Antony Trevor Niksich

The appellant, Bijan Naghshbandi, appealed judgments from two actions where he was ordered to repay significant debts to Shahram Heidari and Tarra Engineering Inc. The appeal raised five grounds: that the trial judge introduced a new theory of liability (joint investment), failed to provide adequate reasons for liability, did not apply a claimed credit, misstated the test for an oppression action, and erred in relying on unreliable witness testimony regarding a share transfer.

The Court of Appeal dismissed all grounds, upholding the trial judge's findings, particularly on credibility, and confirming the debts owed.

The defendants brought a motion to dismiss the plaintiff's action for negligence and breach of contract, arguing that it was barred by the principles of res judicata, collateral attack, and/or abuse of process.

This argument was based on a prior Small Claims Court default judgment obtained by one of the defendants against the plaintiff for unpaid invoices.

The court dismissed the defendants' motion, finding that section 107 of the Courts of Justice Act prevented the application of res judicata in these coincident actions.

Furthermore, the court determined that the parties were not identical in both proceedings, and the issues in the Superior Court action (negligence and breach of contract) were distinct from the Small Claims Court action (unpaid invoices) and not fundamental to the default judgment.

The court also concluded that the action was neither a collateral attack on the Small Claims Court judgment nor an abuse of process, as the Ontario Racing Commission investigation was not a prior legal proceeding.

The defendants moved for dismissal of the action under Rule 20, while the plaintiff opposed and sought judgment against the individual defendant and a newly incorporated entity, relying on the oppression remedy under the Ontario Business Corporations Act.

The court found that the individual defendant, after obtaining a default judgment against his initial corporation, ceased its commercial activity and transferred its goodwill and operations to a new corporation he solely directed, without satisfying the judgment.

The court applied the oppression remedy, concluding that the individual defendant abandoned the best interests of the previous corporation in favour of his own, thereby unfairly disregarding the plaintiff's interests as a creditor.

The defendant/plaintiff by counterclaim, Bijan Naghshbandi, sought leave to amend his statement of defence and counterclaim to add Tarra Engineering and Structural Consultants Inc. (TESC) as a defendant by counterclaim and to add claims for monetary damages.

The motion required leave under Rule 48.04 as the action had been set down for trial.

The court granted leave, finding a substantial and unexpected change in circumstances due to late production of financial records.

The court also allowed most proposed amendments, including claims for a declaration of ownership interest in Tarra Inc. and TESC, successor corporation status, oppression remedy under the OBCA, and fraud.

However, claims for breach of contract, inducement to breach contract, and unjust enrichment related to unpaid salary and management fees against TESC were denied as untenable.

TESC was granted leave to plead a limitations defence.

Costs were awarded to Naghshbandi, fixed at $8,000, payable equally by the opposing parties.

In a wrongful dismissal action under Rule 76, the plaintiff sought additional damages after termination without cause and challenged whether a binding settlement had been reached on termination entitlements.

Applying the objective observer test to the parties’ email exchanges and post-termination conduct, the court found the parties negotiated and finalized a settlement package including notice pay, commissions, extended benefits, and temporary office use.

The court held the employee’s acknowledgment that all terms were agreed, together with acceptance of the negotiated package, confirmed a complete settlement.

Because the settlement had already been performed by the defendants, no further wrongful dismissal damages were recoverable and the action was dismissed, with the defendants entitled to partial indemnity costs.