ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-07-337379
DATE: 20140321
BETWEEN:
BAO DUC NGUYEN
Plaintiff
– and –
IWIN LEE, 1634502 ONTARIO INC., PHUOC NGHIA LY and VA LAY DUONG
Defendants
Bao Duc Nguyen, In Person
Harry J. Doan, for the Defendants
HEARD: March 10, 11,12,13 and 14, 2014
Firestone J.
[1] In this action the Plaintiff Bao Duc Nguyen (“Bao”) sues the defendant Iwin Lee (“Lee”) for repayment of two loans totalling $135,000.00. Lee’s Vietnamese name is Hien.
[2] The first loan was in the amount of $70,000.00. This sum was made up of amounts Lee had borrowed over time for his jewellery business known as “The Jewellery House”.
[3] The second loan was in the sum of $65,000.00 and was advanced by Bao in order to complete the sale of Bao’s property located at 1276 Bloor Street, Toronto, Ontario to Lee in 2004.
[4] These loans as well as the terms of their repayment were set out in an agreement (“the agreement”) dated September 25, 2004 and executed between the parties on September 26, 2004. In the agreement Boa is listed as the lender and Lee as the borrower. The terms of the agreement are as follows:
Bao Duc Nguyen lend to Iwin Lee
I, Bao Duc Nguyen, lend to Iwin Lee, at 1276 Bloor St. W. $65000 (sixty-five)
Thousand) and Iwin Lee owes me from before $70,000 (seventy thousand).
In total Iwin Lee owes $135,000 (one hundred and thirty-five thousand).
This amount, $135, 000, I give Lee for a one year term. Irwin Lee can pay me
anytime. This funding begins on September 30th, 2004 to September 30th, 2005.
[5] Boa at paragraph 14 of his statement of claim, (“claim”) pleads as follows:
Since 2004 and up to about 2006, Lee had been paying the plaintiff
back periodically. The defendant recorded his payments on a piece of paper.
[6] At paragraph 15 of the claim Bao pleads:
As of about February 2007(the last time Lee made a payment and
produced this piece of paper), Lee still owed the plaintiff a total of
$67,500 dollars.
[7] The defendants at paragraph 18 of their amended statement of defence (“defence”) plead as follows:
“After the closing we made the following loan payments to plaintiff”:
Date Amount
May 26, 2005 $23,200
May 27, 2005 $35,000
May 28, 2005 $35,000
September 14, 2005 $10,000
April 29, 2007 $10,000
[8] There is a dispute between the parties regarding whether any payments, and if so in what amount, have been made in satisfaction of the loan agreement executed September 26, 2004.
[9] At trial the plaintiff’s position is that none of $135,000 loan had been repaid. The defendants on the other hand argue that in fact there has been an overpayment.
Analysis
(a) The May 26, 2005 Bank Draft
[10] Exhibit 11 is a copy of a Scotiabank bank draft dated May 26, 2005 payable to the plaintiff Bao in the sum of $23,200.00 along with the supporting savings account history report. This history report confirms this sum was debited from Phuoc Nghia Ly’s (“Phuoc”) account on that day. Phuoc is Lee’s sister.
[11] Bao testified. I found him to be credible and honest. He testified that he never got the bank draft.
[12] Bao testified that his ex-wife is Phuong Thi Nguyen (“Phuong”).Their marital status is unclear. Her maiden name is Bui. I found her evidence to be inconsistent and unreliable. She testified in examination in chief that she received a cheque (referring to the bank draft) in the sum of $23,200.00. She stated that this was reimbursement for things she sold and was not meant for her husband.
[13] On cross-examination she denied that she received jewellery on consignment from Lee to sell. She testified that it was the other way around, namely that she gave things to Mr. Lee to sell and that he borrowed her jewellery for display.
[14] Phuong further testified that she did pick the bank draft up from Lee’s store and that it was cashed by Bao. The $23,200.00 payment however was not payment on the loan, but rather payment for jewellery she had sold to Lee.
[15] I do not accept this evidence in light of the fact that the draft was made payable to Bao and not Phuong. If the draft was meant to reimburse Phuong then it would have been made payable to her and not her ex-husband. As well, there was no evidence led that Bao paid such sum to his ex-wife from this bank draft payable to him.
[16] Lee testified that commencing on about the year 2000 he entered into a consignment jewellery buying relationship wherein he would give jewellery (from his shop carrying on business as The Jewellery House) on consignment to Phuong to sell. I found that Lee gave his evidence in a very straightforward consistent manner. His evidence is reliable. He testified that initially Phuong took jewellery valued at $500.00 to $1,500.00. The procedure followed was that Lee would give Phuong a receipt of what she had taken. It was initialed by her to confirm such receipt. The agreement was that Phuong had two months to sell the jewellery or bring it back.
[17] Lee testified that in May 2005 Bao and Phuong came to his jewellery shop. At that time they indicated that they were in need of money. As a result, Lee arranged to borrow $23,200.00 from his sister Phuoc. Lee testified that Bao and Phuong came to get the bank draft.
[18] Phuoc testified that she purchased the $23,200.00 bank draft because her brother asked her to so he could repay money he owed to Bao, who was now in urgent need of the money.
[19] She testified that she gave the bank draft to her brother and her brother gave it to Bao.
[20] Based on all the evidence, I find that the sum of $23,200.00 was paid on Lee’s behalf to Bao. I accept the evidence of Lee and Phuoc that the bank draft was obtained at Lee’s request in order to pay back monies owing by Lee pursuant to the agreement.
[21] There was insufficient evidence led regarding whether Bao actually cashed the bank draft or whether someone else cashed it on his behalf. It is, however, clear and I accept that the bank draft was made payable to Bao and that it was picked up by him or by his ex-wife on his behalf. This sum therefore, has been repaid.
(b) The May 27, 2005; September 14, 2005 and April 29, 2007 notations.
[22] Exhibit number 5 contains a copy of the agreement dated September 25, 2004, and executed September 26, 2004, between Bao and Lee.
[23] In addition, there is also a copy of the same agreement dated September 25, 2004. This one however is executed September 27, 2004, not September 26, 2004. The original was marked as exhibit 10. The typewritten terms of the agreement on the front side of the document are the same.
[24] The difference between the two agreements is that on the September 27, 2004 version there are hand written notations on the front and back page regarding alleged payments made. On page 2, the following notations are made:
• Received by dear brother Hien 35,000 May 27, 2005
• 14 Sept-2005 10,000
• April 29,2007 12500 10000
There are initials beside each of these payments.
[25] Bao testified that those initials seem like his ex- wife’s signature. He said he never received any repayment from Lee. Bao stated that if she got money he would not know about it.
[26] Bao testified that he conducts his affairs differently from his ex-wife. He does not tell her what he gets and she doesn’t tell him what she gets. There is no evidence that this arrangement was ever communicated to Lee or to Phuoc or to his wife Va Lay Duong (“Va”) during the relevant time period.
[27] Phuong, during her testimony confirmed that the initials beside each of the amounts listed on the back of the agreement executed September 27, 2004, acknowledging receipt of payment are in fact hers. She stated however she never received the money. All she ever received was the $23,200.00 bank draft.
[28] She testified that she signed the paper because she listened to Mr. Lee.
[29] Lee testified that the second agreement was executed at the plaintiff’s request because the first one was lost.
[30] Lee testified that the various payments referred to in the agreement as well as a bank draft were paid at that time because the plaintiff and his ex-wife were in desperate need of repayment.
[31] Lee testified that the writing and initials on the agreement executed September 27, 2004, are that of the plaintiff’s wife Phuong. He stated that on May 27, 2005, the plaintiff and his wife attended at the store. Lee wanted some acknowledgment for the $35,000.00 payment. It was for that reason that Phuong wrote down “received from dear brother Hien $35,000.00 and initialed it.
[32] Regarding the payments on September 14, 2005, and April 29, 2007, Lee stated that all initials beside the amounts listed are those of Phuong. This is consistent with Phuong’s own evidence.
[33] Lee further testified that they both came to the shop to collect money. He had Phuong initial receipt of payment because they were husband and wife. He had no reason to believe they were not married.
[34] Va testified at trial. She gave her evidence in a very straight forward and sincere manner. I found her evidence to be reliable and credible.
[35] She testified that Bao and Phuong always came to the store together and that she only saw Lee speak to both of them together.
[36] Va testified that she was in The Jewellery House on May 27, 2005, September 14, 2005, and April 29, 2007, when both Bao and Phuong picked up the money.
[37] Based on the evidence presented I find that the payments of $35,000.00 on May 27, 2005, $10,000.00 on September 14, 2005, as well as $12,500.00 and 10,000.00 on April 29, 2007 were made in cash to be applied towards the amount owing pursuant to the agreement.
[38] It is clear on the evidence that receipt of such payments was specifically acknowledged by Phuong who initialed receipt of such payments. At all times Lee, Phuoc and Va were under the impression that they were still married. They had no reason to believe otherwise.
[39] I do not accept Phoung’s evidence that she signed but never received the payments beside her initials. This is inconsistent with the totality of the other evidence.
(c) The May 28, 2005 Notation.
[40] On the first page of the agreement executed September 27, 2004, there is notation dated May 28, 2005, for $35,000. Unlike the other notations it is not initialed.
[41] Paragraph 18 of the plaintiff’s amended statement of claim specifically pleads that on that date a loan payment in the sum of $35,000.00 was made to the plaintiff.
[42] Lee now argues at trial that the sum represents the amount owing by Phoung for jewellery she took on a consignment basis from Lee for which neither payment nor return of such jewellery ever occurred.
[43] Lee argues that in fact the actual amount of the jewellery taken on consignment by Phoung is $45,300.00 as set forth in the jewellery receipt dated April 22, 2003 (“the receipt”) initialed by Phuong and entered as exhibit 9.
[44] At trial Phoung testified that it is her initial at the bottom of the receipt. She testified however that the receipt was actually created by Lee to submit to the insurance company to obtain reimbursement for jewellery taken as a result of a robbery which occurred.
[45] Bao, during his examination in chief, testified that in fact a robbery had taken place and that his ex-wife was at home when it occurred. He too testified that the receipt was for the insurance company.
[46] Lee denied that he ever created this receipt for insurance purposes. He testified that in fact it was created as part of the consignment relationship between himself and Phoung. It was to serve as confirmation that she has received the listed jewellery. That is why Phoung signed at the bottom of the receipt.
[47] Lee testified that in May 2005 he requested that Phoung acknowledge she still had not returned the jewellery or payment from its sale in accordance with the consignment relationship between them. At that time Lee had misplaced the receipt but recalled the amount was around $45,000.00.
[48] Lee further testified that Phoung suggested she would write down $35,000.00. Mr. Lee stated $35,000.00 was not the correct amount. In response, Phoung stated she would write down $35,000.00 and they could sort it out once the jury receipt was located.
[49] I do not accept Phoung’s evidence that the jewellery receipt was created for insurance purposes. I base this on the fact that if it was created for insurance purposes there would have been no need or purpose served by having Phoung initial the invoice.
[50] As well, the amount of the invoice, as well as the description of items differs from the proof of loss which was submitted to the plaintiff’s insurance company and marked as Exhibit 7.
[51] I do not, however, give Lee credit for $35,000.00 based on a single notation which is not initialed by any of the parties. If in fact the notation was to represent a credit to be applied to the loan (and not an actual loan payment as originally pleaded) surely it would have been initialed. It is not.
[52] In addition, even if I accept that the notation dated May 28, 2005, in the sum of $35,000.00, was meant to represent monies owing pursuant to the consignment agreement, that was an agreement - as confirmed by Lee himself - between himself and Phoung and not between Bao and Lee. The contractual relationship regarding such consignment for which Lee seeks a credit was not based on a business relationship between anyone other than Lee and Phoung.
[53] As a result there is no basis upon which to now give Lee a credit on the amounts owing pursuant to the agreement arguably by Phoung based on a written notation which was not initialed by either Bao or Phoung and for which there is no amending agreement confirming that such a credit is to be applied.
[54] I have considered the evidence regarding the sale and transfer of the property located at 1276 Bloor Street West, Toronto, Ontario (“the property”).There is no evidence that any dealings with the property registered on title after October 12, 2004 should be found to be void as fraudulent conveyances as requested by the plaintiff.
[55] There is no evidence to support a declaration that the property is held by the defendants in a constructive trust for the benefit of the plaintiff.
[56] I therefore find that from the original agreement amount of $135,000.00 the sum of $90,700.00 has been repaid leaving a balance of $44,300.00 owing by Lee.
[57] The Plaintiff Bao shall therefore have judgment against Lee in the sum of $44,300.00 plus pre-judgment and post judgment interest in accordance with the Courts of Justice Act, R.S.O. 1990, c.C.43.
[58] The action against the defendants 1634502 Ontario Inc., Phuoc and Va is dismissed.
[59] Costs submissions are to be provided by all parties by April 22, 2014.
Firestone J.
Released: March 21, 2014
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
BAO DUC NGUYEN
Plaintiff
– and –
IWIN LEE, 1634502 ONTARIO INC., PHUOC NGHIA LY and VA LAY DUONG
Defendants
REASONS FOR JUDGMENT
Firestone J.
Released: March 21, 2014