Court File and Parties

Court File No.: CV-15-526399
Date: 2025-04-09
Court: Superior Court of Justice - Ontario

Parties:

Darioush Nobahar and Lifetime Homes A. Ltd., Plaintiffs, Defendants by Counterclaim
Kambiz Heshmati and Niloofar Rafsanjani, Defendants, Plaintiffs by Counterclaim

Before: Paul B. Schabas
Counsel:

David Fogel, for the Plaintiffs, Defendants by Counterclaim
David Winer, for the Defendants, Plaintiffs by Counterclaim

Heard: January 13–17, 20–23, 28, 2025

Reasons for Judgment

Overview

This case arises from business dealings between the plaintiff Darioush Nobahar and the defendant Kambiz Heshmati between 2011 and 2014. At the time, Heshmati was a real estate agent and Nobahar was a builder. They are both originally from Iran and had met several years earlier when Heshmati and his wife, the defendant Niloofar Rafsanjani, had bought a house built by Nobahar. A friendship developed and Nobahar oversaw repairs on the house and on another house the defendants moved to a few years later.

In 2011, Nobahar and Heshmati agreed to buy an investment property at 350 Joicey Avenue (“Joicey”) in Toronto. Their relative contributions to the purchase are disputed. Nobahar had previously provided funds to Heshmati, at least some of which were used to help purchase the property. Heshmati took title to the property and oversaw renovations. The property was sold several months later for a profit in 2012. The amount of the profit is in dispute. Heshmati held the funds from the sale.

Upon selling Joicey, Heshmati and Nobahar agreed to join three other investors, including Quoc Long Van (“Long”), in buying a house located at 331 St. Germain Avenue (“St. Germain”). On behalf of Nobahar and himself, Heshmati drew from the Joicey profits to fund this investment. Long oversaw this project which involved rebuilding a home, ultimately resulting in a small profit when it was sold in 2015.

Also in 2012, Heshmati, Nobahar, Long and another investor, Anant Tailor (“Tailor”), decided to purchase a house located at 528 Deloraine Avenue (“Deloraine”) in Toronto. Heshmati and Rafsanjani took title to this property and arranged financing. Long and Tailor made contributions in accordance with each of them having a 10% interest. Nobahar’s financial contribution, if any, is disputed, but it was intended that he have a 30% interest. The investment did not go smoothly. There was a fire shortly after the property was acquired, which led to a complete rebuild to be managed by Nobahar, who was an owner of the plaintiff Lifetime Homes A. Ltd. (“Lifetime Homes”), a home construction business Nobahar owned with Araz Piroozfard (“Piroozfard”). Additional financing was required and obtained by Heshmati and Rafsanjani. There were delays in the construction.

On April 19, 2014, Heshmati and Nobahar met at Deloraine and had a dispute. Nobahar’s position is that he was fired as the contractor/builder after Heshmati learned Nobahar had been having an affair with Rafsanjani. Heshmati denies having knowledge of the affair at that time. Rather, he says Nobahar abandoned the project after Heshmati raised concerns with his work on the house, his lack of accountability over cash provided for the project, delays, and various financial issues. Either way, following their meeting, Nobahar did no more work on Deloraine. Heshmati then hired a different builder, Max Danieli (“Danieli”), who completed the project.

Deloraine’s occupancy permit was issued in February 2015 and the property was sold in early 2016. The project made a profit, although the amount is disputed. Heshmati repaid Long and Tailor their investments and their percentages of the asserted profit. Nobahar was paid nothing.

This action was commenced on April 20, 2015. It initially included Long and Tailor as defendants, but the action against them was resolved before trial.

In his Statement of Claim, Nobahar seeks general damages of $500,000.00 and special damages “in an amount yet fully unascertained.” At the time the action was commenced, in 2015, Nobahar sought a declaration “of his 30% unregistered interest” in Deloraine. In short, Nobahar’s claim is for breach of contract, alleging verbal agreements with the defendants which were breached “after a personal dispute arose” between them, and that Nobahar and Lifetime Homes were “forced from the property.” Lifetime Homes asserts the existence of a construction agreement and claims damages for “approximately $30,000.00.”

At trial, Nobahar’s claim was more specific. As stated in closing submissions, Nobahar sought:

a) $19,051.25 for his investment into St. Germain;
b) $1,600.00 for his share of the profits from St. Germain;
c) $208,932.47 for his investment into Deloraine (or such other amount as the Court finds); and
d) $114,510.65 for his share of the profits from Deloraine.

Lifetime Homes now seeks $35,000.00 “for its unpaid contract.”

By way of counterclaim, Heshmati and Rafsanjani (the “defendants”) seek general damages of $600,000.00 and special damages “in an amount yet to be ascertained.” They acknowledge verbal agreements with Nobahar regarding investments in the properties, but dispute the amount of Nobahar’s contributions and interests. They claim that Nobahar had agreed to manage and supervise the construction at Deloraine but failed to do so and/or was negligent in his construction, and that he abandoned the project causing damages to the defendants which required them to engage a new builder to rectify deficiencies and to complete the construction.

At the conclusion of the trial, the defendants sought:

a) an order dismissing the plaintiffs' claim;
b) an order that the sum of $33,331.60 paid into Court by Long be paid out of Court to them; and
c) damages in the sum of $450,000.00.

For the reasons that follow, I have concluded that the sum of $33,331.60, which related to St. Germain, should be paid out to Nobahar. Nobahar is also entitled to a credit for his investment in Deloraine, which I find to be $47,567.98.

I otherwise dismiss Nobahar’s action as he has failed to demonstrate on a balance of probabilities that he was terminated from the Deloraine project. Instead, I find that the defendants have proven, on a balance of probabilities, that Nobahar abandoned the project. I grant judgment in favour of the defendants on their counterclaim for breach of contract and negligence.

I fix the defendants’ total damages at $105,695.00. After deducting Nobahar’s contribution for the acquisition of Deloraine, I order that he pay the defendants $58,127.02.

Issues

The following issues, stated broadly, must be addressed to resolve this case:

(a) whether, having regard to their relative contributions and profits earned, Nobahar is owed any money from the Joicey, St. Germain and Deloraine investments;
(b) whether Nobahar was fired/locked out of Deloraine by Heshmati, or whether Nobahar abandoned the project;
(c) if Nobahar was fired/locked out, are he and Lifetime Homes entitled to damages and, if so, in what amount; and
(d) if Nobahar abandoned the project, are the defendants entitled to damages and, if so, in what amount.

A determination of these issues requires a review of, among other things, the business and personal relationships of the parties, including financial and other contributions by them, and consideration of the state of construction at Deloraine in April 2014.

The Joicey Investment

[Full text of the Joicey investment section as in the original, with all paragraphs and details preserved.]