



COURT OF APPEAL FOR ONTARIO

CITATION: Tracy v. Iran (Information and Security), 2017 ONCA
    549

DATE: 20170630

DOCKET: C62403, C62404, C62405, C62406 and C62407

Hoy A.C.J.O., Blair and Hourigan JJ.A.

BETWEEN

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

Applicants (Respondents)

and

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

Respondents (Appellants)

AND BETWEEN

Estate of Marla Bennett, Michael Bennett,

Linda
    Bennett and Lisa Bennett

Plaintiffs
    (Respondents)

and

The Iranian Ministry of Information and Security

and
    the Islamic Republic of Iran

AND BETWEEN

Chad Phillip
    Holland

Plaintiff
    (Respondent)

and

The Islamic Republic of Iran,

the Iranian Ministry of Information and Security

and
    the Iranian Revolutionary Guard Corps

Defendants
    (Appellants)

AND BETWEEN

American Center for Civil Justice, Inc., as Assignee

For
    Christine Higgins

Plaintiff
    (Respondent)

and

The Iranian
    Revolutionary Guard Corps

Defendant
    (Appellant)

AND BETWEEN

Katie L. Marthaler, Herman C. Marthaler, III,

Matthew
    Marthaler, Kirk Marthaler, Richard W. Wood, Kathleen

M.
    Wood, Shawn M. Wood, Francis Heiser, Denise M. Eichstaedt, Anthony W.

Cartrette, Lewis W. Cartrette, Thaddeus C. Fennig,
    Catherine Fennig, Paul D. Fennig, Mark Fennig, Catherine Adams, Mary Young,
    Daniel Adams, Elizabeth Wolf, Patrick D. Adams, John E. Adams, William Adams,
    Michael T. Adams, Christopher R. Nguyen, Bridget Brooks, James R. Rimkus, Anne
    M. Rimkus, Steve K. Kitson, Nancy A. Kitson, Lawrence E. Taylor, Vickie L.
    Taylor, Starlina D. Taylor, Dawn Woody, Bernadine R. Beekman, Tracy M. Smith,
    Jonica L. Woody, Timothy Woody, Ibis S. Haun, Senator Haun, Milagritos
    Perez-Dalis, Cecil H. Lester, Sr., Judy Lester, Cecil H. Lester, Jr., Jessica
    F. Lester, Shyrl L. Johnson, Kevin Johnson, Jr., Nicholas A. Johnson, A Minor,
    By His Legal Guardian Shyrl L. Johnson, Michael Morgera, Thomas Morgera, Marie
    R. Campbell, Bessie A. Campbell, James V. Wetmore, George M. Beekman, Che G.
    Colson, Bruce Johnson, Estate Of Brent E. Marthaler, Estate Of Sharon
    Marthaler, Estate Of Michael Heiser, Estate Of Gary Heiser, Estate Of Patrick
    P. Fennig, Estate Of Christopher Adams, Estate Of Thanh Van Nguyen, Estate Of
    Sandra M. Wetmore, Estate Of Kendall Kitson, Jr., Estate Of Kendall K. Kitson,
    Sr., Estate Of Nancy R. Kitson, Estate Of Joshua E. Woody, Estate Of Leland
    Timothy Haun, Estate Of Christopher Lester, Estate Of Kevin J. Johnson, Sr.,
    Estate Of Millard D. Campbell, Estate Of Peter J. Morgera, Estate Of Justin R.
    Wood, Estate Of Earl F. Cartrette, Jr., Estate Of Brian Mcveigh, Estate Of
    Joseph E. Rimkus, Estate Of Jeremy A. Taylor, Estate Of Laura E. Johnson, Paul
    Alexander Blais, Estate Of Curtis Taylor, Maria Taylor, Cielito Valencia, Luz
    Southard, Steven Wolfe, Sonya Turner Broadway, Estate Of Betty Welch, Gerard
    Welch, Michael Welch, Richard Paul Brewer, Joyce Louise Leydet, Diana
    Campuzano, Avi Elishis, Gregg Salzman, Donna Marie Holland, James Robert
    Holland, Elisa Nili Cirilo Peres Ben-Rafael, Yonatan Mishael Benrafael, A Minor
    By His Litigation Guardian Elisa Nili Cirilo Peres Ben-Rafael, Ralph Goldman,
    Noa Ruth Ben-Rafael, Judith Goldman Baumgold And Naomi Goldman

Plaintiffs
    (Respondents)

and

The Islamic Republic of Iran, the Iranian Ministry of
    Information and Security,

And the Iranian Revolutionary Guard Corps

Defendants
    (Appellants)

Colin Stevenson and J. Daniel McConville for the
    appellants

John Adair and Gordon McGuire for the respondents, Tracy
    and Bennett

John B. Laskin, Sarah Whitmore, Eliot Che for the
    respondents, Marthaler, Holland and American Center for Civil Justice, Inc.

Jacqueline Dais-Visca, and Joseph Cheng for the
    intervener, the Attorney General of Canada

Heard: April 18, 2017

On appeal from the orders of Justice Glenn A. Hainey of
    the Superior Court of Justice, dated June 9, 2016, with reasons reported at
    2016 ONSC 3759, 400 D.L.R. (4th) 670.

Hourigan J.A.:

A.

INTRODUCTION

[1]

In 2012, Parliament enacted
the
Justice
    for Victims of Terrorism Act
,

S.C.
    2012, c. 1 (
JVTA
), which was part of the Government of Canadas
    effort to strengthen its response to terrorism. The legislation granted victims
    of terrorism the ability to sue terrorists and foreign states that have
    materially contributed to terrorism and terrorist-sponsored attacks.

[2]

The stated purpose of the
JVTA

was 
to deter terrorism by establishing a
    cause of action that allows victims of terrorism to sue perpetrators of
    terrorism and their supporters (s. 3). The
JVTA
provides for a direct cause of
    action (s. 4(1)) and an ability to sue on a foreign judgment obtained for loss
    or damage suffered as a result of terrorist activities (s. 4(5)).

[3]

The respondents all hold
    judgments issued by courts in the United States for the sponsorship of
    terrorism by one or more of the appellants  the Islamic Republic of Iran, the
    Iranian Ministry of Information and Security and the Islamic Revolutionary
    Guard Corps, a military wing of that ministry (collectively, Iran).  The
    respondents sued in Ontario to enforce their judgments under the provisions of
    the
JVTA.

[4]

Iran did not defend the
    respondents enforcement actions, and ultimately a series of judgments and
    enforcement orders were granted. Iran then moved unsuccessfully to set aside
    the judgments and orders in a series of motions before the motion judge.

[5]

On these appeals, Iran makes the
    same submissions it made before the motion judge, arguing that he erred on
    every legal issue before him. I am satisfied that if these submissions were
    accepted they would have the effect of rendering enforcement actions under the
JVTA
a cumbersome and largely unworkable process that would provide very limited
    rights of recourse to victims of terrorism.
Indeed, Iran
    advances several arguments that appear designed solely to frustrate
    Parliaments intention and the proper operation of the
JVTA.

[6]

That result is, of course,
    contrary to the stated purpose of the
JVTA
and the clear wording of the statute.

Accordingly, I would dismiss the appeals, save for judgments
    based on acts of terrorism that occurred prior to January 1, 1985. Although the
JVTA
is expressly retroactive,
    it does not apply prior to that date, and those judgments cannot be enforced.

B.

BACKGROUND

(1)

The Terrorist Acts

[7]

In
    these reasons, I will refer to the respondents as follows: the Tracy
    respondents; the Bennett respondents; the Holland respondent; the
    American Center for Civil Justice respondent; and the Marthaler group of
    respondents.

[8]

The respondents were
    awarded significant monetary damages, including substantial punitive damages.
    The amount of damages from all the American judgments that has been unpaid by
    Iran totals approximately US$1.7 billion. The judgments arise from several
    different terrorist attacks. I will describe them briefly in chronological
    order because, as I will explain later in these reasons, the timing of the
    terrorist attacks is important.

[9]

The Holland respondents claim
    arises from the suicide bombing carried out by Hezbollah against the U.S.
    Marine Barracks in Beirut, Lebanon on October 23, 1983. The attack killed 241
    American servicemen, including Petty Officer Holland. The U.S. court found that
    Iran provided material support, including financing and training, to Hezbollah.
    The court awarded damages against Iran for the death of Holland on February 1,
    2006.

[10]

The claims of the Marthaler group
    of respondents arise from four separate attacks. The attack that was earliest
    in time was the September 20, 1984 bombing of the U.S. Embassy in East Beirut
    by the terrorist organization Hezbollah. The explosion killed 14 people,
    including Army Warrant Officer Kenneth V. Welch. U.S. Marine Officer Richard
    Paul Brewer was knocked unconscious and wounded. The U.S. court found that Iran
    provided Hezbollah with military training and financial support for the
    bombing. It awarded damages for Welchs death on October 15, 2007 and Brewers
    injuries on October 15, 2009.

[11]

The claim of the American Center for
    Civil Justice respondent arises from the hostage taking and killing of
    Lieutenant Colonel William Higgins in Lebanon. On February 17, 1988, Lieutenant
    Colonel Higgins was kidnapped by the Organization of the Oppressed on Earth,
    a named used by Hezbollah. He was held hostage for 18 months under cruel and
    primitive conditions. When Hezbollahs demands were not met, the terrorists
    killed Lieutenant Colonel Higgins and released a videotape of his body hanging
    from the neck. The American court found that Iran had provided material support
    to Hezbollah by means of training and providing equipment and awarded damages
    for his death on September 21, 2000.

[12]

The Tracy respondents claims
    arise from the hostage taking and captivity of Joseph Cicippio and Edward Tracy
by Hezbollah in 1986. Mr. Cicippio was
    ultimately released and returned to the United States in December 1991, but not
    before his captors broadcast an intention to kill him and had Mr. Cicippio read
    a farewell message to his family on television. Mr. Tracy, who had been chained
    to Mr. Cicippio almost constantly, also survived his abduction, but was badly
    beaten during his captivity. He too was not released until 1991. The American
    court made findings that Iran provided material support to Hezbollah and entered
    judgments against Iran on August 21, 2003 with respect to Mr. Tracy and October
    7, 2005 with respect to Mr. Cicippio.

[13]

The other three attacks to which
    the claims of the Marthaler respondents relate are described at paras. 11-13,
    20-22 and 23-25 of the motion judges reasons. Chronologically, they occurred
    in 1992, 1996 and 1997. They all involved bombings by terrorist organizations
    that the U.S. court found that Iran provided material support and funding to
    for the purpose of carrying out the bombings. They all resulted in awards of
    monetary damages to specific claimants within the Marthaler group of
    respondents.

[14]

Finally, the Bennett respondents
    claims arise from the bombing of the Frank Sinatra Cafeteria at Hebrew
    University in Jerusalem, Israel on July 31, 2002. Marla Bennett, who was a 24-year-old
    student from California enrolled at the university, was killed when operatives
    of the terrorist organization Hamas bombed the cafeteria. The American court found
    that Iran had provided significant support to Hamas and awarded Ms. Bennetts estate
    damages on August 30, 2007.

(2)

The Canadian Legislation
[1]


[15]

The
JVTA
created a civil cause of action for claims against supporters of terrorism,
    where the loss or damage is suffered as a result of a foreign states
    activities in the nature of acts punishable under the terrorism offences in the
Criminal Code
. The statutory cause of action is found in s.
    4(1):

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
.

[16]

Section 4(5) of the
JVTA
provides for recognition of foreign judgments that are in respect of terrorism
    claims:

(5)
A court of
    competent jurisdiction must recognize a judgment of a foreign court that, in
    addition to meeting the criteria under Canadian law for being recognized in
    Canada, is in favour of a person that has suffered loss or damage referred to
    in subsection (1). However, if the judgment is against a foreign state, that
    state must be set out on the list referred to in subsection 6.1(2) of the
State Immunity Act

for the judgment to be recognized.

[17]

At the same time as the
    enactment of the
JVTA
,
    Parliament also amended the
State
    Immunity Act
,

R.S.C
    1985, c. S-18 (
SIA
) to create an exception to the general rule
    of state immunity from court jurisdiction and enforcement. The new statutory
    exception applies only to states that are listed as supporters of terrorism by
    the Governor in Council pursuant to s. 6.1(2) of the
SIA
. On September 7, 2012, Canada listed Iran as
    a foreign state that supports terrorism pursuant to s. 6.1(2). That same day,
    Canada closed its embassy in Tehran, suspended diplomatic relations with Iran
    and expelled Iranian diplomats from Canada.

[18]

Section 6.1(1) of the
    amended
SIA
provides:

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.

(3)

Enforcement Proceedings

[19]

The
Marthaler, Holland and American Center for Civil Justice

respondents
    served statements of claim on Iran to recognize and enforce their American
    judgments in Ontario. Iran did not defend the actions and three separate default
    judgments were signed by Corbett J. on October 3, 2014.

[20]

The
Tracy respondents
commenced proceedings in Nova Scotia for
    an order recognizing their U.S. judgments. Iran did not defend the proceeding.
    The Nova Scotia Supreme Court granted an order dated March 22, 2013 recognizing
    those U.S. judgments (the Nova Scotia Order).

[21]

The Tracy respondents then
    commenced an application in Ontario under the
Reciprocal Enforcement of
    Judgments Act,
R.S.O. 1990, c. R.5 (
REJA
), for registration of
    the Nova Scotia Order. Chapnik J. granted an order
ex parte
on May 22, 2013,

registering the Nova
    Scotia Order as an order of the Ontario court (the Recognition Order).

[22]

In January 2014, the Tracy respondents
    moved for a declaration that certain Iranian assets, including funds from a Bank
    of Nova Scotia account, funds from a Royal Bank of Canada account, a property
    at 290 Sheppard Avenue West in Toronto and a property at 2 Robinson Avenue in
    Ottawa (collectively, the Iranian Assets) are beneficially owned by Iran and
    thus available for execution. D.M. Brown J. (as he then was) granted the order
    on March 17, 2014.

[23]

The
Bennett
respondents commenced an action on September 13,
    2012 for recognition and enforcement of their U.S. judgment in Ontario, the day
    after the
JVTA
came into force. They obtained an
ex parte Mareva
injunction
    from Allen J. on October 11, 2012 in relation to 290 Sheppard Avenue and 2
    Robinson Avenue. They obtained a continued
Mareva
injunction from E. MacDonald
    J. on October 31, 2012.

[24]

On February 1, 2013, the
    Department of Foreign Affairs issued a certificate certifying that a diplomatic
    mission of the Islamic Republic of Iran was established in 1956. The
    certificate listed the addresses of the mission, which did not include 290
    Sheppard Avenue and 2 Robinson Avenue. The listed premises were noted as
    continuing to enjoy the privileges and immunities under the
Foreign
    Missions and International Organizations Act
,
    S.C. 1991, c. 41 (
FMIOA
).

[25]

On August 13, 2013, the Department
    of Foreign Affairs issued an amended certificate. This certificate listed real
    properties and certain bank accounts, all of which were said to continue to
    enjoy the privileges and immunities under the
FMIOA
. None of the Iranian Assets was included in the
    amended certificate.

[26]

On September 4, 2013, the
    Department of Foreign Affairs wrote to counsel for the Tracy respondents and
    provided a list of Iranian diplomatic and non-diplomatic properties that it had
    identified. The 2 Robson Avenue and the Bank of Nova Scotia and Royal Bank of
    Canada accounts were listed in the non-diplomatic section of the list.
    Reference to the 290 Sheppard Avenue property was not found in either list. The
    Department of Foreign Affairs also advised in the letter that a list of Iranian
    properties would be included on its website in the near future.

[27]

In January 2016, the appellants
    brought a motion before the motion judge seeking to set aside, vary or stay
    each of the following: (1) the Recognition Order and all related writs of
    seizure and sale; (2) the order of D.M. Brown J., finding that the Iranian
    Assets were subject to execution, and any writs of seizure and sale flowing
    from the order; (3) the judgments of Corbett J. enforcing the U.S. judgments in
    the Holland, Marthaler and American Center for Civil Justice claims; and (4)
    the order of E. Macdonald J. continuing the
Mareva
injunction in
    relation to the Bennett respondents claims.

C.

Decision Below

[28]

The motion judge dismissed the
    appellants motions. He also heard and granted a motion for summary judgment
    brought by the Bennett respondents for recognition of their American judgment.
    While the details of his reasons will be considered in the analysis section of
    my reasons below, in order to frame the issues on the appeal, I will touch upon
    the motion judges principal holdings in this section.

[29]

The motion judge held that the
JVTA
operates independently from the
SIA
in respect of a plaintiffs entitlement to commence
    proceedings against a state sponsor of terrorism. In his view, the legislation
    was intended to provide a free-standing procedural and substantive mechanism
    for a plaintiffs recovery of losses caused by the acts of state sponsors of
    terrorism.

[30]

The motion judge concluded that s.
    4(5) of the
JVTA
does not
    require a plaintiff to 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.

[31]

With respect to the reference in
    s. 4(1) of the
JVTA
to the date
    of January 1, 1985, the motion judge concluded that the date refers to when the
    losses were suffered and not the date that a terrorist attack occurred. Accordingly,
    he found that even if a terrorist attack predated January 1, 1985, as long as
    the losses or damages continued to flow after that date, an action can be
    brought under s. 4(1) of the
JVTA
.

[32]

The motion judge rejected Irans
    argument that s. 4(1) requires the respondents to prove beyond a reasonable
    doubt the commission of a specific criminal offence under the
Criminal
    Code
. Rather, the reference to the
    provisions of the
Criminal Code
contained in s. 4(1) of the
JVTA
was meant to define the type of conduct that constitutes an act of terrorism
    under the
JVTA
,

and a claim under s. 4(1) need only be proved on the
    civil standard of a balance of probabilities. The motion judge further held that
    he was required to accept the American courts findings of fact and should not
    adjudicate the merits of the respondents claims.

[33]

The motion judge also concluded that
    the respondents enforcement proceedings were not statute barred because the
    limitation period did not begin to run until a cause of action and a defendant
    who is capable of being sued existed. Thus, he concluded that the respondents
    claims arose, at the earliest, on September 7, 2012, when Iran was added to the
    list of state sponsors of terrorism under the
SIA
.

[34]

In finding that the American
    judgments meet the criteria for being recognized under Canadian common law, the
    motion judge rejected the argument advanced by Iran that the judgments violate
    international law. He concluded that, in assuming jurisdiction over the
    respondents claims pursuant to
the
Foreign Sovereign Immunities Act, 1976
, 28 U.S.C. 97 (the 
FSIA
), the American courts did so on the
    same basis as a Canadian court would pursuant to a similar statutory scheme in
    Canada, namely, the
JVTA
. He further found that the fact that the American judgments
    awarded damages greatly in excess of what would likely be awarded in Canada
    does not offend any public or moral interest in Canada such that the judgments
    would be rendered unenforceable in Canada.

[35]

The motion judge rejected Irans
    submission that it is entitled to immunity from execution of the U.S. judgments
    recognized in Ontario. He found
that the
    date of the respondents attempted execution against the Iranian Assets is the
    appropriate date to consider in determining whether the Iranian Assets can be
    attached and executed against. The dates of the attempted enforcement by the respondents
    against the Iranian Assets post-dated the enactment of s. 12(1)(d) of the
SIA,
which removed immunity from execution. Further,
he found that diplomatic immunity cannot be asserted
    to avoid execution in Canadian court proceedings unless the Minister of Foreign
    Affairs (the Minister) has recognized the diplomatic status of the property
    sought to be attached.

[36]

Iran submitted that Nova Scotia
    was not a proper forum for the Tracy respondents to apply to have their
    American judgments recognized under the

JVTA

because Iran has no assets, is not ordinarily resident
    and does not conduct business in Nova Scotia. The motion judge rejected this
    argument, finding that these respondents were
    entitled to apply in Nova Scotia to have their American judgments recognized in
    that province. According to the motion judge, the Supreme Court of Canada's
    decision in
Chevron Corp. v. Yaiguaje
, 2015 SCC 42, [2015] 3 S.C.R. 69, establishes that it
    is not necessary to have a real and substantial connection between Nova Scotia
    and the proceeding to enforce the American judgments. Accordingly, he declined
    to set aside the Recognition Order.

[37]

The motion judge released a costs
    endorsement on February 8, 2017. He ordered that Iran pay costs as follows: to
the Holland, Marthaler and American Center for Civil
    Justice respondents, costs of $142,970.85; to the
Tracy
respondents, costs of $96,425.73; and to the Bennett respondents, costs of
    $62,510.73.

D.      ISSUES

[38]

The issues raised on these appeals
    and my conclusions on each issue may be summarized as follows:

(i) Was
    Irans immunity from the jurisdiction of the Canadian courts removed by the
    JVTA or s. 6.1 of the SIA?

Yes. By virtue of the
JVTA
and the amendments to the
SIA
, Irans state immunity has been lifted with respect
    to its sponsorship of terrorist acts that occurred on or after January 1, 1985,
    but not for sponsorship of terrorist activities that occurred before that date.
    The only proof of the support of terrorism necessary to maintain an enforcement
    action under s. 4(5) of the
JVTA
is the listing of the state sought to be sued under s. 6.1(1) of the
SIA
.  The trial judge properly relied upon the facts
    found in the U.S. judgments, and the respondents were not required to prove the
    commission of a specific criminal offence beyond a reasonable doubt.

(ii) Does
    the JVTA require or permit Canadian courts to recognize the American judgments?

Yes. Subsection 4(5) of the
JVTA
sets forth the process for recognition of the
    American judgments. None of the arguments advanced by Iran defeat recognition.
    There was ample evidence that Irans conduct would be punishable under the
Criminal
    Code
. The claims are not time-barred, as
    the cause of action did not begin to run until Iran was listed under s. 6.1(1)
    of the
SIA
. The American courts
    had jurisdiction to grant the judgments. Finally, recognition of the judgments
    is not contrary to Canadian public policy.

(iii) Did
    the motion judge err when he found that Irans immunity from enforcement or
    attachment was removed by s. 12(1)(d) of the SIA?

No. State immunity from enforcement was stripped from
    Iran because the underlying U.S. judgments were based on Irans support of
    terrorism and the Iranian Assets do not have any cultural or historical value.

(iv) Did
    the motion judge err when he found that Irans bank accounts and two real
    properties were not protected by diplomatic immunity?

No. The time for determination of the exigibility of
    the Iranian Assets is the time of the purported execution. The Minister
    determines the diplomatic status of the Iranian Assets. There was a solid
    evidentiary basis for the motion judge to conclude that the Iranian Assets were
    not protected by diplomatic immunity. The issue of notice of the loss of
    diplomatic immunity is not relevant because, given the existence of
    international sanctions against Iran, notice would have had no practical
    effect.

(v) Did
    the motion judge err by failing to set aside the Recognition Order?

No. Iran missed the statutory deadline to move to set
    aside the Recognition Order. It has not sought leave to extend the deadline or
    offered an explanation as to why the deadline was missed. Irans complaint
    about the manner of service of the Recognition Order is without merit.

(vi) Did
    the motion judge err in his application of the test for setting aside the default
    judgments?

No. The motion judge applied the correct test. Iran
    did not meet its onus in establishing that even a single factor militated in
    favour of setting aside the default judgments. In addition, the interests of
    justice do not support such an order.

(v)
    Did the motion judge err in awarding costs to the respondents?

No. The awarding of costs was consistent with the text
    of both the
JVTA
and the
SIA
.  There is no principled reason why Iran should be
    immune from a costs award. The suggestion otherwise is contrary to binding
    Supreme Court of Canada jurisprudence.

Each of these issues will be considered in greater
    detail in the next section of my reasons.

E.       ANALYSIS

1.

Iranian State Immunity from Canadian Jurisdiction

[39]

On the issue of its immunity, Iran
    makes a general argument regarding statutory interpretation, submitting that
    any interpretation of the
JVTA
and
SIA
that results in the
    removal of its state immunity violates the statutory interpretation
    presumptions of compliance with international law and against retroactivity.  Related
    to that general argument is the specific argument that these presumptions
    prohibit the lifting of state immunity for terrorist attacks that occurred
    prior to January 1, 1985. Iran further submits that the motion judge erred in
    his analysis of this issue when he: (i) refused to require the respondent to
    prove that the state supporter of terrorism exception applied; and (ii)
    relied on s. 83.03 of the
Criminal Code
without considering which crimes are alleged to have been had been
    committed. I will address each of these arguments in turn.

(a)

Statutory Interpretation

[40]

Iran submits that that any
    interpretation of the
JVTA
that
    leads to the lifting of its state immunity violates both the presumption
    against retroactive or retrospective interpretation of statutes and the
    presumption of compliance with international law.

[41]

The presumption against
    retrospective or retroactive statutory interpretation is based on the policy
    that everyone subject to the jurisdiction of Canadian courts is entitled to
    advance knowledge of the laws and the ability to arrange their affairs based on
    settled expectations:
R. v. Bengy
,
    2015 ONCA 397, 325 C.C.C. (3d) 22, paras. 42-43. Iran submits that any non-prospective
    interpretation of the
JVTA
would
    represent a departure from this policy and eliminate a well-established
    immunity relied on by sovereign states in ordering their affairs and in
    international relations generally.

[42]

The presumption of compliance with
    international law presumes that domestic legislation will be interpreted in a
    manner that is consistent with or minimizes contravention of international law:
R. v. Appulonappa
, 2015 SCC 59,
    [2015] 3 S.C.R. 754, at para. 40. State immunity is recognized as a general
    rule of customary international law:
Kazemi Estate v. Islamic
    Republic of Iran
, 2014 SCC 62, [2014] 3
    S.C.R. 176, at para. 38.

[43]

These presumptions are important
    tools in statutory interpretation, but they are subject to rebuttal by
    Parliament through the use of clear statutory language. In short, Parliament
    has the power to make legislation retroactive and it has the power to ignore
    international law.
Parliamentary
    sovereignty requires courts to give effect to a statute that demonstrates such
    an unequivocal legislative intention, absent constitutional concerns, which are
    not raised here.

[44]

The presumption against
    retroactivity can be rebutted either by express words or by necessary
    implication: All that is required is some sufficient indication that the
    legislation is meant to change the law for the past as well as the future:
    Ruth Sullivan,
Sullivan on the Construction of Statutes,
6th ed. (Markham: LexisNexis, 2014), at p. 772.

[45]

Similarly, the
    presumption of compliance with international law is rebutted where Parliament
    expresses a clear intention to default on an international obligation:
R.
    v. Hape
, 2007 SCC 26, [2007] 2 S.C.R. 292,
    at para. 53
.

[46]

A plain reading of the
JVTA,
together with the
    contemporaneous amendments to the
SIA,
establishes that Irans immunity from civil
    proceedings related to terrorism was lifted in September 2012, exposing them to
    liability for acts of terrorism they supported that occurred on or after
    January 1, 1985.

Thus, the presumption of compliance with international
    law and against retroactivity has been rebutted, to this extent, by the clear
    wording of the statutes.

[47]

The question that remains is
    whether Irans state immunity is lifted for terrorist activities that took
    place prior to January 1, 1985.
The issue
    comes down to this question: can an Ontario court recognize a foreign judgment
    against a state sponsor of terrorism where the terrorist attacks in question
    occurred before January 1, 1985 but the resulting harm continued to be suffered
    after that date? Iran says no, the respondents say yes. This question matters
    because the U.S. judgments in favour of two claimants in the Marthaler group of
    respondents, Welch and Brewer, and the respondent Holland arose out of
    Iranian-supported terrorist attacks that occurred before January 1, 1985, but the
    resulting harm continued to be suffered after that date.

[48]

Iran submits that the trial judge
    erred when he decided that judgments based on terrorist attacks prior to 1985
    could be recognized by a Canadian court if the damages continued to be suffered
    after January 1, 1985. It argues that, to the extent that s. 6.1(1) of the
SIA
lifts immunity at all, it is only for terrorist
    activity that took place after January 1, 1985.


[49]

The respondents rely on a
    purposive reading of s. 4(5) of the
JVTA
, which was intended to make it easier to recognize and enforce
    judgments obtained abroad similar to those that could be obtained under s. 4(1)
    of the
JVTA
. Thus, the
    respondents argue that the statutes words should be interpreted broadly, with
    a view to promoting access to justice for victims of terrorism. Therefore, they
    submit that the
JVTA
should be
    read as a standalone basis for stripping state immunity.

[50]

In my view, the motion judge erred
    in law in his interpretation of the
JVTA
and the
SIA
regarding this issue. A careful review of s. 4(5) of the
JVTA
makes clear that Irans state immunity is lifted only
    to the extent permitted by the
SIA
.

[51]

To understand the temporal limits
    of s. 4(5) of the
JVTA
, it is
    first necessary to take a step back and consider the law of state immunity in
    Canada
. Subsection 3(1) of the
SIA
demonstrates
    Canadas acceptance of the well-recognized principle of customary international
    law that states are immune from the jurisdiction of other states; it provides:
    Except as provided by this Act, a foreign state is immune from the
    jurisdiction of any court in Canada.

[52]

The rule in customary
    international law that sovereign states enjoy absolute immunity from the
    jurisdiction of other states has evolved over time, resulting in some
    exceptions to this general rule recognized at common law:
Kuwait
    Airways Corp. v. Iraq
, 2010 SCC
    40, [2010] 2 S.C.R. 571, at para. 13. A number of exceptions have already been
    codified by Parliament in ss. 4-8 of the
SIA
. Today, it is accepted that these statutory
    exceptions are exhaustive and that there are no further exceptions at common
    law:
Steen v. Islamic Republic of Iran
, 2013
    ONCA 30, 114 O.R. (3d) 206, at paras. 24-28.

Bill C-10,
Safe Streets and Communities Act
, S.C. 2012, c. 1, the bill that enacted
    the
JVTA
and amended
    the
SIA
in 2012,
    simply added a new exception for state support of terrorism.

[53]

The Legislative Summary
    of Bill C-10 reflects Parliaments awareness of its obligation under
    international law to respect state sovereignty, but it also evidences a clear
    intention to carve out a new exception to state immunity for the purposes of (i)
    deterring terrorism and (ii) making it easier for plaintiffs to make claims
    against states that support terrorism and that have assets in Canada that could
    assist in satisfying a judgment: see Canada, Parliament,
Bill C-10:
    An Act to enact the Justice for Victims of Terrorism Act and to amend the State
    Immunity Act, the Criminal Code, the Controlled Drugs and Substances Act, the
    Corrections and Conditional Release Act, the Youth Criminal Justice Act, the
    Immigration and Refugee Protection Act and other Acts
, by Laura Barnett, Tanya Dupuis, Cynthia Kirkby,
    Robin MacKay, Julia Nichol and Julie Béchard, Legislative Summary 41-1-C10-E
    (revised February 17, 2012).
The authors of the summary write at p. 14:

Although the JVTA itself does not explicitly state that only
    foreign states on the list established by the Cabinet under the new section
    6.1(2) of the
State Immunity Act
may be sued using the cause of action
    described in section 4(1) of the JVTA, the practical effect of the amendments
    introduced by the
State Immunity Act
is that only listed foreign
    states may be sued. This is because the amendments to the
State Immunity
    Act
create an exception to state immunity only for listed states that
    support terrorism.

[54]

As the motion judge recognized,
    related legislation forms part of the legal context in which an act of
    Parliament is passed: see
ATCO Gas & Pipelines Ltd. v. Alberta
    (Energy & Utilities Board)
, 2006 SCC 4,
    [2006] 1 S.C.R. 140, at para. 59. Parliament must be taken to have been aware
    of the general immunity afforded to states and the need to eliminate that
    immunity to enable plaintiffs to sue states that sponsor terrorism. I would add
    that where there are two possible interpretations of two different statutes
    that relate to the same subject matter, the interpretation that achieves
    maximum harmony between the statutes should be preferred: see
Therrien
    (Re)
, 2001 SCC 35, [2001] 2 S.C.R. 3, at
    para. 121.

[55]

The purpose of the amendments to
    the
SIA
in Bill C-10 was to
    permit actions under the new
JVTA
.
    Parliament recognized that the
JVTA
would be ineffective if it did not carve out an exception to the general rule
    in the
SIA.
Otherwise, the two
    statutes would be in the following conflict: the
JVTA
would purport to create a new cause of action, but
    immunity would not have been lifted under the
SIA
, and s. 3(1) of the
SIA
would hold that Iran was immune from prosecution
    under the
JVTA
. For this reason,
    Parliament amended the
SIA
at
    the same time that it enacted the
JVTA
;
    the two statutes were intended to work in symmetry to permit the effective
    operation of the
JVTA
.

[56]

It cannot be the case that
    Parliament amended the
SIA
to
    permit a cause of action under the
JVTA
but chose to have a more expansive retrospective application in the
JVTA
than in the
SIA
. Such an interpretation would be inconsistent with
    the purpose of the amendments to the
SIA,
which permit actions under the
JVTA
but only to the extent that state immunity is lifted
    by the
SIA
. That interpretation
    would regard state immunity as having been lifted for a broader array of
    conduct under the
JVTA
than is
    permissible under the
SIA
.
    Immunity for the pre-1985 conduct for which damages would be available under
    the
JVTA
would not be lifted
    under the
SIA
, and there would
    be a conflict between the two statutes.

[57]

The respondents submit that Irans
    interpretation is inconsistent with opening words of s. 4(1) of the
JVTA
that the direct cause of action is available to any person
    who has suffered loss or damage in or outside Canada on or after January 1,
    1985 as a result of an act or omission  While the wording of s. 4(1) is
    regrettably not clear, the words relied upon must be read in the context of the
    two interrelated statues.

[58]

To the extent that it could be
    argued that there is some ambiguity, this is an appropriate place to employ the
    presumption of compliance with international law and the presumption against
    retroactivity. The first few words of s. 4(1) of the
JVTA
, which suggest an ability to sue on terrorist actions
    carried out prior to January 1, 1985, do not constitute a sufficiently clear
    intention from Parliament to defeat either presumption.

(b)

Proof of State Sponsorship

[59]

Iran submits that
the motion judge erred when he refused to require the
    respondents to prove that the state supporter of terrorism exception applied
    so as to lift state immunity. Iran says that a claimant must prove not only
    that it was listed under the
SIA
s. 6.1(2) but also that it supported terrorism.

[60]

This submission is contrary to the
    plain language of s. 4(5) of the
JVTA
,
    which provides that a court must recognize a judgment of a foreign court
    where: (i) the criteria under Canadian law for recognition in Canada are met; (ii)
    the judgment is in favour of a person who has suffered loss or damage referred
    to in s. 4(1); and (iii) if the judgment is against a foreign state, the state
    is set out in the list of state supporters of terrorism referred to in s.
    6.1(2) of the
SIA
. As the motion
    judge recognized, the second and third requirements would be redundant if the
    judgment creditor also had to prove that the debtor state supported terrorism.

[61]

Irans argument would also run
    counter to the purpose of the
JVTA
,
    being the facilitation of claims against state sponsors of terrorism.
    Parliament intended that in order to facilitate civil claims all that need be
    established was that the sovereign state be listed under the
SIA
.  As the preamble to the
JVTA
affirms certain states that support terrorism should
    not benefit from state immunity in this regard.

(c)

Proof of Criminal Conduct

[62]

Iran submits that the respondents
    had to prove beyond a reasonable doubt specific criminal acts committed by the
    appellants under Part II.1 of the
Criminal Code
and that the appellants cannot rely on the findings
    of fact made by the U.S. courts to establish liability under the
JVTA.

[63]

I disagree. I accept the analysis
    of the motion judge on this point. Parliament did not intend to require plaintiffs
    to prove the commission of a specific criminal offence under this part of the
Criminal
    Code
. Rather, the requirement under s. 4(1)(b)
    of the
JVTA
was meant to define
    the type of conduct that constitutes an act of terrorism under the
JVTA
.

[64]

Again, the Legislative
    Summary of Bill C-10 is of some assistance in understanding Parliaments intention
    in referring to the terrorism provisions of the
Criminal Code
in s. 4(1)(b) of the
JVTA
. In discussing arguments concerning the
    constitutionality of the
JVTA
, the authors of the summary note at p. 6:

Alternatively, it might be
    possible to view the JVTA as functionally connected to Parliaments
    power to legislate in relation to criminal law (section 91(27) of
    the
Constitution Act, 1867
)
    because the civil remedy is available only if plaintiffs can show that they
    have suffered loss or damage 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
 (clause
    4 of the JVTA). Whether the courts would uphold the statute on this basis
    is, however, open to question,
given that it does not appear
    that securing a criminal conviction under Part II.1 of the Code is a
    precondition to initiating a civil action under the JVTA
. [Emphasis
    added.]

[65]

Reading in a criminal
    standard of proof into an element of the cause of action under the
JVTA
defeats the clear legislative
    purpose of the statute. It would take tremendous financial resources, perhaps
    beyond any potential financial recovery, to prove a states material support of
    a terrorist organization, and a connection to a particular terrorist act,
    beyond a reasonable doubt. Moreover, imposing a criminal standard to an element
    of the cause of action would be inconsistent with Canadian jurisprudence that,
    in civil cases, there is only one standard of proof  the standard of balance
    of probabilities:
F.H. v. McDougall,
2008 SCC 53, [2008] 2 S.C.R. 41, at para. 40.

[66]

The role of a court in considering whether the
    criteria under s. 4(5) of the
JVTA
are met does not extend to
    reconsidering or reviewing the factual findings underlying the foreign
    judgments:
Kuwait Airways
, at para. 23; and
Chevron
, at para. 44.
    Instead, the courts function in the respondents actions was to consider
    whether the requirements of s. 4(5) of the
JVTA
were met within the
    framework of the applicable Canadian law on the basis of the findings of fact
    made by the American courts. It is also appropriate to take into account Irans
    deemed admissions, having been noted in default and therefore deemed to admit
    the allegations in the statements of claim. Any argument that the court must
    look behind the foreign courts factual findings and conduct its own inquiry is
    contrary to the plain language of the
JVTA
and the jurisprudence on the
    enforcement of foreign judgements.

(4)

Recognition and Enforcement of the U.S. Judgments

1.

Irans Position

[67]

Iran submits that Parliament did
    not leave the question of recognition to be determined solely by common law
    criteria set out in cases such as
Beals v. Saldanha,
2003 SCC 72, [2003] 2 S.C.R. 416. Instead, Parliament
    imposed additional statutory criteria that must be satisfied if a Canadian
    court is to recognize these types of foreign judgments. Subsection 4(5) of the
JVTA
provides:

A court of competent jurisdiction must recognize a
    judgment of a foreign court that,
in addition to meeting the criteria under
    Canadian law for being recognized in Canada
, is in favour of a person that
    has suffered loss or damage referred to in subsection (1). However, if the
    judgment is against a foreign state, that state must be set out on the list
    referred to in subsection 6.1(2) of the State Immunity Act for the judgment to
    be recognized. [Emphasis added.]

[68]

Iran submits that the motion judge
    erred when he failed to consider whether all the criteria in s. 4(5) of the
JVTA
for recognition of this type of foreign judgment had
    been satisfied. Accordingly, in this section of my reasons I will examine each
    criterion to determine if the motion judge erred in his analysis.

(d)

Proof of Loss under the
JVTA

[69]

Iran raises a series of arguments
    to the effect that the motion judge erred in finding that there was a
    sufficient evidentiary basis to conclude that the respondents had satisfied the
    requirement of s. 4(5) of the JVTA that they have suffered loss or damage
    referred to in subsection (1). In this case, the respondents rely on s. 4(1)
    (b). I will deal with each of these arguments below.

[70]

First, according to Iran, the
    Governor in Council listed it under the
SIA
on the basis that the politicians reasonably
    believed it to be a supporter of terrorism.  Iran submits that court
    proceedings require more than a reasonable belief:  claimants must prove in
    court that Iran supported terrorism and that its conduct, if carried out in
    Canada, would have constituted a criminal offence.

[71]

This submission has no merit.
The inclusion of the reference to terrorism offences in s. 4(1)(b)
    of the
JVTA
could not have been intended to require proof of the actual
    commission of an offence  rather, as noted above, it references conduct within
    the scope of Part II.1 to establish the type of conduct that triggers the direct
    cause of action created by the
JVTA
. Requiring a judgment creditor seeking
    enforcement under s. 4(5) of the JVTA to prove that the debtors acts actually
    contravened the
Criminal Code
would be inconsistent with the purpose of
    the
JVTA
and the overall purpose of a recognition and enforcement
    action. It would also undermine Parliaments intention that the
JVTA
be
    retroactive; if Irans interpretation were accepted, there would be no recovery
    under the
JVTA
for loss or damage suffered from a state-sponsored
    terrorist act that occurred prior to December 24, 2001, the date when the
    relevant provisions in Part II.1 of the
Criminal Code
provisions came
    into effect.

[72]

Second, Iran submits that the
    motion judge erred when he failed to consider that s. 83.03 of the
Criminal
    Code
requires that Iran provide property or
    financial or other related services knowing they will be used by or will
    benefit a terrorist group as defined in s. 83.01(1).  Terrorist group
    includes a listed entity. Hamas and Hezbollah were only listed in 2002 as
    terrorist entities under the
Order Accepting the Recommendation of
    the Minister of Public Safety and Emergency Preparedness

Concerning the Two-Year Review of the List
    of Entities
, S.I./2012-103. All of the events
    underlying the U.S. judgments obtained by the respondents occurred prior to the
    addition of Hezbollah and Hamas to the list in 2002. It is submitted by Iran
    that the respondents cannot rely on a list that was created years after the
    relevant events to establish that Hamas or Hezbollah were terrorist groups
    within the meaning of (the subsequently enacted) s. 83.03 of the
Criminal
    Code
at the time of the attacks.

[73]

I would not give effect to this
    argument. It is true
that Hamas and Hezbollah were only listed
    as terrorist groups in 2002, but the
JVTA
does not require that the act
    or omission be punishable at the time it was committed. What is relevant is
    whether it would be punishable today.

[74]

Third, Iran submits that the
    motion judge erred with respect to the
actus reus
because a finding by a U.S. court under the
FSIA
that a U.S. citizen suffered personal injury or death
    caused by an act of torture, extrajudicial killing, aircraft sabotage or
    hostage taking, or the provision of material support or resources for such an
    act by a foreign state (even if admissible in Canada), does not provide an
    evidentiary basis for concluding that Iran committed or would have committed an
    offence under s. 83.03 of Canada's
Criminal Code
.

[75]

I disagree.
The
    motion judge properly found, on the basis of the U.S. courts findings of fact
    and the appellants deemed admissions that the respondents losses resulted
    from acts on the part of Iran that would be punishable under the
Criminal
    Code
. The motion judge was entitled to rely on the American courts
    findings and the deemed admissions. He found all three elements of the offence
    under s. 83.03(b) were met: Hamas and Hezbollah are both terrorist groups; Iran
    provided them with significant financial support; and Iran knew that its
    support would be used to facilitate and carry out terrorist activity.

[76]

Fourth, the motion judge found
    that the U.S. judges' reasons established that significant financial support
    was provided to Hamas or Hezbollah. Iran submits that this is not the same
    thing as providing financial services as required by s. 83.03. I reject this
    submission. The criminal offence created by s. 83.03 of providing a person with
financial services with knowledge that they will be used
    to carry out terrorist activities is capable of capturing a broad range of
    conduct.
I see no reason to interfere with the motion judges conclusion
    that the provision of significant financial support to terrorist organizations
    amounts to providing financial services under s. 83.03.


(e)

Limitation Defences

[77]

Iran submits the motion judge
    erred when he found that the American judgments are statutory claims under s.
    4(5) of the
JVTA
and their
    recognition is not barred by any limitation period. Its argument is as follows.
    The subject claims were common law claims for recognition and they could always
    have been brought even in the absence of the
JVTA
, subject to being stayed by virtue of state immunity.
    Moreover, these proceedings are barred either by the basic two-year limitation
    period under s. 4 of the
Limitations Act, 2002
, S.O. 2002, c. 24, Sched. B, or the  former six-year
    limitation period in s. 45(1)(g) of the predecessor
Limitations Act
, R.S.O. 1990, c. L.15, each of which apply to the
    recognition of foreign judgments:
Independence Plaza 1 Associates,
    L.L.C v. Figliolini
, 2017 ONCA 44; and
Lax
    v. Lax
(2004), 70 O.R. (3d) 520 (C.A.)
.
Iran says that

nothing in the
JVTA
or the
SIA
relieves the respondents of the limitation periods that apply to the
    enforcement of foreign judgments. In particular, the suspension of limitation
    periods in s. 4(3) of the
JVTA
does not apply to proceedings under s. 4(5). According to Iran, Parliament
    turned its mind to the possibility of statute-barred claims and specifically
    provided an extension of time for claims under s. 4(1) but not for those under
    4(5).

[78]

I see no error in the motion
    judges conclusion that the respondents claims were not barred by the current
Limitations
    Act, 2002
or its predecessor because they
    were not discovered until the
JVTA
came into force in 2012.  Under s. 5(1)(iv) of the current act, the
    respondents claims would not have been discovered until, having regard to the
    nature of the injury, loss or damage, a proceeding would be an appropriate
    means to seek to remedy it. Prior to
September 7, 2012,
    Iran was not added to the list of state sponsors of terrorism in the
SIA
and a proceeding under s. 4(5) of the
JVTA
was not possible. Proceedings
    to enforce the U.S judgments were not otherwise possible at common law because
    Iran was immune from civil suit in Canada:
Steen
, at paras. 24-28. Thus,
    even if the proceedings could always have been commenced before September 7,
    2012, subject to being stayed by virtue of state immunity, it was not legally
    appropriate for the respondents to commence them until that date and, as the
    motion judge concluded, they were not discovered until that date.

[79]

The purpose of the appropriateness criterion
    in s.
5(1)(iv) of the
Limitations
    Act, 2002
is to deter needless litigation:
Presidential
    MSH Corp. v. Marr, Foster & Co. LLP
,
    2017 ONCA 325, at para. 17. Given that a stay of the respondents proceedings
    on the U.S. judgments would be inevitable if they were brought at common law,
    it would have been fruitless to commence them before 2012 when the
JVTA
and
SIA
carved out an exception to Irans immunity. They were therefore not appropriate
    or discoverable before 2012.

[80]

The same considerations
    apply to the 1990
Limitations Act
,
    as the six-year limitation period applicable to proceedings on a foreign
    judgment did not begin to run under s. 45(1)(g) of that act until the cause of
    action arose. Here the respondents claims on the U.S. judgments did not arise
    within the meaning of that provision until September 7, 2012 when Iran was
    added to the list in the
SIA
.

[81]

I do not accept Irans
    submission that the enactment of s. 4(1) of the
JVTA
and addition of Iran to the list in the
SIA
in 2012 was only a procedural modification to the
    respondents pre-existing claim for recognition and enforcement of the U.S.
    judgments. In my view, the respondents claims only came into substantive
    existence in 2012. In their applications for recognition and enforcement of the
    U.S. judgments, they all specifically relied on s. 4(5) of the
JVTA
, which did not exist before 2012. They did not rely
    on a pre-existing common law cause of action that was somehow procedurally
    modified in 2012.

[82]

In any event, as this
    court held in
Steen
, there are no
    exceptions to state immunity at common law. The respondents claims were only
    made possible by the
JVTA
and
SIA
. The inevitability of a stay on a claim brought
    outside these statutes leads me to conclude that these statutes are more than
    merely procedural considerations and are in actuality the true sources of the
    respondents claims for recognition and enforcement.

[83]

I conclude that the respondents cause of
    action under the
JVTA
was discoverable, or arose, only after the
JVTA
was enacted and Iran was added to the list in the
SIA
at the earliest.
    All of the respondents claims were commenced well within the ensuing two-year
    and six-year limitation periods.

(f)

Jurisdiction

[84]

Iran submits that America had no
    connection to the events or the parties other than that the respondents were
    U.S. nationals and the
FSIA
purported to establish domestic statutory jurisdiction. It argues that the
    motion judge erred when he failed to consider that the American courts
    assumption of jurisdiction was based entirely on an American statute being
    applied unilaterally and retroactively to acts by third parties in other
    countries. It further argues that America did not exercise a properly
    restrained jurisdiction. In the absence of any significant factor connecting
    Iran to the American or Canadian courts, Iran submits that it could not have
    expected that the Canadian courts would enforce American judgments obtained in
    breach of international law.

[85]

I do not accept this argument.
A foreign court will be found to have properly assumed
    jurisdiction where it had a real and substantial connection with the litigants
    or with the subject matter in dispute:
Chevron
, at para. 21.

[86]

The American courts properly assumed
    jurisdiction over the respondents actions against the appellants because they were
    commenced pursuant to an American statute that authorized them. Unless the
FSIA
offends Canadian public policy, which will be discussed below, as a matter of
    comity it was correct for the motion judge not to look behind the American
    statutory authority. Moreover, as the motion judge recognized, the
FSIA
and the
JVTA
provide essentially the same basis for a court to assume
    jurisdiction over a foreign state in a claim for damages resulting from a
    terrorist attack in a foreign country.

(g)

Canadian Public Policy

[87]

Once it is determined that a foreign court
    properly assumed jurisdiction, a foreign judgment is
prima facie
enforceable. The burden then shifts to the foreign defendant to establish the
    availability of a defence to the recognition of a foreign judgment:
Beals v.
    Saldanha
, 2003 SCC 72, [2003] 3 S.C.R. 416, at para. 39.

[88]

Iran asserts as a defence that the
    judgments were contrary to Canadian public policy, advancing the following five
    arguments:

(i) The American courts application of a long arm
    retroactive statutory jurisdiction contravened the fundamental morality of the
    Canadian legal system.

(ii) The American legislation discriminates on the
    basis of national identity and offends the principle of comity in that it fails
    to provide any mechanism to recognize and enforce Canadian judgments arising
    out of the
JVTA
.

(iii) The American judgments contravene public
    international law, as they all predate the 2012 amendments to the
SIA
and the enactment of the
JVTA
.

(iv) The American judgments are statute-barred.

(v) The American judgments are grossly excessive, as
    the Canadian cap on non-pecuniary damages, adjusted for inflation as of June
    2016, is $367,806.00.

[89]

I would not give effect to any of these
    arguments. Before considering them, I note that the defence of public policy
    has a high threshold. To be declared unenforceable on the ground of public
    policy, enforcement of the judgment must violate conceptions of essential
    justice and morality:
Beals
, at para. 222, citing
Boardwalk Regency
    Corp. v. Maalouf
(1992), 88 D.L.R. (4th) 612 (Ont. C.A.), at p. 615.

[90]

Arguments three and four can be
    dealt with summarily, as they have been considered above. The recognition of
    the foreign judgments under the
JVTA
may violate international law, but Parliament has expressly authorized their
    recognition.  In addition, for the reasons set forth above, the judgments are
    not time-barred.

[91]

With respect to the first
    argument, I am not satisfied that the American statute offends Canadian legal
    morality. As proof, I need only point to the
JVTA
, which is substantially similar to the
FSIA.
It is difficult to see how American legislation that Parliament
    has chosen to emulate could be considered morally offensive to our legal
    system.

[92]

The terrorist attacks out of which the
    respondents U.S. judgements arise are repugnant to civilized society. The fact
    that a foreign government would engage in the sponsorship of such atrocities is
    chilling. Both the
JVTA
and the
FSIA
are designed to use the
    countries respective civil justice systems to fight the state sponsorship of terrorism.
    There is nothing offensive about using peaceful legislative means to combat terrorism.

[93]

Regarding Irans second argument, the
    inclusion of a requirement that the plaintiff or the victim in the proceedings
    under the state-sponsored terrorism exception to the
FSIA
be a U.S.
    national is not discriminatory and, in any event, does not offend Canadian
    public policy. The
FSIA
does not use the term citizen but specifically
    uses the term national, which the U.S. Code defines as someone who, though
    not a citizen of America, owes permanent allegiance to America. In addition,
    the requirement is broader than Iran describes  it is met if the plaintiff or
    victim is an American national, a member of the American armed forces or an
    employee of the American government. Irans position also ignores the
    similarities between the
FSIA
and the
JVTA
. The
JVTA
allows a court to hear a matter based solely on the plaintiffs Canadian
    citizenship or residency: see s. 4(2).

[94]

The fact that there is no explicit mechanism
    in the
FSIA
for the recognition of foreign judgments is not determinative.
    Iran has filed an expert opinion from an American law firm to the effect that a
    judgment granted under the
JVTA
would not be enforceable in the United
    States. I note that this issue has not been determined by the American courts.
    Assuming, without deciding, that the opinion is correct, this fact would not,
    in my view, amount to a violation of Canadian public policy. Such a lack of
    reciprocity can hardly be considered to violate conceptions essential to
    Canadian justice and morality.

[95]

With respect to Irans fifth argument, the quantum
    of the judgments, and specifically the American courts application of punitive
    damages law, cannot ground a defence of public policy. The Supreme Court of
    Canada expressly rejected the position that the amount of a foreign judgment
    alone could render its recognition and enforcement contrary to Canadian public
    policy in
Beals
,

at para
.
77.

[96]

Recognizing and enforcing large damage awards
    against Iran is consistent with the public policy animating the
JVTA
to
    enable plaintiffs to bring lawsuits against terrorist and their supporters,
    The fact that the American courts award damages in excess of the cap for
    non-pecuniary damages recognized in Canada does not offend any basic conception
    of morality. To the contrary, awarding damages that may have a deterrent effect
    is a sensible and measured response to the state sponsorship of terrorism and is
    entirely consistent with Canadian legal morals.
[2]


(5)

State Immunity from Execution of the U.S. Judgments in Canada

[97]

Iran submits that the
    jurisdictional immunity in s. 3 of the
SIA
and the immunity from attachment and execution in s.
    12 are distinct immunities. It argues that immunity from the jurisdiction of a
    court does not encompass immunity from execution. Iran submits that even after
    a court has decided that Iran does not enjoy immunity from adjudication and has
    awarded or recognized a money judgment, it must still satisfy itself that the
    conditions for lifting execution immunity have been satisfied.

[98]

In my view, Iran does not enjoy
    state immunity from execution.

[99]

Section 12(1) provides that the
    property of a foreign state that is located in Canada is immune from attachment
    and execution, subject to specified exceptions. Section 12(1)(d) of the
SIA
strips a state of execution immunity 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.

There
    is no question that Iran is listed under s. 6.1(2) of the
SIA
.
Thus,
    it is incumbent on the respondents to prove: (i) the underlying judgment was
    based on Irans support for terrorism; and (ii) the assets do not have cultural
    or historical value.

[100]

The respondents American
    judgments were all obtained in proceedings where the respondents alleged and
    the American courts found that Iran had engaged in state sponsorship of
    terrorism. Therefore, the first of the two criteria is established.

[101]

The second criterion, being the
    cultural or historical value exception to s. 12(1)(d) does not apply because
    Irans affiant, Ms. El-Husseini, conceded in cross-examination that the two
    real properties  2 Robinson Avenue and 290 Sheppard Avenue  have no cultural
    or historical value to Iran. Obviously, the bank accounts would not meet this
    criterion.

(6)

Diplomatic Immunity

1.

Principles

[102]

Diplomatic immunity is a
    long-standing principle of international law and entails the protection of a
    diplomatic missions property and people from state interference and detention,
    as well as a duty of protection by the receiving state: see
Reference
    as to Powers to Levy Rates on Foreign Legations
,
    [1943] S.C.R. 208, per Duff C.J. These special immunities for diplomatic
    missions have been consolidated in the
Vienna Convention on
    Diplomatic Relations
, 18 April 1961, 50
    U.N.T.S. 95 (
Vienna Convention
).
    Canada and Iran are both signatories to this convention.

[103]

The stripping of Irans state
    immunity does not determine what diplomatic immunities, if any, it enjoys under
    the
Vienna Convention
and
    customary international law. For the purposes of determining that issue on this
    appeal, the following legal principles are relevant.

[104]

First, our law recognizes the Crowns
    prerogative to conduct international affairs and that the executive is best
    placed to make foreign policy decisions, within a range of constitutional
    options:
Canada (Prime Minster) v. Khadr,
2010 SCC 3, [2010] 1 S.C.R. 44, at paras. 25-27 and
    36-37. Accordingly, the Minister alone has the power to recognize diplomatic
    status. This power arises from the Crowns prerogative and the
FMIOA
.

[105]

Second, a sending state cannot
    unilaterally attribute diplomatic status over its property with binding effect
    on the domestic laws of the receiving state:
Philippine Embassy

Bank Account Case
(1977), 65 I.L.R. 146 (Fed. Const.
    Ct.) (Germany),
at p.188. It is the
    Minister who must receive and be satisfied by Irans due assurances that the
    property is being used for diplomatic purposes and, if so satisfied, recognize
    diplomatic status.

[106]

Third, the Minister has a right
    under s. 11 of the
FMIOA
to
    deliver certificates to communicate a fact to a court pertaining to foreign
    relations. Under s. 11, the Minister may issue a certificate to communicate any
    fact relevant to, among other things, 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.

[107]

Fourth, where diplomatic immunity
    is going to be stripped from a person, the receiving state must give the person
    reasonable time after the loss of the immunity to put his or her affairs in
    order before the loss takes effect:
Re Regina and Palacios
, (1984) 45 O.R. (2d) 269 (C.A.), at p. 274. In other
    words, the person must be given notice of the loss of immunity.

(h)

Irans Submissions

[108]

With those principles in mind, I
    turn to Irans submissions regarding diplomatic immunity in the circumstances
    of this case.

[109]

Iran submits that the premises of
    a diplomatic mission, the property thereon, its archives, documents and
    official communications are all protected by diplomatic immunity. According to
    Iran, the motion judge erred when he concluded that the Iranian Assets did not
    enjoy diplomatic immunity. Iran relies on a Ministers certificate that did not
    state that its bank accounts or properties were not diplomatic and submits that
    there was other compelling evidence that Canada had accepted that these assets were
    diplomatic in nature.

[110]

With respect to the bank accounts,
    Iran submits that it is undisputed that the two accounts were used to pay
    student scholarships and expenses on behalf of one of the Iranian Embassys
    branches. Iran relies on the fact that Canada issued a diplomatic note
    recognizing the diplomatic nature of the Bank of Nova Scotia account in January
    2012.  It also points out that on June 21, 2012, Iran delivered a diplomatic
    note confirming that the relevant accounts were used and intended to be used
    for diplomatic purposes, that is, student scholarships. In any event, Iran
    submits that it should have been given notice of its loss of diplomatic
    immunity in September, 2012 so that it could transfer the funds out of the
    country.

[111]

With respect to the real
    properties, Iran argues that they are included as premises of its diplomatic
    mission in Canada and are subject to immunity, regardless of the severance of
    diplomatic relations or even the outbreak of armed conflict between two states:
    see
Vienna Convention,
art. 22,
    as incorporated in s. 3 of the
FMIOA.
Iran argues that the evidence establishes that the two properties were used or were
    intended to be used as cultural centres. Iran submits, therefore, that these
    purposes are sufficiently connected with the official purposes of the state and
    the premises of the mission to permit it to invoke diplomatic immunity. Finally,
    Iran submits that even if the Ministers certificate that did not explicitly
    mention that its properties were not diplomatic can be construed as an implicit
    refusal or withdrawal of diplomatic status, Canada was obliged to give it a
    reasonable amount of time to sell the real properties and remove the proceeds from
    Canada.

(i)

Analysis

[112]

I would not give effect to any of
    these arguments.

[113]

Dealing first with the issue of
    notice of the loss of diplomatic immunity, it is unnecessary to determine
    whether this courts ruling in
Palacios
,
    which was made in the context of an individual losing diplomatic immunity and
    being subject to arrest, should be extended to the loss of diplomatic status
    for property. I reach this conclusion because, in my view, notice is not
    relevant given the special circumstances of Irans diplomatic relations with
    Canada.

[114]

Well before the cessation
    of diplomatic relations between the two countries in 2012, Iran was the subject
    of international sanctions set out in the
Special Economic Measures
    (Iran) Regulations
, S.O.R./2010-165.
    Pursuant to these sanctions, Canada had to approve the transfer of funds out of
    the country. When requests were made in September 2012 for such a transfer they
    were denied by the Canadian government.

[115]

Consequently, notice of the loss
    of diplomatic status for the bank accounts or real property would have no
    practical effect. The purpose of notice in such circumstances would be to give Iran
    a reasonable opportunity to transfer money out of Canada, but any such transfer
    could not be affected unless approved by Canada because the sanctions were in
    place. Therefore, the motion judge made no error in not considering the lack of
    notice given to Iran.

[116]

Next, I agree with the motion
    judges finding that the time for determination of the diplomatic status of
    property is the time of the attempted execution on that property. As all
    parties agree, the diplomatic status of property may change over time. If the
    question is whether the property is exigible, logically the status of the
    property must be examined as at the date of the attempted execution.

[117]

I also see no error in the motion
    judges conclusion that diplomatic immunity cannot be asserted to avoid execution
    of a foreign judgment that has been recognized in Canadian court proceedings
    unless the Minister has acknowledged the diplomatic status of the property sought
    to be attached.  That conclusion is entirely consistent with the principles
    outlined above.

[118]

Thus, the question becomes whether
    on the evidence the Minister had conferred diplomatic status on the Iranian
    Assets. The motion judge concluded that no diplomatic status was extant at the
    time of the execution on the property. The evidence, including the fact that
    the Iranian Assets property was not included in the Ministers certificates,
    amply supported that finding
.

[119]

While a certificate is the best
    evidence of Ministers communication of diplomatic status, it was not an error
    for the motion judge to look at the whole context, including the Department of
    Foreign Affairs website and its letter of September 4, 2013 to counsel for the
    Tracy and Bennett respondents, to determine what property enjoyed diplomatic
    status. The
website, for
    example, made clear what Iranian Assets were not protected by diplomatic
    immunity, and it referred specifically to the 2 Robinson Avenue property in
    Ottawa as well as to several Bank of Nova Scotia and Royal Bank of Canada
    accounts.

[120]

The motion judges finding in this
    regard is entitled to deference from this court. Given the solid evidentiary
    base supporting that finding, there is no basis for appellate interference.

(7)


REJA
Enforcement

[121]

Iran submits that the Registration
    Order should have been set aside because the respondents did not comply with the
REJA
. It argues that the
REJA
requires the Ontario court to consider whether the
    original court acted within its jurisdiction, whether Iran carried on business
    in Nova Scotia, and whether Iran would have a good defence to the original
    action. According to Iran, had Chapnik J. undertaken this analysis she would
    have concluded that the original court acted without jurisdiction as Iran did
    not carry on business nor was it resident in Nova Scotia and that Iran would
    have had a good defence because the Nova Scotia Order contravened public policy.
    Further, Iran asserts that the Registration Order was not properly served and that
    the motion judge erred when he failed to consider that s. 3(2) of the
SIA
required the court to give effect to state immunity
    even if Iran fails to take steps in the proceeding.

[122]

I am not persuaded by these
    submissions to set aside the Registration Order
.

[123]

The fact is that Irans motion to
    set aside the order was brought out of time. Section 6 of the
REJA
requires that such motions be brought within one month
    after the judgment debtor has notice of registration. Iran was served with the Registration
    Order on August 19, 2013 and it did not move to set aside that order until May
    16, 2014. There was no request to extend the time under the
REJA
for bringing the motion to set aside, nor has Iran
    provided any evidence to explain why it failed to meet the one-month deadline
    in s. 6 of the
REJA.

[124]

With respect to Irans argument
    regarding the validity of the service of the Recognition Order, in my view the
    service was proper. I note that Irans counsel raised a new argument during the
    course of oral argument on this point that contradicted his position in his
    factum. I will deal with both arguments.

[125]

In its factum, Iran argued that s.
    5 of the
REJA
required service
    of the Registration Order within one month after issuance and Chapnik J. did
    not have authority to extend the time period for service. Section 5 of the
REJA
provides as follows:

In all cases in which registration is made upon an order made
    without notice, notice thereof shall be given to the judgment debtor within one
    month after the registration, and the notice shall be served in the manner
    provided by the practice of the registering court for service of originating
    process, and no sale under the judgment of any property of the judgment debtor
    is valid if made prior to the expiration of the period fixed by section 6 or
    such further period as the court may order.

[126]

In the Registration Order, Chapnik
    J. provided that, pursuant to s. 5 of the
REJA,
a copy of this Order shall be sent by the Applicants
    to the Department of Foreign Affairs of Canada within one month after
    registration for service upon the Respondents through diplomatic channels. She
    made no error in ordering service in this manner. Section 5 of
REJA
provides for service in accordance with the 
manner provided by the practice of the registering
    court for service of originating process. Rule 16.04 of the Ontario
Rules
    of Civil Procedure
, R.R.O.
    1990, Reg. 194, permits a judge to extend the time for service and to order
    substituted service. Accordingly, I am not satisfied that the service order was
    contrary to the manner provided for in the
Rules of Civil Procedure
and, therefore, it did not violate
    s. 5 of the
REJA
.

[127]

While making reply submissions,
    counsel for Iran raised for the first time an alternative argument on this
    point. He submitted, contrary to what was in his factum, that service should
    not be carried out in accordance with s. 5 of the
REJA
but in accordance with s. 9(2) of the
SIA
, which provides:

(2)
For the purposes of paragraph (1)(c), anyone wishing to serve an
    originating document on a foreign state may deliver a copy of the document, in
    person or by registered mail, to the Deputy Minister of Foreign Affairs or a
    person designated by him for the purpose, who shall transmit it to the foreign
    state.

[128]

It is difficult to understand how
    reliance on s. 9(2) of the
SIA
assists
    Iran. The Registration Order explicitly provides for delivery of the order to
    the Department of Foreign Affairs of Canada for service through diplomatic
    channels, which is what Chapnik J. ordered. The Tracy respondents in fact
    complied with this specified manner of service. As Brown J. found at para. 13
    of his reasons for ordering that certain of Irans assets in Canada were
    available to the Tracy respondents for execution, an August 21, 2013
    certificate from the Department of Foreign Affairs confirmed service of the
    Registration Order on Iran on August 19, 2013. Counsel for Iran also appeared
    to concede this point in reply submission. So, under either the
REJA
or the
SIA
,
    service was proper.

[129]

Finally, I acknowledge that under
    s. 3(2) of the
SIA
Chapnik J.
    was obliged to
give effect to the immunity
    conferred on a foreign state by subsection (1) notwithstanding that the state
    has failed to take any step in the proceedings. That subsection would be
    applicable where the immunity granted in subsection (1) is still extant. In her
    order, Chapnik J. specifically provided that once service was affected Iran
    could move under s. 6 of the
REJA
to set aside the
Registration
    Order. In that way, she gave effect to Irans immunity, if it still existed, by
    explicitly providing that it could set aside the order, presumably on the basis
    of, among other things, state immunity.

(8)

Test for Setting Aside a Default Judgment

[130]

Iran submits that the default
    judgments should have been set aside because:

1.

The appellants had viable
    defences;

2.

Section 3(2) of the
SIA
requires the court to give effect to immunity
    notwithstanding that the state has failed to take steps in the proceedings;

3.

The claimants failed to translate
    their documents, resulting in a delay in responding;

4.

Iran understood Canada would
    protect its interests; and

5.

Iran moved promptly to stay these
    proceedings.

[131]

I would not give effect to these
    submissions. For the reasons given above, Iran has not established that it has
    viable defences. Regardless of s. 3(2) of the
SIA
, Iran is not protected by immunity, save for the
    pre-1985 terrorist conduct. Iran has also not tendered any admissible evidence
    to explain its default. Although art. 5 of the
Convention on the
    Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial
    Matters
, 15 November 1965, Can. T.S. 1989
    No. 2, may require a party serving court documents on a foreign state to
    provide copies of the documents in the official language of the state
    addressed, Iran is not a signatory to this convention and therefore cannot invoke
    art. 5: see
Xela Enterprises Ltd. v. Castillo
, 2016 ONCA 437, 131 O.R. (3d) 193, at para. 21, leave
    to appeal refused, [2016] S.C.C.A. No. 366. Finally, the rather vague assertion
    that Canada would protect Irans interests is unexplained and unpersuasive.

[132]

In my view, it is not in the interests of justice to
    set aside the default judgments, save as mentioned above. Iran was properly
    served and ultimately chose to effectively take its chances with the court process
    by not responding to the claims and waiting to have them set aside on a
    subsequent motion. I agree with the motion judges observation at para. 186 of
    his reasons that Iran appears to have been gaming the process.

(9)

Costs

[133]

Iran submits that the motion judge erred in awarding
    costs against it. In support of this position, it advances two arguments.
    First, it says the phrase additional amount in s. 4(1) of the
JVTA
refers to costs so the absence of similar language in
    s. 4(5) means that costs are not payable in an enforcement action. Second, it
    argues that it is immune from a costs award because its immunity has not been
    expressly lifted.

[134]

The motion judge rightly rejected
    these arguments below.

[135]

First, I agree with the motion
    judge that the phrase additional amount in s. 4(1) refers to non-compensatory
    damages. If Parliament intended to refer to costs, it would have done so
    explicitly. The term costs is a familiar and widely used term of art that
    could have easily been used to implement that intention:
Canada
    (Canadian Human Rights Commission) v. Canada (Attorney General),
2011 SCC 53, [2011] 3 S.C.R. 471, at para. 40.

[136]

Second, there is no principled
    reason why, if a foreign states immunity has been lifted under the
JVTA
for an enforcement action, it should not be subject
    to an award of costs for the prosecution of such an action. In this regard, the
    motion judge was correct to rely upon s. 17 of the
SIA
, which provides that except to the extent required
    to give effect to this Act, nothing in this Act shall be construed or applied
    so as to negate or affect any rules of a court. I note as well that the
    argument that a state is immune from a costs award even after it has been
    stripped of its immunity is contrary to binding authority from the Supreme
    Court of Canada:
Kuwait Airways
,
    at para. 36.

F.       DISPOSITION

[137]

I would dismiss the appeal in its
    entirety, save for the
actions of Welch
    and Brewer in the Marthaler group of respondents and the action of the
    respondent Holland. Because the underlying U.S. judgments in those actions relate
    to terrorist activities that occurred prior to January 1, 1985, those judgments
    cannot be recognized under s. 4(5) of the
JVTA
.

[138]

At the conclusion of oral
    argument, the parties indicated their agreement to address the matter of the
    costs of these appeals in writing following the release of these reasons so
    that their discussions may be informed by the outcome of these appeals.
I recognize that as a consequence of the dismissal of the
Welch, Brewer and Holland

actions there may be ramifications for the costs
    ordered on the motions. I trust that the parties can reach an agreement on this
    issue. If they cannot, they may make brief written submissions to this court.

Released: AH JUN 30 2017

C.W. Hourigan J.A.

I agree. Alexandra
    Hoy A.C.J.O.

I agree. R.A. Blair
    J.A.


SCHEDULE A

Justice for Victims of
    Terrorism Act
, S.C. 2012, c. 1.

Preamble

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 Canadas 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 Canadas capacity to suppress and
    incapacitate acts of terrorism;

Whereas United Nations Security Council Resolution
    1373 (2001) reaffirms that acts of international terrorism constitute a threat
    to international peace and security, and reaffirms the need to combat by all
    means, in accordance with the Charter of the United Nations, threats to
    international peace and security caused by acts of terrorism;

Whereas Canada ratified the 1999 International
    Convention for the Suppression of the Financing of Terrorism on February 15,
    2002;

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;

Now, therefore, Her Majesty, by and with the advice
    and consent of the Senate and House of Commons of Canada, enacts as follows:

1
This
    Act may be cited as the

Justice for Victims of Terrorism Act
.

2
The following
    definitions apply in this Act.

foreign
    state

has the
    same meaning as in section 2 of the

State Immunity Act.
(
État
    étranger
)

listed
    entity

has the
    same meaning as in subsection 83.01(1) of the

Criminal Code.
(
entité
    inscrite
)

person

includes an organization as defined in
    section 2 of the

Criminal Code
. (
personne
)

3
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.

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
.

(2)
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
.

(2.1)
In
    an action under subsection (1), the defendant is presumed to have committed the
    act or omission that resulted in the loss or damage to the plaintiff if the
    court finds that

(a)
a listed entity caused or
    contributed to the loss or damage by committing an act or omission that is, or
    had it been committed in Canada would be, punishable under Part II.1 of the

Criminal Code
; and

(b)
the defendant  
     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
.

(3)
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).

(4)
The
    court may refuse to hear a claim against a foreign state under subsection (1)
    if the loss or damage to the plaintiff occurred in the foreign state and the
    plaintiff has not given the foreign state a reasonable opportunity to submit
    the dispute to arbitration in accordance with accepted international rules of
    arbitration.

(5)
A
    court of competent jurisdiction must recognize a judgment of a foreign court
    that, in addition to meeting the criteria under Canadian law for being
    recognized in Canada, is in favour of a person that has suffered loss or damage
    referred to in subsection (1). However, if the judgment is against a foreign
    state, that state must be set out on the list referred to in subsection 6.1(2)
    of the

State Immunity
    Act
for the judgment to
    be recognized.

State Immunity Act
, R.S.C. 1985, c. S-18.

2.1
For
    the purposes of this Act, a foreign state supports terrorism if it commits, for
    the benefit of or otherwise in relation to a listed entity as defined in
    subsection 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
.

3 (1)
Except as provided by this Act, a
    foreign state is immune from the jurisdiction of any court in Canada.

(2)
In any proceedings before a court, the court
    shall give effect to the immunity conferred on a foreign state by subsection
    (1) notwithstanding that the state has failed to take any step in the
    proceedings.



6
.1 (1)
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.

(2)
The Governor in
    Council may, by order, establish a list on which the Governor in Council may,
    at any time, set out the name of a foreign state if, on the recommendation of
    the Minister of Foreign Affairs made after consulting with the Minister of
    Public Safety and Emergency Preparedness, the Governor in Council is satisfied
    that there are reasonable grounds to believe that the foreign state supported
    or supports terrorism.



9

(1)
Service
    of an originating document on a foreign state, other than on an agency of the
    foreign state, may be made

(a)
in any manner
    agreed on by the state;

(b)
in accordance
    with any international Convention to which the state is a party; or

(c)
in the manner
    provided in subsection (2).

(2)
For the
    purposes of paragraph (1)(c), anyone wishing to serve an originating document
    on a foreign state may deliver a copy of the document, in person or by
    registered mail, to the Deputy Minister of Foreign Affairs or a person
    designated by him for the purpose, who shall transmit it to the foreign state.



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

(a)
the state has, either
    explicitly or by implication, waived its immunity from attachment, execution,
    arrest, detention, seizure or forfeiture, unless the foreign state has
    withdrawn the waiver of immunity in accordance with any term thereof that
    permits such withdrawal;

(b)
the property is used or is
    intended to be used for a commercial activity or, if the foreign state is set
    out on the list referred to in subsection 6.1(2), is used or is intended to be
    used by it to support terrorism or engage in terrorist activity;

(c)
the execution relates to a
    judgment establishing rights in property that has been acquired by succession
    or gift or in immovable property located in Canada, or

(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.

(2)
Subject to subsection (3),
    property of an agency of a foreign state is not immune from attachment and
    execution and, in the case of an action

in rem
, from arrest,
    detention, seizure and forfeiture, for the purpose of satisfying a judgment of
    a court in any proceedings in respect of which the agency is not immune from
    the jurisdiction of the court by reason of any provision of this Act.



17
Except to the extent required to give effect to
    this Act, nothing in this Act shall be construed or applied so as to negate or
    affect any rules of a court, including rules of a court relating to service of
    a document out of the jurisdiction of the court.





[1]
For ease of reference, the relevant provisions of the
JVTA
and the
State
    Immunity Act
, R.S.C. 1985, c. S-18 (
SIA
) are set out in the
    attached Schedule A.



[2]

I note that Iran appealed the motion judges order granting
    summary judgment on the Bennett respondents claim for recognition under s.
    4(5). Iran did not pursue this aspect of its appeal extensively in its
    submissions before this court. To be clear, based on the foregoing analysis, I
    am satisfied that the conditions for recognition of the U.S. judgment held by
    the Bennett respondents under s. 4(5) of the
JVTA
had been met. I would
    therefore dismiss this aspect of Irans appeal.


