Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether $5.58 million paid by the plaintiff was for the purchase of property or a loan.

• Determination of beneficial ownership of the Mathers Property and the validity of a registered mortgage.

• Examination of whether the defendants were unjustly enriched and if a constructive trust should be imposed.

• Assessment of the credibility of the parties and their intentions regarding the transaction.

• Consideration of abuse of process due to inconsistent pleadings and prior foreclosure proceedings.

• Calculation and award of monetary relief for transfer taxes and net rental income to the plaintiff.

Facts and outcome of the case

Background and parties

Ali Dolatshah, a businessman from Iran, sought to immigrate to Canada and do business there. He was introduced to Tirdad Moghari, a West Vancouver businessman, by a mutual acquaintance. Moghari, along with his wife Michelle Cecelia Graham and her mother Levy Yu Graham, owned the Mathers Property in West Vancouver. Dolatshah expressed interest in purchasing this property and, in 2017, agreed with Moghari to buy it for $5.58 million. Over several months, Dolatshah transferred the full purchase price to Moghari. However, the property was never transferred to Dolatshah’s name, and the defendants retained both the property and its rental income.

Dispute and legal proceedings

A dispute arose over the nature of the $5.58 million payment. Dolatshah claimed it was for the purchase of the Mathers Property, while the defendants argued it was a loan secured by a mortgage. The mortgage was registered against the property, but Dolatshah asserted he was unaware of its terms and did not intend to enter into a loan agreement. After Dolatshah’s immigration efforts failed, and following further payments for transfer taxes, the relationship between the parties deteriorated. Dolatshah demanded an accounting for rental income and refused to pay additional sums requested by Moghari.

Initially, Dolatshah commenced a foreclosure proceeding to enforce the mortgage but later withdrew this action and pursued a claim for constructive trust and unjust enrichment, asserting that the mortgage was a sham and that he was the true beneficial owner of the property.

Key legal and evidentiary findings

The court examined the credibility of the parties and found significant inconsistencies in their testimonies. The evidence of Joseph Schwartz, the lawyer involved in the transaction, was given considerable weight. Schwartz testified that the mortgage was created solely to protect Dolatshah’s interest from creditors and did not reflect the true agreement, which was a purchase and sale. The court accepted this version, supported by correspondence and the conduct of the parties.

The court found that Dolatshah had enriched the defendants by $5.58 million, plus additional sums for transfer taxes and net rental income, and that there was no juristic reason for the defendants to retain these benefits. The mortgage was not a binding contract, and the real agreement was for the purchase of the property.

Outcome and orders

The court declared that Michelle Graham holds legal title to the Mathers Property in trust for Dolatshah and ordered the transfer of the property to him. The defendants were ordered to pay Dolatshah $430,000 for transfer taxes and $405,000 in net rental income up to the trial date, with ongoing obligations for future rental income. The court also awarded costs of the proceeding to Dolatshah at Scale B, subject to further submissions if necessary. The total specified monetary award was $835,000, with additional amounts for post-trial rental income and legal costs to be determined.