



COURT OF APPEAL FOR ONTARIO

CITATION: Ebrahimpour v. Askari, 2021 ONCA
    830

DATE: 20211118

DOCKET: C69048

Fairburn A.C.J.O., Roberts J.A.
    and Van Melle J. (
ad hoc
)

BETWEEN

Ronak Ebrahimpour and
    Mohammad-Mehdi Mollaei

Applicants/Respondents
    by Cross-Application

(Appellants)

and

Farhad Askari

Respondent/Applicants
    by Cross-application

(Respondent)

John A. Howlett, for the appellants

Danny M. Bertao, for the respondent

Heard and released orally:
    November 12, 2021 by video conference

On appeal from the order of Justice Michael
    R. Gibson of the Superior Court of Justice, dated December 22, 2021.

REASONS FOR DECISION

[1]

The appellants appeal an order made under rule 45.02 of the Rules of
    Civil Procedure, that the amount of $550,000 be paid into court pending the
    resolution of the parties dispute.

[2]

This appeal arises out of a house building project between the
    appellants and the respondent. The respondent loaned funds and worked on the
    project. The parties had a falling out. The respondent says that the appellants
    failed to repay the monies owing to him under a promissory note, pay him his
    share of the profits from the project, and compensate him for his services.

[3]

Without advising the respondent, the appellants sold the house for
    $3,250,000. When the respondent learned of the sale, he registered a caution on
    the property. On the eve of closing, the parties agreed through their lawyers
    that the caution would be removed in exchange for the appellants providing an
    irrevocable direction that $550,000 of the net proceeds of sale would be held
    in trust pending resolution of the parties respective claims.

[4]

The respondent then commenced an action claiming an equitable charge
    against $465,000 of the net proceeds from the house sale for the debt under the
    promissory note; a claim for a constructive trust or equitable charge over 25%
    of the net profit of the project; and a claim for a constructive trust or
    equitable charge over $72,000 of the net sale proceeds for alleged unpaid
    wages. The appellants dispute the respondents claim and counterclaim for
    damages.

[5]

The appellants brought an application to set aside the irrevocable
    direction and for a declaration that the caution was invalidly registered in
    the first place. They sought an order releasing to them all of the proceeds of
    sale held in trust. The respondent brought a cross-application under rule 45.02
    to have the proceeds of sale paid into court. The application judge dismissed
    the appellants application and allowed the respondents application.

[6]

The appellants repeat on appeal the submissions that were rejected by
    the application judge. They say the application judge erred by failing to find
    that: 1) had the caution not been deleted, it would have been set aside because
    the respondent did not satisfy the test for a certificate of pending
    litigation; 2) the irrevocable direction was unenforceable because it was
    procured by economic duress caused by the invalid registration of the caution;
    and 3) the test under rule 45.02 had not been met.

[7]

We see no error in the application judges decision.

[8]

Context is important in answering the first two objections on appeal. The
    withdrawal of the caution was based upon a negotiated agreement reached between
    the parties where both were represented by counsel. While initially rejecting
    respondents counsels suggestion of the irrevocable direction that all funds
    be held in trust, the appellants counsel subsequently counter-proposed that
    $468,148.28 be held in trust and then agreed the next day that $550,000 would
    be held in trust. This context belies any suggestion that a certificate of
    pending litigation would not have been available or that there was a coercion
    of [the appellants] will sufficient to set aside the irrevocable direction:
    see
Taber v. Paris Boutique & Bridal Inc.
, 2010 ONCA 157, at para.
    9.

[9]

Finally, the application judges determination that the respondent
    satisfied the criteria for an order under rule 45.02 as set out in
Sadie
    Moranis Realty Corporation v. 1667038 Ontario Inc.
, 2012 ONCA 475, at para.
    18, is amply supported by the record:

·

The
appellants
concede that the
    respondent claims a right to a specific fund, namely, the net sale proceeds
    held in trust;

·

The respondents evidence of the parties agreement that the loan
    would be repaid, the profits shared, and his wages paid from the sale of the
    property raises a serious issue to be tried regarding the respondents claim to
    that fund by way of the remedies of constructive trust or equitable charge; and

·

The balance of convenience favours granting the relief sought by
    the respondent. There is no evidence that the appellants suffered any prejudice
    from the monies having been held in trust or will suffer any if the monies
    remain in court. There is no dispute that the respondent borrowed the loaned
    funds from his home equity line of credit; he will suffer substantial prejudice
    if the funds are dissipated before the parties dispute is resolved.

[10]

Accordingly,
    the appeal is dismissed.

[11]

The
    appellants shall pay to the respondent costs of the appeal in the agreed upon
    amount of $6,000, inclusive of disbursements and applicable taxes, within 30
    days.

Fairburn
    A.C.J.O

L.B.
    Roberts J.A.

Van
    Melle, J. (ad hoc)


