CITATION: Hui v. Tang, 2024 ONSC 3376
DIVISIONAL COURT FILE NO.: 379/23 DATE: 20240513
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
MYERS, DAVIES, and O’BRIEN JJ.
BETWEEN:
YAN HUI, 2811457 ONTARIO INC. and 2810802 ONTARIO INC. Plaintiffs (Respondents)
– and –
WEI TANG, also known as DAVID TANG, YIJIE QIAO, XIAOHONG YANG, XIAOYING ZHANG, BIN LI, SHELLS WITH PEARLS LTD. and MELODY HOLDINGS LTD. Defendants (Appellants)
Jordan Goldblatt and Emma Parry, for the Plaintiffs (Respondents) Ruzbeh Hosseini and Angela Kwok, for the Defendants (Appellants)
HEARD at Toronto: May 13, 2024
MYERS J. (ORALLY):
[1] The appellants appeal a decision of Mirza J dated June 6, 2023, granting leave to Ms. Hui to bring a derivative action. The appellants acknowledge that Ms. Hui states a claim that lies in the name of the corporation. They disagree on the strength of the claim and they also note that she may have personal claims. But the appellants do not take issue with the finding that there is a corporate cause of action in issue.
[2] The appellants say that the motions judge applied the wrong burden of proof on his fact finding on good faith. He did not accept the appellants’ argument of bad faith. The appellants say the burden was on the plaintiffs to positively prove good faith.
[3] I do not agree that the judge got the wrong burden. Good faith and bad faith are opposite sides of the same coin. It is the same facts on both.
[4] Finding that there is no bad faith and that a corporate cause of action is asserted by the plaintiffs properly left it open to the judge to infer good faith.
[5] The appellants say that all of Ms. Hui’s bad litigation conduct preceding this motion should have led the judge to find bad faith. But the motions’ judge considered these facts expressly. The standard of review for an error of fact is one of palpable and overriding error. It is not open to us to re-weigh the evidence or find the facts or the factual side of the finding of mixed fact and law that Ms. Hui was acting in good faith.
[6] The appellants challenge the finding of fact, or mixed fact and law, that it is in the best interest of the corporations to allow the action to go forward under Ms. Hui. She will pay, so there is no inconvenience to the corporation.
[7] The appellants submit that Ms. Hui’s desire to own the subject property shows that it is not in the corporation’s interest to pursue the claim. But she only has 40% of the shareholdings of the company. So if she wants 100% of the property, a derivative action is not helping her achieve that goal. There is no basis to say that her personal interest as a shareholder should preclude the company from claiming its due entitlement if any.
[8] This too is a finding of fact or mixed fact and law reviewable only for palpable and overriding error. As the motions’ judge was alive to the issue, we cannot intervene.
[9] Finally, the appellants submit that the judge erred in failing to consider whether a claim by Ms. Hui for money damages as an oppression remedy was adequate or a better fit on the facts.
[10] I disagree for two reasons.
[11] First, Ms. Hui’s oppression relief is different than the corporate claim that can include ownership of the property.
[12] Second, this issue was not raised below by the appellants. While this court has discretion to hear a new matter on appeal, it is a discretion that is exercised sparingly. In my view, we are not well placed to make findings of fact and to weigh the competing strands that bear on the exercise of discretion concerning the choice of proceedings. The argument ought to have been made to the motions judge to allow this court to have the benefit of his findings.
[13] It follows that I would dismiss the appeal. Costs are payable by the appellants to the respondents fixed at $25,000, all-inclusive, including the costs of the leave to appeal motion, as agreed by the parties.
Myers J.
I agree
Davies J.
I agree
O’Brien J.
Date of Reasons for Judgment: May 13, 2024
Date of Release: July 9, 2024
CITATION: Hui et al. v. Tang et al., 2024 ONSC 3376
DIVISIONAL COURT FILE NO.: 379/23 DATE: 20240513
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
MYERS, DAVIES, and O’BRIEN JJ.
BETWEEN:
YAN HUI, 2811457 ONTARIO INC. and 2810802 ONTARIO INC. Plaintiffs (Respondents)
– and –
WEI TANG, also known as DAVID TANG, YIJIE QIAO, XIAOHONG YANG, XIAOYING ZHANG, BIN LI, SHELLS WITH PEARLS LTD. and MELODY HOLDINGS LTD. Defendants (Appellants)
ORAL REASONS FOR DECISION
Date of Reasons for Judgment: May 13, 2024
Date of Release: July 9, 2024