NEWMARKET COURT FILE NO.: CV-16-128640-00
DATE: 20190211
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JAVAD KAVEH
Plaintiff
– and –
AMIR HOSSEIN KAVEH SEMNANI and SHAHPAR GERAMI
Defendants
Leo Klug, for the Plaintiff
Hugh MacKenzie, for the Defendants
HEARD: February 1, 2019
REASONS FOR DECISION
VALLEE J.:
[1] On November 4, 2016, the plaintiff issued a statement of claim requesting an order that a decision of the Circuit Court for Montgomery County, Maryland, USA, be recognized and enforced. The State of Maryland is not a reciprocating state under the Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c.R.5.; however, the plaintiff states that a judgment may be pursued and enforced in Ontario on the basis of judicial comity. The plaintiff brings this motion[^1] for the order requested.
[2] The defendant, Amir Hossein Kaveh Semnani, is the plaintiff’s brother. The defendant, Shahpar Gerami, is the defendant’s former spouse. The plaintiff lives in Maryland. The defendants live in Newmarket. In the Maryland action, the plaintiff alleged that the defendants owed him money. They disputed jurisdiction in Maryland but were unsuccessful. Subsequently, they did not defend the action. After a default hearing in which the plaintiff gave evidence regarding the amount owed, the plaintiff obtained default judgment for $107,797.63 USD as well as post-judgment interest.
[3] The defendants oppose the motion. They state that the Maryland court did not have jurisdiction over the dispute. They further state that the plaintiff obtained the judgment by fraud and that natural justice was denied. To enforce the judgment would be contrary to Canadian public policy.
Issues to be Decided
[4] Did the Maryland court properly assume jurisdiction?
[5] Did the plaintiff obtain the Maryland judgment by fraud?
[6] Was natural justice denied in the Maryland proceedings?
[7] Would enforcing the Maryland judgment be contrary to Canadian public policy?
[8] Is there a genuine issue that requires a trial?
Applicable Law
[9] “…in the recognition and enforcement context, the real and substantial connection test operates simply to ensure that the foreign court from which the judgment originated properly assumed jurisdiction over the dispute. Once this is demonstrated, the defendant has an opportunity to prove that one of the defences to recognition and enforcement should apply.” (See: Chevron Corp. v. Yaiguaje, 2015 SCC 42, para. 34)
[10] “Canadian courts have taken a “generous and liberal” approach to the recognition and enforcement of foreign judgments… (See: Zashko v. Touchgate and Ahmed, 2018 ONSC 3734, at para. 18)
[11] “Canadian law recognizes that the purpose of an [enforcement] action to recognize and enforce the foreign judgment is to allow a pre-existing obligation to be fulfilled; that is, to ensure that a debt already owed by the defendant is paid…[An enforcement action] is based not on the original claim the plaintiff had pursued against the defendant but rather on the obligation created by the foreign judgment.” (See: Chevron at para. 43)
[12] “First, the purpose of an action for recognition and enforcement is not to evaluate the underlying claim that gave rise to the original dispute, but rather to assist in enforcing an already adjudicated obligation. In other words, the enforcing court’s role is not one of substance, but is instead one of facilitation.” (See: Chevron at para. 44 quoting Pro-Swing Inc. v.Elta Golf Inc., 2006 SCC 52, at para. 11)
[13] “The facts underlying the original judgment are irrelevant, except, in so far as they relate to potential defences to enforcement.” (See: Chevron at para. 45)
[14] If the defendant alleges that the plaintiff obtained the foreign judgment by fraud or that due process was not followed, the defendant bears the burden of proof. (See: Beals v. Saldanha, 2003 SCC 72, at para. 211)
Did the Maryland court properly assume jurisdiction?
[15] The background of this matter concerns the administration of an estate in Iran. The plaintiff and defendant Semnani’s parents as well as a number of siblings lived in Iran. In 1988, their father passed away leaving an estate comprised of real property among other things. An older brother, Mostafa, was the estate trustee. The defendant, Semnani, operated a business in Ontario. The business failed as did his marriage. As a result of the separation, the defendant had certain financial obligations to his wife.
[16] In the Maryland statement of claim, the plaintiff stated that he and the defendant “agreed to work together to obtain a valid deed and title to a certain parcel of land located in Iran”. The interest in the land was part of their father’s estate. The plaintiff stated that he agreed to advance the majority of the transactional and other expenses until the deed was obtained and the land was sold. The defendant agreed to go to Iran to take the necessary administrative steps. The plaintiff states that they agreed that upon sale of the land, his costs would be returned to him with 18% interest.
[17] The plaintiff states that because of the political situation between the United States and Iran, he could not simply send money to Iran. Instead, he gave money to a mutual acquaintance who took it to Iran and provided it to the defendant.
[18] It appears that the defendant was reluctant to go to Iran because of his financial situation. He believed that he could not meet his financial obligations to his former spouse if he were to go and not earn an income for some period of time.
[19] The plaintiff states that in addition to the funds described in paragraph 17, he also provided personal financial assistance to the defendant. The plaintiff wired money to Ontario a number of times from his bank in Maryland. The plaintiff’s position was that he expected the defendant to pay back the money. The defendant’s position was that he expected the money to be reimbursed to the plaintiff from the estate.
[20] The plaintiff requested reimbursement of the funds. (The defendant states in this motion that the plaintiff was reimbursed by the estate.) Subsequently, the plaintiff brought an action in Maryland to recover the funds. The defendants hired Maryland counsel at the outset to bring a motion to dispute the jurisdiction of the Maryland court. The Maryland court denied the motion against the defendant[^2].
[21] After the motion, the defendants did not defend the action. They state that defending the action would have been too expensive for them. They would have needed an interpreter. Accordingly, the plaintiff obtained default judgment. He attended a default hearing in which he was required to prove the amount of his claim. The Maryland court entered judgment against the defendants on October 17, 2016 in the amount of $107,797.63 USD plus post judgment interest “at the legal rate”.
The Defendants’ Position
[22] The defendants state that the Maryland court did not have jurisdiction over this matter. Iran had proper jurisdiction. The estate’s assets were all in Iran. Alternatively, if Iran is not the country with jurisdiction, then Ontario had jurisdiction. The defendants lived in Ontario. The phone calls were received in Ontario. The records show that the plaintiff called the defendant, Semnani, numerous times to discuss estate administration, request his travel to Iran and arrange for the funds to be sent to Ontario. There are no records showing phone calls that the defendant, Semnani, made to the plaintiff.
[23] The defendants also state that they never attorned to the jurisdiction. They rely on Van Damme v. Gelber, 2013 ONCA 388, in which the court held that, “[Gelber had] attorned to the jurisdiction of the New York Court by litigating the merits of the claim in that jurisdiction. The attornment provided a basis upon which Ontario Court could properly recognize the New York judgment.” (See: para. 3) The defendants also rely on the principles expressed in Van Breda v. Village Resorts Ltd., 2012 SCC 17.
Analysis
[24] I reject the defendant’s argument that Iran was the correct jurisdiction for this matter. Any agreements made between the parties did not occur in Iran. The funds provided to the defendants did not come from Iran. Neither the plaintiff nor the defendants lived in Iran. Furthermore, defending an action in Iran would likely have been more expensive for the defendants than defending an action in Maryland, from a travel perspective, among other things. Counsel for the plaintiff stated that he was unable to obtain records of the defendant Semnani’s calls to the plaintiff in Maryland. Records were produced showing that the plaintiff called the defendant numerous times. Regardless of this, it seems that any agreements between the parties were made during phone calls. I find that the question of whether the plaintiff called the defendant or the defendant called the plaintiff is not sufficient to ground jurisdiction.
[25] In Van Damme, the court stated that attornment to the jurisdiction provided a basis upon which an Ontario Court could properly recognize the New York judgment. The court did not state that an Ontario court cannot recognize a foreign judgment in the face of a failure or refusal to attorn. Attornment is only one of several factors that a court may consider.
[26] In Chevron, para 40, the court commented on the applicability of the principles developed in Van Breda when it stated,
…LeBel J. further – and repeatedly - confined the principles he developed in Van Breda to the assumption of jurisdiction in tort actions… Perhaps most tellingly, LeBel J. stated, at para 85: “The list of presumptive connecting factors proposed here relates to claims in tort and issues associated with such claims. It does not purport to be an inventory of connecting factors covering the conditions for the assumption of jurisdiction over all claims known to the law.”
[27] At para 41, the court in Chevron went on to state, “… Van Breda’s pronouncements should not apply to recognition and enforcement cases.” [at para. 41]
[28] There is no dispute that the funds came from the plaintiff’s bank in Maryland and that the plaintiff lived in Maryland. Based on this, I find that the Maryland court properly assumed jurisdiction.
Did the plaintiff obtain the Maryland judgment by fraud?
The Defendants’ Position
[29] The defendants state that the funds were reimbursed to the plaintiff by the estate as estate expenses. They provided a document entitled Witness Statement, signed and fingerprinted by Mostafa, the defendant and four other siblings, as well as four witnesses. The defendants state that this document proves that the plaintiff was reimbursed by the estate for the funds that he provided from his bank in Maryland to the defendants. The plaintiff withheld this information from the Maryland court. He obtained the Maryland judgment fraudulently. The Maryland judgment results in double dipping.
[30] Furthermore, the defendants state that the plaintiff commenced parallel proceedings in Iran against Mostafa claiming that Mostafa owed him $111,000 USD. The defendants provided a Summons to Appear to substantiate the proceedings against Mostafa. An Iranian lawyer reviewed the document. He provided an opinion that the document was not in the correct court form, among other things. He stated, “It can be concluded that the entire letter of summons submitted to the general court is forged…” The defendants state that even though this is not a legitimate document, it may be taken as some evidence of the plaintiff’s attempting to pressure Mostafa for the money.
[31] The defendants also state that total amount of the wire transfer documents that have been provided is $16,325. Despite this, the plaintiff obtained judgment for $107,797.63 USD.
Analysis
[32] An allegation of fraud is a serious matter. As noted above, the defendants bear the onus of proving it.
[33] The Witness Statement is a curious document. A copy is attached as Schedule A to these Reasons. It states,
…I, Amir Kaveh Semnani, had to leave Canada in four phases, and in this period, I have not received any fees or commissions for negotiating with the Municipality, Governor’s Office, Office of the Governor General, and other administrative agencies to sell or exchange the [estate] property. During this time, the heirs loaned [sic] me 2550 USD only for five months, and in the end, they deducted the total amount of money they paid. All proofs [sic] of it are also available.
Finally, Javad Kaveh demanded the amount of 71,417 USD he had paid plus the extra money (interest) at a rate of 35% which amounted to 49,795 USD…[Javed Kaveh received] the amount of 71,417 USD, the equivalent of 235,676,100 Toman, paid by Javed Haveh for the related expenses…Javed Kaveh received the amount of…71,417 USD for the initial expenses.
[34] I cannot determine from this document whether the funds provided by the plaintiff from his Maryland bank account to the defendants in Ontario were included in the expenses totaling 71,417 USD that the plaintiff received from the estate. There is no breakdown regarding how the $71,417 USD was calculated. I note that the amount of the Maryland judgment is for a much larger amount. I give the forged summons no weight whatsoever.
[35] With respect to the defendant’s claim that the wire transfers total an amount that is much less than the Maryland judgment, I accept the plaintiff’s submission that documentation for only some of the wire transfers could be located. According to the Maryland claim, the plaintiff provided the funds in 2012 and 2013. I note that the plaintiff was required to and did attend before the Maryland court on a default hearing to prove all of the amounts that he claimed. The plaintiff provided a transcript of the hearing which shows that he testified before the Maryland court regarding the various amounts that he had provided, including amounts that he had sent to the defendant’s former spouse. During that hearing, he provided wire transfer documents for the funds sent to Ontario, as well as a number of cheques that were payable to himself. These documents were made exhibits at the hearing. The plaintiff stated that he cashed the cheques and then sent the cash to Iran with family, relatives and friends who were going there. He could not wire funds to Iran nor could a person cash a cheque written on an American bank account in Iran because of the political situation between the two countries.
[36] For these reasons, I find that the defendants have not met the onus of proving that the plaintiff obtained the Maryland judgment fraudulently.
Was natural justice denied in the Maryland proceedings?
The Defendant’s Position
[37] The defendant states that he was not properly served with the Maryland claim. It was served at his former spouse’s residence. He did not live there. He had not been there for five years.
Analysis
[38] While the claim may not have been properly served on the defendant, he certainly had notice of it. As noted above, the defendants retained a Maryland lawyer to bring a motion before the Maryland court regarding jurisdiction. After that motion was dismissed, the defendants chose not to defend the action. Accordingly, I find that there was no denial of natural justice.
Would enforcing the Maryland judgment be contrary to Canadian public policy?
[39] The defendants made a bald statement that enforcing the judgment would be contrary to Canadian public policy; however, the defendants did not point to any specific policy that would be offended. Accordingly, there is no merit in this position.
Is there a genuine issue that requires a trial?
[40] Neither counsel argued this point. It was not specifically addressed in the defendants’ responding materials. I could infer from the defences raised that the defendants take the position that there is a genuine issue that requires a trial. This is not a typical motion for summary judgment. It is not a first instance matter in which credibility could be an issue. The plaintiff is not requesting judgment from this court on an alleged debt. The Maryland court has already determined that the defendants owe a debt to the plaintiff. If the defendants had defended the Maryland action, the Maryland court could have considered credibility. Perhaps this is the reason why none of the materials nor argument in this motion addressed the test for summary judgment.
[41] As noted above, this enforcement action was issued on November 4, 2016. The defendants have had over two years to obtain detailed evidence that the plaintiff was compensated by the estate for the amount of the judgment being $107,797.63 USD. They have not done this. They have produced only a Witness Statement which indicates that he received $71,417 USD. The specifics of that amount were not provided.
[42] If this motion requires me to make a finding as to whether there is a genuine issue requiring a trial, I find that there is no such issue.
Conclusion
[43] Because the Maryland court properly assumed jurisdiction and none of the defences has been proved, the plaintiff shall have the relief requested in the notice of motion, namely, an order and judgment for the registration and enforcement in this court of the judgment granted to the plaintiff against defendants in the Circuit Court for Montgomery County, Maryland, USA dated October 14, 2016 in the amount of $107.797.63 USD together with post judgment interest at the legal rate of 10%.[^3]
[44] If counsel cannot agree on costs, I will receive written submissions on a 7 day turnaround, commencing with the moving party, followed by responding submissions, then reply submissions, if any, commencing 14 days from the date of release of these reasons. Cost submissions shall be no more than 2 pages in length (14 pt font size, regular 1 inch margins, 1.5 spacing), exclusive of any costs outline or offers to settle. All costs submissions shall be delivered via email through my assistant at BarrieJudSec@ontario.ca. If no submissions are received within 21 days from the above date, the issue of costs will be deemed to have been settled between the parties.
Justice M.E. Vallee
Released: February 11, 2019
[^1]: Although not specifically stated in the notice of motion because the motion requests the relief set out in the claim, this is a motion for summary judgment.
[^2]: But granted the motion in favour of the wife with leave to the plaintiff to amend.
[^3]: The Maryland order states “post judgment interest at the legal rate”. No specific rate is set out; however, on October 26, 2006, plaintiff’s counsel in this motion wrote a letter to the defendants stating, “In accordance with the Maryland Code sec. 11-107, the legal rate of interest on this Judgment is 10% per annum. Interest is accruing from the date of the Judgment dated October 14, 2016 until the date of payment.” There is no evidence that the defendants disputed the rate.