SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: Estate of Marla Bennett, Michael Bennett, Linda Bennett and Lisa Bennett, Plaintiffs

AND:

Islamic Republic of Iran and Iranian Ministry of Information and Security, Defendants

BEFORE: D. M. Brown J.

COUNSEL: J. Adair and G. McGuire, for the Plaintiffs

No one appearing for the defendants

M. Arnold, for the plaintiffs in the Jacobsen v. Iran action, CV-12-464847

HEARD: September 9, 2013

REASONS FOR DECISION

I. Motion to include alleged assets of the Islamic Republic of Iran in an existing Mareva Order

[1] The plaintiffs move ex parte for an order which, in effect, declares that certain assets fall within the scope of a Mareva injunction previously granted by this Court against the Islamic Republic of Iran and others, as well as an order requiring certain financial institutions holding specified accounts to disclose information about those accounts to the plaintiffs.

[2] The background to this action, which seeks the recognition and enforcement of an August 30, 2007 judgment of the United States District Court for the District of Columbia made pursuant to the Foreign Sovereign Immunities Act, 28 U.S.C. §1605(a)(7), for damages caused by a terrorist bombing, was set out fully by Allen J. in her reasons of October 17, 2012 granting the initial Mareva injunction: 2012 ONSC 5886. That order was extended once on an ex parte basis, but then extended indefinitely by E. MacDonald J. by order dated October 31, 2012 (the “Mareva Order”), which was made on notice to the defendants. The defendants did not respond to that motion. Nor have the defendants filed a defence to this action. As a result, they have been noted in default and a motion for default judgment will be heard at the end of this month.

[3] Paragraph 1 of the Mareva Order prohibits and enjoins the defendants and others (the “Subject Parties”), from directly or indirectly:

1. (a) selling, removing, dissipating, alienating, transferring, assigning, encumbering or similarly dealing with any of their assets located in Canada (the “Subject Assets”), including but not limited to the assets listed in Schedule “A” hereto;

(b) instructing, requesting, counseling, demanding or encouraging any other person to do so; and,

(c) facilitating, assisting in, aiding, abetting, or participating in any of the acts the effect of which is to do so.

[4] Schedule “A” to the Mareva Order identified four properties, but Paragraph 2 of the Mareva Order showed the breadth of the order:

That paragraph 1 applies to all of the Subject Parties’ assets whether or not they are in their own names and whether they are solely or jointly owned. For the purposes of this Order, the Subject Parties’ assets include any asset which they have the power, directly or indirectly, to dispose of or deal with as if it were their own. The Subject Parties are to be regarded as having such power if a third party holds or controls the assets in accordance with their direct or indirect instructions coming from the defendants, or any of them.

[5] Paragraph 4 of the Mareva Order required that any financial institution on which it was served “shall forthwith disclose to the plaintiffs the existence of any account in the name of the defendants as well as the account holdings.”

[6] Paragraph 6 of the Mareva Order required the Islamic Republic of Iran “to produce for examination under oath for the plaintiffs a representative with substantial knowledge of the party’s assets in Canada…” Paragraph 7 required Iran “to produce to plaintiffs’ counsel any report or other document in its power, possession or control that identifies one or more assets owned by Iran in Canada (whether legally or beneficially and whether directly or indirectly), such production to take place within 30 days of Iran being served with this Order”. Iran was served with the Mareva Order. It did not appeal or seek to vary the Order. Iran has not complied with paragraphs 6 and 7 of the Mareva Order.

[7] The present motion has come about in the following way. Section 12.1 of the State Immunity Act, R.S.C. 1985, c. S-18, provides:

12.1 (1) At the request of any party in whose favour a judgment is rendered against a foreign state in proceedings referred to in section 6.1, the Minister of Finance or the Minister of Foreign Affairs may, within the confines of his or her mandate, assist, to the extent that is reasonably practical, any judgment creditor in identifying and locating the following property, unless the Minister of Foreign Affairs believes that to do so would be injurious to Canada’s international relations or either Minister believes that to do so would be injurious to Canada’s other interests:

(a) in the case of the Minister of Finance, the financial assets of the foreign state that are held within Canadian jurisdiction; and

(b) in the case of the Minister of Foreign Affairs, the property of the foreign state that is situated in Canada.

[8] On February 13, 2013, plaintiffs’ counsel wrote to the Department of Justice, Canada, seeking assistance under section 12.1 in identifying the assets of Iran held in Canada. On September 4, 2013, the Department of Foreign Affairs, Trade and Development Canada wrote to plaintiffs’ counsel providing a list of Iranian non-diplomatic and diplomatic properties in Canada. The letter noted that Foreign Affairs could not guarantee the completeness of the information provided nor the accuracy of any of the information. Foreign Affairs plans to post the information on its website sometime this week.

II. Analysis

[9] As I view the matter, the plaintiffs are not seeking to vary the Mareva Order or even secure a new form of Mareva order; instead, they essentially seek confirmation that certain of the assets identified by Foreign Affairs in its September 4, 2013 letter fall within the ambit of the Mareva Order, specifically the bank accounts at the Royal Bank of Canada, ScotiaBank, Canadian Imperial Bank of Commerce and Bank of Montreal identified as Items 3 to 16 on the list of “Iran’s Non-Diplomatic Assets in Canada” attached to that letter (the “Target Accounts”).[^1] As noted above, the Mareva Order restrains the defendants from dealing with any assets of Iran located in Canada. Section 12.1 of the State Immunity Act authorizes the federal government to assist certain judgment creditors, such as the plaintiffs, in identifying the assets of a state in Canada or within Canadian jurisdiction, which is what Foreign Affairs did in its letter of September 4, 2013. In light of that letter, the plaintiffs have demonstrated a strong arguable case that the assets identified therein fall within the ambit of the Mareva Order, and they therefore are entitled to the order sought in paragraph 1(a) of their Notice of Motion.

[10] Following receipt of the Foreign Affairs letter, the plaintiffs wrote to the financial institutions identified as the locations of the Iranian non-diplomatic bank accounts. In response they have received some information about the accounts from the CIBC, RBC, Scotia Bank and BMO. Paragraph 4 of the Mareva Order required financial institutions to disclose any account “in the name of the defendants as well as the account holdings”. Today’s notice of motion goes further, seeking disclosure by the financial institutions of “their full and complete files with respect to each of the accounts including but not limited to account application or opening forms and account transaction history”.

[11] Although the Mareva Order covers assets directly or indirectly owned or controlled by Iran and the other named entities, and although the letter from Foreign Affairs identified the bank accounts as those of Iran, Foreign Affairs did add a caveat that it could not guarantee the accuracy of the information. While the information provided by Foreign Affairs is sufficient to support an order freezing the Target Accounts under the Mareva Order, I think any disclosure of the particulars of those accounts sought by the plaintiffs ought to be dealt with on a more incremental basis. Accordingly, while I am not prepared to grant the full order sought by the plaintiffs in paragraph 1(b) of their notice of motion, I do make the following order:

(i) The plaintiffs shall serve this order on each of the financial institutions at which a Target Account is located no later than the end of this week, Friday, September 13, 2013;

(ii) On or before Friday, September 20, 2013, each financial institution named in the order shall deliver to plaintiffs’ counsel the name of the account holder for each Target Account identified in this order, as well as the most recent contact information on file for each such account holder, including mail address, telephone number, fax number and email address;

(iii) If any of the accounts are in the name of the Islamic Republic of Iran, the Iranian Ministry of Information and Security, Farhangeiran Inc., Fatima Cultural Activities Inc. or the Mobin Foundation, the entities named as Subject Parties in the Mareva Order, then the financial institutions shall also deliver to plaintiffs’ counsel, on or before Friday, September 20, 2013, the full and complete files with respect to each of the accounts including, but not limited to, account application or opening forms and account transaction history. This requirement flows logically from the requirements imposed by paragraphs 6 and 7 of the Mareva Order on the Subject Parties; and,

(iv) If any of the accounts are not in the name of a person identified as a Subject Party in the Mareva Order, then the plaintiffs may seek directions regarding disclosure of the requested information on the return of the motions for default judgment on September 30, 2013.

[12] In its September 4, 2013 letter Foreign Affairs identified two accounts (Items 3 and 4) as non-diplomatic assets of Iran in Canada, but its list also stated that the owner of those accounts is the “Higher Education Advisory”. In an amended notice of motion handed up at the hearing of the motion, the plaintiffs sought a broad interim order “freezing all of the bank and other financial accounts of the non-party Higher Education Advisory”. No evidence has been put before me describing what the Higher Education Advisory is or what it does. I am prepared to accept the September 4, 2013 Foreign Affairs letter as evidence sufficient to subject the two accounts identified as Items 3 and 4 to the Mareva Order, but I am not prepared to rely on that letter to grant a broader order in respect of the Higher Education Advisory without more evidence.

D. M. Brown J.

Date: September 9, 2013

[^1]: These accounts were identified on Schedule “A” to the notice of motion.