On February 19, 2019, the Ontario Superior Court of Justice released its decision in Moazzani v. Roudechi-Ghias, 2019 ONSC 652. In Moazzani, the Court ordered the discharge of a mortgage on the basis that the funds secured by the mortgage had been fully repaid and despite an alleged re-advance of funds, which the Court found was not made pursuant to the mortgage.
The Plaintiff, Hadi Moazzani, sought an order discharging the mortgage registered against his home in favour of the Defendant, Saeid Roudechi-Ghias, the former boyfriend of Moazzani’s daughter, on the basis that Roudechi-Ghias did not advance any funds to Moazzani pursuant to the mortgage. Conversely, Roudechi-Ghias alleged that mortgage funds had been advanced and, as a result, that Roudechi-Ghias was entitled to payment of the principal sum of the mortgage, interest on the mortgage, possession of the property, and legal costs.
At trial, the father of Roudechi-Ghias, Davood, testified to personally delivering the mortgage funds in cash to a stranger in Iran who had made arrangements for those funds to be delivered to Moazzani’s brother-in-law. Moazzani denied ever receiving any funds owing under the mortgage and ever authorizing the mortgage funds to be delivered to anyone but Hadi himself. Roudechi-Ghias further testified that the mortgage was fully repaid in January or Feburary of 2010, before the mortgage funds were almost immediately re-advanced towards the purchase of a condominium by Mazzani’s brother-in-law and sister-in-law (which Roudechi-Ghias asserted was pursuant to the mortgage).
In response, Moazzani asserted that, based on numerous inconsistencies in the evidence of Roudechi-Ghias and Davood, the trial judge should find that the funds to be secured by the mortgage were not delivered to Moazzani (by the cash delivery in Iran or otherwise). In addition and irrespective of whether the alleged delivery of cash in Iran took place, Moazzani asserted that he was still entitled to the discharge of the mortgage as a result of the alleged full repayment by or on behalf of Moazzani in early-2010 and notwithstanding the alleged re-advance of funds.
In ordering that the mortgage be discharged, Mr. Justice O’Marra accepted Moazzani’s submission that any advance of funds by Rouchechi-Ghias towards the purchase of a condominium after early-2010 was not an advance made pursuant to the mortgage.
This case, therefore, demonstrates the risks of advancing funds to be secured by an existing mortgage without a clear agreement or other documentation to demonstrate the parties’ intent that the funds be secured by the existing mortgage, particularly in circumstances in which the funds are delivered by the mortgagee to a third party.
Hadi Moazzani was represented at trial by Robert B. Cohen and Christopher Selby of Cassels Brock & Blackwell LLP. Click here to read the full decision.