41^st Parliament, 1^st Session

Contents  

Any substantive changes in this Legislative Summary that have been made since the preceding issue are indicated in bold print.

• 2.1 Background
  
  • 2.1.1 Lawsuits Against Foreign States
  • 2.1.2 Victims of Terrorist Attacks, and Civil Suits
  • 2.1.3 Constitutionality
  • 2.1.4 Terrorism But Not Torture
  • 2.1.5 Diplomatic Relations
  • 2.1.6 Listing of Countries
  • 2.1.7 The U.S. Experience
• 2.2 Description and Analysis
  
  • 2.2.1 Justice for Victims of Terrorism Act (Clause 2 of Bill C-10)
    
    • 2.2.1.1 Preamble
    • 2.2.1.2 Title and Interpretation (Sections 1 and 2 of the Justice for Victims of Terrorism Act)
    • 2.2.1.3 Purpose (Section 3 of the Justice for Victims of Terrorism Act)
    • 2.2.1.4 Cause of Action (Section 4 of the Justice for Victims of Terrorism Act)
  • 2.2.2 Amendments to the State Immunity Act (Clauses 3–9 of Bill C-10)
    
    • 2.2.2.1 Circumstances in Which a Foreign State Will Be Considered a Supporter of Terrorism and May Be Sued Under the Proposed Act (Clauses 4–6 of Bill C-10)
    • 2.2.2.2 Attachment, Execution, Arrest, Detention, Seizure and Forfeiture of Foreign States’ Property in Canada (Clauses 7 and 8 of Bill C-10)
    • 2.2.2.3 Penalties Against Foreign States for Failure to Produce Information Relating to a Charge of Supporting Terrorism (Clause 9 of Bill C-10)
• Notes

2 Enactment of the Justice For Victims of Terrorism Act and Amendments to the State Immunity Act
[Bill C-10, Part 1, Clauses 2–9 (Formerly Bill S-7)]

2.1 Background

Part 1 of Bill C-10 creates a cause of action (i.e., grounds to sue) that allows victims of terrorism to sue individuals, organizations and terrorist entities for loss or damage suffered as a result of acts or omissions that are punishable under Part II.1 of the Criminal Code 1 (the part of the Code dealing with terrorism offences) and that have been committed by these individuals, organizations or entities. It also allows victims of terrorism to sue foreign states that have supported terrorist entities which have committed such acts, in certain circumstances. The victim’s loss or damage can have occurred inside or outside Canada but must have occurred on or after 1 January 1985. If the loss or damage occurs outside Canada, there must be a “real and substantial” connection to this country.  Bill C-10 as amended by the House of Commons Standing Committee on Justice and Human Rights would also allow the suit to proceed in the Canadian courts without establishing a “real and substantial connection” (as that term is understood in the case law), where the plaintiff is a Canadian citizen or a permanent resident.

Part 1 of Bill C-10 also amends the State Immunity Act 2 to create a new exception to state immunity, the general rule that prevents states from being sued in Canada’s domestic courts. However, the new exception serves to remove state immunity only when the state in question has been placed on a list established by Cabinet on the basis that there are reasonable grounds to believe that it has supported or currently supports terrorism.

Part 1 of Bill C-10 is almost identical to the previous Bill S-7 as amended at third reading. Bill S-7 was introduced in the Senate on 21 April 2010 by the Leader of the Government in the Senate, the Honourable Marjory LeBreton, but it did not become law before Parliament was dissolved in March 2011 for the general election. Bill S-7 was identical to Bill C-35, which was introduced during the 2^nd Session of the 40^th Parliament on 2 June 2009, by the former Minister of Public Safety, the Honourable Peter Van Loan.3 It was also similar to a number of private members’ bills and senators’ public bills that had been introduced in Parliament since 2005.4 The primary difference between the previous private members’ bills and senators’ public bills and Part 1 of Bill C-10 is that the former bills sought to include the cause of action in the Criminal Code, whereas Bill C-10 creates a free-standing civil cause of action.

2.1.1 Lawsuits Against Foreign States

One of the most significant features of Part 1 of Bill C-10 is the ability it gives victims of terrorist acts to sue, in Canada’s domestic courts, foreign states that support terrorism.5 Most states do not recognize sponsoring or supporting terrorism as an exception to the general state immunity principle.6

Customary international law historically gave states, their agents and instrumentalities complete immunity from being sued in the domestic courts of other states. This principle arose out of another international law principle – the sovereign equality of states. As stated by law professor John Currie, “[i]f all states are equal in international law, so the theory goes, no one state should be able to subject another to the process of its courts.”7

Section 3(1) of the State Immunity Act demonstrates Canada’s acceptance of this general rule. It states: “Except as provided by this Act, a foreign state is immune from the jurisdiction of any court in Canada.” A foreign state is defined, in section  2 of the State Immunity Act, to include sovereigns or other heads of foreign states when acting in their public capacity, as well as governments, departments or agencies of that state. It also includes heads of political subdivisions, such as provinces, when acting in their public capacity, and political subdivision governments, departments and agencies. Having said this, exceptions to the general rule of complete immunity have evolved in customary international law over time. Parliament has acknowledged this evolution by codifying the most common exceptions to the general rule of state immunity in the State Immunity Act as it currently stands. These exceptions include:

• proceedings where the state waives its immunity by initiating or intervening in proceedings in a Canadian court, apart from proceedings or interventions initiated by the state for the purpose of asserting its immunity (section  4);
• proceedings related to the commercial activities of the foreign state (section  5);
• proceedings related to death, personal or bodily injury, or damage to or loss of property, that occur in Canada (section  6);
• proceedings related to ships and cargo owned by a foreign state if the ship is used or intended for commercial activity (section  7); and
• proceedings related to an interest of a foreign state in property in Canada arising by way of gift or succession (section  8).

In each of these situations, Canadian courts have civil jurisdiction over foreign states, their agents and their instrumentalities. Part 1 of Bill C-10 seeks to add a new exception for state support of terrorism.

2.1.2 Victims of Terrorist Attacks, and Civil Suits

Victims of terrorist attacks have been pushing for legislation similar to Part 1 of Bill C‑10 for a number of years. The Canadian Coalition Against Terror (C-CAT), which is a coalition of victims and others interested in counterterrorism, has been particularly influential in the proposal of similar bills over the past six years.8 The first proposed bills were introduced in 2005 by Senator David Tkachuk in the Senate, and by Stockwell Day, M.P., who was in opposition at the time, in the House of Commons.

Proponents of such legislation argue that it is necessary to fight terrorism financing effectively, as criminal provisions against terrorism financing have not resulted in any convictions. Public exposure of such activities through court proceedings is seen as an important deterrent. It is also contended that there are benefits in using civil proceedings, where the standard of proof is lower, when criminal prosecutions are unsuccessful or as a catalyst for later criminal proceedings.9 Finally, it has been argued that the opportunity to sue would empower victims by providing official recognition of their experiences and suffering. In the cases where victims are able to recover the amounts granted by the courts, it would also provide compensation.10

One point of clarification is important at the outset. A number of articles discussing an earlier almost identical bill on this topic, Bill C-35, have said that it is not currently possible to sue an individual or a non-state organization without this bill.11 However, victims can theoretically already seek damages from non-state actors for their support of terrorist activities or organizations. The benefit of the proposed bill is its apparent goal of seeking to make the law clearer and easier to understand, by introducing a specific cause of action rather than requiring victims to rely on the general law of civil responsibility or tort law in each province.12

With the amendments adopted by the House of Commons Standing Committee on Justice and Human Rights, plaintiffs will also be able to make their case before Canadian courts more easily than they would under the general principles of civil liability or tort law. One amendment creates a presumption of causation (i.e., a presumption that the defendant caused the damage) if certain conditions are met.

As noted above, a second amendment addresses when it is appropriate for a Canadian court to hear a case under the new cause of action. In addition to the commonly used requirement of a “real and substantial connection” between the action and Canada, which existed in the original Bill C-10, the amendment permits the case to be heard in Canadian courts if the plaintiff is a Canadian citizen or permanent resident.

Though rare, there appear to have been some suits against individual and non-state organizations for terrorism activities in the past. In July 2008, the Lebanese Canadian Bank was sued by four Canadian-Israeli dual citizens who were in Israel during the 2006 hostilities between Israel and Hezbollah. They alleged that the bank provided banking and financing services to Hezbollah. However, the lawsuit was discontinued 5 November 2009 according to court records.13

There seem to have been no final judgments for terrorism-related civil suits in Canada to date. Victims of terrorist acts have won such lawsuits in other common law jurisdictions by relying on torts such as battery and intentional infliction of harm. A recent example outside Canada is the case in Northern Ireland where several individual defendants, as well as the Real IRA (a paramilitary organization that split from the Provisional Irish Republican Army in 1997), were found liable for loss and damages suffered by victims of the 1998 Omagh bombing and their relatives. That judgment awarded more than £1.6 million to 12 individuals.14

2.1.3 Constitutionality

Generally, civil lawsuits that allow victims to recover damages for harm suffered or loss inflicted as a result of someone else’s tortious conduct are considered matters of provincial jurisdiction under section  92(13) of the Constitution Act, 1867,15 which gives provincial legislatures the power to legislate regarding “property and civil rights in the province.” As stated by Canadian legal expert Peter Hogg:

The federal Parliament has no independent power to create civil remedies akin to its power over criminal law. This means that if the pith and substance of federal law is the creation of a new civil cause of action, the law will be invalid as coming within the provincial head of power “property and civil rights in the province” (section  92(13)).16

Having said this, it has been argued successfully in the past that Parliament can establish provisions related to civil redress if such provisions are established within the context of a broader regulatory or administrative scheme which is itself within Parliament’s legislative jurisdiction under section  91 of the Constitution Act, 1867.17

It is possible, then, that the civil right of action set out in the Justice for Victims of Terrorism Act (JVTA) could be viewed as having been enacted in the broader legislative context of the amendments to the State Immunity Act included in Part 1 of Bill C-10, and whichappear to be within Parliament’s jurisdiction under its power to legislate with respect to foreign affairs and international trade.18 This argument might have greater force, however, if the JVTA were creating a right of action against foreign states only, rather than against foreign states, individual persons, organizations and listed entities. As stated previously in this section  of this legislative summary, victims already have the ability to sue persons, organizations and listed entities for tortious conduct that has caused them injury or harm under ordinary provincial tort law or civil responsibility principles.

Alternatively, it might be possible to view the JVTA as functionally connected to Parliament’s 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.19 Many civil suits relate to Criminal Code offences, such as assault, but that is not sufficient to justify federal jurisdiction and those suits are governed by provincial laws.

The national concern branch of the federal government’s power to legislate on matters involving peace, order and good government provides another possible head of power under which Parliament might be authorized to enact the JVTA.20 The preamble of the JVTA states that “terrorism is a matter of national concern,” which could be an indication that this power is being relied upon.

2.1.4 Terrorism But Not Torture

One of the most common criticisms made regarding the earlier Bill C-35 was that it included terrorism offences but not torture, genocide, war crimes or crimes against humanity. Some lawyers and commentators argued when Bill C-35 was being considered that there was no justification or rational basis to allow suits for terrorism but not for those other crimes.21 A bill put forward by the Honourable Irwin Cotler – Bill C‑483: An Act to amend the State Immunity Act (genocide, crimes against humanity, war crimes or torture), which was first introduced in the House of Commons during the 2^nd Session of the 40^th Parliament on 29 November 2009, and was re-introduced in the House of Commons on 3 March 2010, at the beginning of 3^rd Session of the 40^th Parliament – also proposed to allow states to be sued civilly when their agents commit torture, genocide, war crimes and crimes against humanity as these terms are defined under Canadian law.22 That bill did not become law before Parliament was dissolved in March 2011 for the general election.

The United States has legislation that lifts immunity for “an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources,” thus including both terrorist acts and torture.23 Some countries in Europe, such as Italy, are also lifting immunity for torture, which has permitted suits against Germany for its actions during World War II.24 However, in December 2008, Germany brought a suit before the International Court of Justice against Italy for failing to respect its immunity.25 The hearing of this case was held in September 2011 and the court is now preparing the judgment.26

Private members’ bills addressing torture, but not terrorism, have also been introduced in the House of Lords and the House of Commons in the United Kingdom in recent years, with a bill currently before the House of Lords.27

2.1.5 Diplomatic Relations

Several commentators who expressed their views regarding Bill C-35 said that the bill could create various diplomatic challenges. This may also be true of Part 1 of Bill C-10. Concerns have been raised about the foreign relations implications of listing a country, of assisting in identifying assets and the possibility of retaliation. For example, Afghanistan and Pakistan are commonly seen as “incubators” of terrorism, but their listing could be problematic from a diplomatic perspective as the Canadian government seeks to support the governments of those countries.28

2.1.6 Listing of Countries

Previous private members’ bills and senators’ public bills did not include a government-established list of countries for which state immunity may be lifted.29 Another bill proposed by the Honourable Irwin Cotler – Bill C-408, which was first introduced in the House of Commons during the 2^nd Session of the 40^th Parliament, two days after the introduction of Bill C-35, and was then re-introduced in the House of Commons on 3 March 2010, at the beginning of 3^rd Session of the 40^th Parliament – suggests eliminating the list and, instead, allowing any country with which Canada does not have an extradition treaty to be sued. According to its proponents, this proposal would create a less politicized process than would the requirement that a country could be sued only if it were on a government-established list, and it would still prevent baseless claims.30 Countries with which Canada has extradition treaties are presumed to respect the rule of law and be democratic, and as such, it is assumed that claims could be made directly in those countries, rather than in the Canadian courts.31 However, other commentators have suggested that listing is a good compromise given the potentially negative foreign relations implications of such suits. Listing allows the government to retain some control of Canada’s relations with other nations.32

2.1.7 The U.S. Experience

The only country with similar legislation to Part 1 of Bill C-10 appears to be the United States, which has enacted the Antiterrorism and Effective Death Penalty Act of 1996 and has amended its Foreign State Immunity Act to provide for an exception similar to the one proposed in Part 1 of Bill C-10. That legislation has been in place for more than a decade. Only listed countries can be sued, with currently listed countries being Cuba, Iran, Syria and Sudan.33 North Korea, Iraq and Libya were originally listed but have since been delisted.34

A common problem identified by the Congressional Research Service has been the refusal of defendants to recognize the jurisdiction of the American courts. Defendants do not appear and default judgments are rendered, which the debtor countries then ignore and refuse to pay.35

Recovery has been a major problem, given the limited assets of listed countries being held in the United States and the executive branch’s resistance to allowing frozen assets to be used for this purpose. As Congress attempted to create avenues for recovery, the executive would resist such efforts over concerns about retaliatory measures, losing leverage over the countries concerned, and potentially violating international law on state immunity. For example, the 1981 Algiers Accord that resulted in the release of American embassy staff who were held hostage by Iran barred the hostages from initiating civil suits. However, Congress sought to provide a right of action to those hostages through various proposed laws, which the executive resisted, because of the international implications if such an Accord were to be violated.36

Changing circumstances in Iraq also created a difficult situation for the Bush Administration. Under Saddam Hussein, Iraq was a listed state that could be sued. A number of such suits were successful, and the plaintiffs sought recovery by seizing certain Iraqi assets. However, after the invasion of Iraq, according to the Congressional Research Service, the American government no longer had an interest in allowing such assets to be taken, as they wanted them to be used for the benefit of the Iraqi people in rebuilding the country. Iraq was retroactively delisted and many plaintiffs were unable to recover the money granted to them in judgments.37

With limited seizable assets in Canada, victims will find themselves competing for the few, if any, assets available for recovery. Furthermore, the concerns outlined above with respect to retaliation appear to have come true in the American situation, as equivalent measures have been introduced in Cuba and Iran in response.

The U.S. experience demonstrates the many challenges in making such a legislative scheme effective in meeting the needs of victims and acting as a deterrent. Some question whether the risk of a future lawsuit will have any impact on terrorists’ behaviour when they are willing to kill to meet their objectives.38 The refusal of defendants to engage in the process is also a significant barrier. Finally, with likely fewer assets available for seizure in Canada than in the United States, recovery will be even more challenging in this country.39

2.2 Description and Analysis

Part 1 of Bill C-10 contains nine clauses. Clause 2 of the bill enacts the Justice for Victims of Terrorism Actand clauses 3 to 9 amend the State Immunity Act.40 The JVTA includes a preamble and four section s.

2.2.1 Justice for Victims of Terrorism Act (Clause 2 of Bill C-10)

2.2.1.1 Preamble

The preamble of the Justice for Victims of Terrorism Act provides some insight into the motivating factors behind Part 1 of Bill C-10, the objectives it is designed to serve and the context within which it is to be interpreted and applied if adopted by Parliament. In particular, the preamble:

• recognizes the nature of the threat terrorism poses to national security and to Canadians and people everywhere;
• describes a related United Nations Security Council Resolution and refers to commitments Canada has made internationally by ratifying the United Nations Convention regarding combatting and suppressing terrorism;
• acknowledges the injuries and deaths experienced by victims of terrorist attacks;
• expresses the fact that terrorists need financial and material support in order to perform acts of terror;
• asserts that certain states that support terrorism should not benefit from state immunity; and
• states that the primary purposes behind allowing plaintiffs to sue terrorists and their supporters are to impair the functioning of terrorist groups and to deter and prevent terrorist conduct.

2.2.1.2 Title and Interpretation (Sections 1 and 2 of the JVTA)

Section 1 of the JVTA provides the short title for the new Act introduced by Part 1 of Bill C-10: the Justice for Victims of Terrorism Act.

Section 2 defines three terms that are used throughout the JVTA. All three terms are defined in relation to definitions that are contained in other statutes. Section 2 of the JVTA defines “foreign state” as having the same meaning as in section  2 of the State Immunity Act. As stated above, this means that a foreign state includes sovereigns or other heads of state when acting in their public capacity, as well as governments, departments or agencies of the state, the heads of political subdivisions of the state, such as provinces, when acting in their public capacity, and political subdivision governments, departments and agencies.

Similarly, “listed entity” is defined as having the same meaning as in section  83.01(1) of the Criminal Code, which defines it as “an entity on a list established by the Governor in Council under section  83.05.” Sections 83.05 to 83.07 of the Criminal Code  set out the process for listing entities and the criteria of which the Governor in Council must be satisfied before an entity can be listed.41

Finally, “person” is defined in section  2 as including an organization as that term is defined in section  2 of the Criminal Code. Section 2 of the Code states that an “organization” means:

(a) a public body, body corporate, society, company, firm, partnership, trade union or municipality, or

(b) an association of persons that

  (i) is created for a common purpose,

  (ii) has an operational structure, and

  (iii) holds itself out to the public as an association of persons.

By incorporating the definitions contained in other statutes by reference, Bill C-10 defines the three terms contained in section  2 of the JVTA (in particular, “foreign state” and “listed entity”) in a much broader and more detailed fashion than is immediately apparent from the words themselves.

2.2.1.3 Purpose (Section 3 of the JVTA)

Section 3 states that the JVTA’s purpose is to “deter terrorism by establishing a cause of action that allows victims of terrorism to sue perpetrators of terrorism and their supporters.”

2.2.1.4 Cause of Action (Section 4 of the JVTA)

Section 4 provides the parameters of the new cause of action created by Bill C-10. In many respects, the cause of action is broad in scope. For example, section  4(1) states that any person may bring such an action, regardless of whether the loss or damage he or she suffered occurred inside or outside Canada, as long as the act or omission that caused the loss or damage “is, or had it been committed in Canada would be, punishable under Part II.1 of the Criminal Code.” As stated previously, Part II.1 of the Criminal Code contains terrorism-related offences. Accordingly, in order to sue under the JVTA, the plaintiff must have suffered loss or damage as a result of a defendant’s having committed one or more of the following acts or omissions (section  numbers refer to the Code):

• wilfully and knowingly collecting or providing property for terrorist or certain other activities (section  83.02);
• intentionally providing or making property or services available for terrorist activities (section  83.03);
• using or possessing property for the purpose of facilitating or carrying out terrorist activities (section  83.04);
• knowingly dealing in property owned or controlled by a terrorist group, knowingly entering into or facilitating any transaction in respect of such property, or knowingly providing financial or other services in respect of such property (section s 83.08 and 83.12);
• failing to disclose the existence of property in his or her possession and control that the defendant knows is owned or controlled by or on behalf of a terrorist group to the Commissioner of the Royal Canadian Mounted Police or the Director of the Canadian Security Intelligence Service (section s 83.1 and 83.12);
• in the case of a financial institution, trust or loan company, credit association or other deposit-taking institution, or insurance company or securities dealer, failing to report that it is, or is not, in possession and control of property owned or controlled by a listed entity, and if it is in possession of such property, failing to report details regarding such property (section s 83.11 and 83.12);
• knowingly participating in the activity of a terrorist group (section  83.18);
• knowingly facilitating a terrorist activity (section  83.19);
• committing an indictable offence for the benefit of, at the direction of or in association with a terrorist group (section  83.2);
• directly or indirectly instructing a person to carry out an activity for the benefit of, at the direction of or in association with a terrorist group (section  83.21);
• directly or indirectly instructing a person to carry out a terrorist activity (section  83.22);
• knowingly harbouring a person whom he or she knows has carried out or is likely to carry out a terrorist activity, in order to enable the person or to facilitate the ability of the person to do so (section  83.23); or
• committing a hoax regarding terrorist activity (section  83.231).

Given that section  4 creates a civil cause of action, presumably the standard of proof that would be used to determine that the defendant committed one or more of the acts or omissions outlined above, as well as the standard that would be used to demonstrate that the act or omission in question caused harm to the plaintiff, would be the “balance of probabilities” standard. That standard is generally used in civil litigation, rather than the higher, “beyond a reasonable doubt” standard used in criminal law. The lower standard of proof would serve to broaden the scope of the cause of action outlined in the JVTA, by increasing the likelihood of a successful claim.

The time limit applicable to bringing this cause of action also appears to be quite broad. Section 4(1) is retrospective in scope: it allows victims who have suffered loss or damage as a result of terrorist acts or omissions to bring an action against the perpetrators of such acts or omissions as long as they were committed on or after 1 January 1985 (it is more common for legislation to apply only to actions committed on or after the date when it is enacted). The JVTA is likely designed to operate retrospectively so that families of the victims of the bombing of Air India Flight 182, which occurred on 23 June 1985, can potentially benefit from this new cause of action.

In addition, section  4(3) of the JVTA states that any “limitation or prescription period” for bringing an action described in section  4(1) does not start running until section  4 comes into force. Section 4(3) also suspends the running of the limitation or prescription period during such time as the person who suffered the loss or damage is incapable of commencing an action because of a physical, mental or psychological condition, or is unable to determine the identity of the person, listed entity or foreign state that engaged in the conduct resulting in the damage to him or her. Finally, section  4(1) specifies that the cause of action may be brought in “any court of competent jurisdiction,” which appears to give the victim a choice of forum, as long as the court in question has jurisdiction over the forum and subject matter in question, as well as the authority to make the order sought.42

Although the cause of action itself, the time limit for bringing such an action and the forum for bringing the action all serve to broaden the scope of this new cause of action, other parts of section  4 impose restrictions or limits on how this cause of action may be used, particularly in relation to foreign states. For example, although section  4(1)(a) allows victims of terrorist acts to sue persons, organizations and listed entities who have caused them loss or damage by committing any act or omission punishable under Part II.1 of the Criminal Code, foreign states may be sued only if they did something to benefit the person, organization, or listed entity that actually caused the harm in question. As such, it appears that the cause of action does not cover situations where a state was involved directly.

Section 4(1)(b) provides that if foreign states, persons, organizations or listed entities did not themselves commit the act that caused the harm, but merely did something to benefit the listed entity which committed that act, they will be found liable only if they committed one or more of the following acts (section  numbers refer to the Criminal Code):

• wilfully and knowingly collecting or providing property for terrorist or certain other activities (section  83.02);
• intentionally providing or making property or services available for terrorist activities (section  83.03);
• using or possessing property for the purpose of facilitating or carrying out terrorist activities (section  83.04);
• knowingly participating in the activity of a terrorist group (section  83.18);
• knowingly facilitating a terrorist activity (section  83.19);
• committing an indictable offence for the benefit of, at the direction of or in association with a terrorist group (section  83.2);
• directly or indirectly instructing a person to carry out an activity for the benefit of, at the direction of or in association with a terrorist group (section  83.21);
• directly or indirectly instructing a person to carry out a terrorist activity (section  83.22);
• knowingly harbouring a person whom he or she knows has carried out or is likely to carry out a terrorist activity, in order to enable the person or to facilitate the ability of the person to do so (section  83.23).

In addition, section  4(2) of the JVTA provides that courts may hear and determine the cause of action referred to in section 4(1) if the action “has a real and substantial connection to Canada” (i.e., the victim is Canadian, the defendant is Canadian, the harm occurred in Canada or on a vessel or aircraft in Canada, and so forth).43 On 5 October 2010, the Special Senate Committee on Anti-terrorism reported observations on Bill S-7 back to the Senate, suggesting that the government consider amending the bill to state that Canadian citizenship or permanent residence would be enough to demonstrate such a connection, as those factors would not necessarily establish a “real and substantial connection to Canada” on their own based on current case law. Though this suggestion was not in the original text of Bill C-10, it is reflected in amendments made by the House of Commons Standing Committee on Justice and Human Rights. The Committee also added section 4(2.1) to the JVTA. That section creates a presumption that the defendant committed the act or omission that resulted in the loss or damage to the plaintiff (i.e., a presumption of causation) if two conditions are met:

• a listed entity contributed to the loss or damage by committing an act or omission that, if committed in Canada, would be punishable under part II.1 of the Criminal Code; and
• the defendant committed an act or omission that, if committed in Canada, would be punishable under sections 83.02 to 83.04 and 83.18 to 83.23 of the Criminal Code for the benefit of or in relation to the listed entity.44

Section  4(4) of the JVTA says that courts may refuse to hear a claim made under section  4(1) in cases where the claim has been made against a foreign state, the loss or damage to the plaintiff occurred in that state, and the plaintiff did not give the foreign state “a reasonable opportunity to submit the dispute to arbitration in accordance with accepted international rules of arbitration.”45 In its observations on Bill S-7, the Special Senate Committee on Anti-terrorism said that an amendment to the bill might be necessary to ensure that this clause would not impede litigation unduly. No such change was made in Bill C-10.

Finally, while section  4(5) of the JVTA states that courts of competent jurisdiction in Canada must recognize judgments of foreign courts made in favour of plaintiffs who have suffered loss or damage of the type described in section  4(1), courts will do so only if the foreign judgment meets the requisite criteria under Canadian law for the recognition of such judgments.46 In the case of a suit launched by a plaintiff against a foreign state, recognition of a foreign judgment made against the state in question is further restricted. Section 4(5) specifies that, for a foreign judgment made against a foreign state to be recognized in Canada, the foreign state must be on the list established by Cabinet under section  6.1(2) of the State Immunity Act. (That section  is added by clause 5 of Bill C-10; see below.)

Although the JVTA itself does not explicitly state that only foreign states on the list established by Cabinet under 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 to 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. Further details on the listing process will be provided below.

2.2.2 Amendments to the State Immunity Act (Clauses 3–9 of Bill C-10)

2.2.2.1 Circumstances in Which a Foreign State Will Be Considered a Supporter of Terrorism and May Be Sued Under the Proposed Act (Clauses 4–6 of Bill C-10)

Clauses 3 to 9 of Bill C-10 amend the State Immunity Act to create another exception to the general rule that immunizes foreign states from suits in Canada’s domestic courts, as that rule is expressed in section  3(1) of the Act.47 These amendments are necessary in order to make the right of action described in section  4(1) of the JVTA meaningful. Clause 3 is a housekeeping amendment that introduces a new heading, “Definitions and Interpretation,” before section  2 of the State Immunity Act.

Clause 4 of Bill C-10 adds a new section  2.1 to the State Immunity Act.The new section  2.1 indicates that a foreign state supports terrorism if it commits an act described in section  4(1)(b) of the JVTA. In other words, foreign states are considered to support terrorism, and can be sued for supporting terrorism, only if they engage in conduct that supports the activities of listed entities as outlined in section s 83.02 to 83.04 or 83.18 to 83.23 of the Criminal Code.

Clause 5 of Bill C-10 adds a new section  6.1 to the State Immunity Act. New section  6.1 provides that, for a foreign state to be sued under section  4(1) of the JVTA, the act that the state committed in support of terrorism must have been committed on or after 1 January 1985 (new section  6.1(1) of the Act). The date chosen mirrors the date found in clause 4(1) of the JVTA. As noted above, this date was likely chosen to allow families of victims of the Air India bombing to sue foreign states (provided that the victims’ families can demonstrate that a foreign state committed an act on or after 1 January 1985 in support of the listed entity which committed that bombing).48

In addition, before a foreign state can be sued using section  4(1) of the JVTA, the state in question must have been listed by Cabinet (new section  6.1(1)). New section s 6.1(2) to 6.1(10) of the State Immunity Act set out the procedure for listing foreign states. The process is very similar to that described in section s 83.05 to 83.07 of the Criminal Code for the listing of terrorist entities. The Minister of Foreign Affairs recommends listing, after consulting the Minister of Public Safety, and Cabinet decides whether or not to list. The basis for listing a foreign state is that there are reasonable grounds to believe that the state in question supported or supports terrorism, as defined in new section  2.1 of the Act (new section  6.1(2)).

The Special Senate Committee on Anti-terrorism recommended, in its observations on Bill S-7, that the criteria for listing be made by regulation to ensure their robustness and public availability. The Committee also suggested that public consultation be part of the listing process. At third reading of Bill S-7, the Senate amended section  6.1(2) to clarify that a name may be added to the list “at any time,” provided that the requirements for listing are met. The Senate also amended the bill to add a new section  6.1(3) to the State Immunity Act requiring the government to establish the list within six months from the day the section  comes into force. These amendments are included in Bill C-10.

The Minister of Foreign Affairs, in consultation with the Minister of Public Safety, is required to review the list of foreign states every two years to determine whether reasonable grounds to keep the state on the list remain, and then makes a recommendation to Cabinet about whether the entity should be retained on the list (new section  6.1(7)). The Minister must complete a review as soon as feasible, but in no more than 120 days after commencing it, and must publish a notice in the Canada Gazette without delay once the review has been completed (new section  6.1(9)). The Senate amended Bill S-7 at third reading to require that the two-year review include consideration of whether new countries should be added to the list and to clarify that a review does not affect the validity of the list (new section s 6.1(7)(b) and 6.1(8)). These amendments are included in Bill C-10.

Foreign states may not challenge or make submissions with respect to the listing decision prior to its being made. They can, however, apply in writing to the Minister of Foreign Affairs to be removed from the list once they have been added to it. In such cases, the Minister of Foreign Affairs must, after consulting the Minister of Public Safety, decide whether there are reasonable grounds to recommend to Cabinet that the state in question be removed from the list (new section  6.1(4)). Once the Minister of Foreign Affairs has made a decision regarding the foreign state’s application for removal, he or she must notify the state without delay (new section  6.1(5)). A foreign state may not make another application to be removed from the list unless there has been a material change in its circumstances since the last time it applied for removal, or until the Minister has completed his or her most recent two-year review of the decision to recommend listing (new section  6.1(6)).

The Senate, at third reading, amended Bill S-7 by adding section  6.1(10), which provides a plaintiff with the right to continue an action, once proceedings have commenced, even if the state in question is removed from the list. This amendment is included in Bill C-10.

The most significant difference between the process for listing foreign states contained in new section s 6.1(2) to 6.1(10) of the State Immunity Act and the process for listing terrorist entities contained in section s 83.05 to 83.07 of the Criminal Code is that section s 6.1(2) to 6.1(10) of the State Immunity Act do not grant states an explicit statutory right to apply for judicial review of the Minister’s decision to recommend listing the state in question, or to recommend retaining the state in question on the list established by Cabinet. Under section  83.05(5) of the Criminal Code, terrorist entities are explicitly granted this right.

Clause 6 of Bill C-10 repeals the existing section  11(3) of the State Immunity Act and replaces it with a new section  11(3). Section 11(1) of that Act restricts the type of relief (i.e., what a plaintiff may request as a result of his or her suit) that is available when an action is brought against a foreign state. The existing section  11(3) makes section  11(1) inapplicable to the agencies of a foreign state, meaning that all regular forms of relief are available to plaintiffs when they sue such agencies, but not if they sue the actual state. The new section  11(3) makes all forms of relief available to plaintiffs in an action against agencies of a foreign state, and also in an action against the foreign state itself when the action is brought in relation to support for terrorism.

2.2.2.2 Attachment, Execution, Arrest, Detention, Seizure and Forfeiture of Foreign States’ Property in Canada (Clauses 7 and 8 of Bill C-10)

Clauses 7 and 8 of Bill C-10 amend the State Immunity Act to allow for attachment, execution, arrest, detention, seizure and forfeiture of property belonging to foreign states that is located in Canada, in certain circumstances. Clause 7 amends the existing section  12(1)(b) of the State Immunity Act to allow for the attachment, execution, arrest, detention, seizure and forfeiture of property belonging to foreign states and located in Canada when the state in question is on the list established by Cabinet under new section  6.1(2) of the Act, and the property in question “is used or intended to be used … to support terrorism.” It also adds a new section  12(1)(d) to the Act. This section  allows for the attachment, execution, arrest, detention, seizure and forfeiture of the property of a foreign state located in Canada if the foreign state is listed under new section  6.1(2) of the Act, and the attachment or execution is for the purposes of satisfying a court judgment rendered against that state in an action brought against it for supporting terrorism. Having said this, if the property of that state in Canada has cultural or historical value, then it cannot be attached or executed upon to satisfy such a judgment.

Clause 8 of the bill adds a new section  12.1 to the State Immunity Act. Section 12.1(1) provides that, in the event that a judgment is rendered against a listed foreign state for supporting terrorism, the Minister of Finance and the Minister of Foreign Affairs may, within the confines of their mandates, assist a judgment creditor in identifying and locating the property of the foreign state in Canada. With respect to the Minister of Finance, he or she may assist in locating and identifying the financial assets of the foreign state held within Canadian jurisdiction (new section  12.1(1)(a)), and with respect to the Minister of Foreign Affairs, he or she may assist in locating the property of the foreign state within Canada (new section  12.1(1)(b)).

However, it is important to note that this provision is permissive, rather than mandatory. The ministers may assist in identifying and locating the property of the listed foreign state, “to the extent that is reasonably practical,” unless “the Minister of Foreign Affairs believes that to do so would be injurious to Canada’s international relations or either Minister believes that to do so would be injurious to Canada’s other interests” (new section  12.1(1)). In addition, if the information regarding the identity and location of such property was produced in or for a government institution, or was initially received by a government institution and obtained from that institution, the ministers must obtain the consent of the relevant government institution before releasing the information to judgment creditors (new section  12.1(2)). “Government institution” is defined in the new section  12.1(3) of the State Immunity Act as “any department, branch, office, board, agency, commission, corporation or other body for the administration or affairs of which a minister is accountable to Parliament.” The Special Senate Committee on Anti-terrorism recommended in its observations on Bill S-7 that more mandatory language should be used with respect to government assistance and suggested that another bill creating a fund for victims who are successful in court but unable to receive compensation should be proposed. This suggestion is not reflected in Bill C-10.

2.2.2.3 Penalties Against Foreign States for Failure to Produce Information Relating to a Charge of Supporting Terrorism (Clause 9 of Bill C-10)

In addition to Bill C-10’s other amendments to the State Immunity Act, clause 9 amends section  13(2) of that Act to allow Canadian courts to levy fines or penalties against listed foreign states for failure or refusal to produce documents or information in respect of actions brought against them for supporting terrorism. Provision of such documentation and information would assist Canadian courts in rendering judgments in lawsuits initiated against foreign states pursuant to section  4(1) of the JVTA.

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Notes

*  Notice: For clarity of exposition, the legislative proposals set out in the bill described in this Legislative Summary are stated as if they had already been adopted or were in force. It is important to note, however, that bills may be amended during their consideration by the House of Commons and Senate, and have no force or effect unless and until they are passed by both houses of Parliament, receive Royal Assent, and come into force. [ Return to text ]