COURT OF APPEAL FOR ONTARIO

DATE: 20230124 DOCKET: C68611

Huscroft, Trotter and Harvison Young JJ.A.

BETWEEN

Oscar Wong Plaintiff (Appellant)

and

Jennifer Li, also known as Jennifer Ho, Raymond Ho, also known as Ray Ho , Jasmine Yu, also known as Jasmine Kit Man Yu, also known as Kit Man Yu, also known as Jasmine Shum, also known as Jasmine Kit Man Shum, Grace Lee, also known as Grace Man Chen Lee, also known as Man Chen Lee, also known as Grace Man Chen Chan, Maureen French, also known as Maureen Theola French, Ragavan Thamby and Carlton Stewart, also known as Carl Stewart Defendants (Respondents)

Oscar C. Wong, acting in person Daniel Lawson, for the respondents

Heard: January 16, 2023

On appeal from the judgment of Justice Phillip Sutherland of the Superior Court of Justice, dated July 29, 2020, with reasons reported at 2020 ONSC 4299.

REASONS FOR DECISION

Background

[1] The appellant, Oscar Wong, is a real estate lawyer. The respondent, Jennifer Li, worked at his law firm as a real estate clerk. The respondent, Raymond Ho, is her husband.

[2] Ms. Li worked for the appellant from in or about 2003 to early 2010. Another real estate clerk, Jasmine Yu, commenced work at the appellant’s firm prior to Ms. Li. Both Ms. Li and Ms. Yu were paid a percentage of the fees pertaining to each real estate transaction.

[3] In 2007, the Law Society of Upper Canada (the “Law Society”), now the Law Society of Ontario, started investigating Mr. Wong’s practice. The Law Society commenced an application against Mr. Wong based on his failure to supervise 24 transactions involving 12 properties. Although none of the transactions were identical, there were several common irregularities including the failure to advise lending institutions of certain financing details and the failure to receive deposits from prospective purchasers as required by the agreements of purchase and sale. For some of the transactions, the appellant acted for the purchaser, the vendor, and the mortgagee, without first obtaining consent.

[4] The Law Society’s application was resolved based on the appellant’s admission of professional misconduct, including an admission that he failed to adequately supervise his staff (including Ms. Li and Ms. Yu). The Law Society Hearing Panel suspended the appellant for four months, and ordered him to pay $10,000 in costs: Law Society of Upper Canada v. Oscar Choi-Wah Wong, 2012 ONLSHP 180, at para. 39 (“LSUC Hearing Panel”). The Law Society appealed, which resulted in an increased award of $50,000 in costs: Law Society of Upper Canada v. Oscar Choi-Wah Wong, 2013 ONLSAP 31, at para. 6 (“LSUC Appeal Panel”). The Hearing Panel stopped short of finding that the appellant acted dishonestly; however, it found, “There was an egregious degree of abdication but the abdication was not total”: LSUC Hearing Panel, at para. 27. In dismissing the Law Society’s appeal from the length of the suspension, the Appeal Panel agreed that the abdication of responsibility was “troubling” and “systemic”: LSUC Appeal Panel, at para. 49.

[5] The appellant commenced an action against Ms. Li, Ms. Yu, Mr. Ho, and others. By the time of trial, the appellant’s claims only proceeded against Ms. Li, Ms. Yu, and Mr. Ho. The appellant alleged fraud and deceit/fraudulent misrepresentation, conspiracy, and breach of fiduciary duty. [1] These claims related to a subset of the transactions – 6 residential properties and 14 transactions – addressed in the Law Society proceedings. The appellant alleged that Ms. Li and Ms. Yu used his law office as a platform to promote and facilitate fraudulent schemes and conspiracies.

[6] The trial did not proceed solely on the findings arising from the Law Society proceedings; it proceeded on the basis of the evidence called by the parties. The appellant had no independent recollection of the events concerning the processing of the impugned transactions. The trial judge characterized his evidence as akin to that of “an expert witness reviewing documentary evidence of each real estate transaction in question years after their completion.” The respondents presented their own interpretation of events, claiming that they had done nothing wrong.

[7] In lengthy and detailed reasons, the trial judge dismissed all claims against Ms. Li, Ms. Yu, and Mr. Ho.

The Appeal

[8] The appellant appeals the trial judge’s dismissal of his claims of civil fraud and constructive/equitable fraud (hereinafter referred to as “equitable fraud”). He no longer advances his breach of fiduciary duty claim. He does not appeal the trial judge’s dismissal of his action against Ms. Yu.

[9] The appellant attempts to relitigate the factual issues that were decided at trial by re-examining the evidence relating to the impugned transactions on a granular level. It is not the function of this court to re-try cases. The appellant must establish that the trial judge erred in law and/or that his factual findings are tainted by palpable and overriding error. He has established neither.

Failure to Find the Elements of Civil Fraud

[10] The appellant submits that the trial judge erred in his application of the test for civil fraud. We do not accept this submission.

[11] The trial judge reviewed the transactions relating to the six properties that the appellant alleged fraud on the part of Ms. Li, Ms. Yu, and Mr. Ho. [2] He did so in great detail. The trial judge correctly stated the elements of civil fraud in Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, [2014] 1 S.C.R. 126, at para. 21: (i) a false representation made by the defendant; (ii) some level of knowledge (or recklessness) of the representation on the part of the defendant; (iii) the false representation caused the plaintiff to act; and (iv) the plaintiff’s actions resulted in a loss. He also separately analyzed the elements of equitable fraud and deceit/fraudulent misrepresentation.

[12] In relation to Ms. Li and Mr. Ho, the trial judge found that some of their conduct was “disconcerting”. The ostensible goal of their conduct, Ms. Li’s in particular, appeared to be inducing lenders to advance funds without full awareness of the circumstances. Despite these findings, the trial judge observed, at para. 176: “But this proceeding is not by the lenders. This proceeding was commenced by Wong.”

[13] Ultimately, the trial judge found that the appellant failed to establish that the respondents made any false statements or misrepresentations to Mr. Wong. He reached this finding by applying a broad definition of false representation, which included “misrepresentation by omission, silence, half-truths, inaction or then non-disclosure of material information”. Mr. Wong had no independent recollections of the events concerning the processing of the transactions. The trial judge thus found that there was no evidence that Ms. Li lied to Mr. Wong, failed to provide information to Mr. Wong when requested, provided half-truths, or failed to respond to any inquiry of Mr. Wong. Accordingly, he was hard-pressed to identify a false statement or representation on the part of the respondents to satisfy the first element of the test for civil fraud.

[14] With respect to two properties that the trial judge said involved “more problematic” transactions, Ms. Li and Mr. Ho provided “loans” to a purchaser so that the purchaser could meet the obligation to make a deposit. The trial judge accepted that the appellant was not advised of the loans. He further considered a notation in the client’s ledger that the $10,000 (the loan amount for one of the properties) was a deposit from the purchaser’s lawyer, which was not Mr. Wong. This was false; it was a loan from a third party, Mr. Ho. But the appellant failed to prove that it was Ms. Li who made the entry. The trial judge held that there was no evidence, either direct or circumstantial, that Ms. Li made a false representation on the transactions related to these properties. Consequently, the claim failed on this basis.

[15] All of the transactions reviewed by the trial judge had questionable features. But however questionable, the trial judge found no direct evidence that the appellant was defrauded by the respondents. The appellant has failed to identify any palpable and overriding error in the trial judge’s analysis.

[16] We dismiss this ground of appeal.

Credibility Findings and Sufficiency of Reasons

[17] The appellant submits that the trial judge erred in failing to adequately address Ms. Li’s credibility. Again, we do not accept this submission. In civil cases, as in criminal cases, a trial judge’s credibility findings are owed considerable deference on appeal: F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, at para. 72; R. v. G.F., 2021 SCC 20, 459 D.L.R. (4th) 375, at para. 81. Any deficiencies in a trial judge’s reasons in this respect will rarely merit appellate intervention: R. v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788, at para. 26.

[18] To a large extent, the case for fraud depended on the documentary evidence relating to the transactions, as interpreted by the appellant and the respondents in their evidence. As the trial judge observed, during his testimony, the appellant spent a great deal of time tracking through the relevant documents in relation to individual transactions, providing his own interpretation. Ms. Li was questioned about many of these documents.

[19] It is clear that the trial judge was satisfied with the bulk of her answers. He seemed to accept an important theme of her evidence – she consulted the appellant on many relevant matters, thereby nullifying the appellant’s claim of having been duped or deceived. But the trial judge did not accept all of the respondents’ evidence. In relation to the two properties with transactions that involved loans from Mr. Ho, he rejected their evidence that the loans related to the purchaser’s construction business. Thus, he turned his mind to the credibility of Ms. Li as required.

[20] We agree that it would have been preferrable had the trial judge provided more detailed reasons for his acceptance of Ms. Li’s evidence. However, any insufficiency in this regard does not compromise our ability to meaningfully review the trial judge’s conclusions.

[21] We dismiss this ground of appeal.

Equitable Fraud

[22] The appellant submits that the trial judge erred in not finding that the appellant was wronged by Ms. Li on the basis of equitable fraud. We do not agree.

[23] The trial judge found that there was no relationship, special or otherwise, between the appellant and Mr. Ho and dismissed the appellant’s claim on this basis. As against Ms. Li, the trial judge found that he need not decide whether their relationship was a special one for the purposes of this cause of action. Instead, the trial judge said, “[t]he court is not persuaded in the circumstances that the conduct of Li was unconscionable to compel the court to exercise its equitable discretion and find equitable fraud.” Among the reasons offered by the trial judge for making this finding was the appellant’s admission to the Law Society that he was careless in his supervision of his employees. He further found that the appellant did not prove that Ms. Li gained any advantage or benefit over the appellant. In short, he found no unconscionable conduct on Ms. Li’s part as it related to the appellant. The appellant has failed to identify any legal error or a palpable and overriding error along the path to this conclusion.

[24] We dismiss this ground of appeal.

Disposition

[25] The appeal is dismissed. The parties agreed that the successful party on appeal should receive costs of $20,000, all-inclusive. The respondents are entitled to their costs on this basis.

“Grant Huscroft J.A.”

“Gary Trotter J.A.”

“A. Harvison Young J.A.”

[1] The claim for breach of fiduciary duty was only brought against Ms. Li and Ms. Yu, not Mr. Ho.

[2] Mr. Ho was only involved in the transactions relating to two properties.