COURT FILE NO.: CV-13-00490918-0000

DATE: 20190219

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Hadi Moazzani Plaintiff

– and –

Saeid Roudechi-Ghias Defendant

Robert B. Cohen and Christopher Selby, for the Plaintiff

Evan L. Tingley, for the Defendant

HEARD: December 14, 2018

A.J. O’Marra J.

REASONS FOR JUDGMENT

1This is a case that involves a mortgage transaction in which there is a paucity of documentary evidence, the rest is based on the witnesses’ parole evidence. The credibility of the witnesses is central to the determination of the issues.

2It has the features of one trying to assemble a jigsaw puzzle with many of the pieces missing, and pieces from another puzzle thrown in to add to the uncertainty of the complete picture.

3The plaintiff, Hadi Moazzani (Hadi) provided a mortgage in the amount of $220,000.00 registered March 5, 2009 on title of his property, a condominium unit at 215 Wynford Drive, Toronto to the defendant, the mortgagee Saeid Roudechi-Ghias (Saeid).

4The circumstances of the mortgage being registered against Hadi’s property March 5, 2009 are quite unusual.

5The plaintiff, commenced an action against the defendant on October 17, 2013, more than four years after registration of the mortgage, claiming that the funds had never been advanced. The defendant has refused a discharge. The plaintiff requests an order to discharge the mortgage. It is undisputed that the plaintiff never made any of the monthly payments as required by the terms of the mortgage.

6The defendant, plaintiff by counterclaim, claims that the total amount was advanced by verbal direction of the plaintiff in the following manner; $200,000.00 in cash advanced by Saeid’s father, to a family member of the plaintiff in Tehran Iran, and $20,000.00 by Saeid paying off credit card debt of the plaintiff’s wife. He seeks by counterclaim possession of the property, Wynford Dr. and leave to issue a writ of possession.

7Four witnesses testified on the combined action, Hadi and his daughter Sepideh Moazzani (Sepideh), for the plaintiff, and Saeid and his father, Davood Ghias (Davood), for the defendant.

Background

i) Discussions leading to arrangement of the mortgage

8The plaintiff, Hadi Moazzani, now 76 years old, is a retired hairdresser who has lived in Canada with his wife Havva Lavasani since emigrating from Iran in 1990. He had owned and operated his own hairdressing business with his wife in Toronto for approximately 12 years. He owns and lives with his wife in the subject property, a condominium at 2802-2015 Wynford Drive, Toronto purchased in 2008. He has adult four children. The eldest, his daughter Sepideh Moazzani, is a real estate agent.

9The defendant, Saeid Roudechi-Ghias came to Canada from Iran in 1999. He worked primarily as a personal trainer since 2003 and on occasion became involved in real estate purchases, and managed properties and collected rents on properties owned by his parents, who continue to reside in Tehran Iran.

10Saeid and Sepideh lived together in a common-law relationship from approximately 2007 to late 2010, early 2011. Saeid and Sepideh, during their relationship would often visit and dine with Hadi, wife Havva and other family members at their residence on weekends.

11In early 2009, Hadi had approximately $116,000.00 in debts on credit cards and other loans owed to cousins. Havva had approximately $20,000.00 in credit card debts. Hadi and Sepideh’s evidence was that Saeid offered to help out by providing a loan.

12Saeid, on the other hand, testified that at one of the family gathering during family discussions, Hadi, Havva and Sepideh asked to borrow money from him, because they wanted to invest money in Iran.

13In any event, Saeid was prepared to make the loan, but he would have to obtain the monies from his father, Davood in Iran, who kept large quantities of cash in his safe at home. Keeping large quantities of foreign currency at home was not an uncommon practice because of the Iranian’s distrust of the central Iranian bank to maintain the value of deposits.

14His father, Davood, was prepared to provide the funds, but told him the loan had to be secured by a mortgage. Saeid told Hadi that $200,000.00 would come from his father in Iran and he would assume the $20,000.00 credit card debt of Havva. Hadi agreed to provide a mortgage to secure a loan of $220,000.00 at a simple interest rate of 15 percent over a three year term.

15There was no evidence as to why the mortgage was for $220,000.00, beyond Hadi and Havva’s indebtedness.

ii) The Mortgage

16On March 5, 2009 Hadi, Sepideh and Saeid attended at the law offices of Jeffrey Shek, who had been retained by Saeid to prepare the mortgage documents, and to register the mortgage on the Wynford Dr. title. Sepideh assisted her father, by interpreting the documents prepared by Shek into Farsi, as he read little English.

17During the meeting with Shek, Hadi and Sepideh were directed to another lawyer, Lloyd Rubinoff for independent legal advice. Following their meeting with Rubinoff, Hadi executed the mortgage documents. There were no written directions instructing the delivery of funds however, Saeid told Shek that the money would be transferred to “their account”. Sepideh testified that when the issue of the advance of the funds was discussed with Rubinoff, when he questioned why it was not being advanced through a lawyer’s trust account, she explained the money was coming from Saeid, and they trusted him.

iii) Advance of Funds

18Hadi claims that no funds were in fact ever advanced. He testified, he asked Saeid in the days following the execution of the mortgage where the funds were. Saeid’s response was that he was working on it.

19Hadi, asked why he waited more than four years to commence his action, said it was because Sepideh and Saeid were in a common-law relationship and he left it to Sepideh to deal with.

20Sepideh testified that she had continued to ask Saeid about the advance of funds and he would tell her not to worry about it, “I’m working on it, what’s the rush?”

21Saeid testified that the $200,000.00 in funds were in fact advanced in cash by his father on direction from Hadi to his wife’s brother, Fazlollah Lavasani (Fazlollah) in Iran. Why it was done that way was not explained.

22Davood testified that he had contact with Fazlollah in Iran, whom he talked with a couple of times. Davood provided $200,000.00 Canadian currency as arranged with Fazlollah, by handing over the cash in a plastic bag to a person sent by Fazlollah.

23Davood testified he could not remember the name of the person he gave the funds to, but it was as arranged by Fazlollah. No receipts or any other documentation was provided to confirm the transfer.

24The remainder of the mortgage amount, $20,000.00 was to be advanced directly by Saeid by paying off Havva’s credit cards.

25While the mortgage stipulated monthly payments of $2,750.00, no payments were paid by Hadi. Saeid testified the reason Hadi never made any payments was because he had agreed with Hadi that the interest could be paid when the principal was repaid at the end of the term.

iv) Return of Funds

26Saeid testified that in early 2010 Hadi and Sepideh said that they wanted to repay the mortgage. Initially, the plan was to repay the money to Davood in Iran. However, Davood testified he wanted his son to use the funds for business in Canada, so he requested Fazlollah, the person to whom the $200,000.00 cash had been given earlier, to have the funds wired through a currency exchange, Persepolis, from which Davood could get a good rate for the transfer having dealt with them many times before.

27There is documentation of four Persepolis transfers of funds received by Saeid between January 13 and February 22, 2010 in the following amounts:

1. January 13, 2010 - $10,300.00 – sender, Fereidoun Lavasani (Havva’s brother, Hadi’s brother-in-law) to Saeid.
2. January 18, 2010 - $10,204.00 – sender, Fereidoun Lavasani to Saeid.
3. February 17, 2010 - $99,921.81 – sender, Davood Ghias to Saeid.
4. February 22, 2010 - $100,000.00 – sender, Davood Ghias to Saeid.

28The total amount received by Saeid was $220,434.81. Saeid acknowledged receipt of the funds, which were deposited to his personal account with the Royal Bank. Further, he acknowledged in cross-examination that the funds received would have been sufficient to have fulfilled the loan arrangement he had with Hadi under the mortgage, warranting a discharge.

v) Purchase of 704-38 Avenue Rd.

29However, Saeid claims within a day or two of receipt of the funds he was told by Hadi, either directly or by Sepideh, (he could not remember which, but understood it to have been Hadi’s direction), to apply the funds toward the purchase of another condominium at 704-38 Avenue Road, Toronto by Fazlollah in his wife’s name, Manijeh Hosseni Khaliti.

30Saeid said, he was content to do so because his $220,000.00 would continue to be secured by the mortgage on Hadi’s property. Further, he was willing to assist Fazlollah and his wife Manijeh, a brother and sister-in-law of Havva, Hadi’s wife, who had lived with him and Sepideh for a few months, and he knew they were new immigrants to Canada and unable to get credit.

31Hadi denied giving any such direction. Further, he knew nothing about the money transferred to Saeid’s account from Iran or anything about the purchase of the Avenue Rd. property.

32Sepideh, his daughter however was directly involved in this transaction. She negotiated the purchase. She had power of attorney for Fazlollah and Manijeh to purchase the property.

33Saeid testified that he was told by either the plaintiff or Sepideh, likely Sepideh, to provide a money order to a lawyer acting on the real estate transaction, Joseph Lemire.

34Here, there is some documentation to support the transfer of money from Saeid’s account used in the purchase of 704-38 Avenue Rd. property.

35Saeid’s bank account statement shows that $220,979.87 was withdrawn and a money order in the same amount was issued to “Joseph Lemire in trust”, dated February 24, 2010. A copy of the money order shows that it was issued to “Joseph Lemire in trust” with the reference, “38 Avenue Road, No. 704 Manijeh Hosseni” in whose name the title was registered on closing. Further, Mr. Lemire’s ledger statement shows that the money order dated February 24, 2010 was entered in his trust account on February 25, 2010 and used for the purchase of 704-38 Avenue Road. The abstract of title shows that a charge was placed on title in favour of Fazlollah. Title to the property was later transferred on September 23, 2011from Manijeh to Fazlollah.

36There was no written direction provided and Hadi denied he had anything to do with either the transfer of funds from Iran or with the purchase of 704-38 Avenue Road, by his sister-in-law.

37Sepideh acknowledged knowing that the $220,979.87 went through Saeid’s account into Lemire’s trust account and was used in the purchase of the Avenue Road property in which she was involved on behalf of her aunt and uncle. However, she claimed that the funds belonged to her uncle, Fazlollah, rather being a repayment of funds advanced on the mortgage to Saeid. She said Fazlollah wired his money to Saeid because he could get a better exchange rate through Persepolis. Saeid then forwarded Fazlollah’s money to Lemire to be used for the purchase of the Avenue Rd. property.

38In response Saeid denied Sepideh’s version of events.

39The Persepolis documentation does not support the claim that the funds were Fazlollah’s. Indeed, approximately $20,000.00 was reference as being sent by Fereidoun, another brother of Havva, and $200,000.00 came from sender, Davood Ghias.

40Curiously, the plaintiff, in argument contends that the $220,000.00 sent from Iran was Saeid’s money and it was a loan from Saeid to Fazlollah and Manijeh, contrary to his daughter, Sepideh’s evidence that it was Fazlollah’s money. Neither Fazlollah nor Manijeh testified at the trial.

vi) Absence of Corroboration

41What was absent in this trial was:

1. Any document or written direction or receipt to confirm the original transfer of $200,000.00 said to have been made from Davood to Fazlollah in Iran; and
2. Any document or written direction to confirm Hadi or Sepideh, on his behalf, directed that the more than $220,000.00 received by Saeid from Iran by February 22, 2010 and transferred within days to the purchase of 704-38 Avenue Road by Manijeh, Fazlollah’s wife, was to be secured by the mortgage on Hadi’s property.

42I note that the first two transfers from Iran in January 2010 amount to a little more than $20,000.00 sent by Havva’s brother Fereidoun, an amount approximate to her credit card debt. There was no explanation as to why it came from Fereidoun. Further, the amount sent by Davood in February 2010 approximates the amount said to have been advanced in cash to Fazlollah by Davood. The total of the four transfers sent through Persepolis also approximates the same amount as owed on the mortgage on Hadi’s property.

vii) Saeid and Sepideh’s relationship sours

43Hadi testified that he had refrained from pursuing the advance of funds because Sepideh and Saeid were in a relationship and living together. However, by late 2010 the relationship between Sepideh and Saeid deteriorated, the details of which were not provided. However, a conversation secretly tape recorded by Sepideh, referenced below, with Saeid, sometime late in 2012 suggests it had to do with financial concerns. Interestingly, after they separated, in January 2011 Sepideh took up residence at 704-38 Avenue Road, the property purchased for her uncle Fazlollah, and aunt Manijeh.

viii) Saeid seeks repayment

44After their separation, Saeid started to ask for repayment of Sepideh’s “parents’ debt”, expensive purchases made by Sepideh and loans he made to other Moazzani family members. Between September and November 2012 there were a series of text message between Saeid and Sepideh in which Saeid says he wants repayment and threatened power of sale under the mortgage:

1. September 21, 2012, “when are you going to give me money? And how much Sepid Jan!!!???” (Jan is Dear in Farsi)
2. “Do I get some money from you? If yes, how much and when?... I have been 3½ years and I’m going to wait anymore!”
3. September 23, 2012, “I won’t give up a penny … I throw your parents out and put their property under power of sale.”
4. September 25, 2012, “if don’t sell Wynford Sepid Jan I will not by choice. I lost too much because of Wynford”, (man kheili sare in pool zarar dadam) Farsi.
5. September 28, 2012, “I’ve waited almost 4 years and got nothing … You guys didn’t pay me … I have no choice and need my money” … It won’t take more than 10 weeks Sepid Jan to have a sheriff change the lock. I know it’s gunna be winter but I am letting u guys know from now again I am not doing it by choice u left me with no other choices!”
6. October 1, 2012, “I’m seeing my lawyer today and we gunna start the process asap. Just letting u know from now k I will definitely get the party (property) from your parents even if I lose money.”
7. October 2, 2012, “We did a title search td mortgage is 367,000. And bc (because) they haven’t paid any payments the process is 45 days plus 30 days which means u guys have less than 3 months to pay me back. If u want to keep the property and if your parents want to stay there! Otherwise they are out and the lock will be changed in less than 3 months. This is before the legal fees…”

45Sepideh, a real estate agent, testified that she knew that Saeid was speaking about the enforcement of the mortgage when he referenced using the power of sale process.

46Later, in May 2013 in a text message exchange between Saeid and Peter Moazzani, son of Hadi, Saeid stated:

I will buy it if you guys are willing to pay me off your parents’ debt. Make me a fair offer. I will buy your condo and remove the second mortgage I have registered on your parents’ property at the same time.

47Peter’s response was that he would think about. He did not dispute Saeid’s statement about his parents being in debt.

ix) Loan or Gift

48While the plaintiff disputes the advance of any mortgage funds, he accepts that the defendant paid his wife’s credit card debt. Although he claims it was a gift and unrelated to the mortgage. To that end, counsel tendered the secretly tape recorded conversation by Sepideh with Saeid in which she appears to try to clarify the amount he paid for her mother’s indebtedness as well as to discuss some differences they had over her use of his credit card to purchase an expensive Hermes purse for $20,000.00.

49Based on comments in the recorded call, it would appear that the conversation took place in November 2012 because of reference to 3½ years from April 2009. Much of the conversation focused on the $20,000.00 Saeid had advanced to Havva to pay her credit cards:

Sepideh: While yes. Five months is almost half of year, meaning it’s enough time, but I want to get it over with. I have to do it. Listen, do you know how much, exactly, you gave my mother? Do you know exactly how much you paid? Or you just guessed it?

Saeid: $18,000 something. I paid off your mother’s credit cards and one day, if you remember, we went home . . .

Sepideh: Yes, I remember. Her credit cards were $15,000.00 …

Saied: And I gave her $3,000.00 in cash …

Sepideh: Yes. No, No, No, I know. I just wanted to know how much was her credit card debt? And then how much do you want for all of this? How much do you want from my mom’s debt …

Sepideh: It means $20,600.00, say $21,000.00, how much will it be with interest? Give me the number.

50In my view, rather than establishing that paying her debt was a gift, it is clear from the conversation it was a loan, given Sepideh’s reference to the amount as her mom’s ‘debt’ and her queries as to the ‘interest’ incurred by Saeid.

51They also discussed the purchase of a Hermes handbag and other loans in the call:

Saeid: When I look back, I say, I just want my money, the money I paid.

Sepideh: Well, see Saeid, that’s why we have not been able to pay back the money, because you mix it with other things. See, when you paid my mom’s credit cards, this is what my mom owes you, including interest (Emphasis added)…

Saeid: Ms. Sepideh Moazzani, finally how can I get my money?

Sepideh: Look, this money that is between you and I, for a handbag it should not go over their house. My dear, this is all I say, I say they are not rich. How much comes out of refinancing of their house, for them to repay for a Hermes handbag? This is not right.

Saeid: Dear Sepideh, it is none of my business. I am a person who has sixty, seventy thousand dollars up in the air, and the only thing I have is your parent’s house. (Emphasis added)

52Later in the call there is reference to the mortgage and reassurances by Sepideh that he would be paid. However, I note that the amount purportedly owing on the mortgage was never mentioned by either Sepideh or Saeid.

Sepideh: You should not think that the lien [sic] guarantees the return of your money. No, never think like that. See, the money you gave us, we never deny it, we never say you didn’t give it us, we do not say we will not return it. It has taken time, but it doesn’t matter if you have a lien [sic] or not. It does not matter. …

Sepideh: Let me tell you something Saeid, I don’t want to say this because I have a lot of respect for you, and I’m not that kind of person, you know. The lien or the mortgage on that property does not have any value (Emphasis added)…

Saeid: Well, if you think it does not have any value ….

Sepideh: It is not because of that mortgage that we want to pay you back the money. I told you this 100 times, if you have this mortgage or did not have this mortgage, you will still receive the money 100 percent. Okay, it has taken time, you are right to be upset.

Saeid: This is useless, it is not like this at all.

Sepideh: No, it is totally useless. Fraudulent mortgage and everyone gets into trouble! There was no money and no consideration. (Emphasis added)

Saeid: Do not worry about that. (Emphasis added)

Sepideh: Let me tell you, it is worthless. Don’t say I have a mortgage and I will do this and I will do that. We will do it for the respect and the relationship we had, because of the relationship we had together because of the money you gave us.

Saeid: If you think I am not going to get my money, I will do it.

53The plaintiff’s position is that Saeid was using the mortgage, for which the principal was never advanced, primarily as leverage to recover the funds provided for Havva’s debt and/or used to purchase gifts for Sepideh, after Sepideh ended the relationship with him.

54The defendant, on the other hand suggests, Sepideh, knowing that the conversation was being secretly recorded had been careful not to state the precise amount of the mortgage, but only to reassure Saeid when it came up that he would be paid. He asserts that if the mortgage only secured an amount something less than the $220,000.00, especially if it was only securing $20,000.00 used to pay Havva’s indebtedness, or some other lesser amount, Sepideh would have mentioned it in the conversation or in the texts in response to Saeid’s threat to use the of power of sale process.

55I find no substance to either argument. Indeed, in the call, as will be discussed below, not only the value, but the validity of the mortgage is called into question.

56Following the text message exchanges and the recorded conversation, Sepideh and Hadi retained a lawyer, Jeffrey Radnoff, who sent a letter, dated December 6, 2012 to Saeid, in which he wrote that his client demanded the immediate removal of the mortgage because “no amounts were advanced.”

Credibility

57The question as to whether the funds were advanced in this case depends on the credibility of the witnesses.

i) Hadi Moazzani

58Hadi Moazzani claims that no money was advanced. He asked Saeid for several days after the mortgage was executed and registered where the funds were. He then left it to Sepideh to deal with because she was in a relationship with Saeid.

59It is acknowledged by Hadi that he had approximately $116,000.00 in debt, and Havva owed money on her credit card, which was the basis upon which he says the mortgage was provided and funds were to have been received. Yet, he did not press, or seek assistance to obtain the funds to pay their debts except, according to his evidence, to rely on Sepideh.

60He claims to have paid off his debts by working and paying them “little by little”. I note that he refused to provide bank statements or copies of his and Havva’s credit card statements to show whether the balances were paid around the time of the mortgage registration.

61I do not accept that the plaintiff would have been as complacent or as disinterested in not pursing advance of funds in such circumstances given his understanding of the extent to which his home was encumbered by the mortgage and the extent of his admitted indebtedness to others. He was not new to having a mortgage. He had arranged one with the Toronto Dominion Bank when he purchased the property.

62I do accept his evidence he relied on Sepideh, his real estate agent daughter, to assist him with arranging the mortgage with Saeid, but not that he sat idly by and waited more than four years to make a claim the funds had not been advanced merely because his daughter had been in a relationship with Saeid. Moreover, even on that basis, his claim was made almost two years after they had separated and only when Saeid started pressing for payment and threatening power of sale.

63Sepideh in the recorded conversation with Saeid admits that Saeid gave them money: “See, the money you gave us, we never deny it, we never say you didn’t give it us, we do not say we will not return it.” Her parents had a debt with him.

ii) Sepideh Moazzani

64Sepideh was an experienced real estate agent who had assisted her father to arrange the mortgage to obtain funds because of his and her mother’s indebtedness, and she had acted as agent for her uncle Fazlollah and aunt, Manijeh in the purchase of 38 Avenue Road on February 25, 2010. If her father had not received the funds, as they both claimed, she knew that Saeid had received in excess of $220,000.00 by February 24, 2010. I do not accept that she would not have let her father know, when she had been tasked purportedly by Hadi to find out when Saeid would advance the funds. More to the point, in my view, Hadi had to have known about the funds received by Saeid and that he and Sepideh have been less than truthful in their denial.

65Sepideh’s claim that the money was Fazlollah’s and that he had wired it to Saeid because Saeid could get a better exchange rate through Persepolis, struck me as a vain attempt by her to explain away the evidence of the money which came from Iran into Saeid’s account used as part of the closing funds on purchase of 38 Avenue Rd. Sepideh’s claim that $220,000.00 was sent to Saeid, the same person she and her father claim failed to advance the $220,000.00 in the first place supposedly to save on the exchange rate for her uncle is untenable. Moreover, her position is contrary to the position taken by Hadi that the money was an unrelated loan from Saeid to Fazlollah.

iii) Davood Ghias

66I found important aspects of the evidence of Davood, the father of Saeid difficult to accept as well. Foremost, was his evidence he turned over $200,000 cash to a person whose name he could not remember. Clearly, an important piece of evidence that could have been provided by a simple inquiry of Fazlollah, as well as providing confirmation of receipt of the funds.

67Further, in cross-examination, when Davood was asked if he knew Hadi Moazzani, he responded “Who is Hadi Moazzani?” He did not recognize the plaintiff’s name, yet he swore in his affidavit that the cash he provided was to be picked up on behalf of the plaintiff, and later told by Saeid, the plaintiff wanted to pay the money back. Again, I find it difficult to accept that Davood would take steps to turn over $200,000.00 and not know the name of the person who would be responsible for its repayment.

68He stumbled in his evidence as to whether he counted out Canadian or U.S. dollars for the handover of the money to an unknown person for Fazlollah. Initially, he was clear in his recollection he had counted out U.S. dollars, but when presented with his affidavit, he corrected himself and said it was in Canadian dollars. Notwithstanding the passage of several years since the event, for a retired successful businessman there was an overall lack a particularity in his evidence that causes me to doubt his credibility.

iv) Saeid Roudechi-Ghias

69The text messages and the recorded conversation appear to confirm the plaintiff and his wife, Sepideh’s parents, owed Saeid a debt secured by the mortgage, by which he threatened to collect by power of sale proceedings. I also accept, as reflected in the recorded call that Saeid had advanced at least $20,000.00 by paying for Havva’s credit card debt. Further, the $20,000.00 was in not a gift as suggested by the plaintiff.

70While the text message exchange and the recorded conversation support Saeid’s claim that he was actively seeking payment and he was using the threat of power of sale proceedings to recover, but it is unclear for what amount? During the texts and call, neither Sepideh nor Saeid make reference to the amount of the mortgage. However, there are references to various loans made by Saeid in the call; payment of Havva’a credit card debt, the expensive purchases made by Sepideh using Saeid’s credit card, loans he made to Sepideh’s brother and others – the “sixty or seventy thousand dollars up in the air”, and the only thing I have is your parents’ house. The evidence leaves open the question as to whether he was trying to use the mortgage to collect unsecured loans.

71There is another exchange in the recorded call between Sepideh and Saeid about the mortgage which gives me great concern not only about the integrity of the participants, but more particularly the validity of the mortgage by Sepideh’s statement that the mortgage was “totally useless”, it’s a “fraudulent mortgage and everyone gets into trouble, there is no money and no consideration”.

72Surprisingly, in the face of this comment Saeid did not refute her assertion. Indeed, he simply told her not to worry about it – a mortgage she claims has no value for which there was no consideration on the title of her parents’ home, and one he claims he is still owed principal and interest and never having received any payment.

73As for the transfer of more than $220,000.00 from his account to be used in the purchase of 38 Avenue Rd., I find it difficult to accept that he did not have a clear recollection as to who gave him that direction and why he did not secure it with a mortgage. In my view, the circumstances described by both Saeid and Sepideh about the mortgage, how the funds were or were not advanced, and subsequent use of funds in the approximate amount of the mortgage for the purchase of 38 Avenue Rd. has a malodorous air to all of it.

Conclusion

74This is a case in which I am unable to say I accept one version of events over the other, or to prefer one witness’ evidence over another. Simply put, I do not know who to believe.

75Based on the text and recorded call I accept that Saeid was owed money by members of the Moazzani family, but what I do not know is whether it was for the amount originally secured by the mortgage, or whether he was using it to collect other loans as it was still on title.

76I find that it is more likely than not that some funds were advanced to the benefit of Hadi to pay his substantial debts. Some funds were advanced by payment of Havva’a credit card debt, which in fact is acknowledged in the recorded call.

77The $220,000.00 received by Saeid by transfer from Davood, which he understood to have been repayment on the mortgage, instead went to the interest of Fazlollah, Hadi’s brother-in-law.

78Why was Fazlollah not called? He played a central role in each version. He was a material witness that either party could have called in their claim or counterclaim. He received purportedly $200,000 of the funds, made repayment through Davood, and used the funds to close on a property he later took title to from his wife. He could have either confirmed or refuted that there had been an advance of funds as described by Davood, or whether the money sent to Saeid’s account in February 2010 was money directed by Davood to be sent via Persepolis to repay the “loan”, or that it was his money, which had nothing to do with the mortgage on the Wynford Dr. property.

79In deciding this case, all I can do is rely on the documentary evidence, which establishes that Hadi Moazzani, the plaintiff, defendant by counterclaim, as mortgagor acknowledged registration of the mortgage March 5, 2009 in the principal amount of $220,000.00 on his Wynford Dr. property, and by February 22, 2010 Saeid, the defendant, plaintiff by counterclaim, had received into his account more than $220,000.00 for repayment. He acknowledged he was expecting the funds as repayment. More importantly, he acknowledged that the funds received were sufficient to have warranted the discharge of the plaintiff’s mortgage. That I accept.

80He may well have taken direction from Sepideh, still his partner at that time, to transfer the money to accommodate the purchase of 38 Avenue Rd. However, there is no documentation, or testimony I accept to support Saeid’s claim that any subsequent transfer of funds for the purpose of purchasing the Avenue Rd. property would continue to be secured by the mortgage on the Wynford Dr. property. Saeid should have received a written direction from Hadi, or secured his funds advanced to Fazlollah and Manijeh’s interest in the Avenue Rd. property by another mortgage.

81While someone may have been unjustly enriched, I cannot make that determination. However, I am sure that the mortgagee, Saeid received over $220,000.00 in February 2010, an amount sufficient to have discharged the mortgage. He received it as repayment. It was up to him to have properly secured it thereafter.

82In the result, based on the only credible evidence involving the funds, the transfer records and bank statement, I find that when Saeid received the funds into his account, the mortgage was effectively redeemed.

83I order that the mortgage registered on title by Instrument Number AT2923972 to the property known municipally as 2802-215 Wynford Dr., Toronto be discharged.

84In the circumstances of this case the parties shall bear their own costs.

A.J. O’Marra J.

Released: February 19, 2019