Defendant's Applications to be Set Aside.......................................................................................................................

4
Plaintiffs Make Application Pursuant to Rule 13(10).................................................................................................4
Facts - Exchange of Documents .................................................................................................................................4
Generally.....................................................................................................................................................................4
Particular to Action No. S004040 ..............................................................................................................................7
Particular to Action No. S005440...............................................................................................................................9
Analysis and Argument ............................................................................................................................................10
Doctrine: The Common Law v. Statues. Which are Substantive?........................................................................11
International Law - Service ..................................................................................................................................12
Practice- Rule 13(12) Hague Convention.............................................................................................................13
Practice - Defence -Rule 4 (Rules) ......................................................................................................................14
Part I: Statement Of Facts.............................................................................................................................................15
Circumstances Surrounding the Two Claims............................................................................................................15
The First Claim of Kapoustin et al. v. Republic of Bulgaria No. S004040..........................................................16
Salient Facts .........................................................................................................................................................19
The Second Claim of LifeChoice of others, v. Republic of Bulgaria S005440....................................................21
Defendant's Applications...........................................................................................................................................22
Part II Argument and Analysis Ad Exitum....................................................................................................................22
New Header...............................................................................................................................................................22
Modern Law - Overlapping Causes of Action - Head of Damage............................................................................23
Governing Legal Principles .....................................................................................................................................23
Application of Immunity to the Case at Bar ............................................................................................................23
Doctrine Of Sovereign Immunity.........................................................................................................................24
Statutory Codification ..........................................................................................................................................25
The Evolution of State Immunity .........................................................................................................................26
Application of Rules 13(10) and 14(6) ....................................................................................................................34
Doctrine of Rule 13(10), Jurisdiction Simpliciter.................................................................................................36
Doctrine of Rule 14(6), Jurisdiction Forma non Convenienes.............................................................................39
Part III: a brief statement of argument, ........................................................................................................................41
Applications presently at Bar .......................................................................................................................................42
Law Summaries.............................................................................................................................................................42
Need To Amend Statements of Claim ......................................................................................................................42
Amendments To Statements of Claim.......................................................................................................................43
Action No. S004040..............................................................................................................................................43
Action No. S005440..............................................................................................................................................43
Argument=Application of Immunity To The Case At Bar .......................................................................................43
Sovereign State Immunity, s. 3 of the Act.............................................................................................................45
Waiving of Immunity, s. 4 of the Act....................................................................................................................45
Commercial Activities, s. 2 and s. 5 of the Act.....................................................................................................47
Construing The Definition Of Commercial Activity In The Canadian Act .........................................................47
Personal Injury and Property damage, s. 6 of the Act...........................................................................................48
Criminal Proceedings , s. 18 of the Act.................................................................................................................52
Argument Rule 13(10), Jurisdiction Simpler and 14(6)............................................................................................52
Argument Jurisdiction Simpler.................................................................................................................................54
Argument-Jurisdiction Simpliciter........................................................................................................................55
Argument Applications Of Rule 13 DOES THE COURT HAVE JURISDICTION?...........................................55
Argument 13(10)...................................................................................................................................................56
Argument 13(10).......................................................................................................................................................56
Negligence of Bulgaria.............................................................................................................................................58
Contributing Factor...................................................................................................................................................58
Conspiracy Doornbos S004040................................................................................................................................58
Argument Conspiracy - Forma Convenies................................................................................................................59
Argument Conspracy ...............................................................................................................................................59
Argument forma Convenies .....................................................................................................................................59
Argument 14(6).........................................................................................................................................................59
14(6) reads in part Contractual Cases:..........................................................................................................................65
 (1) Where each party resides.................................................................................................................................66
2) Where each party carries on business. .............................................................................................................66
3) Where the cause of action arose. .....................................................................................................................67
4) Where the loss or damage occurred. ................................................................................................................67
5) Any juridical advantage to the plaintiff . .........................................................................................................67
6) Any juridical disadvantage to the defendant ....................................................................................................68
7) Convenience or inconvenience to potential witnesses. ....................................................................................68
8) Costs of litigation in this jurisdiction. ..............................................................................................................68
9) The applicable substantive law ........................................................................................................................69
(10) Difficulty in proving foreign law, if necessary. ............................................................................................70
(j) Difficulty and cost of proving foreign law:.....................................................................................................70
(11) Whether there are parallel proceedings in any other jurisdiction.................................................................70
(11) Whether there are parallel proceedings in any other jurisdiction................................................................71
Salient Facts As Set Out In Kapoustin Affidavit(S)..................................................................................................73
Part IV: the nature of the order requested, ...................................................................................................................74
Plaintiffs Application to be Set ................................................................................................................................75
Service Inconsistent With the Applicable Enactment and the Rules of Court......................................................75
Application To Be Decided In Absence of Plaintiffs............................................................................................75
STRIKE AFFIDAVIT(S)(S) OF DOBREVA........................................................................................................75
HAVE THE PLAINTIFFS BEEN PROPERLY SERVED?..................................................................................76
PLAINTIFFS TO AMEND STATEMENT OF CLAIM.......................................................................................76
(a) set aside a proceeding, either wholly or in part,..............................................................................................77
(b) set aside any step taken in the proceeding, or a document or order made in the proceeding,.........................77
(c) allow an amendment to be made under Rule 24,.............................................................................................77
(d) dismiss the proceeding or strike out the statement of defence and grant judgment, or...................................77
(e) make any other order it thinks just..................................................................................................................77
THE PLAINTIFFS CLAIM THE FOLLOWING RELIEF:.....................................................................................77
The Evidence On The Application of the Defendant............................................................................................79
Part V: a table of the authorities that the party expects to refer to, arranged alphabetically, together with a reference
to the pages in the argument where they are cited, and ...............................................................................................79
Authorities.................................................................................................................................................................80
Statutes Noticed ...................................................................................................................................................80
Cases Noted...........................................................................................................................................................80
Footnotes ..............................................................................................................................................................81
Words and Phrases ...............................................................................................................................................81
Index......................................................................................................................................................................81
 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 Memorandum for the purpose of
clarifying those facts and law that are material and on which the plaintiffs rely on the merits to prove the
jurisdiction of this Court over the Defendant, Republic of Bulgaria ("Defendant") et al.. Plaintiffs rely on this
Factum together the affidavits and other evidence provided here to assist the Court in circumstances where as a
practical matter the Respondent is obstructed by a defendant in his fundamental civil right to appear in proprio
persona and give evidence at this or any other civil proceedings where the Republic of Bulgaria, its' employees,
agencies or instrumentalities are defendants.

The lawful interests and rights of all the plaintiffs as named and those of any member of the class as yet unnamed
are to be affected by the outcome of this hearing.
Defendant's Applications to be Set Aside

Plaintiffs Make Application Pursuant to Rule 13(10)

[1] The Respondent asserts that the Defendant had erred in (1) 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, and; (4) failing to observe the declarations and reservations on the Hague Convention
as made by the contracting state.
[2] As a result the proper notice requirements of this Court have not been observed by the Defendant.
Therefore, on point of law and as a practical matter the applications of the Defendant should be set
aside and leave given the Defendant to effect proper notice and service [see: Ferguson v. Arctic
Transportation Ltd. (1995), 101 F.T.R. 16 (TD) ] on all parties of record and those other interested
parties known to it pursuant to the Class Proceedings Act [RSBC 1996] c.50.
[3] The evidence surrounding service and attempts at service of documents in these proceedings is
deposed to in the affidavit of Mrs. Marianna Radulova for the Plaintiffs (filed). The circumstances,
facts and relevant legislation may be summarised as follows.

Facts - Exchange of Documents

Generally
[4] The Plaintiffs 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)

[5] 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].
[6] Plaintiffs method of service is consistent 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-
(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)
[7] 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 §below]
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. A copy
of these materials are provided with this Factum.
[8] On February 16th 2001 counsel for the Defendant Bulgaria filed an appearances to both actions
with this Court.
[9] 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.
[10] 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 Affidavits of the
Defendant to both actions as captioned above.
[11] 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 -
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)
[12] 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.
[13] 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 attorning to British
Columbia Rules as opposed to its national law and declarations on the Hague Convention. A copy
of that correspondence is provided with this Factum.
[14] 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.
 [15] The Plaintiffs later effected service of the documents by registered mail.
[16] 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 expressing 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 issues of what is valid notice before this
Court, the inevitable consequences if the Central Authority and Defendant continued to maintain
its reasoning that the local rules of provincial courts were to be applied on the territory of Bulgaria
exclusively in procedures connected to the two above captioned proceedings. Respondent pointed
out, that it was further inconsistent with Article 3 of the Hague Convention and the unjust conduct
to deny the plaintiffs the same procedural advantages it was affording the Defendant ("itself")
when refuse to accept extra-judicial documents 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."
[17] Copies of the Plaintiffs correspondences are provided as exhibits to the Factum.

Particular to Action No. S004040

[18] According to the sworn affidavit(s) of one Marianna Radulova as filed, the Defendant Bulgaria
was served on September 7th 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.
[19] 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.
[20] As of June 25th 2001 the Defendant R.C.M.P. Derek A. Doornbos is in default of appearance.
[21] As of August 23rd 2001 the Ministry of the Attorney General of Canada has been added to an
amended Writ and Statement of Claim as a party (defendant) to this proceeding pursuant to s.
32(1) and s. 24(1) of Canada's Charter of Rights and Freedoms. The documents have been
forwarded with notice of this hearing.
[22] Furthermore and in the alternative, the Plaintiffs did, pursuant to s. 9(2) of the Immunity Act,
comply with that Act, receiving later 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
Government of the Republic of Bulgaria, the Defendant Muravei Radev, Minister of Finance, as
he then was. This fact still places the Defendant Bulgaria in an alternative default of appearance
on or about February 3rd 2001.
[23] 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 response in defence to the Plaintiffs law suit [see § above].
[24] 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 as served on the Defendant pursuant to Rule 23 (Rules).
A copy of the Reply is provided with this Factum.
[25] 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.
[26] The Defendant Bulgaria has yet to traverse any averment therein within the time required. A copy
of the Notice to Admit is provided with this Factum.
[27] 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 materials are provided with this
Factum.
[28] The Duty Master, in the absence of the Plaintiff Kapoustin, in proprio persona, refused to hear any
of their applications.
[29] 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.
[30] On June 5th 2001 the Plaintiffs, pursuant to provisions of Rule 31(1), Rules of the Court, submitted
in Form 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 torts and breaches of contract that did occur in or are
connected to the province and that, inter alia, (1) showed the Defendant had effected the torts
complained of in the province: (2) the tortious conduct complained has it 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. This material evidence was to be relied on by the Plaintiffs at trial and
may be found, in it relevant parts, in the affidavit of Michael Kapoustin as provided with this
factum.
[31] The Defendant Bulgaria has not traversed any averment in the foresaid June 5th 2001 Notice to
Admit within the time required by the Rules, 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.
[32] As of this Factum no other documents have been exchanged among the parties under this action.

Particular to Action No. S005440

[33] 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
[34] Plaintiffs relied on Rule 13(1) Rules of the Court to effect service without leave in that their law
suit is founded on a tort that rendered the completion of a contract within the jurisdiction of British
Columbia impossible [see §above] as a result of the tortfeasors conduct outside the province and
their prior breach of contracts connected to the plaintiffs whose common commercial activities in
the province were as a result affected. Upon the foresaid the plaintiffs have brought their action for
the property losses and damage they incurred in or connected to the province and together with
other economic harm.
[35] According to the sworn affidavit(s) of one Marianna 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.
[36] 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.
[37] Alternatively, in accordance with s. 9(2) of the State Immunity Act, the Defendant Bulgaria was
not in default prior to filing its appearance in February 2001, the Plaintiffs having not yet
undertaken to provide their endorsed Writ to the Government of Canada, Department of Foreign
Affairs and International Trade for transmittal pursuant to s. 9 of the Immunity Act to the
Government of the Republic of Bulgaria.
[38] The Defendant apparently had elected to file an appearance to this action despite the absence of
the Plaintiffs compliance with the Immunity Act.
 [39] On February 28, 2001 the plaintiff Mr. Dimitar Hristov, communicated by fax to the offices of Mr.
Patrick Lewis that he had indirectly become aware of the Appearance. 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, since no
service in this class action had been effected on Republic of Bulgaria under the provisions of
Article 9 of the State Immunity Act [R.S. 1985, c. 5-18]. A copy of this correspondence is
provided with this Factum.
[40] On March 1st 2001 plaintiffs Mr. Borislav Marinov and Ms. Radka Petrova transmitted similar
concerns as those expresses by the plaintiff Hristov above.
[41] 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. Delivered together with the motion in
form of praecipe was 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 these materials are provided
with this Factum.
[42] It is apparent from the affidavits of Plaintiffs Hristov and Marinov, (filed) that only the
Respondent Kapoustin has been served and no other plaintiff. 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 to
and the Plaintiffs to be at least 4,731 individuals resident in Bulgaria. This is sworn to and
specifically enumerated in the affidavit of Maya Dobreva for the Defendant at paragraph 3.
[43] As of this Factum no other documents have been exchanged by the parties under this action.

Analysis and Argument

[44] 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 the issues. Alas that is not the
case here.
[45] It is therefore reasonable and necessary for the Respondent to devote some space in his
discussions here 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.
Doctrine: The Common Law v. Statues. Which are Substantive?

[46] In Driedger on the Construction of Statutes (3rd Ed. 1994) on the interpretation of 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)
[47] The Respondent's view is that a broader interpretation of what is "actual" in the present
proceedings meets all three tests. (1) the claims are plausible. (2) they comply with the legislative
purpose of the applicable acts (3) any outcome in a Canadian court will be reasonable and just.
The Respondent will revisit this later in his Factum.
[48] The common law traditionally usually considered statutes as procedural, as contrasted with the
position in most civil law countries such as Bulgaria, where it has traditionally been regarded as
substantive. 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].
[49] By the turn of the nineteenth century doctrine was firmly established in England and the United
States. Commentary of the time [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 selected articles the Respondent adduced as there being 2 main reasons for the ready
acceptance of this doctrine in Anglo/American jurisprudence. (1) important to the present
interpretations required by this Court, was the view that foreign litigants should not be granted
advantages that were not available to forum litigants. The preference to "lex fori" in conflict
situations. (2) one the Respondent found difficult to fully comprehend, was the view that a
common law cause of action gave the plaintiff a right that endured forever and a statute merely
removed the remedy in the courts of the jurisdiction that had enacted the statute.
[50] 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 delicti".
[51] 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 to the "lex fori" or alternatively, where conflicts of law exist, to apply instead an
international agreement, the Hague Convention , as is the instance pleaded here by the
Respondent.
[52] 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 delicti", this is being displaced in this case by
statutes designed to stream line such basic conflicts as how to serve documents[the Hague
Convention].
[53] So far as the technical distinction between right and remedy, appears in the Canadian courts as
having been chipped away on the basis of relevant policy considerations. It seems to be
particularly appropriate to do so 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.

International Law - Service

[54] General - Practice - Service on foreign state or agency of foreign state - The Respondent argues
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" - The plaintiffs relied on Rule
13(12) and the Convention on the Service Abroad of Judicial and Extra Judicial Documents in
Civil or Commercial Matters - The Federal Court of Canada, Trial Division, in deciding Ferguson
v. Arctic (supra.) rejected a similar argument as that of this Respondent for service in a contracting
state to an agency or department of that state in accordance with provisions of the Hague
Convention, the Court there deciding that the Hague Convention was directed to service on private
parties and not foreign governments.
[55] Exceptions - Service on foreign state or agency of foreign state - Which service takes precedence -
The Respondent argues that, unlike Ferguson v. Arctic (supra), the plaintiffs also relied on s.
9(1)(a) and s. 9(3)(a) of the State Immunity Act as applicable 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, when the Ministry of
Justice, Republic of Bulgaria asked the plaintiff Kapoustin's interpreter to provide it copies of the
endorsed Writ and Statement of Claim in English and Bulgarian - the plaintiffs complied.
Respondent argues that such a request, on two separate occasions and the substantial
correspondences between the state Defendant and the Respondent, expressly manifested that the
"state" had agreed to this "manner" of service and delivery of documents.
[56] 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, that exclusive reliance only 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
provide written notice it would attorn to the forum "lex loci delecti" of 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.
[57] General - Practice - Ex Parte Motion in Praecipe - Master's Order - On April 2 nd 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 "in proprio persona" and speak to
the matter - The Plaintiff Kapoustin is incarcerated by the Defendant and is "indigent", the two
circumstances of which make his appearance before the provincial court a discretion on the part of
the Defendant Bulgaria and a direction to the Defendant by this Court to conduct the Plaintiff
before it, even in custody - the Defendant refused and the motion as filed was left without
resolution.
[58] General - Service - Inadequate - The evidence shows the Respondent, Plaintiff Kapoustin is the
only party to either proceeding to be delivered any documents by the Defendant - Other plaintiffs
have deposed to this Court to not having been notified or provided any proper service by the
 Defendant of its motions or other documents - Respondent seeks to set aside the service to him as
improper and to have documents served as required by prevailing law.
[59] 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 judicial documents
on Bulgaria territory in contravention of international law and its notional could not be accepted as
"good and proper service" or "adequate notice". Defendant rejected the Respondent's arguments.

Practice- Rule 13(12) Hague Convention

[60] 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 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 - Plaintiffs claim Defendants' 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 ex juris service to or in Bulgaria.
[61] In the Federal Court of Appeal, Trial Division in Ferguson v. Arctic Transportation Ltd.(supra.)
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, situations there were reversed from the present
circumstances, but the reasoning is applicable to the instance presently before the Bar and the
Respondent believes supports the request to set aside any service alleged to have been made by the
Defendant; 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. "
[62] Plaintiffs in action No. S004040 have complied with both s. 9(1)(a)(b) and s. 9(2) of the Immunity
Act, that is not the issue in controversy. 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 for in the meaning of the Hague Convention to whom "the
rule [13(12) Rules of Court] expressly provides for service in accordance with the [Hague]
Convention for Service Abroad. When service is in a contracting state". There appears to be no
case law authorities in the alternative. The Hague Convention and Rule 13(12) must be applied
and observed by the parties to both of the above captioned proceedings.
International Law - Hague Convention - Declarations Certificates of Service
[63] 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 provide - no proof or
inadmissible proof - The Plaintiffs seek a declaration that they have not been properly served.
[64] The Respondent relies on the affidavit of Bulgarian attorney Anatol Lukanov to identify the
relevant law and show to this Court that the attempts of the Defendant at service are not proper
service according to Bulgarian law or practice. Respondent further 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 provided for in the
Hague Convention when to a contracting member.
[65] Service of a document is described in Rule 11. Mr. Kapoustin has received under protest, some of
the documents. However, he is neither an employee or authorised official of any of the other
plaintiffs resident in Bulgaria - with the exception of his wife Tracy and son Nicholas - They are
not resident in Bulgaria but reside in the province and require only that Michael receive service
for them - the interpreter Ms Radulova as appointed by the Bulgarian court is not authorised to
accept service. Accordingly, the Respondent is forced to argues that proper notice and service was
not effected on any person as considered by Rule 11 except he and his family in Action No.
S004040 and himself only in S005454. Accordingly, Respondent argues that proper notice or
service has as a result not been effected on those other plaintiffs. To be redundant, in the present
circumstances any notice or service to Bulgaria under Rule 11 is not notice or service at all.
[66] 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."

Practice - Defence -Rule 4 (Rules)

[67] General - Practice - Service to addresses of record - 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 pleadings on service is for
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 actions of the Defendant pre-empt any
argument relying on provisions of Rule 4.
[68] 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 and the affidavit of Radulova sets out, there were
delivered to the Registrar notices for change of address in both proceedings. These events
occurred in part prior to counsel for the Defendant filing an appearance.
[69] The Defendant and its counsel were obviously aware of the new addresses for service when
attempting delivery of the Appearances and Notices under Rule 65 (Rules) in both the proceedings
now before the Bar to the Plaintiff Michael Kapoustin at prison and attempting to do so to other
plaintiffs in Bulgaria. Afterwards, counsel for the Defendant and the Defendant Bulgaria received
notices by fax and letter as to the proper address and methods for service of the plaintiffs in both
proceedings.
[70] It can be adduced, from what limited information the Respondent has, that the Defendant will
attempt or has attempted service to the former address as provided in the originating process.
 Counsel may well attempt to rely on this attempted, but unsuccessful service in the province to
convince the Court the Defendant's reliance only with provisions pursuant to Rule 11 (Rules)
satisfied notice and service requirements of the Court.
[71] 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 plaintiff is incarcerated by that Defendant and is as a result a ward of the
state of Bulgaria. As a ward of the Republic of Bulgaria the proper address for service would care
of a representative of the Republic of Bulgaria in the province or Canada and alternatively the
designated Central Authority in British Columbia, the Ministry of the Attorney General as
authorised under the Hague Convention to receive documents to be transmitted abroad.
[72] 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 it to exploit its
advantages as a state and the incarcerator of the 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. The Respondent has had little opportunity to examine
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 an argument that relied on the plaintiff being required by a defendant to do something that
that defendant, in exercising its power over the plaintiff has intentionally and practically
obstructed the plaintiff from doing.
Part I: Statement Of Facts
[73] Trial Division
[1] Senate Debates (22 January 1981) at 1561-64 (26 May 1981), at 2454-55; House of Commons Debates (23
June 1981), at 10902-08 (30 April 1982), at 16787-93; Standing Committee on Justice and Legal Affairs
Minutes of Proceedings and Evidence (2 February 1982), at 59:5-29 (4 February 1982), at 60:6-35.
3. For authority with respect to this [Federal] court's jurisdiction, see B.C. Marine Shipbuilders Ltd. et al. v. Yorke
(F.M.) and Son Ltd. et al. , [1981] 1 S.C.R. 363; 35 N.R. 288; 121 D.L.R.(3d) 517.

Circumstances Surrounding the Two Claims.

Procedural events surrounding the two claims are each fairly complex, and are further complicated by the personal
financial circumstances of plaintiffs that force them to act pro se and to require the proceedings be conducted in
forma pauperis. The situation is not made easier by the incarceration and necessary reliance on the evidence of
Michael Kapoustin, a key witness and the Respondent here.

The applicant (Defendant Bulgaria) has asserted that the endorsed Writ and Statement of Claim in both actions are
discursive or difficult to understand. Plaintiffs assert in the alternative, that while the applicants 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 It is observable from the application to this Court that the applicant does not traverse the issues on the basis of
those pleadings of the plaintiffs as they stand nor has the applicant traversed the truth of new facts or evidence as
submitted to the applicant. Pleadings may be amended on matters arising since commencement or new pleadings
brought subsequent to the statement of claim with allegations brought in the alternative and any matter of fact or
point of law may be 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 ].The plaintiffs rely on this Factum and the
facts and evidence of that support their general to elaborate and clarify the "discursive" allegations as first made in
the statement of claim and as are amended or new brought in the alternative in these pleadings.

Respondent believes the material evidence now before the Court is relevant and objectively compelling to the issue
of a connection to this jurisdiction and its connection to the various claims framed in tort and alleged breaches of
contract found in both law suits as against the Defendant Bulgaria, Minister of Finance. This Factum attempts to
place as little reliance as possible on pleadings or personal opinions, choosing instead to rely on the material facts as
they are and affidavits as supported by documentary evidence of the facts as they appear to be 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.)

The following 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 as follows:

The First Claim of Kapoustin et al. v. Republic of Bulgaria No. S004040.

[74] The Plaintiffs 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.
[75] 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.
[76] 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.
[77] 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.
[78] 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.
[79] 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.
[80] 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.
[81] 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 Dr. Petrunov, Dr
Nenkov and Dr. Siekerjiiski; Mr. Chavdar Mladenov; the ……
[82] 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.
[83] 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.
[84] 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.
[85] 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.
[86] 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.
[87] The law suit makes further 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 and records of phone conversations and meeting in Canada and various
correspondences or documents in their possession.
[88] 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. Plaintiffs rely on the affidavits of Kapoustin, Lukanov, Kap and officials
correspondences and public statements of the Defendant Bulgaria.
[89] 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. The Plaintiffs rely on the affidavits of Kapoustin, Kap, Lukanov and records
of telephone conversions in the province and correspondences with the Defendant Bulgaria.
[90] 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 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.
[91] 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. Plaintiffs rely on, inter alia, the affidavits of
Michael Kapoustin, Anatol Lukanov, Robert Kap 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.
[92] The Plaintiffs incorporated in their law suit appurtenant references to the February 7th 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,.
[93] 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.
[94] 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.
[95] All Plaintiffs claims are restricted to those activities alleged to have occurred in or are connected
to them in British Columbia.
[96]

Salient Facts

Statement of Claim, Action No. S.004040

[97] The plaintiffs statement of claim 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.
[98] The affidavit(s) evidence provided the Court is the proof necessary to show 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. This evidence, the Respondent believes can
could be clearer or stronger in this regard than the evidence of third party contracts in British
Columbia that specifically set out their reliance on the representations of the Defendant Bulgaria.
[99] The statement of claim alleges another two causes of action 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.
[100] The plaintiffs have chosen to advance their claims beyond mere allegations through pleadings and
assertions or opinions through affidavit(s) involving their assertions framed in tort, not only are
there provided a sequence of events to infer the fraud and acts of conspiracy, there are provided as
evidence in support of such inference official documents and other written materials a
[101] of a case in conspiracy and fraud against a party outside British Columbia, and believe they have
demonstrated a reasonable consideration of the expectations of the national and international legal
community by relying on documentary evidence to support their allegations to the Court. It is not,
in my view, sufficient to advance. A plaintiff is obliged to put before the court a body of evidence
which would show it has a good arguable case. In a case involving assertions of fraud and
conspiracy, that test cannot be met, in my view, by.
[102] 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.).
[103] 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:
[104] The conspiracy by the defendants and each of them was unlawful because the conduct of the
defendants was fraudulent in that the defendants and each of their actions were at variance
with that standard of conduct of honesty and decency which one would expect from as
ordinary decent Canadian citizen.
[105] The breach of fiduciary 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…...
[106] 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 Dorbeva when she alludes to the cooperation between
Canada and the Defendant.
[107] There is evidence provided to this point shows that the defendants disclosed to ….anyone ….
confidence or the ….. the public (germans) where prepared to accept. Further there is no evidence
that the defendants knew that what they were doing was unlaw, 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…..
[108] On a review of those facts as alleged by Mr. Kapoustin and the documents provided, it is apparent
that while the defendant was the central participant, there is evidence that the applicants are bound
by and indeed that they were even aware of, activities in the conversion of the plaintiff properties..
[109] 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(s)(s)? .
[110] 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…..calls for an explanation.
 [111] Should an adverse inference be drawn from the fact that the defendants chose to file no responsive
affidavit(s)(s) material, and that the affidavit(s)(s) 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.
[112] Lacking such evidence, it is submitted, that the defendants….. cheated the plaintiffs not only of
their property but there peace of mind …..money…..and health of the Plaintiffs….of what price
can the court place?
[113] In the Respondents view the real only difficulty is for the plaintiffs to produced some evidence in
support of their contention that the applicants participated in a conspiracy or fraud on the plaintiff.
Authorities

[114] The plaintiffs have met the onus on this test. The material filed by the plaintiffs established the
alleged cause 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.

The plaintiff refers to the following salient facts:

The Second Claim of LifeChoice of others, v. Republic of Bulgaria S005440
[115] 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
[116] In this law suit the Respondent Michael Kapoustin, is a member of one subclass of private and
corporate investors resident or doing business in British Columbia whose claims are in the right of
residents to bring a law suit jointly or severally on behalf of themselves or others similarly
situated.
[117] 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.
[118] 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 their 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.
[119] 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.
[120] 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.
[121] 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.
 [122] 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.
[123]
[124]

Defendant's Applications
The Defendant has brought two Rule 65 applications, one for action No. S004040 and the other for action No.
S005440. In that there is no material fact or law to distinguish one application from the other both may be
summarised as follows:
[125] The applications of the Defendant set out that "The jurisdiction of this Honourable Court over the
Republic of Bulgaria, with respect, does not exist, or alternatively should be declined".
[126] Both applications raise the issues of jurisdiction and appropriate forum.
[127] The position of the Defendant may be summarised as relying on the State Immunity Act to
establish a statutory exception. It can be inferred from the applications that the first question to be
decided by this Court is whether the law suits as brought in the province against the Defendant
Bulgaria are depriving it to its sovereign right of immunity.
[128] The Defendant relies 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 "Act"), the Republic of Bulgaria claiming immunity from any civil or criminal
proceedings in the province. Counsel for the Defendant refers to s.3 of the Act, that reads:
Part II Argument and Analysis Ad Exitum
In the appellant's factum, this part shall contain a concise statement of the points in issue in the appeal. In the
respondent's factum, this part shall contain a statement of his position in regard to the appellant's points which the
respondent wishes to put in issue.

New Header

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.
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.
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."
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 social-policy choices available to the legislature.
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].

Modern Law - Overlapping Causes of Action - Head of Damage

From this "Modern Law" provides a solution to this Court to the plaintiffs Statements of Claim,
replete with its overlapping causes of action and overlapping heads of damage, and that is for the Court to do
something about the overlap, 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.
At issue in these proceedings is whether there should be substantial damages for the plaintiffs lost earning capacity.
The Supreme Court has made it plain 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.
But whatever the issues here they all must transcend questions of social utility of inheritance, 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 a 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:
" 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.)
If malice of the defendants is absent, then at the very least it is the law of negligence that must predominates
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.

Governing Legal Principles

[129] Ultimately the first of many questions in these proceedings must turn on whether the complaints at
issue in the two law suits of the plaintiffs have any "apparent connection at all with the Province
of British Columbia", and if sect. 3 of the (the "Act") confirms the general immunity that the
Defendant Bulgaria relies on to protect it from the jurisdiction of courts in Canada.

Application of Immunity to the Case at Bar

[130] 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 first be given to the provisions of the 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.
[131] The effect of 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. There are exceptions to that immunity the
Defendant Bulgaria seeks to assert in the two actions presently at Bar.
[132] This Factum seeks to make an analysis of case law and relevant facts and evidence of the plaintiffs
that brings their causes of action in both law suits within those exceptions. It requires that the
Respondent give in his analysis consideration to the historic, legislative, theoretical and contextual
development of "restricted immunity" and the jurisprudence on the subject as developed over the
last years.

Doctrine Of Sovereign Immunity

[133] 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 the State Immunity Act.
[134] 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. 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.
[135] 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. 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. 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].
[136] There is as a practical matter one question applicable in both the proceedings presently at bar. Has
the government of the Republic of Bulgaria a proper party to these proceeds?
[137] The plaintiffs' evidence to this Court establishes that the Academy of Medicine [see § ], the
National Oncological Institute [ see § ], National Centre for Infectious and Parasitic Diseases, the
Infectious Diseases Hospital of Sofia Bulgaria [see § ] the National Centre for Radiation [see § ]
are all divisions of government departments of the Defendant Bulgaria, its "alter-egos" engaged in
commercial activities on its bhalf. That Rare Metals Inc., [see § ] and the Free Trade Zones of
"Dragoman" and "Plovdiv" [see § ] are commercial "alter-egos" owned and controlled by the
Defendant government. That each of the foresaid had made representations and concluded
 contracts or other agreements for the Defendant Bulgaria on which all the plaintiffs relied, the
Defendant Bulgaria later breaching its contracts and unlawfully interfering in others, making there
rendering in or connected to British Columbia impossible.
[138] The individual tortfeasors as named in the affidavits of Michael Kapoustin [see § ] and Robert Kap
are each "alter-egos” of the Defendant and identified as the responsible representative, employee
or official responsible for the plaintiffs allegations framed in tort and the personal injury and
damages suffered by the plaintiffs as a result.
[139] The 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."
[140] 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
[141] 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, there
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 as and clearly establishes the criteria in determination of
who is a "necessary or proper party". The plaintiffs have joint and several alleges 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.
[142] It appears that not only is 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.

Statutory Codification
[143] 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.
[144] 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.
The Evolution of State Immunity

The United States

[145] 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.
[146] 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.
[147] 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 --
.....
"(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;"
[83] The American definition of "commercial activity" is somewhat different from that
contained in the Canadian statute. It 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.
[148] 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".
[149] 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. This is particularly true for those plaintiffs whose
claims are framed in tort.
 [150] 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.
[151] 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 is a workable and practical one
that has been of great assistance to the American Courts.

The United Kingdom

[152] It appears that the courts in the United Kingdom accepted that the concept of "restrictive
immunity" prior to legislation replacing that of "absolute immunity".
[153] United Kingdom State Immunity Act 1978, (U.K.), c. 33
"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.
[154] 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."

Canada
[155] In Canada the evolution of the doctrine of state immunity in the courts was not as clear-cut. 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)

[156] 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:
"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."

[157] 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..
[158] 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. Secton 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.
[159] Before the 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.

The Common Law

[160] The common law responded by developing a theory of "restrictive immunity" as suggested by the
plaintiffs [see § ]. This approach, allowed the courts to began 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 [see § ], and not to acts jure gestionis.
[161] 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]
[162] 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.
 "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]
[163] This later passage underscores in the present applications of the Defendant Bulgaria the very point
that its activities as are at issue 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]
[164] Certain aspects of the two actions at issue and the Plaintiffs allegations against the Defendant
Bulgaria are clearly commercial and not imbued with any sovereign attributes, but in other
respects the claims framed in tort represent actions that 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.
[165] 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 to them 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
[166] 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.
[167] There has been disagreement 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.
[168] The utility of "purpose", albeit limited, should not be overlooked by this Court when attempting to
in characterise the activities in question. "Purpose" is sine qua non to characterising the plaintiffs
claims as framed in tort and proposes an important question before the Court. What is the
"purpose" of an official, agency or instrumentality that appears to be engaging in a "sovereign
activity" the result of which can have no other "purpose" except to cause personal injury, physical
harm and material loss and damages to individuals they affect?
[169] 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
-- gift-giving, 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."
[170] 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).
[171] 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 "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'. ..."
[172] While adhering to this approach, That court observed this approach but recited 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".
[173] The respondent has drawn one simple lesson drawn 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.
[174] 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.
[175] With this lesson in mind, the Respondent now turns to the specific questions facing this Court in
the present cases. Two questions were outlined earlier: first, what is the "nature" of the activity in
question -- i.e., do the Defendant Bulgaria's transactions with certain of the plaintiffs in or
connected to British Columbia - constitute commercial activity, and second, are the claims framed
in tort -- xxxxx-- "related" to a legitimate sovereign activity?

Nature of the Activity

[176] As previously discussed nature and purpose are interrelated [see § ], 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. The Nature Of The
Activity
[177] [36] In determining the nature of the activity in question, it is useful to begin by acknowledging
that employment at a military base is a multi- faceted relationship. 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.
[178] The Board, on the other hand, argues that this court should only consider the threshold nature of
the activity, namely a contract of employment, and ignore its context or purpose. PSAC is
prepared to go a little further and characterizes the relevant activity as employment to provide
maintenance services to a military base in return for remuneration. The Canadian personnel
involved are essentially tradesmen who "fix water pipes, run boilers, perform new construction,
and generally maintain the physical buildings on the base". The nature of the contract of
employment is similar to an employment contract in the private sector, because the employees are
using the same trade skills as they would use in the employ of a private contractor.
[179] This aspect carries with it a range of rights and obligations that normally attach to such a contract.
For the employee, these include the right to be paid, the right not to be wrongfully terminated, etc.
Obligations of the employee include diligence, obedience and honesty. These attributes of the
employment relationship will fall at various points along a spectrum between purely "sovereign"
and "commercial" act
[180] Section 5 of the State Immunity Act requires that the proceedings in question relate to the activity
at issue. For me, it is not enough that the proceedings merely "touch on" or "incidentally affect"
the hiring of civilian labour at the base. Acceptance of such a minimal requirement would broaden
the "commercial activity" exception to the point of depriving sovereign immunity of any meaning.
Such an approach is equivalent to the "once a trader, always a trader" approach rejected by Lord
Wilberforce in I Congreso . Instead, the entire context of the activity at Argentia must be
considered. In this regard, it is not enough to take the employment contracts in isolation, and
decide that bargaining unit certification 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 the employment activity at the base. Also of importance
is the breadth of scope of the proceedings of the Board, which I have outlined earlier. Finally, at
this stage of the analysis, it will again be useful to consider the purpose of the activity in question.
[181] [63] I turn now to several collateral points which were raised in argument by the respondents.
First, PSAC 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. In answer to PSAC's submissions, I
would simply 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. However, I am reluctant to
extend the test beyond this class of cases. In particular, I fail to see its utility in the pres-ent case.
[182] The Respondent notes 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.
[183] 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;
[184] 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
1980-81-82-83, c. 95, s. 5.
[185] 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 guidance. The relevant provision in the American Foreign
Sovereign Immunities Act of 1976 , Pub. L. 94-583, 90 Stat. 2891, 28 U.S.C., is §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 ."
[186] 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.
[187] 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 .
"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 ."
[188] 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".
[189] 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.
[190] 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.
[191] 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 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 Act?
[192] 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.
[193] 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.
[194] 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".
[195] The evidence provided in these two law suits provides an adequately 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. And that what is now
before the Court provides a strong prima facie case on the evidence to have the Court find the
Defendant Bulgaria falling within this exception to sovereign immunity, and thus refuting the
immunity claim of the Defendant in both applications.

Distinction Between Public And Private Acts Of Foreign States

Application of Rules 13(10) and 14(6)

[196] The authorities show and the Respondent does not dispute, once a matter of state immunity has
been settled by the Court, the applications under Rule 13(10) for an order setting aside service of
an originating process served outside British Columbia or pursuant to Rule 14(6) for a declaration
that this Court has no jurisdiction or should decline jurisdiction, place 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 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.].
[197] The courts when 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)?
[198] An initial question arises on these applications, does the plaintiff have the right to serve a foreign
defendant ex juris under Rule 13? The resolution of that question in favour of the plaintiff,
however, is not determinative of jurisdiction [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.)].
[199] 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.
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."
 [200]
[201] Once the plaintiffs have passed the threshold test of establishing jurisdiction "simpliciter", prima
facie case and cause of action connected to the province, the 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.
[202] 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.
[203] 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).
[204] 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.).

Doctrine of Rule 13(10), Jurisdiction Simpliciter

[205] 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.
[206] 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 Supreme Court 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 required.
[207] 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.).
[208] Factual circumstances, mutatis mutandis, appropriate to the instance cases before the Bar and the
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 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".
[209] 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 143-144:
"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."
[210] 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.
[211] 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.
[212] 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..
[213] 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 R.
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."
[214] 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 subject-matter 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
"jurisdictionsimpliciter".
[215] 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.)].
[216] His Lordship, Boyd J. in Quest Vitamin Supplies Ltd. (supra) commented in the following way on
evidentiary requirements at pages 88 to 89:
"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)."
[217] 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 follows.
Doctrine of Rule 14(6), Jurisdiction Forma non Convenienes
[218] This raises the question of forum non conveniens. A leading 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."
[219] 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:
"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.
[220] 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."
[221] 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."
[222] 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."
[223] 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:
"'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'".
[224] 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."
[225] 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.]
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.
[226] In Craig Broadcast Systems, Inc. v. Frank N. Magid Associates, Inc., [1998] 3 W.W.R. 17 (Man.
C.A.) wherein 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.
[227] [12] After a review of the pleadings and the evidence and consideration of the rules relied on for
service ex juris on the defendants, a determination must be made as to whether service was
justified and whether there is a real and substantial connection to British Columbia and, hence,
jurisdiction over any of the foreign defendants in either action. 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.
[228] [24] In the case at hand, there is no doubt that the jurisdiction that has the closest connection with
the action, or the natural forum [see footnote 18], is Iran. The plaintiff is a citizen of Iran, the
entity being sued is an agency of the state of Iran, the contract of employment is governed by the
laws of Iran, the nationalization program which led to the loss of the plaintiff's shares proceeded
under Iranian law. The only link between the plaintiff's claim and Canada is the allegation that he
is domiciled in Canada and, of course, the fact that the ship was arrested in Canada where a bond
was subsequently posted to obtain its release.
[229] [25] In the words of Sopinka, J., in Amchem [see footnote 19], 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..." [see footnote 20] in Canada. In
assessing the existence of these special circumstances:
[230] "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." [see footnote 21]
[231] [26] 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 [see footnote 22]. 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 in by the
Defendant with the present applications wherein it is stated thatt:
[232] "... the tribunnals (sic) of Iran have exclusive jurisdiction to decide about disputes between
employees of the state and the state employers." [see footnote 24]
[233]
Part III: a brief statement of argument,
[234] A statement of the argument setting out briefly and concisely the points of law or fact to be
discussed, with a particular reference to the page and line of the case and the authorities relied
upon in support of each point. When a statute, regulation, rule, ordinance or by-law is cited, or
relied on, so much thereof, as may be necessary to the determination of the appeal, shall be printed
 as an appendix to the factum or 10 copies of such statute, regulation, rule, ordinance or by-law
may be filed for the use of the Court.
Applications presently at Bar
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.
Law Summaries
International Law

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" ]

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. 1980-81-82-83, 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.

ARGUMENTS
[235] 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.

Need To Amend Statements of Claim

[236] 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.
[237] 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.
[238] 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.

Amendments To Statements of Claim

Action No. S004040

Action No. S005440

Argument=Application of Immunity To The Case At Bar

[239] It is historically clear that governments and the states they represented had until recently enjoyed
the "absolute immunity" from adjudication by foreign courts as implied by the Defendant Bulgaria
[ see § ].
[240] 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.
[241] As governments the like of the Defendant "Peoples Republic of Bulgaria" as it then was and those
of other former communist states and other governments increasingly became involved in the
commercial arena, the doctrine of "absolute immunity" became increasingly viewed as an 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.
[242]
[243] The position of Counsel for the defendant is that Article 3 of the Act applies to the case at Bar.
Article 3 provides that:
(insert)

[244] 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) claims
 "restricted" immunity from any civil action in Canada framed around the criminal proceedings
brought by Bulgaria against the said Michael Kapoustin.
[245] 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 all 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.
[246] 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 its 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.
[247] 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 answer in 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 gestonitis "? (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 directly or vicariously a result connected to representatives, employees, officials,
agencies or instrumentalities whose controlling mind is the government of Bulgaria?
[248]
[249] 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.
[250] The Respondent has at all times accepted this contention, what the Respondent cannot accept is
that Bulgaria may rely on the ultimate purpose of an activity that is unrelated to the Plaintiff
Kapoustin's present claims to qualify its other acts or those as alleged by the other plaintiffs in
these two Supreme Court actions. 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. It would offend common sense to characterise 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.
[251] 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 the plaintiffs personal injury and material damages. The
Defendant government of Bulgaria having a support role in these activities and was critical to their
success or failure.
 [252] 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.
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.
[253] 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.

Exceptions to Immunity, s. 4 to s. 7 of the Act.

[254] The Court must next settle the question if the plaintiffs various affidavits and documents provide
sufficient prima facie proof to bring their claims within one or several of the statutory exceptions
to immunity as provided for in sect. 4 to sect. 7 and sect. 18 of the State Immunity Act, R.S.C.
1985, c. S-18.

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

Waiving of Immunity, s. 4 of the Act

[255] It is apparent from the evidence of the said Radulova, Robert Kap, and Plaintiff Kapoustin that the
Defendant Bulgaria has taken a "step in the proceeding before the Court" by providing answers in
defence to the endorsed Writs and statements of claim and if the Defendant "otherwise either
before or after the proceedings" had taken steps submitting it to the jurisdiction of this Court. Has
the Defendant waived its immunity as a result?
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
(c) intervenes or takes any step in the proceedings before the court.
Emphasis added
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.
[256] This question of sovereign immunity requires a close examination of the conduct of the Defendant
after having voluntarily accepted service in Supreme Court action S004040 on September 7 th 2000
and Supreme Court action S005440 on XXXX 2001. The Plaintiffs rely on the national legislation
of the Republic of Bulgaria and its declarations to the Hague Convention [see § ] and the affidavits
of Lukanov, Radulova, Hristov, Marinov, Petrova and the Plaintiff Kapoustin.
[257] From the available evidence it is apparent that on September 7th 2000 the Defendant Bulgaria
became aware of the proceeding against it when served a Writ in Supreme Court Action S004040
endorsed pursuant to the requirements of Rule 13(1) [see § ] Rules of the Court and the Statement
of Claim. The same may be said for Supreme Court Action S005440 as of XXX.
[258] In both proceeding before this Court delivery to the Defendant Bulgaria was effected pursuant to
the provisions of Rule 11(6.1)(c)(1), Rules of the Court and alternatively Rule 13(12) and Article 5
sub-paragraph 2 of the Hague Convention [see § to § ]. In Supreme Court action S004040 the
Defendant's Central Authority [see § ] voluntarily accepted the documents and in Supreme Court
action S005440 the Defendant's Minister of Finance voluntarily accepted the documents. Was this
service by the Plaintiffs to the Defendant in Bulgaria proper and sufficient?
[259] When the Court considers this question it might take notice of the fact that the Central Authority
for the Republic of Bulgaria chose to observe the same provisions of the courts' rules when
serving the Plaintiff Kapoustin and attempting to serve other plaintiffs in Bulgaria. It is of
significance that the Central Authority of the Republic of Bulgaria and "alter ego " of the
Defendant Bulgaria, elected to subordinate the requirements of its national legislation and
declarations on the Hague Convention [see § ]. The Defendant choosing instead to observe the
legislation of the province and the requirements of the provincial courts. Was this service by the
Defendant to the Plaintiffs in Bulgaria proper and sufficient?
[260] The Defendant Bulgaria has provided an answer that is in the affirmative. Service on the territory
of the Republic of Bulgaria pursuant only to the Rules of the Supreme Court of British Columbia
appears to be proper and sufficient in these proceedings. A 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 fact that the affidavits of service provided by Bidjeva and
Gogov are not consistent with Declarations of the Republic of Bulgaria on Article 6, paragraphs 1
and 2 [see § ]. Neither Bidjeva or Gogov are authorised by the legislature of the Republic of
Bulgaria to provide certificates of service.
[261] The very submissions of these affidavits to this Court are 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 [see Lukanov Affidavit § ]. Should the Court
provide an affirmative answer to the manner of service abroad this would as a result place the
Defendant in default of appearance to the endorsed Writs in both proceedings upto February 15th
 2001. Alternatively the Defendant Bulgaria would be in default of appearance upto December 7 th
2000[see § ] when it commenced steps in its own defence. The Defendant retaining legal counsel
after the fact of its default would not alter the fact of that default and the consequences of its
having undertaken other steps in these proceedings prior to the later appearance of counsel. It is
those nature and character of the steps 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?
[262] 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 the Respondent is suggesting to the Court. What the Respondent
has suggested to the Court is that the Defendant waived its sovereign immunity as contemplated
by s. 4(2) of the Act by the other steps it has taken in these proceedings. The Respondent
contemplates as one such possible occurrence the December 7th 2000 defence and other answers
provided by the Defendant Bulgaria.
[263] It is suggested to the Court that the Defendant's submission to the jurisdiction of the Court is, if
not "explicit submission" at least an "implied submission" evidenced by the Defendant's numerous
steps.
[264] 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.
[265] 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 Act , then there remains at issue before the Court the
"commercial activity" exception.

Commercial Activities, s. 2 and s. 5 of the Act

[266] 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.

Construing The Definition Of Commercial Activity In The Canadian Act

[267] [98] It will be remembered that the definition of commercial activity in the Canadian Act reads in
this way:
"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;"
[268] 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 CLRB and the Federal Court of Appeal both found that a bar against the
consideration of the purpose of an activity was implicit in the Canadian version although not
explicit. I cannot accept that conclusion. The material shows that the drafters of the Canadian Act
were aware of the particular wording of the American legislation. I would infer that they departed
from it intentionally. By not prohibiting the consideration of the purpose of an activity, the drafters
avoided an overly narrow interpretation of the definition, such as the Texas Trading test.
 [269] [99] How then should the Canadian definition be construed? Clearly, it places paramount
importance on the nature of the activity. To identify this "nature" or quality of an activity, a court
should have regard to the context in which the activity took place. In order to do that, it will often
be necessary to consider the immediate purpose of the actions taken by the foreign state. This
approach fosters the goal of reasonably restricting state immunity. It does so 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. It does not unduly restrict the courts in classifying an activity according to its nature
by unnecessarily narrowing the scope of the inquiry. This contextual approach complies with the
definition of commercial activity contained in the Canadian statute by 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.

Personal Injury and Property damage, s. 6 of the Act

[270] Does The Act Provide Sovereign Immunity To The Bulgaria Government In This Case?
[271] As stated earlier, s. 3 of the 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 Act .
[272] The respondent argues, that s. 6(a) of the Act excepts the Defendant Bulgaria in Supreme Court
action S004040 from sovereign immunity because the proceedings relate to personal injury which
occurred in Canada. 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.
[273] There is little case law available on the subject of the s. 6 exception and this forces a question.
Does s. 6 only apply in situations where the foreign state is performing private rather than public
acts -- that the Act and so continues the common law distinction between jure gestionis and jure
imperii? The Act's s. 6 exceptions do not appear to exist at common law.
[274] 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, illuminate this
problem at p. 73:
[275] "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 ..."
[276] 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.
[277] 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.
 [278] The exceptions in s. 6 do not appear available at common law in this jurisdiction, and so the
Respondent finds it difficult to see how they could, therefore, represent a codification of the
common law.
[279] 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.
[280] 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.
[281] 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 at this time sought relief for the allegedly unlawful imprisonment and personal injury to
the Plaintiff Kapoustin that had occurred in Bulgaria.
[282] 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.
[283] (b) The Torts Of Deceit And False Imprisonment

Claims framed in Tort

The plaintiffs in both law suits rely on Rule 13(1)(h) and have alleged as follows.

Conspiracy Theory
[284] 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.
[285] 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.
[286] 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.
[287] 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.
[288] 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
plaintiff 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.
[289] No 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.
[290] To this the Respondent would draw the Court's attention to one salient fact for His Lordship 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, a party to the
alleged conspiracy, effected act in British Columbia through his agents 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 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.
[291] 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 sworn evidence and the extensive
correspondence in evidence indicates that there is a serious question to be tried as to the conduct
and motives of the Defendant government of Bulgaria. These are questions for the trial judge.
[292] 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.
[293] 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 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.
[294] 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 an 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 documented as having been repeated by the
Defendant and reproduced thousands of time with the Defendant's assistance, the residence of one
of the alleged conspirators here and that the loss, if in fact one was suffered by alleged
unauthorized 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
[295] 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.

Conspiracy and Scienter Allegations S005440

[296] [53] It is alleged that in September 1997 Boise Cascade, acting in concert with the other Boise
Cascade companies, secretly entered into an agreement with de Bosques, known as the
development agreement, which purported to sell, transfer and assign to Compania Industrial
Puerto Montt the right to develop the Chile project and that all of the obligations of de Bosques
under the contract were assumed by Compania Industrial Puerto Montt. It is alleged that under
this conspiracy the defendants Boise Cascade, MacInnes and Zahoran, met, planned and conspired
to injure the plaintiffs by transferring the benefits of the Chile project from the partnership to de
Bosques and then to Compania Industrial Puerto Montt and conspired to proceed with the project
in this manner to avoid payment to the plaintiff pursuant to the RBC Dominion Securities contract.
[297] [54] RBC Dominion Securities sues for damages for conspiracy, inducing breach of contract,
unjust enrichment, quantum meruit and breach of contract.
[298] the defendants say that 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.
[299] [56] To justify its efforts to serve ex juris, RBC Dominion Securities relies on Rules 13(1)(g)
breach of contract, 13(1)(h) tort and 13(1)(j) necessary or proper party.
[300] [57] RBC Dominion Securities' contends that it should been titled to serve ex juris pursuant to
Rule 13(1)(g) because the contract for the payment of a fee for finding an investor or equity funder
was made, partially performed and anticipated to be performed in British Columbia. Partial
performance is said to be the payment of the retainer. Although this alleged contract has a real and
substantial connection to British Columbia, only the partnership and RBC Dominion Securities are
possible parties to that contract. I am unable to see how the claim against the foreign defendants
has a real and substantial connection in contract to British Columbia.
[301] The plaintiff alleges the tort of conspiracy and interference with contractual relations. It seeks
leave to amend to add an endorsement under Rule 13(1)(h). RBC Dominion Securities alleges
that there was a valid and enforceable contract with the partnership to xxxxx, that the defendants
were aware of this contractual obligation and there was interference by dealings that were
inconsistent with the contract. It is alleged that RBC Dominion Securities has 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.
(Walker v. College of Dental Surgeons of B.C. (23 September 1996) Vancouver C946856 (S.C.)).
[302] They allege that some of the conduct, it must be inferred, took place in British Columbia, where
Mr. MacInnes resides, and that the torts of inducing breach of contact and conspiracy have
resulted in damage in British Columbia where the plaintiffs' fee has not been xxxxx (Ichi Canada
Ltd. v. Yamauchi Rubber Industry Co. (1983), 144 D.L.R. (3d) 533 (B.C.C.A.).
[303] The defendants contend that the plaintiff has failed to establish any real and substantial connection
between the tort allegations and British Columbia, that the alleged conspiracy is unclear and that
the case is demonstrably weak given
[304] [61] RBC Dominion Securities relies on Rule 13(1)(j) to support the joinder and service of the
defendants as necessary or proper parties to proceedings brought against someone duly served in
British Columbia. The plaintiff says that the torts of conspiracy and inducing breach of contract or
interference with economic relations are advanced against Mr. MacInnes, a resident of British
Columbia duly served in B.C., and that a common cause of action is asserted against Boise
Cascade, BCC Chile, Compania Industrial Puerto Montt, de Bosques and Mr. Zahoran. The
plaintiff also relies on Pine Ridge, above.
[305] [62] The plaintiff also seeks to rely on Rule 13(3) that provides that the court in any case not
provided for in a subrule may grant leave to serve an originating process outside British Columbia.
The plaintiffs assert that there exists a real and substantial connection between these claims, the
defendants and British Columbia.
[306] Has this plaintiff demonstrated that there is a good arguable case that the pleadings come within
Rule 13 or has the plaintiff simply drafted creative and artful pleadings in an attempt to bring a
claim in tort against these foreign defendants? What is that evidence? The plaintiff, on the issue of
interference with contractual relations, put forward evidence of the existence of a valid and
enforceable contract, 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.

Criminal Proceedings , s. 18 of the Act

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

Argument Rule 13(10), Jurisdiction Simpler and 14(6)

[307] Another question often arises in such applications as those brought by the Defendant Bulgaria and
presently before the bar. Did the Plaintiffs have the right to serve a foreign defendant ex juris
under Rule 13? Case law on that issue appears to seize the Court in favour of the Plaintiffs,
however, this is not determinative of jurisdiction [see: Bushell 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 depending on
whether there exists a real and substantial connection between this court and either the defendant
or the subject matter of the litigation.[see: Cook v. Parcel, Mauro, Hultin & Spaanstra, P.C.
(1997), 31 B.C.L.R. (3d) 24 (C.A.)].
[308] 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.)].

Application To Be Decided On Basis Of Evidence Or Pleadings

 [309] 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.
[310] 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."

[311] 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.
[312] 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.
[313] 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, in this case XX pages and contains XX paragraphs 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 [ see § and § ], and the Court is provided the XXX affidavits of the plaintiff
Kapoustin totalling XX pages, along with over XX documentary exhibits.
[314] 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 §above]. Any references in either of the two
statements of claim to actions not material, are particulars of matters in aggravation of the
damages.
[315] 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,

Jurisdiction, as of Right
[316] 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].
[317] 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:

Argument Jurisdiction Simpler

[318] 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.
[319] 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.
[320] For the purposes of argument the respondent adopts, the latter proposition. In any event, the onus
is on him 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."
[321] 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.
[322] 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."

[323] 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.
Argument-Jurisdiction Simpliciter
[324] To defeat this application, the plaintiff must therefore first present a "good arguable case" that: (1)
the action was properly brought against the Seaboard Vancouver; (2) Seaboard London, the
applicant, is a necessary or proper party to that action; and (3) Seaboard Vancouver was duly
served in British Columbia. The applicant does not dispute that condition (3) has been satisfied.
However, its contention is that the plaintiff cannot establish a good arguable case that: (a) the
proceedings are "properly brought" against Seaboard Vancouver; nor that (b) the applicant,
Seaboard London, is a"necessary or proper party" to that action.

Argument Applications Of Rule 13 DOES THE COURT HAVE JURISDICTION?

[325] 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. I do not wholly like the expression "a "prima
facie case", for, where leave to serve has been given ex parte under Ord. 11 and application is then
made under Ord. 12 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 him, the judge is of opinion that the case - I can find no better word - is a proper one to be
heard in our courts. The description "a good "arguable case" has been suggested and I do not
quarrel with it. But for the purpose of this appeal it is sufficient to say negatively that the learned
judge fell into error in thinking that the court had no jurisdiction to grant leave because he was not
"satisfied" that there had been a breach within the jurisdiction.
I think that it must be accepted that the affidavit(s)(s) filed 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.
[326] 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. At the first stage of litigation the
issue of service ex juris and this problem of the plaintiffs as it arises here 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:
"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...
[327] 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.
[328] 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. My 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.
[329] 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).

Argument 13(10)
[330] 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)(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).
[331] 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)
[332] 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.
[333] In my view, the action as pleaded plus the affidavit(s)(s) evidence fits this case into one of the
categories enumerated in R.13, and, accordingly, jurisdiction simpliciter is established.

Argument 13(10)
[334] [7] The first question, then, is whether the plaintiff can show, by evidence, a good arguable case
that the circumstances fit within Rule 13(1)(m). The plaintiff must establish a good arguable case
not only that the action is based on a contract but also that the defendant has assets in British
Columbia.
[335] [8] It is the position of the defendant that while there were negotiations between the plaintiff and
the defendant concerning the plaintiff being employed by the defendant to market the defendant's
products in British Columbia no contract was ever completed. However, Counsel for the defendant
concedes, for the purpose of this application, that the plaintiff has an arguable case that there was a
contract of employment between the plaintiff and the defendant. However, the defendant disputes
that it has assets in British Columbia.
[336] [9] 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.
[337] [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".
[338] [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.
[339] [12] Counsel for the plaintiff submits that the defendant does have assets in British Columbia,
namely accounts receivable owing by its British Columbia customers. In this regard, the evidence
of the defendant's chief financial officer (paragraph 4 of his affidavit(s)(s)) is as follows:
The Defendant occasionally sells manufactured freezer units to independent dealers in British
Columbia, but such sales represent less than approximately 5% of the Defendant's gross sales in
recent years. All such sales are made to independent dealers who represent other products as well.
These dealers in British Columbia make the sales, bill the end-users and are responsible for paying
the Defendant for the units, which are shipped from our plant in Concord, at the Defendant's
offices at Concord.
[340] [13] 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.
[341] [14] The plaintiff has deposed that he is aware of 8 named companies in British Columbia who
regularly purchase products directly from the defendant.
[342] [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.
[343] The plaintiff, of course, has a difficulty providing precise evidence on this point because that
evidence is solely in the control of the defendant.
[344] the plaintiff has met the onus of demonstrating, with evidence, "a good arguable case" that the
criteria in Rule 13(1)(m) are met. The defendant has not displaced that arguable case by, for
example, evidence of the actual accounts receivable in British Columbia.
[345] that there is a real and substantial connection between this court and the subject matter of this
action. The plaintiff is resident in B.C. It is clear that the defendant carries on business here to the
extent that it sells its products to 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 plaintiff alleges led to the formation of the contract took place between the plaintiff in B.C. and
the defendant's officers in Ontario, although the document said to constitute the contract was
executed in Ontario. While there may be an issue as to where the cause of action arose, the
damages were suffered in British Columbia.
Negligence of Bulgaria
[346] The Plaintiffs asserted that the Defendant was at best negligent, and rely on the law on causation
as considered, mutatis mutandis, by the Manitoba Court of Appeal as held in Webster v. Chapman
(1997), 155 D.L.R. (4th) 82, that a defendant is liable for the entire injury provided their
negligence materially contributed to that injury.

The Common Law

[347] 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.
[348] 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.
[349] 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.
[350] 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.

Contributing Factor
[351] 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.

Conspiracy Doornbos S004040

[352] In Bangkok Bank of Commerce Public Co. v. City Trading Corp., supra, Lowry J. stated at pages
329 to 330:
" Where application is made under Rule 13(10) to set aside service of process effected ex juris on
the ground that there is no jurisdiction simpliciter, the question is whether there is a real and
substantial connection between this jurisdiction and the subject matter of the action or the foreign
defendant: Cook v. Parcel, Mauro, Hultin & Spaanstra, p.c. (1997), 143 D.L.R. (4th) 213 at para.
20 (B.C.C.A.). Where as here a plaintiff contends that the connection lies in the foreign defendant
being a necessary and proper party to an action brought against a person served within the
jurisdiction, there must exist a common cause of action against the two: Jan Poulsen & Co. v.
Seaboard Shipping Co. (1994), 100 B.C.L.R. (2d) 175 at para. 18 (S.C.).
Argument Conspiracy - Forma Convenies
[353] [39] The defendants have suggested that the plaintiffs in addition to this action, should
commence an action against the defendants in Colorado, obtain the evidence they require, and
then that action should be stayed. I see no useful purpose to be served by forcing the plaintiffs to
commence their action in more than one jurisdiction. Even if the plaintiffs brought their action
against the defendants in Colorado, the courts of that jurisdiction will likely have to exercise extra-
territorial jurisdiction over one or more of the defendants who reside in this jurisdiction. I follow
the reasoning of 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.

Argument Conspracy
[354] The plaintiffs therefore say they are not required to prove at this stage of the litigation that the
defendants engaged in a conspiracy, or that they illegally participated in short selling through the
use of nominee accounts. All the plaintiffs are required to demonstrate on an application for
jurisdiction simpliciter, is that:
1 There is a real and substantial connection between the claim and this province; and 2. There is a
claim made which if proven at trial, reasonably discloses a cause of action.
[355] [23] A number of factors to assist the court in an application under R.14(6)(c) are set out in
Leisure Time Distributors Ltd. v. Calzaturificio S.C.A.R.P.A - S.P.A. (cite). At p. 11, they are as
follows:

Argument forma Convenies

[356] Defendant's counsel's submissions do not persuade me that this is not the forum of convenience
for the plaintiff. If the law to be applied is the law of Ontario, it seems reasonable that it will be
easier to prove that law in B.C. than it would be in France. If the plaintiff must send its
witness(es) from Montreal to B.C., that will result in a cost to the plaintiff. The choice of situs is
the plaintiffs.
[357] [5] In connection with the question of forum non conveniens, Sigardson J. referred to the decision
in 427900 B.C. Ltd. v. Thrifty Canada Ltd. (1998), 168 D.L.R. (4th) 602 (B.C.C.A.) where the
court held that where jurisdiction simpliciter is established "the existence of a more appropriate
forum must be clearly established, particularly where there are no parallel foreign proceedings".
[358] There is no evidence that the applicable law will be any different, whether it is British Columbia
or Ontario so that is a neutral factor in my view. Likewise, there is no suggestion of any juridical
advantage or disadvantage to either party regardless of the forum.

Argument 14(6)
[359] 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.
[360] If there is jurisdiction in several places how is the appropriate forum determined? The selection
of the appropriate forum is often not straightforward. 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 recognize 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?
[361] In the Kapoustin et al v. Bulgaria action, S004040, the plaintiffs Tracy and Nicholas are resident in
the Province and plaintiff Michael is expected in a matter of months to be returned by the
Defendant Bulgaria to Canada from under the Transfer of Offender Act. The principal Defendant,
the government of Bulgaria, is permanently represented in Canada by its embassy and consular
officers and has local counsel. The Defendant Doornbos is resident in Canada and is named as a
party to those claims framed in tort, the other defendants resident in Bulgaria have been properly
served. But for the Defendant Bulgaria no appearances have been filed. A number of defendants
have publicly stated that they will recognise the jurisdiction of this court over them. ot attorn to
the jurisdiction of this court recognise (one is from Texas). One defendant is Boise Cascade,
which has its head office in Idaho where it carries on business, but is incorporated under the laws
of Delaware and has no business operations in British Columbia other than through a wholly
owned subsidiary that is not a defendant to either proceeding. B.C.C. Chile is a wholly owned
subsidiary of Boise Cascade and is a company incorporated under the laws of Chile and owns the
shares of Compania Industrial Puerto Montt S.A. Compania Industrial Puerto Montt is a company
incorporated under the laws of Chile and was designated as the project company under the 1997
development agreement.
[362] [77] Mr. MacInnes is a British Columbia resident and Mr. Zahoran is a resident of Santiago, Chile.
Compania Integral de Bosques S.A. is a company incorporated under the laws of Chile. Its
registered shareholders are Messrs. MacInnes and Zahoran and Mr. Zahoran's son, Miguel
Zahoran. One of the plaintiffs, Mr. Bergelt, is a registered shareholder of de Bosques although he
disputes that he knew he had that interest.
[363] [78] The plaintiffs in the CRS action say that leading up to the 1996 agreement there are a number
of written communications between the parties from and to British Columbia, a number of
telephone calls between CRS partnership and Boise Cascade and at least two meetings in British
Columbia between CRS Forestal and Boise Cascade. The bulk of the communications and
negotiations thereafter appears to have been in Idaho, although some were in British Columbia and
some in Chile. The plaintiffs say that there are witnesses in British Columbia, including the four
partners, four lawyers and two investment bankers with Dominion Securities, who have relevant
evidence. They point to the fact that the partnership originated in British Columbia, that the key
agreement was made subject to British Columbia law (the February 1996 confidentiality
agreement) and that documents are located in British Columbia.
[364] In determining the appropriate forum it is important to keep in mind that the plaintiffs are asserting
that as against them the 1996 and 1997 agreements are not valid. If it was a dispute under those
agreements, the question of jurisdiction and the appropriate forum would be quite different.
[365] There are witnesses who reside in all three jurisdictions, but given recent developments in video
conferencing, the location of the witnesses is not, in my view, a significant factor in determining
the appropriate forum.
[366] Although the defendants assert that the appropriate law will be Chilean or that of Idaho and that
the law of Idaho will apply to the nondisclosure agreement and to the question of ownership of the
plant in Chile, it appears to me that the governing law with respect to the initial agreement, i.e. the
February 1996 agreement, and the allegations of conspiracy and inducing breach of contract, will
either be British Columbia or Idaho law.
[367] It is an important consideration in this application that there are no parallel proceedings in Idaho
or Chile. It was not suggested that there were. The existence of Chile or Idaho as a more
appropriate forum has not been clearly established by the defendants with respect to this action.
Argument 14(6) SHOULD THE COURT ACCEPT JURISDICTION?
[368] 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 that
uncertainties with respect to the applicable law of an unidentified "international tribunal" and
relevant Bulgaria legislation granting absolute immunity to government employees, officers or
officials, particularly as surrounds the plaintiffs and defendants gives little choice but to litigate the
claims on the merits in British Columbia. This not would result in any loss by the Defendant
Bulgaria of a benefit of the current law in BugariItaly. On the other hand, based on the opinion of
Mr. Fontanelli, an Italian attorney, the Italian courts will have jurisdiction over the action
commenced by SCARPA. SCARPA has undertaken to accept the jurisdiction of the Italian courts
with respect to any claim that might be brought against it in Italy by Leisure Time.
[369] 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 are somehow
exclusively related to the criminal proceedings against Plaintiff Kapoustin in Bulgaria and the
claims before this Court are somehow to characterised as those more appropriate to a human and
fundamental rights tribunal..
[370] As a supply contract, the sale of the Defendant's products to the plaintiffs and delivery to the
plaintiff all occurred in Bulgaria. However, if the agreement is characterised, as it is in fact is, as
one of exclusive distributorship by the plaintiff of the Defendant's products throughout Canada
and for that matter most of the world, then it appears the Bulgaria court would either not assume
jurisdiction or if it would, the British Columbia law of contract would be applied.
[371] In his affidavit, Mr. Lukanov , the plaintiffs in Bulgaria states that while "under the law currently
in force in Bulgaria ….Italy, if a judgment were rendered by a British Columbia court in the action
commenced by Leisure Time, which otherwise met all of the requirements of Article 797 of the
Code, such a judgment could not be enforced in Italy while SCARPA'S own action in Italy was
pending.". an that the contract being one of exclusive distribution rather than mere supply, a
Bulgaria judge would apply British Columbia law to the contract because its closest connection is
with British Columbia. If British Columbia law were applied, then Mr. Lukanov states the
Bulgaria court would not take jurisdiction over the first two requests for relief which deal with the
distribution agreement.
[372] 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 characterized as a supply contract, is only one
factor in the forum conveniens test: Amchem Products Inc. v. B.C. (W.C.B.), [1993] 1 S.C.R. 897
at p.900.
[373] 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 Kapoustin 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. 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 fairness and justice.. 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."
[374] Apposite are the words of Mr. Justice LaForest in Hunt 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.
[375] "Order and fairness" issues should evoke in this Court the same concerns about the Defendant
Bulgaria's motives in suggesting an "international tribunal" to commence proceedings against it as
opposed to a simple traverse of the claims framed in tort or those alleging contract breach or
interference with commercial activities in Canada. The Court should also be concerned by the
Defendants declaration that the Plaintiff Kapoustin in being incarcerated, is as a result limited in
his civil rights before the courts in any jurisdiction.
[376] The Defendant Bulgaria seeks to rely on an action in an "international tribunal" as argument to
this Court that an assumption of jurisdiction by this court would deprive it of a juridical
advantage before such a tribunal. That seems an unfair attempt to preempt 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.
[377] 45 The test on this stage of whether the court should assume jurisdiction over this action was
conveniently summarized by 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.
[378] 4In 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.
[379] With respect to the Defendant Bulgaria's submission that the plaintiffs seek to obtain juridical
advantage, the Respondent is mindful of the observations of Donald J.A. quoted in Jan Poulsen at
p.184:
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.
[380] The discretion of this Court to assume jurisdiction over these two actions meets the requirements
of order and fairness referred to in Morguard 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 the 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.

14(6)
[381] [14] In Bushnell v. T & N plc, (cite), 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 extra-territorial
jurisdiction. 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.
[382] [15] The Chambers Judge hearing the Bushnell 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."
[383] The Defendants do not dispute that the ability to serve process without leave under Rule 13. The
fact of service ex juris does not establish jurisdiction [Bushell v. T & N plc (1992), 67 B.C.L.R.
(2d) 330 (B.C.C.A.) at 335-36], Plaintiffs having relied on Rule 13(1)(h) of the Court to effect
service without leave in that the proceeding is founded on a tort(s) committed in British Columbia
and alleged in the endorsement on the writ the 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."
[384] The Plaintiffs reasoned at the time that service ex juris was affected that it was open to be
challenged and the Respondent, as plaintiff was liable to supporting the service ex juris by
showing he had a "good arguable case" 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].

14(6)
[385] 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, however 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.
[386] However, the Respondent recalls the Court in Bushnell (see § )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)."

[387] Note must be taken 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 she 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."
14(6)
[388] 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.)

14(6)
[389] 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: 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). 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. Such reliance is however limited. 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.
[390] 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.
[391] 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, and; in action S005440
that a contract and commercial activity in or connected to British Columbia was rendered
impossible by the defendant's interference, and undue influence among other things.
[392] 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 Reply of the Plaintiffs in action S004040 dated XXXX or to
the Notice to Admit of Robert Kap for the plaintiffs dated XXX and that of Michael Kapoustin for
the Plaintiffs dated XXXX. These are capable of being construed as an admission by the
Defendant as the truth of the facts and veracity of the documents that support the various claims of
the Plaintiffs. 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. It is common ground that the Plaintiffs in S005440 had
contracts to be completed at law offices in Vancouver, British Columbia and that they would as a
result have acquired an interest in property and commercial activities in or connected to British
Columbia. The representatives of the Defendant acquired physical possession of the plaintiffs
contracts and in turn their property and as such rendered the completion of the contracts in
Vancouver.
[393] 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 31st, 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.
[394] 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. 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.
14(6) reads in part Contractual Cases:
[395] 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:
"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
thejurisdiction, 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."

[396] 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.)
[397] Earlier this Factum touched briefly on the factors the Court was to give consideration of the forum
conveniens [see § ] 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. 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.
 [398] At p. 79 (B.C.L.R.), Sopinka, J. said that the law on the issue is "remarkably uniform" in various
common lawjurisdictions. He added: "While there are differences in language used, each
jurisdictionapplies 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 fora." At p.
79 (B.C.L.R.), Sopinka, J. set out what is generally consider the test to be applied by the courts:
"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." From a careful reading of the Amchem 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.

[399] 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.
[400] 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.
[401] 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.

[402] 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.
[403] 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 it breaches of contracts or other agreements with companies where they are
majority shareholders or owners or have some other financial interest. 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 they 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..
[404] In action S005440 the individual members of the various sub-classes resident and non-resident 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 posses 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 alleged lead 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.

[405] There is no evidence to dispute the claim that any 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 been directly or vicariously suffered injury or
damages as a result of the alleged acts of the Defendant Bulgaria.
[406] 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 occurrence 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.
[407] This may prove to be a 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 that 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.

[408] 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.
[409] 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 .

[410] 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.).
[411] 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 .

[412] 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.

[413] 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.

[414] 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.
[415] 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.
[416] 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 have been
allegedly created by the Defendant in the public mind toward the Plaintiff Kapoustin. The affidavit
of Robert Kap and the news articles 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

[417] 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.
[418] 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.
[419] 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.
[420] 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.
 [421] 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.
[422] 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.

[423] 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."
[424] 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..
[425] It will be necessary to prove some foreign law, however, there is no evidence that to do so would
be difficult.

(j) Difficulty and cost of proving foreign law:

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

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

[427] There are none.
[428] 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 has no others. The plaintiffs
assert that the question of fairness and justice as referred to in Bushnell (supra), two sine qua non
principles of natural law, 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. It is and must remain wrong to avoid one's contractual
obligations or to interfere with those of others and their lawful rights. One need only ignore the
courys of this allege a move out of the jurisdiction thus forcing the plaintiff to come to a foreign
jurisdiction to enforce its claim. I note in passing that although his counsel referred in his
submissions to other potentially appropriate or convenient forums such as Alberta, Quebec, or
 Ottawa, the defendant in his affidavit(s)(s) states only that he is prepared to submit to the
jurisdiction of the French court.

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

[429] That list is not exhaustive but assist in the exercise of the discretion involved in determining
whether this court should assume jurisdiction over Leisure Time's action.
[430] 51 The following factors weigh in favour of concluding that British Columbia is a forum
conveniens for Leisure Time's action.
[431] 52 1. Leisure Time is a British Columbia company which carries on business here. While
SCARPA is an Italian company with offices only in Italy, it has consistently referred to Leisure
Time as its distributor. Leisure Time distributed SCARPA'S products in British Columbia and
throughout Canada.
[432] 53 2. SCARPA sent its representatives to British Columbia to meet with representatives of
Leisure Time at critical points during their relationship. These included 1981 when SCARPA
initiated the relationship with Leisure Time, and December 14, 1995 when SCARPA terminated
their agreement.
[433] 54 3. SCARPA, through Leisure Time, has 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. 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 Leisure
Time in having this court assume jurisdiction in terms of costs and availability of witnesses.
Leisure Time's lawyers, directors and witnesses are here. Thus, the applicable substantive law
appears to be British Columbia's law of contract.
[434] 55 4. The loss allegedly suffered by Leisure Time occurred in British Columbia. The plaintiff
developed a market of approximately $1,200,000 per year of retail value for SCARPA'S products
in Canada. This is some indication of significant damage suffered in Canada by Leisure Time
should the court find the notice of termination was not reasonable. This is so even though, as
SCARPA points out, the $1,200,000 is a retail figure which does not reflect Leisure Time's
expenses.
[435] 56 5. There is a juridical disadvantage to SCARPA in proceeding in British Columbia.
However, although the defendant is an Italian company, it operates on a significant international
scale with distributors outside Italy.
[436] 57 6. The necessity of proving Italian law in the event it governs, would not appear to be
difficult given both parties adduced opinion evidence on this application on the Italian law.
[437] 58 7. The Rule 18A procedure may be available for this action and would be a juridical
advantage to Leisure Time. I note however, that the availability of this rule will depend on
whether the court is able on affidavit(s)(s)s to find those facts required to solve the claims and
defences.
[438] 59 8. I have already considered the potential juridical advantage to SCARPA of having this
action proceed in Italy, but the Italian law which might preclude Leisure Time from enforcing a
default judgment from British Columbia in Italy may well have changed if and when Leisure Time
obtains judgment in British Columbia. Furthermore, the Italian court may not assume jurisdiction
over the action is the contract is characterized as one of exclusive distributorship rather than a
mere supply contract.
[439] 60 I conclude therefore that Leisure Time has met the onus of establishing that British Columbia
is an appropriate forum in which to try its claim against SCARPA.
(k) Whether there are parallel proceedings:
[440] [74] Both counsel acknowledge there are no parallel proceedings in any other jurisdiction.
[441] [75] Having considered all of the circumstances, it is my judgment that British Columbia is the
most convenient forum and the forum that has the closest connection with the parties and with the
claim. Although there is certainly some disadvantage to both Valmet Paper and Spedition Herbst
to have the action tried in British Columbia, it is the only jurisdiction in which all of the parties
can be required to attend and the dispute can be resolved among all of them once and for all
without unnecessarily duplicative judicial proceedings.
[442] [76] I recognize that if there is a exclusive jurisdiction clause the burden is on the plaintiff to
demonstrate that the court should exercise its discretion not to grant a stay and that burden is a
heavy one. However, I am persuaded that the clause does not apply and in such circumstances the
forum conveniens is clearly British Columbia. Even if I am wrong in that conclusion, I think there
is a good arguable case that the clause does not apply and taking that factor into consideration,
together with all of the other considerations, I
[443] conclude that 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 affidavit(s)(s)s and evidence provided the court a the
standard of a 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.
[444] 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.
[445] 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]. I
accept the test has been met. conclude this court has jurisdiction simpliciter.
[446] [30] 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?
[447] That the Court after consideration of the relevant factors 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.)].
[448] I am further required however 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].
[449] [38] The following factors to be considered in respect of forum conveniens were listed by Low J.
as being derived from Amchem Products Inc., supra, and other appropriate authority. They are
instructive but not exclusive.
(k) whether there are parallel proceedings in any other jurisdiction. [Stern v. Dove
Audio Inc., unreported, 15 April 1994, Vancouver C930935 (B.C.S.C.)].
[450] [42] Given my conclusions as to jurisdiction simpliciter and forum conveniens, I do not consider
it necessary in what is essentially a choice between the courts of two Canadian provinces, British
Columbia and Ontario, to conduct any further or separate analysis 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
[451] jurisdiction in British Columbia.
[452] [43] I am satisfied on the facts disclosed in this application "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].

Salient Facts As Set Out In Kapoustin Affidavit(S)

[453] [7] LifeChoice Minera Exall S.A. de C.V. ["Minera"] is a Mexican company wholly owned by
Exall.
[454] [8] Exall, through Minera, held or had the right to acquire, all necessary property and mineral
rights and claims for the development of the Santo Tomas Project.
[455] [9] The defendant Peter Holmes ["Holmes"] was at all material times a director of Exall and the
Managing Director of Minera. He resides in Tucson, Arizona. The defendant Stephen George
Roman ["Roman"] is a director and the president of Exall.
[456] [10] In October 1995, Allan Matthews ["Matthews"], not a party to this action, telephoned Murray
to inquire if Britannia would be interested in an opportunity to participate with Exall in the
development of a joint pit mining operation to exploit a copper oxide deposit in Mexico (the "San
Tomas Project") by Minera. Murray expressed interest.
[457] [11] Matthews was not acting for, or on behalf of Exall, in any capacity. He advised Holmes of
Britannia's interest and asked he contact Exall by telephone. Matthews was present with Holmes
at his Tucson, Arizona office and initiated the introductory telephone call from Holmes to Exall.
[458] [12] Matthews was offered a finder's fee by Britannia to be paid if it concluded an agreement with
Exall.
[459] [13] Britannia claims in this initial call Holmes "solicited" on behalf of Exall, its participation in
the joint development of the San Tomas Project and made several representations concerning the
Project, including that Exall through Minera held or had the right of acquisition for all necessary
property and mineral rights and claims to fully develop the San Tomas Project as envisaged.
[460] [14] Britannia alleges it relied upon the representations by Holmes in this initial call and later it
negotiated a Letter of Intent concerning the San Tomas Project with Exall.
[461] [15] The Letter of Intent was drafted by Greenslade who is a British Columbia solicitor. At the
request of Britannia, Holmes provided further information on the San Tomas Project to Britannia
by telephone or by fax from his office in Tucson to the plaintiff's office in Vancouver.
[462] [16] Holmes advised Britannia any agreement must be approved and concluded by Roman.
[463] [17] A Letter of Intent dated October 27, 1995 prepared by Greenslade was therefore sent by
Britannia to Roman at Exall's Toronto office where it was accepted and executed. The agreement
was a form of option requiring certain payments be made by Britannia to keep open its ability to
acquire a sixty percent interest in the San Tomas Project.
[464] [18] Britannia advised that it wished to "structure" its participation through a Barbados company.
A payment of $125,000 (U.S.) required of Britannia under the Letter of Intent December 1, 1995
was funded by Britannia through a Barbados subsidiary company.
 [465] [19] Exall was asked November 21, 1995 by Britannia to convert the Letter of Intent to a binding
agreement. Roman, on behalf of Exall, agreed to this request and executed his acceptance by
signature to a document forwarded by Britannia to the Toronto office of Exall.
[466] [20] A draft agreement was prepared by Greenslade and on one occasion he met with Exall's
solicitors in Toronto to discuss aspects of the draft. The agreement was never finalized.
[467] [24] The plaintiff bases its action on misrepresentation by Exall of title to the Mexican mining
claims, the amount of money required to acquire the property, and the economic merits of the
project. The action is framed in both tort and contract.
[468] [31] It was the Defendant Bulgaria through xxxxx who sought out the Plaintiffs in the first
instance. The Plaintiff Kapoustin and LifeChoice Pharmaceutcals Inc., however 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
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.
[469] 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.
[470] On analysis of the material facts before the court there can be seen there is sufficient evidence for
reliance to be found in the affidavits of Michael Kapoustin, Ada Gogova, .....as sworn February
20, 1998 to the effect that had he been aware"... the Santo Tomas Project was comprised of only 2
of these claims, the Plaintiffs would never have become involved with the Defendant Bulgaria in
any commercial activity in British Columbia or elsewhere, whatever its character had they known
of the Defendants fraudulent misrepresentation and deceit …..in the Project".
[471] [7] I will first describe the facts in more detail.
[472] [3] Britannia Gold Corp. ["Britannia"] is a company incorporated under the Company Act,
R.S.B.C. 1996, c.62, s.205. It maintains its registered and records office in Vancouver and is listed
on the Vancouver Stock Exchange. Britannia's directors and officers are resident in the Province
of British Columbia.
[473] [4] William Murray ["Murray"] a businessman, is a director of Britannia. John W. Greenslade,
["Greenslade"] a barrister and solicitor, is a director and the president of Britannia.
[474] 7. The Plaintiff is permanently disabled.
[475]
[476] [41] The relevant factors referred to in this Factum suggest that British Columbia is the
appropriate jurisdiction and is the forum conveniens.
Part IV: the nature of the order requested,
[54] I am not seized of this case but there would appear to be some judicial expediency in bringing any motions
before me..
Plaintiffs Application to be Set

Service Inconsistent With the Applicable Enactment and the Rules of Court
Affidavit(s)(s) of Doreva hearsay, verxasious and misrepresentative
Affidavit(s)(s)s of Service Not A Part of Chambers Record

Application To Be Decided In Absence of Plaintiffs

STRIKE AFFIDAVIT(S)(S) OF DOBREVA

[477] [15] Taken at their basic level, pleadings constitute a kind of conversation between contending
parties. One party may well be an unwilling participant in the conversation but that party is
nonetheless obliged to give sufficient articulation of its position as to lend some sense to the
conversation.
[478] [16] Enough metaphor. The Rules of Court place certain restrictions on any pleadings. R. 19(24)
states, for example:
[479] (24) Scandalous, Frivolous or Vexatious matters
[480] At any stage of a proceeding the court may order to be struck out or amended the whole or any
part of an endorsement, pleading, petition or other document on the ground that
(a) it discloses no reasonable claim or defence as the case may be,
(b) it is unnecessary, scandalous, frivolous or vexatious,
(c) it may be prejudice, embarrass or delay the fair trial or hearing of the proceedings, or
(d) it is otherwise an abuse of the process of the court, and the court may grant judgment or order the proceeding to
be stayed or dismissed and may order the costs of the application to be paid as special costs.
[481] [17] On a more positive note, R. 19(1) provides, in part:
[482] 19(1) A pleading shall be as brief as the nature of the case will permit and must contain a
statement in summary form of the material facts on which the party relies, but not the evidence by
which the facts are to be proved.
[483] [18] The Rules of Court require specific particulars in certain areas (e.g. fraud, libel, slander, or
bills of exchange - Rules 19(11), 19(12), 21(2) respectively). This matter pertains to an alleged
contract however so that the defendants rely on the first part of R. 19(20) and indirectly upon R.
19(22):
[484] (20) It is not necessary in a pleading to deny specifically each allegation made in a preceding
pleading and a general denial is sufficient of allegations which are not admitted, but where a party
intends to prove material facts that differ from those pleaded by an opposite party, a denial of the
facts so pleaded is not sufficient, but the party shall plead his or her own statement of facts if those
facts have not been previously pleaded.
[485] (22) If a contract, promise or agreement is alleged in a pleading, a bare denial of it by the opposite
party shall be construed only as a denial of fact of the express contract, promise or agreement
alleged, or of the matters of fact from which it may be implied by law, and not as a denial of the
legality or sufficiency in law of that contract, promise or agreement.
[486] [19] Finally, R. 21(3) also bears on the matter:
[487] In an action for money due under a contract, a statement of defence must specifically deny such
matters of fact, from which the liability of the defendant is alleged to arise, as are disputed.
[488] [20] Mr. Czepil relies primarily on the first part of R. 19(20) and argues that he need not plead a
tedious, sequential traverse of every fact alleged in the statement of claim. He is correct in this but
I do not conclude that R. 19(20) supports the brevity of the statement of defence in this case.
[489] [21] In Britain, a general denial such as in this case is not permitted. Order 18, Rule 13(3) states:
 [490] Subject to paragraph (4), every allegation of fact made in a statement of claim or counterclaim
which the party on whom it is served does not intend to admit must be specifically traversed by
him in his defence or defence to counterclaim, as the case may be; and a general denial of such
allegations, or a general statement of non-admission of them, is not a sufficient traverse of them.
[491] [22] It is clear from the British authorities that a general traverse such as that contained in the
statement of defence in this matter would offend Order 18 Rule 13. Our Rules are not as specific
but the issue is addressed by Rules 19(20) above and Rule 19(21):
[492] (21) If a party in a pleading denies an allegation of fact in the previous pleading of the opposite
party, the party shall not do so evasively but shall answer the point of substance.
[493] [23] The statement of defence in this case does not "answer the point of substance". It therefore
does not comply with Rule 19(21).
[494] [24] The plaintiff also attacks the statement of defence under Rule 19(24). A pleading is frivolous
if it is without substance, is groundless, fanciful, "trifles with the court" or wastes time. This
statement of defence does, in my view, waste time and verges on the fanciful. There may,
somewhere in the general traverse, be grounds, but as pleaded it lacks substance. It is therefore
frivolous.
[495] [25] A pleading is vexatious if it is without bona fides, is "hopelessly oppressive" or causes the
other party anxiety, trouble or expense. This statement of defence cannot be said to be oppressive
and possibly not without bona fides, but is almost certain to cause the plaintiff (and indeed has
already caused) anxiety, trouble and expense. It is therefore vexatious.
[496] [26] A pleading, to avoid being embarrassing, must not be concealing or evasive. It must state the
real issue in an intelligible form. It must, in short, be a part, even in a minimally articulated form,
of that constructive conversation to which I have alluded. This statement of defence does not meet
that standard. It is therefore embarrassing.
[497] [27] The plaintiff seeks an order that the statement of defence be struck for the above reasons and
that judgment be entered. R. 1(5) states the purpose of the Rules of Court as " . . . to secure the
just, speedy and inexpensive determination of every proceeding on its merits". To enter judgment
against the defendant at this stage for the above deficiencies would not meet the stated intent of
the Rules.
[498] [28] R. 2(2) allows the Court considerable latitude in addressing noncompliance:
[499] Subject to subrules (3) and (4), where there has been a failure to comply with these rules, the court
may

HAVE THE PLAINTIFFS BEEN PROPERLY SERVED?

PLAINTIFFS TO AMEND STATEMENT OF CLAIM

[500] [29] As I have mentioned, Mr. Czepil assured the Court on behalf of the defendants during
submissions of his intent to file an amended statement of defence. I think that is the correct course.
Bullen and Leake and Jacob's assists on this point, at p. 143:
Where the 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 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.
(a) set aside a proceeding, either wholly or in part,

(b) set aside any step taken in the proceeding, or a document or order made in the
proceeding,

(c) allow an amendment to be made under Rule 24,

(d) dismiss the proceeding or strike out the statement of defence and grant judgment, or

(e) make any other order it thinks just.

THE PLAINTIFFS CLAIM THE FOLLOWING RELIEF:

[501] General damages for deceit, negligent, fraudulent misrepresentation, .
[502] General damages for breach of contract.
[503] General damages for breach of fiduciary duty.
[504] Costs.
[505] Such further and other relief as the Court may deem just.
[506] The plaintiff refers to the following salient facts:
"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.

[507] 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.
[508] 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.
[509] 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.
[510] 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.
[511] 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.
[512] 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)?
[513] 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).
[514] 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".
[515] 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.
[516] If any such "international tribunal" actually exits the applications of the Defendant and statement
of Dobreva do not name it.
[517] 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 having occurred in or are connected to British
Columbia and affecting common law rights of residents and citizens of Canada.
[518] 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].
[519] 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 alleged and
the province of Britsih Columbia..
 [520] 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 reling on the hearsay and third
party representations of one Dimitar Tonchev.
[521] 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.
[522] 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.
[523] Dobreva states in both her affidavits that she is unaware of any facts that might connect the
Defendant to the province.
[524] Dobreva makes no reference in her February 23rd 2001 affidavit of the December 7th 2000
statement of defence and denials of Minster Rousseva [see § above] or for that matter to the fact
that the Defendant Bulgaria had been provided a reply on XXXX in form XXX and a list of all
the particulars of material facts and documents that the Plaintiffs intent to rely on at trial[see §
above].
[525]
[526] 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.

The Evidence On The Application of the Defendant

[527] The sworn affidavit(s) of one Ms. Maya Dobreva, Minister plenipotentiary & Counsel, Bulgarian
Embassy, Ottawa, Canada for the Defendant, Republic of Bulgaria.
[528] The sworn affidavit(s) of service one Ms. ……The Plaintiffs have not been provided a copy of this
affidavit(s)(s).
[529] The sworn affidavit(s) of service of one Mr……The Plaintiffs have not been provided a copy of
this affidavit(s)(s).
Part V: a table of the authorities that the party expects to refer to, arranged alphabetically,
together with a reference to the pages in the argument where they are cited, and
A table of authorities expected to be referred to by the party appearing in person or his counsel, arranged
alphabetically, and setting out the page or pages in the submission upon which reference is made to each
authority.
(2.1) Unless otherwise ordered by a Judge or the Registrar, Parts I to IV inclusive of a factum shall not exceed
40 pages.
(3) Paragraphs in Parts I to IV inclusive shall be numbered consecutively. not exceeding 20 pages in length,
unless otherwise ordered by a judge or the Registrar, and signed by the counsel responsible for its preparation or
by the party appearing in person, which memorandum shall be divided into five parts as follows, namely,
(vi) where the party intends to rely on any statutory enactment, copies of the relevant sections of the enactment
set out as appendices to the application for leave.
Authorities

Statutes Noticed
Statutes Noticed
American Foreign Sovereign Immunities Act of 1976 , Pub. L. 94-583, 90 Stat. 2891, 28 U.S.C., is §1603(d) 18, 26
Class Proceedings Act [RSBC 1996] c.50 13
English State Immunity Act 1978 , 1978 (U.K.), c. 33 25
Hague Convention on the Service Abroad of Judicial and Extra Judicial Documents (the "Convention") 14
Rules 13(10) and 14(6) Rules of the Court 71
sect. 3 of the State Immunity Act, R.S.C. 1985, c. S-18 15
sect. 4 to sect. 7 and sect. 18 of the State Immunity Act, R.S.C. 1985, c. S-18. 37
State Immunity Act , S.C. 1980-81-82-83, c. 95 (now R.S.C. 1985, c. S-18) 15, 18
U.K.), c. 18, 19, 25

Cases Noted
Cases Noted
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 63
Bangkok Bank of Commerce Public Co. v. City Trading Corp. (1997), 13 C.P.C. (4th) 324 (B.C.S.C.) 31
Bangkok Bank of Commerce Public Co. v. City Trading Corp., supra, Lowry J. stated at pages 329 to 330 51
Bow Valley Resource Services v. Kansa General Insurance Co. (1991), 56 B.C.L.R. (2d) 337 Chief Judge
McEachern 4
Bushell v. T & N plc (1992), 67 B.C.L.R. (2d) 330 at 342; [1002] B.C.D. Civ. 3714-03 (C.A.) 45
Camco International (Canada Limited) v. Porodo (18 November 1997), Calgary 9601-08706 (Q.B.), p. 7 46
Canadian International Marketing Distributing Ltd. v. Nitsuko Ltd. (1990), 68 D.L.R. (4th) 318 (B.C.C.A.) at 320)72
Cook v. Parcel, Mauro, Hultin & Spaanstra, p.c. (1997), 143 D.L.R. (4th) 213 at para. 20 (B.C.C.A. 52
Cook v. Parcel, Mauro, Hultin & Spaanstra, P.C. (1997), 31 B.C.L.R. (3d) 24 (C.A.) 45
De Sanchez v. Banco Central de Nicaragua (1985), 770 F.2d 1385, the court commented, at p. 1393 23
Emanuelli, Commentaire: La Loi sur l'immunité des Etats (1985), 45 R. du B. 81, at pp. 100-101 24
G.W.L. Properties Ltd. v. W.R. Grace & Co. - Conn. (1990), 50 B.C.L.R. (2d) 260 (C.A.) 45
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.
45
I Congreso del Partido , [1983] A.C. 244 (H.L.) 22
Jan Poulsen & Co. v. Seaboard Shipping Co. (1994), 100 B.C.L.R. (2d) 175 at para. 18 (S.C.). 52
Joseph v. Office of Consulate General of Nigeria (1987), 830 F.2d 1018, at p. 1023 24
Leisure Time Distributors v. Calzturrificio S.C.A.R.P.A. (1996), 5 C.P.C. (4th) 320 (B.C.S.C.), (MacKenzie, J.) 31
McLachlin & Taylor, British Columbia Practice, 2d ed., (1998, Butterworths) at 13-52 to 13-54 46
McLachlin and Taylor (supra) 49
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 4
Paterson et al. v. Hamilton et al. (1991), 115 A.R. 73; 79 Alta. L.R.(2d) 111 (C.A.), at 114 63
Rush-Presbyterian-St. Luke's Medical Centre v. Hellenic Republic (1989), 877 F.2d 574 24
Sarafi v. Ship Iran Afzal (1996), 111 F.T.R. 256 (TD) 4
Spoliate Maritime Corp. v. Cancellous Ltd. , [1986] 3 All E.R. 843 (H.L.), at 854 73
State Bank of India v. N.L.R.B. (1986), 808 F.2d 526, cert. denied (1987), 483 U.S. 1005 26
Texas Trading and Mill Corp. v. Federal Republic of Nigeria (1981), 647 F.2d 300 27
United Oil Seed Products Ltd. v. Royal Bank of Canada (1988), 87 A.R. 337 (C.A.), at 344 46, 63
Valmet Paper Machinery v. Hapag-Lloyd AG (23 December 1996), unreported, No. C960793, Vancouver Registry
(B.C.S.C.) 32
Walker v. Bk. of New York (1994), 69 O.A.C. 153 (CA) 4
Authors and Works Noticed
Footnotes
1. A review of the American as well as the United Kingdom jurisprudence in this regard can be found in P.J.
Kincaid, Sovereign Immunity of Foreign State-Owned Corporations (1976), 10 Journal of World Trade Law 110.
2. See Ferranti-Packard Ltd. v. Cushman Rentals Ltd. et al. (1980), 30 O.R.(2d) 194, affirmed, 31 O.R.(2d) 799
(C.A.) and Lorac Transport v. The Ship Atra (1984), 9 D.L.R.(4th) 129 (F.C.T.D.), affirmed [1987] 1 F.C. 108
( F.C.A.).

Words and Phrases

Commercial activity - The Supreme Court of Canada discussed the meaning of this phrase as it appeared in ss. 2 and
5 of the State Immunity Act, S.C. 80-81-82-83, c. 95 (now R.S.C. 1985, c. S-18).

Index
A depositary receipts............................................ ................21
absolute immunity...................................... .....................27
absolute immunity...................................................... .24, 28
absolute theory............................................................... ...77
Act. 22, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 37, 40, 43,
45, 47, 48, 57, 58, 74, 77, 81
Affidavit Dobreva.................................................... .........10
Affidavit Gogova..................... ......10, 16, 17, 34, 66, 70, 74
Affidavit Robert Kap No. 3............................................ ..18
Affidavit Stewart......................................... .....................10
affidavit(s)..................................................... ...................18
Affidavits, Marianna Radulova............................ ...........7, 9
anxiety................................................................ ..............76
assertion of fact.............................................................. ...18
B false representations........................................................ ..18
breach of contract..............17, 21, 22, 37, 51, 52, 58, 60, 72
breach of fiduciary .................................................. .........17
C fraud........................................ ............19, 20, 21, 38, 58, 75
cause injury........................................................... ......18, 20
class.................................................... ..................21, 22, 32
commercial21, 22, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 43,
45, 47, 48, 58
commercial activies......................................... .................42
commercial activities.....................16, 17, 24, 26, 28, 29, 33
commercial activitiies............................................ ...........19
commercial activity................................................... ..25, 26
commercial avtivties............................................... ..........29
common interest......................................... ......................21
common law.................... ..............25, 29, 31, 32, 48, 58, 66
conspiracy....................19, 20, 21, 49, 50, 51, 52, 59, 60, 68
conspiracy in scienter....................................................... .17
Conspiracy to Unlawfully Imprison......................... .........19
contract breaches.......................................... ....................16
contracts........................................ ............32, 33, 34, 38, 78
Conversion of Property................. ..................17, 20, 58, 74
corporate investors...................................................... ......21
criminal.................................................................. .....20, 22
criminal activities.............................................................. 19
Criminal Malice....................................................... .........18
Criminal Negligence............................................... ..........18
current theory.................................................................. ..77
D jurisdiction 22, 24, 25, 26, 27, 29, 35, 36, 37, 38, 39, 41, 42,
de jure imperii................................................................. ..44
deceit.................................................................... .17, 21, 77
defamation.......................................... ..................17, 58, 63
Defendant State of Mind........................................... ........19
dignity..................................................................... ....17, 29
E
economic injury.................................................. ..............67
emotional anguish..................................................... ........17
emotional anxiety..................................................... ...17, 18
emotional distress.................................. .....................17, 18
exclusive jurisdiction........................................... .............65
extort................................................................................. 18
extortion................................................................... ...58, 63
Extortion Attempted........................................................ ..18
F
false................................................................. .................38
false accusations.............................................. .................18
fiduciary duty................................................ ........19, 20, 22
forum non conveniens......................... ............35, 39, 59, 78
fraudulent misrepresentation....................................... ......77
fraudulent misrepresentation ..................................... .......17
G
Germany.............................................................. .............19
H
Hague Convention...................................... ...4, 5, 6, 7, 9, 14
Hague, Central Authority........................ ................5, 6, 7, 9
Hague, Convention Declarations................... .....................5
honour.............................................................................. .17
humiliation...................................................................... ..63
I
immunity...20, 22, 24, 26, 28, 29, 30, 31, 32, 34, 43, 44, 46,
47, 48, 58, 77
improper seizure.............................................. .................21
induced diabetes ....................................... .......................17
injuriously false............................................. ...................18
injuriously manipulative................................. ..................18
injury........................................................... ....20, 48, 50, 58
international tribunal.................................................... .....78
J
jure gestionis.................... ...................24, 29, 30, 32, 48, 58
jure imperii..............................24, 29, 30, 32, 45, 48, 58, 69
45, 47, 48, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61,
62, 63, 64, 65, 66, 67, 68, 70, 71, 72, 73, 74, 77, 78
K
Kapoustin................................................................ ....20, 21
Kapoustin Arrest................................................... ............19 public acts......................................................... ..........24, 27
Kapoustin Conviction....................................... ................19 public defamation........................................... ..................18
Kapoustin Cruel and Unusual Treatment..........................19 public figure..................................................................... .17
Kapoustin Detention.......................................... ...............19 public humiliation..................................................... ........17
Kapoustin Extradition............................................ ...........19 Public Humiliation...................................................... ......18
Kapoustin In Prison....................................... ...................19 public knowledge......................................................... .....16
Kapoustin Solitary Confinement................................. ......19 public statements.......................................... ....................18
L purpose.................................................................. 30, 31, 58
libel............................................................. ..........17, 18, 75 R
LifeChoice............................................................ ............21 R.C.M.P, Doornbos............................. .18, 20, 50, 58, 60, 67
LifeChoice BANQ1 Corporation\t ........................ ...........21 reputation.................................................................... ......17
LifeChoice International A.D....................................... .....21 restrictive immunity............................24, 25, 26, 27, 28, 44
M restritive immunity........................................................... .28
Maya Dobreva................................................ ..................78 Robert Kap................................................ .......................20
menaces of violence..................................................... .....18 S
mental and physical health......................................... .......17 scienter....................................................... ......................17
mental distress....................................... .....................42, 49 service..............33, 36, 37, 38, 41, 52, 55, 56, 57, 58, 63, 79
mental suffering...................................................... ..........17 slander................................................................. ..17, 18, 75
Minister....................................................................... 29, 79 sovereign right..................................................... .............22
misrepresentation................... ...................19, 21, 58, 72, 74 sovereignty...................................................... ...................5
N [9]State Immunity Act.................................... ....................5
nature.................................... ....................30, 31, 47, 48, 58 Act............................................................................. ...42
negligence.................................................................... .....22 stature............................................................... ................17
Negligence.............................................. ..............17, 54, 58 subclass........................................................................... ..21
negligent................................ ........19, 21, 38, 45, 58, 72, 77 T
negligent misrepresentation................... .....................17, 19 threats of harm........................................................ ..........18
O tribunal....................................................... ......................78
originating process...................................................... ......52 U
P undue influence................................................................ .22
Penitentiary..................................................................... ....5 unlawful interference........................................... .............21
perosnal injury..................................................... .............54 unverified data..................................................... .............18
personal injury....................... ........17, 18, 42, 48, 49, 58, 67 W
Personal Injury............................................................... ...19 wilfully illicit........................................................ ............21
personal opinion......................................... ......................18 Z
physical injury and mental torment........................... ........18 Zlatka Rousseva............................................................... ...5
Plaintiffs, Notice to Admit................................... ...............8
Plaintiffs, Reply in Form 18............................................. ...8  
prima facie case................. ............18, 34, 52, 55, 63, 64, 72 emotional anguish .................................................. .........17
private act........................................................ .................19 Hague Convention.............................................. ...............5
private acts.......................................................... ........24, 27 Hague, Central Authority......................................... ..........5
proper service........................................................... .6, 9, 14 jurisdiction forma non conveniens...................... .............65
public................................................... 20, 30, 33, 34, 44, 48 jurisdiction simpler............................................ ..............54
public act.............................................. ......................28, 44 jurisdiction simpliciter........................... ...34, 35, 36, 43, 78
Public Act........................................................ .................19 Nicholas Kapoustin...................................................... ....17
Public Act, de jure imperii............................... .................19 personal supposition.................................... ....................18
private act, jure gestionis.............................. ...................19