



COURT OF APPEAL FOR ONTARIO

CITATION: Derakhshan v. Narula, 2018 ONCA 658

DATE: 20180725

DOCKET: M49026 (M48944)

Hoy A.C.J.O., Rouleau
    and Benotto JJ.A.

BETWEEN

Farhad Derakhshan

Appellant

and

Seema Narula

Respondent

Farhad Derakhshan, acting in person

Ian Vallance, for the respondent

Heard: June 15, 2018

Rouleau J.A.:

[1]

Farhad Derakhshan brings this motion pursuant to
    s. 7(5) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43 to set
    aside the order of the chambers judge, dismissing his motion for an order
    extending the time within which to serve and file a notice of appeal from the
    trial judges decision rendered on January 24, 2018.

[2]

As I will explain, I would allow the motion and
    grant the extension.

BACKGROUND

[3]

The applicant represented himself during the 21-day
    trial, which took place in the Family Court Branch of the Superior Court of
    Justice in Ottawa. He claimed retroactive spousal support, and asserted a
    constructive trust interest in the respondents assets on the basis of unjust
    enrichment or a joint family venture. Further, he sought the return of 49 of
    his shares in
Turtle Island Staffing Inc. (formerly 2093030 Ontario
    Inc.)
or payment for the shares, which he alleged had been
    transferred to the respondent by means of forgery. The total value of his
    claims was approximately $4.5 million. At the close of the trial, the trial
    judge reserved her decision.

[4]

Some nine months later, the trial judge issued a
    107-paragraph decision dismissing the applicants action. She found that
    although the parties had been in a romantic relationship, it was not a spousal
    relationship. Consequently, the applicants claims for spousal support and a
    constructive trust interest in the respondents property on the basis of a
    joint family venture failed. As to his unjust enrichment claim, the trial judge
    found that the applicant had been compensated for his services in relation to
    the respondents properties. Finally, the trial judge found that there was no
    evidence to support the applicants claim that the respondent had improperly
    taken his shares in Turtle Island Staffing Inc. Costs were awarded to the
    respondent in the total amount of $251,028.

[5]

When the decision was released on January 24,
    2018, it was emailed to the applicant who was in Australia at the time. He made
    arrangements to rush back to Canada to deal with his proposed appeal. The trial
    transcripts were ordered on February 20, 2018. The applicant prepared a notice
    of appeal and served the respondent within the 30 days provided in the rules,
    on Friday, February 23.

[6]

Unfortunately, upon attempting to file the
    notice with proof of service, he discovered that the information he had been
    provided as to the appropriate appellate court was in error. The materials he
    served on the respondent took the form of an appeal under the
Family Law
    Rules
, and were addressed to the Superior Court of Justice rather than to
    the Court of Appeal. As a result his materials were refused by the court office.

[7]

It is understandable that the applicant, who was
    self-represented at the time, was mistaken as to the appropriate forum in which
    to advance his appeal. When he was informed of this error, he acquired the
    requisite forms and began to prepare a new notice of appeal directed to this
    court.

[8]

The following day, Saturday, February 24, the
    applicant served this new notice of appeal on the respondents solicitor by
    email. This was 31 days following the release of the decision. A hard copy of
    the notice of appeal followed on the Monday.

[9]

The applicant sought the respondents consent to
    the late filing of his notice of appeal. That consent was refused and the
    applicant then promptly prepared the motion for an order extending the time in
    which to file the notice of appeal.

[10]

On the proposed appeal, the applicant asserts
    that the trial judge misapprehended or overlooked evidence and interfered with
    the presentation of his case. He submits that a new trial should be ordered
    because the trial judges reasons were inadequate and were not released until
    nine months after the trial.

CHAMBERS DECISION

[11]

On the motion, the chambers judge identified the
    relevant factors on a motion for an extension of time under r. 3.02 of the
Rules
    of Civil Procedure
,
R.R.O. 1990, Reg. 194
. He was
    satisfied that the intention to appeal had been formed within the relevant time
    period and that the very short delay had been explained. He found, however,
    that the three other factors, namely prejudice to the respondent, the merits of
    the appeal and the justice of the case, did not favour granting the extension.

[12]

The chambers judge found that an extension would
    prejudice the respondent because it appeared unlikely that her substantial
    award for costs of the trial would be satisfied. He noted that another
    outstanding costs order against the applicant in a more modest amount had not
    yet been paid.

[13]

As for the merits of the appeal, the chambers
    judge determined that from the material that had been filed he was unable to
    tease out anything of substance to support a claim of palpable and overriding
    error or of any material misapprehension of evidence. He noted that this was a
    fact-based appeal, and that appellate courts do not retry cases.

[14]

The chambers judge concluded that the justice of
    the case did not warrant an extension. He noted again the unlikelihood that the
    respondents cost award would be satisfied.

[15]

The chambers judge therefore dismissed the
    motion for extension and ordered costs to the respondent in the amount of
    $1,500.

ANALYSIS

[16]

As I have noted above, the chambers judge correctly
    identified the relevant factors on a motion for an extension of time.

[17]

However, he erred in finding that there was prejudice
    to the respondent on the basis that her costs award was unlikely to be
    satisfied. This is not prejudice caused by the delay: see
Paulsson v.
    University of Illinois
, 2010 ONCA 21, [2010] O.J. No. 123, at para. 2;
D.G.
    v. A.F.
, 2014 ONCA 436, [2014] O.J. No. 2608, at para. 16. The delay was
    of only one day and, further, the notice of appeal, albeit to the wrong court,
    had been served within the 30 days provided in the rules. The respondent did
    not suffer any prejudice as a consequence of the very short delay.

[18]

The error in the chambers judges analysis of
    prejudice clearly factored into his exercise of discretion. As a result, no
    deference is owed to his decision.

[19]

With respect to the merits of the appeal, I
    acknowledge that fact-based appeals are very difficult and are rarely
    successful. Based on what the self-represented applicant has filed and the
    extensive reasons of the trial judge, it is certainly difficult to discern any
    merit to the appeal.

[20]

The final consideration is the justice of the
    case. At this stage, the court must balance all of the preceding factors and consider
    any others that may be relevant:
Monteith v. Monteith
, 2010 ONCA 78, [2010]
    O.J. No. 346, at para. 20 (In Chambers).

[21]

In my view, it would be unfair to deprive the
    applicant of his right of appeal in the circumstances. The applicant is
    self-represented and the notice of appeal, albeit to the wrong court, was
    served on the respondent within the time provided in the rules. The delay in serving
    the appeal materials addressed to the appropriate court was barely one day.
    There is clearly no prejudice to the respondent and the loss of the right to
    appeal is very significant to the applicant. The trial decision rejected his
    claim for several millions of dollars and ordered him to pay costs in excess of
    $250,000.

[22]

In these circumstances, I am of the view that the
    justice of the case requires granting the extension, despite the applicants
    inability at this stage of the proceeding to demonstrate the merits of his
    proposed appeal. This court has recognized that, in circumstances like the
    present, even where it is difficult to ascertain the merits, a party is
    entitled to appeal and should not be deprived of that entitlement where there
    is no real prejudice to the other side:
Auciello v. Mahadeo
, 2016
    ONCA 414, [2016] O.J. No. 3282, at para. 14 (In Chambers);
Denomme v. McArthur
,
    2013 ONCA 694, 36 R.F.L. (7th) 273, at para. 10 (In Chambers).

[23]

In conclusion, I would allow the motion, set
    aside the chambers judges order dismissing the motion for extension of time and
    ordering costs to the respondent, and substitute an order granting the
    applicant an extension to serve and file his notice of appeal to 14 days
    following the issuance of these reasons. I would make no order as to the costs
    of the motion or the motion to set aside the chambers judges order.

Paul Rouleau J.A.

I agree Alexandra Hoy
    A.C.J.O.


Benotto J.A. (Dissenting):

[24]

I do not agree with my
    colleagues decision to set aside the chambers judges order refusing an
    extension of time to appeal.

[25]

The chambers judge
    applied the well-known test for an extension of time:


(1)  whether the applicant formed an intention to appeal within the
  relevant period;


(2)  the length of, and explanation for the delay;


(3)  any prejudice to respondent;


(4)  the merits of the appeal; and


(5)   whether the justice of the case requires an extension of
  time.

[26]

There was no issue with
    respect to the intention to appeal. The delay was brief and explained. The
    chambers judge addressed the remaining three considerations.
[27]

My colleague concludes
    that the chambers judge erred by considering that the outstanding costs order
    against the applicant constituted prejudice to the respondent. He determines
    that this error factored into the chambers judges exercise of discretion and
    therefore no deference is owed to his decision. I do not agree. While the
    chambers judge referred to the outstanding costs order as some prejudice, he
    did not rely on prejudice as a ground for refusing the extension. Instead, he
    based his decision on the lack of merit to the appeal as factored into the
    justice of the case.
[28]

Once an extension of
    time is sought, the court must consider the merits of the appeal. While the
    threshold for merit is low, it is nonetheless a factor.
[29]

When considering the merits of the
    appeal, it is not with a view to determining whether the appeal will succeed,
    but only with a view to determining whether the appeal has so little merit that
    the court could reasonably deny the important right of appeal:
Duca
    Community Credit Union Limited. v. Giovannoli
(2001), 142 O.A.C. 146
    (C.A.). I agree with the chambers judge that this appeal has so little merit
    that the extension should be denied.
[30]

The applicant asserted
    at trial that he was a spouse of the respondent. He claimed he was entitled
    to spousal support and a constructive trust interest in her property based in
    part on the assertion of a joint family venture. Further, he sought the return
    of 49 of his shares in Turtle Island Staffing Inc. or payment for them. The
    total value of his claims was approximately $4.5 million.
[31]

Following a 21-day
    trial, the trial judge determined that the applicant was not a spouse.
    Consequently, his claims for spousal support and a constructive trust interest
    in the respondents property based on a joint family venture failed. The trial
    judge further found that even if the applicant and the respondent were in a
    spousal relationship, the applicant had failed to establish entitlement to, and
    need for, support.
[32]

As to his unjust
    enrichment claim, the trial judge considered and applied
Kerr v. Baranow
,
    2011 SCC 10, [2011] 1 S.C.R. 269 and concluded that the applicant was well
    compensated for any services provided to the respondent. She also found that
    there was no evidence to support the applicants claim that the respondent had
    improperly taken 49 of his shares in Turtle Island Staffing Inc. or forged his
    signature on the share transfer or corporate resolutions. The applicants
own
    witness
testified that the applicant transferred his shares in Turtle
    Island Staffing Inc. to the respondent at a time when they had no value.
[33]

The trial judge
    provided extensive reasons. She made credibility assessments against the
    applicant and found that he was unable to prove any of his claims.
[34]

In my view a request for an
    extension of time  even after an inconsequential delay  is subject to a
    review of the merits to determine whether the justice of the case requires the
    extension.
This appeal is
    entirely fact based and no legal error is alleged. Given the trial judges
    factual findings on the core basis of the claims asserted, there is no
    possibility of success on appeal.
[35]

Accordingly, I would
    dismiss the applicants motion with costs fixed in the amount of $8,500,
    including costs and disbursements.
M.L. Benotto J.A.
Released: July 25, 2018