Executive Summary: Key Legal and Evidentiary Issues

• Whether the plaintiff and defendant reached a binding joint venture agreement granting the plaintiff 50 percent of the shares in Alfa Pizza.

• Absence of a written contract, contemporaneous documentation, or emails/texts confirming the essential terms of the alleged agreement.

• Credibility and reliability of the parties, including an incorrect affidavit statement and failure to produce relevant documents by the defendant.

• Validity of the Draft Shareholder Agreement, which contained incomplete clauses and disputed signatures.

• Evidentiary weight of inconsistent bank forms listing varying ownership percentages for 5667.

• Whether the plaintiff's role as director, signing authority, and receipt of tips amounted to ownership or mere employment.

Background and parties
Mohsen Kangarloo Mohajer, who came to Canada in his early twenties from Iran and began working for Alfa Pizza as a line cook in 1985, sued Hojjat Mohagheghi, Somayeh Gholibeigi, 1255667 B.C. Ltd. ("5667"), and Alfa Pizza (1979) Ltd. in the Supreme Court of British Columbia. Mr. Mohajer alleged that in July 2020, he and Mr. Mohagheghi entered into a joint venture agreement under which he would own 50 percent of Alfa Pizza, with Mr. Mohagheghi and his wife owning the other 50 percent. 5667 is a holding company that owns all of the issued and outstanding shares in Alfa Pizza, and Ms. Gholibeigi, Mr. Mohagheghi's wife, currently holds 50 percent of the shares of 5667 along with her husband. Mr. Mohagheghi immigrated to Canada in 2018 from Iran with his wife and two children and had previously invested in Atawich, a food chain restaurant in Iran. He denies that he made any promises of ownership to Mr. Mohajer.

Purchase of Alfa Pizza
In approximately July 2020, Mr. Mohagheghi incorporated 5667 with the intent to purchase a restaurant. On September 23, 2020, an unsigned draft letter of intent was sent to Alfa Pizza by 5667 offering to purchase the assets of Alfa Pizza for $280,000. On December 8, 2020, 5667, as purchaser, agreed to purchase the shares of Alfa Pizza from Angela Goulas, as vendor, for $255,000, payable through a $10,000 deposit on September 23, 2020, a bank draft for $165,000 on December 8, 2020, and the balance of $80,000 payable by 11 equal monthly installments of $6,600 beginning on January 1, 2021, with a final payment of $6,740. All of these payments were made by Mr. Mohagheghi, and Mr. Mohajer did not contribute any monies for the purchase of Alfa Pizza. Mr. Mohagheghi testified that the only reason he assigned Mr. Mohajer as a director with signing authority for 5667 was because Mr. Mohajer told him that a Canadian-controlled company would be eligible for a lesser tax of around 12 percent, whereas if the person controlling the business is non-Canadian, the tax would be 25 percent.

Draft shareholder and partnership agreements
Mr. Jafari testified that Mr. Mohagheghi sent him an email dated October 18, 2020 attaching a draft partnership agreement listing Mr. Mohagheghi, Ms. Gholibeigi, and Mr. Mohajer as partners, and on October 19, 2020, a draft shareholder agreement. Clause 6 of the draft partnership agreement required each of the partners to contribute cash or property as a capital contribution, with Mr. Mohagheghi and Ms. Gholibeigi contributing $50,000 and Mr. Mohajer contributing $100,000; Mr. Mohajer did not make this capital contribution. An email dated November 19, 2020, sent by "[email protected]" to Ronald Argue, a lawyer at Munro & Company, attached a shareholder agreement between Mr. Mohagheghi, Ms. Gholibeigi, Mr. Mohajer, and 5667 dated October 15, 2020 (the "Draft Shareholder Agreement"), which contained the signatures of Mr. Mohagheghi, Ms. Gholibeigi and Mr. Mohajer. Mr. Mohagheghi specifically denied signing the Draft Shareholder Agreement, testifying he believed the document was "100%… a forgery," and Ms. Gholibeigi also denied signing it. The Court found the Draft Shareholder Agreement was only a draft since key provisions were missing or incomplete: the number of shares issued under paragraph 5 (Warranties) was incomplete, paragraph 8 referred to a "JOE SMITH," paragraph 10 referred to the corporation's auditor as "TBA," paragraph 20 on dispute resolution did not identify the province having jurisdiction, and paragraphs 58 (entire agreement) and 59 (jurisdiction) both ended mid-sentence.

Banking records and corporate formalities
A Bank of Montreal "Ownership Attestation" signed by Mr. Mohajer on December 14, 2020 set out the ownership of 5667 as 50 percent for Mr. Mohajer, 25 percent (changed in handwriting from 50 percent) for Mr. Mohagheghi, and 25 percent for Ms. Gholibeigi. A "Regulatory Customer Summary Report" dated December 17, 2020 reflected the same 50/25/25 ownership split. On February 9, 2021, at TD Canada Trust, a "Small Business Banking Ownership Structure Template" recorded 5667 as owned 50 percent by Mr. Mohagheghi and 50 percent by Mr. Mohajer (with Ms. Gholibeigi's name appearing but no ownership percentage), and another copy contained handwritten changes to 33.4 percent for each of the three named individuals. There were no corporate documents prepared for 5667 supporting any transfer of shares to Mr. Mohajer—no share purchase/transfer agreement, directors' resolution, central security registry ("CSR") entry, meeting minutes, or shareholder consents existed.

Operations, termination and credibility findings
In the fall of 2020, Mr. Mohajer returned to the Lower Mainland and began working at Alfa Pizza, paid a salary of $6,000 a month, and testified that he and Mr. Mohagheghi agreed to each take a $6,000 monthly paycheque and shared tips at the end of each month. On November 3, 2021, a lawyer for Alfa Pizza wrote a letter terminating Mr. Mohajer's employment immediately for cause, alleging unauthorized withdrawals of $13,500 on August 20, 2021 and $14,000 on October 7, 2021 from Alfa Pizza's bank accounts. On credibility, Justice Forth was not persuaded that either of the main parties was deliberately attempting to mislead the Court, but flagged concerns with Mr. Mohagheghi's incorrect affidavit evidence (sworn November 29, 2021) and his failure to produce relevant communications with Ali Jafari, a chartered accountant.

Legal framework applied
The Court applied the settled principle from Berthin v. Berthin, 2016 BCCA 104, that a binding contractual relationship requires that the parties reached consensus ad idem on essential terms, meaning there was a "meeting of the minds" on all essential matters relating to it. The inquiry into whether there was a meeting of the minds requires an objective approach, as explained in Timberwolf Log Trading Co. Ltd. v. Columbia National Investments Ltd., 2011 BCSC 864.

Ruling and outcome
Justice Forth held that Mr. Mohajer failed to discharge his onus of establishing that a joint venture agreement had been entered into with the essential terms agreed upon. There was no written document setting out all the essential terms, no contemporaneous documents confirming the terms, and Mr. Mohajer failed to produce any email or text confirming any of the terms agreed to. The Draft Shareholder Agreement did not address the number of shares to be issued, Mr. Mohajer made no financial contribution to the purchase of any shares, and it was unclear how he was going to pay for the 50 percent of shares he claimed to be entitled to receive. The Court also found that Mr. Mohajer's receipt of tips supported that he was being treated as an employee, like the other employees who received tips, rather than as an owner. Citing Rockwell v. Fay, 2009 BCSC 935 at paras. 91–92, the Court held that the parties' use of the word "partner" did not establish that a partnership agreement in a legal sense ever existed. The plaintiff's action was dismissed in favour of the defendants, Hojjat Mohagheghi, Somayeh Gholibeigi, 1255667 B.C. Ltd., and Alfa Pizza (1979) Ltd., with the parties given leave to provide written costs submissions; no specific monetary amount was awarded in the reasons for judgment.