COURT OF APPEAL FOR ONTARIO

CITATION: Bouzari v. Bahremani, 2014 ONCA 476

DATE: 20140617

DOCKET: M43489 (C58082)

Juriansz J.A. (In Chambers)

BETWEEN

Houshang Bouzari, Fereshteh Yousefi, Shervin Bouzari and Narvan Bouzari

Plaintiffs (Respondents)

and

Mehdi Hashemi Bahremani, aka Rafsanjani, Akbar Hashemi Bahremani, aka Rafsanjani, Ali Fallahian Najaf Abadi, Gholam Hossein Mohensi Ejei, John Doe, aka Siyadati, Bill Doe, aka Akbari Rad Massoudi and Tom Doe, aka Mohammad Saeedi aka Asghar Saeedia aka Mr. 99

Defendants (Appellants)

Brendan Clancy, for the appellant

Mark H. Arnold, for the respondents

Heard: May 28, 2014

On motion for security for costs.

ENDORSEMENT

[1] The respondents bring a motion for security for costs of the appeal as well as for the unpaid costs awarded in the court below in this unusual proceeding. At the same time, counsel for the appellant moved to remove themselves from the record on the basis that they were unable to obtain any instructions whatsoever. At the hearing, I granted the order removing appellant’s counsel from the record but reserved my decision on the respondents’ motion for security for costs.

[2] The respondent, Houshang Bouzari, seeks damages for his imprisonment and torture in Iran in the early 1990s. The other respondents are his family members, who claim damages under the Family Law Act, R.S.O. 1990, c. F.3. Mr. Bouzari, who was born in Iran, fled the country and eventually settled in Canada where he and his family are now citizens.

[3] The appellant, Mehdi Hashemi Bahremani, aka Rafsanjani, is the son of a former president of Iran. In their action, the respondents allege that Mr. Rafsanjani was instrumental in Mr. Bouzari’s arrest, imprisonment and torture.

[4] Mr. Rafsanjani has filed an appeal from the order of Pollack J. dismissing his forum non conveniens motion, in which he asserted that the court should decline jurisdiction in favor of proceeding in England.

[5] The respondents advance two bases for their motion for security for costs under rules 61.06(1)(a) and 61.06(1)(c) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

Rule 61.06 (1)(a)

[6] The respondents submit that there is good reason to believe that the appeal is frivolous and vexatious and that Mr. Rafsanjani has insufficient assets in Ontario to pay the costs of the appeal. Admittedly, Mr. Rafsanjani has no assets in Ontario. However, I have not been persuaded that there is good reason to believe the appeal is frivolous and vexatious. Mr. Rafsanjani led evidence that he has never been admitted to Canada. In 1993, his request for a visa was denied at the border in Calgary. The motion judge also found, at para. 12, that “for the purposes of this action”, Mr. Rafsanjani twice applied for a visa from London with the assistance of counsel but was unsuccessful both times. Nevertheless, she found that the evidence established only that Mr. Rafsanjani was denied admission into Canada in the past. It did not establish it was unlikely he would be admitted into Canada in the future. In my view, Mr. Rafsanjani has a plausible argument that the motion judge erred in weighing this evidence and declining to infer he would be unable to defend the action in Canada.

Rule 61.06 (1)(c)

[7] Justice Blair discussed the application of rule 61.06(1)(b) in Donaldson International Livestock Ltd. v. Znamensky Selekcionno-Gibridny Center LLC, 2010 ONCA 137, 101 O.R. (3d) 314. He referred to the line of authority in this court establishing that a respondent on appeal may not rely on rule 61.06(1)(b) to obtain an order for security for costs of an appeal as against a defendant/appellant. He explained that the policy rationale behind this line of jurisprudence is not to impose security for costs upon foreign or impecunious defendants who are forced into court by others to defend themselves. Justice Blair also explained that, while the court has jurisdiction under rule 61.06(1)(c) to award costs against a defendant/appellant, “a party seeking an order for security for costs under rule 61.06(1)(c) may not resort to what are in effect the same grounds that would support a rule 56.01 order”.

[8] To rely on rule 61.06(1)(c), the respondents must establish there is some good reason to order security for costs “other than” those already encompassed in the other parts of the rule. They cannot rely on the unpaid costs order from below, the appellant’s lack of any assets in Ontario, and the submission the appeal lacks merit.

[9] Justice Laskin also discussed s. 61.06(1)(c) in Combined Air Mechanical Services Inc. v. Flesch, 2010 ONCA 633. He observed that while the list of reasons justifying security under the residual category is open ended, the “other good reason” must be fairly compelling, as the moving party cannot meet the requirements of either of the first two categories. Security for costs awards under s. 61.06(1)(c) are not to be made routinely.

[10] The “other good reason” must also be related to the purpose for ordering security: that a respondent is entitled to a measure of protection for the costs that will be incurred on the appeal. In such an analysis, the potential merit of the appeal is a relevant factor: Maeder v. 2811472 Canada Inc., [2012] O.J. No. 3908 (C.A.).

[11] Before the motion judge, Mr. Rafsanjani filed evidence that he resides in England and has temporarily returned to Iran to clear his name in legal proceedings there. He was arrested when he returned to Iran and had been released on bail by the time of the motion.

[12] The respondents’ motion came before the court on March 28, 2014. Counsel for Mr. Rafsanjani filed an affidavit from his Iranian lawyer stating that if he provided substantive instructions to his Ontario counsel regarding the motion or the appeal, his bail could be revoked and he could be returned to prison. The affidavit claims that prosecuting authorities in Iran have interpreted certain audio recordings, purportedly of Mr. Rafsanjani, as statements against national security. It suggests that these same audio recordings were potential evidence in the Ontario action, and that Mr. Bouzari was involved in releasing them. Therefore, Iranian prosecutors might construe participation in the Ontario action as an attempt to interfere with evidence or witnesses involved in Mr. Rafsanjani’s prosecution, contrary to Iran’s Criminal Code of Procedure. On this basis, Hoy A.C.J.O. adjourned the motion until May 28, 2014 and vacated the pending appeal date of June 18, 2014.

[13] When the matter returned before me, counsel for Mr. Rafsanjani were removed from the record because of their inability to obtain any instructions, and the respondents’ motion for security proceeded unopposed.

[14] Unless there is a change in circumstances, the appeal will likely be dismissed as abandoned. The respondents will needlessly have incurred further costs in preparing responding materials for the appeal and will have no prospect of collecting any costs awarded against Mr. Rafsanjani. This, counsel for the respondents submits, constitutes “other good reason” why security for costs should be ordered. I am not persuaded.

[15] In exercising my discretion to refuse an order for costs, I have considered the following:

i) There has been little change in the circumstances that prompted Hoy A.C.J.O. to adjourn the respondents’ motion and vacate the hearing date for the appeal;

ii) The appeal could involve the application of novel and important issues of public importance to domestic and international jurisprudence;

iii) The appellant is a foreign defendant brought into the jurisdiction by the respondents. As noted above, it is not the practice of this court to impose security for costs upon foreign or impecunious defendants forced into court by others to defend themselves;

iv) The appeal has plausible merit; and

v) At this time it is uncertain when the hearing of the appeal will be scheduled and whether circumstances may change before then. An order for security for costs granted at this time could effectively terminate the appeal. In my view it is preferable to allow the appeal the greatest prospects of being determined on the merits.

[16] The motion is dismissed. I make no order as to costs.

“R.G. Juriansz J.A.”