Court File and Parties
COURT FILE NO.: CV-19-00627903-0000
DATE: 2024-09-17
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NASRIN GHASEMI and 2399251 ONTARIO INC.
Applicants
– and –
KAMRAN RASOOL SHORA, 2399251 ONTARIO INC. and SHORA HEALTH SERVICES INC.
Respondents
Counsel:
William M. Sharpe and Anumeet Toor, Lawyers for the Applicants
Frank M. Pinizzotto, Lawyer and E. Casciaro, student for the Respondents
HEARD: JUNE 6, 2024
REASONS FOR DECISION
G. DOW, J.
[1] Subsequent to interim injunctive relief provided by Justice Archibald on October 1, 2019 and (as he then was), Justice Sossin on October 11, 2019, to be detailed as required below, the parties sought this Court’s direction and orders to complete the severing of a business relationship that failed to reach agreed upon terms.
Background
[2] It is not contested that the applicant, Nasrin Ghasemi, an optometrist, sought to open a clinic with the assistance of the respondent, Kamran Rasool Shora, a businessman. Mr. Shora leased space at 170 Sandalwood Parkway East, Brampton and subleased portions of that space and was willing to enter into an arrangement. This resulted in the two of them incorporating the applicant, 2399251 Ontario Inc. on December 10, 2013 which operates as Noor Eye Clinic. The respondent, Shora Health Services Inc. is a tenant at 170 Sandalwood Parkway who subleased a portion of its space to a dental clinic, a pharmacy and a physiotherapy clinic. Noor Eye Clinic was to and began to occupy three rooms totalling about 347 to 358 square feet with access to some common areas.
[3] A purported shareholder agreement and sublease was tendered to the National Bank of Canada in order to borrow $160,000, which was used to make leasehold improvements, acquire equipment, purchase inventory and hire staff. In addition, a “lease to own” agreement was entered into with another lender to purchase specialized optometry equipment (which has since been fully paid). The parties agree the shareholder agreement and sublease presented to the lenders was “phony” and that the terms were never agreed upon.
[4] The sublease in place provided for to be paid at $1,500 per month plus HST ($195) plus additional, unquantified additional rent called “TMI” or Taxes, Maintenance and Insurance. That is, rent was being paid at $3.49 per square foot or substantially less than the other subtenants. Noor Eye Clinic began operating on December 14, 2014 and continues to the present.
[5] Kamran Rasool Shora has no business association with the other subtenants aside from the landlord and tenant relationship.
[6] Up until March 1, 2018, the clinic operated with financial assistance from Kamran Rasool Shora in the form of payments made which the subsequent jointly retained litigation accounting expert calculated to be $17,510.43.
[7] As contemplated in the never agreed to Shareholder Agreement, Nasrin Ghasemi received all funds billed for eye examinations through OHIP directly. She refused to produce the records detailing same. Kamran Rasool Shora also claims a payment of $3,130 paid to a third party vendor.
[8] Noor Eye Clinic also began not paying the rent. The accounting expert calculated the rent owed to be $58,500 as of March 1, 2018. This included $17,000 which the expert accountant categorized as pre-paid rent and the respondent claims was a loan.
[9] The dissatisfaction with the business relationship resulted in Nasrin Ghasemi locking out Kamran Rasool Shora and ending his access to the business, including the bank accounts, as of March 1, 2018. As of that date, Nasrin Ghasemi has had sole control of the business.
[10] Rent continued not to be paid increasing the amount owed. This resulted in the respondents locking out the applicants on September 18, 2019 and terminating the lease.
[11] The events of September 18, 2019 resulted in this application being brought in Toronto (I inquired of counsel why the Superior Court of Justice in Toronto office was used with no satisfactory answer. I raised whether either party wished to bring a motion to transfer the matter to Brampton and this was declined).
[12] The locking out by the respondents resulted in the orders, on consent, of Justice Archibald and (then) Justice Sossin. Of note, was the agreement that the respondents not to disclose any personal health information which the applicants sought to have continued as part of this application. The respondents do not oppose this relief on the basis it has complied with the order to date and has no such information. So ordered.
[13] Further, back rent owed in the amount of $56,025.50, less set offs for a loan and costs awarded (which reduced this amount to $22,025.50) was paid to then respondents’ counsel’s law firm, in trust. Rent was to be paid in the amount of $1,835 per month effective immediately, again to then respondents’ counsel’s law firm, in trust. The respondent was to provide the applicant with access to its premises and its communications equipment. These orders were subject to variation, if sought, and pending final determination of this application. I was advised no variation had occurred, that the rent payments had been made and the parties having agreed to this decision including an order transferring the funds from the respondents’ previous counsel, Gay + Board LLP, to its current counsel, Lawrence, Lawrence, Stevenson LLP. So ordered.
[14] Prior to the return date of this application, the respondents confirmed their consent to the following relief sought by the applicants (as set out in the Amended Notice of Application), that is:
a) a declaration as to the monies due on account as between the applicants on the one hand and the respondents on the other;
b) a declaration fixing the amount of rent payable under a sublease between Shora Health Services Inc. and 2399251 Ontario Inc. at and from March 1, 2018 to the earlier of the date of hearing or the date of termination of the sublease of premises municipally described as Part of Unit 5, 170 Sandalwood Parkway East, Brampton, Ontario;
e) an order varying the Sublease;
f) an order setting aside the Shareholders’ Agreement as between Nasrin Ghasemi and Kamran Rasool Shora;
g) a final order or declaration that Kamran Rasool Shora has no right, title or interest in 2399251 Ontario Inc. or any property of 2399251 Ontario Inc.
Analysis
[15] Both parties seek to utilize the broad discretion available under the Business Corporations Act, R.S.O. 1990 c. B.16, Section 248 to determine this application. I am satisfied the broad definition of “complainant” as contained in Section 245(a) of the Business Corporations Act, supra which includes “any other persons who, in the discretion of the Court, is a person to make an application under this Part” includes these parties.
[16] I am also satisfied, first from the results of the jointly retained litigation accountant expert, second by the ongoing operation of Noor Eye Clinic being under the sole control of Nasrin Ghasemi, and third the payment of proposed rent enforced by Court order that the parties who have been been oppressed were the respondents.
[17] I accept the statement of the law as found BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (at paragraph 56) that a breach of reasonable expectations has occurred and that this was the unilateral ouster of Kamran Rasool Shora by Nasrin Ghasemi. She terminated Kamran Rasool Shora’s participation in the Noor Eye Clinic without proper foundation or compensation. Principally this was the non-payment of and which I find not to be fair market value rent. To that end, I reject the submissions of the applicants that it has been oppressed or should receive the benefit of any additional funding by the respondents towards the Noor Eye Clinic. That is, the business is and has been Nasrin Ghasemi’s to own and operate. To the extent a Court order is required to recognize this actual state of affairs, it is so ordered. To that end, I reject the applicant’s claim for any relief from forfeiture as sought under Section 98 of the Courts of Justice Act, R.S.O. 1990 c. C.43.
[18] Counsel for the respondents relied on the decision Larmon v. Synergy Hospitality Inc., 2004 (2562 ON SC) as it also involved parties with an intention to be jointly involved in a business (a restaurant) which proceeded, but being unable to agree on the terms of who should own or receive what share of the profits. Like the matter before me, Synergy Hospitality was a relatively small business where the self interest of each side would be to have the business continue to operate.
[19] The respondents have conceded Nasrin Ghasemi is the appropriate party to have 100% of the equity in the Noor Eye Clinic. No appraisal or buy-out of any potential equity interest is sought.
Conclusion
[20] I order the applicants to repay the respondents the surplus capital contribution as calculated by the jointly retained litigation accounting expert in the amount of $17,510.43.
[21] However, I am not prepared to accept and order the applicants repay the $14,740.60 the respondents paid between June, 2014 and March 1, 2018. Similarly, I am not prepared to order the applicants repay the additional $3,130 paid by the respondents as this appears to have been voluntarily made before it was clear the parties would be unable to reach an agreement. Upon repayment of the sum of $17,510.43, Nasrin Ghasemi is the sole owner and shareholder of 2399251 Ontario Inc. operating as Noor Eye Clinic.
[22] With regard to outstanding rent, I agree fair market value rent, whatever that might be needs to be paid effective from March 1, 2018. Regarding how this is to be calculated, I accept the submissions of counsel for the respondents that one party, which I select to be the respondents, provide the other party, being the applicants, with the names of three certified commercial property appraisers. The applicants shall select which of the three appraisers to proceed with determining the fair market value rent for the space occupied by Noor Eye Clinic since March 1, 2018, including any adjustments on an annual basis. Upon determination of what rent ought to have been incurred, the funds in trust shall be paid out as required. Any balance is due and payable upon determination of what the actual rent ought to have been.
[23] Upon determination of the fair market rent to be paid up to the date of its determination by the certified commercial property appraiser, the lease shall continue for a further six months. This is to permit the parties to either negotiate a new sublease, which is the optimum manner to determine fair market value rent, or for Noor Eye Clinic to vacate the premises.
[24] Subject to appeal of this order, upon the release of this Decision, the respondents shall have 30 days to forward the proposed list of three certified commercial property appraisers to the applicants. The applicants shall have 30 days to advise the respondents of its selection. Any costs and expenses of the chosen certified commercial property appraiser shall be borne equally.
Costs
[25] Pursuant to Rule 57.01(6) I required the parties upload their demand for costs if successful by the end of the day submissions were heard. In this regard, the applicants’ Costs Outline sought partial indemnity fees of $33,476.13, inclusive of HST plus disbursements of $1,636.50 for a total of $35,112.63.
[26] The Costs Outline of the respondents was $29,677.19 for partial indemnity fees, inclusive of HST plus disbursements of $4,106.51 for a total of $33,783.70.
[27] I was advised Rule 49 Offers to Settle have been made which the parties preferred not to disclose pending this decision and to better focus on submissions, if necessary, at that time. I agreed to same.
[28] I urge the parties to agree on costs. If not, the respondents shall forward their written submissions in support of their claim for costs, not to exceed five typed written pages compliant with Rule 4.01 excluding the relied upon Offer to Settle on or before October 17, 2024. The applicants shall respondent, identically limited, on or before November 15, 2024.
Mr. Justice G. Dow
Released: September 17, 2024
COURT FILE NO.: CV-19-00627903-0000
DATE: 2024-09-17
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NASRIN GHASEMI and 2399251 ONTARIO INC.
Applicants
– and –
KAMRAN RASOOL SHORA, 2399251 ONTARIO INC. and SHORA HEALTH SERVICES INC.
Respondents
REASONS FOR DECISION
Mr. Justice G. Dow
Released: September 17, 2024