COURT OF APPEAL FOR ONTARIO

CITATION: Alfano v. Piersanti, 2012 ONCA 612

DATE: 20120918

DOCKET: C54547

Cronk, Epstein and Pepall JJ.A.

BETWEEN

Bertina Alfano, Trustee of the Carmen Alfano Family Trust, Bertina Alfano, Italo Alfano, Trustee of the Italo Alfano Family Trust, Italo Alfano, Ulti Alfano Trustee of the Ulti Alfano Family Trust, and Ulti Alfano

Plaintiffs (Respondents)

and

Terry Piersanti also known as Terry Scatcherd, Christian Piersanti, Piersanti and Co. Barristers and Solicitors, Piersanti and Co. Professional Corporation, 1269906 Ontario Limited, 1281111 Ontario Limited, 1281038 Ontario Limited, 1314112 Ontario Limited, 1281633 Ontario Limited, 1281632 Ontario Limited, 1466556 Ontario Limited, 3957331 Canada Inc., 3964400 Canada Inc., 3968626 Canada Inc., 4002598 Canada Inc., 4011902 Canada Inc., 6051685 Canada Inc., 6060439 Canada Inc. 6260365 Canada Inc., 6292470 Canada Inc., 6306560 Canada Inc., 6324223 Canada Inc., 6792715 Canada Inc., Yonge Centre Properties Inc., 6335144 Canada Inc., TMJ Investments, Tara Piersanti also known as Tara Piersanti-Blake, Justin Piersanti and Morgan Piersanti

Defendants (Appellants)

V. Ross Morrison and R. Samantha Chapman, for the appellants

James F. Diamond, for the respondents

Kyla E.M. Mahar, for the Receiver

Heard: September 5, 2012

On appeal from the order of Justice P.A. Cumming of the Superior Court of Justice, dated October 18, 2011.

Pepall J.A.:

1. Background

[1] The appellants appeal from the October 18, 2011 order of Cumming J. of the Superior Court of Justice dismissing their motion for an order setting aside a Mareva injunction and receivership order granted by Newbould J. of the Superior Court of Justice on August 22, 2011 and also dismissing their motion for an order striking out the respondents’ statement of claim.

(i) Trial Judgment

[2] The appellants include Christian and Terry Piersanti (the “Piersantis”). They have been engaged in complex litigation with the respondents for many years.

[3] In separate prior proceedings, E. Macdonald J. of the Superior Court of Justice granted judgment against the Piersantis and others in favour of the respondents on September 3, 2010. The judgment required the Piersantis to pay the respondents $20,000,000, ordered $2,500,000 to be paid into court to the credit of the respondents, and granted other assorted relief against the Piersantis and a number of the defendants, some of whom are appellants in this action (the “Trial Judgment”). In her reasons, she made findings of fraud, misappropriation, non-disclosure and other egregious conduct on the part of Christian Piersanti, and found Terry Piersanti to have misappropriated funds and her evidence to have been entirely unreliable.

(ii) Stay of Trial Judgment

[4] The Piersantis and the other defendants appealed the Trial Judgment. As a result, pursuant to rule 63.01(1), the monetary provisions of the Trial Judgment were automatically stayed pending the disposition of the appeal.

[5] On June 7, 2011, a single judge of this court ordered that the stay be lifted with respect to the $2,500,000 payment into court.

[6] Subsequently, the respondents commenced a new action against the Piersantis and others, some of whom were defendants in the prior proceedings, and some of whom were not. In their new action, the respondents asserted a new cause of action alleging that the appellants fraudulently created corporate veils and sham mortgages to shield themselves from the respondents and other potential creditors. Among other things, the respondents rely on the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29 and the Assignments and Preferences Act, R.S.O 1990, c. A.33.

(iii) Impugned Order

[7] On August 22, 2011, in the new action, Newbould J. granted a Mareva injunction and, relying on s. 101 of the Courts of Justice Act, R.S.O. 1990, c. 43, a receivership order (the “Impugned Order”).

(iv) Subsequent Developments

[8] On September 12, 2011, this court reinstated the stay of the Trial Judgment relating to the $2,500,000 payment in light of the Impugned Order of Newbould J. and the imminence of the hearing of the appeal from the Trial Judgment.

[9] By judgment dated May 9, 2012, this court allowed the appeal in part and varied the Trial Judgment. Among other things, the award of $20,000,000 against Terry Piersanti was set aside and the damages award against Christian Piersanti was reduced from $20,000,000 to $12,521,555.85. As a result of the disposition of the appellants’ appeal, the automatic stay of the Trial Judgment ceased to have any effect.

(v) Current Appeal

[10] On this appeal, the appellants submit that Cumming J. erred by failing to hold that Newbould J. lacked jurisdiction to grant the Impugned Order because the Trial Judgment was stayed pending disposition of the appellants’ appeal and consequently, jurisdiction to grant injunctive relief and the appointment of a receiver rested with the Court of Appeal.

[11] In particular, they rely on the provisions of rule 63.03(1), which provides that where an order is stayed, no steps may be taken under the order or for its enforcement, except by order of a judge of the court to which a motion for leave to appeal has been made or an appeal has been taken. By operation of this rule, the appellants say, only the Court of Appeal had jurisdiction to grant the relief sought before Newbould J. The appellants also refer to s. 134(2) of the Courts of Justice Act, which addresses an appellate court’s ability to make interim orders pending appeal or leave to appeal, and rule 60.02(1)(d), which states that an order for the payment or recovery of money may be enforced by the appointment of a receiver. The appellants submit that the decision of Bruno Appliance and Furniture Inc. v. Cassels Brock & Blackwell LLP, 2011 ONSC 1305, 17 C.P.C. (7th) 197, is applicable.

2. Discussion

[12] I would reject the appellants’ jurisdictional challenge for the following reasons.

[13] During oral argument, counsel for the appellants properly acknowledged that this appeal turns on whether the motion before Newbould J. leading to the Impugned Order was a motion to enforce the Trial Judgment. In my view, neither the receivership order nor the Mareva injunction granted by Newbould J. constituted steps under the Trial Judgment or for its enforcement within the meaning of rule 63.03(1).

[14] Firstly, the Impugned Order was not a “step” under the Trial Judgment. The relief granted by Newbould J. was in a separate action with different parties and different causes of action which, as I have said, included reliance on the Fraudulent Conveyances Act and the Assignments and Preferences Act.

[15] Secondly, the Impugned Order was protective and preservative in nature. Cumming J. made this observation in his endorsement. The only relief sought on the motion before Newbould J. related to the preservation of assets pending determination of the respondents’ new action. The Impugned Order therefore did not amount to enforcement of the Trial Judgment. I agree with the respondents’ submission that the effect of the stay of the Trial Judgment was to suspend their enforcement rights. However, their rights as judgment creditors remained intact pending appeal.

[16] Furthermore, the appointment of a receiver and the granting of a Mareva injunction are not necessarily orders for enforcement in any event. Indeed, in this case, the receiver was appointed pursuant to s.101 of the Courts of Justice Act.

[17] Finally, contrary to the appellants’ submission, this case differs from Bruno Appliance. In that case, the relief claimed was sought in the original action between the same parties. No new action was commenced and no new cause of action was asserted. That is not this case.

[18] I therefore conclude that Cumming J. did not err in refusing to set aside the Impugned Order of Newbould J. and in refusing to strike out the respondents’ statement of claim. This conclusion is dispositive of this appeal. Accordingly, there is no need to address the other arguments raised by counsel, including the respondents’ contention that the appellants’ attack on the Impugned Order is now moot.

3. Disposition

[19] For the reasons given, I would dismiss the appeal. I would award the respondents their costs of the appeal fixed, as agreed, in the amount of $6,000 inclusive of disbursements and applicable taxes.

Released: September 18, 2012 “EAC”

“S.E. Pepall J.A.”

“I agree E.A. Cronk J.A.”

“I agree Gloria G. Epstein J.A.”