COURT FILE NO.: CV-12-463434

DATE: 20121017

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Estate of Marla Bennett, Michael Bennett, Linda Bennett and Lisa Bennett (Plaintiffs/Moving Parties) and Islamic Republic of Iran and Iranian Ministry of Information and Security (Defendants/Responding Parties

BEFORE: Justice Beth Allen

COUNSEL: John Adair and Khalid Janmohamed , for the Plaintiffs/Moving Parties and

No one appearing, for the Defendants/Responding Parties

HEARD: October 11, 2012

ENDORSEMENT

BACKGROUND TO THIS PROCEEDING

[ 1 ] The Estate of Marla Bennett and her family (“the Plaintiffs”) bring a motion on a without notice basis for a Mareva injunction to restrain Iran and the Iranian Ministry of Information and Security (“the Defendants”) from disposing of, encumbering or otherwise dealing with any of its assets in Canada. The Plaintiffs have identified three assets which are real property situate in Ontario.

[ 2 ] The Court’s authority to grant a Mareva injunction arises under s. 101 of the Courts of Justice Act, R.S.O. 1990, c. C.-34 . That provision allows the grant of an interlocutory injunction where it appears to the court to be just or convenient to do so.

[ 3 ] The Plaintiffs brought a claim against the Defendants in an action commenced in the United States for damages for wrongful death (“the U.S. Action”). Ms. Bennett, a U.S. citizen at the time, was killed as a result of a terror attack bombing by Hamas at the Hebrew University while she was a student there. In the U.S. the Plaintiffs alleged damages against the Defendants for Ms. Bennett’s death on the grounds the Defendants provided material support to Hamas, the organization responsible for the bombing.

[ 4 ] On a standard of “clear and convincing evidence”, the Plaintiffs proved their claim to the satisfaction of the United States District Court for the District of Columbia (“the U.S. Court”). The U.S. Court found that Iran and the Iranian Ministry of Information and Security (MOIS) provided persistent support to Hamas. Judgment was ordered on August 30, 2007 in favour of the Plaintiffs in the amount of $12,904,548 (USD) (“the U.S. Judgment”) [ Bennett v. Islamic Republic of Iran 507 F.Supp.2d 117 (2007)]. The U.S. Judgment is final and binding in respect of the U.S. Court. Problems arose in the Plaintiffs’ attempts to enforce the U.S. Judgment against Iranian assets in the U.S.

[ 5 ] On this motion, the Plaintiffs filed an affidavit sworn on October 8, 2012 by a U.S. attorney, Thomas Fortune Fay, who attested to his successful representation in the U.S. of other plaintiffs in actions against Iran for damages arising from Iran’s support of terrorist acts. Mr. Fay gave evidence as to the conduct of Iran in face of such law suits and in particular Iran’s practice of not defending the actions on their merits. Mr. Fay points out that once a judgment has been obtained Iran immediately takes steps to avoid Iran’s assets in the U.S. from being attached. This has been the case with attempts to give effect to the U.S. Judgement. The Plaintiffs have not been able to enforce the U.S. Judgment against Iranian assets in the U.S.

[ 6 ] The Plaintiffs commenced an action in the Ontario Superior Court on September 13, 2012 seeking an Order to recognize the U.S. Judgment in Ontario. Understandably, the Plaintiffs have had some difficulty serving its Statement of Claim on the Defendants given the closing of the Iranian Embassy. At the time of the motion the Plaintiffs were continuing in their efforts to accomplish service through the Deputy Minister of Canada’s Department of Foreign Affairs and International Trade. The Deputy Minister has received the Statement of Claim and the Plaintiffs await word as to the Department’s success in effecting service.

THE INJUNCTION HAS BEEN ORDERED

[ 7 ] After reviewing the materials filed and hearing the Plaintiffs’ oral submissions on October 11, 2012, I granted an interim interlocutory injunction on October 11, 2012 in the form attached to these Reasons as Schedule A. The injunction will expire 10 days from the date of the Order.

BARRIERS TO ENFORCING JUDGMENTS AGAINST IRAN

[ 8 ] Mr. Fay provided evidence on the circumstances that have prevented the enforcement in the U.S. of judgments against Iran. Substantial and extensive international economic sanctions have been imposed by the international community against Iran with the result that Iran is severely restricted or precluded from holding assets in its own name in foreign jurisdictions. Iran has attempted to ignore and bypass the sanctions, by among other means, trying to conceal its ownership in assets and its involvement in businesses and other economic activities. Mr. Fay describes in the following passage some of Iran’s evasive techniques:

Iran’s national shipping line, the Islamic Republic of Iran Shipping Lines (“IRISL”) has been prohibited from transacting business in many ports around the world. Iran has therefore engaged in practices to hide the true identity and ownership of the IRISL ships. The United States Treasury’s Office of Foreign Asset Control issued a Global Advisory on July 19, 2012 to draw attention to IRISL’s “deceptive practices” of fabricating flags under which its ships were operating in order to avoid the international sanctions.

[See the Fay Affidavit, paras. 11-12, Supp. Motion Record, Tab 1. A copy of the U.S. OFAC Advisory is attached as an exhibit to the Fay Affidavit.]

[ 9 ] The Plaintiffs also filed an affidavit sworn on October 4, 2012 by an expert, Professor Farrokh Zandi, a Professor of Economics at York University in Toronto who by an Acknowledgement of Expert’s Duty, acknowledged his obligation to provide fair, objective and non-partisan opinion evidence restricted to his area of expertise. His resume is attached to his affidavit as an exhibit. He obtained a Ph.D. in Economics from Carleton University and has pursued a field of study and expertise in International Trade and Finance, Money, Banking and Macroeconomics, with an interest in Iran.

[ 10 ] Professor Zandi has served on various Iranian-Canadian community organizations and is the current President of the Iranian-Canadian Congress, in which latter capacity he addressed the Canadian Senate on September 12, 2012 on the topic of Iranian-Canadian relations.

[ 11 ] Professor Zandi also spoke in his affidavit of the international sanctions imposed on Iran and the ploys Iran has used to avoid the reach of the sanctions. He pointed to Iran’s: use of partnerships with corporations outside Iran, which partnerships then engage in the necessary transactions; conducting transactions through third-party entities located in countries that have not sanctioned Iran and which are not themselves facing sanctions; using, in countries that have sanctioned Iran, individual persons and corporations that do not on their face appear to be agents of Iran. Professor Zandi states it is through these means that Iran avoids using its own name in order to evade the restrictive sanctions.

[ 12 ] Professor Zandi addressed the issue of how Iran uses cultural centres to cloak the involvement of the Iranian government and government officials in promoting Iranian interests through these centres.

[ 13 ] The Alavi Foundation in the U.S. is one such centre which Professor Zandi attests to the best of his knowledge operates as arm of the Iranian government involved in promoting Iranian interests in the U.S. In that regard, Professor Zandi makes particular reference to an action for enforcement of a judgment against Iran brought in the U.S. District Court, Southern District of New York. That action pertained to the building that houses the Alavi Foundation. The New York Court did not accept the defendant’s attempts to establish, among other things, that the Alavi Foundation is not in any sense an agency or instrumentality of Iran. The court found that documents seized under a search warrant demonstrated:

… a robust factual basis to find that plaintiffs have sufficiently set forth a basis for subject matter jurisdiction because Moving Defendants “are” in fact, Iran, or are legally “alter egos” or “organs” of “Iran”.

[ 650 Fifth Avenue 2012 U.S. Dist. LEXIS 105188]

[ 14 ] Thus, Iran has been found by U.S. courts to use cultural centres to cover its identity in its quest to avoid the sanctions and impede the enforcement of judgments against its assets in the U.S.

ASSETS IN ONTARIO AGAINST WHICH THE PLAINTIFFS SEEK TO ENFORCE THE U.S. JUDGMENT

[ 15 ] The Plaintiffs have identified three real property assets they assert are either legally or beneficially owned by Iran.

[ 16 ] The first property is that occupied by the Iranian Embassy which was used by the Iranian government until the Canadian government ordered its closure on September 7, 2012. This property is located in Ottawa at 245 Metcalfe Street. The Parcel Register indicates it is owned by Iran.

[ 17 ] The second property is at 290 Sheppard Avenue in Toronto, the legal title to which is held by a corporation called Farhangeiran Inc. That facility is purportedly used as a centre for Iranian studies. Through an affidavit on October 5, 2012 by a student-at-law at the Plaintiffs’ counsel’s firm, Lauren Radkwski, the Plaintiffs have disclosed the following information obtained from corporate and computer searches and stories in the media that suggest that Farhangeiran Inc. is an “alter ego” of Iran used as a front to avoid sanctions.

(a) The Director and President of Farangheiran Inc. is Fazel Larijani, one of five Larijani siblings prominent in the Iranian government. Fazel Larijani was once an Iranian cultural attaché to Canada, one of his brothers, a Speaker of Iran’s Parliament, and another brother, the current head of Iran’s judiciary.

(b) An article in MacLean’s magazine in April 2010 concluded the Centre was a front for and controlled by the Iranian government.

(c) The Toronto Star published an article at about the same time in which one of the original three Directors of Farangheiran Inc. said that if the Centre was continuing to do business it was “an abuse”.

(d) A local Iranian-Canadian academic was quoted by the Toronto Star as saying that the Centre was a “front for the Iranian government”.

[ 18 ] The third property is located at 2 Robinson Avenue in Ottawa. That property is legally owned by the Mobin Foundation which acquired title from Fatima Cultural Activities Inc. Land transfer documents indicate the property was held in trust for the Mobin Foundation.

[ 19 ] Through the affidavit of Ms. Radkowski, the Plaintiffs have brought the following evidence from land titles and computer searches and media articles pertaining to the Robinson Avenue property:

(a) The Canadian Department of Foreign Affairs and International Trade was required to review and approve the purchase of the Robinson Avenue property because the transaction involved a foreign government.

(b) The spokesperson for the National Capital Commission, which sold the property to Fatima (as trustee for the Mobin Foundation), was quoted at the time of the sale as stating that the purchasing corporation “is owned by the government of Iran”.

(c) Renovations were done to the building at the time of purchase in 1998 and the applicant identified on the Building Permit Application was the “Islamic Republic of Iran”.

[ 20 ] According to a Wikipedia search, the sole Director of the Mobin Foundation as listed in a Canadian federal corporate search is Seyed Adeli. Mr. Adelyi is revealed as having a long history of prominent positions in the Iranian government. The MacLean’s article of September 12, 2012 states that the Robinson Avenue property has substantial ties to the Iranian Embassy such that Embassy staff could answer a call to the cultural centre.

[ 21 ] Professor Zandi advanced a strong opinion on the connections between the Sheppard Avenue property in Toronto and the Robinson Street property in Ottawa to the Iranian government.

I can offer an opinion without hesitation that based on my experience as a prominent Iranian academic and researching Iran’s international economic and other operations that I have every expectation that the Iranian government is ultimately responsible for the control and operation of the Iranian cultural centres at 290 Sheppard Avenue West in Toronto and 2 Robinson Avenue in Ottawa. Although I do not have direct personal knowledge of such control and responsibility, it is consistent with my understanding of how Iran operates and in particular the means Iran uses to avoid international sanctions.

[See Professor Zandi’s Affidavit, sworn October 5, 2012, para. 18]

THE LAW ON INJUNCTIONS

The Five Factors

[ 22 ] The five factors set down by courts for consideration on a motion for a Mareva injunction are well known. The plaintiff is required to:

(a) make full and frank disclosure of all material facts within its knowledge;

(b) provide particulars of the claim, stating the grounds of the claim and the amount thereof, and the points that could be fairly made against it by the defendant;

(c) give some grounds for believing that there are assets in the jurisdiction;

(d) give some grounds for believing that there is a real risk that the assets will be removed from the jurisdiction, disposed of within the jurisdiction or otherwise dissipated so that the moving party will be unable to satisfy a judgment awarded to him or her; and

(e) provide an undertaking as to damages.

[ Sibley & Associates LP v. Ross , 2011 ONSC 2951 , at para. 11 , (Ont. S.C.J.) and Chitel v. Robart (1983), 1982 1956 (ON CA) , 39 O.R. (2d) 513 (Ont. C.A.) ]

Full and Frank Disclosure

[ 23 ] Because a motion for an interim Mareva injunction is made on a without notice basis a defendant is foreclosed from making a case against the injunction. The plaintiff is therefore required to make full and frank disclosure to the court of its claim and any available defences.

[ 24 ] The materials on this motion, the affidavits and attached exhibits I find fully set out the basis for the claim against Iran.

[ 25 ] In addressing possible defences, the Plaintiffs acknowledge that their evidence with respect to Iran’s ownership of property in Ontario, particularly the Sheppard Avenue West property in Toronto and the Robinson Avenue property in Ottawa is not direct evidence or conclusive of Iran’s ownership. I will address this more fully below.

[ 26 ] The Plaintiffs have also disclosed a potential defence with respect to possible barriers to attaching the property at the former Iranian Embassy at 245 Metcalfe Street in Ottawa. This defence will be addressed when I deal with grounds to conclude Iran has property in Ontario.

[ 27 ] The Plaintiffs also address other the possible defences to Ontario recognizing the U.S. Judgment ― whether the foreign judgment is against public policy in Canada, was made in breach of natural justice, or was obtained by a fraud on the foreign court. These defences too are dealt with below.

Strong Prima Facie Case

[ 28 ] The plaintiffs are required to show they have a strong prima facie case on the merits with respect to their request that Ontario recognize the foreign judgment. The Plaintiffs point to the following factors as favouring Ontario recognizing the U.S. Judgment.

[ 29 ] Foreign states generally enjoy immunity from law suits in Canada under the State Immunity Act , R.S.C. 1985, c. S-18, s. 6.1, with exceptions, one of which applies to Iran. Because Iran is listed under the State Immunity Act as a sponsor of state terrorism and the claims arising from the U.S. Judgment arise out of a claim of state terrorism, Iran does not enjoy this immunity. Immunity therefore does not stand as a bar to Ontario recognizing the U.S. Judgment.

[ 30 ] An Ontario court will recognize a foreign judgment that is final and binding in respect of the issuing court and where the foreign court “properly assumed jurisdiction when the circumstances are tested against Ontario’s law on jurisdiction [ Beals v. Saldanha , 2003 SCC 72 () , 2003 CarswellOnt 5101 (S.C.C) and Oakwell v. Enernorth, 2006 CarswellOnt 3477 (Ont. C. A.) ]

[ 31 ] The Plaintiffs, I find, have raised a strong prima facie case with respect to those criteria.

[ 32 ] Mr. Fay, an experienced attorney and member of the U.S. Supreme Court Bar, attested to the fact the U.S. Judgment was final and binding. The U.S. Judgment cites the legislation, 28 U.S. Code 1605(a)(7), that grants a U.S. court jurisdiction over a foreign state for claims for personal injury or death where the foreign state has been designated as a state sponsor of terrorism and either the plaintiff or the victim was a U.S. resident at the time of the attack.

[ 33 ] An Ontario Court would also properly assume jurisdiction in the circumstances. Canadian courts now have jurisdiction under the Justice for Victims of Terrorism Act , S.C. 2012, c. 1, s. 2 with respect to claims against foreign states for their support of terrorism.

[ 34 ] As noted above, the Plaintiffs point out the Defendants can raise certain defences to the recognition of the foreign judgment, that is, if it can be established that the U.S. Judgment is contrary to public policy in Canada; or that a breach of natural justice occurred in arriving at the U.S. Judgment; or that the U.S. Judgment was obtained by fraud [See Beals v. Saldanha , supra and Oakwell v . Enernorth , supra ]. The Plaintiffs submit there is little chance the Defendants could succeed on those defences.

[ 35 ] Of course, the strength of the Plaintiffs’ argument that the U.S. Judgment cannot be said to be contrary to public policy lies in Canada’s recent efforts to provide avenues of redress for victims of terrorism through the enactment of the Justice for Victims of Terrorism Act . This presents a strong case against the success of that defence.

[ 36 ] In the U.S. Court the Plaintiffs were required to establish their claims on “clear and convincing evidence”. Notwithstanding that Iran did not defend the action and the matter went by way of default proceedings, the U.S. Court still required the plaintiffs to prove their claims. In their submission that the principles of natural justice were honoured in arriving at a determination, the Plaintiffs point out that the U.S. court had ample evidence before it to consider in arriving at its decision. The Plaintiffs also make a strong case against the Defendants succeeding on this defence.

[ 37 ] The same is true for the defence of fraud. There is nothing on the face of the record to suggest the U.S judgment was obtained by fraud.

Some Grounds for Concluding Iran has Assets in Ontario

[ 38 ] Although, as the Plaintiffs acknowledge, their evidence on this factor is not conclusive, I find the Plaintiffs have managed to adduce evidence sufficient to establish a strong prima facie case that Iran has title either legally or beneficially to three real property assets in Ontario.

245 Metcalfe Street

[ 39 ] The 245 Metcalfe Street property easily meets the “grounds to believe test” since it is legally owned by Iran. But there are some special considerations the Plaintiffs raise with respect to that property that could provide a possible defence to the Plaintiffs’ position.

[ 40 ] There is a possible argument that the 245 Metcalf Street property, as the former Iranian Embassy, could be immune from attachment.

[ 41 ] The Plaintiffs referred the Court to a Canadian Government order cited in the Canada Gazette , Vol. 146, No. 20, September 26, 2012 entitled “Order Establishing a List of Foreign State Supporters of Terrorism.” The Canadian Government’s analysis in that document concludes that while some property of states listed as state supporters of terrorism no longer enjoy immunity, an exception was made for diplomatic and consular property of the listed states. According to the Canada Gazette , the consular property of the listed state is to maintain its inviolability and the protection of the Foreign Missions and International Organizations Act , S.C. 1991, c. 41, as amended (the “FMIO Act ”) and the Vienna Convention on Diplomatic Relations and the Vienna Convention on Consular Relations .

[ 42 ] The Plaintiffs make the submission that such orders made by the Canadian government in the Canada Gazette are not law and therefore are not legally binding. It is the Plaintiffs’ submission that the legal effect of the Canadian government ordering the closure of the Iranian Embassy on September 7, 2012 can be found in the statutory intent expressed in s. 3(1) of the FMIO Act .

[ 43 ] In respect to foreign diplomatic missions and consular posts in Canada, section 3(1) of the FMIO Act cites the provisions of the Vienna Convention on Diplomatic Relations and the Vienna Convention on Consular Relations that have the force of law in Canada. This section states:

3. (1) Articles 1, 22 to 24 and 27 to 40 of the Vienna Convention on Diplomatic Relations, and Articles 1, 5, 15, 17, 31 to 33, 35, 39 and 40, paragraphs 1 and 2 of Article 41, Articles 43 to 45 and 48 to 54, paragraphs 2 and 3 of Article 55, paragraph 2 of Article 57, paragraphs 1 to 3 of Article 58, Articles 59 to 62, 64, 66 and 67, paragraphs 1, 2 and 4 of Article 70 and Article 71 of the Vienna Convention on Consular Relations, have the force of law in Canada in respect of all foreign states, regardless of whether those states are parties to those Conventions.

[ 44 ] Article 22 of the Vienna Convention on Diplomatic Relations expresses the general principle that the premises of the mission shall be inviolable and the receiving State has a special duty to protect the premises of the mission against any intrusion or damage and to prevent the disturbance of the peace of the mission. Article 45 addresses the effect on that principle if diplomatic relations were severed between two States. The receiving State must, even in the case of armed conflict, respect and protect the premises of the mission, together with its property and archives.

[ 45 ] While Article 22 of the Vienna Convention on Diplomatic Relations is cited in s. 3(1) of the FMIO Act , Article 45 is not cited. Hence, the Plaintiffs submit, Article 45 does not have the force of law in Canada.

[ 46 ] Article 27 of the Vienna Convention on Consular Relations also deals with severed relations between States. It provides in the event of the severing of consular relations between two States, even in the case of armed conflict, the receiving State shall respect and protect the consular premises, together with the property and the archives of the consular post. Article 31 provides that the consular premises are inviolable and that the receiving State is under a special duty to protect the consular post against any intrusion or damage.

[ 47 ] Neither Article 27 nor Article 31 of the Vienna Convention on Consular Relations is cited in s. 3(1) of the FMIO Act as having the force of law in Canada.

[ 48 ] The Plaintiffs submit the omission from s. 3(1) of the FMIO Act of Article 45 of the Vienna Convention on Diplomatic Relations and Articles 27 and 31 of the Vienna Convention on Consular Relations expresses Parliament’s intent that those provisions not have the force of law in Canada. The combined effect of the omission of those Articles, according to the Plaintiffs, is that once the Iranian Embassy was closed on September 7, 2012 and diplomatic relations severed, the premises were no longer inviolable and Canada no longer had the to duty protect the mission premises and property from intrusion or disturbance. Thus, the Vienna Conventions do not in the Plaintiffs’ view preclude the attachment of 245 Metcalfe Street for the purpose of enforcing the U.S. Judgment.

[ 49 ] The Plaintiffs addressed a potential defence to that argument. It might be argued that a custom prevails in the international community that could arguably take priority over domestic law ― a custom that provides even with the severance of diplomatic relations the receiving State maintains its obligation to respect the inviolability and immunity of diplomatic missions and to protect the premises and property from intrusion or damage.

[ 50 ] The Plaintiffs acknowledge that while Canadian courts have held that customary international law can have direct legal effect without being given force of law through domestic statute, Canadian courts have also applied the principle of legislative supremacy which provides that legislatures may override customary international law by clearly demonstrating the intent to do so.

[ 51 ] I am satisfied the Plaintiffs have presented a strong prima facie case that the enforcement of the U.S. Judgment against 245 Metcalfe Street may not be precluded by the Vienna Conventions. That asset could therefore be an asset against which enforcement might potentially be effected.

[ 52 ] The injunction I have ordered is temporary and of course the Defendants will have an opportunity to raise defences and seek to vary the Order or have it set aside at the expiry of ten the days.

290 Sheppard Avenue West and 2 Robinson Avenue

[ 53 ] The facts as to title to these two properties are not so clear.

[ 54 ] In connecting the other two properties to Iran, the Plaintiffs relied on the experience of U.S. attorney Mr. Fay, decisions from U.S. courts and the expert opinion of Professor Zandi. The Plaintiffs ask this Court to draw certain inferences from Mr. Fay’s experience with Iran’s practices in avoiding the economic sanctions and from his involvement in multiple actions in the U.S. against Iran. The Plaintiffs further ask this Court to consider the findings of U.S. courts in claims against Iran as to how Iran operates in the U.S. by setting up alter egos or façade entities to evade international sanctions, in particular, how Iran uses cultural centres in this manner to hide its identity.

[ 55 ] With the inferences the Plaintiffs say may be drawn from the experiences in the U.S., the Plaintiffs ask this Court to consider the results of the various searches and the news articles in conjunction with Professor Zandi’s strongly stated opinion. Land title searches were done on the two properties, each turning up the names of entities that appear from computer and corporate searches and news articles to be linked to the Iranian government and Iranian authorities. Because of the apparent connection between the entities on title and the prominent Iranian authorities connected to these entities as discussed above, the Plaintiffs submit it is reasonable to conclude there is more than a passing suggestion that if Iran is not the legal owner of the two properties, they could reasonably be found to be the beneficial owners.

[ 56 ] To be sure news articles, computer searches and evidence from the experiences in another jurisdiction may not be the most conclusive or probative sources of evidence. Injunctive relief however is not required to be sought on a standard of certainty. Establishing a strong prima facie case is not so onerous. I am satisfied based on the information from the Plaintiffs’ sources, combined with the expert opinion of Professor Zandi and evidence of the U.S experience, that the Plaintiffs have established a strong prima facie case that Iran has assets in the two properties that could possibly be used to enforce the U.S Judgment. This conclusion of course can be challenged by the Defendants on the return of the motion.

The Risk Iran Will Dissipate Assets

[ 57 ] The test for this criterion is stated by the Court of Appeal in Chitel v. Robart , supra :

The applicant must persuade the Court by his material that the defendant is removing or there is a real risk that he is about to remove his assets from the jurisdiction to avoid the possibility of a judgment, or that the defendant is otherwise dissipating his assets, in a manner … so as to render the possibility of future tracing of the assets remote, if not impossible in law.

[ Chitel v. Robarts , supra , para. 58]

[ 58 ] The Plaintiffs ask the court to draw inferences from the experience with Iran in U.S. courts and Iran’s practices in evading the international sanctions. As noted earlier, Mr. Fay furnishes examples of Iran’s conduct in relation to the enforcement of U.S. judgments against its assets in the U.S. Mr. Fay has observed from direct experience in litigation against Iran that Iran declines to participate in U.S. court proceedings until enforcement efforts are made. Then Iran gets involved for the purpose of doing whatever it can to avoid enforcement.

[ 59 ] Mr. Fay provides several examples of his knowledge of Iran’s practices. For instance, in a case before the United States District Court for the Southern District of New York, the court ordered the release of $250,000,000 and once Iran received the order Iran took immediate steps to prevent the plaintiffs from reaching the funds by removing them from the jurisdiction. [ Peterson v. Islamic Republic of Iran , 515 F. Supp. 2d 25 - Dist. Court, Dist. of Columbia 2007]

[ 60 ] In another case heard in the United States District Court, District of Columbia, a writ of attachment was served in respect of a debt of $3,000,000 owed by an entity to Iran. After the attachment was quashed, the funds were immediately removed from the jurisdiction. [ Flatow v. Islamic Republic of Iran , 999 F. Supp. 1 - Dist. Court, Dist. of Columbia 1998].

[ 61 ] A defendant’s previous attempts to avoid paying judgments are among the factors courts in Ontario have considered in drawing the inference that dissipation is likely to occur. [See for instance, Sistern Mühendislik Insaat Sanayi Ve Ticaret Anonim Sirketi v. Kyrgyz Republic , 2012 CarswellOnt 10369 , 2012 ONSC 4751 (Ont. S.C.J.) , at para. 23] .

[ 62 ] The Plaintiffs seek non-dissipation orders with respect to the three real properties and also against the entities on title that the Plaintiffs argue are likely agents or alter egos of Iran. The Plaintiffs seek to restrain any assets held by the entities currently on title and an entity previously on title to the Robinson Avenue property and connected to the current title-holder ― Farhangeiran Inc., in relation to 290 Sheppard Avenue West, Toronto and the Mobin Foundation and Fatima Cultural Activities Inc., in relation to 2 Robinson Avenue, Ottawa. As noted earlier, Mobin Foundation is currently on title. Fatima Cultural Activities Inc. purchased 2 Robinson Avenue from the National Capital Commission, held it in trust for the Mobin Foundation for a period and subsequently transferred it to the Mobin Foundation.

[ 63 ] In view of recent U.S. experience with Iran dissipating its U.S. assets, and in light of evidence of Iran’s covert use of cultural centres and Professor Zandi’s unreserved, but admittedly inconclusive, opinion that the Iranian government ultimately controls the Iranian cultural centres at 290 Sheppard Avenue West, Toronto and 2 Robinson Avenue, Ottawa, I am satisfied that a non-dissipation order of the scope requested by the Plaintiffs is appropriate in the circumstances. I am satisfied the Plaintiffs have shown there is a real risk of Iran dissipating its assets in Canada if a freezing order is not imposed.

[ 64 ] Again, the Court is open to hearing any challenges the Defendants might raise against this conclusion.

Undertaking as to Damages

[ 65 ] The Plaintiffs have given an undertaking as to damages in the form prescribed by the Rules.

CONCLUSION

[ 66 ] The Plaintiffs have indicated their efforts to serve the Statement of Claim. I trust the Plaintiffs will also make every effort to expeditiously serve the herein Order on Iran and the Iranian Ministry of Information and Security.

[ 67 ] For all the above reasons, I ordered an interim interlocutory injunction as attached as Schedule A to these Reasons.

Allen J.

Date: October 17, 2012