ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 11-CV-425435
DATE: April 2, 2012
BETWEEN:
Chui Ping Chan
Plaintiff
- and -
William D. Gray
Defendant
COUNSEL:
• Charles Wagman for the Plaintiff
• William D. Gray, self-represented
HEARING DATE: March 30, 2012
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION
[ 1 ] The Plaintiff Chui Ping Chan and the Defendant William D. Gray both bring motions for summary judgment. In her motion, Mrs. Chan seeks $45,000 plus costs on a substantial indemnity basis of $17,000.73. In his cross-motion, Mr. Gray, who is self-represented, seeks a judgment dismissing Mrs. Chan’s action plus costs of $500.
[ 2 ] The evidence for the summary judgment motions consisted of an affidavit from Mrs. Chan, who was not cross-examined, and an affidavit from Mr. Gray, who was cross-examined. Mrs. Chan’s account of the facts is cogent, corroborated, and believable, and she is a credible witness. Mr. Gray’s account of the facts is unbelievable, and Mr. Gray is an unreliable and not a credible witness. Mrs. Chan proves her claim. The legal theory of Mr. Gray’s defence is untenable.
[ 3 ] In my opinion, there are no genuine issues requiring a trial. For the reasons that follow, I grant Mrs. Chan summary judgment as requested.
B. MRS. CHAN’S ACCOUNT OF THE FACTS
[ 4 ] Mrs. Chan’s account of the facts is as follows.
[ 5 ] In October 2009, Mrs. Chan contacted Mr. Gray, who at that time was licensed as a lawyer, and she asked him to act for her in the sale of two taxi licenses. She was selling one licence to Kanwaljit Singh Sikand for $208,000. The second taxi license was being sold to John Velliaris for $215,000.
[ 6 ] Mr. Gray drafted two agreements of sale that indicated the purchase price was $130,000 respectively. He explained to Mrs. Chan that it would be advantageous that the balance of the purchase price be paid in cash and that the transactions be written up as having a $130,000 purchase price.
[ 7 ] The Sikand sale closed, and Mrs. Chan received $130,000 from Mr. Gray and the balance from Mr. Sikand.
[ 8 ] The Velliaris sale closed, and Mrs. Chan received $160,000 from Mr. Gray and $5,000 from Mr. Velliaris. Mr. Gray advised her that an additional $40,000 had been received from Mr. Velliaris and that he had deposited this money into a term deposit that would come due on January 5, 2010. Based on a conversation with Mr. Velliaris, Mrs. Chan understood that Mr. Gray had actually received $50,000 from Mr. Velliaris and returned $5,000 to Mr. Velliaris.
[ 9 ] In December 2009 and in early January 2010, Mrs. Chan’s new lawyer wrote Mr. Gray and outlined the history of the matter and demanded payment of the outstanding $45,000. The letter of December 22, 2009 stated:
Please be advised that I have been consulted by Mrs. Chui Ping Chan in relation to her sale of two taxi-cab licenses. ….
My client advises that the licence that was sold to Mr. Velliaris was sold for $215,000 and that the licence that was sold to Mr. Sikand was sold for $208,000. Of some concern, both contracts indicate a sale price of $130,000. Mrs. Chan advises that it was your suggestion that the contracts both set out a sale price of $130,000 and that the balance of the purchase price be paid in cash. That does not appear to have been an appropriate suggestion.
With respect to the sale of the licence to Mr. Velliaris, our client advises that she received $130,000 from you initially and thereafter you paid her a further $30,000. With respect to the balance, you advised that $40,000 had been paid into a term deposit that was to come due on January 5, 2010.
The first concern is that Mrs. Chan advises that she did not instruct you to put the funds into a term deposit. The funds should be delivered to my client at this time.
The second concern is that the balance should have been $50,000 and not $40,000. The broker for this transaction has advised that he has spoken with the buyer. The buyer has indicated that for some reason, you paid him $5,000 of the purchase price back and indicated that you were going to retain $5,000. The buyer apparently acknowledged that he should not have received the $5,000 and has indicated that he is prepared to return the money to Mrs. Chan.
Assuming that Mrs. Chan does receive the additional $5,000, there would be owed to her the sum of $45,000. Please forward payment of that amount at this time. ….
[ 10 ] Mr. Gray did not respond to the letters, and Mrs. Chan did not receive any payment until the fall of 2010, when she received a $40,000 cheque drawn by Mr. Gray. Mrs. Chan attempted to cash the cheque, but there was a stop payment order.
[ 11 ] Mrs. Chan met Mr. Gray and asked and received a replacement $40,000 cheque from him, but, once again, there was a stop payment order.
[ 12 ] Subsequently, Mrs. Chan’s lawyer wrote another series of demand letters to Mr. Gray. There was no response from Mr. Gray, and on April 29, 2011, Mrs. Chan commenced this action against him.
C. MR. GRAY’S ACCOUNT OF THE FACTS
[ 13 ] Mr. Gray’s account of the facts is as follows.
[ 14 ] Although he had acted for the Mrs. Chan’s husband in the past and was acquainted with Mrs. Chan, Mr. Gray stated that he was not retained by her for the taxi license sales. Rather, he deposed that he was retained by Messrs. Sikand and Velliaris respectively, both of whom were new clients. Mr. Gray deposed that he told Mrs. Chan to retain her own lawyer for the transactions, but she chose not to do so.
[ 15 ] Mr. Gray prepared the contract for the Velliaris sale and the forms required by the City of Toronto for the transfer of a taxi license, which included a statutory declaration with respect to the execution of the agreement of sale and the consideration being paid for the transfer.
[ 16 ] Mr. Gray admits that he commissioned a false statutory declaration signed by Mr. Velliaris, who falsely declared that he was present when Mrs. Chan signed the agreement of sale.
[ 17 ] The purchase price noted in the Velliaris contract was $130,000. The taxi license sale closed on Friday, December 9, 2009, and on the day of the closing of the transaction, Mrs. Chan received a $130,000 cheque and a $30,000 cheque drawn on Mr. Gray’s trust account.
[ 18 ] Mr. Gray deposed that Mr. Velliaris had asked him to deliver the $30,000 cheque to Mrs. Chan. Mr. Gray deposed that he had “accommodated” Mr. Velliaris by delivering this additional money to Mrs. Chan.
[ 19 ] Pausing here, it should be noted that if the $30,000 was not an accommodation as alleged by Mr. Gray but part of the purchase price of the sale, then Mr. Velliaris had falsely declared in his statutory declaration, which was witnessed and commissioned by Mr Gray, that the purchase price was $130,000 and that there was no consideration other than as set out in the agreement.
[ 20 ] Two days later, on December 11, 2009, an unknown person delivered $40,000 in cash to Mr. Gray’s office with the message that it was for Mrs. Chan. Mr. Gray learned about this delivery late in the day, and he phoned Mr. Chan asking for Mrs. Chan. When Mr. Chan advised that he was not talking to his wife due to a disagreement, Mr. Gray decided to take the $40,000 home for safe-keeping and to contact the Chans again after the weekend.
[ 21 ] The next day, Saturday December 12, 2009, after attending to some personal matters in the morning including a visit to a veterinary hospital, Mr. Gray took the $40,000 cash to his office, where he worked for the rest of the day.
[ 22 ] During the day at his office, Mr. Gray received $180,000 in cash from a Mr. Dinardo to be deposited in Mr. Gray’s trust account. The $180,000 was subsequently the subject matter of a Law Society investigation, but for present purposes, its receipt is simply part of Mr. Gray’s account of the factual background.
[ 23 ] At 5:00 p.m., Mr. Gray left his office to drive home. He placed in his vehicle three file folders for court cases, an urn that containing the cremated ashes of the family dog, (The urn had been picked up from the veterinary’s office as a part of the morning tasks) and the $220,000 in cash.
[ 24 ] Mr. Gray put the cash in a brown paper bag, which he placed in a compartment in the trunk of the car.
[ 25 ] On the way home, Mr. Gray stopped at a gas station to purchase a lottery ticket. While purchasing the ticket, he left the car running. He did not want the ashes in the urn to freeze.
[ 26 ] When he left the store at the gas station, he saw his car being stolen by a young man. Mr. Gray reported the theft of the car to the police, but did not mention the loss of the cash. He explained that he did not want to look like a complete idiot for leaving the car unattended.
[ 27 ] The licence plates of Mr. Gray’s stolen vehicle were recovered a few days after the theft. The vehicle and its contents were never recovered.
[ 28 ] Around this time, Mr. Gray reported the theft to Mr. Chan and left a message for Mrs. Chan to call. When she did call, Mr. Gray told her that he had obtained a $40,000 term deposit. Mr. Gray says that this was a false statement but not a lie. On his cross-examination, Mr. Gray’s evidence on the matter of the term deposit was as follows:
A. …. I spoke to Henry Chan about the matter on the 14th of December of 2009, and at that discussion I then told Mrs. Chan that I had put $40,000 in a term deposit, which is not true. There is no term deposit.
Q. So you lied to her?
A. I didn’t lie to her. I didn’t tell her the truth.
Q. I am missing the distinction.
A. Well, so am I. A lie is something intentional. The truth is not intentional.
Q. Why would you tell her that you had put the money into a term deposit for her when you did not?
A. Because I was kind of hopeful that the car would be recovered in a very short period of time including the funds.
Q. You’re buying some time with her?
A. That’s correct. I’m buying some time for the car to be recovered and for the funds to be returned to her, I gather, or for her.
Q. Why didn’t you tell her the truth that here’s what happened. I had the $40,000 and I put it in my trunk. The car got stolen. Oops, sorry about that. Why didn’t you tell her the truth?
A. I told her that later on.
Q. No. You told her about the $40,000 term deposit. Instead of telling her something that wasn’t the case, wasn’t the truth, why didn’t you tell her the truth?
A. Because ….
Q. Why didn’t you tell her what happened?
A. Because after discussing the matter with her husband first then we decided to say we put a term deposit in place.
Q. So you decided to give her a story instead of telling her what you say in your affidavit actually did happen?
A. I didn’t give her a story. I simply indicated to her I put the money in a term deposit certificate.
Q. Well, it seems to be a story because it’s not so.
A. Well, if you want to call it a story be my guest.
Q. What do you call it?
A. I don’t tell. I tell exactly what took place.
[ 29 ] Mr. Gray admits that he did not respond to the correspondence from Mrs. Chan’s lawyer in December 2009 and January 2010 seeking the recovery of $45,000.
[ 30 ] Mr. Gray admits that in the fall of 2010, he drew two $40,000 cheques payable to Mrs. Chan but put stop payments against the cheques.
[ 31 ] Such is Mr. Gray’s account of the facts.
[ 32 ] From the above facts, Mr. Gray submits a twofold defence. First, he relies on the law of bailment, and he argues that as a gratuitous bailee, he is not liable for the theft of the cash in his vehicle. Second, he relies on the doctrine of ex turpi causa , and he submits that if the purchase price for the taxi licence was not $130,000, as he believes it was, but rather $215,000, as alleged by Mrs. Chan, then she is a party to a scheme to avoid capital gains tax by hiding the true consideration for the sale.
D. DISCUSSION
[ 33 ] In the context of the Court’s enhanced powers under rule 20.04 (2.1) of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194 on a motion for summary judgment to weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence, on the basis that the parties have put their respective best evidentiary cases forward, and following the directions of the Court of Appeal in Combined Air Mechanical Services Inc. v. Flesch , 2011 ONCA 764 , about the circumstances in which a summary judgment is appropriate, in my opinion, there are no genuine issues requiring a trial.
[ 34 ] Mrs. Chan’s account of the facts is the true version. She was not cross-examined on her affidavit, and her account is corroborated by the documentary evidence and by the believable parts of Mr. Gray’s account of the facts and by his admissions during his cross-examination.
[ 35 ] It is painfully obvious that Mr. Gray is not a credible or reliable witness. He never refuted the allegations contained in the correspondence from Mrs. Chan’s lawyer. He does not know the difference between a mistake and a lie, and what he apparently believes are mistakes are lies.
[ 36 ] I find that Mr. Gray lied when he deposed that he was not acting for Mrs. Chan. He was acting for both sides in the transactions.
[ 37 ] I find that he knew the true purchase price for the licences, but he designed a transaction that was improper and illegal in that it was designed to conceal the true consideration for the sale of the taxi licences. I find that Mrs. Chan did not agree to this scheme, and, in any event, she has never concealed the true purchase price for the licences. I find that Mr. Gray commissioned false affidavits from the purchasers of the taxi licences about the price of the taxi licences.
[ 38 ] I find that Mr. Gray lied when he said that the additional funds received from Mr. Velliaris were not part of the purchase price but an accommodation payment by Mr. Velliaris. The funds received from Mr. Velliaris were payment of the purchase price, but Mr. Gray did not account for these funds; rather, I find that Mr. Gray did not bill Mrs. Chan but paid himself $5,000 from the purchase funds, gave Mr. Velliaris a $5,000 kickback and lost $40,000 when it was stolen along with his vehicle.
[ 39 ] I find that Mr. Gray did not provide the police with a complete report of the property lost in the theft of his vehicle. He then lied to Mrs. Chan about having purchased a term deposit.
[ 40 ] I find that Mr. Gray falsely accused Mrs. Chan of being a tax cheat for hiding the true consideration for the sale of the licences. From the outset, Mrs. Chan and her lawyer openly objected that it was improper to write up the transaction showing a $130,000 purchase price.
[ 41 ] I find that Mr. Gray wrote cheques to Mrs. Chan that he did not honour and never intended to honour in order to buy time to avoid paying Mrs. Chan’s claim.
[ 42 ] No trial is necessary to make the above findings of fact. In my opinion, this is an appropriate case for a summary judgment.
[ 43 ] The above factual findings also dispose of Mr. Gray’s ex turpi causa defence. There is no evidence that Mrs. Chan was a tax cheat and the evidence is that she early and openly protested that Mr. Gray had improperly written up the transactions.
[ 44 ] With one additional observation, the above factual findings also dispose of Mr. Gray’s bailee defence. The observation is that Mr. Gray was not some sort of gratuitous bailee who found and then lost without gross negligence, the bailor’s money; he was a lawyer closing a sale transaction, and he was obliged to account for the purchase funds, which he failed to do.
E. CONCLUSION
[ 45 ] For the above reasons and with the additional comment that Mr. Gray’s misconduct justifies an award of substantial indemnity costs, I grant Mrs. Chan’s summary judgment motion and I dismiss Mr. Gray’s cross-motion.
Perell, J.
Released: April 2, 2012
COURT FILE NO.: 11-CV-425435
DATE: April 2, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Chui Ping Chan
Plaintiff
‑ and ‑
William D. Gray
Defendant
REASONS FOR DECISION
Perell, J.
Released: April 2, 2012.