Canada One Family Network v. Cach Family Network, 2024 ONSC 7033

CITATION: Canada One Family Network v. Cach Family Network, 2024 ONSC 7033 DIVISIONAL COURT FILE NO.: 651/24 DATE: 2024-12-13

SUPERIOR COURT OF JUSTICE – ONTARIO DIVISIONAL COURT

RE: CANADA ONE FAMILY NETWORK and YAN YAN ZHU, Appellants - and - CACH PLATFORM INC. Respondent

BEFORE: FL Myers J

COUNSEL: Yan Liu and her agent N. Nakano, counsel for the Appellants James Chow, counsel for the Respondent

HEARD at Toronto (by videoconference): December 13, 2024

ENDORSEMENT

[1] The Respondent submits that the order under appeal is an interlocutory order of a judge. It submits that leave to appeal is required under s. 19 (1)(b) of the Courts of Justice Act, RSO 1990 c C.43.

[2] The Appellants submit that the order of the judge under appeal was final for appeal purposes. As less than $50,000 was ordered, there is an appeal as of right to this court under s. 19 (1)(a) of the statute.

[3] Although the matter is not free from doubt, in my view the two holdings made by the judge were both final orders. They brought an end to substantive relief claimed in the pleadings.

[4] The parties entered into two leases on March 26, 2022. In one, Canada One leased commercial space from Cach for five years. In the other, Canada One leased the space for ten years with Canada One having an option to buy the property.

[5] Pleadings were exchanged in 2023. Cach claimed that the five-year lease was correct and that the owner was tricked into signing the second document by Ms. Zhu for Canada One. Cach also claimed that Ms. Zhou had wrongfully posed as a signing officer of Cach to take over Cach’s bank account at Royal Bank of Canada.

[6] Cach initially claimed that rent was in arrears. But it is common ground that Canada One paid the arrears before defending the claim.

[7] Then, in early 2024, Canada One went into arrears again. Cach terminated the lease and re-entered. Canada One then broke into the premises to re-gained possession.

[8] Cach then brought a motion for partial summary judgment in which it sought:

1. A declaration that the lease between Cach Platform Inc. and Canada One Family Network of the property located at 400 Esna Park Drive, Unit 21, Markham, Ontario, was terminated effective January 18, 2024.

2. A mandatory order that Canada One Family Network vacate the leased property.

3. An order granting leave to Cach Platform Inc. to issue a Writ of Possession with respect to the leased property.

4. An order granting Cach Platform Inc. possession of the leased property.

5. An order that Canada One Family Network pay the sum of $2,400.00 per month to Cach Platform Inc. for overholding rent for the period from January 1, 2024 to the date of the hearing of this motion.

6. An order that Canada One Family Network pay the sum of $2,400.00 per month from the date of the hearing of this motion until the date Cach Platform Inc. gains vacant possession of the leased property from Canada One Family Network.

7. A declaration that Yan Yan Zhu does not have any signing authority and control regarding the bank account of Cach Platform Inc. with the Royal Bank of Canada, account number 06532 1016518 and that Wah Hui Lam has the sole signing authority and control regarding said bank account.

8. Costs on substantial indemnity basis as against Canada One Family Network and Yan Yan Zhu.

9. Such further and other relief as counsel may advise and this Honourable Court deem just.

[9] It is important to note that the relief sought did not specific which of the two forms of leases Cach sought to terminate. But its statement of claim was clear that its position was that only the five-year lease was active and the ten-year lease with an option to purchase was null and void as a result of Canada One’s trickery.

[10] Canada One and Ms. Zhou were self-represented at the time of the hearing of the motion. As a result, they failed to deliver sworn evidence. The motion judge declined to receive the defendants’ unsworn material as admissible evidence.

[11] With only Cach’s evidence before him, the judge found as facts:

[4] On the evidence before me the plaintiff is the owner of the property. It entered into a lease with the tenant on March 26, 2022 for a term from March 28, 2022 to February 28, 2027. The rent was agreed to be $2400 per month payable on the first of the month. The tenant was to provide post-dated cheques for each year on the anniversary date of the lease. The tenant did so for the first year of the lease.

[12] That is, the judge discussed only the five-year lease proffered by Cach and he held it was the lease in force. He did not mention the existence of another form of lease or that the main issue joined in the pleadings involved the issue of which of the forms of leases was valid.

[13] The judge then found that on the uncontested evidence, the tenant had fallen into arrears and it deposited sporadic rent payments into the bank account in Cach’s name that Ms. Zhou wrongfully kept from Cach.

[14] The judge made the following findings about the bank account:

[3] The plaintiff in support of its motion filed two affidavits from the sole officer, director and shareholder of the plaintiff, Mr. Lam.

[14] …Ms. Zhu has provided no evidence that she owns the plaintiff, that she is a shareholder or that she is an officer or director of the plaintiff, or that she has any authority to act on behalf of the plaintiff.

[15] I am satisfied on Mr. Lam's affidavit evidence that Ms. Zhu filed false and unauthorized Annual Returns with Corporations Canada on behalf of the plaintiff naming herself as the authorized signing person for the plaintiff, along with forms making her the sole director of the plaintiff and provided them to RBC. Mr. Lam has been able to correct this with Corporations Canada, but RBC still requires a court order before it is prepared to unfreeze the plaintiffs bank account.

[15] The determination of whether an order is final or interlocutory on appeal turns on the order actually made. The judge held:

[18] Order to go as follows:

1. This court declares that the lease between Cach Platform Inc. and Canada One Family Network, of the property municipally known as 400 Esna Park Drive, Unit 21, Markham, Ontario (the property), was terminated effective January 18, 2024.

2. This court orders that Canada One Family Network vacate the property.

3. This court orders that the plaintiff be and is hereby granted possession of the property.

4. This court orders that the plaintiff be and is granted leave to issue a writ of possession with respect to the property.

5. This court orders that Canada One Family Network pay the sum of $2,400.00 per month to the plaintiff for overholding rent for the period from January 1, 2024 until the date that the plaintiff gains vacant possession of the property.

6. This court declares that Yan Yan Zhu, also known as Yanyan Zhu, does not have any signing authority or control relating to the plaintiff's bank account with the Royal Bank of Canada, account number 06532 1016518, and that Wah Hui Lam has the sole signing authority and control regarding the said bank account.

[16] In paragraph 18 (1) the judge granted a declaration of right terminating the lease. Mr. Chow says that the judge left open the question of which of the two possible leases was terminated. On that basis the order has not determined the substantive issue for trial.

[17] I cannot read the decision that way. When the judge refers to “the lease” in para. 18, he has only found there to be one lease before him. It is implicit that the five-year lease was the lease that judge considered in force and then terminated.

[18] One can quite readily question how summary judgment might be granted terminating a lease while leaving for trial the issue of whether another lease applies. The court was not asked to rule that the ten-year lease with an option to purchase was void.

[19] Mr. Chow submits that the issue about terminating a lease due to arrears was not even pleaded. It only arose after pleadings had closed. Arguably then the issues in the pleadings could remain outstanding.

[20] Or one could submit that there was no evidence of any other lease applying in circumstances under which Canada One faced a duty to put it best foot forward on a motion for partial summary judgment.

[21] I cannot make sense of any interlocutory order terminating a lease with a trial yet to come on whether the lease was in force. The motion before the judge was summary judgment motion. He granted judgment. He made a declaration of right. In my view, he has decided the issue of whether the five-year lease was valid and in force. Whether he ought to have done so is the question for the Divisional Court in the appeal.

[22] The applicable test on the issue before me is not in issue. In Sun Life Assurance Co. v. York Ridge Developments Ltd., 1998 4519 (ON CA), the Court of Appeal held:

Ball v. Donais (1993), 1993 8613 (ON CA), 13 O.R. (3d) 322 (C.A.), clarified the application of Hendrickson v. Kallio, 1932 123 (ON CA), [1932] O.R. 675 (C.A.) as to what is a final determination of the rights of the parties. As stated in Holmsted and Watson on Ontario Civil Procedure at 62-24: “Ball holds that what the Hendrikson test really means is that to be final an order must deal with the substantive merits as opposed to mere procedural rights, no matter how important the procedural rights may be. The test focuses on whether the order under appeal finally disposes of the rights of the parties, in the sense of substantive rights to relief (in the case of a plaintiff) or a substantive defence (in the case of a defendant).” An order granting or refusing an application for a stay of execution on a judgment does not determine any substantive rights between the parties.

[23] In other words, looking at the order and the pleadings, did the order end a pleaded claim or defence?

[24] In 1100997 Ontario Limited v. North Elgin Centre Inc., 2016 ONCA 848 the Court of Appeal held that an order refusing relief from forfeiture does not necessarily decide whether the lease was a written or oral lease. That issue remained for trial. The court wrote:

[13] Next, I turn to the motion judge’s observation that Mullins J., in the interim emergency motion, decided that no written lease was in existence on a final basis. The issue before Mullins J. was whether 110 was entitled to relief from forfeiture. Mullins J. refused the relief. She did not make a final determination as to the rights of the parties, stating with respect to the lease: “[t]here is no clear definitive evidence that there is a written lease between the parties.” She considered all of the circumstances in refusing interim relief, including that 110 was in arrears of rent and that only by mortgaging his home could its principal pay some but not all of the rents owing. That she did not purport to decide what was a key issue in the application on a final basis is clear from her disposition of costs of the motion, which she reserved to the justice hearing the application on the merits.

[25] The bolded words are what distinguishes this case from 1100997 Ontario Limited. In that case, the judge found expressly that there was no definitive evidence on point and made no final determination. Here, for better or for worse, the judge did purport to make a final determination on the lease in issue. He granted judgment – albeit partial summary judgment.

[26] The outcome is even clearer on the bank account. It is a pleaded issue and the judge resolved it. He found that Mr. Lam was the sole shareholder, officer and director of Cach. He held that Ms. Zhou held none of those attributes and she was not an authorized signing officer. He found that she delivered falsified and unauthorized documents to the bank. His order provides:

6. This court declares that Yan Yan Zhu, also known as Yanyan Zhu, does not have any signing authority or control relating to the plaintiff's bank account with the Royal Bank of Canada, account number 06532 1016518, and that Wah Hui Lam has the sole signing authority and control regarding the said bank account.

[27] That order is plainly final as it resolves a pleaded issue and leaves nothing for trial.

[28] It follows that the appeal lies to the Divisional Court as of right.

[29] Although this matter was resolved at a case conference, counsel briefed and argued the issues as it were a motion. As both case conferences and motions are heard by videoconference, the only differences here were that counsel were not robed and there was no affidavit evidence. But none was needed to argue the issue of law before me.

[30] Costs are reserved to the panel that hears the appeal.

[31] If the parties continue to have difficulties having their draft orders for Hood J. to sign accepted for filing, they may send them to me in care of my Judicial Assistant at Therese.Navrotski@ontario.ca and I will pass them on to Hood J. for his review.

FL Myers J.

J.

Date: December 13, 2024