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Civil Litigation - Orders - R59.06(2) Set-Asides or Varying Orders

. Wilson v. Fatahi-Ghandehari

In Wilson v. Fatahi-Ghandehari (Ont CA, 2023) the Court of Appeal notes that an R59.06 set aside motion based on fraud must be previously-unknown fraud:
[12] With that background in mind, we turn to the instant appeal. The appeal is from an August 19, 2022 decision dismissing Mr. Wilson’s r. 59.06(2) motion. The motion was brought to set aside the judgment on the undefended trial based on allegations that Ms. Fatahi-Ghandehari had obtained the judgment by fraud. The same judge heard the trial and the motion to set aside the judgment. The trial judge summarily dismissed the r. 59.06(2) motion as an abuse of process for four reasons:

2. The party seeking to set aside a decision based on fraud must show that the fraud was unknown at the time of the hearing or could not have been put forward with the exercise of due diligence: Saggi v. Grilone, 2021 ONSC 2276. Virtually all of the material allegations of fraud were known to Mr. Wilson at the time of the undefended trial, as he had repeatedly raised these allegations in earlier proceedings.
. Holterman v. Fish

In Holterman v. Fish (Ont CA, 2017) the test for setting aside an order [under RCP Rule 59.06(2(a) for fraud], here a consent Order for discontinuance of an action, was applied by the court. The effect of the set-aside was to re-open the trial:
[17] In determining whether there were exceptional circumstances to set aside the discontinuance, the motion judge applied the Sagaz test, which guides the application of r. 59.06(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for setting aside or varying an order due to fraud or facts arising or discovered after the order has been made. In 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59 (CanLII), [2001] 2 S.C.R. 983, the moving party sought to reopen a trial on the basis of fresh evidence. The Supreme Court ruled against the moving party, and cautioned at para. 61 of its decision that the discretion to reopen a trial should be exercised “sparingly and with the greatest care.”

[18] The test from Sagaz is often reduced to two questions: (1) whether the new evidence, if presented at trial, would probably have changed the result, and (2) whether the evidence could have been obtained before trial by the exercise of reasonable diligence. But more is involved. As this Court stated in Mehedi v. 2057161 Ontario Inc., 2015 ONCA 670 (CanLII), at para. 20, the test “includes considerations of finality, the apparent cogency of the evidence, delay, fairness and prejudice.” Appellate courts must also consider the importance of deferring to trial judges, who are “in the best position to decide whether, at the expense of finality, fairness dictates that the trial be reopened”: Sagaz, at para. 60; Mehedi, at para. 21.

[19] In my view, the factors set out in Sagaz provide an appropriate structure for determining whether to set aside a notice of discontinuance, with the caveat that the interest in finality may pose an even greater obstacle to setting aside a consent discontinuance than reopening a trial. An important aspect of a discontinuance on consent is that the parties, after considering their positions, made a joint decision to end the litigation. Although there may be exceptional circumstances where departure from such a decision will be justified, courts should not allow “significant and considered measures” to terminate litigation to be “lightly undone”: Yancey v. Neis, 1999 ABCA 272 (CanLII), 250 A.R. 19, at para. 25; Philipos v. Canada (Attorney General), 2016 FCA 79 (CanLII), 483 N.R. 328, at paras. 17-20.
. Antonyuk v. Antonyuk

In Antonyuk v. Antonyuk (Ont CA, 2022) the Court of Appeal considers re-opening an appeal under the R59.06(2)(a) set aside jurisdiction:
[1] This is a post-appeal motion under rule 59.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The appeal from the decision of the trial judge was decided by this court by reasons dated October 25, 2021.[1] This court upheld the trial judge’s decision that, under s. 22 of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.), the divorce of the appellant and respondent pursuant to a divorce decree granted in Ukraine dated October 23, 1998 is valid and recognized for the purposes of determining the marital status of the parties in Canada, and therefore, there was no basis to grant a Canadian divorce decree under the Divorce Act.

[2] Following the release of this court’s reasons, the appellant moved under r. 59.06(2) to set aside the order of this court and to give effect to a divorce order made under the Divorce Act, dated February 19, 2019, which was set aside by order dated March 22, 2019.

[3] The panel considered this motion in writing. The moving party requested an oral hearing, but the panel determined that one was not necessary: Midland Resources Holding Limited v. Shtaif, 2018 ONCA 743, 81 B.L.R. (5th) 191, at para. 14, leave to appeal to S.C.C. refused, 38507 (May 2, 2019); and 806480 Ontario Limited v. RNG Equipment Inc., 2014 ONCA 796, at para. 9. The panel reviewed all the materials filed on the motion, including the parties’ motion records; the moving party’s factums including the third “reply” factum, which states that it is intended to replace the factums previously filed on the motion; the responding party’s factum; and the responding party’s brief of authorities.

[4] Rule 59.06(2) provides:
(2) A party who seeks to,

(a) have an order set aside or varied on the ground of fraud or of facts arising or discovered after it was made;

(b) suspend the operation of an order;

(c) carry an order into operation; or

(d) obtain other relief than that originally awarded,

may make a motion in the proceeding for the relief claimed.
[5] The appellant argues that this court’s order should be set aside on the basis of fraud or facts arising or discovered after it was made. The affidavit the appellant filed on this motion alleges no new facts or fraud discovered after the order was made. The issue of fraud in obtaining the Ukrainian divorce was addressed by the trial judge. The trial judge specifically found that the appellant had not alleged fraud, and that there was no evidence of fraud.

[6] The trial judge also confirmed that the appellant was not seeking any relief other than a divorce, and that if the foreign divorce was valid, the issue would be solved. She stated at para. 66 of her reasons:
[66] At the outset of trial, I specifically asked the Applicant if she was seeking any relief beyond the divorce. She told me she was not. The Applicant gave no evidence that any of her legal rights were impacted by the foreign divorce other than her ability to remarry. She acknowledged that if I made an Order finding that the foreign divorce was valid, that issue would be solved.
[7] The appellant relies on a recent decision of the Supreme Court of British Columbia, Kootenay Savings Credit Union v. Brar, 2021 BCSC 2027, in support of her motion. This decision, which relates to the characterization of a fraudulent conveyance of a residential farm property, was not a motion to set aside or vary an order and is not relevant to the appellant’s request to set aside this court’s order.

[8] The motion under r. 59.06(2) is dismissed with costs to the respondent of $2,500, inclusive of disbursements and HST.


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