Oskar v. Chee et al., 2012 ONSC 1545

Court File No.: CV-07-086377-00
Date: 2012-03-07

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Oskar United Group Inc., 1714469 Ontario Inc. and 1600308 Ontario Inc, Plaintiffs

AND:

Peter Kin Ho Chee also known as Peter Chee, Mi-Ko Urban Consulting Inc., and Mi-ko Urban Inc., Defendants

BEFORE: McCarthy J.

COUNSEL:
Lorne Sabsay and K.B. Ng, for the Plaintiffs
Michael Tweedie, for the Defendants

HEARD: November 24, 25, 28, 29, 30, December 1, 2, 5, 6, and 7, 2011

McCARTHY J.

Judgment

[ 1 ] The defendant, Peter Kin Ho Chee, “Chee,” provided land planning and development advice and services to the plaintiffs in the years 2006 and 2007. The plaintiffs seek a finding from this court that the parties were in a fiduciary relationship during the term of those services. They seek an additional finding that Chee breached one or more of his fiduciary duties to the plaintiff. They seek a further finding that Chee was negligent in the provision of those services. The claim is limited to punitive and exemplary damages only. The plaintiffs have conceded that they suffered no pecuniary losses. The parties arrived at partial minutes of settlement in respect of the balance of the plaintiffs’ claim and the counterclaim.

BACKGROUND

(i) The Parties and other Key Actors

[ 2 ] Oskar United Group Inc., 1714469 Ontario Inc. and 1600308 Ontario Inc. are related companies owned and operated by individuals who will be referred to here by their anglicized names: Allan Hung, Stanley Hung and Robert Hong. Allan Hung and Stanley Hung will herein be referred to as “Allan” and “Stanley” respectively. They are the sons of Robert Hong whose surname differs from the anglicized version of their last name.

[ 3 ] Oskar United Group Inc. is the parent company of the above numbered companies. The numbered companies were formed to hold land acquired by Oskar United Group Inc. The Oskar United Group Inc. is hereinafter referred to as “Oskar United.” 1714469 Ontario Inc. is hereinafter referred to as “171.” 1600308 Ontario Inc. is hereinafter referred to as “160.”

[ 4 ] Allan and Stanley were responsible for the day to day operations of the plaintiff companies.

[ 5 ] The defendant Chee was the principal and directing mind of Mi-Ko Urban Consulting Inc. (“MKC”) and Mi-Ko Urban Inc (“MKU”).

[ 6 ] The property referred to in the evidence as “15770 Concession 7, King Township, York Region” and also as “7 th Concession, King Township” is hereinafter referred to as the “Oskar property.” The lands located to the north of the Oskar property, adjacent to the village of Pottageville, and which were previously owned by David Bachly and/or Marilyn Bachly, are hereinafter referred to as the “Bachly property.”

[ 7 ] Oskar United was formed on December 22, 2003. It was principally involved in the business of land acquisition for the purpose of holding and developing it. This was called land-banking or land-stocking. 160 was incorporated on December 22, 2003. Oskar United acquired the Oskar property on January 19, 2004, and placed title in the name of 160.

(ii) The Relationship between Oskar United and Chee

[ 8 ] In early 2006, Chee began to provide services to Oskar United. Those services will be discussed in greater detail below.

[ 9 ] In a curriculum vitae attached to a letter addressed to Oskar United and dated January 20, 2006, Chee introduced himself as an urban planner/project co-ordinator, holding professional affiliations with the Ontario Professional Planners Institute and the Canadian Institute of Planners.

[ 10 ] In April 2006, operating under MKC, Chee began to provide regular reports to Oskar United. These reports included analyses of permitted uses, general policies, planning analyses and development processes relating to acquired or targeted properties. This was a trend that was to continue between the parties for approximately the next 16 months. On July 20, 2006, Chee first reported to Oskar United with respect to the development potential of the Oskar property.

[ 11 ] Complying with a request in a report containing recommendations in respect of the Oskar property, 160 provided MKC a retainer cheque in the amount of $2,500, dated August 16, 2006.

(ii) The Oskar/Bachly Initiative

[ 12 ] In his report of November 27, 2006, Chee first referenced the Bachly property. Chee advised Oskar United that he was attempting to contact the owners of those “lands to the north” of the Oskar property to inquire about their interest in selling or entering into a joint venture agreement.

[ 13 ] In a summary memo dated December 8, 2006, Chee provided Allan with a self-evaluation report in which he described his own area of expertise to include the preparation of project feasibility studies, development applications, project co-ordination and approval facilitation. Chee went on to state as follows: “ in addition to the above skills and expertise, I am also a licensed real estate sales person. This has provided me with the understanding of property evaluation, costs, leasing and purchase and sales agreement” (emphasis added).

[ 14 ] Chee provided his own job description as follows:

“Job Description – currently, I assess my job description as acting project manager. The role of this position is to direct, co-ordinate and oversee development projects ( sic ). Further, it is the duty and obligation of the project manager to provide to the company, objective opinions of the projects and to point out opportunities for cost effectiveness.”

[ 15 ] On January 2-3, 2007, an exchange took place between Chee and Allan via electronic mail (“email”). The exchange read as follows:

Chee to Allan: “just got off the phone with the owner of the lands to the north. $595,000 for 44 plus or minus acres.”

Allan to Chee: “can you please draft a purchase agreement of this north side property, thank you. Should we start offering from $400,000?”

Chee to Allan: “let me talk with the owners. What I would do is to inform them that we are interested in entering into discussion to acquire their property. Then I would talk about the terms first. As I said, price can hurt but bad terms could be fatal. It is better to leave it for a couple of days. Do not want to look too anxious.”

[ 16 ] In his report of January 8, 2007, Chee provided Oskar United with an update on the Oskar/Bachly initiative:

“7 th Concession, King City: They are designated ‘Countryside’ in the Oak Ridges Moraine Plan. Since the lands are just south of the hamlet at Lloyd town Road and 7 th Concession, there may be opportunity to request for an Official Plan amendment to allow these lands to be part of the hamlet. Currently, we are in contact with the owners of the land to the north. They had expressed interest in selling their 44 acres for $595,000.

Recommended process: acquire the northerly lands and implement a secondary plan for area: This is timely process. It is estimated to take two to three years for the studies to be complete and re-assessment of the proposal.”

[ 17 ] During the period that Chee was providing services to Oskar United, he was a licensed salesperson for Homelife/Leader Inc. brokerage out of Markham. A number of real estate listings appeared on the Multiple Listing Services with his name as salesperson.

[ 18 ] In an email addressed to Stanley dated April 22, 2007, referencing the “7 th Concession,” Chee posed the following question:

“Stanley; 7 th concession, is the company still interested? If not, let me know by the end of the day tomorrow. Thanks. Pchee.”

[ 19 ] On April 24, 2007, Chee faxed Stanley a copy of what purported to be the outline of an offer with respect to the Bachly property. The proposal was addressed to Bachly and contained the following details:

“Before I begin, I would like to apologize for the lateness of my letter. To further our telephone conversation of April 3, 2007, I had discussed the matter with my clients. At this time, they are considering to offer ( sic) the following:

Purchase Price $525,000

Down Payment on closing .....

Balance of Purchase .......

Closing January 31, 2008

Conditions.......

As I understand from my discussion with Mr. Stanley Hung, one of the principles (sic) of my client’s company, this proposal should be close to what you had discussed with him” (emphasis added).

[Content continues exactly as in the original judgment…]

Justice J. McCarthy

Date Released: March 7, 2012