Court File and Parties

COURT FILE NO.: CV-22-00674774-0000 DATE: 20230731 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JOHN SMITH, BILL SMITH, SAM SMITH, JANE SMITH, MARY SMITH, SALLY SMITH, personally and on behalf of the Estates of their deceased family members or as Personal Representative of their deceased family members, Plaintiffs

AND: ISLAMIC REPUBLIC OF IRAN, ISLAMIC REVOLUTIONARY GUARD CORPS also known as ARMY OF THE GUARDIANS OF THE ISLAMIC REVOLUTION also known as IRANIAN REVOLUTIONARY GUARD CORPS, IRANIAN ARMED FORCES also known as ARMED FORCES OF THE ISLAMIC REPUBLIC OF IRAN, ALI KHAMENEI also known as SUPREME LEADER OF IRAN, MOHAMMAD BAGHERI also known as MOHAMMAD- HOSSEIN AFSHORDI, HOSSEIN SALAMI, SEYYED ABDOLRAHIM MOUSAVI and AMIR ALI HAJIZADEH, Defendants

BEFORE: Justice D.G. Stinson

COUNSEL: Mark Arnold and Jonah Arnold, for the Plaintiffs No one for the Defendants

HEARD: In Writing

Endorsement on Motion for Default Judgment

Introduction

[1] On January 8, 2020, shortly after takeoff from Tehran’s international airport, Ukraine International Airlines Flight PS 752, a Boeing 737-800 passenger aircraft, was struck by two surface-to-air missiles fired by the Iranian Islamic Revolutionary Guard Corps. Minutes later the plane crashed, killing all 176 persons aboard.

[2] In this action the plaintiffs, who are family members of individuals who perished in the crash, claim compensation arising from the incident. They assert that the defendants are responsible for an act of terrorism that resulted in the downing of the plane and are jointly and severally responsible for the harm caused and the losses suffered. On their own behalf they seek damages under the Family Law Act, RSO 1990, c F.3 (“FLA”); on behalf of the estates of their deceased family members they seek damages for those individuals’ pain and suffering and an award of punitive damages. The action has not been defended and thus the plaintiffs have sought default judgment against the defendants.

Procedural background

[3] This is the second identical default proceeding brought before this Court arising from the shooting down by the defendants of Flight PS 752. The defendants also did not defend the first proceeding. Based on the deemed admission of the facts alleged in that case and following a detailed review of the extensive evidence filed by the plaintiffs and applicable legal principles, Justice Belobaba issued a liability decision on May 20, 2021. He determined that the shooting down of the aircraft was an intentional act of terrorism under the laws of Canada and found liability on all defendants. See: Zarei v. Iran, 2021 ONSC 3377 (the “Liability Decision”).

[4] On December 31, 2021, Justice Belobaba issued a decision addressing the Zarei plaintiffs’ damages claims. The Court awarded a total of $107,000,000 in damages to the five plaintiff families. See: Zarei v. Iran, 2021 ONSC 8569 (the “Damages Decision”).

[5] This separate action in Smith was commenced on January 6, 2022, just prior to the expiry of the statutory limitation period. Six additional families who were not included in the Zarei action issued a Statement of Claim against the same defendants for the same relief as in Zarei. The factual allegations that it contains regarding the conduct of the defendants are identical to those in the Zarei Statement of Claim. The second proceeding is titled Smith et al. v. Iran et al. Smith is a pseudonym for the plaintiff family members of the crash victims who fear reprisals from the defendants. In an Order dated January 25, 2022, Justice Myers consolidated both actions.

[6] The plaintiffs in Smith brought a motion pursuant to Rule 59.06 to amend the original default judgment to include their claims. In an Endorsement dated April 4, 2022, Justice Vermette declined to do so and set out procedural steps for the Smith claimants to follow. Those steps have now been completed.

[7] On May 17, 2022, the Statement of Claim in Smith was served on the defendants by the Attorney General for Canada pursuant to Section 9 of the State Immunity Act, RSC 1985, c.S18. The defendants in Smith have not defended the action and have been Noted in Default pursuant to the Order of Justice Vella dated October 8, 2022. The Smith plaintiffs now seek default judgment and damages on the same grounds as the Court based its decisions in Zarei.

Preliminary issues

[8] This matter came before me as a motion in writing. During the course of my review and over a period of several months, I raised with plaintiffs’ counsel a series of questions and concerns regarding the relief sought, the procedural steps taken, and the sufficiency of the materials filed. In turn, this led to a series of case conferences with plaintiffs’ counsel, and the filing of supplementary motion materials.

[9] As part of the supplementary motion materials, plaintiffs’ counsel sought a formal order sealing the court file and anonymizing the names of the plaintiffs and the victims in order to protect their identities so as to avoid potential retribution against them and their family members by the defendants. Additionally, plaintiffs’ counsel sought an order to amend the statement of claim in order to plead with particularity the factual basis upon which the named plaintiffs had and have legal authority to represent the victims. I will deal with these procedural issues before I turn to the merits of the request for default judgment.

Sealing the court file and anonymizing the names of the parties

[10] As discussed by the Supreme Court of Canada in Sherman Estate v. Donovan, 2021 SCC 25, court proceedings are presumptively open to the public. There are, however, discretionary limits on court openness to protect other public interests, where they arise. One such important public interest is protecting individuals from physical harm.

[11] The defendant, Islamic Republic of Iran, is a designated foreign state supporter of terrorism under the Justice for Victims of Terrorism Act, SC 2012 c.1 s. 2 and the State Immunity Act. Iran is broadly recognized as an authoritarian regime in which individuals who protest or are otherwise publicly critical of the government or the conduct of government forces are frequently subject to violent sanctions by the Iranian government. The very act which is the subject of this lawsuit, namely, the downing of Flight PS 752, is but one example of the disregard for human life, for which the government of Iran has been responsible.

[12] As it emerged, according to counsel, due to the foregoing concerns two of the family members named by pseudonym in the title of proceedings, Sam Smith and Sally Smith, decided that they did not wish to continue to advance their claims. This default judgment endorsement therefore does not contain any substantive relief in their favour.

[13] The affidavits filed on behalf of the other plaintiffs in support of their request for an order to seal the court file and to permit them to advance their claims via pseudonyms include information that demonstrates that family members of the plaintiffs and the victims still reside in Iran, where they are subject to the actions of the Iranian government. It is a reasonable inference to conclude that individuals who remain in Iran would be at risk of serious harm or even death, at the instance of the Iranian government, should it become known that the relief claimed in this litigation is being sought on their behalf. In my view, the evidence adequately supports the conclusion that the feared harm is particularly serious, and the order sought is necessary to address the risk. As a matter of proportionality an order sealing the court file and anonymizing the names of the plaintiffs is necessary to address and the only suitable way to avoid the risk.

[14] I therefore conclude that this is a suitable case to make an order sealing the court file in this proceeding pursuant to s.137(2) of the Courts of Justice Act, RSO 1990, c.C43. As well, I grant leave to the plaintiffs to prosecute the action by way of pseudonyms.

[15] As a condition for granting the above relief, I direct plaintiffs’ counsel to file with the Court in a sealed envelope unredacted copies of all materials, that will reflect the actual names and identities of all parties. As well, I direct plaintiffs’ counsel to file in the unsealed portion of the Court file redacted versions of all documents so that they may be accessed as part of the public record.

Standing of the plaintiffs to bring this action

[16] A further issue I raised with plaintiffs’ counsel was the standing of the named plaintiffs to advance claims on behalf of the estates of the deceased victims. Based on the initial materials, as far as I could ascertain only one plaintiff was an actual personal representative of one of the deceased victims, having been named as executor and estate trustee under that person's will.

[17] As a general proposition, only a lawfully designated or appointed personal representative of a deceased person may advance a claim for harm suffered by that individual prior to their death. With the exception noted above, neither the Statement of Claim, nor the affidavits of the plaintiffs explained or articulated the basis upon which the named plaintiffs had authority to advance claims on behalf of the victims who died in the shooting down of the aircraft. In response to my concerns, plaintiffs’ counsel sought to regularize the proceedings, relying on rule 9.03(2) and (3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provide that a proceeding on behalf of a person who has died may be continued by a litigation administrator appointed for the purpose of the proceeding.

[18] The evidence now filed on behalf of the individual plaintiffs establishes appropriate grounds for them to be appointed as litigation administrators for the estates of the various parties whom they represent. I therefore make an order granting that relief. I also make an order amending the statement of claim as proposed in Schedule A to the plaintiffs’ notice of motion dated June 8, 2023.

Conclusion and disposition on procedural issues

[19] The foregoing analyses and dispositions deal with the procedural aspects of this litigation that must be regularized before any substantive relief may be granted. I direct plaintiffs’ counsel to prepare the necessary orders for my signature, one dealing with the sealing of the court file and the anonymization of the parties, and a second dealing with the granting of the relief under rule 9 and the amendment of the Statement of Claim. Once those orders have been issued, plaintiffs’ counsel should prepare unredacted versions of the relevant documents to be filed as part of the sealed court file and redacted versions to be included in the public court file.

[20] On the assumption that those steps will be completed as required I will now proceed to deal with the substantive aspects of the Smith plaintiffs’ motion for default judgment.

Liability - Evidence and Analysis

[21] Apart from the identities and personal circumstances of the plaintiffs and the victims on whose behalf the claims are made, this case involves identical facts to those that formed the basis of the claims in Zarei. The allegations made in the Statement of Claim and the evidence filed by the plaintiffs and relied upon in support of the claims are also identical. The legal issues are identical. All of these facts, evidence and legal issues were the subject of extensive review and analysis in the detailed reasons prepared by Justice Belobaba. I agree completely with his findings, his analysis, and his conclusions as expressed in his Liability Decision at 2021 ONSC 3377.

[22] Ordinarily, a separate action involving separate claimants being decided by a separate judge would require a separate analysis and separate decision. In this case, however, these two cases involve completely identical facts, evidence, and issues. I can find no aspect of the Liability Decision of Justice Belobaba with which I disagree or on which I would reach conclusions different from his. I see no need to prepare written reasons that would merely restate those he has already released on the subject of liability.

[23] I therefore adopt and restate as if incorporated herein the summary of the evidence, findings of fact, legal analysis and conclusions in relation to liability contained in the reasons for decision of Justice Belobaba reported at 2021 ONSC 3377.

[24] For those reasons I conclude that the plaintiffs in Smith, as did the plaintiffs in Zarei, have established that the shooting down of Flight 752 by the defendants was an act of terrorism and constitutes “terrorist activity” under the State Immunity Act, the Justice for Victims of Terrorism Act and the provisions of the Criminal Code. The Smith plaintiffs are therefore entitled to default judgment on liability.

Damages - Evidence and Analysis

[25] In his Damages Decision Justice Belobaba prepared a detailed legal analysis of the damage claims advanced in the Zarei case: see 2021 ONSC 8569. That decision address the nature of the claims advanced, the viability of those claims and the quantum appropriate in each case. He concluded that only three of the claims being advanced are viable under Ontario law on the facts in these cases: (i) the surviving family members’ claims for loss of guidance, care and companionship under s.61 of the FLA; (ii) the estates’ claims for pain and suffering; and (iii) the estates' claims for punitive damages. I agree with his analysis in relation to these points and once again adopt his reasons as my own.

Loss of guidance, care and companionship.

[26] Under s.61 of the FLA damages recoverable may include amounts to compensate for the loss of guidance, care and companionship that the claimant might reasonably have expected to receive from the person if the injury or death had not occurred. Such awards may be made in favour of spouses, children, grandchildren, parents, grandparents, brothers and sisters of the person harmed.

[27] The analysis of Justice Belobaba led him to conclude that a fair and reasonable compensatory award for loss of guidance, care and companionship was in the range of a maximum of $200,000 for each of the eligible plaintiffs. I largely agree with and adopt by reference his analysis and conclude that that sum is an appropriate maximum amount to award. Specific sums for each claimant should be based upon the nature of their relationship with the deceased.

[28] I therefore award the following amounts for loss of guidance, care and companionship for the indicated individuals:

a) John Smith lost his two siblings. I award him FLA damages of $150,000 for each, for a total of $300,000.

b) Bill Smith lost his daughter, age 22 years old. I award him FLA damages of $200,000.

c) Jane Smith lost her spouse. I award her FLA damages of $200,000.

d) Mary Smith lost her brother, her sister-in-law and two nieces. I award her FLA damages for the loss of her brother in the amount of $150,000. No awards are available under s.61 on account of the loss of a sister-in-law or a niece.

The estates’ claims for pain and suffering

[29] Justice Belobaba introduced this subject as follows (at paras. 28 and 29) of the Damages Decision:

[28] In their capacity as estate representatives under s. 38 of the Trustee Act, all five plaintiffs advance claims for the pain and suffering endured by the decedents as Flight PS 752 sustained two missile strikes and plummeted to earth. The missile strikes were spaced about 30 seconds apart. It took another four minutes for the aircraft to descend and crash, killing all onboard.

[29] How exactly should a court monetize the terror that both crew and passengers must have felt after being hit by the first missile? And 30 seconds later, by a second missile? And then over the next four minutes as the plane hurled towards earth and inevitable death?

[30] The conclusion he reached was that an award of $1,000,000 for each deceased victim was appropriate. I agree with and adopt his analysis and conclusions. I therefore award the estates of each victim $1,000,000 for pain and suffering.

The estates' claims for punitive damages

[31] The Damages Decision of Justice Belobaba in the Zarei action ordered the defendants to pay the plaintiffs punitive damages. After conducting a thorough review of the applicable principles, he awarded $100 million, to be shared by the estates of the six deceased in that case, or $16,666,666.66 each. Once again, I find his analysis to be persuasive and, if called upon to address this subject as a matter of first instance, I would arrive at the same conclusion. I therefore adopt those reasons and incorporate them by reference in this decision.

[32] That does not end the analysis, however. Given that the Zarei Damages Decision has already awarded punitive damages and thus the conduct of the defendants has already been sanctioned by the Court through that award, can the Court make a further award of punitive damages in the Smith action arising from the same conduct? For the reasons that follow, I have concluded that it can and should.

[33] The cause of action in both Smith and Zarei is the separate independent tort of wrongful death committed by the defendants against each deceased and their surviving family. The shooting down of Flight PS 752 is the event, it is not the cause of action. If there had been no passengers on the ill-fated airplane there would be no passenger cause of action.

[34] The shooting down of Flight PS 752 caused 176 individual wrongful deaths. Even though those deaths arose from the same event, there are 176 wrongful death causes of action. The punitive damages award in Zarei served as a sanction only in relation to the deaths of the Zarei parties.

[35] An award of punitive damages against the defendants in Smith is intended to punish, denounce, and deter. Such a claim in this action is independent of the damages awarded in Zarei because it relates to the torts committed against each of the Smith plaintiffs.

[36] The issue is whether punitive damages in Zarei fully punished the defendants for their wrongful conduct in killing 176 people, including the Smith plaintiffs. The Zarei award of punitive damages addressed only the wrongs committed in that action. Put another way, so far this Court has only punished the defendants for the torts committed against the Zarei plaintiffs. Unless there is a punitive damages award in Smith the defendants will remain unpunished for what they have done to the Smith victims. If the defendants in Zarei had to pay only punitive damages for the wrong committed against those victims that result would be grossly unjust to the Smith plaintiffs.

[37] Therefore, adopting the rationale and reasons of Belobaba J. in Zarei, I award the following amounts for punitive damages:

a) To the estates of the two siblings of John Smith I award punitive damages of $16,666,666.66 each.

b) To the estate of the daughter of Bill Smith I award punitive damages of $16,666,666.66.

c) To the estate of the spouse of Jane Smith I award punitive damages of $16,666,666.66.

d) To the estates of the brother, sister-in-law and two nieces of Mary Smith I award punitive damages of $16,666,666.66 each.

Summary and Disposition

[38] For the foregoing reasons, I award the plaintiffs the following amounts payable by the defendants, jointly and severally:

a) To John Smith, FLA damages of $300,000;

b) To the estates of John Smith’s two siblings, $1,000,000 each, for pain and suffering;

c) To the estates of John Smith’s two siblings, $16,666,666.66 each, for punitive damages;

d) To Bill Smith, FLA damages of $200,000;

e) To the estate of Bill Smith’s daughter, $1,000,000 for pain and suffering;

f) To the estate of Bill Smith’s daughter, $16,666,666.66 for punitive damages;

g) To Jane Smith, FLA damages of $200,000;

h) To the estate of Jane Smith’s spouse, $1,000,000 for pain and suffering;

i) To the estate of Jane Smith’s spouse, $16,666,666.66 for punitive damages;

j) To Mary Smith, FLA damages of $150,000;

k) To the estates of Mary Smith’s brother, sister-in-law and two nieces, $1,000,000 each, for pain and suffering;

l) To the estates of Mary Smith’s brother, sister-in-law and two nieces, $16,666,666.66 each, for punitive damages.

Final Directions

[39] In relation to costs, I direct plaintiffs’ counsel to submit a bill of costs no later than August 31, 2023, failing receipt of which the plaintiffs shall be deemed to have foregone any award of costs. I further direct plaintiffs’ counsel to submit by that date draft orders and a formal judgment (both in redacted and unredacted form) incorporating all the dispositions and directions contained in these reasons.

Stinson J. Date: July 31, 2023