B.C. court orders transfer of West Vancouver home to Iranian businessman who paid $5.58 million

The ocean, Stanley Park and Downtown Vancouver is seen from a residential hillside in West Vancouver, B.C. in an undated stock photo. (Shutterstock)

An Iran-based businessman is the rightful owner of a home on Mathers Avenue in West Vancouver, the B.C. Supreme Court has ruled, nearly eight years after he paid $5.58 million to acquire it.

Ali Dolatshah met Tirdad Moghari via a mutual friend in 2017, according to Justice Lisa J. Hamilton’s decision, which was published online Friday.

At the time, Dolatshah was interested in immigrating to Canada, and Moghari – a businessman with a background in construction – was finishing work on the Mathers Avenue property.

“Mr. Moghari met Mr. Dolatshah in 2017 via email and telephone,” Hamilton’s decision reads. “Mr. Moghari was excited about potential business opportunities with Mr. Dolatshah. Mr. Moghari wanted to help Mr. Dolatshah immigrate to Canada and referred him to an immigration consultant.”

Because of his work in the construction industry, Moghari and his wife put the Mathers Avenue property in her name when they acquired it, with the goal of shielding it from “potential creditors” of Moghari’s construction business, according to the decision.

This concern about potential creditors also led to the central dispute between Moghari and Dolatshah: a $5.58 million mortgage registered against the West Vancouver home in Dolatshah’s favour.

Dolatshah told the court that he had agreed to purchase the Mathers Avenue property from Moghari for that amount, and that he was unaware of the mortgage until years after it was registered.

Moghari, meanwhile, claimed that the $5.58 million was a loan, and that Dolatshah had no ownership interest in the property.

Hamilton concluded that neither man was a credible witness, and ended up ruling in Dolatshah’s favour based largely on the testimony of the lawyer who registered the mortgage.

Mortgage ‘not meant to be real’

Joseph Schwartz, described in Hamilton’s decision as Moghari’s long-time lawyer, testified that Moghari told him in August 2017 that Dolatshah was going to purchase the property for $5.58 million.

“Mr. Schwartz says that Mr. Moghari asked him how to protect Mr. Dolatshah’s interest in the Mathers property from the defendants’ potential creditors pending the transfer of title, which would not occur until later,” the decision reads.

Schwartz told the court he was the one who suggested the mortgage, and that Moghari agreed to the arrangement. Schwartz prepared the mortgage and had it registered against the home’s title.

“Mr. Schwartz testified that although Mr. Dolatshah was technically his client for the transaction, Mr. Dolatshah did not instruct him to prepare the mortgage nor did he sign the mortgage,” the decision reads.

“Mr. Schwartz testified that although he sent Mr. Dolatshah a copy of the registered mortgage by email, he knew that Mr. Dolatshah did not read or speak English. Mr. Schwartz said that he did not explain the documents to Mr. Dolatshah because the mortgage was not meant to be real – its sole purpose was to protect Mr. Dolatshah’s interests in the Mathers property from potential third-party creditors.”

Moghari’s version of events was “diametrically opposed” to his long-time lawyer’s, according to Hamilton.

Moghari claimed that the mortgage represented a loan from Dolatshah, and said that although the Iran resident had expressed an interest in buying the property, he had never followed through.

Credibility

While Dolatshah told the court – and Hamilton accepted – that he was unaware of the mortgage until years after it was registered, his first effort to resolve his dispute with Moghari was by initiating foreclosure proceedings.

Alongside his petition to foreclose on the Mathers property, Dolatshah filed an affidavit in which he swore that the mortgage was a valid contract.

He later withdrew the foreclosure petition and launched the lawsuit that Hamilton ultimately ruled on, prompting Moghari to argue that his filings were an abuse of process.

Hamilton rejected the abuse of process claim, but agreed with Moghari that Dolatshah’s affidavit undermined his credibility.

“Mr. Dolatshah says that his affidavit in the foreclosure proceeding was wrong because he could not read English,” the decision reads. “However, both the affidavit and the petition were translated for Mr. Dolatshah in advance, so his explanation lacks credibility.”

However, Hamilton found Moghari had also contradicted his own testimony in writing. In 2021, after he had paid more than $6 million – the $5.58 million purchase price plus $430,000 in purported property transfer taxes and fees – toward acquiring the property, Dolatshah contacted Moghari to demand payment of interest owing on the mortgage.

“Interestingly, Mr. Moghari’s own written response to Mr. Dolatshah’s demand for return of the money with interest was to remind Mr. Dolatshah that the mortgage was fake and that the real agreement between them was the purchase of the Mathers property,” the judge’s decision reads.

Hamilton concluded that both men’s testimony “appeared more focused on winning the lawsuit than relaying the actual facts.”

Schwartz, by contrast, was “refreshingly balanced and candid,” according to the judge, who accepted his version of events.

“Mr. Schwartz’s evidence did not appear to be affected by loyalties to either party,” the decision reads. “He had nothing to gain from his testimony. Quite the opposite, he was in the obviously awkward position of having to explain that the mortgage he prepared was essentially a sham.”

Constructive trust

Dolatshah’s lawsuit argued that there was a “constructive trust” resulting from his payments to Moghari.

To prove a constructive trust, plaintiffs must show that they have enriched the defendants, that this enrichment has left them correspondingly deprived, and that there is no “juristic reason” for the enrichment.

The defendants in this case conceded that they had been enriched and Dolatshah had been deprived, but argued that the mortgage was legitimate and constituted a juristic reason for their enrichment.

By concluding that the mortgage was fake, Hamilton also found that the constructive trust had been established.

She ruled that Moghari’s wife had held the Mathers property in trust for Dolatshah since 2017 and ordered that the property’s title be transferred to him.

Hamilton also ordered the defendants to repay Dolatshah the $430,000 they had received from him for alleged property transfer taxes and fees, and she ordered Dolatshah to pay any and all applicable taxes from the transaction.

Finally, the judge ordered the plaintiffs to pay Dolatshah $405,000, representing the net rental income they had collected from the Mathers property since 2017.

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