Steen et al. v. Islamic Republic of Iran et al., (2013) 300 O.A.C. 306 (CA)

• Judge: Winkler, C.J.O., Armstrong and Watt, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 23, 2012
• Jurisdiction: Ontario
• Citations: (2013), 300 O.A.C. 306 (CA);2013 ONCA 30

Steen v. Iran (2013), 300 O.A.C. 306 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. JA.009

Alann B. Steen, John Rose Jr. (Representative of the Estate of Virginia Steen), Eric Jacobsen, Paul Jacobsen, Diane Jacobsen and Doris Fisher (plaintiffs/appellants/respondents by way of cross-appeal) v. Islamic Republic of Iran, Iranian Ministry of Information and Security, and Iranian Revolutionary Guard (defendants/respondents/appellants by way of cross-appeal)

(C54635; 2013 ONCA 30)

Indexed As: Steen et al. v. Islamic Republic of Iran et al.

Ontario Court of Appeal

Winkler, C.J.O., Armstrong and Watt, JJ.A.

January 21, 2013.

Summary:

Between 1982 and 1988, Iran directed the kidnapping and detention of 18 American citizens in Beirut, Lebanon, for the purpose of collecting a ransom. Steen and Jacobson were two of the individuals kidnapped. The appellants (Steen and his wife and Jacobsen's children and sister) sued the respondents, Islamic Republic of Iran, Iranian Ministry of Information and Security, and Iranian Revolutionary Guard, in two separate actions in the United States District Court for the District of Columbia for damages. The respondents did not appear. The court awarded judgments of US$342,750,000 and US$6,400,000 against the respondents. The appellants commenced an action in Ontario seeking to enforce the judgments. The respondents moved under rule 21.01(2) of the Rules of Civil Procedure to dismiss the action on the basis that they were immune from the jurisdiction of any court in Canada pursuant to s. 3(1) of the State Immunity Act (SIA). The appellants submitted that the respondents' conduct that gave rise to the American judgments constituted "commercial activity" and the exception from immunity for commercial activity in s. 5 of the SIA applied. In the alternative, the appellants contended that the common law of state immunity continued to apply, which precluded immunity for acts of terrorism, kidnapping, torture and hostage-taking committed by or on behalf of sovereign states.

The Ontario Superior Court, in a decision reported at [2011] O.T.C. Uned. 6464, granted the respondents' motion on the basis that the SIA barred the appellants' claim for enforcement of the American judgments. The court held that kidnapping and detention did not constitute "commercial activity" under the SIA and the exception under s. 5 did not apply. The court also concluded that the SIA was a complete code that permitted no common law exceptions. Despite the respondents' success on the motion, the appellants were awarded costs of $70,000. The appellants appealed. The respondents cross-appealed the costs award.

The Ontario Court of Appeal dismissed the appeal. The court declined to grant the respondents leave to cross-appeal the costs award.

International Law - Topic 2200

Sovereignty - Incidents of - Immunity - General - [See International Law - Topic 2202 and Practice - Topic 8298 ].

International Law - Topic 2202

Sovereignty - Incidents of - Immunity - Exceptions - Proceedings relating to commercial activity of foreign state - Acta gestionis - State Immunity Act, s. 5 - Between 1982 and 1988, Iran directed the kidnapping and detention of 18 American citizens in Beirut, Lebanon, for the purpose of collecting a ransom - Steen and Jacobson were two of the individuals kidnapped - The appellants (Steen and his wife and Jacobsen's children and sister) sued the respondents, Islamic Republic of Iran, Iranian Ministry of Information and Security, and Iranian Revolutionary Guard, in two separate actions in the United States District Court for the District of Columbia for damages - The respondents did not appear - The court awarded judgments of US$342,750,000 and US$6,400,000 against the respondents - The appellants commenced an action in Ontario seeking to enforce the judgments - The respondents moved under rule 21.01(2) to dismiss the action on the basis that they were immune from the jurisdiction of any court in Canada pursuant to s. 3(1) of the State Immunity Act (SIA) - The appellants submitted that the exception from immunity for "commercial activity" in s. 5 of the SIA applied - In the alternative, the appellants contended that the common law of state immunity continued to apply, which precluded immunity for acts of terrorism, kidnapping, torture and hostage-taking committed by or on behalf of sovereign states - The motions judge granted the respondents' motion on the basis that the SIA barred the appellants' enforcement claim - The motions judge held that kidnapping and detention did not constitute "commercial activity" and the exception under s. 5 did not apply - Further, the SIA was a complete code that permitted no common law exceptions - The appellants appealed - The Ontario Court of Appeal dismissed the appeal - The court agreed that the commercial activity exception in s. 5 of the SIA did not apply - A mere nexus to commercial activity was insufficient to invoke the exception - Rather, the nature of the acts for which relief was sought, in this case kidnapping, detention and torture, had to be commercial - The court also agreed that s. 3(1) of the SIA was clear and did not permit the application of a common law exception to state immunity - See paragraphs 17 to 28.

International Law - Topic 2203

Sovereignty - Incidents of - Immunity - Exceptions - Death, personal injury, torture and hostage taking - Between 1982 and 1988, Iran directed the kidnapping and detention of 18 American citizens in Beirut, Lebanon, for the purpose of collecting a ransom - Steen and Jacobson were two of the individuals kidnapped - The appellants (Steen and his wife and Jacobsen's children and sister) sued the respondents, Islamic Republic of Iran, Iranian Ministry of Information and Security, and Iranian Revolutionary Guard, in two separate actions in the United States District Court for the District of Columbia for damages - The respondents did not appear - The court awarded judgments of US$342,750,000 and US$6,400,000 against the respondents - The appellants commenced an action in Ontario seeking to enforce the judgments - The respondents moved under rule 21.01(2) to dismiss the action on the basis that they were immune from the jurisdiction of any court in Canada pursuant to s. 3(1) of the State Immunity Act (SIA) - The motions judge granted the respondents' motion on the basis that the SIA barred the appellants' enforcement claim - The appellants appealed - The appellants argued that the motion judge erred in failing to conclude that the respondents lost the benefit of state immunity by committing acts in violation of peremptory norms of international law (jus cogens) - The Ontario Court of Appeal stated that "the appellants' contention that customary international law has developed to recognize an exception for state immunity where violations of jus cogens norms are alleged is contrary to this court's conclusion in Bouzari, and the more recent decisions of the majority of the ICJ in Germany v. Italy and the Quebec Court of Appeal in Hashemi. I thus see no merit in this ground of appeal" - See paragraphs 29 to 37.

Practice - Topic 8298

Costs - Appeals - Appeals from order granting or denying costs - Requirement of leave to appeal - The appellants commenced an action in Ontario seeking to enforce two American judgments against the respondents, Islamic Republic of Iran, Iranian Ministry of Information and Security, and Iranian Revolutionary Guard - The respondents moved under rule 21.01(2) to dismiss the action on the basis that they were immune from the jurisdiction of any court in Canada pursuant to s. 3(1) of the State Immunity Act (SIA) - The motions judge granted the respondents' motion - Despite the respondents' success on the motion, the appellants were awarded costs of $70,000 - The appellants appealed - The respondents sought to cross-appeal the costs award - The respondents submitted that the motion judge did not have jurisdiction to make a costs award against them by virtue of sovereign immunity under the SIA, or in the alternative, that the motion judge improperly exercised her discretion under rule 57.01(2) to award costs against the respondents who were successful on the motion - The Ontario Court of Appeal declined to grant leave to appeal the costs award - The court stated that "I am not satisfied that there are strong grounds to find that the motion judge erred in exercising her discretion. This is particularly so when the respondents left the issue of costs in the hands of the judge" - See paragraphs 38 to 42.

Cases Noticed:

Bouzari et al. v. Islamic Republic of Iran (2003), 220 O.A.C. 1; 71 O.R.(3d) 675 (C.A.), consd. [para. 7].

Kuwait Airways Corp. v. Iraq (Republic) et al., [2010] 2 S.C.R. 571; 407 N.R. 145; 2010 SCC 40, consd. [para. 24].

Islamic Republic of Iran v. Hashemi, 2012 QCCA 1449, refd to. [para. 27].

Jurisdictional Immunities of the State (Germany v. Italy: Greece Intervening) (2012), ICJ General List No. 143, online: International Court of Justice, www.icj-cij.org/docket/files/143/16883.pdf, refd to. [para. 32].

Brad-Jay Investments Ltd. v. Village Developments Ltd. et al. (2006), 218 O.A.C. 315 (C.A.), refd to. [para. 38].

Statutes Noticed:

State Immunity Act, R.S.C. 1985, c. S-18, sect. 3(1) [para. 5]; sect. 5 [para. 6].

Authors and Works Noticed:

Currie, John H., Forcese, Craig, and Oosterveld, Valerie, International Law: Doctrine, Practice, and Theory (2007), p. 159 [para. 30].

Counsel:

Mark H. Arnold, François Larocque and Syed Ali Ahmed, for the appellants/respondents by way of cross-appeal;

James A. Woods, Sarah Woods and Barbra Miller, for the respondents/appellants by way of cross-appeal.

This appeal and cross-appeal were heard on May 23, 2012, before Winkler, C.J.O., Armstrong and Watt, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Armstrong, J.A., and was released on January 21, 2013.