DATE: 20051214

DOCKET: C43497

COURT OF APPEAL FOR ONTARIO

RE:

PRUDENT WESTCOM GROUP INC., a.k.a. TEXAS CORPORATION NO. 118782400, and PATRICK S. M. WONG, in the capacity of shareholder of the plaintiff PRUDENT WESTCOM GROUP, INC. (Plaintiffs/Respondents) – and – PRUDENT WESTCOM GROUP INC., a.k.a ONTARIO CORPORATION NO. 869076, and STEPHEN WAI (Defendants/Appellants)

AND RE:

PRUDENT WESTCOM GROUP INC., a.k.a ONTARIO CORPORATION NO. 869076, STEPHEN WAI and OAK GLEN RESIDENCE DALLAS, INC. (Plaintiffs by Counterclaim/Appellants) – and – PRUDENT WESTCOM GROUP INC., a.k.a. TEXAS CORPORATION NO. 118782400, and PATRICK S. M. WONG, in the capacity of shareholder of the plaintiff PRUDENT WESTCOM GROUP, INC., PATRICK S. M. WONG, WESTCOM GROUP DALLAS INC., V & M PROPERTIES, L.C., PLAW INVESTMENTS, L.P., LANK PROPERTIES, INC., and AMANDA HO also known as AMANDA HO LEUNG also known as AMANDA LEUNG (Defendants by Counterclaim/Respondents)

BEFORE:

WEILER, BLAIR and ROULEAU JJ.A.

COUNSEL:

Murray I. Teitel

for the appellant

R. Lee Akazaki

for the respondent

HEARD & RELEASED ORALLY:

December 12, 2005

On appeal from order of Justice Sarah E. Pepall of the Superior Court of Justice dated April 6, 2005.

E N D O R S E M E N T

[1] The Texas Corporation and Wong (the respondent) sued the Ontario Corporation and Wai (the appellant) for misappropriation of money from the Texas Corporation. Wai defended and counterclaimed claiming that the money he allegedly misappropriated was in settlement of a debt owing to him by Wong. Wai alleges that he and Wong were “partners” through a number of companies in a series of joint real estate ventures and that he is entitled to equitable set-off against Wong personally because each corporation was in effect an alter ego for the individual.

[2] Peppall J. struck that portion of the defence claiming equitable setoff which related to Wong personally, but allowed the defence claims relating to the Texas Corporation and to another property, Forest Wood, administered by that Corporation. She found no connection between the paragraphs of the statement of defence which she struck, namely paragraphs 22-39, and Wai’s allegations of set-off. We agree and see no reason to interfere with her decision. The appeal is therefore dismissed.

[3] We do not take the motion judge’s comment, to the effect that should the appellant wish to further amend its pleadings it should not expect any further accommodation from the court, to be an in futuro absolute prohibition to amendment. We agree with the respondent that her remarks were more in the nature of a commentary and we therefore order that paragraph 4 of her order be deleted.

[4] Costs of the appeal are to the respondent and are fixed in the amount of $3500 all inclusive.

“K. M. Weiler J.A.”

“R. A. Blair J.A.”

“Paul Rouleau J.A.”