Executive Summary: Key Legal and Evidentiary Issues

• Plaintiff investors moved for summary judgment against the defendant for fraudulent misrepresentation arising from unregistered foreign exchange investment agreements.
• At issue was whether the defendant's representations about guaranteed high returns constituted false statements of fact, rather than mere opinions or predictions.
• Suitability for summary judgment depended on whether the court could make the necessary findings of fact without a trial, notwithstanding the defendant's credibility objections.
• Evidence established that the defendant failed to segregate investor funds and used a portion of the plaintiffs' money for personal expenses.
• Knowledge or recklessness as to the falsity of her representations was established in part by the defendant's own cross-examination admissions.
• Reliance by the plaintiffs was supported by individual affidavits, prior referrals, and earlier payments made by the defendant that lent her credibility.

Facts of the case

The plaintiffs — Maryam Sadrolssadat Zadeh, Seyed Mehdi Motakefpour, Mohsen Jahanmehr, Meysam Jahanmehr, Narges Geramikhosh, Jinous Surki, Mehri Sadrossadat, Seyed Abdolhamid Jahanmehr, Harry Hoogkamp, and David Lloyd Hamidi — are all members of the Iranian diaspora who invested money with the defendant, Parisa Shaegan Fard, pursuant to written agreements. The defendant, who moved to Canada in 1994 and whose highest level of education is a high school diploma obtained in Iran, had engaged in foreign exchange trading and completed several courses in currency trading, including an online course through Market Traders Institute in Florida in 2017. She was not registered with the Ontario Securities Commission or any other securities or financial services regulator.

The plaintiffs came to invest with the defendant through referrals and social connections. Plaintiff Maryam Zadeh, for instance, had previously invested with Mohammad Pirhayati, who in 2018 advised he could no longer invest for them and recommended the defendant. Ms. Zadeh made an initial investment in approximately December 2018, received monthly payments of $4,000 for three months, and subsequently invested a further $200,000 in March 2019. Meetings between the parties were held at a building known as "World on Yonge" in Thornhill. The investments ranged from $25,000 to $325,000, made between October 2018 and May 2019. The defendant lost the plaintiffs' money. While she admitted liability in breach of contract, she denied committing fraud. The plaintiffs sought a finding of fraudulent misrepresentation so that their judgments would survive anticipated bankruptcy proceedings.

Contractual terms at issue

All agreements were titled "Joint Venture Agreement" and described the plaintiffs as "investors" and the defendant as the "investee." The agreements signed on October 22, 2018 — with Harry Hoogkamp, David Hamidi, and Narges Geramikhosh and Jinous Surki — promised a return of the original investment plus 50% of the growth of the deposited funds, with no mention of any possibility of losses. The agreement dated March 5, 2019, with Seyed Jahanmehr and Mehri Sadrossadat, required the defendant to return the original investment plus 100% of the growth, meaning the defendant would retain no benefit whatsoever. The agreements dated March 11, 2019 were more complex; for example, the agreement with Ms. Zadeh committed the defendant to pay twice the original investment — $650,000 CAD — within 10 months, and set out varying monthly profit rates depending on when the investor chose to withdraw. The court noted the lack of sophistication and care in these agreements, observing that one clause mistakenly stated the defendant would pay "325K CAD per month," which would represent 100% per month rather than the 10% referenced in the immediately preceding text. All agreements used language — such as "original deposit," "growth of the monies deposited," and "return" of the investment fund — that reasonably implied the defendant would maintain proper and separate accounting of invested funds, which she did not do.

Reasoning and analysis

The court first addressed whether the case was suitable for summary judgment. Applying the test from Hryniak v. Mauldin, 2014 SCC 7, the court was satisfied that it could make the necessary findings of fact, that the law could be applied to those facts, and that summary judgment was a proportionate and more expeditious means of achieving a just result. The court distinguished the defendant's reliance on Henry Hill & Associates Inc. v. Santos, 2021 ONSC 6051, finding the facts substantially different: unlike that case, the present dispute did not turn on a "whodunit" question or require review of a multitude of electronic files. The court found that the key factual dispute — whether the defendant's statements were facts, opinions, or predictions — did not require a trial to resolve.

On the merits, the court applied the five elements of fraudulent misrepresentation as set out in Chaba v. Khan, 2020 ONCA 643, and Midland Resources Holding Limited v. Shtaif, 2017 ONCA 320. As to false representations, the court found that the defendant had represented to every plaintiff, either explicitly or implicitly, that they would achieve high rates of return and that their investments would not be lost. These representations were found to go beyond mere opinion and to constitute representations of fact. The court further found them to be false when made: the defendant's own cross-examination admissions confirmed she knew foreign exchange trading did not offer guaranteed returns. Evidence also established that on March 11, 2019, when the defendant's personal bank account balance was approximately $1,500, she received $100,000 from one of the plaintiffs and within days wrote a cheque for $5,800 and made Interac purchases well in excess of her prior balance. Evidence from plaintiff Mohsen Jahanmehr's reply affidavit described the defendant's admissions at a March 2020 meeting — that she had debts when she accepted the plaintiffs' money, that part of the funds were used for personal expenses, and that she saw the plaintiffs' investments as an opportunity to recover her own losses. Account screenshots further suggested she had deposited approximately $734,000 CAD into her trading account in 2018 and made withdrawals totalling approximately $159,724 CAD, implying losses of approximately $574,000 CAD by February 2019. The court concluded that the defendant had not traded with, and therefore misused, almost $160,000 of the funds she received from the plaintiffs. As to knowledge or recklessness, the court found the defendant had either known her representations were false or had made them with complete recklessness as to their truth. Intent, reliance, and loss were each separately established: the plaintiffs sought judgment only in the amounts of their original investments, not including the promised returns, and the defendant acknowledged those losses.

Ruling and overall outcome

The court granted summary judgment in favour of the plaintiffs, finding all five elements of fraudulent misrepresentation made out on the available record. Justice Chown held that there was no genuine issue requiring a trial, and that the defendant, Parisa Shaegan Fard, was liable to the plaintiffs for fraudulent misrepresentation. The exact total monetary award was not specified in the decision, as the court indicated it would receive written submissions on costs — from the plaintiffs by June 26, 2026, and from the defendant by July 10, 2026. The plaintiffs' recovery is limited to the amounts of their original investments as set out in the decision, though the precise aggregate judgment figure was not stated in the reasons.