nicholas Kapoustin. Copies of these are provided in my affidavit [Kapoustin No. 15 Volume III].

[146]

The foresaid material evidence provided the Defendant was to be relied on by the Plaintiffs at trial and may be found, in it relevant parts, in the affidavit this Plaintiff (Kapoustin) as filed.

[147]

The Defendant Bulgaria has not traversed any averment in the foresaid June 5th 2001 Notice to Admit within the time required by the Rules, and counsel for the Defendant relies on Rule 14(7) and 14(8) (Rules) . "Rule 14 Idem (7) Where an application is made under Rule 13 (10) or subrule (6) of this rule, the plaintiff or petitioner shall take no further step in the proceeding against the applicant, except with leave of the court, until the application has been concluded. Idem (8) An application made under Rule 13 (10) or subrule (6) of this rule does not constitute acceptance of the jurisdiction of the court.

[148]

As of this Factum no other documents have been exchanged among the parties under this action.

Part IIIFacts Particular to Action No. S005440 [149]

The Plaintiffs lawsuit is brought pursuant to Rule 5(3), Rules of the Court and they have relied on provisions of s. 2(1), s. 6, s. 7, and s. 40 of the Class Proceedings Act [RSBC 1996] c.50 as follows: " Plaintiff's class proceeding 2 (1) One member of a class of persons who are resident in British Columbia may commence a proceeding in the court on behalf of the members of that class. Subclass certification 6 (1) Despite section 4 (1), if a class includes a subclass whose members have claims that raise common issues not shared by all the class members so that, in the opinion of the court, the protection of the interests of the subclass members requires that they be separately represented, the court must not certify the proceeding as a class proceeding unless there is, in addition to the representative plaintiff for the class, a representative plaintiff who: (a) would fairly and adequately represent the interests of the subclass,

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(b) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the subclass and of notifying subclass members of the proceeding, and (c) does not have, on the common issues for the subclass, an interest that is in conflict with the interests of other subclass members. (2) A class that comprises persons resident in British Columbia and persons not resident in British Columbia must be divided into subclasses along those lines." "Certain matters not bar to certification 7. The court must not refuse to certify a proceeding as a class proceeding merely because of one or more of the following: (a) the relief claimed includes a claim for damages that would require individual assessment after determination of the common issues; (b) the relief claimed relates to separate contracts involving different class members; (c) different remedies are sought for different class members; (d) the number of class members or the identity of each class member is not known; (e) the class includes a subclass whose members have claims that raise common issues not shared by all class members. [Emphasis Added-Mine] [150]

The plaintiffs and this Respondent intend to file an application for certification of action No. S005440 as a class proceeding subsequent to the joinder of other parties, amendment of the pleadings to reflect the new facts and a resolution of the issue of jurisdiction simpliciter and forum non conveniens.

[151]

Plaintiffs relied on Rule 13(1) Rules of the Court to effect service without leave in that their law suit is founded on: (1) a tort that rendered the completion of a contract within the jurisdiction of British Columbia impossible [see §Iabove] as a result of (2) a prior breach of contract connected to the Defendant Bulgaria and other plaintiffs commercial activities in British Columbia, that rendered completion in the province of the first (1) contract impossible; (3) the tortfeasors and institutions alter egos of the Government of the Republic of Bulgaria and it a proper and necessary party to any proceedings commenced to determine; (3) the plaintiffs and defendants common commercial activities in the province and what, if any, damaged or injury or loss resulted. Upon the foresaid the plaintiffs have brought their action for the property losses and damage they have incurred in or connected to the province.

[152]

According to the evidence of one Ms. Radulova as filed, the Defendant Bulgaria was served on October 24th 2000, the Plaintiffs relied on provisions of Article 5 paragraph 2 of the Hague Convention and the fact that the Central Authority for the Defendant Bulgaria had voluntarily accepted service in this action by receiving at its offices the endorsed Writ and Statement of Claim as personally served in the Bulgarian and English languages.

[153]

As of on or about December 4th 2000 all defendants named in this law suit had been severed in Bulgaria and are, in accordance with the courts Rules, in default of appearance.

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[154]

The Respondent draws the attention of the Court to the fact of the Plaintiffs in this action not having yet undertaken to provide their endorsed ex juris Writ to the Government of Canada, Department of Foreign Affairs and International Trade for transmittal pursuant to s. 9(2) of the Immunity Act to the Government of the Republic of Bulgaria. This was an intention oversight, undertaken by plaintiffs, in order to observe if the Defendant Bulgaria would attorn to the "voluntary service" provisions of the Hague Convention and agree to "this manner of service" under applicable provisions of international law and sovereign immunity or would, in the alternative, refuse to acknowledge the documents so served. The Court is asked to recall service was affected in December 2000 and the appearance filed in February in anticipation of defending, on the merits, this class action.

[155]

On February 28, 2001 the class member, plaintiff Dimitar Hristov, communicated by fax to the offices of counsel for the Defendant, Mr. Patrick Lewis, that he had indirectly become aware of the filed Appearances. The said Hristov advised counsel that no service had been effected or attempted to him at his address of delivery outside of the Province of British Columbia, Canada. He also advised counsel that he insist that any extra-judicial service of documents had to comply with Rule 13(12)(b) and (c) (Rules) and be in compliance with the declarations and reservations of the Republic of Bulgaria on Article 6 §§ 1 and 2 and Article 10 and Article 5 (a)(b) of the Hague Convention. Mr. Hristov further expressed his befuddlement that an Appearance had been filed by the Defendant Bulgaria at all. His confusion caused by the fact that service in this class action had not yet been effected on the government under the provisions of s. 9(2) of the State Immunity Act [R.S. 1985, c. 5-18]. The affidavit of Mr. Hristov, for the Plaintiffs, is provided with this Factum..

[156]

On March 1st 2001 plaintiffs Mr. Borislav Marinov and Ms. Radka Petrova transmitted similar concerns as those expresses by the plaintiff Hristov above.

[157]

On or about March 29th 2001 plaintiffs in this action filed with the Court the required fees and documents necessary for motions in praecipe Form 56 (Rule 41(16.3), requiring an Order, without notice, to join as parties of record to the class proceeding all persons identified in the affidavit deposed to by Ms. Ada Gogova for the Plaintiff LifeChoice et al., as being individual members of the class or of a subclass of Plaintiffs alleged to have suffered property loss or personal injury in British Columbia as a result of acts committed by the defendants. The Court was asked to provide, ex parte, an Order whereby each party of record would be required to provide notice to each individual interested as named and sufficient time for them to respond. The plaintiffs requested that any service ex juris be in compliance with the Rules of the Court and with the Hague Convention. The Court was also asked to extend by 90 days any time fixed by its Rules for the serving, delivering, filing or amending of any pleading or any other document. The Affidavit No 1 of Ada Gogova dated March 7, 2001, filed and the Affidavit No. 3 of Robert Stewart dated March 12, 2001 were to be read in support of the Order required. The affidavits were delivered together with the motion in terms of praecipe for a Notice of Change of Address for Delivery for LifeChoice International et al., dated March 8, 2001 and signed by Mr. Robert Stewart. Copies of the foresaid materials may be found in Vol. III of the Respondent's (Kapoustin No. 14) affidavit, filed.

[158]

It is apparent from the affidavit of Plaintiff Hristov (filed) that only the Respondent Kapoustin has been served and no other plaintiff.

[159]

Counsel for the Defendant has apparently neglected to have his client provide adequate notice of his motion or the hearing to the other Plaintiffs named in the action or the interested parties which are known to the Defendant and the Plaintiffs to be at least 4,731 individuals resident in Bulgaria. This number of interested parties is specifically identified as connected to the British Columbia company "LifeChoice" in §3 of the affidavit of Maya Dobreva for the Defendant. The allegations by the state of Bulgaria of an "embezzlement" of assets from a British Columbia company as made by Ms. Dobreva are unrelated to these civil proceedings, and its inclusion in the applications questionable.

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[160]

As of this Factum no other documents have been exchanged by the parties under this action.

Chapter 4Argument Part IPlaintiff/Applicant [161]

The Respondent asserts that the Defendant has erred in (1) when not obtaining leave for service ex juris of its documents; (2) when relying on Rule 11, Rules of the Court in attempting ex juris service of its documents upon plaintiffs in Bulgaria; (3) not observing the statutory requirement of Rule 13(12), to affect service ex juris in a contracting state to the Hague Convention according to that convention, (4) failing to observe the declarations and reservations on the Hague Convention as made by the contracting state, Bulgaria and: (5) not providing proper notice or service pursuant to s. 11(1), s. 15(1) and s. 21(1) of the Class Proceedings Act, as follows: 11 (1) Unless the court otherwise orders under section 12, in a class proceeding, (a) common issues for a class must be determined together, (b) common issues for a subclass must be determined together, and (c) individual issues that require the participation of individual class members must be determined individually in accordance with sections 27 and 28. (2) The court may give judgment in respect of the common issues and separate judgments in respect of any other issue." " Participation of class members 15 (1) In order to ensure the fair and adequate representation of the interests of the class or any subclass or for any other appropriate reason, the court may, at any time in a class proceeding, permit one or more class members to participate in the proceeding. (2) Participation under subsection (1) must be in the manner and on the terms, including terms as to costs, that the court considers appropriate." "Notice to protect interests of affected persons 21(1) At any time in a class proceeding, the court may order any party to give notice to persons that the court considers necessary to protect the interests of any class member or party or to ensure the fair conduct of the proceedings. (2) Section 19(3) to (5) applies to notice given under this section" "Notice 19(5) The court may order that notice be given to different class members by different means."

[162]

The plaintiffs seek to set aside the Defendant's ex juris service of documents upon them on the grounds that the Rules and applicable statutes of relevant enactments have not been met when serving, inter alia, the Bulgarian residents in class action proceeding S005440. These Plaintiffs have not been dully summoned or served according to the requirements of the Class Proceedings Act. As a result they have had insufficient opportunity to be able to respond to the Defendant's Notices or retain counsel.

[163]

This Respondent, although not identified by name in complaint No. S005440, was for some reason served by the Defendant.

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[164]

As a result, the proper notice requirements of this Court in action No. S005440, have not been observed by the Defendant and plaintiffs seek the applications of the Defendant to be set aside, with leave granted the Defendant to effect proper notice and service [see: Ferguson v. Arctic, supra ]] to all the parties of record identified in the Schedules to the Affidavit of Ms. Ada Gogova for the plaintiffs and those other interested parties known to the Defendant. Service to be pursuant to the statutory requirements of both the previously mentioned acts. In action S005440 the Rules of Court are superseded when in conflict an enactment and the court may stay the applications pursuant to s. 12, s. 13 and s. 40 of the Class Proceedings Act as follows: ""Part 3 — Conduct of Class Proceedings Division 1 — Role of Court "Stages of class proceedings "Court may determine conduct of proceeding 12 The court may at any time make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination and, for that purpose, may impose on one or more of the parties the terms it considers appropriate. "Court may stay any other proceeding 13 The court may at any time stay any proceeding related to the class proceeding on the terms the court considers appropriate." " Rules of Court 40 The Rules of Court apply to class proceedings to the extent that those rules are not in conflict with this Act."

[165]

General - Preference and Reliance - Precedent - Rules of Court as opposed to statutes Plaintiffs repeatedly argued and protested, first directly to the Defendant Bulgaria and then later to its Canadian legal counsel's, their exclusive reliance on local Rule 11 (Rules) when attempting the service of documents in Bulgaria - Plaintiffs repeatedly demanded the Defendant either comply with the Hague Convention when attempting service to them on Bulgarian territory or to provide a written notice the Defendant would attorn to the forum of the "lex loci delecti" - the British Columbia courts - Counsel notified plaintiffs agent in Bulgaria that the Defendant intended "to proceed only with the accepted rules of legal practice in British Columbia ” and to rely on local rules for ex juris service - Plaintiffs argued that Rule 13(12) was clear in that regard and the Defendant should comply with it and the "lex fori" of Bulgarian legislation, at least when attempting service of its documents on its territory, alternatively the state Defendant should waive its immunity plea.

[166]

General - Practice - Ex Parte Motion in Praecipe - Master's Order - On April 2nd 2001 the Plaintiffs in action S004040 filed an ex parte motion for an Order requiring all parties to comply to Rule 13(12)(c) (Rules) when effecting service on them outside the province Master refused to set the application for hearing requiring the plaintiff Kapoustin attend to chambers "in proprio persona persona" " and speak to the matter - The Plaintiff Kapoustin is incarcerated by the Defendant and is "indigent", two circumstances which combined make appearance before the provincial court (1) discretionary on the part of the Defendant Bulgaria and (2) financially impossible to retain local legal counsel. A direction was required from the Court to the Defendant to conduct the Plaintiff to Chambers in custody - Defendant refused the Plaintiff Kapoustin's requests and his motion to the Court, as filed was left without any resolution.

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[167]

General - Practice - Service on foreign state or agency of foreign state - In Ferguson v. Arctic, supra, in that case it was argued that service had been effected in accordance with ss. S. 9(1)(b) and s. 9(3)(c) of the State Immunity Act, which provided for service on a foreign state or on an agency of a foreign state "in accordance with any international Convention" to which the state was a party or applicable to the agency - and "in accordance with any applicable rule of court" - There Rule 13(12) and the Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters were relied on - The Federal Court of Canada, Trial Division, in deciding Ferguson rejected the argument, ruling against service in a contracting state to an agency or department of that state in accordance with provisions of the Hague Convention, the Federal Court there deciding that the Hague Convention was directed to service on private parties and not foreign governments.

[168]

Exceptions - Service on foreign state or agency of foreign state - Which service takes precedence - This Respondent argues that in the proceedings before the Bar, unlike Ferguson v. Arctic supra, the plaintiffs in this instance also relied on s. 9(1)(a) and s. 9(3)(a) of the State Immunity Act and those exceptions are to be applied in the present proceedings - The plaintiffs provided service by a "manner agreed on by the state", or in a "manner agreed to by the agency" of that state and Central Authority under the Hague Convention. Respondent asserts that when the Ministry of Justice, Republic of Bulgaria asked the plaintiff Kapoustin's interpreter, M. Radulova, to provide it copies of the endorsed ex juris Writ and Statement of Claim in English and Bulgarian - the plaintiffs complying - the Defendant agreed to the manner of service. Respondent argues, in this case that such a request by the Defendant, on two or more separate occasions of service. Respondent asserts that the substantial correspondences exchanged between the litigants contains numerous references by the Defendant to both the present proceedings, and the Defendant's actions are an unmistakable expression that the "state" had agreed to this "manner" of service and delivery of documents.

[169]

General - Service - Inadequate - The evidence shows this Respondent, Plaintiff Kapoustin, is the only party to either proceeding to be delivered any documents by the Defendant - The plaintiff Hristov has deposed to this Court he and others have not been properly notified or provided proper service by the Defendant of its motions or other documents - Respondent seeks to set aside the service to him and the failure to notify and service other parties as improper and the proceedings to be stayed until documents are served to plaintiffs in a manner as required by the prevailing statues.

[170]

Waiving Immunity - Attorning to Jurisdiction - Central Authority of the Defendant Republic of Bulgaria, Ministry of Justice knowingly set aside it national legislation and preferred to attorn to the "lex loci delecti" forum of the British Columbia provincial court - Respondent argued on a point of law to the Central Authority- that any attempted service or service of documents on Bulgaria territory in contravention of international law and its national law - should not be accepted as "good and proper service" or "adequate notice". Defendant rejected the Respondent's arguments.

[171]

Ex juris plaintiffs - Applications - Respondent argues Rule 11 is superseded by Rule 13(12) of the Rules of Court - and Rule 13(12)(c) seizes the Court to require all parties to comply with the Hague Convention - 3 individual plaintiffs are residents of the Republic of Bulgaria and the other, a British Columbia resident and Canadian citizen is incarcerated in a Bulgaria prison - Plaintiffs seek to set aside the Defendant 's attempted service to them of its February 28th 2001 Notice of Motion and its later Notices of Hearing - Defendant's past attempts to deliver or serve extra or judicial documents on the territory of Bulgaria are inconsistent with national law and the methods prescribed for service ex juris to or in Bulgaria.

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[172]

The Federal Court of Appeal, Trial Division in Ferguson v. Arctic Transportation Ltd.(supra.), previously cited, there the court was confronted with the same set of circumstances where a defendant attempted ex juris service to the agency of the United States. The question before the Federal Court did not differ greatly, mutandis mutatis, from the present proceeding before the Bar, the same reasoning is applicable. The Respondent believes Ferguson supports his request to set aside any service alleged to have been made by this Defendant (Bulgaria). In Ferguson, His Lordship Mr. Justice Reed, J wrote: "Counsel for the defendants argues that even if service has not been properly completed pursuant to s. 9(3)(c) of the State Immunity Act , it has been effected in accordance with ss. 9(3)(b) and 9(1)(b). Counsel relies upon Federal Court Rule 307 and the Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters . Both Canada and the United States have signed this Convention. Insofar as Federal Court Rule 307 is concerned, while it covers service on a party to a proceeding who is outside of Canada, as subordinate legislation, it could not take precedence over the provision of a statute. Indeed, the rule expressly provides for service in accordance with the Convention on Service Abroad , when service is in a contracting state. I do not find in that Convention , however, provisions governing the service of foreign governments. Its terms are directed to service on private parties. I cannot read it, in conjunction with rule 307, as overriding s. 9(2) of the State Immunity Act , or providing a method of service described in s. 9(1)(b) of the State Immunity Act . I am of the view that the appropriate method of service, in this case, is found in s. 9(2) of that Act. "

[173]

Plaintiffs in action No. S004040 had complied with both s. 9(1)(a)(b) and s. 9(2) of the Immunity Act, that is not the issue in controversy before the Court. It is apparent that the Defendant has filed its appearances and is a part of this proceeding, what is at issue is that the Defendant has repeatedly failed or refused to recognise that courts' rules are "subordinate legislation" and could never "take precedence over the provision of a statute" and that unlike the agency of a foreign state or the state itself, the plaintiffs are private persons within the meaning of the Hague Convention. The "rule" [13(12) Rules of Court] expressly provides for service in accordance with the [Hague] "Convention on Service Abroad". When service is "in a contracting state". There appears to be no case law to the alternative. The Hague Convention and Rule 13(12) must be applied and observed by all the parties to both of the above captioned proceedings when effecting service ex juris. The plaintiffs in both actions have observed and applied both rule and enactment.

[174]

Ex juris plaintiffs - Bulgarian Declarations to Convention - exceptions to method of service and certification of service- Declarations by the Republic of Bulgaria to Hague Convention Articles 6, paragraphs 1 and 2, and Article 10 - Plaintiffs assert the Court should refuse to admit the affidavits of service sworn to by Ms. Roumiana Bidjeva and Mr. Veselin Dimitrov Gogov as invalid certification of service. Respondent argues that these affidavits are inconsistent with Hague Convention declarations of the Defendant and its national law and are inadmissible - The Plaintiffs seek a declaration that they have not been properly served.

[175]

Respondent argues that the purported service should be set aside because it does not comply with Rule 13(12), delivery was not affected in a manner provided for in the place of service and Bulgaria is a party to the Hague Convention so that rules [13(12)] governing provision does apply. Under Rule 13(12) service may only be effected outside British Columbia in a manner provided by the rules for service set down in the Hague Convention when service is in a contracting member.

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[176]

Service of a document is described in Rule 11. This Respondent, received documents under protest. However, he is neither an employee or authorised by any of the other plaintiffs resident in Bulgaria - Tracy and Nicholas who reside in British Columbia require that this Respondent receive service for them in Bulgaria - the interpreter Ms Radulova as appointed by the Bulgarian court is not authorised to accept service. Accordingly, the Respondent is forced to argue that proper notice and service was not effected on the other plaintiffs.

[177]

To be redundant, in the present circumstances any notice or service in Bulgaria under Rule 11is not notice or service at all.

[178]

It seems once again appropriate at this point to quote from the words of His Lordship Reed, J. in Ferguson v. Arctic Trans. (supra.) at §24 : "[24] Accordingly, the application will be dismissed. An extension of time to allow for service….will be granted. While some argument might be made that counsel for the Commission's appearance on the motion constituted a voluntary attornment to the jurisdiction, I understand that appearance to be conditional only - for the purpose of arguing the state immunity and service issues. Accordingly, I do not treat it as a voluntary attornment."

Part IIDefendant/Respondent - Anticipated [179]

The Respondent is forced into the uncomfortable position of anticipating the counsel for the Defendant, a situation forced on him by his absence from the Court. Under no circumstance can the Respondent hope to read the mind of learned counsel, yet no matter how naive this Respondent, he must consider what replica said counsel may propose to the Court and provide some possible answers, no matter how inappropriate the practice. In response to possible arguments the Respondent advances the following.

[180]

General - Practice - Service to addresses of record - Rule 4(Rules) - Natural defence Anticipation of defence required - Respondent prevented from attending to Court Hearing proceeding in absentia of the Respondent or any plaintiffs - A natural defence to the Respondent's arguments may find the Defendant to rely on requirements in Rule 4 subrules (6) to (10) Rules of Court - Respondent argues his status as a ward of the state of Bulgaria and its actions as such pre-empt any argument relying on provisions of Rule 4.

[181]

The Master, in examining the court records in both actions would find the plaintiffs provided an address for service in British Columbia at the time they filed their originating process. That afterwards, as this Factum has reviewed in detail and the affidavit of Ms. Radulova confirms, there were delivered to the Registrar of this court Notices for Change of Address in both proceedings.

[182]

The Defendant and its counsel were obviously aware of the new addresses for service when attempting delivery in Bulgaria of the Appearances and Notices under Rule 65 (Rules) in both these proceedings. Afterwards, counsel for the Defendant and the Defendant Bulgaria received notices by fax and letter again advising counsel in Vancouver as to the proper address and methods for service of the plaintiffs in both proceedings. It can be adduced, from the limited information available to the Respondent, that the Defendant has attempted service to the no longer valid former address for service provided in the originating process. Counsel for the Defendant may well attempt to rely on such attempts as made in the province to convince this Court to place its reliance only on provisions pursuant to Rule 11 (Rules) and not the applicable statues.

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[183]

Should counsel so err, the Respondent relies on and argues that the facts and circumstances under the two cases provide evidence of the plaintiffs compliance with the requirements of Rule 7(b)(ii). Alternatively, the Respondent asks the Court to recall that he, as a Plaintiff in these proceedings alleges to have been left, inter alia, indigent by the Defendant Bulgaria. The Court need not be reminded again that the Respondent/Plaintiff is incarcerated by that Defendant and is as a result a ward of the state of Bulgaria.

[184]

As a ward of the Republic of Bulgaria the proper address for service would be in care of a representative of the Republic of Bulgaria in the province or Canada or alternatively service in care of the designated Central Authority in British Columbia, the Ministry of the Attorney General as authorised by Canada on its declarations to the Hague Convention as to agencies authorised to receive documents to be transmitted abroad.

[185]

Counsel for the Defendant and the Bulgaria may choose to rely on subrule 7(9), that the "address for delivery must be a place located in British Columbia". The respondent argues that such an argument by the Defendant would appear, on the face of it, a further attempt by the Defendant to exploit its advantages as a state and as incarcerator of the Respondent/Plaintiff. The practical circumstances and physical person of the Plaintiff Kapoustin are completely and exclusively under the control and at the disposition of the foreign state defendant.

[186]

The Respondent has had little opportunity to examine all the case law or other authorities on the subject, but it seems reasonable to conclude that the application of natural justice would not consider, under these particular circumstance, as fair and just any argument by counsel for the Defendant, that relied on the plaintiff being required to do something that that defendant, in exercising its power over the plaintiff, has intentionally and practically obstructed and so made impossible for the plaintiff to do. An example is to fix a hearing, provided notice of that hearing and then refuse to permit the opposing party to attend that hearing. In conclusion, it is for the Court to ascertain if this particular set circumstance, unique to these proceedings, meets the common law tests of "fairness and justice."

Chapter 5Evidence Part IPlaintiff/Applicant [187]

The plaintiffs rely on the affidavits of Kapoustin, particularly Vol. 1 and II and that of Mr. Hristov and Ms. Radulova. Reliance is also made on the affidavits of Gogova as to the class proceeding members in S005440 and the affidavit of attorney Lukanov in S004040.

[188]

The plaintiffs further rely on the copies provided in evidence (Vol. I - II) that document the written exchanges between the plaintiffs and the Defendant.

Part IIDefendant/Respondent [189]

The Defendant Bulgaria's evidence surrounding service and attempts at service of documents on the territory of the Republic of Bulgaria are deposed to in the sworn affidavits of service of Mr. Veselin Dimitrov Gogov and Ms. Roumiana Bidjeva, employees of the Defendant.

Part IIIPlaintiffs Dispute Defendant's Evidence of Service - Relief Sought [190]

The Plaintiffs have not received copies of the said affidavits of Gogov or Bidjeva and is puzzled by their inclusion in a Rule 65 (Rules) proceeding's Chambers Index [see: subrules 65(32)(a)]. It is asserted that, for the purposes of these proceedings, the said affidavits are not admissible as proof of service if they do not attest to a "voluntary acceptance" of the documents served or in the alternative are not "Certificates" in the meaning of the Hague Convention and Declarations to it of the Republic of Bulgaria.

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[191]

In the alternative, should the foresaid "affidavits" of Gogov and Bidjeva attest to "voluntary acceptance" or alternatively prove to be "certificates" within the meaning of Hague Convention Article 6 [see: Traxler v. Metzeler Reofem GMBH (2000), BCSC 808, Docket No, C974816 Vancouver], the Respondent asks the Court for an Order that the Defendant provide him and other plaintiffs copies of the "certificates" and the Court give leave to the plaintiffs to file an appropriate responce.

[192]

As a practical matter the Court should provide sufficient time for the parties to obtain an explanation from the new government [Elections June 2001] as to the reason for irregularities of either the affidavits themselves, if they in fact are such or in the alternative the certificates if they prove to be that instead.

Section BDefendant's Applications - Immunity - Jurisdiction Simpliciter - Forma Non Conveniens Chapter 1Positions - Utility Of State Immunity To The Case At Bar Part IDefendant/Applicant [193]

The first argument brought in the applications of the Defendant is that this court is without jurisdiction to hear the plaintiffs' claim as the defendant is a foreign government and protected by state immunity. In order for this argument to succeed, the defendant must bring itself within the ambit of s. 3 of the State Immunity Act as previously cited above.

[194]

It is historically clear that governments and the states they represented had until recently enjoyed "absolute immunity" from adjudication by foreign courts as implied by the Defendant Bulgaria.

[195]

In practice it was generally believed that international law required that sovereign states should not be "embarrassed" by being subjected to the control of a foreign judiciary.

[196]

The position of Counsel for the defendant is that Article 3 of the Immunity Act applies to the case at Bar: "3(1) Except as provided by this Act, a foreign state is immune from the jurisdiction of any court in Canada. "3(2) In any proceedings before a court, the court shall give effect to the immunity conferred on a foreign state by subs. (1) notwithstanding that the state has failed to take any step in the proceedings." [Emphasis Added-Mine]

[197]

From the applications it can be adduced that the Defendant Bulgaria asks the Court to accept that the scope of immunity available to the Defendant before the Courts of Canada as having remained as broad in its scope as that previously available under the "absolute theory" of sovereign immunity.

[198]

The applications suggest this Court recognise such immunity as an absolute right conferred on the Defendant, the inference being that such absolute immunity is the statutory intention of s. 3 of the Act.

[199]

The applications do not identify authorities or authors on the subject of sovereign immunity that might support the defence opinion that the "absolute theory" is to be the "current theory" that requires the Court to be seized by the Defendant's alleged immunity.

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[200]

A reasonable conclusion can be drawn from the applications that the Defendant Bulgaria seeks immunity to escape the jurisdiction of Canadian courts and any damages that may be awarded at trial on the merits of fact and law before a Court in Canada.

[201]

The applications of the Defendant further rely on the provisions under Rules 13(10) and 14(6) Rules of the Court. Rule 13 Application to set aside (10) Application may be made to set aside service of an originating process or other document served outside British Columbia without entering an appearance, and if it appears that service should not have been made outside British Columbia, the court may (a) set aside service of the originating process or other document, and (b) order the person initiating the proceeding to pay the costs of the applicant as special costs. Rule 14 Filing of appearance (6) Where a person served with an originating process has not entered an appearance and alleges that (a) the process is invalid or has expired, (b) the purported service of the process was invalid, or whether or not the person has entered an appearance, alleges that (c) the court has no jurisdiction over him or her in the proceeding or should decline jurisdiction, the person may apply to the court for a declaration to that effect.

[202]

The Court is required by the applications to consider two further questions: (1) does the court have jurisdiction over the defendant in respect of this action ( jurisdiction simpliciter) and (2) if the court has jurisdiction, should it decline jurisdiction in favour of a more appropriate jurisdiction (forum non conveniens)?

[203]

The Defendant Bulgaria requires the Court first decide if it has jurisdiction simpliciter, and if it does, then the second question of whether the Court should exercise a discretion to decline jurisdiction, forum non conveniens. [Respondent suggests: Canadian International Marketing Distributing Ltd. v. Nitsuko Ltd. (1990), 68 D.L.R. (4th) 318 (B.C.C.A.) at 320].

[204]

The Defendant raises the question of jurisdiction forum non conveniens and suggests in its applications to the Court that "applicable principles of international law which clearly indicate that an action of this kind (to the extent that it can be understood) must be advanced before an international tribunal".

[205]

Provided with the applications is the sworn statement of Ms. Maya Dobreva for the Defendant Bulgaria. Dobreva does not deny or otherwise traverse the Plaintiffs material allegations in their law suits, instead Dobreva, on behalf of the Defendant Bulgaria, objects to the juridical forum of British Columbia or for that matter Canada and goes on to suggest to this Court the alternative forum of an "international tribunal" being the competent and more appropriate jurisdiction.

[206]

If any such "international tribunal" actually exits the applications of the Defendant and statement of Dobreva do not name it.

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[207]

Dobreva, in speaking for the Defendant, does not establish to the Court if the Defendant Bulgaria would in fact submit itself to a civil proceeding in another jurisdiction on factual circumstances that the allege tort(s) and breach(es) of contract as having occurred in or are connected to British Columbia and affecting the common law rights of residents and citizens of Canada.

[208]

The applications of the Defendant and statement of Dobreva do not identify to this Court what, if any, advantage or disadvantage the Plaintiffs or Defendant are to expect as distinct from what they might expect in a provincial Court. [Respondent suggests to the Court: Spoliate Maritime Corp. v. Cancellous Ltd. , [1986] 3 All E.R. 843 (H.L.), at 854].

[209]

The Dobreva statement and applications of the Defendant both infer that the plaintiffs in either of the two law suits have jointly or severally failed to establish in their endorsed Writ any real or substantial connection with Bulgaria, and inter alia, the torts and breaches of contract allegedly connected to the province of British Columbia..

[210]

Dobreva provides no evidence to support her affidavit and her "personal knowledge", if any, of the particulars in the law suits. By her own admission Dobreva is relying on the hearsay and third party representations of one Dimitar Tonchev.

[211]

The Dobreva affidavit and application of the Defendant Bulgaria in Supreme Court of British Columbia action No. S004040 are objections to the rights of Plaintiff Kapoustin to sue and do not traverse the material facts alleged. The Defendant raises no other apparent objections to the claims and the rights in law of Plaintiffs Nicholas and Tracy Kapoustin to bring their joint and several allegations and claims against the Defendant Bulgaria.

[212]

The same may be said of the application and evidence provided by the Defendant Bulgaria in Supreme Court of British Columbia action No. S005440. There is no material fact traversed by the affidavit of Dobreva, and the Defendant again demurs to an objection in law and not of fact. No direct objection is raised by the Defendant as to the right in law of the other sub-class members who are resident in or connected somehow to British Columbia to bring their joint and several allegations and claims before a provincial court.

[213]

Dobreva states in both her affidavits that she is unaware of any facts that might connect the Defendant to the province.

[214]

Dobreva fails to make reference in her February 23rd 2001 affidavit of the December 7th 2000 statement of defence and denials of Minster Rousseva [see § Iabove] or for that matter to the fact that the Defendant Bulgaria had been provided a Reply by the Plaintiffs (filed) and, by way of Notice to Admit, a list of all the particulars of material facts and documents that the Plaintiffs intent to rely on at trial[see § IIabove].

[215]

The Defendant and its counsel have filed no additional materials or provided other facts or evidence. The Defendant's applications rely only on the pleadings and evidence of the said Dobreva.

[216]

From what can be understood of the two applications Bulgaria appears to either (1) be claiming "absolute" immunity generally from any action of any character in Canada or (2) Bulgaria claims "restricted" immunity from any civil actions in Canada that it chooses to believe are framed around the criminal proceedings it brought in October of 1995 against the said Michael Kapoustin. To paint every and any civil action having named the Respondent/Plaintiff Kapoustin as a litigant or witness as one connected to the said criminal proceedings is simply to broad a brush and to wide a stroke.

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[217]

The applications of the government of Bulgaria did not illuminate any facts and provides one argument limited to being "…. unaware of any connection between, on the one hand, Mr. Kapoustin's criminal case and the allegations he makes in this action…" [see Dobreva affidavit §5]. As a result, it is can only be inferred that the Defendant Bulgaria relies on the "criminal case" proceedings in Bulgaria to fall within the scope of public acts of sovereign states and therefore immunity in Canada.

Part IIPlaintiff/Respondent [218]

Sovereignty - Incidents of - Immunity - Exceptions - Proceedings relating to Commercial Activities - Section 3 of the State Immunity Act confirmed the immunity of foreign states from the jurisdiction of Canadian courts - The Act also provided for exceptions from that immunity, including s. 5, which excepted a foreign state from immunity in any proceeding relating "to any commercial activity of the foreign state" carried on in or connected to Canada. These proceedings concern the application of the international law doctrine of sovereign immunity, as codified in the State Immunity Act , S.C. 1980-81-8283, c. 95 (now R.S.C. 1985, c. S-18), and relate to agreements and contracts Plaintiffs claim are breached in respect of " commercial activity" of the Republic of Bulgaria in or connected to Canada. Bulgaria claims immunity from the proceedings, and the question ultimately turns on whether the proceedings "relate to any commercial activity" of the Republic of Bulgaria. In Sarafi v. Ship Iran Afzal (1996), 111 F.T.R. 256 (TD) the Federal Court of Canada, Trial Division, found that the defendants did not benefit from state immunity - It was the nature of the activity, and not its purpose in the state's perspective that must be considered in assessing if the state was engaged in commercial activity.

[219]

Sovereignty - Immunity - Exceptions - Death or personal injury -Damage to or loss of property - Section 3 of the State Immunity Act confirmed the immunity of foreign states from the jurisdiction of Canadian courts - The Act also provided for exceptions from that immunity, including s. 6, which excepted a foreign state from immunity in any proceeding relating to, inter alia, any death or personal injury that occurred in Canada These proceedings concern the application of the international law doctrine of sovereign immunity, as codified in the State Immunity Act , S.C. 1980-81-82-83, c. 95 (now R.S.C. 1985, c. S-18), to the personal injury and harm suffered by the Plaintiffs and damage to or the loss of their property in respect of the activities of the Republic of Bulgaria in or connected to Canada. Bulgaria claims immunity from the proceedings, and the question ultimately turns on whether the proceedings relate to any "personal injury" suffered in Canada and "to any damage or loss of property" as a result of the Republic of Bulgaria. The Ontario Court of Appeal [Walker v. Bk. of New York (1994), 69 O.A.C. 153 (CA)] held that "the scope of personal injury covered by s. 6 is not merely physical, but could include mental distress, emotional upset and restriction of liberty" ]

[220]

Bulgaria cannot claim immunity from the jurisdiction of this Court when there is no valid reason disclosed by the facts of this case, why Canadians in Canada should not have the benefit and protection of Canadian law.

[221]

The fact that the defendant is a foreign state has its legal consequences, however that fact alone is no evidence that all activities of a foreign state must be characterised by this Court as jure imperii, or that there cannot exist a direct or vicarious liability of that foreign state for the tortious, negligent or even criminal conduct on the part of its representatives, employees, officials or agencies and instrumentalities when conducting activities on behalf of that foreign state with citizens of Canada, on or beyond the territories of either that foreign state or the province.

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[222]

In the first of these two instances it appears that the Defendant Bulgaria is asserting immunity for no reason other than it being the government of a sovereign state, its reasoning that being a foreign state speaks for itself. It does not speak for itself. The maxim res ipsa loquitur does not apply [see Whitehouse v. Jordan and another, [1980] 1 All E.R. 650 at 652 (C.A.), affirmed [1981] 1 All E.R. 267 (H.L.)]. In Canada the doctrine of res ipsa loquitur no longer applies in any event: Fontaine v. British Columbia (Official Administrator), [1998] 1 S.C.R. 424 (S.C.C.). His Lordship Denning's comments lead to an impression that the trier of the fact should first analyse the issues and determine the question of causation , de jure imperii can be held only if the balance of probabilities hold for state immunity to be invoked.

[223]

The second of these two instance requires this Court to determine whether or not the Defendant Bulgaria is entitled to "restricted immunity", and depends, in this context, on the answers to the following questions. (1) What is the government of Bulgaria's connection to the representations, contracts and commercial activities of its officials, agencies or instrumentalities, government departments and state corporations that conducted transactions with individuals and corporations resident in or connected to British Columbia as enumerated in the plaintiffs evidence? (2) If the activities are connected to the government of Bulgaria can they be characterised as commercial in nature? (3) Can the plaintiffs' claims framed in tort be characterised by their "purpose" and "nature" as acts, "jure gestonies "? (4) Is there a criminal genus to any of the allegations framed in tort? (5) Did the personal injury and damages suffered by Tracy and Nicholas Kapoustin, and Robert and Tatiana Kap occur in British Columbia? (6) Did the various subclasses of plaintiffs suffer property damage or loss in or connected to British Columbia? (7) Is the personal injury and property loss suffered in British Columbia as a direct or vicariously result and consequence of tort or breaches of contract connected to private or commercial activities of representatives, employees, officials, agencies or instrumentalities whose controlling mind is the government of Bulgaria?

[224]

There can be no claim of immunity for governments the like of the Defendant "Peoples Republic of Bulgaria (1949 to 1991)", as it then was and those of other former communist states. At the turn of the century governments had increasingly become involved in the commercial arena. After the WWII and the advance of communist ideology into eastern Europe, caused a rethinking of the doctrine of "absolute immunity" as it become increasingly viewed to be unfair shield for individuals, agencies or instrumentalities abusing the private and criminal law of other nations or when acting for their governments as commercial operators under the umbrella of state ownership or control. It is a historic fact that the Defendant government of Bulgaria has been and remains today still engaged in commercial activities that, on the evidence show to have extended to Canada and the province.

[225]

At the risk of being redundant, the Respondent cannot accept that Bulgaria may rely on the ultimate purpose of one activity, its already more than 6 year "investigation and prosecution " of an alleged crime, that is unrelated to the present claims and hope, in s doing to qualify its officials or agencies breached contracts (commercial activities) and tortious conducts as sovereign acts. These violations of civil and possibly criminal law are alleged by and have had consequences for other plaintiffs, not only this Respondent. It would offend common sense to characterise, inter alia, the tort of slander or libel, public defamation, deceit, fraudulent misrepresentation, conspiracy, attempted extortion and the conversion of the plaintiffs property by employees of a state as public acts, when those same acts, in their extreme sense, can be qualified as ones performed by criminals.

[226]

The United Kingdom and the United States, both adopted the principle of restrictive immunity as the doctrine that governs an impugned act of a foreign state and is to be reviewed in the context of the surrounding circumstances. Canada has adopted the same principle and the Defendant Bulgaria as with all other foreign governments can no longer find it possible to rely only a general public purpose to colour all its subsidiary activities so as to give it immunity from suit.

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[227]

Respondent asserts that any representative, employee, official, agency or instrumentality of the Defendant government serves merely as its alter-ego in, on the one hand those commercial activities connected to the plaintiffs in the province, and on the other hand as the alter-ego having committed what are alleged to be unlawful acts when carrying out their official tasks and when having conspired together to engage in activities to cause and profit from the plaintiffs personal injury and material damages. The Defendant government of Bulgaria having a support role in all these activities and was critical to their success or failure.

[228]

There is no principle of state immunity which exempts a foreign government from the application of Canadian laws when the questioned actions are commercial in nature as defined by the State Immunity Act , are activities that have lead to personal injury or property loss or damage and most certainly no immunity can be considered for individual activities that have a criminal genus.

Chapter 2Doctrine Of Sovereign Immunity Part IAbsolute Immunity [229]

Foreign states have enjoyed "absolute immunity" from domestic courts. This doctrine had, over the years, evolved into one of "restrictive immunity" as foreign states increasingly engaged in commercial activities.

[230]

In England and the United States, as in Canada, legislation has been enacted which codifies the modern doctrine of restrictive immunity and the courts of Canada have often applied the test adopted by some American courts: if the impugned activity of the foreign state is one in which a private person could engage it is not entitled to immunity.

[231]

The doctrine of absolute state immunity was developed early in the history of international law. It had as its object the preservation of the sovereignty of independent states. It protected a foreign state from the processes of the courts of a host state, although not from the application of the law of that host state.

[232]

The concept was derived from principles of comity and reciprocity. It furthered the interests of sovereign states by protecting them from actions initiated by citizens of the host state. The doctrine of absolute state immunity recognised the sovereignty and equality of nation states but at a cost to private citizens. The burden of that cost weighed ever more heavily on private citizens as the commercial activities of nations expanded.

[233]

The unfairness of this burden was recognised and the concept of state immunity was accordingly refined to reflect commercial reality. This was accomplished by recognising a distinction between a foreign government's public acts ( jure imperii ), which require immunity, and private acts ( jure gestionis ), which do not. [See Emanuelli, Commentaire: La Loi sur l'immunité des Etats (1985), 45 R. du B. 81].

Part IIThe Common Law [234]

It might be useful for the respondent to establish before this Court the reasoning relied on as to the common law and after having done so to delve into the specific questions posed by the two cases presently before the bar. The Respondent asks the Court to consider first the common law antecedents of the Canadian State Immunity Act. To this Respondent it has become apparent that the law in this area reveals a consistent pattern of development that appears to point to characterising a state activity only after having appreciated its entire context. The case law on the subject suggests that rigid dichotomies between the "nature" and "purpose" of state activity are not helpful in this analysis.

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[235]

It further seems to the Respondent that the contextual approach as adopted in the majority of decisions is the only reasonable basis of applying the doctrine of "restrictive immunity" . The courts have apparently found attempts in the alternative to be awkward and any antiseptic distillation of a "once-and-for- all" characterisation of the activity in question, to be entirely divorced from its "purpose", as this approach would convert virtually every private or commercial act by an agent of the state into an act jure imperii. However, the converse is also true. Rigid adherence to the "nature" of an act to the exclusion of "purpose" would render innumerable government activities jure gestionis. It appears that neither of these extremes offers an appropriate resolution of the problem for this Court and this is further complicated by the plaintiffs claims framed in tort.

[236]

That being said it would appear to that the Court may well be required in common law to examine the context of the "nature" and "purpose" of each individual act of the Defendant Bulgaria.

[237]

To support the Respondent's reasoning in this Factum it will be necessary at certain intervals to incorporate comparisons of Canada's an the United Kingdoms codification of the common law with the statutory model in the United States.

[238]

The common law responded by developing a theory of "restrictive immunity", this approach, allowed the courts to begin to evaluate the acts of the foreign state in question on the evidence available to them in order to only extend immunity to acts jure imperii, and not to acts jure gestionis.

[239]

In I Congreso del Partido , [1983] A.C. 244 (H.L.) Lord Wilberforce made a formidable statement on the development and current status of the restrictive theory of immunity. His Lordship dissented in part in that case, however the other Law Lords did express their agreement on the general principles Lord Wilberforce explained in support of the new approach and policy to sovereign immunity, at p. 262: "The relevant exception, or limitation, which has been engrafted upon the principle of immunity of states, under the so called 'restrictive theory', arises from the willingness of states to enter into commercial, or other private law, transactions with individuals. It appears to have two main foundations: (a) It is necessary in the interest of justice to individuals having such transactions with states to allow them to bring such transactions before the courts. (b) To require a state to answer a claim based upon such transactions does not involve a challenge to or inquiry into any act of sovereignty or governmental act of that state. It is, in accepted phrases, neither a threat to the dignity of that state, nor any interference with its sovereign functions." [Emphasis Added - Mine]

[240]

The difficulty comes in determining just when a transaction is private, criminal or commercial. Lord Wilberforce acknowledged the case law that stresses that it is the character of the act that is determinative, rather than its purpose. However, he concluded, at p. 263, that the answer must be found through another analysis: "In my opinion this argument, though in itself generally acceptable, burkes, or begs, the essential question, which is 'what is the relevant act?' It assumes that this is the initial entry into a commercial transaction and that this entry irrevocably confers upon later acts a commercial, or private law, character. Essentially it amounts to an assertion 'once a trader always a trader'. But this may be an over-simplification.

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"If a trader is always a trader, a state remains a state and is capable at any time of acts of sovereignty. The question arises, therefore, what is the position where the act upon which the claim is founded is quite outside the commercial, or private law, activity in which the state has engaged, and has the character of an act done jure imperii . The 'restrictive' theory does not and could not deny capability of a state to resort to sovereign or governmental action: it merely asserts that acts done within the trading or commercial activity are not immune. The inquiry still has to be made whether they were within or outside that activity." [Emphasis Added - Mine] [241]

This later passage underscores in the present applications of the Defendant Bulgaria the very point, that it is its activities that are at issue, and these are in the nature of commercial or private acts, and will often possess a hybrid nature -- one public, the other private, this is the reality. Lord Wilberforce did not attempt to surmount the conceptual difficulties inherent in formulating the precise method of how justice of a court are to differentiate between acts jure imperii and acts jure gestionis. Instead Lord Wilberforce opted at p. 267 for a contextual approach,: "The conclusion which emerges is that in considering, under the 'restrictive' theory whether state immunity should be granted or not, the court must consider the whole context in which the claim against the state is made, with a view to deciding whether the relevant act(s) upon which the claim is based, should, in that context, be considered as fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to engage, or whether the relevant act(s) should be considered as having been done outside that area, and within the sphere of governmental or sovereign activity." [Emphasis Added - Mine]

[242]

Certain aspects of the two actions at issue, the plaintiffs allegations and the cause of action against the Defendant Bulgaria are clearly commercial and not imbued with any sovereign attributes, but in others certain aspects of the claims framed in tort represent actions that, by their "nature" and their "purpose", are infused with some sovereign attributes. The issue then becomes whether the effect on the realms of commercial or private or criminal law in Canada is sufficiently strong as to form a "nexus" so that it can truly be said that the proceedings " relate" to some personal injury, loss or damage to property or arising out of commercial activity.

[243]

The Respondent expresses the Plaintiffs' view, that a nexus exists in both the proceedings before the Court and that the effect on commercial activity in or connected to British Columbia is more than incidental and the sovereign attributes of the claims framed in tort are blurred at best, however, their effect on the personal health and lives of the Plaintiffs is not incidental and the long term consequences are significant. Both law suits present issues supported by evidence capable to possibly trigger s. 4 and most certainly the application of s. 5 and s. 6 of the State Immunity Act.

[244]

Canadian case law on the subject appears to have found that what is explicitly stated in the American statute is implicit in Canadian law, "character" is meant to be determined with reference to the "nature" of the act, and not its purpose.

[245]

However, there is disagreement among the courts, and with respect the Respondent finds himself proposing to this Court the reasoning of the opposite camp of jurisprudence that found that by excluding the qualifying language in the American model, Parliament seemed to have intended that "purpose" was to have some place in determining the character of the relevant activity.

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[246]

The utility of "purpose" should not be overlooked by this Court when attempting in characterising the particular activities framed in tort and pose important questions before the Court. What is the "sovereign purpose" of an official, agency or instrumentality that appears to be engaging in as activity, the only possible consequence of which will be to inflict personal injury, physical harm and material loss and damages to an individual or individuals publicly characterised as undesirable?

[247]

On this point it is important to note that American courts have continued to consider the "purpose" of an activity, even in the face of words in their legislation that would seem to invite the contrary position [see: De Sanchez v. Banco Central de Nicaragua (1985), 770 F.2d 1385, the court commented, at p. 1393]: "We recognise that in determining whether an activity is commercial or sovereign, we examine its 'nature' rather than its 'purpose'. We do not interpret this provision, however, to bar us totally from considering the purposes of different types of activities. Indeed, we do not believe that an absolute separation is always possible between the ontology and the teleology of an act. Often, the essence of an act is defined by its purpose -- giftgiving, for example. Unless we can inquire into the purposes of such acts, we cannot determine their nature. Indeed, commercial acts themselves are defined largely by reference to their purpose. What makes these acts commercial is not some ethereal essence inhering in the conduct itself; instead, as Congress recognised, acts are commercial because they are generally engaged in for profit." [Emphasis Added - Mine]

[248]

In Rush-Presbyterian-St. Luke's Medical Centre v. Hellenic Republic (1989), 877 F.2d 574, that court adopted De Sanchez and agreed that "nature" and "purpose" do not delimit "hermetically sealed, separate domains", and that the courts must "confine any consideration of purpose as closely as we can, considering that purpose only so far as is absolutely necessary to define the nature of the act in question" (at pp. 577-578). Such an analysis is required in the proceeding now at Bar.

[249]

In another case the court conceded that the purpose of an act may be relevant in defining its nature [see: Joseph v. Office of Consulate General of Nigeria (1987), 830 F.2d 1018, at p. 1023] and in Rush-Presbyterian , that court reiterated the United States' "private person" test, at p. 578: "In determining the nature of the foreign state's action, an important inquiry is whether a private person could have engaged in similar conduct. If a private person could have engaged in the same type of activity, then the sovereign has presumptively engaged in 'commercial activity'." [Emphasis Added - Mine]

[250]

While adhering to this approach, the court observed a litany of cases conflicted with this approach and demonstrated the difficulty in applying this test in a principled manner, at p. 579, "These cases illustrate that a court faced with a claim of immunity must be sensitive to the particular facts of the case before it".

[251]

The respondent has drawn one simple lesson from the common law and the American experience in the application of a statutory restrictive immunity model: that the proper approach to characterising state activity is to view it in its entire context. This approach requires an examination predominantly of the "nature" of the activity, but its "purpose" can also be relevant, and most certainly must be deemed to be relevant in these proceeding.

[252]

In Emanuelli, Commentaire: La Loi sur l'immunité des Etats (1985), 45 R. du B. 81, at pp. 100-101, at least one Canadian academic suggests that a consideration by the courts as to "purpose" of a states activity to determine its natures has not been excluded by Parliament as a possibility.

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Part IIIStatutory Codification [253]

During the 1970s, several countries moved to codify the common law regarding "restrictive immunity" . The United States passed the Foreign Sovereign Immunities Act of 1976 , the United Kingdom passed its State Immunity Act 1978 , followed by the Canadian State Immunity Act in 1982. All these statutes provide a "personal injury" and "commercial activity" exception to sovereign immunity. The English statute provides a list of specific exceptions, an approach different from that prevailing in North America.

[254]

The relevant provisions of the Canadian State Immunity Act as a codification are in ss. 2 to 6 and focus on the nature and character of the activity in question, just as the common law did. In the United States, a similar model has been adopted, although the definition in that of commercial activity is somewhat different.

Chapter 3The Evolution of State Immunity Part IThe United States [255]

The United States State Department adopted a policy of restrictive immunity in the 1952 "Taft letter", it restricted the doctrine of state immunity to those acts of nations that are governmental in nature and specifically excluded from protection those acts which are commercial in nature.

[256]

In 1976, the United States entrenched this policy by enacting the Foreign Sovereign Immunities Act of 1976 , 28 U.S.C. (" FSIA "). Paragraph 1605 of the FSIA removes sovereign immunity from any action undertaken with respect to " commercial activity" which is defined in a very general way. Since 1976, the American cases dealing with state immunity have turned on the characterization of the questioned activity of the foreign state.

[257]

The United States Foreign Sovereign Immunities Act Of 1976, Pub. L. 94-583, 90 Stat. 2891, 28 U.S.C. " §1603. Definitions "(d) A 'commercial activity' means either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose. " §1604. Immunity of a foreign state from jurisdiction "Subject to existing international agreements to which the United States is a party at the time of enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in ss. 1605 to 1607 of this chapter. " §1605. General exceptions to the jurisdictional immunity of a foreign state "(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case -"(1) explicit or implicit waver of immunity by the foreign state; "(2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States;" "(3) property taken in violation of international law is at issue;

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…… "(5) money damages are sought against a foreign state for personal injury or death, or damage to or loss of property occurring in the United States and caused by a tortious act or omission of that foreign state;" [258]

The American definition of "commercial activity" and "personal injury" is somewhat different from that contained in the Canadian statute.

[259]

In purely commercial cases the American practice bars the courts from considering the purpose of an activity when determining whether it is commercial in nature. Despite the difference in the definition the American cases which considered the scope of "commercial activity" are still of interest.

[260]

A broad test was proposed in Texas Trading and Mill Corp. v. Federal Republic of Nigeria (1981), 647 F.2d 300, at p. 309 to help determine if an government activity was commercial in nature: "if the activity is one in which a private person could engage, it is not entitled to immunity".

[261]

From available case law it appears Canada's courts have adopted this test for its simplicity and ease of application. In the instance case it is the very simplicity of this test that reveals the inherent difficulties that this Court faces in characterising an any activity solely on the basis of its nature, without giving some regard to its purpose. Case law on the subject of characterisation has demonstrated that the nature of the act itself may only become evident when it is viewed in light of the purpose for which it was undertaken.

[262]

This approach is of particularly importance and utility here when attempting to interpret for those activities for which there are claims framed in tort, particularly the personal injury claims for Nicholas and Tatiana. The American law, unlike the Canadian, makes a distinction to include a "tortious act or omission of that foreign state" and so gives the courts direction that certain "sovereign acts" acts may are not to be immune if they are "tortious" or some official act "omission" that results in injury or property loss. The Canadian act leaves it open to this Court to examine "purpose" when determining if the activity is actionable in Canada.

[263]

The United States Seventh Circuit Court of Appeals devised a more flexible approach in Segni v. Commercial Office of Spain (1987), 835 F.2d 160. Wood, J., for the court, acknowledged the problems which can ensue if a rigid line is drawn between the nature and purpose of an act because of the frequent overlap between the two concepts, finding it was impossible for the court to engage in an enquiry into the nature of an activity without considering the specific goal of the undertaking. He held that the court should also consider the nature of the activities carried.

[264]

Wood, J., concluded that while the statutory definition in the FSIA had bared the court from classifying an act as sovereign in nature solely on the basis of its underlying purpose, the court may nonetheless consider the immediate aim or purpose of the specific activity which gives rise to the dispute in question. This has been accepted by other American Courts. It was cited in Rush-Presbyterian-St. Luke's Medical Center v. Hellenic Republic (1988), 690 F. Supp. 682; Brewer v. Socialist People's Republic of Iraq (1989), 890 F.2d 97, and, in Weltover Inc. v. Republic of Argentina (1991), 941 F.2d 145, demonstrating that the Segni test cited above (Sengi, supra) is a workable and practical one that has been of great assistance to the American Courts.

Part IIThe United Kingdom [265]

It appears that the courts in the United Kingdom accepted that the concept of "restrictive immunity" prior to legislation replacing that of "absolute immunity".

[266]

United Kingdom State Immunity Act 1978, (U.K.), c. 33

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"1(1) A State is immune from the jurisdiction of the courts of the United Kingdom except as provided in the following provisions of this Part of this Act. "3(1) A State is not immune as respects proceedings relating to -(a) a commercial transaction entered into by the State; or (b) an obligation of the State which by virtue of a contract (whether a commercial transaction or not) fails to be performed wholly or partly in the United Kingdom. ..... "3(3) In this section 'commercial transaction' means -(a) any contract for the supply of goods or services; (b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and (c) any other transaction or activity ( whether of a commercial, industrial, financial, professional or other similar character) into which a State enters or in which it engages otherwise than in the exercise of sovereign authority; "4(2) Subject to subs. (3) and (4) below, this section does not apply if -(a) at the time when the proceedings are brought the individual is a national of the State concerned; or (b) at the time when the contract was made the individual was neither a national of the United Kingdom nor habitually resident there; or (c) the parties to the contract have otherwise agreed in writing." [267]

In Trendtex Trading Corp. v. Central Bank of Nigeria , [1977] Q.B. 529, the Court of Appeal affirmed the distinction between public acts of states, which are entitled to immunity, and private acts, which are not. Later, the House of Lords approved the restriction of state immunity to public acts in I Congreso del Partido , [1983] A.C. 244. Although this case was heard after Parliament had legislated a restrictive immunity standard in the State Immunity Act 1978 , 1978 (U.K.), c. 33, the dispute had arisen before the introduction of the Act . In this judgment, the House of Lords favoured a contextual approach to defining those private acts which do not attract state immunity. Lord Wilberforce concluded, at p. 267, that: "... in considering, under the 'restrictive' theory whether state immunity should be granted or not, the court must consider the whole context in which the claim against the state is made, with a view to deciding whether the relevant act(s) upon which the claim is based, should, in that context, be considered as fairly within an area of activity, trading or commercial, or otherwise of a private law character, in which the state has chosen to engage, or whether the relevant act(s) should be considered as having been done outside that area, and within the sphere of governmental or sovereign activity." [Emphasis Added - Mine]

Part IIICanada

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[268]

In Canada the evolution of the doctrine of state immunity in the courts was not as clearcut. In Gouvernement de la République démocratique du Congo c. Venne , [1971] S.C.R. 997, the court considered a dispute between the Congo and a Canadian architect who had been hired to design that nation's pavilion for Expo '67 in Montreal. The Quebec Court of Appeal, [1969] Que. Q.B. 818, applied the doctrine of "restrictive immunity" to the case. It found the concept of absolute immunity: "outdated and inapplicable to today's conditions" (at p. 827). The decision was appealed to the Federal Court of Appeal and. Ritchie, J., writing for the majority characterized the Congo's activity as public in nature. As a result, he did not find it necessary to determine whether an absolute or restrictive immunity should prevail in Canada. In his view, on either standard, the Congo could claim state immunity from the architect's suit. Laskin, J. (as he then was), dissented. He held that the principle of "restrictive immunity" should govern the approach of the courts. He explained: "Affirmatively, there is the simple matter of justice to a plaintiff; there is the reasonableness of recognising equal accessibility to domestic courts by those engaged in transnational activities, although one of the parties to a transaction may be a foreign State or an agency thereof; there is the promotion of international legal order by making certain disputes which involve a foreign State amenable to judicial processes, even though they be domestic; and, of course, the expansion of the range of activities and services in which the various States today are engaged has blurred the distinction between governmental and nongovernmental functions or acts (or between so-called public and private domains of activity), so as to make it unjust to rely on status alone to determine immunity from the consequences of State action." (At p. 1020). [Emphasis Added - Mine]

[269]

In Zodiac International Products Inc. v. Polish People's Republic , [1977] C.A. 366, Kaufman, J.A., relied upon American cases and academic commentary to support the proposition that the doctrine of "restrictive immunity" had superseded that of "absolute immunity". He observed, at p. 371, that:

[270]

"Crown corporations abound, governments are freely (and frequently) engaged in business, and their transactions often reach the market place, both at home and abroad. Given these circumstances -- and I now speak of commercial matters only -- a plea based on immunity is out of place and therefore unacceptable."

[271]

In Amanat Khan v. Fredson Travel Inc. (No. 2) (1982), 36 O.R.(2d) 17, Steele, J., acknowledged the compelling strength of a position which favoured "restrictive immunity" rather than "absolute immunity". He referred to the decisions of the Quebec Court of Appeal and to English cases favouring this policy. He noted the inconclusive treatment of the matter by this court in Gouvernement de la République démocratique du Congo , supra, and observed that while he was left in some doubt, he was of the view that the doctrine of sovereign immunity had been abandoned in commercial matters in in Ontario.

[272]

The passage of the State Immunity Act made it clear that foreign states could no longer enjoy "absolute immunity" from suit in Canadian court proceedings. Section 3 provides that a foreign state is immune from the jurisdiction of any court in Canada except as provided in the Act . Section 5 provides that a foreign state is not to be immune from court proceedings in Canada that relate to any commercial activity of that foreign state. "Commercial activity" is defined in s. 2 of the Act as "any particular transaction, act or conduct or any regular course of conduct that by reason of its nature is of a commercial character". The determination of the scope of the terms "commercial activity" is crucial to the resolution of this appeal. Section 6 provides that a foreign state is not to be immune from court proceeding in Canada that relate to personal injury, damage or loss of property in Canada.

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[273]

Before the Immunity Act was passed it was considered by the Standing Senate Committee on Legal and Constitutional Affairs. B.L. Strayer, then Assistant Deputy Minister, Public Law, in answering the questions of senators, referred to the American and British statutes. He noted that the United Kingdom legislation was drafted to implement a European convention on this issue which required an extensive definition of "commercial activity". He explained that the drafters of the Canadian Act chose to follow the American model of providing a very broad definition of "commercial activity". This was done in order to permit the courts to develop an interpretation of its scope on a "case by case basis". He left open the question as to the weight which courts might attach to the purpose of an activity when determining whether it was commercial in nature. [See: Proceedings of the Senate Standing Committee on Legal and Constitutional Affairs , Issue No. 10, March 19, 1981, at pp. 10: 7-8]. Other Justice officials appearing as witnesses before the Senate Committee frequently referred to the American and British legislation and to the cases which dealt with that legislation. The drafters of the legislation were thus well aware of the American statute and cases when they enacted the definition of commercial activity.

Part IVConclusion [274]

With the aforesaid history and lessons in mind, the Respondent now turns to the specific questions facing this Court in the present cases: first, what is the "nature" of the activity in question -- i.e., do the Defendant Bulgaria's transactions and contracts with certain of the plaintiffs in or connected to British Columbia constitute commercial activity, and second, are the claims framed in tort - have a "purpose" that can be "related" to a legitimate sovereign activity?

Chapter 4Assertions Part IWaiving Immunity Under s. 4 of the Immunity Act [275]

This question of sovereign immunity requires a close examination of the conduct of the Defendant after having voluntarily accepted service in both Supreme Court actions. The plaintiffs rely on the national legislation of the Republic of Bulgaria and its declarations to the Hague Convention and the affidavit evidence.

[276]

The Respondent asserts it is apparent from the extensive exchanges of documents and correspondence among the litigants that the Defendant Bulgaria accepted service in a manner agreed to by it and had not remained silent or idle, taking more than the needed one "step in the proceeding before the Court". Has the Defendant therefor waived its immunity as a result? "State Immunity Act Immunity Waived 4. (1) A foreign state is not immune from the jurisdiction of a court if the state waives the immunity conferred by subsection 3(1) by submitting to the jurisdiction of the court in accordance with subsection (2) or (4). State submits to jurisdiction (2) In any proceedings before a court, a foreign state submits to the jurisdiction of the court where it (a) explicitly submits to the jurisdiction of the court by written agreement or otherwise either before or after the proceedings commence; (b) initiates the proceedings in the court; or

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(c) intervenes or takes any step in the proceedings before the court. [Emphasis Added-Mine] Exception (3) Paragraph (2)(c) does not apply to (a) any intervention or step taken by a foreign state in proceedings before a court for the purpose of claiming immunity from the jurisdiction of the court; or (b) any step taken by a foreign state in ignorance of facts entitling it to immunity if those facts could not reasonably have been ascertained before the step was taken and immunity is claimed as soon as reasonably practicable after they are ascertained. Appeal and review (5) Where, in any proceedings before a court, a foreign state submits to the jurisdiction of the court in accordance with subsection (2) or (4), that submission is deemed to be a submission by the state to the jurisdiction of such one or more courts by which those proceedings may, in whole or in part, subsequently be considered on appeal or in the exercise of supervisory jurisdiction. 1980-81-82-83, c. 95, s. 4. [277]

The Defendant's Ministry of Justice has provided a defence, albeit not in proper form, however, its purpose leaves little to the imagination and is sufficiently clear to be understood for what this December 7th, 2000 document represents, a defence. By providing answers in defence to the endorsed Writs and statements of claim shows it as responding to and taking part , pro se, in these two proceedings.

[278]

This Defendant also, "otherwise either before or after the proceedings" had taken steps submitting to the jurisdiction of this Court, having done so in the most obvious way, by choosing to observe the "Lex loci delecti" of British Columbia as opposed to the Defendant's "Lex fori" .

[279]

It is apparent from the Immunity Act that the appearances filed by the Defendant Bulgaria are not subject to controversy, and that is not the issue here.

[280]

However, from the available evidence it becomes clear that the appearance filed with this Court were belated and only as an afterthought. By December 2000 the Defendant Bulgaria was already aware, directly by the service made and indirectly from the numerous press and television reports concerning the proceeding against it in British Columbia as set out in an the endorsed ex juris Writs and the Statements of Claim. The Court may take notice of these facts when it considers question of waiving immunity.

[281]

A collateral observation of attornment are the affidavits of Gogov and Bidjeva, they make obvious that the Defendant had ordered its Central Authority for the Republic of Bulgaria, the Ministry of Justice, to observe, not its Declarations on the Hague Convention or Bulgarian national law, but instead the provisions of the British Columbia Rules of Court for service in the province. This was is considered at great length later in this Factum [see: Respondent's Rule 13(10) Application].

[282]

The Respondent asserts that, where a state Defendant had chosen to subordinate itself to legislation of the province and the requirements of the Provincial Courts are seen by the Defendant Bulgaria to supersede its national law and international treaties, then that foreign state agency or instrumentality responsible has, as such, ceded the immunity of its Government in the matters before the foreign court. Bulgaria has "implicitly" provided the answer to the question, and that the answer is in the affirmative.

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[283]

This is fact that strongly implies that the Defendant Bulgaria has knowingly and willingly submitted to the jurisdiction and rules of this Court. A conclusion supported by the affidavits of service provided by Bidjeva and Gogov. This "method" and "proof" of service are inconsistent with Declarations of the Republic of Bulgaria on Article 6, paragraphs 1 and 2 of the Hague Convention as previously cited. Neither Bidjeva or Gogov are authorised by the legislature of the Republic of Bulgaria to provide certificates of service.

[284]

The very submissions of these affidavits to this Court is concrete, not abstract proof that the Central Authority for the Republic of Bulgaria has set aside its own national legislation and chosen instead to submit to the legislation and practices of Canada's courts, despite the conflict of that legislation and judicial practice with those of the Republic of Bulgaria.

[285]

The Respondent notes that the Defendant Bulgaria attempts to set aside the plaintiffs service ex juris by employing the very rule (Rule 13) that Bulgaria has so loosely interpreted and itself violated. Early in this Factum and in these proceedings the Respondent made application to this Court for declarations that service ex juris by the Defendant was inconsistent with the requirements of Canadian statutory law found in the Hague Convention. An affirmative answer to the plaintiffs application would dispose of this hearing pending proper service, an answer in the alternative - that the Hague Convention needn't have been observed. Should be Court so decide and accept the Defendant as an exception to the Hague Convention, the this manner of service abroad would have provincial court rules displaced Bulgarian national law and international treaty. As such, not only will it places the Defendant in default of appearance to the endorsed Writs in both proceedings upto and including February 15th 2001, but would as well raise issues of the December 2000 statement of defence, the plaintiffs Reply and the Notices to Admit, and such issues would as a result of such a decision find the Defendant Bulgaria to have joined the issues and the possibility for trial to be fixed.

[286]

Defendant Bulgaria later retaining legal counsel after the fact of its default would not alter the fact of that default or the fact of its submission to this Courts rules respecting service.

[287]

It is those nature and character of the steps taken by Bulgaria that this Court must assess when answering the question: Has the Defendant somehow waived its immunity by submitting to the legislation of the province and rules of this court?

[288]

The Respondent acknowledges and does not question that the present applications by the Republic of Bulgaria in and of themselves are contemplated by s. 4(3) of the Act and do not materialise the waiving of sovereign immunity.

[289]

What is suggested to the Court is that the Defendant waived its sovereign immunity as contemplated by s. 4(2) of the Immunity Act in the other steps it has taken in these proceedings, and particularly when ignoring its own statutory law respecting service of judicial and extra-judicial documents. The Respond asserts that the submission to the jurisdiction of the Court is, if not "explicit submission" at least an "implied submission" evidenced by the Defendant's numerous steps as previously enumerated in his Rule 13(10) application in this Factum and as to be found in his affidavit (Kapoustin No. 15) Volumes I and II.

[290]

Given the language of s. 4(2)(a) any written waiver must be clear and unequivocal, the Defendant, in a written agreement must explicitly submit to state to the jurisdiction of the court. Respondent argues that the various steps and exchanges between the plaintiffs and the Defendant are material facts that strongly suggest the Defendant Bulgaria knew of its immunity under international law and consciously waived that immunity. As a result the Defendant can not longer plead that immunity.

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[291]

Should this Court find that the Respondents argument insufficient and that the Defendant's actions subsequent to the proceedings commencement do not constitute an implied waiver of immunity within the meaning of s. 4(2)(a) of the Immunity Act , then there remains at issue before the Court the "commercial activity" and "personal injury and Property Loss" exceptions.

Part IICommercial Activities, s. 2 and s. 5 of the Immunity Act [292]

At the crux of both actions is a proper interpretation of s. 5 of the State Immunity Act . Plaintiffs assert several provisions of the Act to establish jurisdiction over the Republic of Bulgaria. The Respondent concerns himself in this section with examining the definition of "commercial activity" in s. 2, and this raises the two basic questions. First, what is the "nature" of the activity in question ? Second, are the proceedings in this case "related" to that activity? The two questions are, of course, interrelated, and neither can be answered in absolute terms.

[293]

Respondents asks the Court to turn to the "commercial activity" issue as particularly relied on by the Plaintiffs in both law suits. The common law on state immunity has established a state is not immune from the jurisdiction of Canada's courts if engaged in commercial activity within the meaning of s. 2 of the Act. "2. In this Act, 'commercial activity' means any particular transaction, act or conduct or any regular course of conduct that by reason of its nature is of a commercial character;

[294]

An affirmative answer to this question would bar the Republic of Bulgaria's from its claim of immunity. Commercial activity 5. A foreign state is not immune from the jurisdiction of a court in any proceedings that relate to any commercial activity of the foreign state. [Emphasis Added - Mine] 1980-81-82-83, c. 95, s. 5.

[295]

The Canadian definition of commercial activity differs from the American in that it does not explicitly bar a consideration of the purpose of an activity as does the American statute. Nonetheless, the Federal Court of Appeal found that a bar against the consideration of the purpose of an activity was implicit in the Canadian version although not explicit.

[296]

According to available case law, the drafters of the Canadian Act particular wording of the American legislation and may have intentionally. In not prohibiting the consideration of the purpose drafters avoided an overly narrow interpretation of the definition, Trading, supra. test.

[297]

How then should the Canadian definition be construed? It appears to place paramount importance on the nature of the activity. The Respondent takes the literature and case law to infer that to identify this "nature" or "quality" of an activity, the Court should have regard to the context in which the activity took place.

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were aware of the departed from it of an activity, the such as the Texas

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[298]

As previously discussed nature and purpose are interrelated, and it appears impossible to determine the former without considering the latter. The definition of "commercial activity" in the Act precludes consideration of its purpose and in a circuitous fashion, defines "commercial activity" as conduct that "by reason of its nature is of a commercial character". In many cases, it may be unnecessary to delve into metaphysical distinctions between the ontology and teleology of the activity in question. However, if consideration of purpose is helpful in determining the nature of an activity, then such considerations should be and are allowed under the Act . Further, when an activity is multifaceted in nature (as in the instant case) consideration of its purpose will assist in determining which facets are truly "related" to the proceedings in issue.

[299]

In determining the nature of the activity in question, it is useful to begin by acknowledging that commercial relationship with the Defendant Bulgaria was a multifaceted one. It is simply not valid to isolate one aspect of this activity and label it as either "sovereign" or "commercial" in nature. A better approach is to determine which aspects of the activity are relevant to the proceedings in issue, and then to assess the impact of the proceedings on these attributes as a whole.

[300]

This aspect carries with it a range of rights and obligations that normally attach to a contract. For LifeChoice et. al, as exclusive distributors and joint venture partners, for the Kapoustins and other individual plaintiffs there is the providing money and assets to go into projects that relied on Bulgarian government institutions and employees. These rights include the right to not have the contracts wrongfully terminated, etc., and the obligations of the Bulgarian Government, its officials and institutions, that include diligence, and honesty. These attributes of the relationship will fall at various points along a spectrum between purely "sovereign" and "commercial" acts.

[301]

Section 5 of the State Immunity Act requires that the proceedings in question relate to the activity at issue. It is not enough that the proceedings merely "touch on" or "incidentally affect" the plaintiffs in or connected to the province. Clearly, acceptance of such a minimal requirement would broaden the "commercial activity" exception to the point of depriving sovereign immunity of any meaning and is equivalent to the "once a trader, always a trader" approach rejected by Lord Wilberforce in I Congreso.

[302]

Instead, the entire context of the activity must be considered. In this regard, it is not enough to take the contracts in isolation, and decide that, say tort proceedings will have some bearing on these contracts. A more substantial connection is needed. Of relevance is the competing nexus between the proceedings and the sovereign aspects of some of the activity. Finally, at this stage of the analysis, it will again be useful to consider the purpose of the activity in question.

[303]

It seems, that in order to do that, the Court will find it necessary to consider the immediate purpose of the commercial transactions and contracts, then the later actions taken by the foreign state and its employees.

[304]

This approach fosters the goal of reasonably restricting state immunity by looking beyond the ultimate purpose of the foreign state's action, which will almost always be public, while continuing to protect by immunity the truly sovereign acts of states from domestic court proceedings.

[305]

This way the Court is not unduly restricted in classifying an activity according to its nature by an unnecessarily narrow scope of inquiry. This contextual approach complies with the definition of commercial activity as considered by the Canadian statute means retaining the nature of the activity as the focus of the decision. On the other hand, it avoids the problems caused by attempting to treat the nature and purpose of an activity as completely separate and discrete inquiries.

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[306]

I turn now to several collateral points which were raised in earlier argument. First, it is urged this court to adopt the American "private person" test as a simple means of distinguishing between acts jure imperii and acts jure gestionis . I adverted to this test earlier in my analysis of the common law and the American statute and dare to ask the Court adopt the reservations regarding this test expressed by Lord Wilberforce in I Congreso , and by Iacobucci, C.J., in the court below. The test was developed in the "trading cases" and is a useful analytical tool in that context [see: Trendtex Trading Corp. v. Central Bank of Nigeria , [1977] Q.B. 529 (C.A.), and Texas Trading v. Nigeria , supra], it may be of some utility in the present case when examining the causes of action for claims framed in tort.

[307]

The Respondent recalls that Parliament chose to follow the American model for codification of the rules regarding the restrictive theory of sovereign immunity, in that both Canada and the United States define "commercial activity" in a general fashion, leaving it to the courts to develop a workable definition. This model can be contrasted with the English State Immunity Act 1978 , 1978 (U.K.), c. 33.

[308]

Because of the paucity of Canadian judicial authority on the interpretation of the State Immunity Act , and because it was patterned after the American model, the Respondent considered it useful to turn to American authority for some guidance and to the relevant provision I previously cited from in the American Foreign Sovereign Immunities Act of 1976 , Pub. L. 94-583, 90 Stat. 2891, 28 U.S.C., for the purpose of this particular analysis I make reference to §1603(d): "(d) A 'commercial activity' means either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose ."

[309]

The bulk of American jurisprudence deals with pure commercial activities of foreign states; see, for example, State Bank of India v. N.L.R.B. (1986), 808 F.2d 526, cert. denied (1987), 483 U.S. 1005.

[310]

The Respondent found it of assistance in interpreting this provision, the following statement of the legislative purpose of the U.S. House of Representatives Judiciary Committee, issued prior to the enactment of the American Sovereign Immunities Act (reprinted in [1976] U.S. Cong. & Admin. News 6604): "(d) Commercial activity . Paragraph (c) of s. 1603 defines the term 'commercial activity' as including a broad spectrum of endeavour, from an individual commercial transaction or act to a regular course of commercial conduct. A 'regular course of commercial conduct' includes the carrying on of a commercial enterprise such as a mineral extraction company, an airline or a state trading corporation. Certainly, if an activity is customarily carried on for profit, its commercial nature could readily be assumed. At the other end of the spectrum, a single contract, if of the same character as a contract which might be made by a private person, could constitute a 'particular transaction or act'. "As the definition indicates, the fact that goods or services to be procured through a contract are to be used for a public purpose is irrelevant: it is the essentially commercial nature of an activity or transaction that is critical. Thus, a contract by a foreign government to buy provisions or equipment for its armed forces or to construct a government building constitutes a commercial activity. The same would be true of a contract to make repairs on an embassy building. Such contracts should be considered to be commercial contracts, even if their ultimate object is to further a public function .

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"The courts would have a great deal of latitude in determining what is a 'commercial activity' for purposes of this bill. It has seemed unwise to attempt an excessively precise definition of this term, even if that were practicable. Activities such as a foreign government's sale of a service or a product, its leasing of property, its borrowing of money, its employment or engagement of labourers, clerical staff or public relations or marketing agents , or its investment in a security of an American corporation, would be among those included within the definition ." [311]

A leading American case on "commercial activity" was Texas Trading and Mill Corp. v. Federal Republic of Nigeria (1981), 647 F.2d 300. Here the court adopted the so-called "private person" test when applying the exception at p. 309: " ... if the activity is one in which a private person could engage, it is not entitled to immunity".

[312]

Applying that same test to two instant cases, it can reasonably be concluded that if the same facts had presented themselves in the United States, inter alia the agreements to conduct research and development of a British Columbia scientific property, the granting of a license to distribute in and through British Columbia the pharmaceutical products of the Defendant, the delivery by Plaintiffs of their technological properties and machinery for exploitation by the Defendant, would have been described as a commercial activity, because the such an activity can be performed by a private party.

[313]

The Plaintiffs have adopted this public-private dichotomy in their interpretation of s. 2 of Canada's State Immunity Act , having concluding that activities of the Defendant with the Plaintiffs were private acts that fall within the "commercial activity" exception of the Canadian legislation.

[314]

Therefore two questions arise and must be answered by the Court. Is the government of Bulgaria's manufacture of pharmaceuticals and their distribution, licensing and export a commercial activity within the meaning of s. 2 of the Immunity Act? A finding in the affirmative requires another answer. Do the numerous licensing agreements, contracts, transactions in goods and services of the Defendant with the plaintiffs, fall within the ambit of s. 5 of the Immunity Act?

[315]

The foresaid legislative history clearly suggests that the Defendant's activities with the Plaintiffs, its agreements, contracts and other representations to the Plaintiffs and third parties connected to them in the province as related to the activities being considered by this Court would all fall within the "commercial activity" exception in the American statute. Conclusions

[316]

The evidence of Lukanov, Gogova and the Plaintiff Kapoustin prove that the Defendant government of the Republic of Bulgaria has been involved in the commercial activity of providing research and development services, production facilities, warehousing, distribution and licensing for export of pharmaceutical products that said government manufactured for profit. The Defendant Bulgaria extended its commercial activity into the province, Canada and elsewhere through these agreements and contracts with the Plaintiffs.

[317]

The evidence provided in both law suits makes reference to oral or written agreements completed or to be completed in the province of British Columbia and the licensing of products to be sold and delivered to the province or otherwise acted on by the Defendant. This commercial activity of the Defendant government of Bulgaria with the Plaintiffs was organised and orchestrated by the Defendant in Canada "through its organs or agencies, including persons, representatives, subordinate organs, instrumentalities, corporations and government departments of which the" Defendant government is composed. In all instances the Plaintiffs and buyers in British Columbia and elsewhere relied on agreements and contracts with each such person, representative, and instrumentality as being "an integral part of the state and its machinery of government".

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[318]

The evidence provided in affidavits and documents, particular Volumes I and II of Affidavit No. 15 of this Respondent (Kapoustin) provided in these two law suits is an adequate and comprehensive exposition of the all transactions, oral and written agreements, contracts and other facts material to the Courts assessment of the Plaintiffs' claims and the Defendant's immunity, if any.

[319]

What is now before the Court provides a strong prima facie case on that evidence to have the Court find the Defendant Bulgaria falling within this exception to sovereign immunity, and thus making the immunity claim of the Defendant, in both applications, inappropriate.

Part IIIPersonal Injury and Property damage, s. 6 of the Immunity Act Claims Framed In Tort [320]

As stated earlier, s. 3(1) of the Immunity Act confirms the general immunity of foreign states from the jurisdiction of courts in Canada; however, it provides for exceptions from that immunity as set out in the Immunity Act .

[321]

Sect. 6 raises different from s. 5 although many of the same principal of interpretation might be applied, and the definition in s.2 of "commercial activity" is not mutually exclusive to s. 5. It can be seen to form a part of the s. 6(b) exception to " damage to or loss of property" as might occur during a "commercial activity".

[322]

The respondent argues, that s. 6(a) of the Act excepts the Defendant Bulgaria from sovereign immunity because the proceedings relate to personal injury and s. 6(b) to damage or loss of property connected to a commercial activity in British Columbia, Section 6 reads: "6. A foreign state is not immune from the jurisdiction of a court in any proceedings that relate to (a) any death or personal injury, or (b) any damage to or loss of property that occurs in Canada. Emphasis Added 1980-81-82-83, c. 95, s. 6."

[323]

If we recall Ferguson v Arctic supra, it will be remember in that case that the court was considering a personal injury connected to the commercial activity exception. However, the consequences leading to an s. 6 exception carry personal consequences for the injured party. The question becomes: Does the Immunity Act afford sovereign immunity to the Bulgarian Government in the case of the personal injuries suffered by the Kapoustins and Kaps in British Columbia (Action No. S004040)? If so to what extend is that injury actionable in Canada? A further question arises. Does s. 6 only apply in situations where the foreign state is performing private rather than public acts -- and so continues the common law distinction between jure gestionis and jure imperii?

[324]

The Immunity Act's s. 6 exceptions do not appear to exist at common law and the reasons of La Forest, J., in the Supreme Court of Canada decision in Reference Re Canada Labour Code and State Immunity Act (Can.) , [1992] 2 S.C.R. 50; 137 N.R. 81, illuminated this problem at p. 73: "I view the Canadian State Immunity Act as a codification that is intended to clarify and continue the theory of restrictive immunity, rather than to alter its substance. The relevant provisions of the Act , ss. 2 and 5, focus on the nature and character of the activity in question, just as the common law did ..."

[325]

Some states when confronted with the Act's s. 6 exception have applied the first sentence of this quotation, and argue that the Act as a whole was not intended to alter the common law and that, therefore, the excepted jurisdiction in s. 6 only applies when the bodily injury involved results from a private act of the foreign state, and not from a public one.

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[326]

After pondering on the quotation from La Forest, J.'s, it seems that the broad statement made in the first sentence is qualified by His Lordship in the second sentence and that he was referring to the restrictive nature of the immunity as codified in s. 5 of the Act.

[327]

The exceptions in s. 6 do not appear available at common law in this jurisdiction, and its difficult to see how they could represent, therefore, a codification of the common law.

[328]

The position of the Respondent is that the scope of a personal injury as covered by s. 6 is not merely physical, but could include mental distress, emotional upset, and a restriction of liberty.

[329]

However, it is necessary for the Court to first accept that the alleged injuries to Tracy and Nicholas Kapoustin, and Tatiana and Robert Kap, the latter seeking to be joined in this case, have occurred in Canada, as is required by s. 6. And that as a consequence the Defendant does not enjoy the protection of s. 3 of the Act.

[330]

Some bases for damage awards turn on matters that are very real but have no actual "financial" or pecuniary aspect. The most obvious example is damages for the pain and suffering of the Plaintiffs in action No. S004040. The pain and suffering are real enough, but the idea that these losses create a loss calculable in money terms as a financial or pecuniary loss is fictive.

[331]

The Respondent acknowledges that a distinction may be made respecting those heads of damages that are very personal to the victim, especially an award for pain and suffering. That award does not speak to those in the pleadings that seek to replace lost property but is rather to offer some sense of consolation and retributive justice to the victim. This explains reliance on the exception in s. 6(a) of the Immunity Act as presently under review by this Court, but not its extension to the loss of property and the exception in s. 6(b), particularly its connection to s. 5 of the Immunity Act as also under review by this Court.

[332]

The Respondent views, the loss by the 8 year old Plaintiff Nicholas or for that matter all the plaintiffs in S004040 at different times, of their individual ability to earn a livelihood, this is not only real but palpable and can be valued in commercial terms. Indeed, Judson, J., in Ontario Minister of Highways v. Jennings , [1966] S.C.R. 532, at 546, described the ability to earn a living as a "capital asset". The conception of this ability as intangible property helped drive the Canadian decision to award damages for its loss. [see: Andrews et al. v. Grand & Toy (Alberta) Ltd. et al. , [1978] 2 S.C.R. 229; 19 N.R. 50; 8 A.R. 182; [1978] 1 W.W.R. 577; 83 D.L.R.(3d) 452. In sum the Respondent agrees with Lord Scarman when, in Pickett v. British Rail Engineering , [1979] 1 All E.R. 774 (H.L.) at 798, he said: "Whether a man's ambition be to build up a fortune, to provide for his family, or to spend his money on good causes or merely a pleasurable existence, loss of the means to do so is a genuine financial loss."

[333]

The Respondent argues that his interpretation of the action in any claim that is notional or fictive (e.g. punitive and exemplary damages) or that is for non-pecuniary loss is consistent with that expressed in James Estate v. Rentz (1986), 69 A.R. 198; 27 D.L.R.(4th) 724 (C.A.). and the courts making a distinction between "quantified economic loss" and general damages. Other values also underpin tort law, as explained by Professor Klar in his work Tort Law (Carswell) from p. 10., such as the other socialpolicy choices available to the legislature.

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[334]

The plaintiffs are not required to prove that the future event (lost income potential) will occur, it requires only that they establish some reasonable chance that it may occur, and any award is discounted by the weakness of the chance. The law in this regard seems is settled at least in the context of assessment of damages for future events and at least in Alberta. B.P.I. Resources Ltd. v. Merrill Lynch Canada Inc. and Anderson (1989), 95 A.R. 211 (C.A.).[in additions see: Steenblok v. Funk (1990), 46 B.C.L.R.(2d) 133 (C.A.), leave to appeal refused [1991] 1 S.C.R. ix; Gerula v. Flores (1995), 83 O.A.C. 128; 126 D.L.R.(4th) 506 (C.A.), and K.G. Engelhart, Proof of Future Events: In support of the Simple Probability Burden of Proof (1987,) 8 The Advocates Quarterly 163].

[335]

The questions to be decided at trial are whether the torts alleged by the plaintiffs provided one or more contributing factors to the personal and physical injuries suffered by Nicholas and Tatiana and to the economic losses of all the plaintiffs.

[336]

The House of Lords state the following in Bennington Castings Ltd. v. Wardlaw, [1956] All E.R. 615: "A contributing factor is material if it falls outside the de minimus range.", a conclusion of the law approved by the British Columbia Supreme Court in Campbell v. Khan (1997), 42 B.C.L.R. (3d) 343 at 362 (S.C.).The issue in the litigation brought is whether the claims framed in tort and alleged as being the causus of the personal injury, breach of contract, misrepresentation, fraud defamation and attempted extortion and the damages claimed by the plaintiffs.

[337]

Concerning the references of Dobreva and the Defendant to the hearings in the Republic of Bulgaria against Plaintiff Kapoustin of an alleged embezzlement of his company's funds or the fraud alleged to have occurred in Bulgaria. This fact may have been of some importance had the plaintiffs somewhere in these two law suits sought relief from Bulgaria for the alleged malicious prosecution or unlawful imprisonment of the Respondent, and the personal injury resulting.. However, that is for the present moment not the case, and his personal injury having occurred in Bulgaria makes the question of its actionable nature in the "lex fori" of British Columbia as opposed to the "lex loci delecti" open to substantive debate. This is not a question this Court is asked by the plaintiffs to consider.

[338]

That is not the case here, and a decision by the Court as to the application of s. 6 to these facts is unnecessary in order to deal with those other issues of the personal injury suffered by Nicholas and Tracy Kapoustin and Robert and Tatiana Kap. Those occurred in the Province and are alleged to be a direct result of the claims framed in tort.

[339]

This same reasoning is applicable to those claims framed in tort and connected to the purely commercial and property side of the plaintiffs relationships with the Defendant Bulgaria.

Part IVCriminal Proceedings , s. 18 of the Immunity Act [340]

Action No. S004040 raises claims framed in tort that the plaintiffs allege to be criminal in nature, and accordingly are seeking that those heads of damage be treated as criminal in nature.

[341]

Sect. 18 raises again a different exception from that of s. 5 and s. 6 as previously discussed. However, yet again many of the same principal of interpretation might be applied, and the definitions in s.2 of "commercial activity" and s. 5 "personal injury" or "loss of property" are not mutually exclusive. It is only reasonable that, depending on the "nature" or "purpose" of the act in question, may provide an interpretation that the individual perpetrator had a criminal intent. In s. 18 of the Immunity Act this possibility is considered and excepted: 18. This Act does not apply to criminal proceedings or proceedings in the nature of criminal proceedings. 1980-81-82-83, c.95, s. 17

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[342]

Plaintiffs action No. S004040 makes allegations as to the criminal malice or negligence of the Defendant through out the period of on or about May 1995 up to the present. Plaintiffs allege that government officials and representatives of the Defendant are criminally liable for the their misconduct in or connected to the province and that the Defendant Bulgaria is vicariously liable for its negligence in permitting its officials and representatives to use the telephones in British Columbia and other public media in their attempts to extort money from the Plaintiffs and the Defendant's failure in acting to stop what it knew or should have known to be activities that run afoul of Canadian criminal law and international comity. The Plaintiffs rely on the affidavits of Robert Kap, Michael Kapoustin (No. 15 Vol. I-II), Dimitar Hristov and their sworn statements as to phone conversations and meeting in Canada and to various correspondences or documents in their possession or of which they are familiar.

[343]

As a result of the foresaid the Plaintiffs have incorporated s.188 of the Criminal Code of Canada (C.C.C.) and claims that the Defendant Bulgaria at all material times knew the information its officials distributed in British Columbia and elsewhere to be manipulative and injuriously false statements of slander or libel. Plaintiffs assert in their complaint that agencies and instrumentalities of the Defendant Bulgaria had disguised unverified information the nature of which are slanders or libels presented in a form that appear as if they are conclusions of fact and made it impossible for the public and others to draw a coherent distinction between a statement of personal opinion or supposition as opposed to an assertion of fact. The public distribution of which the Defendant knew would be information that causes or is likely to cause injury to the Plaintiffs in the province and rely on the affidavits of Kapoustin, Lukanov, Kap, Hristov and official correspondences and public statements of the Defendant Bulgaria as are to be found among the defendants' records and reproduced in the mass media.

[344]

Further incorporated in this law suit is s.346.1(1) C.C.C. and a complaint by family members in British Columbia that the Defendant Bulgaria allegedly had in mind to induce in them a state of severe emotional distress and anxiety to aid attempts by its officials to extort money and property from British Columbia. Family members have asserted in their affidavit(s) a prima facie case having the genus of attempted extortion beginning from on or about March 1996 to as recently as February April 2001. Its is alleged that officials or private representatives of the Defendant Bulgaria on the telephone advised family members in the province that a payment of money to the Defendant, at different times ranging from $ 300,000 USD. to $ 5,000,000 USD, would end any further public humiliation of the Plaintiffs, and the Defendant would cease to torment the Plaintiffs in British Columbia..

[345]

Further incorporated in the law suit is s.426(1)(a)(ii) C.C.C., and a complaint alleging that the Defendant had uttered its false accusations, threats and menaces of violence to family members in British Columbia as the result of a collective agreement among the Defendant's representative, employees, officials, agencies and instrumentalities and the Canadian defendant Derek Doornbos, to share any reward, advantage or benefit of any kind received jointly or severally gained directly from the Plaintiffs in the province or elsewhere. Plaintiffs rely on, inter alia, correspondence from Doornbos to the Defendant dated July 7th 1995 [see Affidavit No. 15 Kapoustin Evidence - Third Chapter Tab 22 Vol. II] where the conspiracy is expressly set out and the agreement to share with the Defendant any such proceeds as garnered from the Plaintiffs in the province of British Columbia.

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[346]

The law suit has incorporated s.426(1)(b) C.C.C., complaining that the promise of monetary and other rewards by the Defendant Bulgaria to its officials as alleged in the Plaintiffs claim was agreed upon in exchange for officials and officers of the Defendant government providing public and official statements and reports that are knowingly false, erroneous or defective in their material particulars and intended to mislead others and the official correspondences of the Defendant Bulgaria dated on or about November 1995 and another dated on or about January 1996 to authorities of Interpol; an official statement and other correspondence dated on or about February 12th 1996 to the Federal Republic of Germany and official statements that were fraudulent misrepresentation and intentionally deceitful; and the hundreds repetitions of the Defendant's deceit, fraudulent misrepresentations and defamation in international and national newspaper, television and radio reports.

[347]

All Plaintiffs claims framed in tort are restricted to those activities that are alleged to have caused the personal injury, damages or losses to be suffered in British Columbia or are connected to the province.

[348]

In any event, the onus is on the plaintiffs to advance a strong argument in support of this Court exercising jurisdiction. Part of the strength is reflected in the words of Dickson J., who gave reasons on behalf of the Court in Moran v. Pyle National (Canada) Ltd., [1974] 2 W.W.R. 586 (S.C.C.) at 598: ".. the following rule can be formulated: the forum in which the plaintiff suffered damage is entitled to exercise judicial jurisdiction over that foreign defendant. This rule recognizes the important interest a state has in injuries suffered by persons within its territory. It recognizes that the purpose of negligence as a tort is to protect against carelessly inflicted injury and thus that the predominating element is damage suffered."

Chapter 5Analysis of "Good and Arguable " [349]

The first question, then, is whether the Respondent can show, by evidence, a good arguable case that the circumstances cited fit within Rule 13(1), and thereby defeat the claim of state immunity and with establish jurisdiction simpliciter, both rely on "a good arguable case" not only that the action is based on one or more contracts but also that the Defendant has committed an actionable tort and is a party necessary to proceedings in British Columbia.

[350]

Materials as filed by the plaintiffs will determine if the Defendant's applications for immunity will fail or succeed. The evidence must only show (1) if the Defendant Government of Bulgaria is "engaged" in "commercial activities" somehow connected to the plaintiffs, or (2) in the alternative show if a "personal injury" or "damage or loss to property" was suffered by the plaintiffs and are somehow connected directly or vicariously to the nature of the Defendant Government of Bulgaria's "commercial" or other "private" activities, and (3) that the Defendant Bulgaria is a necessary and proper party to these proceedings.

[351]

In answering these questions posed by the immunity plea of the Defendant Bulgaria the early difficulties of the plaintiffs to have put before this Court a body of evidence that shows they have a good arguable case against the Defendant is apparent and requires serious discussion by this Respondent as to the degree of "good and argue" the plaintiffs must satisfy. How far must the Respondent and the other plaintiffs to go to meet this test?

[352]

At the first stage of litigation the issue of service ex juris and immunity is a problem of the plaintiffs and as it arises here it was addressed by the Alberta Court of Appeal in Nova, an Alberta Corporation v. Grove (1982), 140 D.L.R. (3d) 527 (Alta. C.A.) Laycraft J.A. at page 531:

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"The need for service ex juris arises, of necessity, before pleading is complete and before there has been production of documents or oral examinations. The plaintiff at that stage will often find it a problem to prove many facts which would be easily proven at a later stage of the action. For example, a plaintiff who is not certain which of two defendants injured him or whether his claim is in contract or in tort is entitled to plead alternative causes of action ... or may plead against defendants in the alternative... [353]

That case was considered by the B.C. Court of Appeal in G.W.L. Properties Ltd. v. W. R. Grace & Co. - Conn., supra at page 262: "In dealing with the test to be adopted at this stage reference was made to the decision of the Alberta Court of Appeal in Nova, an Alta. Corp. v. Grove, [1982] 6 W.W.R. 481, 22 Alta.L.R. (2d) 262, 31 C.P.C. 219, 140 D.L.R. (3d) 527, 39 A.R. 409. The headnote states: "To obtain an order for service ex juris pursuant to Alberta R. 31, a plaintiff must show only that he has "a good arguable case" against the defendant. The rule does not require the plaintiff to prove his case as he would at trial, or take away his right to plead in the alternative."

[354]

The judgment of Mr. Justice Laycraft, who dissented in part, supports that proposition in the headnote. Mr. Justice Laycraft appreciated that the burden on the plaintiff at this stage was not to prove the case that it would be required to prove at trial but rather to lay before the court a body of evidence which would show that it had a good arguable case. Mr. Justice Laycraft commented about the difficulty of proving at that stage of a proceeding the case that the plaintiff would be called upon to prove at trial.

[355]

The plaintiffs have chosen to advance their claims beyond mere allegations through pleadings and assertions or opinions through affidavit(s) involving their assertions as framed in tort and contact breach. Not only are there provided to this Court a sequence of events to establish the nexus of the "lex loci delecti" to be British Columbia for the acts inferred, there are also provided documents in evidence to the Court to support such inferences and to make a case in tort against one or more parties in and outside of British Columbia. Respondent asserts that they have demonstrated a reasonable consideration of the expectations of the national and international legal community by relying on documentary evidence to support allegations to this Court. The Respondent has provided a substantial quantity and he believes adequate quality of evidence, however, he and other plaintiffs have difficulty providing more precise evidence precisely at this point in the proceedings because that evidence is solely in the control of the defendant.

[356]

Beside the arguments of there being plaintiffs in both law suits that are residences and citizens of the province, the "good arguable case" of the plaintiffs is supported by documents that evidence contracts and transactions with firms in British Columbia and are further proof that there existed and exits a real and substantial connection between this court and the subject matter of this action.

[357]

It is clear from the historical context that the Defendant Bulgaria engaged in commercial activities and obvious from the documents it transacted business here in British Columbia to the extent that it sold its products and service to the plaintiffs for their customers in B.C. While that is not one of the circumstances under Rule 13(1) that gives a plaintiff the right to serve ex juris without leave, it is in my view a factor in determining the existence of a "real and substantial connection". The negotiations which the plaintiffs allege in their affidavits led to the formation of the contract took place between the plaintiffs in B.C. and the defendant's officers in Toronto, Ontario and later in Sofia, Bulgaria, although some, but not all, the documents said to constitute contracts appear to have been executed in Bulgaria by the Defendant and representatives for the plaintiffs.

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[358]

The apparent origin of the "good arguable case" test is to be found in Vitkovice v. Korner, [1951] A.C. 869 (H.L.). There the plaintiff obtained leave to serve the defendant ex juris. The defendant applied to set aside the order on the ground that it did not support the existence of a breach of contract committed within the jurisdiction. While the contract there had been entered into in Czechoslovakia, the evidence conflicted on whether the contract was to be performed in Czechoslovakia or England. Lord Simonds at pages 878 to 880 stated: "But, my Lords, whether the issue is as to the making of a contract "within the jurisdiction" (r. 1 (e)(i)) or the making of it by "an agent trading or residing "within the jurisdiction on behalf of a principal trading or "residing out of the jurisdiction" (r. 1 (e)(ii)) or as to the law which by its terms or by implication governs it (r. 1 (e) (iii) or as to the place where the alleged breach has been committed, the obligation of the plaintiff is not to "satisfy" the court that he is right but to make it "sufficiently appear ... that the case is a "proper one for service out of the jurisdiction under this order". As Lord Davey said in Chemische Fabrik Vormals Sanoz v. Badische Anilin und Soda Fabriks (20), "This" (i.e., r. 4) "does" not, of course, mean that a mere statement by any deponent "who is put forward to make the affidavit that he believes that "there is a good cause of action is sufficient. On the other hand "the court is not on application for leave to serve out of the "jurisdiction" ... called upon to try the action or express a "premature opinion on its merits".

[359]

The "good arguable case" test was adopted by the Supreme Court of Canada in Composers Authors and Publishers Association of Canada Limited v. International Good Music, Inc. (formerly KVOS INC.) et al, [1963] S.C.R. 136. Martland J. at pages 143144: "I have not formed, and would not, at this stage of the proceedings, wish to express, an opinion as to whether or not, assuming as established the allegations contained in the statement of claim, the appellant has a good cause of action against the respondents, but I am satisfied that, on the basis of those allegations and the other material which was before the learned President, the appellant has got "a good arguable case". To me it seems arguable that a person who has held himself out to advertisers as being able to communicate, by means of his American television transmitter, with some 1,000,000 persons in British Columbia, if he transmits musical works, of which the appellant has the Canadian copyright, to viewers in Canada who receive such programmes, has thereby communicated in Canada such musical works by radio communication, within the provisions of the Copyright Act, R.S.C. 1952, c.55. The purpose of this action is to determine that very legal point and, in my opinion, it should not be determined at this stage of the proceedings, but ought to be tried."

[360]

In Antares Shipping Corporation v. The Ship "Capricorn" (also known as the Ship "Alliance") et al, [1977] 2 S.C.R. 422 at pages 446-447 the Supreme Court of Canada, a "good arguable case" related to whether on the face of the pleadings, which were taken to be true, the plaintiff disclosed that a good cause of action existed within the jurisdiction.

[361]

It is suggested the courts have been less than consistent as to whether the assessment of the case is to be made without the plaintiff having to adduce evidence: Quest Vitamin Supplies Ltd. v. Hassam (1992), 79 B.C.L.R. (2d) 85 at para. 9, Jan Poulsen & Co. supra at para 23, and Pineridge Capital Group Inc. v. Anderson (1995), 16 B.C.L.R. (3d) 297 at para 3, or made with reference to evidence the plaintiff is required to put before the court: Leisure Time Distributors Ltd. v. Calzaturificio S.C.A.R.P.A.-S.P.A. (1996), 5 C.P.C. (4th) 320 at 328 and Valmet Paper Machinery Inc. v. Hapag-Lloyd Ag., [1996] B.C.J. No. 2655 at para. 31.

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[362]

What was said in G.W.L. Properties is required in the present applications before the Bar, that is the plaintiffs are not at this stage required to prove their case, but must lay before the court a body of evidence sufficient to show that it has an arguable case. Unlike G.W.L. Properties (supra) the writ of summons in the present proceeding before the Bar are endorsed with a statement of claim. The courts have consistently required the plaintiff to show the evidentiary basis for the existence of a good arguable case before those who are entirely foreign to the court's jurisdiction, and who would challenge its jurisdiction, are required to embark on defending an action against them. Clearly to defeat an application of this kind, a plaintiff must show that a good arguable case against the foreign defendant. However, the plaintiff is not required to prove the case..

[363]

In Stern v. Dove Audio, In. et al (21 October 1994), Vancouver Registry, CA018818, on a review of a single justice of the court refusing leave to appeal the dismissal of an application under Rule 13(10) to set aside service ex juris, the Court of Appeal stated at page 4, paragraph 9: "With deference to the applicants' counsel, the plaintiffs were not required to show more than a good arguable case, specifically they were not required to show that their claim was bound to succeed."

[364]

In the B.C. Court of Appeal in Cook v.Parcel, Mauro, Hultin & Spaanstra, P.C. (1997), 31 B.C.L.R. (3d) 24 (B.C.C.A.) (leave to appeal refused) at pages 30 to 31: "It is common ground that the test to be applied in determining whether the B.C. Supreme Court has jurisdiction over these proceedings is whether there is a real and substantial connection between the court and either the defendant (respondent firm) or the subjectmatter of the litigation (occasionally referred to in the authorities as the "transaction" or the "cause of action"). Jurisdiction founded on this basis is referred to as "jurisdiction simpliciter".

[365]

One earlier decision on the law to be applied on applications for service ex juris is Orr v. Brown, [1932] 2 W.W.R. 626 (B.C.C.A.). There the deponent in his affidavit did not set out facts in support of his application for an order for service ex juris, but merely an assertion that what the defendant did was without jurisdiction and authority, and that on his belief and on the advice of counsel, the plaintiff had a good cause of action. M.A. Macdonald J.A. for the majority at pages 630 to 631: "The Court must be satisfied, before permitting non-residents to be brought into this province to defend an action, not that the plaintiff can establish his cause of action at the trial, but that the facts (not opinions) deposed to on the application, if proved, reasonably disclose a cause of action." The plaintiffs must present an evidentiary basis for their allegations which amounts to a good arguable case (see: Leisure Time Distributors v. Calzturrificio S.C.A.R.P.A. (1996), 5 C.P.C. (4th) 320 (B.C.S.C.), (MacKenzie, J.); Bangkok Bank of Commerce Public Co. v. City Trading Corp. (1997), 13 C.P.C. (4th) 324 (B.C.S.C.) and Valmet Paper Machinery v. Hapag-Lloyd AG (23 December 1996), unreported, No. C960793, Vancouver Registry (B.C.S.C.)].

[366]

His Lordship, Boyd J. in Quest Vitamin Supplies Ltd. (supra) commented in the following way on evidentiary requirements at pages 88 to 89:

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"I have carefully considered Huddart J.'s decision in Northland and I am not persuaded that in using the words which she did, Huddart J. meant to describe an exercise whereby the Court should attempt to weigh all of the evidence and arguments relating to the merits of the plaintiff's claim. Rather, the decision appears to reflect the Court's attempt to discern whether there was any evidence to support the plaintiff's claims. I note that the Court there was faced with a case in which the plaintiffs advanced extremely tenuous claims against certain solicitors who had acted for Equitable in Ontario. There was absolutely no evidence upon which the plaintiff could advance a claim either of equitable fraud or a claim that the solicitors were guilty of negligent or false misrepresentations which had induced the plaintiff to enter into two lending contracts with Equitable. I draw some comfort from the fact that in Buschell (supra), the Court of Appeal reviewed the tests to be applied when a foreign defendant seeks to challenge the extra-territorial jurisdiction of the British Columbia Courts. Dealing with the first test, McEachern C.J.B.C. (speaking for the Court) notes the threshold test at p. 20 and states [p.342]… [SIC]" "In my view, the "intellectual exercise" involved in the threshold step described is merely that which requires an analysis of the allegations set out in the pleadings. The issue is whether the plaintiff has raised a good arguable case that the allegations pleaded, if proved, would fall within one of the categories enumerated in R. 13(1)." [367]

In the either the plaintiffs contract disputes or their claims framed in tort, while there may be an issue as to where the cause of action arose, the damages in both actions and in each separate instance were ultimately suffered in British Columbia.

[368]

Is the plaintiffs evidence sufficient and compelling? While the Rules distinguish clearly between no evidence and insufficient evidence motions and provide when an applicant for one or the other is called upon to elect whether to call evidence, they do not provide guidance as to the test for either. Courts have long debated, in both civil and criminal contexts, the extent to which a judge can or must consider the sufficiency of the evidence before putting it before the trier of fact. Is there a "prima facie case"?

[369]

It is, no doubt, difficult to say precisely what test must be passed for an applicant to make it sufficiently appear that the case is a proper one and the Respondent does not wholly like the expression "a "prima facie case", for, where leave to serve has been given ex parte under Rule 13(1) and application then made under Rules 13(10) and 14(6) to set the proceedings aside, a conflict may arise in which the question is not so much whether a prima facie case has been made out as whether upon all the materials then before the judge is of opinion that the case is a proper one to be heard in our courts. Therefore I have referred to case law where the description "a good "arguable case" is suggested for the purposes of meeting the requirements to defeat the present applications, of the Defendant. It is sufficient to say negatively that errors have been made by the court determining they had no jurisdiction to grant leave because the presiding judge or master was not "satisfied" that there had been a breach within the jurisdiction, that latter question, and I believe I am supported in this by the available case law, is a question for the trier of the facts, be that judge or jury in the case of claims framed in tort. I think that it must be accepted that had the plaintiffs filed affidavit(s) in support of the appellant's application for service ex juris discloses that a good cause of action existed within the jurisdiction of the Federal Court against Delmar and Portland or at least that there was "a good arguable case", a standard suggested by Lord Simonds in Vitkovice Horni v. Korner, [1951] A.C. 869, and adopted by this Court in C.A.P.A.C. v. International Good Music, [1963] S.C.R. 136, per Martland J. at p. 142. In an application such as this the facts stated in the second amended Declaration are to be taken as true.

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[370]

The criminal context has some relevance to the present proceedings as certain claims are brought by the plaintiffs in that context. The debate was somewhat resolved in Canada when a unanimous Supreme Court confirmed, in Monteleone v. Her Majesty The Queen, [1987] 2 S.C.R. 154, its earlier decision in Mezzo v. The Queen, [1986] 1 S.C.R. 802, holding that a trial judge must not weigh or consider the quality of the evidence on a motion for a directed verdict. In Monteleone at 161 McIntyre J. wrote for the court: "Where there is before the court any admissible evidence, whether direct or circumstantial, which if believed by a properly charged jury acting reasonably, would justify a conviction, the trial judge is not justified in directing a verdict of acquittal. It is not the function of the trial judge to weigh the evidence, to test its quality or reliability once a determination of its admissibility has been made. It is not for the trial judge to draw inferences of fact from the evidence before him. These functions are for the trier of fact, the jury."

[371]

In Mezzo, at 838, Macfarlane J. had cited with approval Lord Cairns' expression of the rule at 197 in Metropolitan Railway Co. v. Jackson (1877), 3 App. Cas. 193. "The Judge has a certain duty to discharge, and the jurors have another and a different duty. The Judge has to say whether any facts have been established by evidence from which negligence may be reasonably inferred; the jurors have to say whether, from those facts, when submitted to them, negligence ought to be inferred. It is, in my opinion, of the greatest importance in the administration of justice that these separate functions should be maintained, and should be maintained distinct."

[372]

It appears that this narrow approach to evidence is rooted in the distinction between the functions of the judge and the jury or trier of fact. At 844 in Mezzo McIntyre J. commented that for a judge to consider weight or quality of evidence was to encroach on the jury's territory and thereby exceed his function.

[373]

However, as the present cases at Bar are civil cases, and the courts seem to generally accept, at least from the case law in British Columbia, that a plaintiff can be non- suited for a failure to call evidence on an essential ingredient of the case such that any judgment for the plaintiff would be wrong in law.

[374]

Counsel for the defendant infers that the plaintiff's case is deficient without electing whether to call evidence. Clearly counsel does so fully aware of the court's discretion to permit the plaintiff to re-open its case if the necessary evidence is available. Effectively counsel for the Defendant is apparently seeks a non-suit on the basis of the weakness or insufficiency of the pleadings or evidence and must elect not to call evidence.

[375]

Rules 40(8) to (11) reflect that jurisprudence, well summarized in Surfwood Supply Ltd. v. General Alarms Ltd., [1976] 3 W.W.R. 93 (B.C.S.C.), where McKenzie J. had sought to apply the principle applied in criminal law to the civil context. This court approved that approach in Funk v. Clopp (1984), 35 B.C.L.R. (2d) 222 where counsel agreed the test to be applied was "whether there is no evidence that could reasonably satisfy a jury that the fact sought to be proven is established." Following the enactment of the rules, Romilly J. agreed in Hoole v. Advani (1996), 39 C.B.R. (3d) 122 (S.C.), at 125: "the determination is not whether the evidence is sufficient to meet the standard of proof but whether there is any evidence which addresses the legal issues in the claims before the court."

[376]

A review of the authorities persuades me that this court has not approved so narrow an approach as Romilly J., but has preferred a test consistent with that formulated in Monteleone, supra, for a directed verdict in a criminal case.

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[377]

An understanding of the problem can be gleaned from looking at the development of the procedure in England and Ontario. Although neither English nor Ontario courts distinguish between no evidence and insufficient evidence, it is to them that the Respondent has looked for guidance in understanding what a test for no evidence might be.

[378]

The English Court of Appeal reviewed the history of non-suit applications in Clack v. Arthur's Engineering Ltd., [1959] 2 Q.B. 211. Rule 40(8) has its origins in this plea of non-suit and provides a means by which a plaintiff, recognizing a fatal defect in his or her case, could apply to the court to end the action, while reserving the right to sue again. Although the introduction of rules on discontinuing an action displaced the plaintiff's right to be non-suited, the High Court continued to end litigation where the plaintiff failed to make out a case for the defendant to answer as Romer L.J. explained in Alexander v. Rayson, [1936] 1 K.B. 169 at 178: "Where an action is being heard by a jury it is, of course, quite usual and often very convenient at the end of the case of the plaintiff, or of the party having the onus of proof, as the defendant had here, for the opposing party to ask for the ruling of the judge whether there is any case to go to the jury, who are the only judges of fact. It seems to be not unusual in the King's Bench Division to ask for a similar ruling in actions tried by a judge alone. "

[379]

Lord Romer commented that such motions were "highly inconvenient" and noted that a judge should not have to "express any opinion upon the evidence until the evidence is complete".

[380]

Romer L.J. in Alexander wrote, this was "by the way". The plaintiff there was seeking a ruling that there was no case to answer in law, accepting the evidence given on the defendant's behalf. (The defendant, it was agreed, bore the onus of proving that the contract at issue had been without consideration or illegal.) The trial judge had acceded to the plaintiff's request and given a ruling of law upon the evidence as it then stood in favour of the plaintiff, without calling on him to elect whether to call evidence. It was not suggested that the defendant had not established a prima facie case as to the facts on the illegality issue. Only because both parties urged the court to dispose of the appeal on the material before the court to save expense did they do so. The court agreed with the trial judge's disposition on the issue of consideration, there being evidence of some consideration, but remitted the illegality issue to the trial judge.

[381]

Lord Romer's view was that it is not appropriate to assess the quality of a plaintiff's case to determine whether she has made out a case on the law unless the defendant elects not to call evidence. Yet, the practice of assessing the quality of the plaintiff's case has a long history. In Ryder v. Wombwell (1838), L.R. 4 Exch. 32, Willes J. had formulated a test more generous to the applicant for whether there was "any evidence on which the jury could properly find the question for the party on whom the onus of proof lies." For a unanimous court he wrote, at 39: "It was formerly considered necessary in all cases to leave the question to the jury if there was any evidence, even a scintilla, in support of the case; but it is now settled that the question for the judge is not whether there is literally no evidence, but whether there is none that ought reasonably to satisfy the jury that the fact sought to be proved is established."

[382]

The foresaid formulation invites this court to consider the sufficiency and quality of the evidence when deciding whether to make an order in the nature of that now before it. It was applied by the court in Parfitt v. Lawless (1872), 41 L.J.P. & M. 68 where, at 71-72, Lord Penzance wrote:

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"I conceive, therefore, that in judging whether there is in any case evidence for a jury the Judge must weigh the evidence given, must assign what he conceives to be the most favourable meaning which can reasonably be attributed to any ambiguous statements, and determine on the whole what tendency the evidence has to establish the issue.” "It is not intended to be said that he upon whom the burden of proving an issue lies is bound to prove every fact or conclusion of fact upon which the issue depends. From every fact that is proved, legitimate and reasonable inferences may of course be drawn, and all that is fairly deducible from the evidence is as much proved, for the purpose of a prima facie case, as if it had been proved directly. I conceive, therefore, that in discussing whether there is in any case evidence to go to the jury, what the Court has to consider is this, whether, assuming the evidence to be true, and adding to the direct proof all such inferences of fact as in the exercise of a reasonable intelligence the jury would be warranted in drawing from it, there is sufficient to support the issue." [383]

According to this view it appears the Court is to assess the evidence to determine whether it "meets the minimum legal requirements of the particular case" as Bladon noted in G.L. Bladon, "Non Suit: Heads I Win, Tails I Don't Lose" (1993) 15 Advocates' Q. 425 at 436. On this view, necessarily, the court must determine what that minimum evidence is to be and thus enter the realm of fact-finding. This continues to be the English practice. In Storey v. Storey, [1960] 3 All E.R. 279 (C.A.), Ormerod L.J. noted at 282 that there were two situations in which a defendant might submit that there was no case to answer. "In the one case, there may be a submission that, accepting the plaintiff's evidence at its face value, no case has been established in law, and in the other that the evidence led for the plaintiff is so unsatisfactory or unreliable that the court should find that the burden of proof has not been discharged."

[384]

Of course the argument of counsel for the Defendant is that it does not have to answer to any evidence as it is "immune".

[385]

In Hall v. Pemberton (1974), 5 O.R. (2d) 438 the Ontario Court of Appeal adopted Lord Penzance's formulation of the test for a non-suit as the appropriate test when considering an application where the defendant had elected not to call evidence. From what case law this Respondent has reviewed Ontario has not followed the British Columbia example and introduced rules to govern the procedures on non suit applications. Ontario practice continues to be moulded by the courts. J. Sopinka and S.N. Lederman articulated the function of a judge on a motion for non-suit when sitting with a jury in The Law of Evidence in Civil Cases (Toronto: Butterworths, 1974) at 521. "If a plaintiff fails to lead sufficient material evidence, he may be faced at the close of his case by a motion for a non-suit by the defendant. If such a motion is launched, it is the judge's function to determine whether any facts have been established by the plaintiff from which liability, if it is in issue, may be inferred. It is the jury's duty to say whether, from those facts when submitted to it, liability ought to be inferred....The judge does not decide whether the jury will accept the evidence, but whether the inference that the plaintiff seeks in his favour could be drawn from the evidence adduced, if the jury chose to accept it."

[386]

In 317159 B.C. Ltd. v. C.A. Boom Engineering (1985) Ltd. (5 December 1990), [Unreported], this court adopted that description of the judge's role on a no evidence motion in a trial by judge alone.

[387]

On this formulation of the test for no evidence, it might be argued the determination as to whether there is any evidence to support a claim is to be equated with an assessment of the quality of the plaintiff's case to determine whether he or she has made out a prima facie case on the law.

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[388]

In Boom Engineering, the court found the trial judge had "overlooked the distinction between considering whether there was no evidence and assessing whether there was sufficient evidence" to justify a finding of a duty to inspect the roof of a building the plaintiff was proposing to purchase. Legg J.A., speaking for the court, was clear that a trial judge may not evaluate the quality of the evidence on a no evidence motion. He may determine only whether there was any evidence capable of supporting the plaintiff's claim.

[389]

Case law demonstrates that reasonableness is a question for the jury, not the judge, insofar as the weight or quality of the evidence is concerned. It is for the judge to determine whether there is some evidence on each element of the cause of action required to be proved by the plaintiff; it is for the jury to determine whether that evidence is sufficient to justify a verdict for the plaintiff. The judge is not to decide whether the evidence on each of those elements meets a minimum standard unless the motion is one of insufficient evidence under Rule 40(10). That rule provides: "At the close of the plaintiff's case, the defendant may apply to have the action dismissed on the ground that the evidence is insufficient to make out the plaintiff's case.

[390]

In the Respondents view the real and only difficulty is for the plaintiffs to produce some evidence in support of their contention that the defendants participated in a conspiracy or fraud on the plaintiff. As to the rest of the plaintiffs claims framed in tort and the breach of contract, the Respondent believes as plaintiffs we have met the onus on this test. The material filed established the alleged causes of action by reasonable facts, not opinions, beliefs or suppositions: see Quest Vitamin Supplies Ltd. v. Hassam (1993), 79 B.C.L.R. (2d) 85.

[391]

The plaintiffs therefore say they are not required to prove at this stage of the litigation that the defendants engaged in a conspiracy or a fraud, or for that matter any tort or breach of contract, all the plaintiffs are required to demonstrate on an application for jurisdiction simpliciter and state immunity, is that as previously mentioned: (1) The Defendant's activities as questioned are commercial in nature; (2) A real personal injury or property loss in Canada; (3) There is a real and substantial connection between the claim and this province; and (4). There is a claim made which if proven at trial, reasonably discloses a cause of action. Having said that the Respondent proceeds to the causes and the nexus of the factual matrix of the plaintiffs claims in tort and in contract.

Chapter 6Plaintiffs Claims Part IConspiracy [392]

In S004040 Plaintiffs allege there was a conspiracy among the Defendant's representative, employees, officials, agencies or instrumentalities to eliminate, inter alia, the Plaintiffs' investment and interest in property connected to the exclusive right to distribution of pharmaceutical products by the Defendant and new product technologies for the treatment of HIV/AIDS and Cancer as delivered to the Defendant; the Plaintiffs investment and interest in waste oil and refining technology and equipment delivered to the Defendant; the Plaintiffs investment and interest in land, buildings , and equipment as delivered to the Defendant and the Plaintiffs' interest in research and development results projects, and the Defendant acting to deny Plaintiff their access to any information on the foresaid.

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[393]

In S004040 Plaintiffs allege there was a concurrent conspiracy and scienter among the Defendant's representatives, employees, officials, agencies or instrumentalities of, inter alia, slander or liable and extortion. The defamation carried out in aid of the primary conspiracy to eliminate the Plaintiffs, end their commercial activities and acquire benefit for the defendants. A third allegation of conspiracy and scienter is made having a genus of criminal extortion. Plaintiffs' have provided the Court with affidavit evidence alleging attempts to extort money and property from the Plaintiffs in exchange for desisting from its further humiliation and personal injury to the honour, dignity, integrity and personality of the Plaintiffs individually and as a family. Allegedly representatives and employees of the Defendant had offered in telephone conversations with the Plaintiffs in Canada to prevent or end the harm to the Plaintiff Kapoustin who was incarcerated, even offering to arrange his release in exchange for the payment of substantial amounts of money.

[394]

In S005440 Plaintiffs allege there was a conspiracy and scienter among the Defendant's representative, employees, officials, agencies or instrumentalities to interfere with the Plaintiffs' possibility to complete their contracts in Vancouver in so doing to acquire an interest in, inter alia, the exclusive rights owned by other plaintiffs for the distribution of pharmaceutical products manufactured by the Defendant and new product technologies for the treatment of HIV/AIDS and Cancer; interest in waste oil and refining technology and equipment as had been delivered to the Defendant; an interest in land, buildings , equipment and research and development projects.

[395]

In S005440 the Defendant allege a concurrent conspiracy to take possession of the plaintiffs securities known as "American or Redeemable (for shares) Depositary Receipts" and to prevent the completion of their contracts in Vancouver by holding and deny access to their property. The Defendant exerting undue influence on the plaintiffs to accept that their contracts and the interest in the projects they would acquire were for all practical purposes worthless. Plaintiffs allege the value of the projects and land, building and equipment was intentionally converted, depleted or damaged by the Defendant for its own purposes.

[396]

Whether the means used by the defendants are lawful or unlawful, an action in conspiracy lies where the predominant purpose of the defendant's conduct is to cause injury to the plaintiffs; or where the conduct of the defendant is unlawful, and the conduct is directed toward the plaintiff alone or together with others and the defendant should know in the circumstances that injury to the plaintiffs is likely to and does result (Can. Cement LaFarge Ltd. v. B.C. Lightweight Aggregate Ltd. (1983), 24 C.C.L.T. 111 (S.C.C.)). The former type of conspiracy is alleged. The conspiracy has been specifically pleaded in both law suits [Can Dive Services Ltd. v. Pacific Coast Energy Corp. (1993), 96 B.C.L.R. (2d) 156 (C.A.)], the plaintiffs saying that there are specific overt acts as alleged and can be proven in evidence with respect to each of the defendants and that such allegations against or evidence makes the Defendant Bulgaria a party to the alleged conspiracy.

[397]

Not one of the defendants has argued to the alternative. And the Defendant Bulgaria makes no denial of the plaintiffs' conspiracy allegations, its only argument before the Court is that for there to be jurisdiction in this court, British Columbia must be the country that is substantially affected (Moran v. Pyle National (Canada) Ltd. (1973), 43 D.L.R. (3d) 239 (S.C.C.). Adding that the plaintiffs are pleadings vague and imprecise and there is no real and substantial connection to British Columbia.

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[398]

To this the Respondent would draw the Court's attention to one salient fact for it to consider Rule 13(1)(h) and can in the instance Supreme Court action S004040 be read together with 13(1)(j) which entitles the plaintiffs to serve ex juris necessary parties to a conspiracy when one is similarly alleged against a Canadian resident connected to British Columbia who has been served. In this respect the Respondent relies on the fact that Mr. Derek Doornbos, is a party to the alleged conspiracy, effected in British Columbia through agents accountable to the Ministry of the Attorney General of British Columbia and has been properly served as of right. Pine Ridge Capital Group Inc. v. Anderson, [1996] 4 W.W.R. 495; 16 B.C.L.R. (3d); [1006] B.C.D. Civ. 3714-01 (S.C.) is an authority for the proposition that an allegation of conspiracy should be dealt with in a single forum and that where the allegations against the foreign defendants are identical to those against a domestic defendant they can be served as necessary parties.

[399]

The Respondent believes an adequate inference can be draw from all the documentation beginning on or about September 1991 and prior to the 1998, and the plaintiffs sworn evidence and the extensive correspondence in evidence that there is a serious question to be tried as to the conduct and motives of the Defendant Government of Bulgaria and the Defendant Doornbos in the province. These are questions for the trial judge.

[400]

The statement of claim alleges against the Defendants, among them - conspiracy and breach of fiduciary duty, as characterised by the plaintiffs as conspiracy and fraud. The plaintiffs had in their possession, and have placed before the Court the requisite evidence they believe sufficient to demonstrate a good arguable case of fraud and conspiracy, them to implead the foreign parties.

[401]

The facts and evidence made available to the Court meet the test for the tort of conspiracy that arises where (1) the predominant purpose of the defendants' conduct is to cause injury to the plaintiff, whether the means used by the defendants are lawful or unlawful or (2) where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result. (See Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregates (1983) 145 D.L.R. (3d) 385 (S.C.C.; Hunt v. Carey Canada Inc. (1990) 49 BCLR (2d) 273 (S.C.C.); Lonhro Ltd. v. Shell Petroleum Co. Ltd. [1982] AC 173 (H.L.).

[402]

In this case the plaintiff have alleged that the predominant purpose of the defendants' conduct was to cause injury to the plaintiffs and as a result somehow obtain money and other benefits by converting the Plaintiffs property. The Affidavit(s)(s) of Robert Kap (the statement of claim) alleges that the conspiracy was unlawful. Paragraph 22 of the statement of claim says:

[403]

The conspiracy by the defendants and each of them was unlawful because the conduct of the defendants was fraudulent in that the defendants each knew of that their actions were at variance with that standard of conduct of official of a state agencies, honesty and decency, which one would expect from as ordinary decent Canadian citizen.

[404]

The plaintiff's theory is that this was undertaken to allowed the Defendants to gain access to and control over the personal property of the Plaintiffs and convert it to their own use or for less than the actual worth with the difference accruing to the defendants. So much is in fact admitted by Defendant Doornbos and the Deponent Dobreva when she alludes to the co-operation between Canada and the Defendant.

[405]

A critical issue for the Court on this application is what, if anything, ought to flow from the decision of the all the Defendants in not filing an appearance in time and for not providing the Defendant as applicant with responsive materials to file with its affidavit?

[406]

The plaintiff says that the past and recent conduct of the defendants in engineering public statements resulting in injury to the plaintiff and loss of not only their property by Kapoustins' dignity, honour, peace of mind and health, calls for an explanation.

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[407]

Should an adverse inference be drawn from the fact that the defendants chose to file no responsive affidavit material, and that the affidavit filed by Ms. Maya Dobreva is not honest, but instead a fraudulent explanation relying on hear say and clearly designed to deceive it reader . If there had been any commercial or other legitimacy then that explanation should be made in evidence by the defendants.

[408]

Lacking such evidence, it is submitted, that the defendants cheated the plaintiffs not only of their property but there peace of mind and money and health of the Plaintiffs. Of what price can the court place on the health of Nicholas and Tatiana?

[409]

The breach of duty to the laws of Canada by the Defendant Derek A. Doornbos, a Staff Sargent of the R.C.M.P., is a most remarkable and an outstanding example. of the complaints alleged against the defendants that they worked closely and in sceinter to harm the Plaintiffs when repeatedly and with a total disregard for the Plaintiffs began disclosing to the general public and mass media that the plaintiff was, to only mention a few:

a.

Convicted of sexually molesting children

b.

Involved in an international organization to defraud the citizens of Bulgaria.

c.

Money laundering

[410]

There is evidence provided to this point shows that the defendants disclosed to anyone who asked or anything they felt the general public where prepared to accept. Further there is evidence that the defendants knew that what they were doing was unlawful, but acted with impunity due to criminal and civil immunity afforded them by law. Finally and most significantly there is the evidence that the defendants had converted and sold property of the plaintiff to confidants and associates of the defendants or converted the property to their own use.

[411]

On a review of those facts as alleged and the documents provided, it is apparent that while the defendant was the central participant, there is evidence that the individuals named as defendants are bound by and indeed that they were even aware of, activities in the conversion of the plaintiff properties.. Scienter Allegations In S005440

[412]

It is alleged that agencies of the Government beginning in May 1995 began acting in concert with the defendant Doornbos, secretly entering into an agreement with the said Doornbos, which purported to a criminal investigation in British Columbia of the Plaintiff Michael Kapoustin and others. Its puprose clearly stated on July 7th 1995 to "prosecute" the plaintiff Kapoustin or his LifeChoice companies for the purpose of acquiring information and data concerning the plaintiffs companies, money and other assets in British Columbia and elsewhere

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[413]

It is alleged that agencies of the Government of Bulgaria beginning in October of 1995 acted in concert with each other to acquire the securities of the plaintiffs and their other property as it devolved to them. The Defendant Bulgaria doing so to later sell, transfer and assign to third parties, in some instances political agencies, the capital equipment, leasehold improvement, inventories of various stocks and the commercial rights to develop and market the scientific and medical projects of the plaintiffs and that all of the financial obligations of the plaintiffs under the contract were assumed by them and all o the assets were converted by the defendants. It is alleged that under this conspiracy that the defendants Doornbos, Georgiev, Stoyanov, Dimitrova, Shackle, and Mitkova, met at different times, planned and conspired to injure the plaintiffs by transferring the benefits of the LifeChoice projects from the unincorporated association of the plaintiffs to the Defendant Government of Bulgaria and then to third parties not as yet fully discovered by the plaintiffs. The Defendant Bulgaria conspired so its institutions could proceed with the LifeChoice projects in this manner to interfere with the plaintiffs contracts and to avoid delivery of the shares payment to the plaintiffs pursuant to the contract with LifeChoice to be completed in Vancouver, British Columbia.

[414]

Plaintiffs are suing for damages for conspiracy, inducing breach of contract, unjust enrichment, quantum meruit and breach of contract. The Defendant Bulgaria make only reference to the separate and outstanding 6 years of arrest and investigation of the Plaintiff Kapoustin. Although some of these points may ultimately provide an answer to the plaintiffs' claim, they are not directly responsive to the question of whether there is an arguable case in conspiracy to damage or interference with contractual relations to be completed in British Columbia or those connected to commercial activities in British Columbia..

[415]

To justify their efforts to serve ex juris, the plaintiffs LifeChoice et. At relies on Rules 13(1)(g) breach of contract, 13(1)(h) tort and now includes 13(1)(j) necessary or proper party. Respondent agrues it should been titled to serve ex juris pursuant to Rule 13(1)(g) because the contract for the exchange of securities (depositary receipts for common shares) was made, and the contracts to be performed in Vancouver, British Columbia at the law offices of McCandless, Morrison and Verdicchio. These contracts have a real and substantial connection to British Columbia, and the various sub-classes of plaintiffs that can be seen from the affidavits of Ada Gogova and Rob Stewart to include residents of British Columbia, the United States and Bulgaria are parties to the contracts with LifeChoice et al. in the province. The claim against the foreign defendants for conspiracy or interference with contracts and commercial activities of the plaintiffs has a real and substantial connection in contract to British Columbia.

[416]

The Respondent alleges the tort of conspiracy and interference with contractual relations and seeks leave to amend to add an endorsement under Rule 13(1)(h), plaintiffs allege that there was a valid and enforceable contract with the LifeChoice et al. and that the defendants were aware of this contractual obligation of the plaintiffs and there was interference by dealings that were inconsistent with the contract. It is alleged that plaintiffs have established that there was a valid and enforceable contract known to the defendants, deliberately and directly interfered with by the defendants to prevent or hinder the performance of the contract and that these pleadings satisfy the requirements of the tort of interference with contractual relations. [see: Walker v. College of Dental Surgeons of B.C. (23 September 1996) Vancouver C946856 (S.C.)]

[417]

Respondent alleges that some of the conduct, it must be inferred, took place in British Columbia, where defendant Doornbos operated, and that the torts of inducing breach of contact and conspiracy have resulted in damage in British Columbia where the plaintiffs' securities have not been as they had intended [see: Ichi Canada Ltd. v. Yamauchi Rubber Industry Co. (1983), 144 D.L.R. (3d) 533 (B.C.C.A.].

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[418]

The defendants contend that the plaintiff has failed to establish any real and substantial connection between the contract and tort allegations and British Columbia. Although the Defendant Bulgaria has offered little in the way of facts, it may be inferred that the Defendant may allege that the conspiracy is unclear and that the case is demonstrably weak given

[419]

The plaintiffs seek to add Rule 13(1)(j) to support the joinder and service of the defendants as necessary or proper parties to proceedings brought against someone resident in the province.. The Respondent asserts that the torts of conspiracy and inducing breach of contract or interference with economic relations are advanced against Mr. Doornbos, a resident of Canada, and that a common cause of action is asserted against the Ministry of the Attorney General of British Columbia and the foreign defendants the Republic of Bulgaria and in an indivual capacity, each individual named.

[420]

The Respondent believes the plaintiffs have demonstrated that there is a good arguable case that the pleadings come within Rule 13 or and done more than drafted "discursive" pleadings in an attempt to bring a claim in tort and a breach of contract against these foreign defendants. What is that evidence? It is embodied in the affidavits provided.

Part IINegligence or Fraudulent Misrepresentation [421]

The affidavit(s) evidence provided the Court is the proof necessary to show, inter alia, that the cause of action of the tort of negligent or fraudulent misrepresentation and has the required proof of reliance by the plaintiffs on the misrepresentation by the Defendant Bulgaria. This evidence, the Respondent, believes cannot at this time be clearer or stronger in this regard than the evidence of third party contracts in British Columbia that specifically set out in the contracts their reliance on the representations of the Defendant Bulgaria's institutions and officials of the Ministry of Health and collaterally the Ministries of Foreign Affairs and Finance.

Part IIIContracts [422]

The Respondent, on the issue of interference with contractual relations, puts forward evidence of the existence of valid and enforceable contracts, and knowledge by the defendants of the contract, but is there any evidence of a deliberate and direct interference by the defendant that prevented or hindered the performance of the contract? Yes, it only requires the Court to examine the affidavit of Mr. Hristov and attorney Lukanov to realise that the contracts in question and the securities (depositary receipts) were taken from and detained, by the Defendant without consent of the plaintiffs or other lawful reason. What is more the defendants, most particularly the Defendant Government of Bulgaria refused all requests to release the contracts or securities to their owners, the plaintiffs.

Section CIssues of Jurisdiction Chapter 1Generally [423]

It is apparent that from the above and the nature of the authorities that this present application can be adduced to be have three factors that must concern the Respondent and that this Court must consider could be summarised on this application as follows: (1) whether the Plaintiffs action is prima facie meritorious, or, (2) to decide if the Court has jurisdiction simpliciter, and (3) whether it is the jurisdiction forum conveniens for the progress of the action. Here I will discuss the former.

Part IRespondent

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Jurisdiction, Simpliciter as of Right [424]

In Supreme Court action S004040 all the Plaintiffs are resident in this jurisdiction or alternatively they are in some way connected. As such, the plaintiffs have a prima facie right to litigate in this jurisdiction. The onus is on the defendants to show that there is another available forum which is clearly or distinctly more suitable. [see: United Oil Seed Products Ltd. v. Royal Bank of Canada (1988), 87 A.R. 337 (C.A.), at 344].

[425]

The fact that there may be significant jurisdictional questions about the authority of the Provincial Court to hear the matter between the parties is a factor which this Court must usually consider when determining immunity and the most convenient forum for the litigation. The court in Camco International (Canada Limited) v. Porodo (18 November 1997), Calgary 9601-08706 (Q.B.), p. 7 set out that the usual factors to be considered and dealt with further on are:

[426]

The respondent recognises the mere fact that a plaintiff is resident in British Columbia does not support a real and substantial connection to British Columbia, but there is much more to the plaintiffs' allegations that touch on this province and there is an arguable case on the merit of the facts and not only opinion. The genesis of the commercial activities of the Defendant with the Plaintiffs from 1991 to 1996, as in S004040, the Plaintiffs search for an industry partner and the facts of the licence, distribution, manufacturing and research agreements, the funds, property and equipment made available to the Defendant by the Plaintiffs, good placed in the fiduciary care of the Defendants, the slander or libel of the Plaintiffs is documented has occurred and been repeated by the Defendant and reproduced on its request thousands of times, the employer of one of the alleged conspirators here and that the losses, if in fact one was suffered by alleged unauthorised dealing in the plaintiffs' interests, may have been a loss occurring in British Columbia, I think there is a real and substantial connection to this jurisdiction

[427]

Does it follow that there is only one jurisdiction to which there is a real and substantial connection.? Whether jurisdiction should be declined is another question the respondent will turn to after having discussed the allegations in the other law suit.

Chapter 2Argument Part IRespondent [428]

The burden on the plaintiff at this stage is not to prove the case that it would be required to prove at trial. Rather, it is to put before the court a body of evidence which would show that it has a good arguable case. This means the plaintiff must adduce sufficient evidence upon which, assuming it is accepted by the court, the court could reasonably conclude on a balance of probabilities that an agreement for exclusive distributorship of the defendant's products was terminated without reasonable notice.

[429]

As indicated at the outset of this Factum, the Defendant's failure to identify in its applications another more suitable jurisdiction and the fact that there are no parallel proceeding in another jurisdiction have, as a result made the only substantive issue in these applications one of jurisdiction simpliciter. If this province has jurisdiction over the action, and there is a real and substantial connection with the province dealing with the "fairness and justice test" then it is unlikely that the courts of any foreign jurisdiction will be offended if this court exercises its jurisdiction over the defendants.

Part IISalient Facts As Set Out In Kapoustin Affidavit(S)

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[430]

It was the Defendant Bulgaria that sought out the Plaintiffs in the first instance. The Plaintiff Kapoustin and LifeChoice Pharmaceuticals Inc., was at the time seeking someone to share participation in the Dy-Alkovin and other projects and once introduced to representative, employees and officials of the government of the Defendant Bulgaria Kapoustin was motivated to procure their involvement. British Columbia is the jurisdiction from which the Plaintiffs transacted all their its business. It is Kapoustin and the directors of LifeChoice Pharmaceuticals Inc., who actively negotiated the agreement in issue are all B.C. residents. Alleged misrepresentations were made by the defendants to Kapoustin and the LifeChoice and investors in B.C. during telephone conversation and through material sent to the plaintiffs in B.C. by mail or fax. The Defendant Bulgaria dispatched its representatives to attend meeting with the plaintiffs and investors in Vancouver, Montreal, Toronto and the United States of American. The money initially advanced and for which recovery in the action is sought by the plaintiff originated from the Plaintiffs in Vancouver.

[431]

The various contracts with the Defendant Bulgaria were "vetted" through the attorneys of the Plaintiffs in Vancouver. Even although the plaintiffs and the Defendant were contracting over products to be developed and produced in Bulgaria, negotiations were initiated by telephone between Kapoustin in Vancouver and offices of the Defendant's representative in Toronto, Ontario and Sofia, Bulgaria. Millions of dollars paid by the Plaintiffs was channelled through accounts of their company in Antigua directly to Bulgaria, it is realistic only to consider B.C. as forum conveniens. No party suggests Bulgaria or Antigua should be seriously considered.

[432]

The relevant factors referred to in this Factum suggest that British Columbia is the appropriate jurisdiction and is the forum conveniens.

Section DRule 13(10) - Service Ex Juris - Jurisdiction Simpliciter Chapter 1Doctrine of Rule 13(10), Jurisdiction Simpliciter [433]

It appears that, prior to 1977 a plaintiff was required to obtain leave in order to serve a writ of summons ex juris. When the Supreme Court Rules were amended and Rule 13 allows the service of a writ ex juris without leave in certain circumstances. The revisions to the rules were not intended to change the practice: Bushell v. T & N plc, supra, at pages 335-336. The test on an application for an order to serve ex juris, should therefore be the same as the test on an application to set aside service ex juris.

[434]

Both proceeding before the Court rely on Rule 13(1) to incorporate and bring to this jurisdiction the foreign defendants named. In the endorsed Writ of action S004040 the Plaintiffs identify 13(1)(h), their claims framed in tort. In the endorsed Writ of Supreme Court action S005440 the Plaintiffs identify 13(1)(g), claiming breaches of contract. Some discussion and analysis in the applications of the relevant parts of Rule 13 is given further on..

[435]

Case law on the subject seems consistently to show that the determination whether the action as pleaded falls under Rule 13(1)(g) of for that matter 13(1)(h) is an "intellectual exercise not involving any discretion": Bushell v. T & N plc (1992), 67 B.C.L.R. (2d) 330 (B.C.C.A.) at p.342. Rule 13(1) is procedural only, for instance it is not enough to show an action as pleaded falls within Rule 13(1)(g): Stern and Stern v. Dove Audio Inc. et al (April 15, 1994) Vancouver Registry No. C930935, (B.C.S.C.). In applications under Rule 13(10), the onus is on the plaintiffs to establish a good arguable case that the circumstances come within Rule 13(1): G.W.L. Properties Ltd. v. W.R. Grace & Co.Conn (1990), 50 B.C.L.R. (2d) 260 (C.A.).

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[436]

Once having established a "good argue case" by having deposing to "the facts(not opinions)" are then required to analysis if the court has a real and substantial connection with either the defendant or the subject-matter of the litigation, it is open to the court to decline jurisdiction if there is clearly a more convenient or appropriate forum elsewhere to which the defendant will attorn. In exercising its discretion to decline jurisdiction, the court is giving effect to the doctrine of forum non conveniens as naturally flows from the present applications at Bar.

Chapter 2Defendant Bulgaria Applications Part IPosition [437]

The Defendant has brought two applications, one for action No. S004040 and the other for action No. S005440. Both rely, in part, on Rule 13(10). Both may be considered in the same analysis and argument since neither application makes any distinction as to any material fact or law that might distinguish one application from the other.

[438]

The applications of the Defendant assert generally that "The jurisdiction of this Honourable Court over the Republic of Bulgaria, with respect, does not exist, or alternatively should be declined".

[439]

Both applications raise the issues of, jurisdiction simpliciter, jurisdiction forum non conveniens and immunity.

[440]

The position of the Defendant may be summarised as relying on the State Immunity Act to first attempt to establish a statutory exception to jurisdiction simpliciter. This can be inferred from its applications since they do not traverse any of the facts or evidence averred to in the statements of claim or the Notices to Admit as provided the Defendant and its counsel.

[441]

This leaves the Court with only one possibility, to operate on a pre-trial supposition that the facts and material evidence averred to in the plaintiffs statements of claim, affidavits and documents are true. Leaving only one question for the Court to decide in the Defendant's applications as to be heard on the August 24th 2001. Are the law suits as brought in the province against the Defendant Bulgaria depriving it to its sovereign right of immunity?

Part IIApplications' Context [442]

The Defendant argument appears to heavily rely on the Court's application of the international law doctrine of sovereign immunity, as codified in the State Immunity Act , S.C. 1980-81-82-83, c. 95 (now R.S.C. 1985, c. S-18) (the "Immunity Act"), the Republic of Bulgaria claiming immunity from any civil proceedings, generally or civil proceedings in the nature of a criminal proceeding. Counsel for the Defendant refers to s.3 of the Act, that reads: Sovereign State Immunity, s. 3 of the Act "STATE IMMUNITY 3. (1) Except as provided by this Act, a foreign state is immune from the jurisdiction of any court in Canada." 1980-81-82-83, c. 95, s. 3"

[443]

Defendant, further and in the alternative, alleges that "there is no connection at all with the province of British Columbia" and the Canadian judicial system, jurisdiction simpliciter.

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[444]

Defendant further places its' last reliance on the supposition that "an action of this kind (to the extent it can be understood) must be advanced before an international tribunal", jurisdiction forum non conveniens.

Part IIIRespondent's Position [445]

Respondent relies on the case law that a test of a good arguable case can be met if the pleadings and affidavit evidence provided by Plaintiffs are supported by evidence which if believed would amount to a prima facie case [see: Huddart J., as she then was, in Northland Properties v. Equitable Trust Co. (1992), 71 B.C.L.R. (2d) 124 (B.C.S.C.)].

[446]

Case law suggests the burden is on the Defendant to prove jurisdiction forum non conveniens. It is impossible for plaintiffs to argue on the issue raised by the Defendant as to an "international tribunal" without it having been identified in the application. However, in anticipation of argument on this issue I have addressed, hypothetically, in this Factum the only possible claim for such an alternative forum.

[447]

The issue appears to suggest jurisdiction simpliciter requires the Master to examine, in some detail, the question of sufficiency in the plaintiffs pleadings and various affidavits or documents placed in evidence. Respondent turns his attention now to Defendants Rule 13(10) application and the issue of jurisdiction simpliciter.

Part IVDoctrine Argument 13(10) [448]

In British Columbia Practice, McLachlin and Taylor, Vol.1, 2nd ed., the learned authors discuss the different kinds of cases in which an application is made under R.13(10). It appears there are cases where the claim falls clearly with R.13(1) and others where only affidavit(s)material can establish that the claim falls within the rule because the writ describes the claim in general terms without the factual specificity required to determine the threshold jurisdictional issue. There is a third and residual category of cases in which the claim advanced is so tenuous the court has concerns whether there is any evidence to support the claim. The learned authors make the following comment about R.13(10): "….if the action as pleaded, fits into one of the categories enumerated in R.13(1), that generally puts an end to the issue of jurisdiction simpliciter (Bushnell v. T & N pic (1992) 67 BCLR (2d) 330 (CA)). There may also be facts that go to jurisdiction (eg, whether in a claim founded on contract or a claim for alimony, the defendant has assets in British Columbia; see R.13(1)(m), which have not been pled because they are not relevant to the cause of action, and those facts will also have to be proved by affidavit(s)(s).

[449]

Quoting again from McLachlin and Taylor (supra): "When service ex juris is challenged under R.13(10) it is necessary for the plaintiff to come forward and support the service ex juris upon the basis that it comes within one of the subsections in R.13(1). The test to be applied on a motion under R.13(10) is whether plaintiff has made out a good arguable case (p.13-52)

[450]

The plaintiff's Statement of Claim, in my view, establishes a good arguable case that the allegations pleaded, if proved, would fall within R.13(1). The defendant has not put into evidence any material fact which seeks to controvert the substance of the plaintiff's claim.

[451]

In my view, the action as pleaded plus the affidavit(s) evidence fits this case into one of the categories enumerated in R.13, and, accordingly, jurisdiction simpliciter is established.

Part VAnalysis

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[452]

The authorities show, and the Respondent does not dispute, that once the matter of state immunity as discussed later in this Factum is first settled by the Court, it then follows that the Defendant's applications under Rule 13(10) for an order setting aside service of an originating process must be settled or alternatively the Court to pursue the Defendant's application pursuant to Rule 14(6) for a declaration that this Court has no jurisdiction or should decline jurisdiction.

[453]

The aforesaid places the onus on a plaintiff to establish both that this Court has jurisdiction over the case, jurisdiction simpliciter and that the case is a proper one in which the Court ought to exercise such jurisdiction, forum conveniens [see: Bushnell, supra. 330 at 336 and 342; Amin Rasheed Shipping v. Kuwait Insurance Co. [1983] 2 All E.R. 884; Spiliada Maritime Corp. v. Cansulex Ltd. [1986] 2 All E.R. 843; Valmet Paper Machinery Inc. v. Hapag-Lloyd AG., unreported, December 23, 1996 (B.C.S.C.) at p.4; Stern v. Dove Audio Inc., unreported, April 15, 1994 (B.C.S.C.) at p. 16.].

[454]

It appears that the courts in dealing with applications under Rules 13(10) and 14(6) appear to consider two questions: (1) does the court have jurisdiction over the defendant in respect of this action ( jurisdiction simpliciter) and (2) if the court has jurisdiction, should it decline jurisdiction in favour of a more appropriate jurisdiction (forum non conveniens)?

[455]

In a recent decision, Global Light Telecommunications Inc. v. GST Telecommunications Inc., Vancouver Registry No. C990449, May 18, 1999 (B.C.S.C.), Satanove J. summarized the applicable principles: "1. Regardless of whether an application is brought under Rule 13(10) or 14(6), the court must determine whether a real and substantial connection exists between the court and either the defendant or the subject matter of the litigation in order to assert jurisdiction simpliciter over the proceedings. Although the factors in Rule 13(1) suggest a real and substantial connection, there may be situations where the circumstances required therein create a connection, but not one that meets the criteria of real and substantial. 2. If the court decides it has jurisdiction simpliciter, it may still exercise its discretion to decline jurisdiction if there is a clearly more convenient or appropriate forum elsewhere to which the defendant will attorn. 3. A real and substantial connection test is applicable not only to determine jurisdiction simpliciter but also in evaluating the appropriateness of a particular forum. 4. When it comes to a determination of the appropriate forum the onus is on the defendants to show another forum that is clearly more convenient or appropriate. 5. Factors commonly considered in determining a real and substantial connection are the parties' residences and places of business, where the cause of action arose, where the damage was suffered, any juridical advantages and disadvantages, convenience and expense, governing law and the existence of any parallel proceedings. 6. The right of the plaintiff to sue in the court of his choice is not now a significant factor. It has been replaced by the governing principle of comity of nations. 7. Parallel proceedings dealing with the same subject matter must be avoided unless the party resisting the application to stay the proceedings can demonstrate a possible loss of a juridical advantage. 8. In determining whether another forum is more appropriate the choice is to be made on the basis of factors designed to ensure, if possible, that the action is tried in the jurisdiction that has the closest connection with the action and the parties and not to secure a juridical advantage to one of the litigants at the expense of others in a jurisdiction that is otherwise inappropriate.

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9. If the court is satisfied that both British Columbia and the foreign courts are appropriate for and one is not clearly more appropriate than the other, then the court, to some degree, will necessarily favour the party who initiates the proceedings first." [456]

The Respondent does not believe the Court requires the Plaintiffs at this stage of the proceedings to prove their case to a standard fit for trial, he must nonetheless put before the court a body of evidence which would show that the Plaintiffs have a good arguable case to take to trial.

[457]

Respondent have take note of Huddard J. in Northland Properties Limited v. The Equitable Trust Company et al., unreported, May 24, 1991, an application brought to set aside the ex juris service of a writ under Rule 13(1). At page 4 Madam Justice set out the standard the Respondent, as a plaintiff must meet: "As I have said, not only should the pleadings reveal a good, arguable cause of action, but those pleadings should also be supported by evidence, which, if believed, would amount to a prima facie case."

[458]

The Respondent, as plaintiff was liable to supporting the service ex juris by showing he had, "good arguable case" that was connected to the Province and coming under one or more of the applicable subsections of Rule 13(1) [G.W.L. Properties Ltd. and Bentall Properties Ltd. v. W.R. Grace & Company - Conn. et al (1990), 50 B.C.L.R. (2d) 260 (B.C.C.A.) at 262, 264].

[459]

The standard required to establish a "good arguable case" appears to be contentious. Some limited reliance is placed by the Respondent on the proposition in Quest Vitamin Supplies Ltd. v. Hassam (1993), 79 B.C.L.R. (2d) 85 that affidavit evidence may not be required and on Jan Poulsen & Co. v. Seaboard Shipping Co. (1995), 100 B.C.L.R. (2d) (B.C.S.C.) at p.180, where the court said "... that the allegations pleaded, if proved, would establish a prima facie case": [see also: Jeredo Investments Limited et al v. Polylinks International Limited et al (June 19, 1995), Vancouver Registry No. C946684, B.C.S.C].

[460]

Such reliance by the plaintiffs is however limited and the Respondent believes this Court may find itself seized by the decision of the Court of Appeal in G.W.L. Properties Ltd., there the plaintiff was required to establish a prima facie case and so to adduce further evidence on such an application as those presently at Bar.

[461]

That having been said the Respondent has provided the Court with numerous and varied affidavits and documents in evidence to support of the plaintiffs pleadings and meet the burden upon them to adduce before the Court a sufficient body of evidence that shows there is a good arguable case. The materials as filed by the Respondent and plaintiffs establish the alleged causes of action in both law suits to be reasonable according to facts, not opinions, beliefs or suppositions: Quest Vitamin Supplies Ltd. v. Hassam (1993), 79 B.C.L.R. (2d) 85.

[462]

The defendants' in their applications do not appear to dispute the plaintiffs' right to serve process without leave under Rule 13. As in Bushnell, supra. at 335-36, the fact of service ex juris does not establish jurisdiction. Plaintiffs having relied in action S004040 on Rule 13(1)(h) of the Court and on Rule 13(1)(g) (Rules) in action No. S005440 to effect service without leave in that both proceeding have some claims founded on contracts breaches or a tort(s) committed in British Columbia and are alleged in the endorsement on the writ defendants as having "effected tortious acts, inter alia, abuse of official process, extortion, destruction of property, defamation and privacy within the Province, whereby causing the Plaintiffs physical suffering, deep humiliation and financial loss" having reasoned at the time that service ex juris was affected and that it was open to be challenged.

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[463]

The court must afterward consider whether jurisdiction should be declined, on the grounds of jurisdiction forum conveniens [GWL Properties Ltd. et al v. W R Grace and Company (1990) 50 BCLR (2d) 260 (BCCA); Orr v. Brown [1932] 2 W.W.R. 626 (BCCA) at 630; Leigh Marine Services Ltd. v. Harburn Leasing Agency Ltd. (1972) 25 D.L.R. (3d) 604 (B.C.S.C.) at 608.].

Part VIRespondent's Evidence [464]

If an answer if found in the affirmative, the evidence must then speak to the question of issue jurisdiction simpliciter. Do the plaintiffs commercial activities with the Defendant Bulgaria and the economic loss or personal injuries allegedly suffered have a connection to Canada and British Columbia? To obtain an answer requires the Master to examine the question in the context of the facts and evidence as pleaded and placed before the Court, and in the proceedings at Bar requires the Master to closely examine Volumes I - IV of the plaintiffs evidence found in affidavits, documents and this Factum.

[465]

Plaintiffs' arguments rely on the evidence before the Court to prove a sufficient prima facie case to bring their claims (1) within one or several of the cited statutory exceptions to immunity, and (2) within jurisdiction simpliciter. Respondent is of the opinion that once the issue of immunity is settled it will as well settle the issues of jurisdiction simpliciter.

Part VIIPrima Facie Case [466]

The position of the Defendant as pointed out in its application leaves a great deal to the imagination, it make no reference to its commercial activities or that there were several negotiations between 1991 and 1993 in British Columbia between the plaintiff Michael Kapoustin in Action S004040 and the Defendant Bulgaria or similarly with the plaintiffs LifeChoice et al and the Defendant Bulgaria in British Columbia.

[467]

These negotiations concerned the Defendant's commercial activities and it contracting with the plaintiffs to market the defendant's products in British Columbia and through British Columbia to the United States, Mexico and elsewhere, are contracts that were completed. However, the defendant fails to make mention of these contracts and does not concedes, for the purpose of this application, that the plaintiffs have an arguable case that there were contracts between the plaintiffs and the Defendant. The defendant simply disputes it has any connection to British Columbia.

[468]

The defendant is a company incorporated in Ontario. The defendant manufactures freezer display and storage units at its plant in Ontario and sells the units to its customers in Canada and in the U.S. Sometimes it also installs walk-in freezers it has manufactured.

[469]

[10] The chief financial officer of the defendant deposes that "the defendant has never carried on business in British Columbia, and in particular has never owned or operated offices or a plant in British Columbia, nor has it ever employed anyone in British Columbia prior and subsequent to the dealings with the plaintiff".

[470]

[11] In answer to the suggestion that the defendant does not carry on business in British Columbia, the plaintiff attaches to his affidavit(s)(s) copies of "yellow page" advertisements from the BC Tel and Telus directories for the years 1997-1998, 1998-1999 and 1999-2000. Counsel for the plaintiff submits that the defendant ought to be registered in British Columbia under the Company Act, R.S.B.C. 1996, c.62 as an extraprovincial company carrying on business in British Columbia and that if it had complied with B.C. law the plaintiff would have been able to serve the defendant's attorney in British Columbia. However, the test for service ex juris under Rule 13(1)(m) is not whether a person carries on business within the province. It is whether it has assets within the province.

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[471]

In my view, it is immaterial to a consideration of Rule 13(1)(m) whether the defendant sells to dealers or to end-users. In either case there may be debts owing to the defendant by the dealers or the end-users, as the case may be, which may constitute "assets" within the jurisdiction. The issue on this application is the nature and extent of such receivables.

[472]

[14] The plaintiff has deposed that he is aware of 8 named companies in British Columbia who regularly purchase products directly from the defendant.

[473]

[15] In Northern Sales Co. v. Government Trading Corp. of Iran [1991] B.C.J. No. 3088 (B.C.C.A.) the defendant had agreed to purchase grain from the plaintiff. Under the contract the risk in the grain was to pass from the seller to the buyer when the grain left the spout at the elevator and was placed on board a ship. The defendant accepted but failed to pay for grain shipments and the plaintiff sued in British Columbia. The defendant did not carry on business in British Columbia. The writ was served ex juris relying on Rule 13(1)(m). On appeal from a decision refusing to set aside the service the Court of Appeal concluded the temporary existence of the grain in British Columbia did not meet the test.

[474]

The plaintiff has the onus of demonstrating, with evidence, "a good arguable case" and so meet the criteria in Rule 13(1)(m) are met. The defendant's applications have not displaced that arguable case, for example, the evidence of the actual contracts and places, dates and times of meetings in British Columbia.

Part VIIIConclusions [475]

The test requiring a "real and substantial connection" to B.C. applies equally to contract as it does to tort [Morguard Investments Ltd. v. De Savoye (1990), 52 B.C.L.R. (2d) 160 (S.C.C.) 183], and the Court has been asked to accept the test has been met and to conclude it has jurisdiction simpliciter.

[476]

The plaintiffs have met the test on an application for jurisdiction simpliciter which appears to me to be on a review of the authorities, that on the basis of the pleadings, the evidence, or both, there is a real and substantial connection between the court and either the defendant or the subject matter of the litigation, and the plaintiff has made out a good arguable case that it has a claim or cause of action which falls within one of the categories within Rule 13(1).

[477]

In Moran et al v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393, as noted in G.W.L. Properties Ltd., supra, at 264, suggests a broader perspective be considered to ascertain whether a real and substantial connection to this jurisdiction exists. The Court should consider if B.C. is "substantially affected" by the defendants' activities or consequences, and if it was likely the law of B.C. would be in the reasonable contemplation of the parties?

[478]

After consideration of the relevant factors the Court is asked to find that British Columbia is substantially affected by the defendants' activities and their consequences. In the circumstances, it a view of the law of British Columbia was also likely within the reasonable contemplation of the parties. [Tolofson v. Jensen (1994), 100 B.C.L.R. (2d) 1 (S.C.C.) at 19; Moses v. Shore Boat Builders Ltd. (1993), 83 B.C.L.R. (2d) 177 (B.C.C.A.)].

[479]

The Respondent is now further required to consider if B.C. is in all the circumstances an appropriate or convenient forum for the action and to exercise a discretion under Rule 14 if it is shown that a more appropriate forum exists. [Jan Poulsen & Co. v. Seaboard Shipping Co. (1994), 100 B.C.L.R. (2d) 175 (S.C.), applying the principles in Amchem Products Inc. v. British Columbia (Workers' Compensation Board) (1993), 77 B.C.L.R. (2d) 62; [1993] 3 W.W.R. 441] (S.C.C.), Sopinka J. at 72-79].

Section ERule 14(6) Jurisdiction Forum Non Conveniens

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Chapter 1Doctrine of Jurisdiction Forma non Convenienes Part IArgument Jurisdiction Non Conveniens [480]

The Defendant has not identified any juridical disadvantage in its applications. Accepting for the purposes of the Respondent's arguments that this is in fact so, it cannot be argued by the Defendant that there exits a disadvantage in the present proceeding sufficient to displace a strong case for jurisdiction to remain in British Columbia.

[481]

In Westec Aerospace Inc. v. Raytheon Aircraft Company, 19 April 1999, Vancouver Registry No. CA025410,(C.A.), Madam Justice Rowles for the Court noted that "the law in this jurisdiction" is now as laid down in 472900 B.C. Ltd. v. Thrifty Canada, Ltd. 18 December 1998, Vancouver Registry No. CA023129 (C.A.) as grounded upon the decisions in The Abidin Daver, [1984] A.C. 398 and in Spiliada Maritime Corp. v. Cansulex Ltd., [1986] 3 All E.R. 843 (H.L.).at page 859: "The mere fact that [a party has] a juridical advantage ... cannot be decisive." Lord Goff pointing out that an advantage to one party "will ordinarily give rise to a comparable disadvantage to the [other party]." This Court must "consider where the case may be tried suitably for the interests of all the parties and for the ends of justice."

[482]

One way to deal with the applicant's submissions is that if the Defendant was properly served according to Rule 13, and that appears to be the case, the only issue to be decided is whether British Columbia is the appropriate forum. That it is overwhelmingly more convenient and less expensive to litigate this action in British Columbia is apparent from the affidavits of Mr. Lukanov, an attorney for the plaintiff Kapoustin in Bulgaria. British Columbia is the "natural forum", the residence of the plaintiffs, the locus of the incidents and the place where the injuries and damages were suffered. To require the plaintiffs to go before an "international tribunal" as has been suggested as a remedy is difficult to comprehend since no such tribunal exits to the plaintiffs knowledge.

[483]

The determination of forum conveniens does not even arise until the plaintiff has established the "reasonable measure of fairness and justice" standard in Bushell., it should be conceded there exist uncertainties with respect to the applicable law of an unidentified "international tribunal" make it difficult to do so .

[484]

The question of forum non conveniens has as an authority in British Columbia, 427900 B.C. Ltd. v. Thrifty Canada Ltd. (1998), 168 D.L.R. (4th) 602, a decision of Esson, J.A. for a five person court. The effect of Thrifty is described in this excerpt at 617: "The Abidin Daver and the Spiliada laid to rest the insular English rule in both its original and modified forms and mandated the radically different approach of determining which is the more appropriate jurisdiction. Comity, which played no part in the old rule, is now a major consideration. Parallel actions dealing with the same subject matter must now be avoided unless the party resisting the application to stay can demonstrate possible loss of a juridical advantage. The right of the plaintiff to sue in the court of his choice is not now a significant factor."

[485]

In Thrifty, Esson, J.A. reviewed the decision of our Court of Appeal in Avenue Properties Ltd. v. First City Development Corp. Ltd. (1986), 7 B.C.L.R. (2d) 45 (C.A.). He reasoned that the case was inconsistent with the present state of the law and should not be followed. He, however, was required to consider whether the Supreme Court of Canada in Amchem Products Inc. v. British Columbia (Workers' Compensation Board, [1993] 1 S.C.R. 897 had endorsed the correctness of the Court of Appeal's decision in Avenue Properties. He referred, at page 622, to this passage in Amchem:

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"While the standard of proof remains that applicable in civil cases, I agree with the English authorities that the existence of a more appropriate forum must be clearly established to displace the forum selected by the plaintiff. This was the position adopted by McLachlin J.A. (as she then was) in Avenue Properties Ltd. v. First City Development Corporation (1986), 7 B.C.L.R. (2d) 46. She emphasized that this had particular application where there were no parallel foreign proceedings pending. [486]

Esson, J.A. said that if that were an endorsement of the principles stated and applied in Avenue Properties the appeal, which the court allowed, must fail. He said at 622: "...that passing reference is not an endorsement of the reasoning in Avenue Properties except on the one uncontroversial point that the existence of a more appropriate forum must be clearly established, particularly where there are no parallel foreign proceedings."

[487]

The courts have over the years formulated specific organising principles in the law of conflicts for determining if a court has jurisdiction, and when it may decline to assert such jurisdiction. Those principles are referred to by Mr. Justice La Forest, speaking for the Court, in Tolofson v. Jensen, [1994] 3 S.C.R. 1022 at p. 1049 of that decision: "To prevent overreaching, however, courts have developed rules governing and restricting the exercise of jurisdiction over extraterritorial and transnational transactions. In Canada, a court may exercise jurisdiction only if it has a "real and substantial connection" (a term not yet fully defined) with the subject matter of the litigation; see Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393, [[1974] 2 W.W.R. 586]; Morguard, [[1990] 3 S.C.R. 1077, 52 B.C.L.R. (2d) 160]; and Hunt, [[1993] 4 S.C.R. 289, 85 B.C.L.R. (2d) 1]. This test has the effect of preventing a court from unduly entering into matters in which the jurisdiction in which it is located has little interest. In addition, through the doctrine of forum non conveniens a court may refuse to exercise jurisdiction where, under the rule elaborated in Amchem, [[1993] 1 S.C.R. 897] (see esp. at pp. 921, 922, 923), there is a more convenient or appropriate forum elsewhere."

[488]

Rule 13(1) allows for the service of an originating process on a person outside British Columbia with respect to various causes of action or related circumstances which are enumerated in subparagraphs (a) to (q). In this case the plaintiffs rely on the following for jurisdiction of this court and therefore service of the Defendant Bulgaria in Bulgaria together with others named.. As previous discussed it is well established that once the court determines that it has jurisdiction to hear an action, the decision as to whether it should dispose of it when another forum is also capable of doing so is a matter of pure discretion. A general statement of the factors to be considered by the court in exercising that discretion can be found in Antares Shipping Corp. v. Ship Capricorn et al. , [1977] 2 S.C.R. 422; 7 N.R. 518, at 448 [S.C.R.] (hereinafter Antares ) where it is stated: "The factors affecting the application of this doctrine [of 'forum conveniens'] have been differently described in various cases, to some of which reference will hereafter be made, and they include the balance of convenience to all parties concerned, including the plaintiff, the undesirability of trespassing on the jurisdiction of a foreign state, the impropriety and inconvenience of trying a case in one country when the cause of action arose in another where the laws are different, and the cost of assembling foreign witnesses."

[489]

In Yasuda Fire & Marine Insurance Co. v. Ship Nosira Lin et al. , [1984] 1 F.C. 895; 52 N.R. 303 (F.C.A.), at 900 [F.C.] the Federal Court of Appeal identified as follows: "The real question to be answered on an application of this kind is stated by paragraph 50(1)(b) of the Federal Court Act ; is it in the interest of justice that the proceedings be stayed? That question must be answered in the light of the principles that were formulated by Lord Diplock in MacShannon v. Rockware Glass Ltd. , [1978] 1 All E.R. 625 (H.L.) at 630:

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"'In order to justify a stay, two conditions must be satisfied, one positive and the other negative: (a) the defendant must satisfy the court that there is another forum to whose jurisdiction he is amenable in which justice can be done between the parties at substantially less inconvenience or expense, and (b) the stay must not deprive the plaintiff of a legitimate personal or juridical advantage which would be available to him if he invoked the jurisdiction of the English court'". [490]

In Burrard-Yarrows Corp. v. Ship Hoegh Merchant , [1982] 1 F.C. 248 at 250 (T.D.), the trial division of this court adopted the more elaborate statement of Brandon, J., in Ship Eleftheria, Re , [1969] 1 Lloyd's Rep. 237, at page 242: "The principles established by the authorities can, I think, be summarised as follows: (1) Where plaintiffs sue in England in breach of an agreement to refer disputes to a foreign Court, and the defendants apply for a stay, the English Court, assuming the claim to be otherwise within the jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not. (2) The discretion should be exercised by granting a stay unless strong cause for not doing so is shown. (3) The burden of proving such strong cause is on the plaintiffs. (4) In exercising its discretion the Court should take into account all the circumstances of the particular case. (5) In particular, but without prejudice to (4), the following matters, where they arise, may be properly regarded: (a) in what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial as between the English and foreign Courts. (b) Whether the law of the foreign Court applies and, if so, whether it differs from English law in any material respects. (c) With what country either party is connected, and how closely. (d) Whether the defendants genuinely desire trial in the foreign country or are only seeking procedural advantages. (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign Court because they would (i) be deprived of security for that claim; (ii) be unable to enforce any judgment obtained; (iii) be faced with a time-bar not applicable in England; or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial."

[491]

The Supreme Court revisited the governing principles of the doctrine of "forum conveniens" for the first time since it had done so in Antares . [See Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.) , [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1 ( hereinafter Amchem )]. Sopinka, J., after noting that the identification of the "forum conveniens" has become more difficult in a world where litigation, like commerce, is becoming increasingly international, stated: "In this climate, courts have had to become more tolerant of the systems of other countries. The parochial attitude exemplified by Bushby v. Munday (1821), 5 Madd. 297, 56 E.R. 908, at p. 308 and p. 913, that '[t]he substantial ends of justice would require that this Court should pursue its own better means of determining both the law and the fact of the case' is no longer appropriate. "This does not mean, however, that 'forum shopping' is now to be encouraged. The choice of the appropriate forum is still to be made on the basis of factors designed to ensure, if possible, that the action is tried in the jurisdiction that has the closest connection with the action and the parties and not to secure a juridical advantage to one of the litigants at the expense of others in a jurisdiction that is otherwise inappropriate." [at p. 912 S.C.R.]

[492]

His Lordship Donald J.A. said in Marchand v. Alberta Motor Association Insurance Co. 1994 89 B.C.L.R. (2d) 293 at 296: "The central question is which forum has the "natural" or "real and substantial connection" with the case. This involves a balancing function in the exercise of discretion. One does not simply add up the number of connecting factors on each side; it is not an arithmetic exercise. The factors must be given weight and significance.

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[493]

In Craig Broadcast Systems, Inc. v. Frank N. Magid Associates, Inc., [1998] 3 W.W.R. 17 (Man. C.A.) wherein Justice Helper J.A. for the Court considered all of the leading cases and concluded that the "onus is on the moving party ... to satisfy the court that it is not a convenient forum." He also cited the proposition that the burden of proof will rarely matter and that the choice of the appropriate forum will generally resolve itself on the relative strength of the relevant factors rather than on the determination of who is to bear the burden of proof.

Chapter 2Defendant Bulgaria's Application Part IPosition [494]

The Defendant Bulgaria has suggested in it applications that "applicable principles of international law" clearly indicate "an action of this kind (to the extent it can be understood) must be advanced before an international tribunal" in connection with the question of forum non conveniens. The applications to not suggest the "applicable" international law or what "international tribunal".

Chapter 3Argument Part IRespondents Position [495]

If there is jurisdiction simpliciter over any of the defendants, the next question is whether this court should decline jurisdiction and if so, in favour of what jurisdiction.

[496]

In the case at hand, there can be no doubt at least about the jurisdiction of British Columbia as having the closer connection with the action, or the natural forum, than might an "international tribunal" for the reasons that follow.

[497]

The plaintiffs in action No. S004040 are all citizens of Canada, the Republic of Bulgaria is being rightly sued for commercial activities or other private activities in its name by its officials, institutions and agencies or instrumentalities of the state.

[498]

The questions of agreements or contracts are governed by the laws of British Columbia, since having occurred or to be completed there. The conspiracy which led to the breach of contracts and loss of the plaintiff's property and shares occurs under contracts governed by British Columbia law. The only link between the plaintiff's claim and the Bulgarian criminal proceeding against the Respondent/Plaintiff (Kapoustin) is that he had been the key person of the LifeChoice companies and a director and shareholder in Bulgarian subsidiary, and of course the primary target of the alleged defamation. The fact he was arrested and prosecuted by Bulgaria on Canadian information and a request originating from British Columbia are mitigating circumstances to the principal issues of the law suits.

[499]

In the words of Sopinka, J., in Amchem where a defendant discharges the burden of demonstrating "... that there is another forum which is clearly more appropriate for the trial of the action... a stay will be granted unless the plaintiff establishes special circumstances by reason of which Justice requires that the trial takes place..." in Canada. In assessing the existence of these special circumstances: "Mere loss of a juridical advantage will not amount to an injustice if the court is satisfied that substantial justice will be done in the appropriate forum."

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[500]

In applying the foregoing to the present cases it becomes apparent the Defendant has not demonstrated another forum where this litigation has the " most real and substantial connection" and hence, the natural forum for its disposition. The question to the Court then becomes whether the Defendant has established circumstances which could compel this court to deny its jurisdiction despite the fact that it is the natural forum for its disposition. In this regard, the only allegation which could be considered as evoking special circumstances of the type discussed by the Supreme Court in Amchem is that found in the Dobreva affidavit, filed that: "an action of this kind (to the extent it can be understood) must be advanced before an international tribunal"

[501]

The Respondent recalls the Court in Bushnell, supra. where Chief Justice McEachern said at p. 342: "It is not enough to show that the action as pleaded fits into one of the categories enumerated in Rule 13(1). That is an intellectual exercise not involving any discretion. Once that threshold has been satisfied, a distinction must be drawn between applications to stay British Columbia actions and challenges to the court's extra-territorial jurisdiction. In the former, forum conveniens, as explained in the cases, is the governing principle and a plaintiff will not be lightly denied its choice of situs. For this reason, the onus of displacing jurisdiction will be on the defendant. Chief Justice McEachem goes on to say: "In the latter category, the onus is upon the plaintiff not just to satisfy the forum conveniens test, but also to persuade the court that a reasonable measure of fairness and justice sufficient to meet the reasonable expectations of the national and international legal communities will be preserved if the court exercises jurisdiction. (emphasis added)."

[502]

Once the plaintiffs have passed the threshold test of establishing jurisdiction "simpliciter", prima facie case and cause of action connected to the province, the plaintiff bears the onus not just to satisfy the forum conveniens test, but also to persuade the court that a reasonable measure of fairness and justice sufficient to meet the reasonable expectations of the national and international legal communities will be preserved if the court exercises jurisdiction: Bushell, supra.

[503]

The applicable standard of fairness and justice in applications of the nature now before the Court are enunciated by Campbell A.C.J.B.C. in Jan Poulsen & Co. v. Seaboard Shipping Co. (1994), 100 B.C.L R. (2d) 175 (B.C.S.C.) at pages 179 to 180: In Quest Vitamins Supplies Ltd. v. Hassam (1992), 79 B.C.L.R. (2d) 85 (S.C.), at p. 87, Boyd J., following Bushell, supra, succinctly sets out the test to be applied where a defendant challenges the extra- territorial jurisdiction of the court: "….where a defendant challenges the jurisdiction of the Court over him, the onus lies upon the plaintiff to establish: (a) that the action as pleaded falls within one of the categories enumerated in R.13(1) - in other words, to establish jurisdiction simpliciter; (b) that the Courts of British Columbia are a forum conveniens with respect to the action; and (c) that a reasonable measure of fairness and justice sufficient to meet the reasonable expectation of the national and international legal communities will be preserved if the Court exercises jurisdiction.

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[504]

The application of "Fairness and Justice" in a civil or criminal proceeding becomes incredulous at best in a society such as Bulgaria whose legislation presently continues to grant "absolute immunity" from private prosecution to government employees, officers or officials and its agencies. This is can be see from the affidavit of the Respondent and evidence at Fourth Chapter Tab No. 6, and particularly when it surrounds claims by the plaintiffs, who have little choice but to litigate the claims in British Columbia on the merit of the facts and evidence at hand.

[505]

It is for these reasons that the submissions of the Respondent and other plaintiffs are lengthy and burdened with details having centred heavily on that evidence they believe as materially supporting the theory of "restrictive immunity" as an inseparable part of the first factor; that is, whether the complaint and relief sought of Plaintiffs is prima facie meritorious from the preponderance of documents placed before this Court [see Libman v. Quebec (Attorney General), [1997] 3 S.C.R. 569].

[506]

Afterward the application is in the nature that appears to proceed on to the remaining factors that logically flow from the first [See: Canadian International Marketing Distributing Ltd. v. Nitsuko Ltd. (1990), 68 D.L.R. (4th) 318 (B.C.C.A.)].

Part IIRespondent's Analysis [507]

In 427900 B.C. Ltd. v. Thrifty Canada Ltd. (1998), 168 D.L.R. (4th) 602 (B.C.C.A.) the court held that where jurisdiction simpliciter is settled in the affirmative "the existence of a more appropriate forum must be clearly established, particularly where there are no parallel foreign proceedings".

[508]

The test on this stage of whether the court should assume jurisdiction over this action was conveniently summarized by Madame Justice Saunders J. in Mercer. She adopted the test in Ecco Heating Products Ltd. v. J.K. Campbell & Associates Ltd. (1990), 48 B.C.L.R. (2d) 36 (C.A.) where Mr. Justice Taylor summarized the test for determining the forum conveniens, at p.42: "The court must consider which forum has the most substantial connection to the parties and the transaction. In answering that question it must review all of the factors which connect the parties and the transaction to each jurisdiction. It must consider, among other factors, the cost that each would impose on the parties, the presence of juridical advantage to one party (or disadvantage to the other) and the law governing the transaction.

[509]

In Jan Poulsen & Co. v. Seaboard Shipping Co. (1995), 100 B.C.L.R. (2d) (B.C.S.C.) 175, Campbell A.C.J.S.C. adopted the finding of Donald J.A. in Marchand (Guardian Ad Litem of) Alberta Motor Assn. Insurance Co. (1994), 89 B.C.L.R. (2d) 293, where he considered the principles in Amchem with respect to the balancing function in determining which forum has the "natural" or "real and substantial connection" with the case. Donald J. observed the exercise was not simply arithmetic but involved giving weight and significance to the various factors.

[510]

Defendant's counsel's submissions are not at all specific enough to persuade the Respondent that if the Court finds the issues of immunity and jurisdiction simpliciter to be in the affirmative for the plaintiffs, that this is not then the forum of convenience.

[511]

If the law to be applied is the "international law" suggested by counsel for the Defendant, then it seems reasonable that it will be easier to prove that law in B.C. than it would be, say in France. If the plaintiff must send its witness from B.C. or Bulgaria to an "international tribunal" that will result in a cost to the plaintiff. Therefore the choice of situs is the plaintiffs.

[512]

Counsel provides no evidence to believe that the applicable law of an "international tribunal" will be any different from that in British Columbia, so to the Respondent the question of "forum" appears to be a neutral factor.

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[513]

Likewise, the Defendant Bulgaria has made no suggestions of any juridical advantage or disadvantage to either party regardless of the forum.

[514]

However, hypothetical or neutral as the issue of jurisdiction forum non conveniens may be the question must still be asked, if there is jurisdiction in several places how is the appropriate forum determined? This selection of forum is often not that straightforward, as observed in Westec Aerospace v. Raytheon Aircraft Company, [1999] B.C.J. No. 871 (B.C.C.A.) (Q.L.) Vcr. Registry No. CA025410, Rowles J.A., in para. 31, cited this passage from Amchem at 911-912: " It is often difficult to pinpoint the place where the transaction giving rise to the action took place. Frequently, there is no single forum that is clearly the most convenient or appropriate for the trial of the action but rather several which are equally suitable alternatives. The choice of the appropriate forum is still to be made on the basis of factors designed to ensure, if possible, that the action is tried in the jurisdiction that has the closest connection with the action and the parties and not to secure a juridical advantage to one of the litigants at the expense of others in a jurisdiction that is otherwise inappropriate. I recognise that there will be cases in which the best that can be achieved is to select an appropriate forum. Often there is no one forum that is clearly more appropriate than others. What is the appropriate forum?"

[515]

The Chambers Judge hearing the Bushnell v. T & N plc (1992), 67 B.C.L.R. (2d) 330 (B.C.C.A.) application at first instance said in his reasons that: "...a plaintiffs choice of forum should not be lightly denied. It is his right to have ready access to the courts of his jurisdiction and not to be required to travel outside his jurisdiction to present his case. This is particularly the case where the plaintiff resides in the jurisdiction where he seeks to bring his action, or where there is some other bona fide connection between the action and the jurisdiction in which it is sought to be brought."

[516]

In Bushnell v. T & N plc, supra. the court held that fitting the action within R.13(1) is only the threshold. Once that threshold is crossed, the court must still draw a distinction between applications to stay British Columbia actions and challenges to the court's extraterritorial jurisdiction.

[517]

In the former case, the governing principle is forum conveniens: the plaintiff will not lightly be denied its choice of situs. In the latter case, the onus is on the plaintiff not just to satisfy the forum conveniens test, but also to persuade the court that a reasonable measure of fairness and justice sufficient to meet the reasonable expectations of the national and international legal communities will be preserved if the court exercises jurisdiction.

[518]

The same onus as to good arguable case as previous applied to Rule 13(10) applies under a Rule 14(6) application where a Rule 13(1) basis for jurisdiction is asserted by the plaintiff [see: Mercer International Inc. v. Larsen (1994), 25 C.P.C. (3d) 110 (B.C.S.C.)], as a result the plaintiff has the onus of establishing a good arguable case on all the elements related to any claims asserted under Rule 13(1).

Part IIIArgument

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[519]

Bulgaria's argument that an "international tribunal" would assume jurisdiction over the action appears to depend on its argument that the present proceedings before the Court somehow exclusively stem form the criminal prosecution of the Plaintiff Kapoustin in Bulgaria. The inference is that all the plaintiffs claims are somehow characterised to be related to the said criminal proceedings, the alleged violations of law more appropriate to an international human and fundamental rights tribunal. It is difficult for the Respondent to comprehend a supply contract, or the sale of the Defendant's service and products to the plaintiffs as a human and fundamental rights controversy. It then appears that the international tribunal or court would either not assume jurisdiction or if it would, the British Columbia law of contract would be applied.

[520]

Most contracts in dispute might be better characterised, as they in fact are, as ones of exclusive distributorship by the plaintiffs of certain of the Defendant's Ministry of Health products throughout Canada, and for that matter most of the world, rather than mere supply, its closest connection is with British Columbia were all the agreements originated starting in 1991.

[521]

However, even though the respondent's actions in Bushell appeared to be statute-barred in the appellant's home province of Quebec, that did not lead the court in Bushell to conclude that juridical advantage to the appellants outweighed other factors militating in favour of the British Columbia court assuming jurisdiction. In any event, any argument on juridical advantage assuming the agreement between the parties is characterise as an exclusive supply and distribution contract, is only one factor in the forum conveniens test [see: Amchem Products Inc. v. B.C. (W.C.B.), [1993] 1 S.C.R. 897 at p.900].

[522]

Bushell (supra) cannot be interpreted as a distinct separator requiring a discrete separation or sequential determination of the issues of forum conveniens and "reasonable measure of fairness and justice sufficient to meet the reasonable expectations of the international legal community." While the plaintiffs bear the onus of satisfying both requirements, in these cases, the tests are intertwined and it is observable that there is nothing to prevent the plaintiffs and this Respondent from taking reasonable advantages of an "international tribunal" to, as he has done, raise issues of human and fundamental rights abuses occurring in Bulgaria against the Defendant.

[523]

Reasonably the other plaintiffs, including Kapoustin should be anticipated to take advantage of Canadian law for matters connected to Canada and this province and for which no other jurisdiction is available or will not meet the requirements of fairness and justice.

[524]

In Morguard Investments Ltd. v. DeSavoye, [1993] S.C.R. 1077, at p.1111 the court said, "There is nothing, then, to prevent a plaintiff from bringing such an action and thereby taking advantage of the rules of private international law as they may evolve over time."

[525]

Apposite are the words of Mr. Justice LaForest in Hunt, supra. at pp.27-28 where he said in discussing the decision of the Supreme Court of Canada in Morguard, supra: "In Morguard a more accommodating approach to recognition and enforcement was premised on there being a "real and substantial connection" to the forum that assumed jurisdiction and gave judgment. Whatever approach is used, the assumption, and the discretion not to exercise jurisdiction must ultimately be guided by the requirements of order and fairness, not a mechanical counting of contacts or connections".

[526]

"Order and fairness" issues should evoke in this Court the same concerns about the Defendant Bulgaria's motives in suggesting an "international tribunal" to the commencement of proceedings against it as opposed to a simple traverse by it of the claims framed in tort or those alleging contract breach or interference with commercial activities in Canada.

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[527]

The Court should also be concerned by the Defendant's written declaration in evidence before it [see Affidavit Kapoustin No. 14, First Chapter Tab No. 9] that the Plaintiff Kapoustin has limited to no civil rights to appear before the courts in any jurisdiction except those the Defendant allows.

[528]

However, the Respondent and other plaintiffs do not seek at this stage to prove the case and are of the opinion such tests remain at trial of the issues, assuming such evidence is accepted by the court, and the court could reasonably conclude on a balance of probabilities that, inter alia; in action S004040 an agreement for exclusive distributorship of the defendant's products was terminated without reasonable cause or notice and the claims framed in tort have a reasonable basis in fact for the personal injury and losses suffered by the Plaintiffs in British Columbia, and; in action S005440 that a contract and commercial activity in or connected to British Columbia was rendered impossible by inter alia, the defendant's interference, and its undue influence among other things.

[529]

The Defendant Bulgaria has offered no evidence with either of the two applications to displace the specific evidence put forward by the Respondent and other plaintiffs. In particular the Defendant had no made no response at all to the January 2001 Reply of the Respondent in action S004040 or to the January and June 2001 Notices to Admit as delivered by the plaintiffs.

[530]

The Respondent asserts a position that the foresaid is capable of being construed as an admission by the Defendant as to the truth of the facts and veracity of the documents that support the various claims of the Plaintiffs.

[531]

It is common ground that the Plaintiffs in S004040 were the only distributor in Canada and most of the world of the Defendant's products as produced at its National Centre for Infectious and Parasitic Diseases for approximately 3 to 4 years. The representatives of the defendants travelled to Vancouver at the beginning of the relationship between the parties to initiate the agreement between the parties.

[532]

It is common ground that the Plaintiffs in S005440 had contracts to be completed in October and November of 1995 at law offices of McCandless, Morrison and Verdicchio in Vancouver, British Columbia and provided the plaintiffs a right to acquire interest in property and commercial activities in or connected to British Columbia. The Defendant took physical possession of the plaintiffs contracts and in turn their property and as such rendered impossible the completion of the contracts in Vancouver.

[533]

Most agreements with the Defendant Bulgaria and the various plaintiffs are all reduced to writing, and where a written agreement is absent the common intention of the parties is well communicated by their conduct and the letters and documentation exchanged between them. Such an instance is illustrated by the Plaintiffs December 31 st, 1993 shipment of a medical substance "Dy-Alkovin" [see §] to the Defendant and the letters that follow are all capable of being construed as an indication to the outside world of the parties' intention and mutual promises. Everything that has occurred between the parties relevant to their agreements will be considered by the trial court in deciding the issue. At this point however, the Respondent and plaintiffs have brought a body of evidence before this Court upon which if accepted by the trial court could reasonably infer from the language, conduct and communication between the parties, that the plaintiffs have established, on a balance of probabilities their claims.

[534]

All the numerous agreements have indeed been terminated or not completed on by a Defendant Bulgaria that has according to the evidence before this court received financial and property consideration from the Plaintiffs. And indeed the Plaintiffs Nicholas Kapoustin became a diabetic at the approximate age of 4 and Tatiana Kap has been fallen has become mentally disabled, both personal injuries occurring during the period. The documents have confirmed it.

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[535]

The plaintiff's argument about what caused these injuries and the relationship of that cause to the claims framed in tort, would be a live issue at trial. The trial court would have to consider many factors on the issues of personal injury.

[536]

The principal Defendant, the Government of Bulgaria, is permanently represented in Canada by its embassy and consular officers and has local counsel.

[537]

The Defendant Doornbos is resident in Canada and in his status as an official of the Canadian Government connected to the Province of British Columbia at the time, the plaintiffs rightly seek to join the Ministry of the Attorney General of British Columbia as a defendant in action No. S004040 as a party to those claims framed in tort.

[538]

The other defendants in both laws are resident in Bulgaria have been properly served. But for the Defendant Bulgaria no appearances have been filed.

[539]

There are other interested parties in the class action No. S005440 that are resident in British Columbia and are rightly to be added by the present plaintiffs as litigants in that proceeding.

[540]

The Plaintiffs allege that on a number of occasions officials of the Defendant Bulgaria Ministries of Justice, such as Ms. Bidjeva, Finance such as Mr. Radev and Health, such as Dr. Petrunov, have privately stated that they recognise the jurisdiction of this court over the Defendant Bulgaria.

[541]

Plaintiffs further allege that numerous statement were released by officials of the Defendant to the media that it recognised the jurisdiction of the Supreme Court of British Columbia and would "defendant itself" in these proceedings. These statement were repeated on Bulgarian television and radio programs and later reproduced in the national press.

[542]

The Respondent has provided a copy of what he alleges as a written statement of defence and has identified actions by officials of the Defendant that the Respondent alleges provide evidence and substance to the allegation that the Defendant Bulgaria did attorn to the jurisdiction prior to counsel filing his applications.

[543]

The plaintiff corporations of LifeChoice et al having their controlling shareholders in the Province, the others are in the United States and Bulgaria. LifeChoice companies had their head office in British Columbia where it carried on business as LifeChoice Pharmaceuticals Inc., incorporated in a British Columbia , and LifeChoice International Inc., operated in the province but is incorporated under the laws of Antigua and Barbuda and had business operations in British Columbia through its owned subsidiary that is a defendant by inference of its association to the sub-class of plaintiffs resident in British Columbia. LifeChoice International Inc. (A.D.) Bulgaria is a wholly owned subsidiary of LifeChoice International Inc., and is a company incorporated under the laws of Bulgaria and owns the shares of LifeChoice Inc., a United States registered corporation doing business in Vancouver, British Columbia LifeChoice BANQ1 Corporation is a company incorporated under the laws of Antigua and was designated as the project company under the 1994 Depositary Receipt Agreement and the July to October 1995 contracts of the individual class members.

[544]

Mr. Hristov, Mr. Marinov and Ms. Petrova Bulgaria residents and registered depositary receipt holders of the project company LifeChoice BANQ1 Corporation and have a right, by contract, to shares of the British Columbia corporation LifeChoice Pharmaceuticals and the United States corporation LifeChoice Inc. operating in British Columbia as well as shares of LifeChoice International Inc. (AD), the Bulgaria corporation.

[545]

The Kapoustins and Kaps have at all material times been British Columbia residents and are registered shareholders or hold through LifeChoice International Inc. (Antigua) controlling shares in all the foresaid LifeChoice companies. are Messrs.

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[546]

The plaintiffs in the both actions say that leading up to the December 1991 agreement and April 1992 contract between the Defendant Bulgaria Ministry of Health and the British Columbia corporation of LifeChoice Pharmaceuticals Inc., to conduct a joint commercial development and marketing of LifeChoice cancer and HIV/AIDS medical products, that there are a number of written communications between the parties from and to British Columbia, a number of telephone calls between officials of the Ministries of Health and Foreign Affairs of the Defendant Bulgaria and LifeChoice Pharmaceutical Inc.'s offices in Richmond, British Columbia and Vancouver, and at least two meetings in Toronto, Ontario.

[547]

The plaintiffs in both actions further say that leading up the 1995 contracts between LifeChoice International Inc., (Antigua) and the Defendant Bulgaria, Ministry of Health and a third party contracts with Founders Group Inc., a British Columbia company, LifeChoice Inc., the United States corporation operating in British Columbia, that at least two meetings in Vancouver, Montreal and Toronto, Canada and Austin, Texas, Washington, D.C. and Bethesda, Maryland, between officials of the Defendant Bulgaria, Ministry of Health and the management and investors of the Canadian and United States corporations and partnerships.

[548]

The bulk of the communications and negotiations thereafter appears to have been continued in British Columbia and Texas, although a significant number were naturally in Bulgaria in British Columbia and some in Chile.

[549]

The plaintiffs evidence provides a list of interested parties and say that there are witnesses in British Columbia, including more than one hundred limited partners, six lawyers and two investment groups, who have relevant evidence.

[550]

Respondent points to the fact that the LifeChoice companies and its partnerships had their origins in British Columbia with the Kapoustins and others in 1991, that the key agreement in December of 1991 was made subject to British Columbia law and all third party contracts with distributors or licensees of the Defendant Bulgaria's products were signed in the province (the 1993, 1994 and 1995 agreements with Founders Group, LifeChoice Partnership and LifeChoice Inc.) and that those documents are located in British Columbia.

[551]

In determining the appropriate forum it is important to keep in mind that the plaintiffs are asserting that the 1991 and 1995 agreements and contracts have been breached and interfered with by the Defendant Bulgaria. It is a dispute under those agreements, and the question of jurisdiction and the appropriate forum appears clear.

[552]

There are witnesses who reside in all three jurisdictions, but given recent developments in video conferencing, the location of the witnesses is not, in the respondents view, a significant factor in determining the appropriate forum.

[553]

From the Defendant Bulgaria asserting that the appropriate law will be an "International Tribunal" and its "applicable principles of international law" will apply, an inference can be drawn that this assertion considers facts in the statement of claim S004040 connected to claims of human and fundamental rights violations alleged by the Plaintiff Kapoustin.

[554]

This reasoning escapes the Respondent since the nature of the claims and damages sought are for "breaches of contract" and others are framed in tort and related to, inter alia, questions of defamation, personal injuries suffered by the plaintiffs Nicholas, Tracy, Tatiana and Robert, in the province and other losses they incurred as a result. It seems the governing law of these key 1991 and 1992 agreements and representations appears to be the province. What is more the "Lex Loci Delecti" of the personal injury that occurred from 1996 to 1998 are British Columbia.

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[555]

Other questions are considered both actions about, inter alia, unlawful interference and dealings with contracts and agreements, conversion of plaintiffs private property and making fraudulent misrepresentations and disclosures causing financial injury and related to the questions of ownership of the inventories of whisky and vodka, chocolates, sea and land containers, vehicles, 2 oil refining plants and equipment, leaseholds, builds and land, intellectual property and securities that are all in possession of various institutions of the Defendant Government of Bulgaria and located there. These are all related to agreements in British Columbia spanning a period from April 1992 to October of 1995. It appears to me that the governing law with respect to initial agreements, i.e. the April 1992 agreement, and the allegations of conspiracy and inducing breach of contract, in the July to August 1995 contracts must be British Columbia.

[556]

It is an important consideration in this application that there are no parallel proceedings in Bulgaria. It was not suggested that there were. The existence of Bulgaria or the United States as a more appropriate forum has not been not be brought by the defendants and no "international tribunal" is clearly established by the defendants with respect to this action.

[557]

Avenue Properties (supra) and Thrifty (supra) involved parallel proceedings. Here there are no parallel proceedings. In those circumstances, the existence of a more appropriate forum must be clearly established to displace the forum selected by the plaintiffs.

Part IVAnalysis of Factual Circumstance [558]

However, the fact that the plaintiffs may be entitled to serve the defendants because they have pleaded a case and introduced evidence that permits them to serve defendants ex juris does not necessarily mean that this court has jurisdiction. The question of jurisdiction is whether, as stated in Cook v. Mauro, above, there is a real and substantial connection between the court and either the defendants or the subject matter of the litigation. This question should be answered in the affirmative, for there is a real and substantial connection to British Columbia and the subject matter of the conspiracy claim as follows.

[559]

The limited partnership of Dy-Alkovin Marketing and corporation of LifeChoice Pharmaceuticals Inc., each had their founding investors, corporation members and associated partnerships here in British Columbia. The commercial activities and other projects in with the Defendant Bulgaria in British Columbia, the United States and Bulgaria evolved over time to become the raison d'etre of the incorporated and unincorporated association of plaintiffs in both law suits partnership. British Columbia lawyers and investment brokers were retained to secure the initial equity financing for the projects. Although the threats of harm and attempts of extortion of the plaintiffs in British Columbia came over the telephone from outside British Columbia and those responsible are not in British Columbia, they were still telephone discussions that occurred in British Columbia and threats uttered here.

[560]

In contractual cases an important consideration is whether or not this court should decline jurisdiction where the contract contains an exclusive jurisdiction clause. The "Eleftheria" [1970] P. 94, [1969] 2 All E.R. 641 held that the burden is on the plaintiff to demonstrate that the court should exercise its discretion not to grant a stay in the face of an exclusive jurisdiction clause. Brandon J. said at 99:

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"The principles established by the authorities can, I think, be summarized as follows: (1) Where plaintiffs sue in England in breach of an agreement to refer disputes to a foreign Court, and the defendants apply for a stay, the English Court, assuming the claim to be otherwise within the jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not. (2) The discretion should be exercised by granting a stay unless strong cause for not doing so is shown. (3) The burden of proving such strong cause is on the plaintiffs. (4) In exercising its discretion, the Court should take into account all the circumstances of the particular case. (5) In particular, but without prejudice to (4), the following matters, whether they arise, may be properly regarded: (a) In what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial as between the English and foreign Courts; (b) Whether the law of the foreign Court applies and, if so, whether it differs from English law in any material respects; (c) With what country either party is connected, and how closely. (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages. (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign Court because they would (i) be deprived of security for that claim; (ii) be unable to enforce any judgment obtained; (iii) be faced with a time-bar not applicable in England; or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial." [561]

The Eleftheria was considered in Pirrana Small Car Centres Ltd. v. Rumm, Measures and Kathcare Enterprises Ltd. (1981), 27 B.C.L.R. 292 (S.C.), (B.D. Macdonald J.) and G & E Auto Brokers Ltd. and Ablitt v. Toyota Canada Inc. (1980), 25 B.C.L.R. 145, (Macfarlane J.).

[562]

Earlier this Factum touched briefly on the factors the Court was to give consideration of the forum conveniens as generally determining whether or not its should decline jurisdiction as were described in Stern v. Dove Audio Inc., [1994] B.C.J. No. 863, Vancouver Registry No. C930935, by Low J. at p. 11. A number of factors to assist the court in an application under R.14(6)(c) are also set out in Leisure Time Distributors Ltd. v. Calzaturificio S.C.A.R.P.A - S.P.A.. It is clearly apparent once the test for jurisdiction simpliciter is met the court should not decline jurisdiction unless the Defendant has made it is clear that there is a more appropriate forum for trial of the action. The applicant Defendant Bulgaria has not satisfied this requirement.

[563]

Case law on this issue is "remarkably uniform" in various common law jurisdictions and despite where there are differences in language used, each jurisdiction applies principles designed to identify the most appropriate or appropriate forum for the litigation based on factors which connect the litigation and the parties to competing "fori" and what is generally consider the test to be applied by the courts. While the standard of proof remains that applicable in civil cases, the authorities show that the existence of a more appropriate forum must be clearly established to displace the forum selected by the plaintiff. From a careful reading of the Amchem (supra) case and the other cases cited it can reasonably be concluded that on an application under Rule 14(6)(c) the court should consider the following factors:

1) Where each party resides.

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[564]

In action S004040 two of the three individual defendants continue to reside in British Columbia, the third is incarcerated by the Defendant Bulgaria, however it can be reasonable assumed that British Columbia remains his residence together with that of his wife and son. Except for Michael Kapoustin neither of the remaining Plaintiffs has ever had a permanent physical presence in Bulgaria, or a legal address in Bulgaria.

[565]

In S005440 a sub-class is identified as resident in British Columbia and some are individually named in the Affidavit of Ada Gogova, filed. The remaining members of the sub-classes of plaintiffs, some 5,000, are all connected to British Columbia and the Defendant by their individual agreements and contracts having been identified in the affidavits of Hristov, Marinov and Petrova.

[566]

The applicant is a foreign state, it is permanently represented and it could be said has a "residence" or a "place of business" at its embassy at Ottawa, Ontario and conducts its business through out Canada. The wording of the application to this Court and the affidavit of Ms. Dobreva can be arguably seen as not attempting to advance a supposition the Court might find hard to accept, one where the Defendant Bulgaria wished to leave the impression, that it has no presence in Canada. The individuals, agencies or instrumentalities named as the alleged tortfeasors and criminally responsible parties for the personal injury of the Plaintiffs or their loss of property are all officials or divisions of the Defendant government with their controlling mind the Defendant government of Bulgaria.

2) Where each party carries on business.

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[567]

All of the parties in both actions, at one time or other have carried on business in or have been connected to commercial activities in British Columbia.

[568]

In action S004040 the Plaintiffs allege that their right to sue the Defendant Bulgaria in the province devolves to them under Rule 13(1)(g)(h) from their joint commercial activities with the Defendant and its later breach of contracts or other agreements with companies where the plaintiffs are either majority shareholders or owners or have some other direct or indirect financial interest in business activities carried on or connected to the province. The companies the Plaintiffs identify as connect to the province are LifeChoice Pharmaceuticals Inc., a Canadian federal corporation having had its principal office in Vancouver, British Columbia; they allege to be owners of LifeChoice International Inc., a Antigua, West Indies company and the alleged parent corporation of the said British Columbia corporation; and of LifeChoice BANQ1 Corporation another Antigua company; and of LifeChoice International A.D. (Inc.) a Bulgaria subsidiary company. All these foreign corporations of the Plaintiffs during the action period are alleged to have had their principal offices in and conducting their significant business from Vancouver, British Columbia. It is apparent that the Plaintiffs and their companies are no longer carrying on any active business..

[569]

In action S005440 the individual members of the various sub-classes resident and nonresident in the province, allege their right to sue is derived from Rule 13(g)(h) and various rights that devolve to them as either in law or by the agreement or contract they each hold, and that where to have been completed at Vancouver law offices of the attorneys for the Plaintiffs LifeChoice International Inc., and LifeChoice BANQ1 Corporation. As a result their claims are framed in tort for unlawful interference with their agreements or contracts resulting in a breach of contract connected to the province that allegedly leads to their loss of property and contracts in or connected to commercial activities in British Columbia with the Defendant Bulgaria. The individuals, agencies or instrumentalities of the Defendant Bulgaria conducting commercial activities in British Columbia or interfering with those activities are all officials or divisions and their controlling mind is the Defendant government of Bulgaria.

3) Where the cause of action arose.

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[570]

There is no evidence to dispute the claim that the personal injury and loss suffered as alleged by Plaintiffs Tracy and Nicholas Kapoustin or those of Robert and Tatiana Kap, if true must have arose in British Columbia. The same can be safely said for any sub-class of plaintiff in S005440 that was or is resident in the province and has directly or vicariously suffered injury or damages as a result of the alleged acts of the Defendant Bulgaria.

[571]

S004040 is an action whereby the Plaintiffs claims are, in part framed in tort and for damages resulting from a breaches of contract. The plaintiffs allege that the defendant orchestrated a plot with the intention of causing personal injury to the Plaintiffs by first publicly humiliating them and then in an organised manner systematically breaching their contracts with the Plaintiffs and their companies to cause economic injury to the Plaintiffs commercial activities in the or connected to the province. Part of that plot involves later actions taken by the defendants in British Columbia. The acts complained of included occurrences in Vancouver which by telephone representative of the Defendant attempted to extort money from the Plaintiffs in exchange for ceasing the public actions taken against their reputation, and particularly against the Plaintiff Michael Kapoustin and their various companies. The actions taken by the all defendants except for Canadian citizen Derek Doornbos, were all actions that would have been taken by the controlling mind of the Defendant Bulgaria. It is reasonable to assume that any action taken by the defendants in or connected to Canada would have been affected by the individual defendants and directed by the government Defendant based in Sofia, Bulgaria.

[572]

This may prove to be a very contentious issue at trial. It is arguable that the cause of action against the Defendant Bulgaria arose in British Columbia beginning on or about May 15th 1995. The Defendant replies that there is no cause of action, but this assertion by the Defendant is not free of doubt as the affidavit of Dobreva admits there may be causes of action against it are that are more appropriate in an international judicial forum. This is uncertain and speculative, but generally the cause of action in both actions can be said to have their affect on the Plaintiffs in British Columbia or arose in British Columbia and had their affect later on plaintiffs outside the province.

4) Where the loss or damage occurred. [573]

This issue is not relied on by the applicants in the case at Bar, the Court may chose to treat it as a neutral factor. The complexity of this case and the transnation quality of the various transactions may create some question about this at trial. However, some discussion on the subject is merited.

[574]

Claim S004040 involves personal injury and injury to the economic interests of the plaintiffs. Although there will be losses in Bulgaria, the United States as well as in Canada, the plaintiffs residence is British Columbia and their corporate head office at the time was Vancouver and it is the economic interests of that plaintiffs and that corporation in Vancouver which the plaintiffs allege have been principally affected. There can be no question as to the hospitalisation and care of Nicholas and Tatiana having taken place in British Columbia and the ongoing costs of that care is a part of the recoverable damages as is that part of the heath care costs paid by the government of British Columbia.

5) Any juridical advantage to the plaintiff .

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[575]

Part of the claim of the plaintiff is for an award for punitive damages as against the defendants. There is no provision under the law in Bulgaria for an award of punitive damages and therefore were the defendants to be granted a stay of this action it would deprive the plaintiffs in both actions of a significant juridical advantage. Castanho v. Brown & Root , [1981] A.C. 557 (H.L.); Pindling v. National Broadcasting Corp. (1984), 49 O.R. (2d) 58 (H.C.J.).

[576]

The plaintiff also notes that there is no discovery or interrogatory process in Bulgaria therefore the parties have no right to pre-trial Examination for Discovery. In addition, each party is only required to produce those documents in their possession on which they propose to rely. As Stevenson, J.A. (as he then was), noted in United OilSeed (supra), at p. 344, where a plaintiff brings an action as of right and the competing forum does not permit a pre-trial discovery process, it is open to the court to conclude that the other jurisdiction may not be suitable despite other advantages. We must ask ourselves whether substantial justice may be done notwithstanding the difference in procedures. In this case, the plaintiffs in both actions allege a conspiracy and argue that where a conspiracy is alleged pre-trial discovery and production of documents would be critical to the action. Therefore, were a stay to be granted the plaintiffs would not have access to these processes which processes would be a juridical advantage to the plaintiffs. It is apparent from the evidence of Marianna Radulova, attorney Mr. Lukanov and the Plaintiff Kapoustin, that the effort of the Plaintiffs to effect pre-trial discovery or uncover facts and documents is not a fruitful process, despite the number of times the plaintiffs have regularly demanded production of documents. The immunity granted in Bulgaria appears to deny the plaintiffs of any possibility for justice.

6) Any juridical disadvantage to the defendant. [577]

None has been alleged. It appears to be a neutral issue and no argument has been advanced as reason to suggest the Defendant government will suffer judicial unfairness in this jurisdiction.

7) Convenience or inconvenience to potential witnesses. [578]

The only inconvenience here appears to be to the Plaintiff Kapoustin who is incarcerated in Bulgaria and cannot appear since the Defendant government refuses his applications to be brought temporarily before this Court The parties have not discussed what witnesses who will likely be called. This is likely a result of the Defendant Bulgaria believing its immunity will prevent this from becoming an issue, except for the Plaintiff Kapoustin. The defendants indicate that two witnesses are resident in Calgary and at least six witnesses are resident in Argentina..

8) Costs of litigation in this jurisdiction.

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[579]

The cost of conducting the litigation for the plaintiffs in any jurisdiction other than British Columbia would be prohibitive if not impossible for them. Plaintiff Kapoustin has brought a motion in both actions to be declared indigent by the Court. Those requests are now at before the Bar.

[580]

There is the fact that of the Defendant ventures to suggest the jurisdiction of Bulgaria, it would require British Columbia residents to travel there at great expense. The prevailing law of Bulgaria requires plaintiffs deposit 4% of the damages they claim, considering that the plaintiffs allege millions of dollars in damages that would make it impossible for them to commence an action of any sort. As non-resident foreigners it is uncertain how many times they would be required to travel back and forth. Although potential witnesses are located in various jurisdictions the individual parties and the controlling mind of both parties are more readily located in Vancouver and therefore much of the documentary evidence is likely to be available in this jurisdiction.

[581]

There is simply very little evidence on this point. As with the question of where the loss of damage occurred, the court can make no determination. Accordingly, this may be treated as a neutral issue. The contention that since the Defendant has a presence in Canada and has already retained local counsel proves that, it will be far less expense for on defendant to appear in British Columbia and far less inconvenience or expense than for the elderly and very ill Mrs. Kap and Mr. Kap, and 8 year Nicholas who is diabetic to travel with his mother Tracy to Bulgaria. There is as well the safety of these Plaintiffs, considering the atmosphere of enmity and rancour having demonstrably created by the Defendant in the public mind toward the Plaintiff Kapoustin and his family. The affidavit of Robert Kap and Dimitar Hristov together with the news articles cited and the uttering public threats to hang or execute Kapoustin lend substance to these fears. There exist no such concerns in the litigation if it is conducted in this jurisdiction..

9) The applicable substantive law

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[582]

This factor raises again the issue of the framing of the actions. The Defendant take the position that the substance of these actions are the same as the criminal proceeding conducted by the Defendant in Bulgaria against the Plaintiff Kapoustin and therefore it is a matter of whether an international tribunal is the more convenient forum to hear the actions in the nature of claims placed before the Bar. A review of the evidence provided shows that these are not the same issues. The affidavit of the attorney in the criminal proceeding in Bulgaria, Mr. Lukanov, says the Bulgaria action and international law claims of Mr. Kapoustin to the European Court involve matters the context and nature of which are different from the plaintiffs claims in British Columbia. Mr. Michael Kapoustin's complaints of human and fundamental right violations of unlawful arrest and imprisonment, among other, are wholly different from the personal injury, property loss or damage and breach of contract allegation of the plaintiffs in British Columbia and these actions involves a number of parties of which the Plaintiff Kapoustin and the Defendant Bulgaria are but only one. The British Columbia actions revolving primarily around claims framed in tort and commercial activities connected to the province. The action in Bulgaria does not involve the same parties in British Columbia other than Kapoustin. It alleges actions by Bulgaria and the individual defendants caused personal injury and economic losses in S004040 and only economic losses to the plaintiffs in S005440. While there will undoubtedly be evidence common to the Bulgaria criminal proceeding and those civil proceeding in British Columbia, they are entirely different causes of action. Therefore, the plaintiffs, assert that since the claims framed in tort and those alleging contract breaches are initiated by British Columbia residents in both actions and concern acts or breaches allegedly occurring in or connected to Canada and there are allegations against one Canadian resident defendant for his alleging involvement in a conspiracy among all the defendants to acquire money and information in British Columbia, it would seem likely to apply British Columbia law. This does not mean, however, that resort will not have to be had to international law or that of Bulgaria as certain actions were taken by the defendants in and outside Bulgaria involving international treaty law and their legal system.

[583]

The applications imply to the Court that a European tribunal may have jurisdiction over the Defendant Bulgaria in matters of human and fundamental right violations applicable to the arrest, extradition, treatment and adjudication of the Plaintiff Kapoustin on criminal proceedings in Bulgaria.

[584]

The Respondent, as a party to this litigation is partially in agreement that acts clearly and unambiguously found to be jure imperii in a human and fundamental rights proceeding are subject to such tribunal and its jurisprudence in such matters. However, it is doubtful if such a tribunal can provide relief to residents of Canada where the actions are framed in tort or are connected to commercial activities and contracts of the Defendant as connected to Canada or possibly both. That is not the choice this court has been given [see: Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.) , [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1; 102 D.L.R.(4th) 96; 77 B.C.L.R.(2d) 62, at 89; Paterson et al. v. Hamilton et al. (1991), 115 A.R. 73; 79 Alta. L.R.(2d) 111 (C.A.), at 114] and should the Defendant Bulgaria suggest to this Court that the unnamed "international tribunal" is the European Court of Human Rights, the Respondent is convinced that the charter of that tribunal and practice of the European Court would not permit it to hear the civil complaints of plaintiffs in Canada.

[585]

Even if the Defendant Bulgaria were to somehow satisfy that issue, the factors which this Court has to consider in determining which forum is more convenient should not lead it to conclude that the jurisdiction of the European Court of Human Rights is clearly or distinctly a more suitable forum.

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[586]

The Respondent takes the plaintiffs position and asserts that there is no international tribunal that has jurisdiction to hear the ongoing matters between the parties. Neither are the Plaintiffs Tracy and Nicholas in Supreme Court action S004040 residents of Europe, they are residents and citizens of the province and Canada. For that matter the evidence of Ada Gogova shows there are significant numbers of a sub-class of plaintiffs in Supreme Court action S005440 that are residents of this province. There is a real question as to whether or not any "international tribunal" or other jurisdiction would provide a proper alternative forum in the present issues.

[587]

Many of the decisions referred to by the Respondent in this Factum have considered that where a party has jurisdiction as of right, which the plaintiffs do in both circumstances of the present actions, the court must then be satisfied that the other jurisdiction provided by the Defendant Bulgaria is clearly or distinctly more suitable and the Respondent has grave concerns about whether or not the suggested "international tribunal" has any jurisdiction to hear these matters at all.

10) Difficulty in proving foreign law, if necessary. [588]

The Respondent found the words of Stevenson, J.A., in United OilSeed at para. 32 to be extremely helpful: "I would not accord any special status to the plaintiff's choice of forum, unless that forum has jurisdiction as of right. Even where that jurisdiction exists as of right we should recognise that there may be a superior forum, having regard to the interests of both parties. Where that superior forum can be readily identified litigation should be pursued in it."

[589]

An alternative and superior forum is suggested and made reference to in the present applications of the Defendant, however it is not named and no reasons are given to show it as being a superior forum having competent jurisdiction. [see: Spoliate Maritime Corp. v. Cancellous Ltd. , [1986] 3 All E.R. 843 (H.L.), at 854]. The Respondent asserts that there is no international forum that has proper or competent jurisdiction to hear the actions now before the Bar..

[590]

It will be necessary to prove some foreign law, however, there is no evidence that to do so would be difficult.

[591]

Plaintiffs have asserted that there are complex issues of applicability of Canadian and Bulgarian law but the cost and inconvenience will be negligible if and when required.

11) Whether there are parallel proceedings in any other jurisdiction.

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[592]

There are none. Argument

[593]

This list is not exhaustive, of course and the Defendant has not advanced any considerations for the court and the Respondent, apart from those enumerated above.

[594]

The plaintiffs assert that the question of fairness and justice as referred to in Bushnell (supra), are sine qua non principles of natural law that can best, or perhaps only be preserved if, in these particular cases, the court in British Columbia does assume jurisdiction over this litigation. To do otherwise would be to send the message that it is possible for state representatives, employees, officials, officers, agencies or instrumentalities who enjoy in law or as a practice absolute immunity in their own countries to avoid their obligations to international comity and respect for the laws of other states whose citizens fall pray to their actions.

[595]

It is and must remain wrong to avoid one's contractual obligations or to interfere with those of others and their lawful rights. Otherwise one need only ignore the courts of the province and allege a move out of the jurisdiction, thus forcing the plaintiff to come to a foreign jurisdiction to enforce a claim.

[596]

I note in passing that although counsel for the Defendant referred in his submissions as to other potentially appropriate or convenient forums an international tribunal, the defendant in its his affidavit only infers that it is prepared to submit to the jurisdiction of such a court. Conclusion

[597]

The foresaid factors weigh in favour of concluding that British Columbia is a forum conveniens for both these actions.

[598]

The Plaintiff Kapoustin and the LifeChoice companies had there business and commercial beginnings in this province. LifeChoice had its first incorporation in British Columbia and carried on its business here. The Defendant Bulgaria has a governemnt division, the Ministry of Health , that has scientific institutions it owns, controls, finances, and operates for profit, one of these in the National Centre for Infectious and Parasitic Diseases an Bulgaria government commercial institution with offices only in Bulgaria, the Defendant has consistently referred to LifeChoice et al. in its agreements and contracts as its exclusive distributor and a scientific research partner. LifeChoice et al and the Plaintiff Kapoustin distributed the pharmaceutical products manufacture by of the Defendant in British Columbia and throughout Canada.

[599]

The Defendant sent its representatives. Dr. Petrunov and others to Canada and British Columbia in particular to meet with representatives of LifeChoice et al at critical points during their relationship. These included 1992 and 1993 when the Defendant's officials initiated the relationship with the Plaintiff Kapoustin and LifeChoice et al, and were party to representations made to clients and customers of Kapoustin and LifeChoice et al when signing contracts in British Columbia with Founders Group Inc., LifeChoice Partnership and LifeChoice Inc., USA. Between June 1994 and January 1995.

[600]

The Defendant, through Kapoutsin and LifeChoice et al, carried on business in British Columbia. The evidentiary focus is the relationship between these parties in British Columbia. The evidence is more readily available here from law offices and other plaintiffs or defendant. The effect on the relative convenience and cost militates in favour of British Columbia being the forum conveniens. There is an obvious juridical advantage to the plaintiffs in having this court assume jurisdiction in terms of costs and availability of witnesses. The plaintiffs lawyers, directors and witnesses are here. Thus, the applicable substantive law appears to be British Columbia's law of contract.

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[601]

The loss allegedly suffered by the Kapoustins occurred in British Columbia. The plaintiff developed a market of approximately $2,200,000 per year of retail value for the Factor-R and other products in Canada and the United Sates. This is some indication of significant damage suffered in Canada by the plaintiffs should the court find the termination was not reasonable.

[602]

The necessity of proving foreign law in the event it governs, would not appear to be difficult given both parties adduced opinion evidence on this application on the international law and the plaintiffs on both.

[603]

Therefore the onus is met of establishing that British Columbia is an appropriate forum in which to try the plaintiffs claims against Bulgaria. British Columbia is the forum conveniens and in my assessment the reasonable expectations of the international legal community will be preserved if this court exercises jurisdiction. The Plaintiff asserts that his affidavits and evidence provided the court a the standard that exceeds the requirements of a "good arguable case", and the allegations and claims made by the plaintiffs involve more than bare pleadings and assertions. It is argued argues that there is evidence of a good arguable or prima facie case as required, and the court is not simply back to the procedural or intellectual exercise of determining whether the action as pleaded falls within one of the categories in Rule 13(1). And that G.W.L. Properties Ltd. is binding upon the court.

[604]

Rule 13(1)(g) is relevant to claims of alleged breach of contract in British Columbia. These claims are pleaded as breaches of implied contractual warranties. These claims framed in contract mirror the tort claim of negligent misrepresentation.

[605]

Given the facts it is not necessary in to consider what is essentially a choice between the courts of Canada, and to conduct any further or separate analysis into unknown territory of an unidentified international tribunal as to whether a reasonable measure of fairness and justice, sufficient to meet the reasonable expectation of the national and international legal communities, is preserved by a decision to exercise jurisdiction in British Columbia.

[606]

On the facts disclosed in this Factum "a reasonable measure of fairness and justice" for all parties will be preserved with the action proceeding in this jurisdiction [Jan Poulsen & Co., supra, 186-87; Quest Vitamin Supplies Ltd. v. Hassam (1992), 79 B.C.L.R. (2d) 85 at 179-80].

Part VDefence Defendant [607]

The Respondent again repeats his cardinal sin of anticipating counsel for the Defendant.

[608]

Counsel may seek to assert and rely on an argument to this Court that its assumption of jurisdiction would deprive his client of a juridical advantage before an international tribunal. That would seem an unfair attempt to pre-empt the plaintiffs action here. It is odd that the defendant would suggest to the Court that the plaintiffs commence an action in before an "International Tribunal" and not before its own courts to seek relief concerning relationships and allegations asserted by the plaintiffs.

[609]

Mindful of such a possible submission by counsel for the Defendant that plaintiffs seek to obtain juridical advantage, the Respondent is also mindful of his own observations in case law that the factors involved in that analysis should not be effected by the motive of the party in choosing the disputed jurisdiction, because it is only rational to sue in the most advantageous place.

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[610]

The defendants have yet to suggest that the plaintiffs in addition to or as an alternative to this action, should commence an action against the defendants in Bulgaria, obtain the evidence they require or a decision, one of the two actions to be stayed. The Respondent see no useful purpose to be served by the Court forcing the plaintiffs to commence their action in more than one jurisdiction or another jurisdiction entirely. Even if the plaintiffs brought their action against the defendants in Bulgaria, the courts of that jurisdiction will likely have to exercise extra- territorial jurisdiction over one or more of the defendants or plaintiffs who reside in this jurisdiction. In following the reasoning of His Lordship Mr. Justice Boyd J. in Quest Vitamin Supplies Ltd. which was applied in Pineridge Capital Group Inc. c. Anderson (1995), 16 B.C.L.R. (3d) 296 (B.C.S.C.): a trial involving a claim of conspiracy which concerns a series of transactions should be dealt with if at all possible in a single trial to avoid not only the risk of inconsistent verdicts, but to avoid enormous expense and inconvenience.

[611]

Conspiracy among the defendants is alleged and the Defendant Government of Bulgaria the organizing mind of the conspiracy and the pecuniary and non-pecuniary beneficiary of the conspiracy alleged to have caused the plaintiffs losses and personal injuries. The proceeding now at the Bar are on all fours with the reasoning of Boyd, J. in Quest, supra..

Part VIConclusion [612]

It is at the discretion of this Court to assume jurisdiction over these two actions if it meets the reasonable requirements of order and fairness referred to in Morguard, supra and the "reasonable measure of fairness and justice" articulated in Bushell. The international scope of the distribution and sale by the Defendant of its products and what the Respondent believes to be a reasonable and substantial connection of this action to British Columbia based on all the forums conveniens factors should persuade the Court that this last test has been met by the plaintiffs. Volume III.

Authorities

CASES NOTED 317159 B.C. Ltd. v. C.A. Boom Engineering (1985) Ltd. (5 December 1990), [Unreported]----------------------------68 Alberta Court of Appeal in Nova, an Alberta Corporation v. Grove (1982), 140 D.L.R. (3d) 527 (Alta. C.A.) Laycraft J.A. at page 531--------------------------------------------------------------------------------------------------------------------61 Alberta. B.P.I. Resources Ltd. v. Merrill Lynch Canada Inc-------------------------------------------------------------------57 Alexander v. Rayson, [1936] 1 K.B. 169 at 178---------------------------------------------------------------------------------66 Amanat Khan v. Fredson Travel Inc. (No. 2) (1982), 36 O.R.(2d) 17--------------------------------------------------------48 Amchem Products Inc. et al. v. Workers' Compensation Board (B.C.) , [1993] 1 S.C.R. 897; 150 N.R. 321; 23 B.C.A.C. 1; 39 W.A.C. 1; 102 D.L.R.(4th) 96; 77 B.C.L.R.(2d) 62, at 89--------------------------------------------94, 99 Amin Rasheed Shipping v. Kuwait Insurance Co. [1983] 2 All E.R. 884; Spiliada Maritime Corp. v. Cansulex Ltd. [1986] 2 All E.R. 843;------------------------------------------------------------------------------------------------------------12 Andrews et al. v. Grand & Toy (Alberta) Ltd. et al. , [1978] 2 S.C.R. 229; 19 N.R. 50; 8 A.R. 182; [1978] 1 W.W.R. 577; 83 D.L.R.(3d) 452, 469-70.---------------------------------------------------------------------------------------------4, 57 Antares Shipping Corporation v. The Ship "Capricorn" (also known as the Ship "Alliance") et al, [1977] 2 S.C.R. 422 at pages 446-447-------------------------------------------------------------------------------------------------------------63 Bangkok Bank of Commerce Public Co. v. City Trading Corp. (1997), 13 C.P.C. (4th) 324 (B.C.S.C.)-----------12, 64 Bow Valley Resource Services v. Kansa General Insurance Co. (1991), 56 B.C.L.R. (2d) 337--------------------------11 Brewer v. Socialist People's Republic of Iraq (1989), 890 F.2d 97-----------------------------------------------------------46 Bushnell v. T & N plc (1992) 67 B.C.L.R. (2d) 330 at 336 and 342---------------------------------------------------------12 Bushnell v. T&N plc (1992), 67 B.C.L.R. (2d) 330 at 342; [1002] B.C.D. Civ. 3714-03 (C.A.)-------------------------19 Camco International (Canada Limited) v. Porodo (18 November 1997), Calgary 9601-08706 (Q.B.), p. 7-----------74 Canadian International Marketing Distributing Ltd. v. Nitsuko Ltd. (1990), 68 D.L.R. (4th) 318 (B.C.C.A.) at 320)37 Clack v. Arthur's Engineering Ltd., [1959] 2 Q.B. 211-------------------------------------------------------------------------66

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Composers Authors and Publishers Association of Canada Limited v. International Good Music, Inc. (formerly KVOS INC.) et al, [1963] S.C.R. 136. Martland J. at pages 143-144----------------------------------------------------62 Cook v. Parcel, Mauro, Junltin & Spaanstra, P.C. (1997), 31 B.C.L.R. (3d) 24 (C.A.)------------------------------------19 Cook v.Parcel, Mauro, Hultin & Spaanstra, P.C. (1997), 31 B.C.L.R. (3d) 24 (B.C.C.A.)--------------------------------63 CRS Forestal v. Boise Cascade Corporation, Vancouver Registry No. C983201, August 13, 1999 (B.C.S.C.), Sigurdson, J------------------------------------------------------------------------------------------------------------------------12 De Sanchez v. Banco Central de Nicaragua (1985), 770 F.2d 1385, the court commented, at p. 1393------------------43 Emanuelli, Commentaire: La Loi sur l'immunité des Etats (1985), 45 R. du B. 81------------------------------------41, 44 Emanuelli, Commentaire: La Loi sur l'immunité des Etats (1985), 45 R. du B. 81, at pp. 100-101---------------------44 Fontaine v. British Columbia (Official Administrator), [1998] 1 S.C.R. 424 (S.C.C.)-------------------------------------39 Funk v. Clopp (1984), 35 B.C.L.R. (2d) 222-------------------------------------------------------------------------------------66 G.W.L. Properties Ltd. v. W.R. Grace & Co. - Conn. (1990), 50 B.C.L.R. (2d) 260 (C.A.)--------------------------61, 63 G.W.L. Properties Ltd. v. W.R. Grace & Company - Conn. (1990), 50 B.C.L.R. (2d) 260 (C.A.)-----------------------12 Gerula v. Flores (1995), 83 O.A.C. 128; 126 D.L.R.(4th) 506 (C.A.),-------------------------------------------------------57 Gouvernement de la République démocratique du Congo c. Venne , [1971] S.C.R. 997-----------------------------47, 48 Hall v. Pemberton (1974), 5 O.R. (2d) 438---------------------------------------------------------------------------------------67 Hoole v. Advani (1996), 39 C.B.R. (3d) 122 (S.C.), at 125:-------------------------------------------------------------------66 Huber v. Steiner (1835), 2 Bing. N.C. 202; 132 E.R. 80-----------------------------------------------------------------------20 Huddart J., as she then was, in Northland Properties v. Equitable Trust Co. (1992), 71 B.C.L.R. (2d) 124 (B.C.S.C. ---------------------------------------------------------------------------------------------------------------------------------------77 Hunt v. Carey Canada Inc------------------------------------------------------------------------------------------------------11, 70 I Congreso del Partido , [1983] A.C. 244 (H.L.)-------------------------------------------------------------------42, 47, 52, 53 J. Michael Jensen Boat Sales Ltd. v. McAfee (1997) 12 C.P.C. (4th) 210 (B.C.S.C.)-------------------------------------12 James Estate v. Rentz (1986), 69 A.R. 198; 27 D.L.R.(4th) 724 (C.A.)-----------------------------------------------------57 Jensen Boat Sales Ltd. v. McAfee (1997) 12 C.P.C. (4th) 210 (B.C.S.C.)---------------------------------------------------12 Joseph v. Office of Consulate General of Nigeria (1987), 830 F.2d 1018, at p. 1023--------------------------------------44 Leisure Time Distributors Ltd. v. Calzaturificio S.C.A.R.P.A. - S.P.A. (1996), 5 C.P.C. (4th) 320 (B.C.S.C.) at p. 3 12 Leisure Time Distributors v. Calzturrificio S.C.A.R.P.A. (1996), 5 C.P.C. (4th) 320 (B.C.S.C.), (MacKenzie, J.)- - -64 Leroux v. Brown (1852), 12 C.B. 801; 138 E.R. 1119--------------------------------------------------------------------------20 McLachlin & Taylor, British Columbia Practice, 2d ed., (1998, Butterworths) at 13-52 to 13-54----------------------13 McLachlin and Taylor (supra)------------------------------------------------------------------------------------------------------77 Metropolitan Railway Co. v. Jackson (1877), 3 App. Cas. 193---------------------------------------------------------------65 Mezzo v. The Queen, [1986] 1 S.C.R. 802---------------------------------------------------------------------------------------65 Minnes v. Minnes (1962), 39 W.W.R. 112, 34 D.L.R. (2d) 497 (B.C.C.A.)-------------------------------------------------11 Monteleone v. Her Majesty The Queen, [1987] 2 S.C.R. 154------------------------------------------------------------65, 66 Moran v. Pyle National (Canada) Ltd., [1974] 2 W.W.R. 586 (S.C.C.) at 598----------------------------------------------60 Nash v. Tupper (1803), 1 Caines 402 (N.Y.S.C.)--------------------------------------------------------------------------------20 Ontario Minister of Highways v. Jennings , [1966] S.C.R. 532, at 546------------------------------------------------------57 Orr v. Brown, [1932] 2 W.W.R. 626 (B.C.C.A.)---------------------------------------------------------------------------------64 Parfitt v. Lawless (1872), 41 L.J.P. & M. 68-------------------------------------------------------------------------------------67 Paterson et al. v. Hamilton et al. (1991), 115 A.R. 73; 79 Alta. L.R.(2d) 111 (C.A.), at 114------------------------------99 Pickett v. British Rail Engineering , [1979] 1 All E.R. 774 (H.L.) at 798---------------------------------------------------57 Quest Vitamin Supplies Ltd.--------------------------------------------------------------------------------------------------passim Quest Vitamin Supplies Ltd. v. Hassam (1993), 79 B.C.L.R. (2d) 85--------------------------------------------------------68 Rush-Presbyterian-St. Luke's Medical Center v. Hellenic Republic (1988), 690 F. Supp. 682---------------------------46 Rush-Presbyterian-St. Luke's Medical Centre v. Hellenic Republic (1989), 877 F.2d 574-------------------------------44 Ryder v. Wombwell (1838), L.R. 4 Exch. 32-------------------------------------------------------------------------------------67 s. 4 through s. 7 and s. 18 of the State Immunity Act, R.S.C. 1985, c. S-18--------------------------------------------------5 Sarafi v. Ship Iran Afzal (1996), 111 F.T.R. 256 (TD)--------------------------------------------------------------------------39 Spoliate Maritime Corp. v. Cancellous Ltd. , [1986] 3 All E.R. 843 (H.L.), at 854----------------------------------38, 100 State Bank of India v. N.L.R.B. (1986), 808 F.2d 526, cert. denied (1987), 483 U.S. 1005------------------------------53 Steenblok v. Funk (1990), 46 B.C.L.R.(2d) 133 (C.A.), leave to appeal refused [1991] 1 S.C.R. ix--------------------57 Stern v. Dove Audio Inc., unreported, April 15, 1994 (B.C.S.C.) at p. 16---------------------------------------------------12 Stern v. Dove Audio, In. et al (21 October 1994), Vancouver Registry, CA018818----------------------------------------63 Supreme Court of Canada decision in Reference Re Canada Labour Code and State Immunity Act (Can.) , [1992] 2 S.C.R. 50; 137 N.R. 81, illuminated this problem at p. 73------------------------------------------------------------------56

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Surfwood Supply Ltd. v. General Alarms Ltd., [1976] 3 W.W.R. 93 (B.C.S.C.)-------------------------------------------66 Texas Trading and Mill Corp. v. Federal Republic of Nigeria (1981), 647 F.2d 300---------------------------------------54 Traxler v. Metzeler Reofem GMBH (2000), BCSC 808, Docket No, C974816 Vancouver------------------------------36 Trendtex Trading Corp. v. Central Bank of Nigeria , [1977] Q.B. 529--------------------------------------------------47, 53 United Oil Seed Products Ltd. v. Royal Bank of Canada (1988), 87 A.R. 337 (C.A.), at 344-----------------------74, 100 United States Seventh Circuit Court of Appeals devised a more flexible approach in Segni v. Commercial Office of Spain (1987), 835 F.2d 160------------------------------------------------------------------------------------------------------46 Valmet Paper Machinery Inc. v. Hapag-Lloyd AG., unreported, December 23, 1996 (B.C.S.C.) at p.4----------------12 Valmet Paper Machinery v. Hapag-Lloyd AG (23 December 1996), unreported, No. C960793, Vancouver Registry (B.C.S.C.)--------------------------------------------------------------------------------------------------------------------------64 Vile et al v. Von Wendt; Zurich Insurance Company, Third Party 26 O.R. (2d) 513 at 516 (High Court of Justice Division, Divisional Court)------------------------------------------------------------------------------------------------------15 Vitkovice v. Korner, [1951] A.C. 869 (H.L.)-------------------------------------------------------------------------------------62 Walker v. Bk. of New York (1994), 69 O.A.C. 153 (CA)----------------------------------------------------------------------39 Weltover Inc. v. Republic of Argentina (1991), 941 F.2d 145-----------------------------------------------------------------46 Whitehouse v. Jordan and another, [1980] 1 All E.R. 650 at 652 (C.A.), affirmed [1981] 1 All E.R. 267 (H.L.)-----39 Zodiac International Products Inc. v. Polish People's Republic , [1977] C.A. 366-----------------------------------------47

STATUTES NOTICED American Foreign Sovereign Immunities Act of 1976 , Pub. L. 94-583, 90 Stat. 2891, 28 U.S.C., §1603 - §1605---45 American Foreign Sovereign Immunities Act of 1976 , Pub. L. 94-583, 90 Stat. 2891, 28 U.S.C., is §1603(d)- -44, 53 Class Proceedings Act----------------------------------------------------------------------------------------------------------30, 31 Class Proceedings Act [RSBC 1996] c.50-------------------------------------------------------------------------------17, 19, 27 Class Proceedings Act [RSBC 1996] c.50:s. 15(1) and s. 21(1).--------------------------------------------------------------19 English State Immunity Act 1978 , 1978 (U.K.), c. 33-------------------------------------------------------------------------53 Hague Convention on the Service Abroad of Judicial and Extra Judicial Documents in Commercial and Civil Matters------------------------------------------------------------------------------------------------------------------------------19 Rules 13(10) and 14(6) Rules of the Court---------------------------------------------------------------------------------------37 State Immunity Act , S.C. 1980-81-82-83, c. 95 (now R.S.C. 1985, c. S-18)-----------------------------------------------75 U.K.), c.-----------------------------------------------------------------------------------------------------------------------44, 46, 53

RULES Rule 14(7) and 14(8) Rules of the Court------------------------------------------------------------------------------------------27

AUTHORS NOTED Driedger on the "Construction of Statutes (3rd Ed. 1994)"--------------------------------------------------------------------19 Edgar H. Ailes, Limitation of Actions and the Conflict of Laws (1933), 31 Mich. L. Rev. 474, at p. 487--------------20 Ernest G. Lorenzen, Huber's De Conflictu Legum (1919), 13 Ill. L. Rev. 375, reprinted in Ernest G. Lorenzen, Selected Articles on the Conflict of Laws (1947), at p. 136----------------------------------------------------------------20 Ernest G. Lorenzen, Story's Commentaries on the Conflict of Laws - One Hundred Years After (1934), 48 Harv. L. Rev. 15, reprinted in Selected Articles , supra, at p. 181--------------------------------------------------------------------20 G.L. Bladon, "Non Suit: Heads I Win, Tails I Don't Lose" (1993) 15 Advocates' Q. 425 at 436-------------------------66 H.L. Molot and M.L. Jewett, The State Immunity Act of Canada (1982), 20 Can. Y.B. Int'l. 79. At page 107--------15 K.G. Engelhart, Proof of Future Events: In support of the Simple Probability Burden of Proof (1987,) 8 The Advocates Quarterly 163]--------------------------------------------------------------------------------------------------------57 Professor Klar Tort Law (Carswell) from p. 10----------------------------------------------------------------------------------57 S.A. Williams and A.L.C. de Mestral, An Introduction to International Law (2nd Ed. 1987), at 149-150--------------15 Storey v. Storey, [1960] 3 All E.R. 279 (C.A.), Ormerod L.J. noted at 282-------------------------------------------------66 The Law of Evidence in Civil Cases (Toronto: Butterworths, 1974)---------------------------------------------------------66 Ulrich Huber, and his essay "De conflictu legum diversarum in diversis imperiis" (1686)-------------------------------20

OTHER AUTHORITIES Alberta Institute of Law Research and Reform writing in an article in (1964), 3 Alta. L. Rev. at pp. 197-201---------5

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Mr. Wilbur F. Bowker, the former Dean of the Faculty of Law, University of Alberta,-------------------------------------5 Proceedings of the Senate Standing Committee on Legal and Constitutional Affairs , Issue No. 10, March 19, 1981, at pp. 10: 7-8-----------------------------------------------------------------------------------------------------------------------48 Standing Senate Committee on Legal and Constitutional Affairs. B.L. Strayer, then Assistant Deputy Minister, Public Law-------------------------------------------------------------------------------------------------------------------------48 Taft letter------------------------------------------------------------------------------------------------------------------------------44 U.S. House of Representatives Judiciary Committee, Sovereign Immunities Act (reprinted in [1976] U.S. Cong. & Admin. News 6604---------------------------------------------------------------------------------------------------------------53

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