Court File and Parties

Court File No.: CV-22-00000352-0000 Date: 2024-06-20 Superior Court of Justice - Ontario

Re: Parham Pozhhan, Plaintiff And: Pedram Pozhhan, Defendant

Before: Mew J.

Counsel: Jennifer Ng, for the Plaintiff Pedram Pozhhan (defendant in default), did not participate

Heard: 20 June 2024, at Belleville (in writing)

Endorsement

[1] The plaintiff brings an urgent motion in writing for partial judgment, pursuant to Rule 19 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, against the defendant, who was noted in default on 10 May 2024.

[2] The parties are brothers. Their dispute arises in connection with a residential property at 83 Moira Street East in Belleville (the “Property”) the title to which is currently registered to the defendant, but which is occupied by the plaintiff, who provided the funds to purchase the Property and who has fully indemnified the defendant in respect of all obligations arising under a mortgage on the Property, which was taken out in the defendant’s name. These arrangements enabled a mortgage to be obtained from Toronto-Dominion Bank (“TD”) on more favourable terms than the plaintiff would have been able to procure, based on the plaintiff’s credit history.

[3] The evidentiary record discloses that the defendant was fully reimbursed by the plaintiff for any and all expenses incurred by or attributed to him in relation to the Property. Specifically, it was understood that the defendant was simply lending “his name” and that the plaintiff would be responsible for all mortgage payments and other costs/expenses associated with the Property. Indeed, the plaintiff has lived in the Property since 2014 (except for a period of approximately one year when he rented it out).

[4] By 2022, the plaintiff was in a position to pay off the balance of the mortgage and assume title in the Property from the defendant. The defendant, however, refused to cooperate with the plaintiff’s requests to facilitate this transfer, as a result of which this action was commenced, claiming inter alia, a declaration of the plaintiff’s beneficial ownership of the Property and an order vesting title in the plaintiff.

[5] Subsequently, the plaintiff became aware that there was a second charge on title to the Property, for what appeared to be a line of credit in the amount of $40,000.00 to TD, which was registered in or around 2 October 2017 by the defendant without notice to the plaintiff.

[6] The plaintiff waived the need for the defendant to deliver a statement of defence to permit settlement discussions to take place. The defendant was legally represented at the time and a resolution of the dispute was ultimately negotiated. However, after the plaintiff had purported to accept an offer made by the defendant, but before a release or other settlement documentation had been completed, the defendant’s lawyer ceased to act for him.

[7] After that, the defendant was unresponsive to the efforts made by the plaintiff’s lawyer to conclude the settlement formalities.

[8] Nevertheless, the plaintiff continued to pay the monthly mortgage instalments owing to TD as well as for all other upkeep, and costs, associated with the Property. On the first of each of the months of February, March, April and May 2024, $1,032.00, the current amount of the monthly installment(s), was e-transferred to the defendant to be applied towards the mortgage.

[9] On 3 May 2024, the plaintiff’s lawyer sent the defendant an email stating that she had instructions to note him in default, explaining that the consequences of which would entail the plaintiff seeking further relief and court orders against him without further notice.

[10] As a result of being noted in default, the defendant is deemed to admit the truth of the allegations made in the statement of claim.

[11] On 31 May 2024, the plaintiff received notice by letter from TD addressed to the defendant at the Property, indicating that there were mortgage arrears as of 27 May 2024 of $4,224.00, plus legal costs and disbursements and demanding immediate payment.

[12] The plaintiff made immediate arrangements to address the arrears and make payment directly to TD.

[13] On a motion for default judgment, the court will undertake an inquiry into what deemed admissions of fact flow from the statement of claim; whether the deemed admissions in fact entitle the plaintiff, as a matter of law, to judgment; and, if not, whether the plaintiff adduced admissible evidence which, when combined with the deemed admissions, entitles the plaintiff to judgment: Gennett Lumber Co. v. John Doe aka Milton Harvey, 2019 ONSC 1345, at para. 18.

[14] The evidentiary record amply demonstrates that the Property was purchased with the TD mortgage for $138,500 and $49,365.976 provided by the plaintiff, who also paid the legal fees and disbursements due on closing. Thereafter the mortgage, upkeep, maintenance and all other payments relating to the Property have been provided by the plaintiff. As a consequence, I am satisfied that the plaintiff has established that he holds a beneficial interest in the Property in the form of a resulting trust. A resulting trust arises when legal or equitable title to property is in one party’s name, but that party, because he is a fiduciary or gave no value for the property, is under an obligation to return the property to the original owner or to the person who did give value for it: Caroti v. Vuletic, 2022 ONSC 4695, per Doi J. at para. 599.

[15] The plaintiff submits that defendant has abused his position of authority and trust: first, by failing to transfer, upon request, legal title in the Property to its rightful (and the beneficial) owner, to which he has contributed nothing aside from his “name” on the mortgage; secondly, by his registration, without notice or consultation to the plaintiff, of a $40,000.00 line of credit against the Property; and finally, by diverting funds receipted by him intended for the mortgage, apparently for his own use or benefit.

[16] I agree.

[17] Accordingly, judgment will go (a) declaring the plaintiff to be the sole beneficial owner of the Property, free and clear of any claim, right, title or interest of the defendant; (b) ordering that all right, title and interest in the Property vests in the plaintiff, nunc pro tunc effective 17 November 2014, free and clear of any claim by the defendant or his creditors, mortgagees, successors or assigns, subject only to the interests of TD pursuant to the mortgage and subsequent charge; and (c) that the plaintiff’s ownership shall be recorded on title.

[18] The balance of the relief claimed in the plaintiff’s motion for judgment, including the issues of damages and costs, shall be adjourned to a date to be set in consultation with the trial coordinator. I will remain seized of this matter for that purpose.

Mew J. Date: 20 June 2024