CITATION: Tracy v. The Iranian Ministry of Information and Security, 2016 ONSC 3759

COURT FILE NO.: CV-14-10403-00CL COURT FILE NO.: CV-14-497414 COURT FILE NO.: CV-13-10204-00CL COURT FILE NO.: CV-13-493290 COURT FILE NO.: CV-14-499468

DATE: 20160609

ONTARIO SUPERIOR COURT OF JUSTICE COMMERCIAL LIST

BETWEEN:

EDWARD TRACY, by his Litigation Guardian, Charles Murphy and others Applicants

– and –

THE IRANIAN MINISTRY OF INFORMATION AND SECURITY and others Respondents

AND BETWEEN:

CHAD PHILLIP HOLLAND Plaintiff

– and –

THE ISLAMIC REPUBLIC OF IRAN and others Defendants

AND BETWEEN:

ESTATE OF MARLA BENNETT and others Applicants

– and –

THE IRANIAN MINISTRY OF INFORMATION AND SECURITY and others Respondents

AND BETWEEN:

KATIE L. MARTHALER and others Plaintiffs

– and –

THE ISLAMIC REPUBLIC OF IRAN and others Defendants

AND BETWEEN:

AMERICAN CENTER FOR CIVIL JUSTICE, INC., as Assignee for Christine Higgins Plaintiff

– and –

THE IRANIAN REVOLUTIONARY GUARD CORPS Defendant

John J. Adair, for the Applicants Edward Tracy and Estate of Marla Bennett

Colin P. Stevenson and J. Daniel McConville, for the Moving Parties, Iran et al.

John B. Laskin and Sarah Whitmore, for the Applicants/Plaintiffs Chad Phillip Holland, Katie L. Marthaler and American Center for Civil Justice, Inc./Christine Higgins

Jacqueline Dais-Visca, for the Attorney General of Canada, Intervener

HEARD: January 25-27, 2016

HAINEY J.

OVERVIEW

[1] Terrorism is one of the world’s greatest threats. This case involves claims by victims of terrorist attacks carried out by two terrorist organizations, Hamas and Hezbollah. The defendant, the Islamic Republic of Iran, has been designated as a foreign state supporter of both of these terrorist organizations. The plaintiffs in the five actions before the court are U.S. citizens who obtained judgments against the defendants in proceedings before U.S. courts. The U.S. courts found the defendants liable for the plaintiffs’ damages resulting from these terrorist attacks on the basis that Iran actively supported Hamas and Hezbollah. The U.S. judgments remain largely unpaid.

[2] The plaintiffs commenced proceedings in Canada to enforce the U.S. judgments after the Canadian government made significant legislative changes in 2012 to facilitate claims by terrorist victims. These changes enable plaintiffs to bring lawsuits against terrorists and their supporters before Canadian courts. According to the Canadian government, the purpose of this legislation is to deter and prevent acts of terrorism against Canadians.

[3] Iran did not defend any of the actions in the U.S. or Canada. The plaintiffs submit that Iran was properly served and had notice of the U.S. and Canadian proceedings.

[4] The U.S. judgments were recognized and enforced by this court in default proceedings. Iran now moves to stay or set aside these default judgments primarily on the ground that it is immune from the jurisdiction and enforcement of this court.

[5] The broad issue before the court is whether Iran is entitled to immunity from the jurisdiction of Canadian courts for its support of terrorism.

BACKGROUND

U.S. Judgments

[6] The five Ontario proceedings before the court on this motion involve the recognition and enforcement of twelve U.S. judgments against the Islamic Republic of Iran, its Ministry of Information and Security (“MOIS”), and the Islamic Revolutionary Guard Corps (“IRGC”). The IRGC is a military wing of the MOIS (referred to collectively as “Iran”). The U.S. judgments against Iran arose from eight different terrorist attacks summarized below.

[7] The U.S. courts assumed jurisdiction over the defendants in the plaintiffs’ actions under the “state sponsored terrorism” exception to the general grant of immunity provided to foreign states in the Foreign Sovereign Immunities Act of 1976[^1] (“FSIA”). The state sponsored terrorism exception to the FSIA removes a foreign state’s immunity from a claim for damages arising out of personal injury or death caused by acts of “torture, extrajudicial killing, aircraft sabotage, [or] hostage-taking” for which the foreign state provided “material support or resources”.

[8] The FSIA imposes the following three additional requirements for jurisdiction:

1. The U.S. has designated the defendant country a “state sponsor of terrorism”;

2. The act complained of occurred outside of the foreign state; and

3. The claimant or victim is a U.S. national, member of the U.S. Armed Forces, or employee of the U.S. government.

[9] In each of the plaintiffs’ actions, the U.S. courts found that all of the requirements under the FSIA had been satisfied. The U.S. courts concluded that the defendants were liable to the plaintiffs for the terrorist attacks and awarded the plaintiffs significant damages.

Summary of Terrorist Attacks

[10] The U.S. judgments are based upon the following eight terrorist attacks:

1. Suicide bombing on Ben Yehuda Street in Jerusalem, Israel on September 4, 1997

[11] Diana Campuzano, Avi Elishis and Greg Salzman (“Campuzano Plaintiffs”) were at the Ben Yehuda Street pedestrian mall in Jerusalem on the afternoon of September 4, 1997 when suicide bombers detonated several bombs. The bombs killed five people and wounded nearly 200, including the Campuzano Plaintiffs. Hamas claimed responsibility for the bombing and was found by the U.S. court to have deliberately detonated the bombs that caused the Campuzano Plaintiffs’ injuries.

[12] The U.S. court found that Iran provided Hamas with material support, including ongoing terrorist training and economic assistance, for the specific purpose of carrying out the bombings at the Ben Yehuda Street pedestrian mall.

[13] The U.S. court awarded damages against the defendants on September 10, 2003 (“Campuzano Judgment”).

2. Suicide bombing of the United States Embassy Annex in East Beirut, Lebanon on September 20, 1984

[14] On September 20, 1984, a suicide bomber drove a truck packed with explosives through the gates of the United States Embassy Annex building in East Beirut. The explosion killed 14 people and wounded 35 others. Army Warrant Officer Kenneth V. Welch was killed and Richard Paul Brewer, a United States Marine Officer, was knocked unconscious and wounded during the explosion.

[15] Hezbollah carried out the terrorist attack. The U.S. court found that Iran provided Hezbollah with material support, including extensive military training and substantial financial support, for the bombing. The U.S. court also found that Iran’s material support of Hezbollah constituted a proximate cause of the terrorist attack and that Hezbollah committed the attack at the direction of the MOIS.

[16] The U.S. court awarded damages against the defendants for Officer Welch’s death on October 15, 2007 (“Welch Judgment”) and for Officer Brewer’s injuries on October 15, 2009 (“Brewer Judgment”).

3. Suicide bombing of the United States Marine Barracks in Beirut, Lebanon on October 23, 1983

[17] On October 23, 1983, Hezbollah carried out a suicide bombing at the U.S. Marine barracks in Beirut by detonating a bomb in a truck being driven by an Iranian citizen. The attack killed 241 American servicemen. Petty Officer Robert Holland was killed instantly. Because of the nature of the blast, Petty Officer Holland’s family had to wait nearly two weeks for his body to be identified.

[18] The U.S. court found that Iran provided material support, including financing, training and strategic planning to Hezbollah in respect of the bombing. The U.S. court also found that Iran’s support for the bombing was a proximate cause of Petty Officer Holland’s death and that the defendants had engaged in deliberate conduct to assist with the attack, which was aimed at destroying the Marine barracks.

[19] The U.S. court awarded damages against the defendants for Petty Officer Holland’s death on February 1, 2006 (“Holland Judgment”).

4. Bombing of the Khobar Towers Residence in Dhahran, Saudi Arabia on June 25, 1996

[20] On June 25, 1996, a terrorist attack was carried out at the Khobar Towers in Dhahran where a number of U.S. Air Force personnel lived. The attack involved an explosion of a large gasoline tanker truck outside the perimeter wall of the Khobar Towers complex. Nineteen United States Air Force personnel were killed and hundreds of others were injured in the explosion. Among the Air Force personnel killed were Master Sergeant Michael Heiser, Airman Cielito Valencia and Paul Blais.

[21] The U.S. court found that Iran provided material support, in the form of funding and planning, to Hezbollah for the purpose of carrying out the bombing. The court also found that the terrorist attack was approved by the Supreme Leader of Iran and that the Iranian government planned, funded and sponsored the bombing. The U.S. court found that without Iran’s support, the terrorist attack would not have occurred.

[22] The U.S. court awarded damages against the defendants for Mr. Blais’ death on September 29, 2006 (“Blais Judgment”), for Master Sergeant Heiser’s death on September 30, 2009 (“Heiser Judgment”) and for Airman Valencia’s death on March 31, 2010 (“Valencia Judgment”).

5. Suicide bombing of the Israeli Embassy in Buenos Aires, Argentina on March 17, 1992

[23] On March 17, 1992, a suicide bomber drove a pickup truck loaded with explosives into the front of the Israeli Embassy in Buenos Aires. The explosion destroyed the Embassy and the surrounding buildings. Twenty-nine people were killed and 242 were injured. A group called “Islamic Jihad”, an alias used by Hezbollah, claimed responsibility for the bombing. David Ben-Rafael, the Deputy Chief of Mission at the Israeli Embassy, was killed in the suicide bombing.

[24] The U.S. court found that Iran provided material support to Hezbollah for the bombing. The support included the provision of material, financial and technical resources. The U.S. court also found that Iran knew of the bombing plot and provided the necessary support to allow Hezbollah to carry out the attack on the Embassy. The court also found that Hezbollah would not have succeeded in its attack on the Embassy without the money, training and technical expertise provided to it by Iran.

[25] The U.S. court awarded damages against the defendants for the death of David Ben-Rafael on February 25, 2008 (“Ben-Rafael Judgment”).

6. Hostage taking and killing of Colonel Higgins in Lebanon between 1988 and July 1989

[26] Colonel William Higgins was an Officer in the United States Marine Corps. He was assigned to the United Nation’s unarmed peacekeeping initiative in Lebanon. On February 17, 1988, Colonel Higgins was kidnapped by the “Organization of the Oppressed on Earth”. This is a name used by Hezbollah. Colonel Higgins was held hostage for 18 months under cruel and primitive conditions. When Hezbollah’s demands were not met, the terrorists killed Colonel Higgins and released a gruesome videotape of his body hanging from the neck. The videotape was played worldwide by CNN.

[27] The U.S. court found that Iran had provided material support to Hezbollah, including the provision of funds, training, and equipment for the hostage-taking and killing of Colonel Higgins. The court also found that at the time Colonel Higgins was taken hostage, Iran “virtually directed the terms and conditions under which hostages would be held or released”.

[28] The U.S. court awarded damages against the defendants for Colonel Higgins’ death on September 21, 2000 (“Higgins Judgment”).

7. Bombing of the Frank Sinatra Cafeteria at Hebrew University in Jerusalem, Israel on July 31, 2002

[29] In July 2002, Marla Bennett, a 24-year-old student from California, was enrolled at Hebrew University in Jerusalem. On July 31, 2002, she was eating her lunch in the Frank Sinatra Cafeteria at the University. A local Hamas agent had constructed a bomb that had been planted in the cafeteria. After a failed attempt to detonate the bomb the previous day, another Hamas agent triggered the bomb in the cafeteria on July 31, 2002, killing Marla Bennett.

[30] The U.S. court found that Iran had provided persistent and material financial and technical support to Hamas and knew that Hamas was engaged in acts of terrorism.

[31] The U.S. court awarded damages against the defendants for Marla Bennett’s death on August 30, 2007 (“Bennett Judgment”).

8. Hostage taking and captivity of Joseph J. Cicippio, Sr. and Edward Tracy in September 1986 and October 1986

[32] In 1986, Joseph Cicippio was employed as the Controller for the American University of Beirut in Lebanon. On September 12, 1986 he was abducted by members of Hezbollah. He was held captive for 1,908 days. Throughout his captivity he was tortured, and Hezbollah continually threatened to publicly execute him.

[33] Edward Tracy was also abducted by Hezbollah on October 21, 1986. He was held captive for almost five years. Throughout most of his time in captivity he was chained to Mr. Cicippio. He was beaten and tortured regularly while he was held hostage.

[34] The U.S. court found that Iran provided material support and resources to Hezbollah. The court also found that Iran caused Mr. Cicippio and Mr. Tracy to be abducted, tortured and held hostage.

[35] The U.S. court awarded damages against the defendants with respect to Mr. Tracy on August 21, 2003 (“Tracy Judgment”) and with respect to Mr. Cicippio on October 7, 2005 (“Cicippio Judgment”).

Canadian Legislation

[36] Foreign states generally enjoy immunity from suit in Canada pursuant to the State Immunity Act[^2] (“SIA”).

[37] In 2012, Parliament enacted legislation that gives victims of terrorism the ability to sue foreign states that have materially contributed to terrorism and have sponsored terrorist attacks. Parliament also created a process that facilitates the enforcement of foreign judgments obtained by victims of terrorist attacks against foreign states that support terrorism.

[38] The amendments to the SIA came into force in March 2012. Section 6.1(1) provides that:

A foreign state that is set out on the list referred to in subsection (2) is not immune from the jurisdiction of a court in proceedings against it for its support of terrorism on or after January 1, 1985.

[39] Section 6.1(2) of the SIA authorizes the Governor in Council to establish a list of states that are reasonably believed to be supporters of terrorism. The Islamic Republic of Iran is on the list.

[40] Section 2.1 of the SIA sets out the circumstances in which a foreign state will be held to support terrorism. It provides as follows:

… a foreign state supports terrorism if it commits, for the benefit of or otherwise in relation to a listed entity as defined in section 83.01 (1) of the Criminal Code, an act or omission that is, or had it been committed in Canada would be, punishable under any of sections 83.02 to 83.04 and 83.18 to 83.23 of the Criminal Code.

[41] These offences under the Criminal Code relate to the facilitation, support, and contribution to terrorist activities and the provision of support to terrorist groups that carry out such activities.

[42] The Justice for Victims of Terrorism Act[^3] (“JVTA”) came into force at the same time as the amendments to the SIA. The preamble to the JVTA refers to the nature, purpose and national importance of this legislation as follows:

Whereas Canadians and people everywhere are entitled to live their lives in peace, freedom and security;

Whereas Parliament recognizes that terrorism is a matter of national concern that affects the security of the nation and considers it a priority to deter and prevent acts of terrorism against Canada and Canadians;

Whereas acts of terrorism threaten Canada’s political institutions, the stability of the economy and the general welfare of the nation;

Whereas the challenge of eradicating terrorism, with its sophisticated and trans-border nature, requires enhanced international cooperation and a strengthening of Canada’s capacity to suppress and incapacitate acts of terrorism;

Whereas hundreds of Canadians have been murdered or injured in terrorist attacks;

Whereas terrorism is dependent on financial and material support;

Whereas certain states that support terrorism should not benefit from state immunity in this regard;

And whereas Parliament considers that it is in the public interest to enable plaintiffs to bring lawsuits against terrorists and their supporters, which will have the effect of impairing the functioning of terrorist groups in order to deter and prevent acts of terrorism against Canada and Canadians;

[43] Section 4(1) of the JVTA gives victims of terrorism a cause of action against foreign states that support terrorism. It provides as follows:

4(1) Any person that has suffered loss or damage in or outside Canada on or after January 1, 1985 as a result of an act or omission that is, or had it been committed in Canada would be, punishable under Part II.1 of the Criminal Code, may, in any court of competent jurisdiction, bring an action to recover an amount equal to the loss or damage proved to have been suffered by the person and obtain any additional amount that the court may allow, from any of the following:

(a) any listed entity, or foreign state whose immunity is lifted under section 6.1 of the State Immunity Act, or other person that committed the act or omission that resulted in the loss or damage; or

(b) a foreign state whose immunity is lifted under section 6.1 of the State Immunity Act, or listed entity or other person that - for the benefit of or otherwise in relation to the listed entity referred to in paragraph (a) - committed an act or omission that is, or had it been committed in Canada would be, punishable under any of sections 83.02 to 83.04 and 83.18 to 83.23 of the Criminal Code.

[44] Section 4(5) of the JVTA, the provision relied upon by the plaintiffs in this case, provides that Canadian courts must recognize an otherwise enforceable foreign judgment granted in favour of a person who has suffered a loss or damage referred to in s. 4(1) of the JVTA. If the judgment is against a foreign state, that state must be included on the list of foreign states established to be supporters of terrorism under s. 6.1(2) of the SIA.

Ontario Judgments

[45] Iran’s motions concern the following five Ontario proceedings in which orders have been made for the recognition and enforcement of the 12 U.S. judgments (“Ontario Judgments”):

Tracy (1 plaintiff) / Cicippio (14 plaintiffs) CV-14-10403

[46] In March 2013, the Tracy and Cicippio plaintiffs jointly brought an application in chambers before the Nova Scotia Supreme Court to have their U.S. judgments recognized. On March 22, 2013, Robertson J. recognized their U.S. judgments and made an order pursuant to s. 4(5) of the JVTA (“Nova Scotia Order”).

[47] The plaintiffs then brought an application without notice before the Ontario Superior Court of Justice for a recognition order pursuant to the Reciprocal Enforcement of Judgments Act[^4] (“REJA”). On May 22, 2013, Chapnik J. ordered the registration of the Nova Scotia Order pursuant to the REJA (“Ontario Recognition Order”).

[48] According to the plaintiffs, the Ontario Recognition Order was served upon the Islamic Republic of Iran through Canada’s Department of Foreign Affairs on August 19, 2013.

[49] In January 2014, the Tracy and Cicippio plaintiffs moved without notice before the Ontario Superior Court to enforce the Ontario Recognition Order against certain property in Ontario alleged to belong to Iran.

[50] On March 17, 2014, D. M. Brown J. (as he then was) granted the motion. He declared that real property located at 2 Robinson Avenue, Ottawa, and 290 Sheppard Avenue West, Toronto, is beneficially owned by Iran and is exigible property available to satisfy the Ontario Recognition Order (“Iran’s Exigible Real Property”). He made a similar order with respect to a bank account held at Scotiabank (Account Number 04451-18) and another bank account held at the Royal Bank of Canada (Account Number 864-949-3) in the name of the Embassy of the Islamic Republic of Iran (“Iran’s Exigible Bank Accounts”).

[51] Subsequently, on consent, the funds in Iran’s Exigible Bank Accounts were paid into the plaintiffs’ counsel’s trust account to be held pending the outcome of these motions. Iran’s Exigible Real Property has not been seized pending the outcome of these motions. However, it is subject to the Mareva injunction referred to below.

Holland (2 plaintiffs) CV-14-497414; Marthaler (79 plaintiffs) CV-13-493290; Higgins (2 plaintiffs) CV-14-499468

[52] The U.S. judgments obtained by the Holland plaintiffs, the Marthaler plaintiffs and the Higgins plaintiffs were the subject of three separate statements of claim issued to recognize and enforce them in Ontario. According to the plaintiffs, the three statements of claim were served upon the defendants in accordance with s. 9(2) of the SIA. Certificates were issued by the Canadian Department of Foreign Affairs, Trade and Development (“Department of Foreign Affairs”) confirming that service of the statements of claim was effected upon the defendants pursuant to s. 9(5) of the SIA on the following dates:

• December 8, 2013, in respect of the Marthaler statement of claim;

• March 18, 2014, in respect of the Holland statement of claim; and

• April 13, 2014, in respect of the Higgins statement of claim.

[53] The defendants did not defend these actions. They were noted in default.

[54] The U.S. judgments obtained by these plaintiffs were recognized by Corbett J. in three separate default judgments dated October 3, 2014.

Bennett (4 plaintiffs) CV-13-10204

[55] The Ontario action brought by the four Bennett plaintiffs is based upon a U.S. judgment dated August 30, 2007. The Bennett plaintiffs have requested that their summary judgment motion to recognize and enforce their U.S. judgment against the defendants be dealt with on this motion.

[56] On October 17, 2012, Allen J. granted the Bennett plaintiffs an ex parte Mareva injunction in respect of certain of Iran’s property in Canada. The Mareva injunction was continued and eventually varied by D. M. Brown J. to apply only to Iran’s “non-diplomatic properties” in Canada as specified in a letter dated September 4, 2013, from Canada’s Department of Foreign Affairs. Iran disputes that these are non-diplomatic assets.

[57] The assets that are subject to this Mareva injunction are Iran’s Exigible Real Property and Iran’s Exigible Bank Accounts (collectively “Iran’s Exigible Property”).

Iran’s Motions

[58] Iran’s motions seek to set aside, vacate or stay the following:

• Chapnik J.’s order dated May 22, 2013, with respect to the Tracy/Cicippio plaintiffs;

• D. M. Brown J.’s order dated March 17, 2014, with respect to the Tracy/Cicippio plaintiffs;

• Corbett J.’s three default judgments dated October 3, 2014, with respect to the Holland/Marthaler/Higgins plaintiffs; and

• E. Macdonald J.’s order dated October 31, 2012, that continued Allen J.’s Mareva injunction with respect to the Bennett plaintiffs.

[59] The specific relief sought and the grounds of Iran’s motions are set out in detail in Appendix “A”.

Attorney General of Canada’s Intervention

[60] The Attorney General of Canada (“Canada”) was granted leave to intervene in these proceedings by Moore J. on April 12, 2013.

[61] After the suspension of diplomatic relations with Iran in September 2012, Canada recognized that certain Iranian property had diplomatic status in order to meet its obligation to “respect and protect” the premises of Iran’s diplomatic mission in accordance with Article 45 of the Vienna Convention. On August 15, 2013, amended certificates were issued by the Department of Foreign Affairs on behalf of the Minister of Foreign Affairs (“Minister”). These amended certificates (“Minister’s Certificates”) were forwarded to the Ontario Superior Court of Justice and the Supreme Court of Nova Scotia pursuant to ss. 11(a) and 11(c) of the Foreign Mission and International Organizations Act[^5] (“FMIOA”). The Minister’s Certificates identified Iran’s diplomatic property as consisting of a number of real properties located in Ottawa, Ontario and two bank accounts at the Royal Bank of Canada and Scotiabank. These bank accounts are different accounts than Iran’s Exigible Bank Accounts.

[62] Iran’s Exigible Property is not included in the Minister’s Certificates.

ISSUES

[63] According to Iran, the major issues that I must decide are as follows:

1. Does the SIA remove Iran’s immunity from the jurisdiction of Canadian courts?

2. Does the JVTA require Canadian courts to recognize the U.S. judgments against Iran?

3. Does the SIA remove Iran’s immunity from enforcement or attachment of Iran’s Exigible Property?

4. Is Iran’s Exigible Property immune from enforcement under international law or the FMIOA?

5. Did the Mareva injunction require the plaintiffs to establish that s. 11(3) of the SIA applied?

6. Did the plaintiffs make full and frank disclosure on the application for the Mareva injunction?

7. Did the plaintiffs act properly in obtaining the Nova Scotia Order and then registering it in Ontario under the REJA?

[64] The plaintiffs submit that I must also consider whether the defendants have satisfied the test for setting aside the Ontario Judgments and the Bennett plaintiffs seek summary judgment to enforce their U.S. judgment.

ANALYSIS

Issue #1 – Is Iran’s Immunity Removed by [s. 6.1](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-s-18/latest/rsc-1985-c-s-18.html#sec6.1_smooth) of the [SIA](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-s-18/latest/rsc-1985-c-s-18.html)?

[65] Iran submits that its immunity is not lost simply because the plaintiffs have brought proceedings under the JVTA to enforce judgments for its support of terrorism. Iran maintains that the plaintiffs must first establish that Iran is listed under s. 6.1(2) of the SIA and that it has supported terrorism within the meaning of s. 2.1 of the SIA before they can succeed with their claims under the JVTA. Iran submits that the plaintiffs have failed to meet this two-part test primarily because they failed to prove the elements of any of the prerequisite offences under the Criminal Code referred to in s. 2.1 of the SIA. Iran argues that the default judgments should be set aside for this reason.

[66] The JVTA operates independently of the SIA in respect of the plaintiffs’ entitlement to commence proceedings against state sponsors of terrorism. Iran’s submission that the plaintiffs must satisfy a two-part test is inconsistent with the purpose of the JVTA and with a plain reading of the federal anti-terrorism legislation as a whole.

[67] The purpose of the JVTA is set out in its preamble. It is to “enable plaintiffs to bring lawsuits against terrorists and their supporters, which will have the effect of impairing the functioning of terrorist groups in order to deter and prevent acts of terrorism against Canada and Canadians”. Section 3 of the JVTA states as follows:

The purpose of this Act is to deter terrorism by establishing a cause of action that allows victims of terrorism to sue perpetrators of terrorism and their supporters.

[68] In enacting legislation, Parliament is presumed to be aware of the operation of other legislation. As a result, in enacting the JVTA to “enable plaintiffs to bring lawsuits” against state sponsors of terrorism, Parliament is presumed to have been aware of the general immunity afforded to states and the need to waive that immunity to enable plaintiffs to sue states that sponsor terrorism. The preamble to the JVTA specifically recognizes that “certain states that support terrorism should not benefit from state immunity.”

[69] The JVTA’s preamble and its stated purpose set out in s. 3 make clear that the JVTA was intended to provide a free-standing procedural and substantive mechanism for a plaintiff’s recovery of losses caused by the acts of state sponsors of terrorism.

[70] Further, a plain reading of s. 4(5) of the JVTA demonstrates that it operates independently of the SIA for the purposes of recognition and enforcement proceedings against state sponsors of terrorism. This section requires Canadian courts to recognize and enforce foreign judgments granted in favour of victims of terrorism supported by foreign states that are on the list referred to in s. 6.1(2) of the SIA.

[71] To have a foreign judgment recognized, a plaintiff must establish the following three requirements pursuant to s. 4(5) of the JVTA:

1. The foreign judgment must meet the criteria under Canadian law for being recognized in Canada;

2. The foreign judgment must be in favour of the plaintiff for loss or damage referred to in s. 4(1) of the JVTA; and

3. The state sponsor of terrorism must be on the list referred to in s. 6.1(2) of the SIA.

[72] The second and third requirements above would be redundant if Iran’s submission is correct and the plaintiffs must establish that Iran has supported terrorism within the meaning of s. 2.1 of the SIA and also establish that Iran is listed under s. 6.1(2) of the SIA. This is not a reasonable interpretation of the section. I am satisfied that Parliament did not intend this when it enacted s. 4(5) of the JVTA. Accordingly, I am of the view that s. 4(5) of the JVTA does not require that a plaintiff establish that the foreign state supports terrorism within the meaning of s. 2.1 of the SIA if the foreign state is on the list referred to in s. 6.1(2) of the SIA.

[73] Iran’s motions to set aside or stay the Ontario Judgments on this ground, therefore, fail.

Issue # 2 – Does the JVTA Require the Court to Recognize the U.S. Judgments?

[74] Iran submits that s. 4(5) of the JVTA requires the plaintiffs to satisfy each of the following criteria:

(a) Did the plaintiffs suffer loss or damage referred to in s. 4(1) of the JVTA?

(b) Do the U.S. judgments meet the criteria for being recognized in Canada under Canadian statute law and, in particular, Ontario’s statutes of limitations?

(c) Do the U.S. judgments meet the criteria for being recognized in Canada under Canadian common law with respect to the following questions:

• Do they satisfy the principles in the Supreme Court of Canada’s decision in Beals v. Saldanha[^6]? Was there a real and substantial connection between the plaintiffs’ causes of action and the U.S. courts’ assumption of jurisdiction? Is there a real and substantial connection between the U.S. judgments and Iran’s presence in Ontario?

• Were the U.S. judgments obtained fraudulently or by virtue of a denial of natural justice or are they contrary to Canadian public policy?

(a) Did the plaintiffs suffer loss or damage referred to in s. 4(1) of the JVTA?

Was the Plaintiffs’ loss suffered after January 1, 1985?

[75] Iran submits that s. 4(1) of the JVTA requires that a plaintiff’s loss or damage must have been suffered after January 1, 1985. According to the defendants the Welch, Holland and Brewer plaintiffs cannot recover under the JVTA because their losses arose as a result of terrorist attacks that occurred before this date.

[76] The January 1, 1985 date referred to in s. 4(1) of the JVTA relates to the date that the loss or damage was suffered by the victim of a terrorist attack, not the date when the terrorist attack occurred. The difference in the language used by Parliament in s. 4(1) of the JVTA and in s. 6.1(1) of the SIA supports this conclusion. The January 1, 1985 date in s. 6.1(1) of the SIA relates to the date of the terrorist attack because it specifically refers to the support of terrorism after this date. In contrast, s. 4(1) of the JVTA refers to “loss or damage [suffered] in or outside Canada on or after January 1, 1985 as a result of an act or omission that is, or had it been committed in Canada would be, punishable under Part II.1 of the Criminal Code.” The date in s. 4(1) of the JVTA, therefore, refers to when the loss or damage was suffered by the plaintiff, not the date when the terrorist attack occurred. The U.S. judgments were all granted after January 1, 1985. In each case the U.S. court found that the plaintiffs were continuing to suffer harm at the time of the judgments as a result of the earlier terrorist attacks. I am, therefore, satisfied that the date requirement under s. 4(1) of the JVTA has been met by all of the plaintiffs.

Offence under Part II.1of the Criminal Code

[77] Iran also submits that the plaintiffs have failed to establish the specific criminal offence or offences that the defendants committed under Part II.1 of the Criminal Code which, it argues is a requirement under s. 4(1) of the JVTA. Further, according to Iran, the plaintiffs are required to prove the criminal offence committed by the defendants beyond a reasonable doubt. Iran also submits that the plaintiffs cannot rely upon the findings of fact made by the U.S. courts to establish liability under the JVTA because the U.S. courts’ findings of fact constitute inadmissible hearsay evidence.

[78] The cause of action under s. 4(1) of the JVTA must result from an act or omission that would have been punishable under Part II.1 of the Criminal Code if it had been committed in Canada. Part II.1 of the Criminal Code contains offences related to terrorism. Parliament did not intend to require plaintiffs to prove the commission of a specific criminal offence under this part of the Criminal Code. Rather, this requirement under s. 4(1) of the JVTA was meant to define the type of conduct that constitutes an act of terrorism under the JVTA.

[79] Iran’s submission that the plaintiffs must establish a specific criminal offence is inconsistent with the purpose of the JVTA, which is to make it easier for “victims of terrorism to sue perpetrators of terrorism and their supporters.” To require plaintiffs to prove the commission of a specific criminal offence would make it very difficult to establish a cause of action under s. 4(1) of the JVTA. I am satisfied that this is not what Parliament intended and that the reference in s. 4(1) of the JVTA to Part II.1 of the Criminal Code was a means of delineating the type of conduct contemplated by the section.

Standard of Proof

[80] Iran submits that a plaintiff must establish the commission of a specific criminal offence on a criminal standard of proof beyond a reasonable doubt. This would make it even more difficult for a plaintiff to succeed. Parliament could not have intended this. I am satisfied that the applicable standard of proof under s. 4(1) of the JVTA is the normal standard of proof in civil cases of proof on a balance of probabilities. The law in this respect was settled by Laskin C.J.C. in Continental Ins. Co. v. Dalton Cartage Co.[^7] as follows:

Where there is an allegation of conduct that is morally blameworthy or that could have a criminal or penal aspect and the allegation is made in civil litigation, the relevant burden of proof remains proof on a balance of probabilities.

U.S. Courts’ Findings of Fact

[81] The U.S. courts found that the plaintiffs’ losses and damages arose as a result of Iran’s material support for the terrorist attacks that caused the plaintiffs’ losses and damages. Iran submits that the U.S. courts’ findings of fact cannot be relied upon to establish liability under the JVTA.

[82] I am satisfied that this court must accept the U.S. courts’ findings of fact and should not again adjudicate the merits of the plaintiffs’ claims that the defendants’ acts constituted material support for terrorism that caused their losses. The Supreme Court of Canada’s decision in Kuwait Airways Corp. v. Iraq[^8] supports this position. LeBel J. stated as follows at para. 23:

It [the domestic court] may not retry the case and therefore must not reassess the facts. Thus, the issue of state immunity and the exceptions to state immunity must be considered within the framework of the law currently applicable in Canada, including public international law, but on the basis of Steel J.’s [the foreign court judge] findings of fact.

[83] I find that the U.S. courts’ findings of fact establish the defendants’ material support for the terrorist attacks that caused the plaintiffs’ losses and damages. Further, I find that the U.S. courts’ findings of fact establish conduct that would be punishable under Part II.1 of the Criminal Code, particularly s. 83.03 which provides as follows:

Every one who, directly or indirectly, collects property, provides or invites a person to provide, or makes available property or financial or other related services

(a) intending that they be used, or knowing that they will be used, in whole or in part, for the purpose of facilitating or carrying out any terrorist activity, or for the purpose of benefiting any person who is facilitating or carrying out such an activity, or

(b) knowing that, in whole or part, they will be used by or will benefit a terrorist group,

is guilty of an indictable offence and is liable to imprisonment for a term of not more than 10 years.

[84] In United States v. Nadarajah[^9], Pattillo J. found the essential elements of an offence under s. 83.03(b) of the Criminal Code to be the following at para. 58:

• a terrorist group exists;

• the accused collected or provided property or financial or related services to the terrorist group; and

• the accused knew such property or services would be used for facilitating or carrying out a terrorist activity.

[85] “Terrorist activity” is defined in s. 83.01(1) of the Criminal Code to include:

an act or omission that is committed in or outside Canada and that, if committed in Canada, is one of the following offences:

(iv) the offences referred to in subsection 7(3.1) that implement the International Convention against the Taking of Hostages, adopted by the General Assembly of the United Nations on December 17, 1979;

(ix) the offences referred to in subsection 7(3.72) that implement the International Convention for the Suppression of Terrorist Bombings, adopted by the General Assembly of the United Nations on December 15, 1997.

[86] The offence referred to in s. 7(3.1) is the offence of hostage-taking contrary to s. 279.1 of the Criminal Code. The offence referred to in s. 7(3.72) is the offence of explosive devices contrary to s. 431.2 of the Criminal Code. The terrorist attacks upon which the U.S. judgments are based involve either hostage-taking or bombing. I find that they are, therefore, “terrorist activity” within the meaning of the Criminal Code.

[87] On the strength of the U.S. courts’ findings of fact I find that the essential elements of an offence under s. 83.03(b) of the Criminal Code, as defined by Pattillo J. in Nadarajah,[^10] have been made out for the following reasons:

• Hamas and Hezbollah are both existing terrorist groups;

• Iran provided significant financial support to both of these terrorist groups; and

• Iran knew that its financial support would be used to facilitate and carry out terrorist activity.

[88] Further, the plaintiffs’ statements of claim plead that the damages they suffered resulted from the defendants’ acts that would be punishable under Part II.1 of the Criminal Code. The defendants did not defend any of the plaintiffs’ claims and were noted in default. As a result, the defendants are deemed to have admitted all of the allegations contained in the statements of claim including the allegations that their conduct would be punishable under Part II.1 of the Criminal Code.

[89] For these reasons, Iran’s motions to set aside or stay the Ontario Judgments on these grounds fail.

(b) Do the U.S. judgments meet the criteria for being recognized in Canada under Canadian statute law and, in particular, Ontario’s statutes of limitations?

[90] Iran submits that all of the Ontario proceedings are barred either by the former Limitations Act[^11] (“Old Limitations Act”) or by the current Limitations Act[^12] (“New Limitations Act”). According to Iran, there is nothing in the SIA or JVTA that relieves the plaintiffs from the Ontario limitation periods that apply to the enforcement of the U.S. judgments.

[91] Iran submits that the limitation period applicable to all of the U.S. judgments obtained prior to January 1, 2004, is six years from the date of the U.S. judgment pursuant to s. 45(1)(g) of the Old Limitations Act. Iran maintains that all of these actions are statute-barred and relies upon the Ontario Court of Appeal’s decision in Lax v. Lax[^13] in support of this position.

[92] Further, according to Iran, the two-year limitation period under the New Limitations Act applies to all of the post-January 1, 2004 U.S. judgments and in all cases the limitation period expired before the actions were commenced in Ontario. According to Iran, they are, therefore, statute-barred.

[93] It is a fundamental principle under Canadian law that a limitation period does not begin to run until a cause of action and a defendant who is capable of being sued exists. The Supreme Court of Canada held in Peixiero v. Haberman[^14] that to preclude an action before a person is able to sue amounts to an injustice.

[94] The plaintiffs’ claims to recognize and enforce the U.S. judgments are statutory claims under s. 4(5) of the JVTA. In Peixiero,[^15] the Supreme Court of Canada considered a statutory cause of action and held that there can be no cause of action until the plaintiff’s injury meets the statutory criteria. In this case it was only when the JVTA came into force and Iran’s immunity was removed that the plaintiffs met the statutory criteria and their causes of action under s. 4(5) of the JVTA arose. I am of the view that the applicable limitation period began to run from the date when the JVTA came into force in 2012.

[95] Further, the application of the discoverability principle to the plaintiffs’ claims also supports the conclusion that any limitation period governing the plaintiffs’ claims in Ontario did not begin to run until the JVTA came into force. Under the discoverability principle (codified in ss. 4 and 5 of the New Limitations Act), a limitation period begins to run only when the plaintiff discovers or reasonably ought to have discovered his or her claim. “Claim” is defined in s. 1 of the New Limitations Act as a “claim to remedy an injury, loss or damage that occurred as a result of an act or omission.”

[96] There was no statutory remedy in Ontario for the plaintiffs’ losses arising from Iran’s nonpayment of the U.S. judgments until s. 4(5) of the JVTA came into force and Iran was added to the list of state sponsors of terrorism referred to in s. 6.1(2) of the SIA. Prior to the JVTA coming into force and Iran being listed under the SIA, the defendants were immune from the Ontario court’s jurisdiction. The plaintiffs did not have causes of action against the defendants until Iran’s immunity was lifted and the JVTA came into force in 2012.

[97] Finally, s. 4(3) of the JVTA further supports the position that any limitation period that applied to the plaintiffs’ claims did not begin to run until the JVTA came into force. Section 4(3) of the JVTA provides, in part, as follows:

A limitation or prescription period in respect of an action brought under subsection (1) does not begin before the day on which this section comes into force and is suspended during any period in which the person that suffered the loss or damage

(a) is incapable of beginning the action because of any physical, mental or psychological condition; or

(b) is unable to ascertain the identity of the listed entity, person or foreign state referred to in paragraph (1)(a) or (b).

[98] Iran’s suggestion that s. 4(3) of the JVTA applies only to an action under s. 4(1) and not to an action under s. 4(5) makes no sense and would produce an absurd result. For this reason, I do not accept Iran’s submission in this regard.

[99] I find that the plaintiffs’ claims under the JVTA arose, at the earliest, on September 7, 2012, when Iran was added to the list of state sponsors of terrorism referred to in s. 6.1(2) of the SIA. Therefore, even if the most restrictive limitation period is applied to the plaintiffs’ claims, the two-year limitation period under the New Limitations Act, their claims are not statute-barred. All of the plaintiffs’ actions to enforce the U.S. judgments were commenced within two years of September 7, 2012.

[100] For these reasons, I have concluded that the plaintiffs’ actions are not statute-barred. Iran’s motions to set aside or stay the Ontario Judgments on this ground fail.

(c) Do the U.S. judgments meet the criteria for being recognized under Canadian common law?

The Test in Beals v. Saldanha

[101] Iran submits that the plaintiffs did not meet the test for the recognition of a foreign judgment established by the Supreme Court of Canada in Beals v. Saldanha.[^16] This is because the U.S. courts assumed jurisdiction on the basis of the FSIA, which was applied unilaterally and retroactively to the acts of third parties in foreign countries under circumstances in which the FSIA applied only to U.S. citizens. Iran submits that the FSIA contravened international law and the U.S. courts did not exercise a properly restrained jurisdiction. Iran maintains that for this reason the U.S. judgments should not be recognized in Canada.

[102] In Beals v. Saldanha,[^17] Major J. stated as follows at para. 29:

In the absence of a different statutory approach, it is reasonable that a domestic court recognize and enforce a foreign judgment where the foreign court assumed jurisdiction on the same basis as the domestic court would …

[103] The U.S. judgments were obtained pursuant to the FSIA. This American legislation gives U.S. courts jurisdiction over a foreign state for claims for personal injury or death resulting from a terrorist attack where the foreign state has been designated as a state sponsor of terrorism. The JVTA provides essentially the same basis for a Canadian court to assume jurisdiction over a foreign state in a claim for damages resulting from a terrorist attack in a foreign country. Accordingly, the U.S. courts assumed jurisdiction over the plaintiffs’ claims on the same basis as a Canadian court would pursuant to a similar statutory scheme in Canada.

[104] For this reason, I have concluded that the plaintiffs have satisfied the test in Beals v. Saldanha[^18] for the enforcement of their U.S. judgments in Canada.

Canadian Public Policy

[105] Iran submits that the U.S. courts’ application of a “long arm, retroactive, statutory jurisdiction in favour only of U.S. citizens is contrary to international law, contravenes natural justice and the fundamental morality of the Canadian legal system”. Iran’s submission is based on the following:

1. The amounts awarded in the U.S. judgments are grossly excessive;

2. The U.S. judgments discriminate on the basis of national identity;

3. Higgins’ claim has been assigned to a third party and is tainted by champerty and maintenance and by the fact that U.S. law did not authorize punitive damages; and

4. The U.S. judgments are statute-barred.

5. Amounts of the U.S. Judgments

[106] The U.S. courts awarded millions of dollars in damages to the plaintiffs, including substantial amounts for punitive damages. The Higgins and Brewer plaintiffs were each awarded $300,000,000 in punitive damages. I agree with Iran’s submission that the damages awarded by the U.S. courts greatly exceed what one would expect a Canadian court to award. Iran submits that the amounts awarded in the U.S. judgments are so large that they are arbitrary, and violate Canadian public policy.

[107] While Canadian law limits the amount that can be awarded for non-pecuniary damages for bodily injury, the fact that the U.S. judgments awarded damages greatly in excess of this amount does not offend any public or moral interest in Canada.

[108] The Supreme Court of Canada has expressly rejected the position that the amount of a foreign judgment alone renders the judgment contrary to Canadian public policy. In Beals v. Saldanha,[^19] Major J. explained at para. 73 that a “grossly excessive award” by its amount alone, could not “shock the conscience of the reasonable Canadian”. The Supreme Court held that such an award is not the type of perceived injustice that would offend Canadian morality.

[109] While the amounts of the U.S. judgments are substantially greater than the amounts of damages that a Canadian court would likely award to the plaintiffs, I am satisfied that this, in itself, does not render them contrary to Canadian public policy or morality.

2. Discrimination Based on National Identity

[110] The FSIA requires a plaintiff to be a U.S. national, a member of the U.S. Armed Forces or an employee of the U.S. government to pursue a claim under this legislation. Iran submits that a Canadian cannot sue under the FSIA or enforce a Canadian judgment in a U.S. court that is based upon acts of terrorism. According to Iran, this constitutes discrimination on the basis of citizenship or national identity and is thereby contrary to “Canadian concepts of justice and inconsistent with international principles of comity”.

[111] I do not agree with Iran’s characterization of the FSIA as having a U.S. “citizenship” requirement. The FSIA requires that a plaintiff or a victim must be either a U.S. national or a member of the U.S. Armed Forces or government. This requirement only applies to either the plaintiff or the victim of a terrorist attack. It is not a U.S. citizenship requirement. A Canadian citizen could, therefore, pursue a claim pursuant to the FSIA on behalf of a family member who was either a U.S. national, an employee of the U.S. government or a member of the U.S. Armed Forces. A Canadian citizen could also pursue a claim under the FSIA if he or she was a member of the U.S. Armed Forces or an employee of the U.S. government.

[112] Iran’s submission also ignores the similarities between the FSIA and the JVTA. Section 4(2) of the JVTA provides as follows:

A court may hear and determine the action referred to in subsection (1) only if the action has a real and substantial connection to Canada or the plaintiff is a Canadian citizen or a permanent resident as defined in subsection 2(1) of the Immigration and Refugee Protection Act.

[113] The approach to standing under the JVTA is consistent with the approach to standing under the FSIA. It is not an asymmetrical legislative scheme as Iran suggests. I do not consider it contrary to Canadian public policy for a Canadian court to enforce a judgment obtained pursuant to the FSIA. Both statutes in Canada and the U.S. adopt a similar approach to standing for the enforcement of judgments obtained in respect of state-sponsored terrorism.

3. Champerty and Maintenance and Punitive Damages

[114] Iran submits that because the outstanding portion of the Higgins’ Judgment for punitive damages has been assigned to the American Center for Justice Inc. it is “tainted by champerty and maintenance and contravenes Canadian public policy.” Iran also submits that the punitive damages award was “probably given contrary to U.S. law at the time.”

[115] O’Connor J.A. set out the following four general principles regarding champerty and maintenance in the Ontario Court of Appeal’s decision in McIntyre Estate v. Ontario (Attorney General)[^20]:

• Champerty is a subspecies of maintenance. Without maintenance, there can be no champerty.

• For there to be maintenance the person allegedly maintaining an action or proceeding must have an improper motive which motive may include, but is not limited to, officious inter-meddling or stirring up strife. There can be no maintenance if the alleged maintainer has a justifying motive or excuse.

• The type of conduct that has been found to constitute champerty and maintenance has evolved over time so as to keep in step with the fundamental aim of protecting the administration of justice from abuse.

• When the courts have had regard to statutes such as the Champerty Act and the Statute Concerning Conspirators, they have not interpreted those statutes as cutting down or restricting the elements that were otherwise considered necessary to establish champerty and maintenance at common law.

[116] There is no evidence before me to suggest that the assignment of the Higgins Judgment was made for an improper purpose or motive. The assignment does not contravene Canadian public policy because Canadian public policy accepts that judgments may be assigned.

[117] Further, Iran has not provided any basis for its suggestion that the U.S. courts lacked jurisdiction to award punitive damages. This aspect of the U.S. judgments is not contrary to Canadian public policy.

4. U.S. Judgments are Statute-Barred

[118] Iran submits that the U.S. judgments contravene Canadian public policy because they contravene Ontario’s statutes of limitation. I have considered and rejected Iran’s position with respect to the Ontario limitation periods. The U.S. judgments are not contrary to Canadian public policy for this reason.

[119] For these reasons, Iran’s motions to set aside or stay the Ontario Judgments on these grounds fail.

Issue # 3 – Does the SIA Remove Iran’s Immunity from Enforcement or Attachment?

[120] Enforcement immunity is different from jurisdictional immunity. Sections 3 and 6.1 of the SIA deal with the court’s jurisdiction to adjudicate claims against a foreign state. I have determined that the SIA and the JVTA give the court jurisdiction to adjudicate the plaintiffs’ claims against Iran in this case. However, Iran submits that even if I conclude that the court has jurisdiction to recognize the U.S. judgments, the conditions for allowing the judgments to be enforced against Iran’s Exigible Property have not been met by the plaintiffs and Iran is, therefore, entitled to enforcement immunity.

[121] Iran argues that s. 12(1)(d) of the SIA demonstrates that the jurisdictional immunity set out in s. 3 of the SIA and the immunity from attachment and execution provided for in s. 12 of the SIA, are distinct immunities. Section 12(1)(d) of the SIA provides as follows:

12. (1) Subject to subsections (2) and (3), property of a foreign state that is located in Canada is immune from attachment and execution and, in the case of an action in rem, from arrest, detention, seizure and forfeiture except where …

(d) the foreign state is set out on the list referred to in subsection 6.1(2) and the attachment or execution relates to a judgment rendered in an action brought against it for its support of terrorism or its terrorist activity and to property other than property that has cultural or historical value.

[122] According to Iran’s submissions, s. 12(1)(d) of the SIA must be interpreted retroactively if it is to be relied upon to allow for the execution of the U.S. judgments against Iran’s Exigible Property. This is because the U.S. judgments pre-date the enactment of s. 12(1)(d) of the SIA. Iran submits that a retroactive interpretation to s. 12(1)(d) of the SIA is contrary to the established law of Ontario that presumes legislation is not intended to apply retroactively unless it is expressly stated to be so. Further, according to Iran, a retroactive interpretation would also be contrary to the well-established rule under international law that domestic legislation should apply retrospectively.

[123] The plaintiffs submit that a retroactive interpretation of s. 12(1)(d) of the SIA is not necessary to enforce the U.S. judgments. They argue that the starting point is to determine the date on which Iran’s Exigible Property should be considered for enforcement purposes. According to the plaintiffs, this is the date that they first attempted to execute against Iran’s Exigible Property. This occurred after s. 12(1)(d) of the SIA was enacted and it is, therefore, not necessary to apply this section retroactively.

[124] Iran’s expert witness on international law, Professor Patrick Macklen, testified that under international law it is up to the court to select the most appropriate date for this assessment based upon the circumstances of the case. Professor Macklen suggested that the two most likely dates for the assessment would be the date of the attempted enforcement or the date when the litigation was commenced.[^21]

[125] There is international authority to support the position that the appropriate assessment date is the date of the commencement of enforcement proceedings. The Belgium Court of Appeal of Brussels in the case of Iraq v. Vinci Construction[^22] and the Swedish Supreme Court in the case of Sedelmayer v. Russian Federation,[^23] each concluded that the relevant date to determine whether state property, that is otherwise immune, can be attached is the date of the attachment or attempted attachment.

[126] It is not necessary to apply a retroactive interpretation to s. 12(1)(d) of the SIA to determine whether Iran’s Exigible Property is subject to execution to enforce the Ontario judgments. I am of the view that the date of the plaintiffs’ attempted enforcement against Iran’s Exigible Property is the appropriate date to consider in determining whether the property can be attached and executed against. The dates of the attempted enforcement by the plaintiffs against Iran’s Exigible Property post-date the enactment of s. 12(1)(d) of the SIA. Accordingly, it is not necessary to apply s. 12(1)(d) of the SIA retroactively to determine this issue.

[127] Section 12(1)(d) of the SIA also provides that immunity from attachment and execution is not lost if the property in question “has cultural or historical value”. Although the defendants submit that Iran’s Exigible Property enjoys diplomatic status, they do not argue that it has cultural or historical value within the meaning of s. 12(1)(d) of the SIA.

[128] Iran’s Exigible Bank Accounts were used to fund student expenses. As such, they could not have cultural or historical value within the meaning of s. 12(1)(d) of the SIA.

[129] According to the defendants, Iran’s Exigible Real Property was used for Iranian cultural centres. This is disputed by the plaintiffs who argue that these two properties were used as fronts for Iranian terrorist activities. D. M. Brown J. held that these two properties do not have cultural or historical value in his Reasons for Decision dated March 17, 2014. I agree with his assessment of this property. I find that Iran’s Exigible Real Property does not have cultural or historical value within the meaning of s. 12(1)(d) of the SIA.

[130] I am satisfied, for these reasons that s. 12(1)(d) of the SIA removes Iran’s immunity from enforcement of the U.S. judgments in Ontario.

[131] Iran’s motions to set aside or stay the Ontario Judgments on these grounds, therefore, fail.

Issue # 4 – Is Iran’s Exigible Property Immune from Enforcement under International Law?

[132] Iran submits that its two bank accounts and two real properties that have been determined to be exigible were used for diplomatic purposes and are, therefore, subject to diplomatic immunity under international law. They, therefore, cannot be attached to enforce the Ontario judgments notwithstanding s. 12(1)(d) of the SIA.

Iran’s Exigible Bank Accounts

[133] The law of diplomatic immunity is well settled and has been incorporated into the 1961 Vienna Convention on Diplomatic Relations (“Vienna Convention”). The Vienna Convention was ratified by Canada in 1966 and implemented by the FMIOA. Although the Vienna Convention does not expressly refer to embassy bank accounts, Iran submits that the international law of diplomatic immunity extends beyond the protection of items expressly mentioned in the Vienna Convention and includes embassy bank accounts. Professor Patrick Macklen’s expert evidence supports this position.

[134] As indicated above, Canada has identified Iran’s diplomatic property in Canada in the Minister’s Certificates issued pursuant to ss. 11(a) and 11(c) of the FMIOA. Iran’s Exigible Bank Accounts are not included in the Minister’s Certificates. Iran submits, however, that this does not conclusively establish that the bank accounts are not subject to diplomatic immunity from enforcement under international law.

[135] According to Iran’s submission, the court must look beyond the Minister’s Certificates to determine whether the bank accounts were used for diplomatic functions as defined under the Vienna Convention. Iran relies upon Article 21 of the United Nations Convention on Jurisdictional Immunity, which provides execution immunity for all diplomatic property “including any bank account, which is used or intended for use in the performance of the functions of the diplomatic mission of the State”.

[136] Iran submits that under international law, bank accounts that are used to pay the salaries of diplomatic personnel, expenses of the diplomatic mission, and scholarship grants enjoy diplomatic immunity from execution. Iran’s Exigible Bank Accounts were used by Iran’s Embassy to fund student scholarship programs. Under these circumstances Iran maintains that these bank accounts are immune from execution under international law.

Iran’s Exigible Real Property

[137] The defendants also submit that Iran’s Exigible Real Property is immune from execution under international law because these properties constitute “premises of the mission” as defined in Article 3 of the Vienna Convention. Article 3 of the Vienna Convention provides as follows:

1. The functions of a diplomatic mission consist inter alia in:

(a) representing the sending State in the receiving State;

(b) protecting in the receiving State the interests of the sending State and of its nationals, within the limits permitted by international law;

(c) negotiating with the Government of the receiving State;

(d) ascertaining by all lawful means conditions and developments in the receiving State, and reporting thereon to the Government of the sending State;

(e) promoting friendly relations between the sending State and the receiving State, and developing their economic, cultural and scientific relations.

[138] According to Iran, the premises of its diplomatic mission are immune from execution even though its diplomatic relations with Canada have been suspended. Iran argues that even if there had been an outbreak of war between the two countries, Canada would still have a continuing obligation to protect the premises of Iran’s mission under international law. Canada does not dispute this but submits that Iran’s Exigible Real Property is not part of “the premises” of Iran’s diplomatic mission.

[139] Iran’s Exigible Real Property was used or was intended to be used as cultural centres. Iran submits that this purpose is sufficiently connected with the official purposes of its diplomatic mission to invoke enforcement immunity under international law. According to Iran, even though this property is not included in the Minister’s Certificates, it is nonetheless immune from execution under international law because it is part of “the premises of Iran’s mission” in Canada.

The Minister’s Certificates

[140] Canada submits that in order to determine whether Iran’s Exigible Property is subject to diplomatic immunity from enforcement I must determine the following two issues:

1. Does the Minister alone determine whether a foreign state’s property has diplomatic status?

2. Should the court accept the Minister’s Certificates and the listing of Iran’s non-diplomatic property on Canada’s Department of Foreign Affairs’ website as dispositive of whether Iran’s Exigible Property enjoys diplomatic immunity?

[141] I have concluded that the answer to both questions is “yes” for the following reasons.

Minister’s Role

[142] Matters of foreign relations are conducted state to state. In Canada, the Minister exercises the prerogative power to negotiate with sending states the functions that a foreign mission will be permitted to undertake within Canada and to recognize the diplomatic status of a sending state’s mission, its property, and its agents within the agreed-upon parameters of that diplomatic relationship.

[143] Canada submits that the Minister’s recognition of diplomatic status is necessary to establish a foreign state’s entitlement to assert diplomatic immunity from enforcement under international law in a Canadian court proceeding. According to Canada, the only immunity Iran is entitled to assert with respect to Iran’s Exigible Property in these proceedings is the limited state immunity from attachment or execution for “property that has cultural or historical value” provided by s. 12(1)(d) of the SIA. As I have already concluded, there is no evidence before me to establish that Iran’s Exigible Property has “cultural or historical value” within the meaning of s. 12(1)(d) of the SIA. It is, therefore, not immune from enforcement under this section.

[144] The Minister’s Certificates were provided to the court pursuant to the FMIOA. Iran’s Exigible Property is not included in the Minister’s Certificates. Further, Canada’s Department of Foreign Affairs’ website indicates that Iran’s Exigible Property does not enjoy diplomatic status in Canada. Accordingly, Canada submits that this conclusively establishes that Iran’s Exigible Property does not enjoy diplomatic status.

[145] Diplomacy and diplomatic relations are at the very core of foreign affairs. Decisions relating to the institution of, and the severance of, diplomatic relations and the maintenance of and the means of conducting international relations are all matters that fall squarely within the prerogative power of the Minister to make discretionary decisions on behalf of Canada in matters of international policy.

[146] I agree with Canada’s submission that it is essential for states establishing mutual relations and engaging in diplomacy to be able to negotiate and agree upon what property, premises, and agents each state will recognize as enjoying diplomatic status. This is important for sending states who seek to maintain diplomatic missions in Canada. It is equally important for Canada in maintaining Canadian diplomatic missions abroad. Without diplomatic immunity embassies would be vulnerable to intrusions into their operations by the host state.

[147] Diplomatic immunity is a long standing principle of international law recognized by the Vienna Convention to which Canada is a party. Article 45 of the Vienna Convention establishes an obligation upon Canada to respect and protect the premises of a suspended diplomatic mission. Canada is therefore obligated to protect Iran’s diplomatic property notwithstanding that their diplomatic relations are suspended. Canada maintains that it has met this obligation by issuing the Minister’s Certificates. The Minister’s Certificates identify Iran’s property in Canada that is subject to diplomatic immunity. This property continues to be immune from enforcement.

[148] In Canada, the Minister is empowered by s. 10 of the Department of Foreign Affairs, Trade and Development Act[^24] to conduct diplomatic and consular relations pertaining to Canada’s compliance with international obligations under international law. This includes the Vienna Convention. The Minister gives effect to Canada’s international obligations through the exercise of the Minister’s prerogative powers and the powers under the FMIOA.

[149] I agree with Canada’s submissions at paras. 39-41 of its factum as follows:

(39) Prerogative powers are the residue of discretionary or arbitrary authority, which at any given time is legally left in the hands of the Crown. It is trite law that the Crown holds prerogative power over matters of foreign affairs. As noted by the Supreme Court in Canada (Prime Minister) v. Kadar, the executive is best placed to make foreign policy decisions on behalf of Canada within a range of constitutional options, with disputes between States to be resolved through diplomatic channels, not the courts.

(40) While the courts can review exercises of the foreign affairs prerogative, such review is only available where the rights or legitimate expectations of an individual are affected or where a constitutional question is raised. Even in cases which engage the most serious questions of constitutionality, judges have been careful to maintain the distinction between the executive and the courts by deferring to the exercise of the prerogative power in matters of foreign affairs within a range of constitutional options.

(41) Preserving the distinction between the executive and the courts has been held by the Supreme Court of Canada as integral to the effective working of the government as a whole:

It is fundamental to the working of government as a whole that all these parts play their proper role. It is equally fundamental that no one of them overstep its bounds, that each show proper deference for the legitimate sphere of activity of the other.

(New Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the House of Assembly), 1993 153 (SCC), [1993] 1 SCR 319, para. 141.)

[150] I have concluded for these reasons that diplomatic immunity cannot be asserted to avoid enforcement in Canadian court proceedings unless the Minister has recognized the diplomatic status of the property sought to be attached. Diplomatic immunity under customary international law should not be accorded to property that has not been recognized as having diplomatic status by the Minister on behalf of Canada.

Effect of the Minister’s Certificates

[151] The question of the diplomatic status of a foreign state’s mission and property in Canada involves factual issues that are peculiarly within the knowledge of the Minister. Evidence directly from the Minister in the form of a certificate delivered to the court in a legal proceeding is the most reliable evidence of the Minister’s view of the diplomatic status of property. In my view it should be regarded as conclusive by the court.

[152] Section 11(e) of the FMIOA provides as follows:

A certificate purporting to be issued by or under the authority of the Minister of Foreign Affairs and containing any statement of fact relevant to any of the following questions shall be received in evidence in any action or proceeding as proof of the fact stated in the certificate without proof of the signature or official character of the person appearing to have signed the certificate:

(e) whether any person, diplomatic mission, consular post, office of a political subdivision of a foreign state, international organization or accredited mission has privileges, immunities or benefits under this Act.

[153] The Minister’s Certificates list all of Iran’s property in Canada that Canada recognizes as having diplomatic status. It does not include Iran’s Exigible Property. This fact alone, by necessary implication, establishes that this property does not enjoy diplomatic immunity.

[154] Further, Canada’s Foreign Affairs’ website states, in part, as follows:

The Government of Canada is committed to fighting terrorism and to holding the perpetrators of terrorism and those who support them accountable for their actions. The Justice for Victims of Terrorism Act - and related amendments to the State Immunity Act - allows victims of terrorism to sue perpetrators of terrorism and those who support them, including listed foreign states, for loss or damage that has occurred as a result of an act of terrorism committed anywhere in the world. Foreign Affairs Minister John Baird and the Honourable Vic Toews, then Minister of Public Safety, announced on September 7, 2012 that Canada has listed the Islamic Republic of Iran as a state that supports terrorism. To assist victims in locating and identifying Iranian state assets in Canada, Foreign Affairs, Trade and Development Canada (DFATD) is releasing the list of known Iranian state-owned property in Canada.

Please note that DFATD does not guarantee the completeness or accuracy of the information provided. Judgment creditors of the Islamic Republic of Iran are encouraged to conduct their own due diligence and not to rely solely on the information provided below.

[155] Iran’s Exigible Property is listed on the website as “Iran’s Non-Diplomatic Assets in Canada”.

[156] Iran relies upon the decision of Braid J. in Canadian Planning and Development Canada Ltd. (CPDC) v. Libya et al.[^25] in support of its position that the Minister’s Certificates are not conclusive evidence of Canada’s recognition of what property enjoys diplomatic status in Canada. I am not bound by this decision and I decline to follow it on this issue. In my view the Minister’s Certificates are conclusive on what Iranian property in Canada enjoys diplomatic status.

[157] On the strength of the Minister’s Certificates and the information contained on the Department of Foreign Affairs’ website, I find that Iran’s Exigible Property does not enjoy diplomatic status in Canada under international law. Iran is, therefore, not entitled to claim diplomatic immunity from enforcement against that property under either domestic or international law.

[158] Iran’s motions to set aside or stay the Ontario Judgments on these grounds, therefore, fail.

Issue # 5 – Did the Mareva injunction require the plaintiffs to establish that [s. 11(3)](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-s-18/latest/rsc-1985-c-s-18.html#sec11subsec3_smooth) of the [SIA](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-s-18/latest/rsc-1985-c-s-18.html) applied?

[159] Iran submits that the court that initially granted the Mareva injunction did not consider that granting the order involved not only assuming jurisdiction to adjudicate the issue but also determining whether Iran’s immunity from enforcement had been removed thereby allowing the attachment of Iran’s assets. Iran argues that the court should not have granted the Mareva injunction without first making a definitive finding that Iran supported terrorism and that its acts or omissions constituted an offence under Part II-1 of the Criminal Code pursuant to s. 11(3) of the SIA.

[160] I have already dealt with and rejected a similar argument by Iran with respect to s. 4(1) of the JVTA.

[161] Section 11(1) of the SIA precludes a Mareva injunction in respect of a foreign state’s property unless s. 11(3) applies. Section 11(3) provides as follows:

(3) This section does not apply either to an agency of a foreign state or to a foreign state that is set out on the list referred to in subsection 6.1(2) in respect of an action brought against that foreign state for its support of terrorism or its terrorist activity.

[162] I have concluded that it is sufficient for the plaintiffs to establish that Iran is on the list referred to in s. 6.1(2) of the SIA. It is not also necessary for the plaintiffs to establish that Iran supports terrorism and that the acts of terrorism constitute specific criminal offences under Part II-1 of the Criminal Code.

[163] In her Endorsement granting the Mareva injunction Allen J. stated as follows at para. 29:

Foreign states generally enjoy immunity from lawsuits 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. judgments.

[164] I am satisfied that Allen J. properly applied s. 11(3) of the SIA and concluded that Iran’s property was subject to attachment before granting the Mareva injunction.

[165] Iran’s motion to set aside or stay the Mareva injunction on this ground, therefore, fails.

Issue # 6 – Did the plaintiffs make full and frank disclosure on the application for the Mareva injunction?

[166] D. M. Brown J. considered this issue on a motion by Canada to vary the Mareva injunction. He concluded that the plaintiffs had not made full and frank disclosure of material facts before Allen J. who granted the Mareva injunction in the first instance, and before Lederman J. and E. Macdonald J., both of whom continued the Mareva injunction. The non-disclosure related to the plaintiffs’ failure to disclose to the court that their argument in favour of the exigibility of Iran’s diplomatic assets (i.e., the assets included in the Minister’s Certificates) was at best highly contestable and “merely a serious question to be tried” as opposed to “a strong prima facie case”, the test required for a Mareva injunction.

[167] D. M. Brown J. concluded as follows at para. 48:

Consequently, I conclude that the appropriate remedy for the want of full and frank disclosure in this case is to vary the Mareva Order made on October 31, 2012 so that it does not extend to the assets of Iran which the Minister has certified as constituting diplomatic property.

[168] Iran submits that the plaintiffs’ failure to make full and frank disclosure on the application for the Mareva injunction was “far more pervasive” than D. M. Brown J. concluded. Iran argues that the plaintiffs’ failure to raise all of the arguments that Iran has advanced on this motion constituted material non-disclosure that should result in the setting aside of the Mareva injunction.

[169] I do not agree with this submission. Iran has raised many novel and unprecedented arguments on this motion. It is unreasonable to suggest that the plaintiffs should have raised all of these issues before the motion judge. I am satisfied from Allen J.’s Endorsement that, apart from the non-disclosure of arguments relating to the exigibility of Iran’s diplomatic assets identified by D. M. Brown J., the plaintiffs made full and frank disclosure of all material facts relating to the issuance of the Mareva injunction against Iran under the circumstances.

[170] In my view, Allen J. was justified in concluding at paras. 63 and 64 of her Endorsement as follows:

… 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.

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

[171] I would not set aside or stay the Mareva injunction for these reasons. Iran’s motion on this ground fails.

Issue # 7 – Did the plaintiffs act properly in obtaining the Nova Scotia Order and then registering it under the [REJA](https://www.canlii.org/en/on/laws/stat/rso-1990-c-r5/latest/rso-1990-c-r5.html)?

[172] Iran submits that Nova Scotia was not a proper forum for the Tracy/Cicippio plaintiffs to apply to have their U.S. judgments recognized under the JVTA because Iran has no assets, is not ordinarily resident, and does not conduct business in Nova Scotia. Further, Iran argues that “it is likely that the Tracy/Cicippio plaintiffs brought their recognition application in Nova Scotia in an attempt to circumvent the law relating to Ontario limitation periods”.

[173] The plaintiffs submit that Iran is out of time to set aside the Ontario Recognition Order granted by Chapnik J. on May 22, 2013. According to the plaintiffs, the Ontario Recognition Order was served upon Iran on August 19, 2013. Section 6 of the REJA provides that an application to set aside a recognition order must be brought within one month after the judgment debtor has notice of the registration. Iran’s motion to set aside the Ontario Recognition Order was first brought in May 2014, nine months after the Ontario Recognition Order was served upon Iran. The plaintiffs maintain that the motion is, therefore, out of time. I agree with this submission.

[174] Further, the plaintiffs submit that this court cannot set aside the Nova Scotia Order because it is an order of a court of another province and Iran has not moved to set it aside in Nova Scotia. I also agree with this submission.

[175] In my view, the plaintiffs were entitled to apply under the JVTA in Nova Scotia to have their U.S. judgments recognized there. The Supreme Court of Canada’s decision in Chevron Corp. v. Yaiguaje[^26] establishes that it is not necessary to have a real and substantial connection between Nova Scotia and the proceeding to enforce the U.S. judgments. I, therefore, do not accept Iran’s submission on this issue.

[176] I have determined that the proceedings under the JVTA to enforce the U.S. judgments are not statute-barred under the Ontario limitation statutes. I therefore do not accept Iran’s submission on this issue.

[177] For these reasons, I am satisfied that the plaintiffs acted properly in obtaining the Nova Scotia Order and then registering it under the REJA. Further, I find that Iran’s motion to set aside the Ontario Recognition Order is out of time under the REJA.

[178] For these reasons, Iran’s motion on this ground fails.

Proper Service upon Iran and Translation of Court Documents into the Persian Language

[179] Iran submits that it was not properly served with the motion material that led to the Ontario Judgments. The record establishes that Iran was properly served pursuant to the SIA. This is clear from para. 13 of the Reasons for Decision of D. M. Brown J. dated March 17, 2014, paras. 62–67 of the Marthaler/Holland/Higgins plaintiffs’ factum and paras. 44-45 of the Tracy/Bennett plaintiffs’ factum.

[180] Iran has raised one further overall objection to these proceedings. None of the court documents served upon Iran were translated into the Persian language. According to Iran, this is a requirement of the Hague Convention. However, Iran concedes that it is not a signatory to the Hague Convention. I find that there was, therefore, no requirement on the part of the plaintiffs to translate any of the court documents into the Persian language.

Conclusion on all Issues Raised by Iran

[181] For the reasons outlined above, Iran’s motions fail on all of the issues it has raised.

Test for Setting Aside Default Judgment

[182] Although I have concluded that none of the issues raised by Iran justify setting aside or staying the Ontario Judgments, the plaintiffs submit that Iran’s motions should be dismissed in any event because the defendants have not met the test for setting aside a default judgment.

[183] According to the plaintiffs, on a motion to set aside a default judgment, the court “must ultimately determine whether the interests of justice favour granting the order” and whether the moving party is “gaming the process”.

[184] In HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation[^27] the Ontario Court of Appeal set out the following three-part test to set aside a default judgment:

1. Whether the motion was brought without delay after the defendant learned of the default judgment;

2. Whether the circumstances giving rise to the default were adequately explained; and

3. Whether the defendant has an arguable defence on the merits.

[185] The plaintiffs submit that Iran has failed to adequately explain why it did not defend any of the proceedings in Ontario. Further, Iran has not demonstrated that it has an arguable defence on the merits. I accept these submissions. I find that Iran had proper notice of the Ontario proceedings and chose not to defend them.

[186] Iran has not provided a reasonable explanation for its failure to defend the Ontario proceedings. The failure to provide any reasonable explanation for Iran’s failure to defend these motions suggests to me that the defendants were attempting to gain a procedural advantage and were “gaming the process”.

[187] I do not consider Iran’s complaint that the “judicial papers” that were served upon the defendants were in the English language rather than in the Persian language to be an adequate explanation for failing to defend these proceedings. There is no evidence before me that the defendants could not understand the plaintiffs’ English motion material.

[188] I also do not consider the defendants’ assumption that the Canadian government would protect their entitlement to their property in Canada as a reasonable justification for their failure to defend the Ontario proceedings. In Beals v. Saldanha,[^28] the Supreme Court of Canada considered the enforceability of a default judgment obtained in Florida in relation to property located there. The defendants had taken no action to appeal or set aside the default judgment in Ontario on the basis of advice from a lawyer that the judgment could not be enforced. On the appeal from the order enforcing the Ontario judgment, the Supreme Court held that the judgment was enforceable, stating that “while their failure to move to set aside or appeal the Florida judgment was due to their reliance upon negligent legal advice, that negligence cannot be a bar to the enforcement of the respondents’ judgment”.

[189] For these reasons, I have concluded that the defendants have not adequately explained why they did not defend the Ontario proceedings and they have not demonstrated that they have an arguable defence to the plaintiffs’ claims on the merits.

[190] Iran has failed, therefore, to meet the test to set aside the default Ontario Judgments. Iran’s motions fail for this reason as well.

Bennett Motion for Summary Judgment

[191] The four Bennett plaintiffs move to recognize and enforce the Bennett Judgment issued by the United States District Court for the District of Colombia on August 30, 2007 (“Bennett Motion”). This motion was originally brought before D. M. Brown J. on September 30, 2013 who adjourned it to a date that was later vacated. The Bennett plaintiffs have continued the motion before me. The Bennett Judgment orders the defendants to pay damages to the Bennett plaintiffs in the amount of US $12,904,558.

[192] The Bennett Motion seeks an order:

1. Requiring Iran to pay to the Bennett plaintiffs a sum of money in Canadian dollars sufficient to purchase US$12,904,548;

2. Declaring that Iran is the beneficial owner of Iran’s Exigible Real Property;

3. Requiring that a writ of seizure and sale be issued as against Iran’s Exigible Real Property; and

4. Costs of the motion.

[193] The Bennett Motion is brought pursuant to s. 4(5) of the JVTA. As I have already concluded, a plaintiff who wishes to have a foreign judgment recognized under s. 4(5) of the JVTA must establish the following:

1. The foreign judgment meets Canadian common law criteria for the recognition of foreign judgments;

2. The foreign judgment is in favour of a person who suffered the type of loss or damage referred to in s. 4(1) of the JVTA. The plaintiff must, therefore, have suffered loss or damage as a result of conduct prohibited by Part II.1 of the Criminal Code; and

3. The foreign state is set out on the list of state sponsors of terrorism pursuant to s. 6.1(2) of the SIA.

[194] With respect to the first criterion, an Ontario court will recognize a foreign judgment where that judgment is final and binding and where the foreign court properly assumed jurisdiction according to Canadian legal principles of jurisdiction.

[195] The Bennett Judgment meets both of these criteria. It is final and binding and the U.S. court properly assumed jurisdiction with respect to the claim pursuant to the FSIA.

[196] The Bennett Judgment, including the U.S. court’s findings of fact, establish that Marla Bennett died as a result of a terrorist bombing carried out by Hamas, a terrorist organization actively supported by Iran. The Bennett plaintiffs, therefore, suffered loss and damage as a result of terrorist activity prohibited by Part II.1 of the Criminal Code.

[197] Finally, Iran is included on the list of state sponsors of terrorism created pursuant to s. 6.1 (2) of the SIA.

[198] All three criteria under s. 4(5) of the JVTA have been established. I therefore recognize the Bennett Judgment in Ontario pursuant to s. 4(5) of the JVTA.

[199] As Iran’s Exigible Property has already been determined by Brown J. to be available to satisfy the plaintiffs’ judgments against Iran, I order that a writ of seizure and sale be issued in respect of Iran’s Exigible Property in favour of the Bennett plaintiffs.

[200] The Bennett plaintiffs are entitled to their costs of this motion.

CONCLUSION

[201] In conclusion, Iran’s motions to set aside, vary or stay the Ontario Judgments are dismissed. The Bennett Motion for summary judgment is granted.

COSTS

[202] I urge the parties to settle the issue of costs. If they are unable to do so they may schedule a 9:30 a.m. appointment before me to address this issue.

HAINEY J.

Date: June 9, 2016

APPENDIX “A”

Tracy/Cicippio Plaintiffs (two motions)

First Motion

Relief Sought

• Setting aside and vacating the order of Chapnik J., dated May 22, 2013;
• Setting aside and vacating all related writs of seizure and sale, including those dated April 4, 2014;

Grounds

• The order of Chapnik J., dated May 22, 2013, did not comply with the REJA in that:
  • the defendants were not given reasonable notice of the application;
  • the defendants were not personally served with process in the original action and did not appear or defend or otherwise submit to the jurisdiction of the original court;
  • the underlying judgments (two U.S. judgments) were not issued by a court in a reciprocating state;
  • the underlying judgments had been issued more than six years prior to the application and were time-barred;
  • the original court acted without jurisdiction;
  • the defendants neither carried on business nor were ordinarily resident within the jurisdiction of the original court and did not voluntarily appear or otherwise submit during the proceedings to the jurisdiction of that court;
  • the judgment was in respect of a cause of action which, for reasons of public policy or for some other similar reason, should not have been entertained by the registering court; or
  • the defendants would have had a good defence if an action had been brought on the original judgment.
• In the alternative, the order should be set aside because notice was not given to the defendants within one month after registration.
• The REJA was misused to indirectly attempt to do what the plaintiffs could not do directly, i.e. register U.S. judgments in Ontario.
• There was no sufficient or admissible evidence before Chapnik J. to issue the order.
• Chapnik J. relied on inadmissible evidence.
• No reasons were given for the order.
• There was a lack of full and fair disclosure to the court.
• If Chapnik J. relied on the JVTA, which came into force on September 7, 2012, such reliance was improper because,
  • the SIA is contrary to international law, including the customary and treaty rules on state, diplomatic and consular immunity from process;
  • the SIA violates the principles of fundamental justice because it is not a neutral law of general application but is discriminatory and directed to a particular country, namely, Iran;
  • the JVTA, being retroactive in nature, violates the common law principle against retroactive law and the principles of fundamental justice.
• The evidence before Chapnik J. did not satisfy the requirements of s. 4(5) of the JVTA in that,
  • the U.S. judgments did not meet the criteria under Canadian law for being recognized in Canada;
  • there was no proof that the plaintiffs had suffered loss or damage as a result of an act that would have been punishable under Part II.1 of the Criminal Code as required by s. 4 of the JVTA;
  • the plaintiffs’ claims had no real and substantial connection to Canada.
• The proceedings are an abuse of process.

Second Motion

Relief Sought

• Setting aside and vacating the order of D. M. Brown J., dated March 17, 2014;
• Setting aside and vacating all related writs of seizure and sale, including those dated April 4, 2014 as they apply to the two bank accounts and to properties described in the order of D. M. Brown J.

Grounds

• Notice of the motion was not given to the defendants.
• The court should not have relied upon evidence filed in other actions or, in the alternative, should not have done so without notice to Iran.
• The motion judge was not given an opportunity to consider the provisions of the Foreign Missions and International Organizations Act, S.C. 1991, c. 41 (“FMIOA”).
• The properties and bank accounts are exempt from enforcement by virtue of the FMIOA and international law.
• The evidence before the court did not warrant making the orders that were made.
• The court relied on inadmissible evidence.
• There was a lack of full and fair disclosure to the court.
• The underlying order of Chapnik J., dated May 22, 2013, was improperly granted for the reasons set out above with respect to the First Motion.
• Iran is entitled to full immunity from civil and criminal process, including enforcement, in accordance with international law and relevant Canadian legislation.
• The JVTA is contrary to international law, including the customary and treaty rules on state, diplomatic and consular immunity from process, including enforcement.
• The JVTA violates the principles of fundamental justice in that it is not a neutral law of general applicability but rather discriminatory and directed to a particular country, namely, Iran.
• The JVTA is retroactive in nature and violates the well-entrenched common law principle against retroactive law and the principles of fundamental justice.
• The order granted is not permitted by virtue of s. 4(5) of the JVTA because the plaintiffs did not comply with the other requirements of s. 4, and, in particular:
  • the U.S. judgments did not meet the criteria under Canadian law for being recognized in Canada;
  • there was no proof that the plaintiffs had suffered loss or damage as a result of an act that would have been punishable under Part II.1 of the Criminal Code as required by s. 4 of the JVTA;
  • the plaintiffs’ claims had no real and substantial connection to Canada.
• The proceedings are an abuse of process.
• The property dealt with in the order has cultural and historical value and is immune from enforcement by virtue of s. 12(d) of the SIA.
• The two real properties dealt with in the order are owned by separate legal entities and the court had no basis in law or in fact to pierce the corporate veil.

Holland / Marthaler / Higgins Plaintiffs

Relief Sought

• Setting aside and vacating the judgments of Corbett J. dated October 3, 2014;
• Setting aside and vacating all related writs of seizure and sale;
• Further, or in the alternative, staying the judgments of Corbett J. dated October 3, 2014, staying the underlying actions and staying the enforcement of any writs.

Grounds

• Notice of the claims and motions for judgment were not given to the defendants.
• The evidence before the court did not warrant making the orders that were made.
• The court relied on inadmissible evidence.
• There was a lack of full and fair disclosure to the court.
• Iran is entitled to full immunity from civil and criminal process, including enforcement, in accordance with international law and relevant Canadian legislation. The defendants have not submitted to the jurisdiction of this court and they do not do so for the purpose of this motion except to claim full immunity from civil and criminal process in accordance with international law and relevant Canadian legislation.
• The JVTA is contrary to international law, including the customary and treaty rules on state, diplomatic and consular immunity from process, including enforcement.
• The JVTA violates the principles of fundamental justice in that it is not a neutral law of general applicability but rather it is discriminatory and directed to a particular country, namely Iran.
• The JVTA is retroactive in nature and violates the well-entrenched common law principle against retroactive law and the principles of fundamental justice.
• The orders granted are not permitted by virtue of s. 4(5) of the JVTA because the plaintiffs did not comply with the other requirements of s. 4, and, in particular:
  • the U.S. judgments did not meet the criteria under Canadian law for being recognized in Canada;
  • the plaintiffs are statute barred from attempting to have their claims recognized in Canada by virtue of the applicable limitation periods;
  • there was no evidence or insufficient evidence that the plaintiffs had suffered loss or damage as a result of an act that would have been punishable under Part II.1 of the Criminal Code as required by s. 4 of the JVTA;
  • the plaintiffs’ claims had no real and substantial connection to Canada;
  • the actions are not against a foreign state.

Bennett Plaintiffs

Relief Sought

• Staying the underlying proceeding;
• Setting aside and vacating the order of E. Macdonald J. dated October 31, 2012, as varied by further orders of the court (the “Mareva Orders”).

Grounds

• The plaintiffs did not meet the test necessary for a Mareva injunction and did not present a strong prima facie case.
• There was a lack of full and fair disclosure to the court.
• Iran is entitled to full immunity from civil and criminal process, including enforcement, in accordance with international law and relevant Canadian legislation.
• The assets subject to the Mareva Orders are entitled to full immunity from civil and criminal process, including enforcement, in accordance with international law and relevant Canadian legislation.
• The court was not given an opportunity to consider the provisions of the FMIOA.
• The properties and bank accounts are exempt from enforcement by virtue of the FMIOA and international law.
• Notice of the motion was not given to the defendants.
• The evidence before the court did not warrant making the orders that were made.
• The court relied on inadmissible evidence.
• The JVTA is contrary to international law, including the customary and treaty rules on state, diplomatic and consular immunity from process.
• The JVTA violates the principles of fundamental justice in that it is not a neutral law of general application but instead it is discriminatory and directed to a particular country, namely, Iran.
• The JVTA, being retroactive in nature, violates the common law principle against retroactive law and principles of fundamental justice.
• The properties dealt with in the order have cultural and historical value and are immune from enforcement by virtue of s. 12(d) of the SIA.
• The two real properties dealt with in the order are owned by separate legal entities and the court had no basis in law or in fact to pierce the corporate veil.

[^1]: 28 U.S.C. §§ 1602. [^2]: R.S.C. 1985, c. S-18. [^3]: S.C. 2012, c. 1, s. 2. [^4]: R.S.O. 1990, c. R.5. [^5]: S.C. 1991, c. 41. [^6]: 2003 SCC 72. [^7]: 1982 13 (SCC), [1982] 1 S.C.R. 164 at page 169. [^8]: 2010 SCC 40, [2010] S.C.J. No. 40. [^9]: ((2009), 2009 9482 (ON SC), 95 O.R. (3d) 514.) [^10]: Ibid. [^11]: R.S.O. 1990, c. L.15. [^12]: 2002, S.O. 2002, c. 24, Sched. B. [^13]: 2004 15466 (ON CA), [2004] O.J. No. 1700. [^14]: [1997] 3 S.C.R. 459 at para. 44. [^15]: Ibid. [^16]: Supra. [^17]: Supra. [^18]: Supra. [^19]: Supra. [^20]: 2002 45046 (ON CA), [2002] O.J. No. 3417 at para. 34. [^21]: Macklen cross-examination questions 84-107. [^22]: CLR, Belgium, Court of Appeal of Brussels (Ninth Chamber) 4 October 2002, p. 108. [^23]: Supreme Court of Sweden, Case No. 170-01, at para. 20. [^24]: S.C. 2013, c. 33. [^25]: ((2015), 2015 ONSC 1638, 124 O.R. (3d) 579.) [^26]: 2015 SCC 42. [^27]: 2008 ONCA 894. [^28]: Supra, at para. 36.