CITATION: Soleimani v. Karimi, 2023 ONSC 2109

DIVISIONAL COURT FILE NO.: DC-22-12920

DATE: 20230406

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

Title: AZADEH SOLEIMANI, Applicant (Respondent on Appeal)

AND:

HAMIDREZA KARIMI, Respondent (Respondent on Appeal)

AND:

PUYA KARIMI, Respondent (Appellant on Appeal)

BEFORE: Lococo, Leiper and Hooper JJ.

COUNSEL: Meysa Maleki and Nadine Saba, for the Applicant (Respondent on Appeal)

Rick Bickhram, for the Respondent (Appellant on Appeal)

HEARD: January 27, 2023 by video conference at Toronto, with further submissions received in writing on March 15, 2023

Date of Decision: April 6, 2023

E N D O R S E M E N T

INTRODUCTION

[1] This is an appeal from two orders of Healey, J. dated January 7, 2022 and January 11, 2022. The January 7 order directed the release of half the proceeds from the sale of a matrimonial property to one of the owners on title, the Respondent on Appeal Azadeh Soleimani. The January 11 order dismissed the claim by the Appellant/third party Puya Karimi for an equitable interest in the sale proceeds.

[2] At the hearing of this appeal, the panel raised a preliminary issue of jurisdiction. The parties made brief oral submissions, asserting that the Divisional Court had jurisdiction to hear this appeal. The panel directed the parties to provide further submissions in writing.

[3] In their written submissions, the parties now submit that the Divisional Court may not have jurisdiction over the matters raised on this appeal. The Appellant seeks a transfer to the Court of Appeal. The Respondent on Appeal submits that the appeal is without merit and should be dismissed with costs.

BACKGROUND

The Parties

[4] The Appellant is the third party, Puya Karimi (“Puya”). He is the brother of the former spouse of the Respondent on Appeal, Azadeh Soleimani (“Azadeh”).

[5] Puya’s brother Hamidreza Karimi (“Hamid”) and Azadeh separated on September 18, 2018. By way of Amended Application dated February 19, 2019, Azadeh made claims relating to divorce, the child of the marriage, support, property, and other declaratory relief variously under the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), the Family Law Act, R.S.O. 1990, c. F.3; and the Children’s Law Reform Act, R.S.O. 1990, c. C.12. At the time of separation, Hamid and Azadeh were joint owners of a property at 20 Beaufort Hills Road, Richmond Hill (the “Beaufort Property”).

[6] Following the marriage breakdown between Azadeh and Hamid, Puya claimed an interest in the Beaufort Property. Puya relied on his purported loan of funds to the couple for their purchase of the Beaufort Property and a signed trust document among Azadeh, Leila, Hamid and Puya. Puya alleged that there was a trust in his favour granted by Azadeh and Hamid, pending his eventual immigration to Canada.

[7] Hamid is not actively participating in this appeal. His pleadings were struck on December 17, 2020 for failing to abide by court orders.

[8] Puya and Hamid have a sister, Leila Karimi (“Leila”), who although referred to in the pleadings, is not a party to these proceedings.

The Beaufort Property

[9] On separation, Azadeh and Hamid were the joint registered owners of the Beaufort Property.

[10] On October 25, 2018, Azadeh, Hamid, and Leila executed a Trust Instrument dated October 25, 2018 (the “Trust Declaration”), stating that Azadeh and Hamid were holding the Beaufort Property in trust for Leila.

[11] On March 12, 2020, Puya was added as a respondent in the family law proceeding between Hamid and Azadeh.

[12] On December 17, 2020, Hamid’s pleadings were struck on all non-parenting issues because of his breaches of several court orders, including child and spousal support and cost orders.

[13] On February 22, 2021, Jarvis J. ordered that the Beaufort Property be sold. By order dated August 19, 2021, Jarvis J. ordered that the proceeds of the sale be held in trust by Azadeh’s real estate lawyer and that Puya receive notice of the sale transaction which was scheduled to close on August 31, 2021.

[14] The sale closed and sale proceeds of $888,070.90 were deposited into the real estate lawyer’s trust account.

The Motion before Healey, J.

[15] Azadeh served a notice of motion on November 3, 2021, seeking a pay-out of half of the funds from the sale of the Beaufort Property and an order permitting her to amend her Amended Application. Puya responded to the motion and asserted his trust entitlement to the proceeds from the sale.

[16] On January 7, 2022, Healey, J. heard the motion. Azadeh submitted that the onus was on Puya to show why the money claimed by Azadeh should remain in trust pending a trial, arguing that Puya was required to meet the strict test for the interim preservation of funds under r. 45.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg 174. Healey, J. considered the fact that the funds were already being held in trust, and determined that Azadeh was seeking an order for partial summary judgment, as provided for in r. 16 of the Family Law Rules O. Reg. 114/99.

[17] Puya argued that a valid trust was created at common law between Hamid, Azadeh and Leila, relying on Duca Financial Services Credit Union Ltd. v. Bozzo, 2011 ONCA 455, 68 E.T.R. (3d) 1, para. 2. Puya submitted that Leila was holding his beneficial share of the funds from the sale of Beaufort for him as beneficiary because of an oral agreement between them, based on his contributions to the down payment for the sale of the house, and contributions to the mortgage payments and upkeep.

[18] Following the parties’ submissions, Healey J. orally advised that Azadeh’s motion for the release of sale proceeds and amendment of her pleadings was granted in full, with written reasons to follow.

[19] By temporary order dated January 7, 2022, Healey J. ordered the release of half of the proceeds held in trust from the sale of Beaufort Property to Azadeh and granted her leave to amend her pleadings.

[20] In her endorsement dated January 11, 2022, Healey J. determined that there was no genuine issue for trial for Puya’s trust claim. She found among other things that:

a. Puya provided “scant, contradictory and illogical evidence” to support his fundamental assertion that he financed and maintained the Beaufort Property;

b. none of the information from Puya about his business relationship with Leila was confirmed in her affidavit;

c. there was no evidence about why the trust document did not name Puya as a beneficiary from the beginning;

d. there was no evidence to support the creation of an oral trust;

e. the trust document was signed in circumstances of vulnerability and coercion of Azadeh, which had the effect of placing an asset acquired during marriage out of her reach; and

f. the trust document was an unconscionable agreement that should be overridden by the court.

[21] In considering Puya’s claim of an oral trust supporting his entitlement to the sale proceeds, Healey, J. applied sections 9 and 10 of the Statute of Frauds, R.S.O. 1990, c. S.19, which require that trust agreements with respect to land be in writing. She dismissed his trust claim by way of partial summary judgment. Further to that decision, Healey J. signed a final order to that effect dated January 11, 2022.

THE JURISDICTIONAL ISSUE

[22] The parties submit that there is a live question as to our jurisdiction to hear this appeal pursuant to the Courts of Justice Act, R.S.O. 1990, c C.43. The relevant provision is found s. 19(1) of the CJA:

Divisional Court jurisdiction

19 (1) An appeal lies to the Divisional Court from,

(a) a final order of a judge of the Superior Court of Justice, as described in subsections (1.1) and (1.2);

(a.1) a final order of a judge of the Family Court made only under a provision of an Act or regulation of Ontario;

[23] Section 19(1)(a) does not provide the Divisional Court with jurisdiction, since the orders under appeal are not as described in ss. 19(1.1) or (1.2). Those provisions address appeals from orders under certain monetary limits ($25,000 or $50,000 depending on when the order was made), which have no application in this case.

[24] Turning now to s. 19(1)(a.1), there is no dispute that the orders under appeal were made by a judge of the Family Court, since Newmarket is a Family Court jurisdiction: see CJA, ss. 21.1(4), 21.1(5), 21.8(1). As well, by Charney J.’s endorsement dated March 17, 2022, the orders under appeal were previously determined to be “final orders” for the purpose of determining appellate jurisdiction: see Soleimani v. Karimi, 2022 ONSC 1685 (Div. Ct.). Therefore, the issue to be determined is whether the orders were “made only under a provision of an Act or regulation of Ontario.”

Positions of the Parties on Jurisdiction

[25] Puya submits that his claims on appeal that rely on equitable principles may fall outside of the jurisdiction of the Divisional Court under s. 19(1)(a.1). He cites the decision of Finlayson, J. in M.P.A.N. v. J.N., 2018 ONCJ 769. At para. 75 of that decision, Finlayson, J. noted that the Ontario Court of Justice does not have the jurisdiction to make an order of equitable set-off.

[26] M.P.A.N. is not helpful in determining our case. The Superior Court of Justice has jurisdiction to grant equitable relief, as confirmed in ss. 11(2) and 96 of the CJA. The Divisional Court is a branch of the Superior Court of Justice: CJA, s.18(1).

[27] Sections 11(2) and 96 of the CJA provide as follows:

Superior Court of Justice

11 (1) The Ontario Court (General Division) is continued as a superior court of record under the name Superior Court of Justice in English and Cour supérieure de justice in French.

Same

(2) The Superior Court of Justice has all the jurisdiction, power and authority historically exercised by courts of common law and equity in England and Ontario.

Rules of law and equity

96 (1) Courts shall administer concurrently all rules of equity and the common law.

Rules of equity to prevail

(2) Where a rule of equity conflicts with a rule of the common law, the rule of equity prevails.

Jurisdiction for equitable relief

(3) Only the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may grant equitable relief, unless otherwise provided.

[28] Azadeh also submits that the jurisdiction of the Divisional Court over this appeal is “unclear” because Healey J. relied on the legal test for summary judgment to dismiss Puya’s claims. Azadeh submits that on a close reading of the endorsement, this appeal is not an appeal of a final order of a judge of the Family Court made only “under a provision of an Act or regulation of Ontario” in accordance with s. 19 (1) (a.1) of the CJA.

Analysis

[29] The approach to statutory interpretation begins with the direction from the Supreme Court of Canada in Rizzo Shoe, that is, “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the objects of the Act, and the intention of Parliament”: Re Rizzo & Rizzo Shoes Ltd., 1998 837 (SCC), [1998] 1 S.C.R. 27, at para. 21.

[30] Section 19(1)(a.1) gives this court jurisdiction over final orders from judges sitting in the Family Court, in certain circumstances, that is, orders “made only under a provision of an Act or regulation of Ontario.” Section 21.1 (1) of the CJA describes the Family Court as “a branch of the Superior Court of Justice known as the Family Court in English and Cour de la famille in French.”

[31] Section 21.8 (1) provides:

In the parts of Ontario where the Family Court has jurisdiction, proceedings referred to in the Schedule to this section, except appeals and prosecutions, shall be commenced, heard and determined in the Family Court.

[32] The Schedule referred to in that section provides the Family Court with jurisdiction over matters as follows:

1. Proceedings under the following statutory provisions:

Change of Name Act

Child, Youth and Family Services Act, 2017, Parts V, VII and VIII

Children’s Law Reform Act, except sections 59 and 60

Civil Marriage Act (Canada)

Divorce Act (Canada)

Family Homes on Reserves and Matrimonial Interests or Rights Act (Canada)

Family Law Act, except Part V

Family Responsibility and Support Arrears Enforcement Act, 1996

Interjurisdictional Support Orders Act, 2002

Marriage Act, section 6.

2. Proceedings for the interpretation, enforcement or variation of a marriage contract, cohabitation agreement, separation agreement, paternity agreement, family arbitration agreement or family arbitration award.

3. Proceedings for relief by way of constructive or resulting trust or a monetary award as compensation for unjust enrichment between persons who have cohabited.

4. Proceedings for annulment of a marriage or for a declaration of validity or invalidity of a marriage.

5. Appeals of family arbitration awards under the Arbitration Act, 1991.

6. Proceedings under First Nation laws made under,

i. the Family Homes on Reserves and Matrimonial Interests or Rights Act (Canada), or

ii. the First Nations Land Management Act (Canada), with respect to the effect of relationship breakdown on matrimonial real property.

7. Any other family law proceedings that may be prescribed by the regulations.

[33] The recognition that judges of the Family Court have jurisdiction over a broad range of statutory proceedings, both federal and provincial, provides some context for the appeal route to the Divisional Court found in s. 19(1)(a.1). The thrust of those provisions leads us to conclude that the Legislature intended to exclude final orders of the judges of the Family Court under federal legislation from the jurisdiction of the Divisional Court on appeal, leaving appeals from final orders made under provincial legislation (including orders addressing claims for equitable relief referred to in the CJA) within the Divisional Court’s jurisdiction: see C.C. v. J.B., 2021 ONSC 2174 (Div. Ct.). The excluded matters would be heard by the Court of Appeal for Ontario by virtue of s. 6 (1)(b) (i) of the CJA, which provides as follows:

Court of Appeal jurisdiction

6(1) An appeal lies to the Court of Appeal from,

(b) a final order of a judge of the Superior Court of Justice, except,

(i) an order referred to in clause 19 (1) (a) or (a.1),

[34] In our view, interpreting s. 19(1)(a) to include the orders under appeal in this case is consistent with access to justice principles, the importance of which is highlighted in previous case law, including Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87.

[35] In the matter under appeal, Healey J. heard a motion dealing with (i) property rights claimed by Azadeh pursuant to provincial legislation, including the Family Court Rules made as a regulation under the Family Law Act, and (ii) equitable relief claimed by Puya pursuant to equitable principles referred to in the CJA. Healey J. also applied the provincial Statute of Frauds. There was no federal legislation in play at the motion that is the subject of the appeal before us.

[36] When considering whether the orders under appeal were made only under a provision of an Act or regulation of Ontario, it is important to consider the context of Healey J.’s finding that there was no genuine issue requiring a trial, leading to her order for partial summary judgement. That finding was made in the context of a motion to pay half the proceeds from the matrimonial home sale to Azadeh. Section 23 of the Family Law Act provides the court with broad authority relating to the matrimonial home, including the power to order the home’s sale or encumbrance, and to determine whether or not a property is a matrimonial home.

[37] As part of the reasoning process in deciding to grant the motion to pay half the sale proceeds to Azadeh, the motion judge found that there was no genuine issue requiring a trial on the ownership issue. Flowing from that finding, Healey J decided to grant summary judgment and dismiss Puja’s ownership claim, as provided for in r. 16 of the Family Law Rules. That chain of reasoning supports the conclusion that the orders under appeal were made only under provisions of an Act or a regulation of Ontario.

[38] We conclude that the orders under appeal were made under provisions available to the motion judge under provincial legislation to determine whether to release the funds from the sale of the Beaufort Property to Azadeh and to determine Puja’s trust claim.

[39] Accordingly, we find that the Divisional Court has jurisdiction over this appeal under s. 19(1)(a.1) of the CJA.

CONCLUSION

[40] We have not heard submissions on the merits of this appeal. Priority should be given to determining the substantive issues at stake, given their importance to the parties. In order to ensure the appeal hearing is scheduled as soon as possible, the panel is not seized with this appeal, although the members of the panel may be scheduled if available.

[41] Costs of the appeal to date are reserved to the panel hearing the appeal.

Lococo J.

_______________________________ Leiper J.

_______________________________ Hooper J.

Released: April 6, 2023