10 Jul 2023
6071376 Canada Inc. V. Mahmood Khedmatgozar et al.
On June 25, 2019, Justice Tausendfreund had granted a judgment in favor of the applicant, 6071376 Canada Inc., against the respondent, Mahmood Khedmatgozar, for over $1.5 million. The judgment had been based on Tausendfreund J.'s findings that Dr. Khedmatgozar had misappropriated investment property belonging to the applicant and had been described as an "admitted liar."
The applicant had then alleged that Dr. Khedmatgozar and other respondents had conspired to fraudulently transfer assets to prevent the applicant from accessing them to satisfy the judgment. They had argued that Dr. Khedmatgozar's primary asset, his interest in dental professional corporations, had become unavailable to creditors due to a sale to the respondent Capital Dentistry Group Limited.
Following the judgment in June 2019, and amidst the pending appeal, discussions regarding the sale of Dr. Khedmatgozar's dental practices had taken place. Eventually, on October 14, 2020, MCA had purchased several dental practices and incorporated Capital Dentistry Group, where Dr. Khedmatgozar had received cash and a minority shareholding interest.
However, the court had concluded that the applicant had failed to provide sufficient evidence to establish that the respondents had engaged in a conspiracy through unlawful means to participate in a fraudulent conveyance.
Regarding costs, the parties had been encouraged to reach a settlement amongst themselves. In case they had been unable to reach an agreement, the respondents had been allowed to submit brief written submissions to support their costs outlines within two weeks from the date of the court's decision.