Layeghpour v Rashidi, 2023 ABKB 674

Court of King’s Bench of Alberta Citation: Layeghpour v Rashidi, 2023 ABKB 674 Date: 20231128 Docket: 2201 10137 Registry: Calgary Between: Shahin Layeghpour Appellant/Defendant - and - Leila Rashidi Respondent/Plaintiff _______________________________________________________ Decision on Appeal from Alberta Court of Justice Civil Division of the Honourable Justice Robert A. Graesser _______________________________________________________ Introduction [ 1 ] Leila Rashidi obtained a default judgment against Shahin Layeghpour on an action seeking repayment of monies invested in technology developed by Mr.

Layeghpour. Following demands for repayment, Ms. Rashidi commenced action against Mr. Layeghpour. She had difficulty serving him and obtained an order for substituted service. Mr. Layeghpour was served with the Notice of Claim in accordance with the substitutional service order. When a reply or defence was not filed within the required time, Ms. Rashidi obtained default judgment in the amount of $8.000. [ 2 ] Ms. Rashidi filed her judgment with the Court of Queen’s Bench and began collection proceedings.

[ 3 ] On learning of the judgment against him, Mr. Layeghpour brought an application to set aside the default judgment. [ 4 ] The application was heard by Justice Higa on August 19, 2022. Justice Higa dismissed the application. Mr. Layeghpour now appeals that decision to this Court. Background [ 5 ] By Agreement dated December 19, 2021, Ms. Rashidi purchased a 1% interest in Mr. Layeghpour’s “upcoming patent regarding a Student Hiring Website Across the Globe” for $5000 CAD. [ 6 ] The Agreement provided that Ms. Rashidi could get her money back in several circumstances: a.

Before making any payment to a patent agent and/or initiation of the process for registration: 100% of the $5000 will be refunded. b. After a payment is made to a patent agent and/or initiation of the process for patent, there are two options for Leila to decide: i. Replace her position with someone else; or ii. Give me time (without expecting for interest(

s) to replace her position with another individual so I can refund her fully. c. After pre-registration of the patent: No refund will be considered. [ 7 ] The Agreement also stated: Based on the nature of the work, which is an innovation, I hereby acknowledge that I will take no responsibility in any kind regarding the success and/or marketing of the patent named in the Agreement. [ 8 ] The Agreement included a “Governing Law and Jurisdiction” clause: This Agreement will be construed in accordance with and exclusively governed by the laws of Mr.

Shahin Layeghpour’s jurisdiction at the time of any dispute. [ 9 ] Ms. Rashidi gave Mr. Layeghpour an additional $3000 CAD for a further 1% interest in the “upcoming patent” between December 27, 2021, and January 9, 2022. There is no documentation in evidence concerning this further investment, other than what is contained in Ms. Rashidi’s Notice of Claim. [ 10 ] Later in January 2022, Ms. Rashidi decided that she wanted her money back. She and Mr. Layeghpour corresponded on the subject. On February 3, 2022, Ms. Rashidi emailed Mr. Layeghpour and demanded the return of her funds. No refund was provided, and Ms.

Rashidi commenced a civil claim in Provincial Court Civil Division (as it then was) in March 2022. [ 11 ] She had difficulty serving Mr. Layeghpour with the Notice of Claim and obtained an order for substituted service. Ms. Rashidi served the Claim in accordance with the Order. Mr. Layeghpour did not defend within the stipulated time, and Ms. Rashidi obtained default judgment. [ 12 ] On learning of the judgment some time later, Mr. Layeghpour sought to appeal the decision, but learned that he needed to apply to open up the noting in default first. He brought an application to open up. Ms.

Rashidi opposed the application, and the matter was eventually heard by Justice Higa on August 19, 2022. [ 13 ] Mr. Layeghpour raised three issues on his application: 1. He had not been properly served with notice of the claim; and 2. Alberta is not the proper jurisdiction for any action to be brought against him. [ 14 ] Justice Higa dismissed the application, stating: It is clear that there is a connection with Alberta in the sense that Mr.

Layeghpour is a resident of Alberta and was at the time, has always been a resident, relies on a line in the agreement between the parties that says, This agreement will be construed in accordance with and exclusively governed by the laws of Mr. Layeghpour’s jurisdiction at the time of any dispute. And his residence at the time was Alberta. It does not say Iran. It does not say that Iran – Iranian Courts have sole jurisdiction to hear a matter. It says it will be-the agreement will be construed in accordance with the laws of Mr. Layeghpour’s jurisdiction. And I find that is Alberta.

There is a direct connection of this case with Alberta. So the submission that Alberta is not the proper jurisdiction, the Court does not find that to be the case. This Court does have jurisdiction. So to deal with the application to set aside, the Court has to be presented with an arguable defence. Jurisdiction is not an arguable defence, in my view. There – I have reviewed all affidavits. And this application was adjourned in order for Mr. Layeghpour to provide further information to the Court. And supplemental affidavits were filed. I have got a number of affidavits.

And none of the addressed the arguable defence. There is no proposed dispute note on the file. I am not sure what – in terms of the evidence shat would be a defence to the claim on its merits.

The defence that this Court does not have jurisdiction, I find, does not apply., it would not be successful at a trial, and the affidavits insupport do not deal with a – or a defence on the merits. And no proposed dispute note was filed. The application is dismissed. The tests have not been addressed in terms of an arguable defence. [15] Mr. Layeghpour’s initial application references the Agreement and says that he and the Plaintiff had agreed that jurisdictionwould be the State of Iran and that the Plaintiff was in Iran when the Agreement was made. [16] Mr.

Layeghpour referenced telephone discussions and messages exchanged between him and the Plaintiff to the effect that“the location of the business development regarding the written agreement supposed to be in Iran”. [17] Mr. Layeghpour’s Brief of Law submitted for this appeal acknowledges that sometime later in January, Ms. Rashidi wantedher money back. They apparently communicated over her request. Mr. Layeghpour acknowledges that on February 3, Ms. Rashidi madesome sort of formal demand for repayment. [18] Mr.

Layeghpour states that by February 3, he had “already initiated payments toward legal fees, making it impossible toprovide an immediate full refund as stipulated in clause 2.a of the Agreement”. He says that in February the “current” form of patentregistration had been rejected. [19] In the argument before me, there was some discussion about Mr. Layeghpour’s claimed defence that he did not have to makea refund to Ms. Rashidi because he had “initiated payment towards legal fees” and that brought into play paragraph 2(

a) of theAgreement, quoted above. He represented that the project was now essentially dead so there was no ability for him to find a new investoras contemplated in paragraph 2(b). [20] I noted that there was no evidence of any of this in his earlier affidavits. At the conclusion of the argument, I invited him toprovide affidavit evidence of the expenses he claims to have made towards the patent. Any affidavit was to be filed by October 31, 2023.No such affidavit has been filed. Issues [21] The issues are therefore: 1. Was Mr. Layeghpour properly served; 2.

Is Alberta without jurisdiction to hear the dispute between these parties; and 3. Have the requirements to open up a noting in default been met. Standard of Review [22] The standard of review on appeals from the Alberta Court of Justice to the Alberta Court of King’s Bench is governed byHousen v Nikolaisen, 2002 SCC 33, which I need not articulate. Essentially, Mr. Layeghpour has to establish that Justice Higa’sdecision was incorrect concerning matters of law or tainted by palpable and overriding error on questions of mixed fact and law or fact. Analysis 1. Not properly served [23] Mr.

Layeghpour was served in accordance with a valid order for substituted service from then the Provincial Court of Alberta.There is no merit to this argument. That leaves consideration of the other two grounds of appeal. 2. Jurisdiction [24] This is a question of mixed fact and law. There are legal issues concerning forum conveniens and their application to the facts,mixed fact and law issues regarding the

interpretation of the Agreement, and factual issues concerning the parties themselves and themaking of the contract. [25] Mr. Layeghpour references Rule 11.25 regarding service of commencement documents outside of Alberta. He also cites: Club Resorts Ltd. v Van Breda, 2012 SCC 17 , [2012] 1 SCR 572; Breeden v Black, 2012 SCC 19 , [2012] 1 SCR 666; Herman v Alberta (Public Trustee), 2002 ABQB 255; and Toews v First Choice Canada Inc, 2014 ABQB 784. [26] Firstly, Rule 11.25 has no application here, as Mr. Layeghpour was in Alberta when he was served.

He acknowledges in hisaffidavit of August 5, 2022, that he was a resident in Edmonton up to March 14, 2022, when he moved to an unspecified new address.

He picked up the delivery notice from a post office at the Shoppers Drug Mart store in his new neighborhood. [ 27 ] As for the

interpretation of the Agreement, the Agreement specifically references “the laws of Mr. Shanin Layeghpour’s jurisdiction at the time of any dispute”. [ 28 ] Justice Higa’s fact finding was that Mr. Layeghpour resided in Alberta. There was absolutely no evidence to the contrary. Ms. Rashidi may have been outside Alberta when the Agreement was signed, but it is not her “jurisdiction” that is referenced in the Agreement. [ 29 ] Justice Higa made no “palpable and overriding error” when he failed to consider Mr.

Layeghpour’s undocumented and unsubstantiated claims that the parties discussed the Agreement being subject to Iranian law, let alone being litigated in Iran. [ 30 ] There is a distinction between the governing law of a contract and the forum where disputes may be litigated. Making an agreement subject to the laws of a particular jurisdiction do not require that disputes over that agreement be resolved in that jurisdiction. It is perfectly allowable to have an agreement subject to foreign law being litigated in Alberta. [ 31 ] Here, the Agreement references governing law, not forum. Iran is never mentioned.

There is no evidence at all that Mr. Layeghpour’s jurisdiction (which presumably means domicile) remains Iran, despite his Alberta residence. [ 32 ] Cases on jurisdiction, such as Club Resorts Ltd v Van Breda , focus on the “real and substantial connection” test. All one has to do is to turn to para 90 of that decision to see that one of the most significant tests is where or not the defendant is resident in the jurisdiction. Mr. Layeghpour clearly was. The second test was whether he was carrying on business in the jurisdiction, which also appears to be the case.

I do not know where the contract was made; presumably communication of acceptance occurred in Alberta when Mr. Layeghpour received the signed Agreement back from Ms. Rashidi (if she was in Iran when she signed it). [ 33 ] There is no factor that ousts Alberta’s jurisdiction to decide the matter. [ 34 ] There is no information in this matter as to whether Iran actually has any jurisdiction to deal with this matter, or what their legal system is like to determine whether the dispute can fairly be determined there.

There is also no information suggesting that there are proceedings underway in Iran so there is no contest as to which jurisdiction is more appropriate to deal with the matter. [ 35 ] Master Schultz considered jurisdiction issues in Toews v First Choice Canada Inc . [ 36 ] Breeden v Black , Herman v Alberta , and Toews v First Choice Canada Inc. offer no assistance to the Appellant on this issue. [ 37 ] Justice Higa made no palpable and overriding error on the issue of jurisdiction. [ 38 ] Dismissing an appeal on such a basis is like damning someone with faint praise. I apply the wording of the Housen test.

If this issue had to be determined on a correctness standard, I would have no hesitation in finding that Justice Higa’s decision on jurisdiction was correct. 3. Defence on the merits [ 39 ] The Alberta Court of Justice uses the Rules of Court as their default rules of procedure. I am not aware that the Court of Justice has adopted any other rules regarding opening up default judgments. [ 40 ] Rule 9.15 gives the Court the power to open up a noting in default and to permit the defendant to file as statement of defence.

This is a discretionary power, and the Court is not obliged to open up a noting on default just because the defendant wants to take the matter to trial. [ 41 ] Cases such as Poloma Investments Ltd v Yuen , 2016 ABCA 93 at para 4 make it clear that to allow the defendant to open up the noting in default, the defendant must show a reasonable explanation for the failure to defend in the first place, that there was no unreasonable delay in applying to open up the default, and that there is an arguable defence on the merits. [ 42 ] I see no issue with the reason for failing to defend: the defendant was in the process of moving.

He brought the application shortly after he learned of the default judgment. That only leaves whether Mr. Layeghpour has an arguable defence on the merits. [ 43 ] Here, his first two affidavits do not speak to a defence other than one relating to jurisdiction. I invited another affidavit to deal with the defence on the merits, if any. My request was not a difficult one and gave nearly a month to respond. The Defendant has for whatever reason chosen not to file any further evidence. [ 44 ] I infer from that there is no arguable defence on the merits.

Speaking of one or speculating on one is one thing; putting some evidence of it forward is another. [ 45 ] This part of the test for opening up is absent, and the appeal must accordingly fail. Conclusion [ 46 ] There has been no valid basis shown to allow the appeal from the decision below. Mr. Layeghpour’s appeal is dismissed. Ms. Rashidi was self-represented, and I do not award any costs.

Heard at Calgary Alberta on October 6, 2023 Dated at Edmonton, Alberta this 28 th day of November, 2023. Robert A. Graesser J.C.K.B.A. Appearances: Shahin Layeghpour Appellant/Defendant (self-represented) Leila Rashidi Respondent/Plaintiff (self-represented)