



COURT OF APPEAL FOR ONTARIO

CITATION: Derakhshan v. Narula, 2019 ONCA
    742

DATE: 20190923

DOCKET: C65731

Doherty, Harvison Young and
    Thorburn JJ.A.

BETWEEN

Farhad
    Derakhshan

(Applicant) Appellant

and

Seema Narula

(Respondent) Respondent

Farhad Derakhshan, acting in person

Ian C. Vallance, for the respondent

Heard: September 16, 2019

On
    appeal from the judgment of Justice Elizabeth C. Sheard of the Superior Court
    of Justice, dated January 24, 2018.

REASONS FOR DECISION

OVERVIEW

[1]

The application judge dismissed the
    appellant, Mr. Derakhshans application for retroactive spousal support, unjust
    enrichment and consequent constructive trust in twelve properties, a
    declaration that there was a joint family venture in the accumulated value of
    the properties, and an order for the return of his shares in Turtle Island
    Staffing, an Indigenous staffing company.

[2]

On this appeal, Mr. Derakhshan claims the application
    judge made palpable and overriding errors of mixed fact and law. He seeks an
    order to set aside the decision and have the case reheard by a new judge. He
    also claims the application judges reasons were inappropriately copied from
    the written submissions of the respondent
.

ANALYSIS AND
    CONCLUSION

Spousal relationship

[3]

Section 29 of the
Family Law Act
, R.S.O.
    1990, c. F.3 defines a spouse as a married couple or two persons who are not
    married to each other and have cohabited continuously for a period of not less
    than three years, or have a relationship of some permanence, if they are the
    parents of a child.

[4]

Mr. Derakhshan and Ms. Narula met in 2006. There
    was clear evidence of a romantic relationship at some point and the parties
    lived together from the summer of 2011 to September 2012.

[5]

The application judge noted however, that Ms. Narula
    and Mr. Derakhshan had no children together, were never married and referred to
    themselves as single on their tax returns. Moreover, they largely kept
    separate bank accounts and Mr. Derakhshan used many different addresses on his
    drivers licence, car insurance, passport, and income tax returns. They
    maintained separate residences for all but one year.

[6]

Thus, while she accepted that Mr. Derakhshan and
    Ms. Narula were in a romantic relationship at some stage and lived together for
    approximately one year, the application judge found that Mr. Derakhshan failed
    to prove that he and Ms. Narula were in a spousal or common-law relationship for
    three years as required by the provisions in the
Family Law Act
, as I
    cannot conclude that they cohabited for a continuous period of not less than
    three years.

[7]

There was ample evidence to support this
    conclusion.

Unjust enrichment

[8]

In order to prove a claim in unjust enrichment, Mr.
    Derakhshan must prove that Ms. Narula has been enriched, Mr. Derakhshan
    suffered a corresponding loss, and there is no juristic reason for the
    enrichment:
Pettkus v. Becker
, [1980] 2 S.C.R. 834.

[9]

Mr. Derakhshans unjust enrichment claim relates
    to 12 properties in Ottawa. From 2006 to 2012, Ms. Narula bought, renovated,
    and either rented or sold the properties. Mr. Derakhshan, or his companies, did
    much of the renovation work. When they first met, Ms. Narula was a successful
    businesswoman. Mr. Derakhshan admitted at trial that he was poor when he met Ms.
    Narula.

[10]

Ms. Narula testified that she paid Mr. Derakhshan
    $2,192,598.78 between 2006 and 2012. Mr. Derakhshan admitted to receiving
    $1,625,063.35 over the six-year period but claims he was entitled to more.

[11]

Mr. Derakhshan
conceded
    that his records were lacking but called no expert evidence to support the
    value of the work done or his alleged investment of monies into the properties.
    His only proof was before and after photos, evidence of some of his own
    workers, his own spreadsheets, and supplier invoices. It was impossible to
    correlate the invoices with the monies paid to him. Moreover, his claimed
    increase in value of the properties was based on his own assessment.

[12]

By contrast, Ms. Narula signed all the
    agreements of purchase and sale, paid the down payment, and arranged mortgage
    financing in her name alone. Ms. Narula agreed that Mr. Derakhshan had done
    work but asserted that Mr. Derakhshan had been paid for the work he did. She
    backed up her assertion by producing copies of cancelled cheques and T4s
    together with spreadsheets summarizing that documentary evidence. There was no
    evidence that at any time prior to their break up, Mr. Derakhshan asserted any
    claim to be paid for work done either by virtue of a joint venture, unjust
    enrichment, or otherwise.

[13]

The application judge found that Mr. Derakhshan therefore
    failed to prove his claim for unjust enrichment as he was unable to adduce
    evidence to satisfy the court that he was not paid for work that he did or that
    Ms. Narula was unjustly enriched at his expense. There was ample evidence to
    support her findings. At the oral hearing before this court, the appellant
    submitted that the respondent had given false evidence at trial. There is no
    basis for this court to interfere with the application judges findings.

Joint Family Venture

[14]

The question of whether there is a joint family
    venture is a question of fact and must be assessed by having regard to the
    relevant circumstances including:

a.

mutual efforts;

b.

economic integration;

c.

intention of the parties;

d.

priority of the family; and

e.

length of the relationship.

[15]

The use of funds for family purposes or situations
    where one spouse takes all may also indicate a pooling of resources. The more
    extensive the integration, the more likely it is that they have engaged in a
    joint family venture:
Kerr v. Baranow
, 2011 SCC 10, [2011] 1 S.C.R.
    269, at paras. 84-98.

[16]

While a joint family venture claim logically
    becomes stronger when the relationship begins to resemble that of spouses, a
    spousal relationship is not required for there to be a joint family venture. A
    spousal requirement is inconsistent with the doctrine of unjust enrichment
    which developed in response to inequitable outcomes resulting from strict
    definitions of spouses and narrow views of domestic arrangements:
Pettkus
.

[17]

While the application judge held in her reasons
    that, [t]o establish that he and Ms. Narula were engaged in a joint family
    venture he would have had to show that they were in a spousal relationship. He
    did not, this must be read in the context of the two preceding paragraphs
    which provide that:

[
86
] There was no evidence
    or suggestion that Derakhshan was providing services other than services
    directly related to the Properties. The facts in this case are different from
    those in other joint family venture cases, as noted above. With respect to
    the Properties, there was no pooling of funds, no common purse, no financial
    intertwining, and no amassing of a common pool of savings. All of the funds
    came from or through Narula, who took all the financial risk and absorbed any
    losses. Apart from a small ($300.00) joint account opened by Narula in
    India, which she and Derakhshan could access while travelling in India, Narula and
    Derakhshan kept their finances separate.

[
87
] While there may have
    been some financial overlap, not uncommon between couples in a relationship,
    the evidence fell short of showing an economic integration between Derakhshan and
    Narula, a key indication of a joint family venture.

[18]

While a spousal relationship is not a legal
    prerequisite to finding a joint family venture, there was ample evidence to
    justify the application judges conclusion that there was no joint family
    venture in these circumstances.

[19]

There was no evidence that Mr. Derakhshan was
    providing services other than services directly related to the properties. There
    was no pooling of funds or economic integration. At most, there was some
    financial overlap but no economic integration of the sort that indicates a
    joint family venture. For these reasons, we find that the application judges
    reasons provide ample basis to conclude that there was no joint family venture.

Transfer of shares in Turtle Island

[20]

In 2008, Ms. Narula and a third party, Dumont,
    created a business together called Turtle Island Staffing. Ms. Narula used one
    of Mr. Derakhshans inactive numbered corporations, 2093030 Ontario Inc., for
    the company. Dumont held 51% of the shares, Mr. Derakhshan held 49% through his
    company, and Ms. Narula held no shares. Ms. Narula testified that this was done
    because the majority shareholder had to be of Indigenous heritage in order to
    submit tenders for government work.

[21]

The application judge accepted Ms. Narulas
    evidence that it was always their intention that Mr. Derakhshan would transfer
    his shares to Ms. Narula and he eventually did. Ms. Narulas evidence on this
    point was corroborated by the company accountant, Mr. Siddiqi, who was called
    by Mr. Derakhshan.

[22]

In 2011, Mr. Derakhshans shares were
    transferred to Ms. Narula for $1.00. While Mr. Derakhshan claimed that his
    signature was forged, he produced no expert evidence of forgery and the
    accountant testified that Mr. Derakhshan told him he willingly transferred the
    shares.

[23]

The application judge therefore rejected Mr. Derakhshans
    claims that his shares in Turtle Island Staffing were fraudulently transferred
    to Ms. Narula. For reasons more fully explained by the application judge, there
    was evidence upon which the application judge could reasonably conclude the
    shares were not fraudulently transferred.

Were the application judges reasons
    inappropriately copied from the written submissions of the respondent?

[24]

Mr. Derakhshan claims that because the decision
    was rendered more than six months after the hearing, there is reason to suggest
    the application judge relied unduly on the respondents written submissions.

[25]

We do not agree.

[26]

Mr. Derakhshan bears the onus to show that a
    reasonable person, apprised of the relevant facts, would conclude that the
    application judge failed to come to grips with the issues and deal with them
    independently and impartially. He has not done so. The trial was heard over 21
    court days with 24 witnesses being called and 142 documents entered as
    exhibits. Both parties were invited to provide written submissions and did so.
    The reasons for decision is a new document that does not copy Ms. Narulas
    written submissions.

[27]

The application judge carefully reviewed the evidence
    and the law on the issues before her. We find there is no merit to this
    submission.

Conclusion

[28]

There is no palpable and overriding error in the
    application judges findings or in her conclusion dismissing the appellant, Mr.
    Derakhshans claims. On the contrary, her reasons were measured and
    comprehensive.

[29]

For these reasons, the appeal is dismissed.
    Costs to the respondent in the amount of $20,000.

Doherty J.A

Harvison Young J.A.

Thorburn J.A.


