SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: Edward Tracy, by his Litigation Guardian Charles Murphy, Elizabeth Ciccipio-Puleo, estate of Helen Fazio, estate of Domenic Cicippio, David B. Cicippio, Eric R. Cicippio, Richard Dennis Cicippio, Thomas J. Cicippio, estate of Paul V. Cicippio, Allen John Cicippio, estate of Rose Abell Anthony Cicippio, estate of Alexander Cicippio, Nicholas B. Cicippio and estate of Joseph J. Cicippio Jr., Plaintiffs

AND:

The Iranian Ministry of Information and Security, The Islamic Republic of Iran and The Iranian Revolutionary Guard Corp., Respondents

BEFORE: D. M. Brown J.

COUNSEL: G. Adair, for the Plaintiffs

HEARD: January 23, 2014; written cost submissions dated April 21, 2014.

SUPPLEMENTARY REASONS FOR DECISION - costs

Motion to enforce a judgment against the Islamic Republic of Iran

[1] By Reasons dated March 17, 2014 (2014 ONSC 1696) I granted certain relief in respect of the enforcement of the May 22, 2013 order of Chapnik J. which recognized the March 22, 2013 order of the Nova Scotia Supreme Court which, in turn, recognized judgments obtained by the plaintiffs against the defendants, The Iranian Ministry of Information and Security (“MIS”), the Islamic Republic of Iran (“Iran”) and The Iranian Revolutionary Guard Corp. (the “Revolutionary Guards”), in the United States District Court for the District of Columbia (the “US Judgments”).

[2] Although properly served, neither Iran, the Revolutionary Guards, the MIS nor the other persons affected by the orders sought responded to or appeared at the hearing of the plaintiffs’ motion.

[3] The plaintiffs now seek their costs of the motion. Specifically, the plaintiffs seek substantial indemnity costs against the defendants, Iran, the MIS and the Revolutionary Guards for several reasons: (i) Iran’s conduct in supporting terrorism demands costs on an elevated scale; (ii) in violation of international economic sanctions and Canadian law Iran attempted to conceal the ownership of its assets in Canada; and, (iii) Iran attempted to prevent enforcement by judgment creditors thereby putting those creditors, including the plaintiffs, to needless expense and delay.

[4] The plaintiffs are entitled to their costs, but not on a substantial indemnity basis. As the Court of Appeal stated in Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.), elevated costs are appropriate in circumstances where a party has engaged in “reprehensible” litigation conduct.

[5] Censure of the political conduct of foreign states properly belongs to Parliament or to the executive of Canada, not to the courts, unless such authority is granted to them. In enacting the Justice for Victims of Terrorism Act, S.C. 2012, c.1, Parliament did not provide for the award of elevated costs in cases involving the enforcement of judgments against foreign states which engage in or support terrorism, such as Iran. In my view, judicial cost awards should not be designed to express approval or disapproval of the non-litigation conduct of a foreign state on the international stage or domestically where Parliament has not directed the courts to take such conduct into consideration in making cost awards.

[6] In terms of the defendants’ conduct in this proceeding, they did not respond to or oppose the relief sought. Those defendants simply ignored this proceeding. Such conduct did not constitute “reprehensible” conduct justifying an award of elevated costs. An award of partial indemnity costs is appropriate.

[7] I have reviewed the Bill of Costs submitted by the plaintiffs, and I have taken into account the factors enumerated under Rule 57 of the Rules of Civil Procedure, including the time spent, the result achieved, and the complexity of the matter, as well as the application of the principle of proportionality: Rule 1.04(1). In addition, I have considered the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3rd) 291 (C.A.) and Davies, supra., specifically that the overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant. I conclude that the partial indemnity costs of $15,456.05 claimed by the plaintiffs are fair and reasonable in the circumstances, and I order the defendants to pay the plaintiffs such costs within 30 days of the date of this order.

D. M. Brown J.

Date: May 28, 2014