The introduction of the Justice for Victims of Terrorism Act S.C. 2012, c.1 s.2 (the “JVTA”) by the Ontario legislature allows victims of terrorism to seek redress against the foreign state, if such state is listed as a supporter of terrorism. There have been have four Ontario proceedings seeking to enforce US judgments against Iran’s assets in Canada. Most recently, the Supreme Court of Ontario ordered the seizure and sale of two Iranian real properties, as well as the garnishment of two bank accounts. This successful use of the JVTA opens the door for future proceedings by victims of terrorism.
The JVTA came in force on March 13, 2012 with a view “to deter terrorism by establishing a cause of action that allows victims of terrorism to sue perpetrators of terrorism and their supporters.” As per section 4(1), the JVTA allows victims of terrorism to seek civil redress against the perpetrator, as well as a foreign state, if: i) they suffered loss or damage on or after January 1, 1985; and ii) the state is listed as a supporter of terrorism.
Currently, there are only two states recognized as supporters of terrorism: the Islamic Republic of Iran and the Syrian Arab Republic. The JVTA allows foreign state immunity to be lifted for these countries and it allows victims to sue them in order to collect from their Canadian assets.
The new legislation is currently being tested by Dr. Sherri Wise, a Vancouver dentist injured in a 1997 Hamas suicide bombing in Jerusalem, who has named Iran as a defendant. Iran owns several Ottawa properties and 14 Canadian Bank accounts holding at least $2.6 million.
While that case has not yet proceeded to trial, several cases have come before the Ontario courts by American parties to enforce their foreign judgments in Canada. Section 4(5) of the JVTA provides that 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 section 4(1).
These cases include proceedings by Edward Tracy, Bennett Estate, and Jacobsen/Steen. At the request of the Bennett Estate plaintiffs, seeking to enforce their US judgment of $13 million, an Ontario judge froze Iran’s bank accounts. The other judgments also sought to be enforced include a $300 million award. Iran did not defend and was noted in default. The Ontario proceedings were opposed by Dr. Wise, as an intervenor, as well as by the Attorney General of Canada.
The Attorney General of Canada intervened in the Ontario proceedings to defend Iran’s diplomatic assets from being seized. Those assets include the Iranian embassy, official residence, staff quarters, and two bank accounts. The Attorney General argued that it has an obligation under international law to protect diplomatic assets, especially considering it has its own embassy in Iran.
Dr. Wise sought intervenor status to prevent the US plaintiffs from enforcing their judgment in Canada as that would deplete all Iranian assets, thus leaving nothing for Dr. Wise or other Canadian victims. Dr. Wise sought to make an argument not advanced by the Attorney General that the JVTA
did not suspend the limitation period for foreign judgments, and thus the US plaintiffs were out of time and statute-barred. Dr. Wise was refused intervenor status by the Superior Court, as the motion judge reasoned that she lacked legal interest in the issues raised by the American action, and would not be able to provide any value added assistance to the court, thereby unnecessarily delaying the proceedings.
The decision was appealed to the Court of Appeal for Ontario, which reversed the Superior Court decision and granted Dr. Wise intervenor status. The court found that Dr. Wise had a contingent interest in the subject matter of the proceedings and may be adversely affected by a judgment in favour of the American plaintiffs. The Court of Appeal ruled that it was in the public interest to grant intervenor status given that Iranian assets in Canada are limited and insufficient to satisfy all judgments. Despite obtaining intervenor status, Dr. Wise, along with the other US Plaintiffs reached an agreement out of court deferring the hearing of the Bennett Estate and Jacobsen/Steen enforcement proceedings in favour of a motion to enforce the Ontario Recognition Order in the Edward Tracy proceedings.
The motion in Edward Tracy v. The Iranian Ministry of Information and Security, 2014 ONSC 1696 was heard on March 17, 2014. The foreign judgments obtained by the Edward Tracy applicants met the requirements of the JVTA, the result of which was that they obtained the Ontario Recognition Order. That order could be enforced using the various devices available under Rule 60 of the Rules of Civil Procedure (Ontario) against any non-diplomatic property of Iran “other than property that has cultural or historical value”.
The plaintiffs provided evidence of two bank accounts and two properties that could be seized to satisfy the Ontario Recognition Order. Both accounts were identified by Foreign Affairs as “Iran’s Non-Diplomatic Assets in Canada” and contained $1,651,942 and €333,445.23 respectively. The judge found that the assets were non-diplomatic assets of Iran, available to satisfy the Ontario Recognition Order, and thus ordered both banks to pay the amounts to the local sheriff. The judge also found that both properties are beneficially owned by Iran and constitute non-diplomatic assets of Iran in Canada which have no “cultural or historical value.” The judge ordered the sheriff to enforce the applicant’s writ of seizure and sale on both properties.
Although possible actions are limited as only two states, Iran and Syria, are currently considered perpetrators of terrorism under the legislation, the JVTA allows for potential future actions if other foreign states are added to the list. The existing case law demonstrates that the JVTA can be successfully utilized by victims of terrorism in seeking civil redress against foreign states for loss or damage that occurred as a result of terrorism. The JVTA not only seeks to respond to the unique concerns of victims of terrorism but also demonstrates Canada’s continued commitment to counterterrorism measures.
The foregoing comments are of a general nature, and are not intended nor should they be used as a substitute for legal advice or legal opinions which can be rendered only when related to specific situations.