



COURT OF APPEAL FOR ONTARIO

CITATION: Abuzour v.
    Heydary, 2015 ONCA 249

DATE: 20150413

DOCKET:  M44807  C59984

Huscroft J.A. (In Chambers)

BETWEEN

Hasan Abuzour and Samira Abuzour

Respondent on Appeal

(Applicants)

and

Javad Heydary and Heydary Hamilton Professional
    Corporation

(Respondents)

Mark Adilman, for the applicants

Megan Marrie, for the moving party LAWPRO

Brian N. Radnoff, for Jeff Landmann, Yan Wang and Darren
    Smith

Heard:  March 26, 2015

Huscroft J.A.:

[1]

LAWPRO brings this motion for directions concerning the order of Penny J.,
    dated October 28, 2014, which states:

THIS COURT ORDERS that LAWPRO pay to the Abuzours the available
    proceeds of the 2013 insurance policy of the Respondents, Javad Heydary and
    Heydary Hamilton Professional Corporation.

[2]

That order was not appealed. A second order by Penny J., dated January
    29, 2015, dismissing a motion to vary his October 28 order, is subject to an
    appeal by Jeff Landmann, Yan Wang, and Darren Smith (Landmann, Wang, and
    Smith), three lawyers formerly employed by the Heydary law firm
.

[3]

LAWPRO asks whether the October 28 order is automatically stayed by
    operation of rule 63.01(1). In the event that the October 28 order is not automatically
    stayed, LAWPRO asks whether it should be stayed in the interests of justice.

Background

[4]

On October 28, 2014, Penny J. ordered LAWPRO to pay to the Abuzours the
    proceeds of an insurance policy held by Javad Heydary and Heydary Hamilton
    Professional Corporation. LAWPRO did not appeal this order.

[5]

Landmann, Wang, and Smith brought a motion to vary or set aside the
    October 28 order on the basis that it was made without adequate notice to them
    as affected non-parties.

[6]

Justice Penny concluded that they had a serious financial interest in
    the proceeding and were affected by the relief sought because the order
    exhausted coverage under the insurance policy and put them at risk of being
    sued by the Abuzours. As a result, they should have been given notice of the
    motion and had the right to bring the motion to vary or set aside the October
    28 order. However, Penny J. concluded that they failed to show sufficient cause
    to set aside or vary the October 28 order and dismissed their motion in his
    January 29, 2015 order.

[7]

Landmann, Wang, and Smith are appealing the January 29 order. LAWPRO
    agreed not to pay out on the insurance at their request.

[8]

On February 10, 2015, Penny J. ordered an interim stay until March 27,
    2015 or the date this court deals with the stay issue, whichever is sooner.
    Counsel representing LAWPRO, Landmann, Wang, and Smith, and the Abuzours
    undertook to take no action on the matter pending release of my decision on the
    motion.

LAWPROs Standing

[9]

The Abuzours submit that LAWPRO does not have standing to bring this
    motion. LAWPRO simply holds insurance proceeds. It has not appealed either the
    October 28 or the January 29 order and is an interpleader rather than a party.

[10]

The
    Abuzours note that Landmann, Wang, and Smith did not bring the present motion
    and suggest that LAWPRO should have brought a motion for interim relief under
    s. 134(2) of the
Courts of Justice Act
.

[11]

LAWPRO
    submits that the January 29 order and appeal impact on whether and when it is
    required to pay out on the insurance. LAWPRO submits that the court can make an
    order under s. 134(2) of the
Courts of Justice Act
even though it has
    not specifically brought its motion under that provision.

[12]

Landmann,
    Wang, and Smith submit that LAWPRO is a respondent and has an absolute right to
    bring the motion because it is threatened by an enforcement action.

[13]

In
    my view, LAWPRO is affected by the October 28 and January 29 orders and is
    entitled to bring this motion seeking directions. The motion is properly before
    the court.

Is the October 28 Order automatically stayed under rule
    63.01(1)?

[14]

Rule
    63.01(1) provides as follows:

63.01 (1) The delivery of a notice of appeal
    from an interlocutory or final order stays, until the disposition of the
    appeal, any provision of the order for the payment of money, except a provision
    that awards support or enforces a support order.

[15]

It
    is uncontroversial that the October 28 order is an order for the payment of
    money. However, that order is not under appeal. The January 29 order dismissing
    a motion to vary or set aside the October 28 order is the order that is under
    appeal.

[16]

Landmann,
    Wang, and Smith argue LAWPROs obligation to pay the Abuzours arises because of
    the combined effect of the October 28 order and the January 29 order dismissing
    the motion to vary or dismiss the October 28 order. Ultimately, they submit,
    their appeal of the January 29 order will require the Court to determine
    whether the October 28 order should have been made. They could not appeal the
    October 28 order because they were not parties to that order as a result of the
    failure of the Abuzours to provide notice of the motion to them. They argue
    that they should not be in a worse position than they would have been if they
    had received notice of the motion giving rise to the October 28 order.

[17]

The
    Abuzours submit that the October 28 order cannot be stayed automatically
    because it is not under appeal, whereas the January 29 order (the order under
    appeal) is not stayed automatically pursuant to rule 63.01(1) because it does
    not require payment or repayment of monies to anyone.

[18]

It
    is clear that Landmann, Wang, and Smith were not party to the October 28
    order because they were not provided with notice of the motion and that the
    failure of notice resulted in proceedings culminating in the January 29 order.
    It is also clear that the appeal of the January 29 order will determine the
    obligation to pay money under the insurance policy.

[19]

However,
    these considerations do not affect the operation of the rule, which has always
    been interpreted narrowly:
Longley v. Canada (Attorney General)
, 2007
    ONCA 149, 153 C.R.R. (2d) 224, at para. 11. The January 29 order contains no
    provisions requiring the payment of money and cannot properly be characterized
    as an order for the payment of money. It cannot be stayed automatically under rule
    63.01(1) without undermining one of the primary purposes of the rule itself,
    which is to provide a measure of certainty. It would be counterproductive to
    encourage litigation over whether a particular order is tantamount to an order
    to pay money. It is appropriate that the rule is interpreted narrowly.

[20]

I
    appreciate that, in the circumstances of this case, the Abuzours failure to
    provide notice to Landmann, Wang, and Smith of the motion resulting in the
    October 28 order not only occasioned further proceedings and expense, but also
    has the effect of denying them the benefit of an automatic stay that would have
    obtained had they received notice. In my view, this is a relevant consideration
    in determining whether a discretionary stay should be ordered. I consider this
    matter below.

Should a stay of the October 28 order be granted?

[21]


The grant of a stay under rule 63.02(1) is premised on
    the existence of an appeal. The October 28 order has not been appealed and as a
    result the court cannot grant a stay of that order under rule 63.02(1).

[22]

However,
    the Court has jurisdiction to grant a stay pursuant to s. 134(2) of the
Courts
    of Justice Act
. That section provides as follows:

On motion, a court to which a motion for leave to appeal is
    made or to which an appeal is taken may make any interim order that is
    considered just to prevent prejudice to a party pending the appeal.

[23]

As
    Doherty J.A. explained in
Waxman v. Waxman
, 2003 CanLII 22440, at
    para. 19, s. 134(2) establishes a broad jurisdiction for the court to make
    interim orders necessary to avoid prejudice to a party pending an appeal. The
    term party in s. 134(2) is not restricted to a party to the action:
CPC
    International Inc. v. Seaforth Creamery Inc.
(1996), 3 C.P.C. (4th) 100
    (Ont. C.A.), at paras. 6-7. Therefore, there is no impediment to granting
    relief to Landmann, Wang, and Smith in the context of this motion.

[24]

The
    test for granting interim relief under s. 134(2) is the same as for granting a
    stay pending appeal pursuant to rule 63.02(1). It is based on the test for an
    interlocutory injunction set out by the Supreme Court of Canada in
RJR-MacDonald
    Inc. v. Canada (Attorney General)
, [1994] 1 S.C.R. 311 at 334. It must be
    established that:

1.       there is a serious question to be tried;

2.       the applicant would suffer irreparable harm if the
    application       were refused; and

3.       the balance of convenience favours the applicant
    (i.e., the          applicant would suffer greater harm if the stay were not         granted
    than the respondent would suffer if the stay were      granted).

[25]

As
    Laskin J.A. has noted, the components of the test are interrelated in the
    sense that the overriding question is whether the moving party has shown that
    it is in the interests of justice to grant a stay:
BTR Global Opportunity
    Trading Limited v. RBC Dexia Investor Services Trust
, 2011
    ONCA 620, 283 O.A.C. 321, at para. 16.

Serious question

[26]

What is a serious question? Sopinka and Cory JJ.
    put the matter this way in
RJR-Macdonald
, at
    334:

There are no specific requirements which must
    be met in order to satisfy this test. The threshold is a low one. The
    judge on the application must make a preliminary assessment of the merits of
    the case. The decision of a lower court judge on the merits of the  claim
    is a relevant but not necessarily conclusive indication that the issues raised
    in an appeal are serious

Once satisfied that the application is neither
    vexatious nor frivolous, the motions judge should proceed to consider the
    second and third tests, even if of the opinion that the plaintiff is unlikely
    to succeed at trial.  A prolonged examination of the merits is generally
    neither necessary nor desirable.

[27]

The
    Abuzours submit that the serious issue threshold is not met and that the stay
    should be denied on this basis. They submit that Penny J. rejected all of the
    arguments raised by Landmann, Wang, and Smith in his January 29 order in strong
    terms.

[28]

In
    my view, this submission fails to appreciate the low threshold at the serious
    issue step. I need not conclude that the appellants have a strong argument or
    that they will succeed on appeal. Their appeal is neither vexatious nor
    frivolous, and that is enough at this stage to allow me to conclude that there
    is a serious issue to be tried.

Irreparable harm

[29]

Landmann,
    Wang, and Smith submit that they will suffer irreparable harm if LAWPRO pays
    out on the insurance policy to the Abuzours before their appeal is determined.
    Once this occurs they will be left without any professional liability insurance
    to defend against claims that may be brought against them by the Abuzours.

[30]

The
    appellants submission is supported by LAWPRO, which submitted that the only
    relevant insurance is the Heydary policy. Once it is paid out the insurance is
    exhausted, and this will leave up to $2.5 million in potential liability not
    covered.

[31]

The
    Abuzours submit that neither LAWPRO nor Landmann, Wang, and Smith have filed
    any evidence on the motion and that irreparable harm cannot be determined based
    on unsupported assumptions.

[32]

I
    disagree. I think it is reasonable to conclude from the nature of the
    proceedings that the appellants would suffer irreparable harm if a stay is not
    granted in these circumstances.

Balance of convenience

[33]

The
    balance of convenience test requires the court to determine which party will
    suffer the greater harm from granting or refusing a stay. This is determined on
    the unique characteristics of individual cases.

[34]

Landmann,
    Wang, and Smith submit that the balance of convenience favours not paying out
    the proceeds of the policy while the appeal is pending. The money is being held
    by LAWPRO and at worst the Abuzours face a delay in obtaining it. Their appeal
    of the January 29 order has already been perfected so the delay will be
    minimal.

[35]

LAWPRO
    submits that if the funds are paid out now and Landmann, Wang, and Smith
    succeed on their appeal, there is no assurance that the Abuzours will be able
    to repay LAWPRO, and that such a result could render the appeal moot.

[36]

The
    Abuzours submit that there is no evidence on the motion and as a result there
    is no basis that would allow the court to determine that the balance of
    convenience favours the grant of the stay. They characterize the concerns
    raised as speculative.

[37]

The
    strongest argument in favour of granting a stay is one of basic fairness. The
    problem at the heart of these proceedings results from the failure of the
    Abuzours to provide proper notice to Landmann, Wang, and Smith of the first
    motion before Penny J. Had notice been provided, they would have been able to
    appeal the October 28 order and that order would have been stayed automatically
    pursuant to rule 63.01(1).

[38]

In
    my view, the overall justice of this case requires the grant of a stay.
    Landmann, Wang, and Smith should not end up in a worse position than they would
    have been had they received proper notice of the first motion. Accordingly, the
    October 28 order of Penny J. is stayed pending appeal of the January 29 order.

Costs

[39]

If
    the parties cannot agree on costs they may make brief submissions in writing,
    not to exceed three pages, within 10 days of this order.

Grant
    Huscroft J.A.


