Diamond vanishes in consignment deal gone wrong, B.C. woman claims

Fariba Pourbaba says she and her father once owned a round, three-carat diamond. It was a brilliant cut — one of the most expensive ways to shape a stone, to give it the best shine — valued at tens of thousands of dollars.

But that was four years ago, before it supposedly went missing.

Pourbaba says she and her father haven't seen the stone since they gave it on consignment to a jewelry dealer in West Vancouver in late 2019, according to a lawsuit filed this week. Court documents allege they had agreed with Masoud Javaherian that he would sell the diamond in exchange for a cut of the profit, but that they haven't seen the diamond — or a dime — since.  

The allegations have not been proven and the jeweller says her story is not true. 

The case has developed into a "she said/he said" dispute between Pourbaba and the jeweller, which experts say highlights the importance of a paper trail for the growing number of people looking for help selling valuable property.

"The best way out of these situations is not to get in them to begin with," said Ross McLarty, a civil litigation lawyer based in Vancouver.

'No longer' with jeweller

Pourbaba says Javaherian, the shop owner, received the diamond in fall 2019 and had agreed it would be sold for no less than $50,000 US, or $67,000 Cdn. She claims he was supposed to give it back in a few days if he couldn't find any takers, though she doesn't specify whether that was a verbal or written agreement.

The lawsuit says her father, Marefat, couldn't get an update from Javaherian when he followed up later.

She also claims she had the diamond appraised this past June at $72,600 US — or $98,158 Cdn.

The lawsuit provides little further detail about that appraisal, including how the diamond was appraised after it went missing. 

Some appraisals can be done based on photographs or other documentation, but Pourbaba's lawyer says no such photographs could be provided.

The appraiser, Mardon Jewelers, declined comment, citing client privacy.

The claim does not say whether the stone had been officially appraised before 2019.

Pourbaba, through her lawyer, declined further comment.

She found out the diamond was gone when she went to Javaherian's store looking for an answer in July, according to the claim filed in B.C. Supreme Court.

"The defendant informed her that the diamond was no longer in his possession but assured her that he would provide partial payments of the total value of the diamond," the lawsuit reads. 

"The defendant ... neglected to make any payments." 

Javaherian has not filed a response in court, but denied the allegations when reached by phone on Thursday. He, together with his son Sam Javaherian, says they did sell a diamond from the Pourbabas — but that the sale went off without issue.  

This was sometime between 2017 and 2019, they said, and the Pourbabas got a cut.  

Sam says it was a handshake agreement with nothing in writing because his father and Fariba's father had known each other for decades. He also says the diamond in question was worth tens of thousands of dollars less.

"It is not true," he said of the story described in the lawsuit.

Consignment growing in popularity

Consignment is an arrangement between sellers and businesses to sell second-hand items and split the profit. Stores use their sales staff and retail space to sell belongings and, in return, the shop keeps a percentage of the selling price.

People can consign items including luxury jewelry, watches, bags, shoes and musical instruments and everyday clothing. Items generally don't sell for top dollar, but consigners can make some money on items they might otherwise donate for free anyway — or that they might have sent to the landfill.

McLarty, the lawyer, says most shops ask consigners to fill out waivers saying the store can't be held responsible if their items are lost, stolen or damaged. He says it's crucial to pay attention to waivers and any other contracts before giving up your items if they're valuable to you.

If not, disputes can turn into frustrating "he said/she said" fights — as with the case of the Pourbabas' diamond.

"Obviously, particularly with something of this kind of value, you would certainly at a minimum want something in writing," said McLarty, adding he hasn't seen a case like the missing diamond lawsuit in roughly 40 years of practice. 

"That's important because if it's lost or damaged, then that would be evidence of what the damage was," he said.

He says agreements should describe the item in detail, confirm whether it was in good condition and an estimate of its dollar value.

"Do your homework," said Richard Rainey, a commercial lawyer of 30 years in Coquitlam, B.C. "Don't rush into any kind of arrangement with the first person that offers to take the item from you. And then, what's critically important, is to make sure you have a written contract and understand it."

Consignment shops are typically physical stores that specialize in one type of item, like a jeweler, but online consignment shops like The RealReal and Poshmark are increasingly popular. 

The global second-hand commerce space is expected to grow three times faster than the traditional retail space by 2027, according to an annual forecast report from the research firm ThredUp. The resale marketplace report said three-quarters of consumers were open to shopping second-hand, with that share rising to 83 per cent among Gen Z.

In their lawsuit, the Pourbabas are claiming damages for breach of contract and unjust enrichment.