Court of Appeal for Ontario

Date: 2020-01-20 Docket: C66457

Judges: Gillese, Rouleau and Fairburn JJ.A.

Between: Wangdah Material Toronto Ltd. and Qing Chen Applicants (Appellants)

And: 1691530 Ontario Ltd. Respondent (Respondent)

And Between: 1691530 Ontario Ltd. Applicant (Respondent)

And: Wangdah Material Toronto Ltd. and Qing Chen Respondents (Appellants)

Counsel: Qing Chen, acting in person Robert Wood, for the respondent

Heard: January 13, 2020

On appeal from the judgment of Justice Thomas Lederer of the Superior Court of Justice, dated December 27, 2018, with reasons reported at 2018 ONSC 7714.

Reasons for Decision

I. BACKGROUND

[1] The parties were involved in purchasing vehicles and exporting them to China. The appellants would arrange to purchase vehicles and pay deposits for them. On a vehicle-by-vehicle basis, the respondent would agree with the appellants to take over the agreement of purchase and sale. Once the vehicles were sold in China, the respondent would pay the appellant, Mr. Chen, a commission based on the profits from the sale.

[2] The appellants purchased two vehicles with the respondent’s money but refused to deliver those vehicles to the respondent for export. Instead, the appellants sold them to a third party and kept the proceeds. This resulted in the respondent refusing to do further business with the appellants. At the time that the respondent severed the relationship between the parties, the appellants had paid deposits on 63 vehicles which had not yet been delivered to the respondent.

[3] The respondent brought an application seeking compensation for the conversion of the two vehicles sold by the appellants to a third party. The appellants commenced a counter-application alleging breach of contract and seeking to set off against the amounts claimed for conversion damages for, among other things, the unpaid deposits, unpaid commissions, and various allegedly improper deductions.

[4] This matter was the subject of lengthy case management discussions. Ultimately, the parties agreed upon the amount of money that was subject to the claim of conversion arising from the improper sale of the two vehicles to the third parties. That amount was reduced by amounts that the respondent agreed it owed the appellants for commissions and HST. After these calculations, the respondent claimed it should recover $79,159.81 for the conversions.

[5] The appellants maintained that this amount should be further reduced by the value of the deposits on the 63 vehicles, improperly deducted administrative fees, and improper capital interest deductions.

[6] The applications were determined by way of summary trial pursuant to r. 38.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

II. THE DECISION BELOW

[7] The trial judge found that there was no overarching contract governing a consistent and continuing business relationship between the parties. Rather, he concluded that there were a series of individual and independent contracts between the parties which were entered into on a vehicle-by-vehicle basis. The trial judge concluded that the parties had not yet entered into agreements in relation to the 63 vehicles at issue by the time the respondent refused to do any further business with the appellants. In the absence of an overarching contract, he held that there was no obligation on the respondent to take any of the vehicles on which the appellants had placed deposits.

[8] The trial judge also concluded that the set-off claim relating to the administrative fees and capital interest payments could not succeed. Administrative fees of this type were commonplace in arrangements such as those existing here and the interest payments arose from the respondent’s need to obtain financing to cover costs of vehicles and shipping before the sales were complete. The appellants were aware of those costs and the need to contribute to administration costs and the interest payments arising from the financing.

[9] Accordingly, the trial judge concluded that the appellants had no right to be reimbursed for the unpaid deposits or the administration fees and interest charges. Those amounts could not be set-off against the money realized by the appellants through the conversion of the two vehicles. The appellants were ordered to pay the respondent $79,159.81.

III. ISSUES ON APPEAL

[10] The appellants challenge the trial judge’s decision to dismiss their breach of contract claims and object to the factual findings made by the trial judge. The standard of review for factual findings and questions of contractual interpretation is one of palpable and overriding error. The appellants have shown no basis upon which to interfere with those findings. An appeal is not a second trial. There was evidence supporting each one of the trial judge’s factual conclusions and we defer to them.

[11] The appellants also claim that the respondent falsified the agreements which formed the basis of the conversion claim. They argue that the trial judge inappropriately stopped him from exploring that matter during the cross-examination of the respondent. We see no error on the part of the trial judge. The documents in question were irrelevant to the issues to be decided at trial. The conversion claim had already been determined during the case management phase of the proceedings. Liability for conversion had been admitted by the appellants, as reflected in the case management judge’s endorsements.

[12] The appellants also suggest that there is a reasonable apprehension of bias on the part of the trial judge. We see nothing to support this suggestion. To the contrary, the record reveals that the trial judge presided over this matter in a patient and fair way, one that ensured meaningful access to justice for a self-represented litigant.