COURT OF APPEAL FOR ONTARIO

CITATION: Esfahani v. Samimi, 2018 ONCA 516

DATE: 20180605

DOCKET: C64714

MacPherson, LaForme and Miller JJ.A.

BETWEEN

Djalaleddin Esfahani

Plaintiff (Appellant)

and

Kamran Samimi, Marina Samimi, Danny Aria Samimi, Layla Sabet, Shariar Moshtael & Klaus Hartmann

Defendants (Respondents)

Anita Landry and Eric Florjancic, for the appellant

Arnold H. Zweig, for the respondents

Heard: June 4, 2018

On appeal from the judgment of Justice Darla A. Wilson of the Superior Court of Justice, dated November 30, 2017.

REASONS FOR DECISION

Background

[1] Djalaleddin Esfahani obtained a judgment in Germany against Kamran Samimi in 2007. He then obtained a judgment in Ontario recognizing the German judgment and its enforceability in the Superior Court (the “enforcement judgment”). Esfahani received no payments and brought an action in 2011 claiming damages and pleading that the respondents fraudulently conveyed properties to evade payment.

[2] In November 2013 Kamran Samimi filed an assignment in bankruptcy. The report of the Trustee in Bankruptcy pursuant to the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, (“BIA”) dated July 3, 2014, was served on Esfahani. He did not file any written opposition to the discharge of Kamran who was discharged from bankruptcy on August 7, 2014.

[3] Also in 2013, Esfahani brought his summary judgment motion but agreed to proceed with the motion as a mini trial. The mini trial was to address a single issue - whether the respondents engaged in a series of transactions with the intent to defeat, delay, hinder or prejudice Esfahani from receiving payment from Kamran for the outstanding judgment or enforcing it.

[4] In March 2015 the mini trial judge answered the issue in the affirmative. That is, the respondents did engage in the described conduct. The mini trial judge also made several other observations on procedural issues in the specific circumstances of this case, which will be referred to later. The respondents’ appeal of the mini trial decision to this court was dismissed: Esfahani v. Samimi, 2016 ONCA 418.

[5] In October 2017, the summary judgment motion, originally brought in 2013, continued.

The Summary Judgment Motion

[6] On the summary judgment motion, Esfahani relied on the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, (“FCA”) and the Assignment and Preferences Act, R.S.O. 1990, c. A.33, (“APA”) to recover the proceeds of the fraudulent conveyances. He argued that any funds from the fraudulent conveyances are imprinted with a trust for him.

[7] The respondents in turn argued that because Kamran Samimi has been discharged from bankruptcy, the debt upon which these proceedings are based has also been discharged. That is to say, there is no “debt” which can form the basis of a judgment.

[8] The motion judge reviewed the decision of the mini trial judge and noted that his decision included the observation that: “[Esfahani] of course still has the simple and direct option of moving under the Bankruptcy and Insolvency Act to pursue the FCA action …” She noted at para. 15 that:

[Esfahani] commenced a motion in bankruptcy court in December 2015 seeking to set aside Kamran’s discharge and for permission to proceed with the bankruptcy proceeding in his own name pursuant to s. 38 of the BIA. However, for reasons which remain unclear, the plaintiff chose to abandon it and instead, brought the motion before me seeking a judgment against the remaining Defendants in damages to the amount of the Nolan judgment

[9] The core of the motion judge’s decision is found at para. 23, where she concludes:

At the present time, and until a bankruptcy court decides otherwise, the judgment debt is discharged. [Esfahani] through this motion seeks damages against the other Defendants but there is nothing on which to form a basis for a damages claim, since the debt belongs to the trustee, not to Kamran.

[10] The motion judge held that Esfahani had failed to follow the correct procedure to realize on the amounts owing under the 2009 enforcement judgment. She dismissed Esfahani’s motion, which he now appeals.

The Issues

[11] We agree with the respondents; the summary judgment is directed at the fraudulent conveyance claims and is not a final order. It simply dismissed Esfahani's motion for summary judgment with costs to the respondents. In dismissing the summary judgment motion, the motion judge did not invoke Rule 20.04(4) or 20.05(1) and reference the legal determination that the party argues is a binding legal determination; that is, the fraudulent conveyance claim: see Skunk v. Ketash, 2016 ONCA 841, at paras. 35-36. As such, the judgment is an interlocutory order appealable to the Divisional Court with leave.

[12] In any case, Esfahani can still pursue his fraudulent conveyance claims in Bankruptcy Court, or he can seek leave to appeal the summary judgment in the Divisional Court. Esfahani has not been deprived of the substantive right to pursue his fraudulent conveyance claim. He has simply chosen not to pursue it in the proper forum – the Bankruptcy Court - despite the views expressed by both the motion judge and the mini trial judge.

[13] As for Esfahani’s conspiracy claim, as the respondents note, the motion judge was aware of the claim but made no decision in respect of it. We note this court’s decision in Esfahani v. Samimi, 2016 ONCA 418, which dealt with the appeal of the mini trial, and its observation at para. 4:

[T]he material facts pleaded against the appellants could arguably support more than one cause of action, including claims regarding fraudulent conveyances, fraud or deceit, and civil conspiracy. The question to be determined at the mini-trial, as agreed by the parties, was fact-driven. The answer to the question posed, and the trial judge’s factual findings supporting that answer, could also arguably ground more than one cause of action against the appellants, as well as Kamran Samimi.

[14] Thus, to the extent the conspiracy claim can be separated from the fraudulent conveyance claim, Esfahani is free to continue his efforts and carry on with it in the Superior Court, as the respondents concede that he can.

[15] In sum, because the order made by the motion judge is interlocutory, as it does not determine the substantive rights of the parties, an appeal properly lies in the Divisional Court with that court’s leave pursuant to s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43. This court may only transfer an appeal to the Divisional Court if the appeal does not require leave to appeal to that court.

[16] For these reasons, the appeal is quashed. As agreed, costs are to the respondents in the amount of $5,000, inclusive of disbursements and HST.

“J.C. MacPherson J.A.”

“H.S. LaForme J.A.”

“B.W. Miller J.A.”