ONTARIO
SUPERIOR COURT OF JUSTICE
Court File No.: 11-CV-434055
Date: 20120430
BETWEEN:
Babak Naghash
Plaintiff
- and -
Mohammad Taghi Taeb also known as Mohammed-Taghi Taeb and Mohammed Taghi Taeb in his capacity as Trustee for Babak Naghash
Defendant
Counsel:
• Rob Moubarak for the Plaintiff
• David Mario Farmani for the Defendant
Hearing Date: April 27, 2012
Perell, J.
REASONS FOR DECISION
[ 1 ] This is a motion brought by the Plaintiff Babak Naghash to enforce a settlement allegedly reached with the Defendant Mohammad Taghi Taeb. It is a very unfortunate motion, because Mr. Naghash’s belief that the parties settled their dispute is reasonable, but, unfortunately it is a mistaken belief, and, therefore, for the reasons set out below, his motion should be dismissed.
[ 2 ] By way of summary, in my opinion, the parties never completed their negotiations and, in any event, any agreement was subject to a formal contract that has never been formalized. There are several fundamental terms for a settlement that have never been resolved. Given the important matters that had apparently been resolved, it should have been easy for the parties to resolve the balance of the terms, but unfortunately, they did not do so. In my opinion, the parties did not come to end-of-job.
[ 3 ] There is no settlement to enforce and, accordingly, I dismiss the motion with costs in the cause. I encourage the parties to finalize a settlement, because it appears from the record that this should be possible. A settlement would make this action in Toronto and a related and presently stayed action in Milton unnecessary. Essentially, what is required is an adjustment of the moneys to be paid by Mr. Naghash to Mr. Taeb to take into account the expenses incurred by Mr. Taeb in carrying the property that is the subject matter of their dispute and a mechanism to discharge Mr. Naghash from liability under the mortgage that presently encumbers the property. A firm closing date is also required.
[ 4 ] It is not disputed that Mr. Taeb, who resides in Halifax, Nova Scotia, and Mr. Naghash, who resides in Mississauga, Ontario, entered into an agreement under which they would purchase a property known as 205 Norton Avenue in Toronto. It was agreed that title would be registered in Mr. Taeb’s name, but he would hold a 50% interest in trust for Mr. Naghash. A written trust agreement to this effect was signed. The parties planned to develop this property and perhaps others.
[ 5 ] In pursuance to their agreement, Mr. Taeb and Mr. Naghash each contributed $130,000 to purchase 205 Norton Avenue. The balance of the purchase price was financed by an approximately $670,000 mortgage from Mr. Taeb that was registered against the title of the property. The purchase transaction closed in June 2011.
[ 6 ] By the late summer of 2011, Mr. Naghash became concerned that Mr. Taeb was dealing with the 205 Norton Avenue property without involving Mr. Naghash. Based on these concerns, Mr. Naghash commenced this action, and he obtained a certificate of pending litigation on an ex parte motion granted by Justice Low on September 2, 2011. Meanwhile, Mr. Taeb had also commenced an action in Milton, Ontario but was having difficulty serving Mr. Naghash.
[ 7 ] On September 8, 2011, Mr. Taeb unexpectedly showed up at Mr. Naghash’s, office, and the parties, without the benefit of having their lawyers in attendance, negotiated what Mr. Naghash thought was a settlement of their dispute. The key element of this settlement was that Mr. Naghash would pay Mr. Taeb $97,000 for his 50% interest in 205 Norton Avenue.
[ 8 ] In his affidavit for this motion, Mr. Naghash deposes that his understanding that there was a settlement was confirmed in e-mail messages and by telephone conversations between him and Mr. Taeb between September 9 and September 22, 2011.
[ 9 ] Because he believed there was a settlement, Mr. Naghash or his litigation lawyer retained a real estate lawyer, and in September and October 2011, there was correspondence and discussions between the lawyers acting for Mr. Naghash and Mr. Farmari, the lawyer acting for Mr. Taeb.
[ 10 ] The parties differ about the meaning of these communications. Mr. Naghash understands them as confirming a settlement. Mr. Taeb understands the communications as continuing negotiations or as being offers or counteroffers to resolve the dispute between the parties.
[ 11 ] Finally, on October 12, 2011, Mr. Farmani wrote a letter on Mr. Taeb’s behalf revoking all offers. This motion to enforce the settlement followed in November 2011.
[ 12 ] I have reviewed the documents alleged by Mr. Naghash to evidence a concluded settlement, and, in my opinion, the documents rather demonstrate that the parties had not come to an agreement about the essential terms of the agreement and that they also intended that any settlement be documented by a formal agreement drafted by their lawyers.
[ 13 ] Mr. Naghash relies on Mr. Taeb’s e-mail message of September 9, 2001 as showing a settlement, but I read this message as indicating only that a settlement required the signing of a formal agreement of purchase and sale in which the sale price and a closing date had yet to be determined. The sale price had to be determined because it would not be enough for Mr. Naghash simply to pay $97,000; the mortgage on the 205 Norton Avenue property would have to be discharged at Mr. Naghash’s expense.
[ 14 ] The chain of e-mail between September 9 to September 23, 2011 stated, with my emphasis added:
September 9, 2011 - Mr. Taeb to Mr. Naghash,
Regarding yesterday negotiation about the property shared between us (205 Norton Ave.), we agreed you purchase my share $97,000. It is needed you inform your lawyer as soon as possible about our negotiation and agreement and let him send his offer to my lawyer for $97,000, then my lawyer will stop everything today. We sign purchase agreement, you pay the amount and fix closing date (legal procedure). This offer should be sent before official time because you told me should be for Monday. Best regard
September 21, 2011 – Mr. Naghash to Mr. Taeb
My Lawyer has replied to [Mr. Taeb’s lawyer’s] letter on Friday last week September 16, 2011 re arrange for closing date and proper way to close our settlement. All we got another claim from him for Milton action against me (it seems like [your lawyer] does not agree to you for settling this matter.) I need you to instruct him to work with my lawyer so that we could close this deal before end of October. Your attention is much appreciated on this matter.
September 22, 2011 -- Mr. Taeb to Mr. Naghash,
I asked my lawyer that if there is no problem with purchase agreement and everything is clear, try your best to finish this case and fix closing date. I think my lawyer wants to go through legal procedure. In will be in touch with you and him.
September 23, 2011- Mr. Taeb to Mr. Naghash
I will call you Friday morning around 9am. My cellphone # is …..
September 23, 2011 - Mr. Naghash to Mr. Taeb
Please have your lawyer to reply to my lawyer fax sent on September 16, 2011. Some of the items asking from your lawyer is not acceptable to my lawyer. He could call my lawyer to coordinate the final settlement legal details. Purchase offer will be prepared after this matter.
[ 15 ] This chain of e-mail does not record a settlement and evidences an intention to formalize the parties’ agreement with the signing of an agreement of purchase and sale with a fixed price, arrangements to re-finance the mortgage encumbering the property, and a scheduled closing date.
[ 16 ] I have the same opinion about Mr. Naghash’s lawyer’s letter to Mr. Taeb’s lawyer dated September 12, 2011. The letter stated with my emphasis added:
It appears as though our clients have reached a settlement in the aforestated matter. I am advised by my client that your client has agreed after negotiations with my client to settle the two pending actions in this matter … on the following conditions: ….
That your client agrees to sell his fifty percent (50%) interest in the property for the total all inclusive price of any applicable taxes, fees, reimbursements for any mortgage payments made by your client up until the closing of this transaction between our respective clients and finalization of the terms of the offer to settle , any expenses incurred by your client of any nature for 205 Norton, Toronto, Ontario, up until finalization of the settlement, any administration fees, taxies, levies, disbursements, legal costs, and any liabilities incurred by your client, with respect to 205 Norton Avenue, Toronto, Ontario, for the total all inclusive sum of ninety seven thousand dollars ($97,000.00) Canadian.
That my client will immediately obtain refinancing and/or assume the current existing mortgage .
That my client will provide you with an Agreement of Purchase and Sale for the property, reflecting the terms of this offer as drafted by the real estate solicitor retained by my client. Your client will execute and facilitate this transfer and closing of the transaction as directed by the real estate solicitors handling the transaction on behalf of our respective cleints.
I look forward to confirmation of your client’s agreement to settle and/or your feedback.
[ 17 ] Mr. Taeb’s lawyer’s response to the letter of September 12, 2011 does not confirm a settlement. Mr. Farmari, rather, doubts whether a settlement has been reached, and the letter notes several outstanding matters. The letter states with my emphasis added:
…. I am extremely surprised on the series of events and hoping that it what my client wishes. ….
I am uncertain and extremely reluctant on giving you any response on your noted offer to settle the Milton Claim until the following: [confirmation that Mr. Naghash’s lawyer on the record in Milton action]….
I will respond to your offer with my proposed revisions, once I receive the above confirmation.
[ 18 ] There was an exchange of correspondence on September 16, 2011 and Mr. Taeb’s lawyer’s letter states that the offer is accepted only if certain conditions are satisfied including the review of an agreement of purchase and sale and resolution of the matter of discharging the mortgage under which Mr. Taeb was the mortgagor. These themes were repeated in Mr. Farmari’s letter dated September 23, 2011.
[ 19 ] For present purposes, it is not necessary to review all the correspondence in more detail. For present purposes, it is sufficient to say that I am unable to conclude that the parties finalized an agreement. Further, although they had agreed upon $97,000 being paid to Mr. Taeb, the parties had not settled on the mechanism or the timing for discharging Mr. Taeb from his liability for the 205 Norton Avenue property.
[ 20 ] Because I conclude that no binding settlement was reached, it is not necessary to review the case law about enforcing settlements.
[ 21 ] For the above reasons, I dismiss Mr. Naghash’s motion with costs in the cause.
Perell, J.
Released: 20120430
COURT FILE NO.: 11-CV-434055
DATE: 20120430
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Babak Naghash
Plaintiff
‑ and ‑
Mohammad Taghi Taeb also known as Mohammed-Taghi Taeb and Mohammed Taghi Taeb in his capacity as Trustee for Babak Naghash
Defendant
REASONS FOR DECISION
Perell, J.
Released: 20120430