COURT OF APPEAL FOR ONTARIO DATE: 20230113 DOCKET: M53916 (COA-22-CV-0312) & M53943 (COA-22-CV-0418)

George J.A. (Motion Judge)

BETWEEN

Harry Gefen Applicant (Respondent/Responding Party)

and

Henia Gefen, in her personal capacity and in her capacity as the Estate Trustee of the Estate of Elias Gefen, and Harvey Gefen Respondents (Appellants/Moving Parties)

Counsel: Benjamin Salsberg, Ingrid Matckars, for the moving party Harvey Gefen Ronald Moldaver, for the moving party Henia Gefen Aidan Fishman, for the responding party Harry Gefen Archie Rabinowitz and Stacey Blydorp, for Shael Eisen, Guardian of Property and Litigation Guardian for Henia Gefen Chris Graham, for the Yehuda Gefen Estate

Heard: December 23, 2022

ENDORSEMENT

[1] 100-year-old Henia Gefen (“Henia”) is the mother of Harvey Gefen (“Harvey”), Harry Gefen (“Harry”), and Yehuda Gefen (now deceased). The applicant in the main proceeding, Harry, seeks to pass over the appointments of Henia as the sole Estate Trustee of his father Elias Gefen’s estate (“Estate”), and the appointment of he and Harvey as alternate trustees. The Estate is presently being administered by an Estate Trustee during Litigation (“ETDL”) as ordered by Newbould J. on January 27, 2015.

Nature of Motion

[2] Henia and Harvey (“moving parties”) are appealing the motion judge’s order, which, inter alia: 1) appointed Shael Eisen as Litigation Guardian and Guardian of Property for Henia; 2) directed Eisen to attend mediation on Henia’s behalf and that he have full authority to settle any objections made by Henia; 3) removes Mr. Ronald Moldaver as Henia’s counsel of record (in all matters related to the Estate); 4) lifts a September 5, 2022 stay of all litigation in which Henia is involved; 5) directs Harvey to pay the costs he had been ordered to pay to that point, within 15 days, and Henia to similarly pay all outstanding costs orders within 30 days; and 6) orders Mr. Moldaver to pay $3,500 in costs personally. Pending hearing of their appeal the moving parties seek a stay of the motion judge’s order.

[3] Harry, of course, opposes the request for a stay, as does Yehuda’s estate, which is owed costs by Elias’s estate. Mr. Eisen also opposes a stay, taking the position that because he is fully accountable to the court for any decision he makes, or action he takes, on behalf of Henia, there would be no irreparable harm to the moving parties if the motion judge’s order took immediate effect and was operative pending the outcome of the appeal.

Trial before Kimmel J.

[4] In 2013, after the death of her husband Elias, Henia commenced an action against Harry and Harvey. In that initial action, Harry and Yehuda counterclaimed, and Harvey brought a third-party claim. These matters were tried before Kimmel J. in 2018-19 and ended in divided success. Of note, while there is no judgment against Harvey (a point repeatedly stressed by his counsel at the hearing of this motion), Kimmel J. did find as a fact that he had unconscionably procured approximately $8.66 million of Henia’s assets. The appeal of that decision was dismissed by this court: Gefen Estate v. Gefen, 2022 ONCA 174, 161 O.R. (3d) 267, leave to appeal to S.C.C. denied, 40164. Kimmel J. also ordered that the Estate (of which Henia is the trustee and sole beneficiary) pay more than $1 million in costs to Harry, Yehuda and Harvey.

[5] In 2021, Harry, in his capacity as a creditor of the Estate (by virtue of the unpaid costs award from trial), commenced this application. He then brought a motion which sought a declaration that Henia was incapable of instructing counsel or managing property, and for the appointment of a litigation guardian. On November 4, 2022, the motion judge granted the motion, making the order under appeal.

Decision Below

[6] In her endorsement, the motion judge details the lengthy and difficult history of this application and related proceedings. I will only repeat here that which is relevant to the request for a stay.

[7] After the application was commenced (but before the order under appeal was made), Harry sought to compel an examination of Henia pursuant to r. 39.03 of the Rules of Civil Procedure. In her capacity as case management judge, the motion judge granted the order, observing at the time that it “should not have been necessary” and that the “result of the motion was inevitable”. Henia was examined in February 2022 when, at least according to Harry, Mr. Moldaver repeatedly, and improperly, interrupted and refused “dozens of basic and essential questions”. While Mr. Moldaver does not agree with this characterization, Harry further submits that the answers Henia did provide were “illogical, tangential, and/or confused”. This led to the capacity assessment, and ultimately the motion judge’s finding that Henia was incapable of instructing counsel or managing her property.

[8] As mentioned, in addition to the finding of incapacity, the motion judge appointed Mr. Eisen as litigation guardian and guardian of property; ordered costs against Mr. Moldaver personally; and restrained Mr. Moldaver from representing Henia in this proceeding or in any other concerning the Estate. She also ordered that Harvey not serve as Henia’s attorney or litigation guardian.

Analysis

[9] To grant a stay, I must be satisfied: 1) that there is a serious issue to be tried; and 2) that the moving parties would suffer irreparable harm if the stay was not granted. I must also consider who would suffer the greater harm from granting, or refusing, the stay.

Is there a serious issue to be tried?

[10] To start, I agree with Harry’s counsel that many of the moving parties’ complaints about the motion judge’s order, and what led to it, are procedural in nature, and do not go the merits per se. For instance, the argument that the motion judge somehow usurped the authority of one of her judicial colleagues – who was scheduled to hear the main application on a later date – has no relevance to or bearing on the issues before me. In any event, the motion judge, who was also the case management judge, did not “reserve” any issues to a later date. Apart from any errors she may have committed (which this court will consider when the appeal is heard), the motion judge had the authority to hear this motion and to make the order she did.

[11] Counsel for the moving parties also made much of the fact that the court registrar had emailed them, after the motion judge’s decision was released, advising that the scheduled application date was no longer required. While it will be for a panel of this court to decide (if this issue is raised), it is hard to see how this was an “error” or procedural misstep that would warrant this court’s intervention. As I understand it, the moving parties had already expressed their intention to appeal the order, which clearly meant that the application would not be heard in an expedited manner and that the looming hearing date had to be vacated. It strikes me that this communication was simply to confirm that obvious fact.

[12] Counsel for the moving parties also expressed concern over the fact that there was no viva voce evidence from Ms. Postoff, the person who assessed Henia’s capacity. To this, I would point out that Mr. Moldaver did not swear an affidavit that spoke to Henia’s ability to instruct him. In fact, there was no evidence before the court in support of the position that Henia was capable of instructing counsel – the alternative assessor, Mr. Cappuccio, only formed an opinion as to her capacity to manage property, a lower standard: Calvert (Litigation Guardian of) v. Calvert (1997), 32 O.R. (3d) 281, at p. 294, aff’d Calvert (Litigation Guardian of) v. Calvert (1998), 37 O.R. (3d) 221. Therefore, in the circumstances of this case, given Henia’s age and what unfolded at her examination, and in light of the uncontradicted evidence that she was incapable, the motion judge’s finding that Henia lacked capacity to instruct counsel is likely unassailable. Moreover, her strong reasons for preferring Ms. Postoff’s evidence over Mr. Cappuccio’s likely make her finding that Henia lacked capacity to manage her property similarly unassailable.

[13] We must also remember the context, which is that Kimmel J., after a lengthy trial, found that Harvey had unconscionably procured millions of dollars in Henia’s assets. The motion judge was aware of this, and was right to consider it. It is difficult to see on what basis this court would interfere with that decision. As counsel for Harry stated in his submissions, it is hard to imagine a starker example of someone being unfit to be a guardian. The moving parties should not be permitted to mount a collateral attack on that finding at this stage.

[14] The moving parties further argue that Harry lacked standing to seek the relief he did. That argument is not likely to succeed, for two reasons: First, while I stand to be corrected, upon my review of the record below it does not appear that Harry’s ability to seek an order passing over Henia as estate trustee was even argued before the motion judge. Second, and more importantly, pursuant to r. 7.03 of the Rules of Civil Procedure and s. 22 of the Substitute Decisions Act, S.O. 1992, c. 30, “any person” has standing to seek the appointment of a guardian of property, and any applicant has standing to seek the appointment of a litigation guardian for the respondent in an application. In any case, the motion judge had already weighed in on this question – first in her January 19, 2022, endorsement (on a r. 39 motion), and next in her June 6, 2022, decision (on Harry’s motion to appoint a capacity assessor). In both instances Henia sought leave to appeal to the Divisional Court, which was denied. Therefore, this is not a serious issue to be heard on appeal.

[15] The balance of the moving parties’ complaints – including that the motion judge should not have preferred Ms. Postoff’s capacity assessment over Mr. Capuccio’s – are without merit, and therefore do not represent a serious issue to be tried. The motion judge’s reasons thoroughly explain why she decided as she did. Likewise, at this point and on this record, I see no error in the motion judge’s decision to appoint a neutral, independent guardian, as opposed to allowing Harvey to continue exercising control over Henia’s affairs.

Would the moving parties suffer irreparable harm if a stay is not granted?

[16] There would be no irreparable harm to either Henia or Harvey were I to deny their request for a stay. Henia, who has been found to be incapable, presently has a guardian managing her property (Mr. Eisen). Pending the hearing of this appeal, Mr. Eisen will continue in this role. Mr. Eisen, who is experienced in these matters, is an officer of the court who will have to account for every action he takes on Henia’s behalf. That being the case, it is extremely difficult to even make sense of the moving parties’ argument on this point. Conversely, were I to grant a stay, this would maintain Harvey as the dominant force in Henia’s affairs, which is hard to justify in light of Kimmel J.’s findings.

[17] I would also reject the argument that, if a stay is not granted, Henia would be unable to contest the ETDL’s ongoing passing of accounts. First, this argument continues to ignore Mr. Eisen, the function he serves, and his legal obligations. Stated otherwise, Mr. Eisen, on Henia’s behalf, can contest any inappropriate expenses incurred by the ETDL, and there is no reason to believe he would not do so if the circumstances warranted. Second, Harvey himself, to the extent he has a financial interest in Elias’s estate, has the ability to contest ETDL expenses himself.

Balance of Convenience

[18] The considerations at play here are largely the same as those under the irreparable harm branch, which make it clear that Henia would not be inconvenienced were a stay not granted. As for Harvey, the motion judge’s order does not even affect his rights. Therefore, the balance of convenience favours allowing the motion judge’s order to take effect and to continue pending the outcome of this appeal.

Conclusion

[19] I decline to stay any aspect of the motion judge’s order. The motion is therefore dismissed. If an agreement cannot be reached, I will hear from the parties on the issue of costs. Harry, the Yehuda Gefen estate, and Eisen, may file written submissions within 20 days. Harvey and Henia may respond in writing within 7 days of receipt of those submissions. These shall not exceed 2 pages in length, excluding a costs outline. Any authorities relied upon must be hyperlinked.

“J. George J.A.”