Court of Appeal for Ontario
Date: November 28, 2018 Docket: M49721 Motion Judge: Brown J.A.
Between
Yahya Heydari Respondent (Moving Party)
and
Homa Ahmadi Applicant (Responding Party)
Counsel
For the moving party: Pathik Baxi and Ida Mirzadeh
For the responding party: Michael Stangarone and Stephen Kirby
Heard: November 22, 2018
Reasons for Decision
Overview
1In this family law litigation, the husband, Yahya Heydari, moves for: (i) an extension of time to file a notice of appeal from the final order of Justice Fletcher Dawson dated May 9, 2018 (the "Final Order"); (ii) a stay of the Final Order pending appeal; (iii) certain relief in regard to the matrimonial home in the event it is sold; and (iv) leave to file fresh evidence on the appeal.
2The matrimonial home has now been sold. Pursuant to the order of Pardu J.A. made November 15, 2018, the net proceeds of the recent sale are being held in trust by the real estate solicitor acting on the sale pending disposition of this motion. As well, I informed Mr. Heydari's counsel that an application for fresh evidence must be brought before the panel hearing an appeal in accordance with s. 7.2.1 of this court's Practice Direction Concerning Civil Appeals. Accordingly, that leaves for determination the moving party's request for an extension of time to file a notice of appeal and a stay of the Final Order.
The Proceedings Below
3A history of this proceeding can be found in the lengthy reasons of Price J. dated April 26, 2018, reported at 2018 ONSC 2682.
4Briefly, the parties were born in Iran. They were married in 2007 in Iran. At that time, Mr. Heydari lived in Calgary; Ms. Ahmadi lived in Iran. She immigrated to Canada in 2008.
5Ms. Ahmadi assisted Mr. Heydari with his home renovation and re-sale business. Their only child tragically died less than a month after his birth in early 2013.
6The parties separated in May 2016, whereupon Ms. Ahmadi commenced this application. She sought to set aside a marriage contract and obtain orders for spousal support and a net equalization payment.
7As a result of Mr. Heydari's failure to comply with undertakings he gave on questioning and court orders directing that he provide answers to those undertakings, on April 26, 2018 Price J. struck out Mr. Heydari's pleadings (the "Strike Pleadings Order"). He ordered the matter to proceed to an uncontested trial the following month.
8Mr. Heydari did not move to set aside the Strike Pleadings Order. Nor did he appeal it. Further, his Amended Notice of Motion and Draft Notice of Appeal do not indicate that he seeks an extension of time to appeal the Strike Pleadings Order.
9Dawson J. heard the uncontested trial on May 9, 2018. His Final Order awarded Ms. Ahmadi: (i) lump sum spousal support in the amount of $248,734, payable upon the closing of the sale of the matrimonial home; (ii) an equalization payment of $26,887.64; (iii) costs of $35,000; and (iv) a restraining order against Mr. Heydari. As well, the Final Order directed the sale of the matrimonial home. Although title to the home was in the name of Mr. Heydari, the Final Order vested title in Ms. Ahmadi's name to facilitate the sale and directed payment of the spousal support, equalization payment and costs out of the net sale proceeds.
10As noted, the sale of the matrimonial home closed in mid-November and the real estate solicitor is holding the net sale proceeds in trust pending disposition of this motion.
11On October 16, 2018, Mr. Heydari filed this motion to extend the time to file a notice of appeal from the Final Order and to stay that order.
12If granted an extension of time, Mr. Heydari is prepared to deliver his notice of appeal within 10 days and perfect his appeal within 30 days.
Analysis
Framework for Extension of Time
13The framework in which to assess Mr. Heydari's request for an extension of time to appeal is well known. Each case must be assessed on its own facts. A court ultimately must be guided by whether the justice of the case requires granting the extension. In reaching that decision, the court usually considers: (i) whether an appellant formed an intention to appeal within the relevant appeal period; (ii) the length of, and explanation for, the delay; (iii) prejudice to the respondent; and (iv) the merits of the appeal, specifically whether there is so little merit in the proposed appeal that the court could reasonably deny the important right of appeal: Kefeli v. Centennial College of Applied Arts and Technology (2002), 23 C.P.C. (5th) 35 (Ont. C.A.); Issasi v. Rosenzweig, 2011 ONCA 112, 277 O.A.C. 391; and Duca Community Credit Union Limited v. Giovannoli (2001), 142 O.A.C. 146 (C.A.).
Intention to Appeal
14Mr. Heydari was represented by several counsel prior to the Strike Pleadings Order. In his affidavit, he complains about poor or inadequate representation by most of them.
15The Final Order was made on May 9, 2018. Mr. Heydari approached his current counsel on May 22, 2018 and retained him on June 6, 2018. A notice of change in representation was sent to opposing counsel that day.
16Mr. Heydari deposes that it was not until opposing counsel sent his new counsel the Final Order on June 19 that he learned the result of the uncontested trial. Sometime in late June or early July he decided to appeal the Final Order, raised funds for counsel, and fully retained new counsel.
17Although Mr. Heydari did not expressly advise opposing counsel or Ms. Ahmadi of his intention to appeal until mid-October when he filed this motion for an extension of time to file his notice of appeal, I am satisfied that service of the notice of change in representation signaled that he was contemplating an appeal of the Final Order as there was little other need for counsel to go on the record in this proceeding.
Explanation for the Delay in Bringing the Motion to Extend Time
18Notwithstanding his retainer of new counsel by June 6, 2018 and his knowledge of the Final Order no later than June 19, Mr. Heydari did not file his motion for an extension of time to appeal until October 16, 2018, some five months after the Final Order was made.
19I find Mr. Heydari's explanation for the delay to be weak. He deposes that instead of moving for an extension of time to file an appeal, he focused his efforts on trying to amass the information required to answer the undertakings he had failed to fulfill prior to the Strike Pleadings Order. His affidavit discloses that he decided to pursue the following litigation strategy: put together belated answers to the undertakings; try to have that information admitted as fresh evidence on the appeal thereby indirectly setting aside the Strike Pleadings Order, which he has not appealed or moved to set aside; try to set aside the Final Order through an appeal and re-wind the litigation clock back to early 2018 by obtaining a new trial. As I read his affidavit, developing that strategy is how Mr. Heydari spent his time between June and October, 2018.
20It is evident that Mr. Heydari did not spend the time readying his appeal for perfection. In response to my question during the motion hearing, his counsel advised that the appeal book and factum were not yet ready and Mr. Heydari requires a further 30 days to perfect his appeal.
21Mr. Heydari's affidavit also discloses that he spent part of the summer trying to frustrate the operation of the Final Order, which had directed the sale of the matrimonial home and placed carriage of the sale solely in the hands of Ms. Ahmadi. To his affidavit Mr. Heydari attached an August 3, 2018 letter his accountant wrote to the Canada Revenue Agency Voluntary Disclosures Program. It is an extraordinary letter. In part, the letter contains information about Mr. Heydari's past income that raises very serious questions about the accuracy of the income he reported on his February 10, 2017 Form 13.1 Financial Statement. As well, his accountant drew the CRA's attention to the support dispute Mr. Heydari was having with Ms. Ahmadi, writing:
Due to legal impediments of my client, his ex-wife will sell his only material asset, [the matrimonial home], to satisfy spousal support payments. My client feels the support payments are warranted however dispute the actual amount of spousal payments, since up until recently, he was not aware he had unreported income from selling properties.
To complicate his unreported income with the CRA, the Superior Court of Justice in Ontario has a court order in favour of his former wife, [Ms. Ahmadi], to sell his only quantifiable material asset, which is the [matrimonial home].
This property is currently put up for sale by his ex-wife, and is currently on the market since mid-end of July 2018. Without such proceeds from the sale of said property, my client does not have any other material assets or enough potential income in future years to pay for such tax liabilities.
Mr. Heydari is in the process of filing a court motion to halt the sale of [the matrimonial home] and to prevent his ex-wife to use the sell proceeds. Mr. Heydari has advised me through his discussion with his lawyer that such motion might take 6-8 weeks and by that time, his ex-wife would have emigrant out of Canada with the proceeds. Mr. Heydari believes his ex-wife is a flight risk, given after the sale of [the matrimonial home], she would have no primary residential ties with Canada as her immediate family are in Iran.
To further prevent the erosion of proceeds leaving Canada and leaving Mr. Heydari with a significant unpayable tax liability, Mr. Heydari has voluntary given consent to the CRA to put a lien of $1,017,126 (see "Tax liabilities" section for the calculation) as a form of security on his only material asset, [the matrimonial home]. This lien should be put in place immediately. Please be advised that Mr. Heydari is the sole and 100% owner of this property as proven in family court and through real estate title search.
Furthermore, the sale of [the matrimonial home] will create additional business income, and given the flight risk of Mr. Heydari's ex-wife, it would be in the best interest for the CRA to put a lien on this property. [Emphasis in the original.]
22From this letter I conclude that instead of using the time following the Final Order to prepare an appeal, Mr. Heydari spent his time trying to frustrate the provisions of the Final Order directing the sale of the matrimonial home. Accordingly, Mr. Heydari's explanation for his delay in bringing this motion to extend is quite weak, and I conclude that he has not pursued the preparation of his appeal with the requisite diligence.
Merits of the Appeal
23Mr. Heydari's draft notice of appeal offers little in the way of specifics about the errors he will submit taint the Final Order. The draft notice of appeal merely contains bald assertions that the trial judge misapprehended the evidence and made findings of fact unsupported by the evidence, without offering any specifics.
24Mr. Heydari's counsel submits that while his client does not take issue with the quantum of the ordered spousal support, the trial judge erred in failing to explain why he ordered support payable in a lump-sum. As well, Mr. Heydari submits that the trial judge's endorsement does not clearly explain how he reached certain conclusions.
25I would note that the trial judge's reasons do provide insight into how he reached his conclusion to make a lump-sum spousal support award. The trial judge wrote:
In terms of spousal support, I note the significant admissions that flow from the respondent's failure to respond to a comprehensive Request to Admit. Entitlement to spousal support is established on more than one basis. As to quantum, I accept the evidence which supports the imputation of income that in turn supports the quantum of the spousal support sought. I accept that in the circumstances as described in the 23C affidavit, a lump sum is warranted in the amount proposed. This amount corresponds with a reasonable period of support based on the length of the marriage.
26As well, para. 19 of Ms. Ahmadi's 23C affidavit, referred to by the trial judge, summarizes the basis upon which she submitted that Mr. Heydari should pay her lump-sum spousal support in the amount of $253,201. From the award actually made, it is apparent the trial judge gave significant weight to that evidence. Further, as Ms. Ahmadi's counsel argues, Mr. Heydari's disclosure of his accountant's letter to CRA raises serious questions about whether he grossly understated his income on his Form 13.1 Financial Statement.
27However, I am not satisfied that the grounds of appeal advanced by Mr. Heydari fail to meet the very low threshold of having so little merit as to deny the important right of appeal.
Prejudice to Ms. Ahmadi
28One factor a court must take into account on a motion for an extension of time to file a notice of appeal is the prejudice to a respondent in granting an extension request.
29The prejudice deposed to by Ms. Ahmadi is financial in nature. She states that she is in desperate need of funds. She spent her married life assisting her husband with his business. Ms. Ahmadi had been a teacher in Iran but is not qualified to teach in Ontario. Following the parties' separation, Ms. Ahmadi completed coursework at the OREA Real Estate College. However, she has yet to earn any income through real estate. She deposes: (i) that the only income she received in 2017 was $1,000 in spousal support; and (ii) she continued to receive $1,000/month in spousal support through April, 2018.
30If Mr. Heydari is granted an extension of time to appeal, enforcement of some parts of the Final Order would be stayed automatically. The Final Order requires Mr. Heydari to pay Ms. Ahmadi $310,926.38 from the net sale proceeds of the matrimonial home, made up of the following amounts:
(i) $248,734 in lump sum spousal support;
(ii) $26,887.64 as an equalization payment;
(iii) $304.74 in prejudgment interest;
(iv) $35,000 in costs.
31In the event an extension of time is granted to Mr. Heydari to file a notice of appeal, the automatic stay of a provision of an order for the payment of money under r. 63.01(1) would apply only to the amount of $62,192.38, comprised of items (ii), (iii) and (iv). Since r. 63.01(1) stipulates that the automatic stay does not apply to "a provision that awards support or enforces a support order" granting Mr. Heydari an extension of time to appeal would not stay automatically the provision of the Final Order requiring payment of the lump sum support of $248,734.
32Nor would it stay automatically the related provision in the Final Order directing payment of that amount from the net sale proceeds "upon the closing of the sale of the [matrimonial home]." That provision falls within the language of r. 63.01(1) of a "provision that … enforces a support order."
33As a result, in the absence of an order staying the spousal support provisions of the Final Order, granting Mr. Heydari an extension of time to file a notice of appeal would not prevent Ms. Ahmadi from obtaining immediately almost 80% of the money awarded to her out the net sale proceeds now held in trust. Accordingly, the financial prejudice to Ms. Ahmadi of granting Mr. Heydari an extension would be modest in proportion to the overall amount awarded by the Final Order.
Mr. Heydari's Request for a Stay
34However, Mr. Heydari seeks to stay the payment of the $248,734 spousal support award from the net sale proceeds pending his appeal.
35Whether one approaches Mr. Heydari's request through the lens of the standard test for a stay (RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311) or by reversing the perspective applied on a request to lift an automatic stay (SFC Litigation Trust v. Chan, 2018 ONCA 710), in my view the result is the same – he is not entitled to a stay of the spousal support provisions of the Final Order because:
(i) His grounds of appeal are weak;
(ii) The only harm he might suffer if a stay is not granted is monetary. Even then, his disclosure to the CRA of substantial unreported income – which was not disclosed to the court prior to trial – suggests that the amount of the Final Order was lower than it might otherwise have been had Mr. Heydari disclosed his actual income; and
(iii) The balance of convenience overwhelming favours not interfering with the "no automatic stay" policy regarding support orders as expressed in r. 63.01(1). Mr. Heydari: (i) ignored court orders that he fulfill his undertakings; (ii) only paid spousal support when ordered to do so; (iii) delayed significantly in seeking an extension of time to appeal; and (iv) instead used that time to try to thwart the court-ordered sale of the matrimonial home and develop a litigation strategy to undermine, indirectly, the Strike Pleadings Order. I see no equity on Mr. Heydari's side of the ledger.
Summary
36For those reasons, Mr. Heydari has not made out a case for a stay of the spousal support provisions in the Final Order. In that circumstance, after considering the justice of the case as a whole, I am satisfied that the prejudice Ms. Ahmadi may suffer from granting Mr. Heydari an extension of time to appeal is proportionately modest given her immediate entitlement to $248,734 of the net sales proceeds to satisfy the Final Order's award of spousal support. Although Mr. Heydari's grounds of appeal are weak, as is his explanation for his delay in seeking an extension of time, I am reluctant to deprive a litigant of his statutory right of appeal where the delay to appeal is five months.
37Finally, in her factum Ms. Ahmadi submits that until Mr. Heydari obtains an order setting aside the Strike Pleadings Order, r. 1(8.4) of the Family Law Rules does not entitle him to participate in these proceedings in any way. I do not accept this submission as the Family Law Rules do not apply to an appeal in the Court of Appeal: r. 1(2).
Disposition
38Accordingly, I grant Mr. Heydari an extension of time to file a notice of appeal on the following terms:
(i) He deliver his notice of appeal no later than 3 p.m. on Monday, December 3, 2018; and
(ii) He perfect his appeal no later than Thursday, December 20, 2018. Mr. Heydari did not include a draft certificate of evidence in his motion record, so I cannot determine whether he intends to rely on any transcripts. If he does, I suspect that not much transcription will be involved since the Final Order was made after an uncontested trial that proceeded largely on deemed admissions and affidavit evidence. In any event, if fixing this deadline for perfection necessitates paying for expedited transcripts, Mr. Heydari will have to bear that cost.
39I dismiss Mr. Heydari's request for a stay of the Final Order. Further to para. 2 of the order of Pardu J.A. made November 15, 2018, I direct that the real estate solicitor holding in trust the net proceeds from the sale of the matrimonial home release to Ms. Ahmadi, or her counsel at her direction, the sum of $248,734 in satisfaction of paras. 5 and 10(2)(a) of the Final Order.
40Mr. Heydari does not seek costs in the event he succeeds on the motion. Ms. Ahmadi seeks substantial indemnity costs in the amount of $8,400 payable forthwith out of the net sale proceeds. Mr. Heydari submits that in the event Ms. Ahmadi succeeds on the motion, she should receive $2,000 in costs.
41Although I have granted Mr. Heydari part of the relief he requested on the motion, I regard his litigation conduct with respect to this appeal as employing delay and attrition tactics too often seen in matrimonial litigation. His request for a stay of the spousal support provisions of the Final Order signals that he seeks to grind down Ms. Ahmadi, who lacks financial resources. When assessed against the backdrop of Mr. Heydari's attempts to thwart the sale of the matrimonial home, I regard his request for a stay of the payment of spousal support as a form of litigation misconduct. Such misconduct is to be discouraged, especially in matrimonial litigation.
42Consequently, I award Ms. Ahmadi elevated, substantial indemnity costs of $8,400, as supported by her bill of costs. That amount is payable immediately out of the net sale proceeds of the matrimonial home held in trust.
"David Brown J.A."
