Court of Appeal for Ontario

Date: 2017-11-28 Docket: C63480

Judges: Sharpe, Epstein and van Rensburg JJ.A.

Between

6443923 Canada Inc., c.o.b. as Zesty Market Plaintiff (Appellant)

and

Yashar Kablou Defendant/Plaintiff by counterclaim (Respondent)

and

Ali Karimi and Nava Vosough Defendants by counterclaim

Counsel

Eric Lay, for the appellant

Ian B. McBride, for the respondents

Heard: November 23, 2017

On appeal from the order of Justice Calum MacLeod of the Superior Court of Justice, dated February 3, 2017

Reasons for Decision

[1] These civil proceedings follow a 2011 criminal trial in which a jury found Mr. Karimi, a principal of the numbered company appellant in each action, guilty of extortion and criminal harassment. The respondents and a third individual, Mr. Alireza Khodabandeh, were the victims of Mr. Karimi's crimes. Mr. Karimi defended the criminal charges primarily on the basis that the respondents and Mr. Khodabandeh had committed theft against his company. In the sentencing judge's view, the guilty verdict made clear that the jury found no theft had occurred. She imposed a sentence that included significant restitution orders in favour of the respondents. On April 28, 2014, this court dismissed Mr. Karimi's appeal from conviction and sentence.

[2] Following his criminal prosecution, Mr. Karimi commenced these actions against the respondents, and an action against Mr. Khodabandeh. In each action, Mr. Karimi claimed damages for theft.

[3] On December 1, 2015, Beaudoin J. granted summary judgment dismissing the action against Mr. Khodabandeh. On July 11, 2016, this court dismissed Mr. Karimi's appeal from that decision. Mr. Karimi sought leave to appeal to the Supreme Court.

[4] The respondents moved for a stay of these proceedings, primarily on the basis that the actions were an abuse of process. In his decision dated February 3, 2017, the motion judge accepted the appellant's submissions on abuse of process and ordered that both actions be temporarily stayed, reasoning that they amount to an impermissible collateral attack on the verdict in the criminal prosecution. The motion judge ordered that if the Supreme Court refused Mr. Karimi leave to appeal this court's July 11, 2016 decision (or granted leave and dismissed the appeal), the temporary stay would become permanent. The motion judge further provided that Mr. Karimi had to comply with the restitution orders from the criminal proceedings as a condition of bringing any motion to lift the stay.

[5] Prior to this appeal being heard, the Supreme Court denied leave to appeal this court's July 11, 2016 decision. As a result, the stay ordered by the motion judge is now permanent.

[6] The appellant appeals the motion judge's imposition of the stay. His primary argument is that the motion judge erred in finding that the actions against the respondents amount to a collateral attack on the criminal prosecution. He submits that the jury charge provided the jury a number of different routes to a guilty verdict, not all of which involved the conclusion that no theft had occurred. Since it is impossible to know which route the jury followed, the appellant submits the motion judge erred in finding that these actions constitute a collateral attack on the jury's verdict.

[7] We disagree with this argument.

[8] In our view, it was open to the motion judge to conclude that the jury in the criminal prosecution found that the alleged thefts did not occur. The sentencing judge in those proceedings, Ratushny J., held that the jury implicitly made such a finding. At para. 125 of her reasons for sentence, she reasoned:

It can be said that the Crown proved the absence of any theft. The jury by reason of its guilty verdicts has to be taken to have accepted the victims' evidence that they were not thieves and that Karimi's accusations that they were thieves was not a reasonable justification, excuse or lawful authority for his crimes of extortion and harassment.

[9] Ratushny J. went on to observe that the "jury heard ample evidence to lead them to the conclusion that there had been no theft committed by any of the victims or by anyone else."

[10] The appellant takes issue with relying on Ratushny J.'s reasons. Citing R. v. Punko, 2012 SCC 39, [2012] 2 S.C.R. 396, at para. 11, he argues that the sentencing judge's finding set out above does not constitute a judicial determination that the respondents did not steal from him.

[11] The problem with this submission is that Punko addressed the application of issue estoppel to criminal proceedings. Here, the motion judge stayed the proceedings on the basis of the abuse of process doctrine, which is "unencumbered by the specific requirements of concepts such as issue estoppel" Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at para. 37. The doctrine of abuse of process engages the court's inherent jurisdiction to prevent the misuse of its procedure in a way that would be manifestly unfair to a party before it or would otherwise bring the administration of justice into disrepute: C.U.P.E., at para. 37.

[12] The motion judge explained why these actions amount to an abuse of process as follows at para. 8 of his decision:

It would bring the administration of justice into disrepute if a man convicted of criminal offences on the basis that he made false allegations of theft against these plaintiffs is then permitted to proceed with a civil action based on identical allegations. In effect he would be allowed to continue the persecution and harassment for which he has just been convicted.

[13] We agree with that statement.

[14] We further note that in its July 11, 2016 decision, this court noted that Beaudoin J. was entitled to rely on Ratushny J.'s reasons for sentence in forming his own judgment about the evidence before him on the summary judgment motion brought by Mr. Khodabandeh. For similar reasons, it was open to the motion judge in this case to take both Beaudoin J.'s and Ratushny J.'s reasons into account. We note that the motion judge did not suggest that the findings in either decision were binding on him.

[15] The appellant also submits that the motion judge lacked the authority to order Mr. Karimi to satisfy the restitution orders from the criminal proceedings before seeking to lift the temporary stay. As the Supreme Court's denial of leave renders the stay permanent, we need not address this submission.

[16] Accordingly, the appeal is dismissed.

[17] Costs to the respondents fixed at $13,500 inclusive of disbursements and HST.

"Robert J. Sharpe J.A."

"Gloria Epstein J.A."

"K. van Rensburg J.A."