Court File and Parties

Court File No.: CV-19-142742 Date: 20210301 Ontario Superior Court of Justice

Between: Fahimeh Ahrami, Plaintiff – and – Raouf Ghadrdoust, Nooshin Kadivar and Nima Priyeshakbari, Defendants

Counsel: Brian Sherman, for the Plaintiff Doug Bourassa, for the Defendants, Raouf Ghadrdoust and Nooshin Kadivar David Seed, for the Defendant, Nima Priyeshakbari

Heard: January 13 and February 12, 2021

Reasons for Decision

de Sa J.:

Overview

[1] This motion is brought to strike portions of the Plaintiff’s claim which assert allegations of fraud and conspiracy.

[2] The Defendant, Nima Priyeshakbari, asserts that the claim against him fails to meet the minimum required:

(a) particularity for a tort involving allegations of conspiracy;

(b) particularity required involving allegations of civil fraud;

(c) particularity required involving allegations of a fraudulent conveyance;

(d) particularity required to plead an interest in land; or

(e) particularity required to plead a document or conversation.

[3] I disagree with the Defendant. On a motion to strike out a pleading, the court must accept the facts alleged in the statement of claim as proven unless they are patently ridiculous or incapable of proof. The test to be applied is whether it is “plain and obvious” or “beyond reasonable doubt” that the claim discloses no reasonable cause of action.

[4] The Defendant has failed to satisfy me that there is no reasonable cause of action here.

[5] The motion is dismissed. The reasons for my decision are below.

Allegations in the Statement of Claim

[6] The Plaintiff alleges that around or about March of 2019, the Defendants acted in concert to accomplish an unlawful conversion of a property located at 3481 Monarch Park Avenue in East York (the “Subject Property”) with a view to depriving the Plaintiff of her investment.

[7] In June of 2017, the Plaintiff, with the encouragement of the Defendants, agreed to invest the sum of $115,000 plus a proportionate share of renovation costs and carrying costs into the Subject Property to acquire a 31% beneficial interest in the Subject Property.

[8] The plan for the Plaintiff and Deng was to renovate the Subject Property, tenant it where possible and to sell the property when the market rose sufficiently to produce a “good” profit. The Subject Property was purchased in the name of Nooshin Kadivar. Zeyuan Deng would hold a 69% of the beneficial interest in the Subject Property and the Plaintiff would hold the remaining 31%.

[9] On June 30, 2017 a trust agreement in writing was executed by Kadivar, Deng and the Plaintiff. Kadivar agreed to accept a $10,000 all inclusive payment for her services as bare trustee of the Subject Property. This investment structure was created and managed by Mehdi Moradi, a friend of Ghadrdoust at that time. Ghadrdoust encouraged the Plaintiff to participate in the investment.

[10] Throughout the rest of 2017, all of 2018 and early 2019, the Plaintiff, Deng and Moradi carried out the terms of the agreement. The Plaintiff made ongoing contributions to the renovations of the Subject Property.

[11] Sometime in 2019, without any notice to the Plaintiff, the Defendants arranged to “sell” the Subject Property to themselves on a non-arms length basis at a below market price. They placed the Subject Property in the name of Priyeshakbari and arranged a mortgage to facilitate the transfer. This fraudulent transaction closed March 27, 2019.

[12] On April 3, 2019 the Defendant Priyeshakbari listed the Subject Property for lease, listing with the same real estate brokerage in Richmond Hill with which the Defendant Kadivar is associated.

[13] Some time after April 2019, the Plaintiff became suspicious and visited the Subject Property only to find tenants living there who said they were tenants of Priyeshakbari. A title search revealed the above-mentioned transfer (a sale from Kadivar to Priyeshakbari).

[14] The Plaintiff started asking questions but has never received satisfactory answers and has never received any money from the proceeds of sale.

[15] Ghadrdoust has recently told the Plaintiff that it was he and not the Plaintiff and Deng that held the beneficial interest in the Subject Property. He claimed to have bought it through Kadivar in April of 2017 and sold it in March of 2019 to his confederate Priyeshakbari in a private sale for less than its market value. Ghadrdoust has even admitted the Subject Property was sold below market value.

[16] The Plaintiff has, as of the present, not only lost her entire investment but has expectancy damages for the loss of profit expected from the investment in the Subject Property.

Alleged Deficiencies in the Statement of Claim

[17] The Defendant, Priyeshakbari, takes the position that Plaintiff’s claim fails to meet the minimum particularity of a proper plea of both civil fraud and of a conspiracy. Where a party alleges the commission of a tort but fails to plead the necessary elements, the claim should be struck: Ontario Store Fixtures Inc. v. Mmmuffins Inc. (H.C.J.), p. 8; Sun Life Assurance Co. of Canada v. 401700 Ontario Ltd. (Gen. Div.); Copland v. Commodore Business Machines Ltd..

[18] Priyeshakbari also argues that the “bare trust” that is described in the Statement of Claim does not meet the formal requirements of a trust.

[19] Finally, Priyeshakbari submits that the Plaintiff’s claim must fail as presently constituted because it asks the court to make a finding contrary to basic tenets of real estate law. The current Land Titles system refuses to recognize the existence of trusts, whether or not they are registered; any pleading that asks a court to derogate from such a basic premise of the system of land registry cannot succeed.

Analysis

Requirements for a pleading

[20] A pleading must contain a “concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved”: Rule 25.06(1) and Rule 25.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[21] The test for determining whether a pleading should be struck was stated by the Supreme Court of Canada in Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at p. 980, 74 D.L.R. (4th) 321 at p. 336:

[T]he test in Canada governing the application of provisions like Rule 19(24)(a) of the British Columbia Rules of Court is the same as the one that governs an application under R.S.C., O. 18, r. 19: assuming that the facts as stated in the statement of claim can be proved, is it “plain and obvious” that the plaintiff’s statement of claim discloses no reasonable cause of action? As in England, if there is a chance that the plaintiff might succeed, then the plaintiff should not be “driven from the judgment seat”. Neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strong defence should prevent the plaintiff from proceeding with his or her case. [Emphasis added.]

[22] On a motion to strike out a pleading, the court must accept the facts alleged in the statement of claim as proven unless they are patently ridiculous or incapable of proof, and must read the statement of claim generously with allowance for inadequacies due to drafting deficiencies: Toronto-Dominion Bank v. Deloitte Haskins & Sells (1991), 5 O.R. (3d) 417 at p. 419, 8 C.C.L.T. (2d) 322 (Gen. Div.).

[23] Also, the court should not, at this stage of the proceedings, dispose of matters of law that are not fully settled in the jurisprudence: R.D. Belanger & Associates Ltd. v. Stadium Corp. of Ontario Ltd. (1991), 5 O.R. (3d) 778, at p. 782.

Application to the Facts of this Case

[24] In this case, the Defendant, Priyeshakbari, is alleged to have been part of a scheme to deprive the Plaintiff of her $115,000 investment. He together with Kadivar, and Ghadrdoust and possibly Deng, are alleged to have duped the Plaintiff to invest in the Subject Property with the intention of defrauding the Plaintiff of her funds.

[25] There is no direct evidence that Priyeshakbari orchestrated the scheme with the other Defendants. However, under rule 25.06(8), “where fraud, misrepresentation, breach of trust, malice or intent is alleged, knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred.”

[26] In this case, it is clear that the Plaintiff is relying upon the fact that the Subject Property was sold on a non-arms length basis at below market price.

[27] Priyeshakbari contests the accuracy of these facts in claiming that the Plaintiff’s claim should be dismissed. However, on a motion to strike out a pleading, the court must accept the facts alleged in the statement of claim as proven unless they are patently ridiculous or incapable of proof.

[28] The test to be applied is whether it is “plain and obvious” or “beyond reasonable doubt” that the claim discloses no reasonable cause of action. The Defendant has failed to satisfy me that there is no reasonable cause of action here.

[29] I also agree with the Plaintiff that s. 62 of the Land Titles Act does not ban or outlaw trusts rather it simply makes clear that others checking title or interested in title do not have to look behind a registered owner but may safely deal with that registered owner in all matters regarding title.

[30] The motion is dismissed.

[31] In the course of submissions, Defendant’s counsel noted that there may be some issues regarding obtaining further financing because of the presence of the CPL on the Subject Property.

[32] Plaintiff’s counsel also confirmed that the Plaintiff has no issue with working with the Defendant in this regard, provided that sufficient equity has been preserved in the Subject Property to satisfy the outstanding claim.

[33] If the parties require any further assistance regarding such issues, I will be available to assist and can be contacted through the trial coordinator.

[34] I will receive costs submissions from the Plaintiff two weeks from the release of this decision. The Defendant can file their response one week after the Plaintiff’s materials have been served/filed.

Justice C.F. de Sa

Released: March 1, 2021