



COURT OF APPEAL FOR ONTARIO

CITATION: Esfahani v. Samimi, 2016 ONCA 418

DATE: 20160530

DOCKET: C60293

Cronk, Blair and Pardu JJ.A.

BETWEEN

Djalaleddin Esfahani

Plaintiff (Respondent)

and

Kamran
    Samimi,
Marina Samimi
, Danny Aria Samimi,

Layla
    Sabet
,
Shariar Moshtael
and Klaus Hartmann

Defendants (Appellants)

Lawrence Thacker, for the appellants

Raymond Colautti, for the respondent

Heard and released orally: May 26, 2016

On appeal from the judgment dated March 11, 2015 and the costs
    order dated April 13, 2015 of Justice Sean F. Dunphy of the Superior Court of
    Justice.

ENDORSEMENT

[1]

The appellants seek, on several grounds, to set aside the trial judges
    ruling on the mini-trial conducted on consent in this case.  They argue,
    principally, that the trial judge erred by failing to rule, prior to conducting
    the mini-trial, on the contested issue whether the respondents action against
    Kamran Samimi was stayed under s. 69(1) of the
Bankruptcy and Insolvency
    Act
, R.S.C. 1985, c. B-3 (the 
BIA
), no order lifting the s.
    69(1) automatic stay having been obtained.  This error, the appellants say,
    prejudiced their interests in several ways, including by necessitating the
    conduct of a four-day mini-trial that ultimately became unnecessary and moot.

[2]

We reject this argument.

[3]

The automatic stay under the
BIA
applied only to the
    respondents action against Kamran Samimi, the bankrupt.  It would not operate
    to stay what the respondent asserts are his stand-alone claims against the
    appellants.  Those claims were detailed in the respondents statement of claim,
    which was available many months before the scheduled date of the mini-trial. 
    In this sense, the mini-trial was rendered neither moot nor unnecessary by the
    trial judges subsequent decision on the issue of the
BIA
stay
    relating to Kamran Samimi.

[4]

Moreover, the 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 judges factual findings
    supporting that answer, could also arguably ground more than one cause of
    action against the appellants, as well as Kamran Samimi.

[5]

The appellants were well aware of the question posed for determination
    at the mini-trial and of the contents of the respondents pleading.  It was clearly
    foreseeable that the factual findings to be made by the trial judge in
    determining the agreed question at the mini-trial could lay the foundation for
    stand-alone claims asserted by the respondent against the appellants.

[6]

In these circumstances, the conduct of the mini-trial cannot be said to
    have taken the appellants by surprise, notwithstanding the late-breaking
BIA
issue in relation to the action against Kamran Samimi, or to have occasioned
    any procedural unfairness.  We note that the trial judge made no determination
    whether the
BIA
considerations affected the respondents ability, at
    law, to seek redress against the appellants, nor did he decide whether the
    claims advanced against the appellants would succeed.  His decision was
    expressly limited to factual findings responsive to the question that the
    parties had agreed upon.  In our view, his findings were open to him on the
    record.

[7]

It is also noteworthy that there is no evidence that, after the trial
    judge released his ruling indicating that he intended to reserve his decision
    on the issue of the
BIA
stay of the action against Kamran Samimi and
    to proceed with the mini-trial, the appellants sought an adjournment of the
    proceeding to permit an appeal of his ruling, to reconsider their position
    regarding the mini-trial, to revisit the evidence to be called at the
    mini-trial, or to consider other potential remedies in light of the ruling. 
    This, too, undercuts any suggestion of procedural unfairness or prejudice to
    the appellants arising from the manner in which events proceeded before the
    trial judge.

[8]

At the end of the day, the trial judge conducted a mini-trial on the
    very issue framed by the parties, as he was directed to do by the consent order
    of Moore J. of the Superior Court of Justice dated September 18, 2012, in accordance
    with the procedural agreement reached by the parties.  At no point after
    learning of Kamran Samimis bankruptcy did any of the appellants seek to vary
    the consent order or the procedural agreement based on changed circumstances or
    to halt the conduct of the mini-trial.

[9]

For these reasons, the appellants challenge to paras. 2 to 8 of the
    trial judges judgment on the mini-trial fails.

[10]

The appellants also challenge the trial judges costs award, again on
    several grounds.  We grant leave to appeal the costs award and allow the costs
    appeal in the following respect.

[11]

In fashioning his costs award, the trial judge failed to account for the
    appellants success before him in defeating the respondents motion to continue
    his action against Kamran Samimi notwithstanding Kamran Samimis discharge from
    bankruptcy.  This was an error in principle.  The appellants were entitled to
    the costs of the continuance motion, which should have been set off against or
    reduced the adverse costs award against them in relation to the mini-trial.

[12]

The continuance motion consumed one hearing day, while the mini-trial
    proceeded over four days.  The motion was brought at the last moment, with the
    result that most of counsels preparation time and prehearing efforts were
    focused on the pending mini-trial.  In the circumstances, we would reduce the
    quantum of the costs award against the appellants ($141,205, including
    disbursements and H.S.T.) by $7,500, resulting in the net aggregate amount of
    $133,705.

[13]

In light of the parties positions on costs before the trial judge, we
    see no basis to interfere with any other aspect of the trial judges
    discretionary costs award.  In our view, it is neither plainly wrong nor
    tainted by any error in principle.  Appellate interference with the balance of
    his award is therefore precluded.

[14]

For the reasons given, the main appeal is dismissed.  Leave to appeal
    costs is granted and the costs appeal is allowed in part in accordance with
    these reasons.  The respondent is entitled to his costs of this appeal, fixed
    in the amount of $20,000, inclusive of disbursements and all applicable taxes.

E.A. Cronk J.A.

R.A. Blair J.A.

G. Pardu J.A.


