COURT FILE AND PARTIES

COURT FILE NO.: CV-13-487129

DATE: 20140123

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Chi-Kin Lam and Wing-Fu Hui, Plaintiffs

– AND –

Vanith Kandasamy, 2282697 Ontario Inc., Jian Yu Song, Tian Qing Liu, and Jue Chen, Defendants

AND RE: Jian Yu Song, Tian Qing Liu, and Jue Chen, Plaintiffs by Counterclaim

– AND –

Chi-Jin Lam, Wing-Fu Hui, Mansoura Development Inc., and Rebecca Chin, Defendants to the Counterclaim

BEFORE: Justice E.M. Morgan

COUNSEL:
Joy Casey, for the Plaintiffs

Enzo Di Iorio, for the Defendants, Jian Yu Song, Tian Qing Liu, and Jue Chen

HEARD: January 23, 2014

ENDORSEMENT

[1] The Plaintiffs seek various heads of relief in this motion, chief among them being an injunction ensuring the preservation of the net proceeds (after payment of the mortgage debt) from the sale of the property at 17210 Leslie Street, Newmarket, ON.

[2] The seller and former owner of the Leslie Street property is the Defendant, 2282697 Ontario Inc. (“228”). The Plaintiffs and the Defendants, Jian Yu Song, Tian Qing Liu, and Jue Chen (the “Shareholder Defendants”) are shareholders of 228.

[3] It would appear that the mortgagee has now been paid and that the net proceeds of sale after the mortgage payment come to a total of $581,027.89. Of this amount, $232,400.08 has been deposited in Royal Bank of Canada chequing account no. 06462-1008010 owned by 228. The balance of $348,627.81 are not in the account and have been distributed in an unknown way by some or all the Shareholder Defendants.

[4] Mr. Di Iorio seeks an adjournment of today’s motion in order to cross-examine the Plaintiffs on the affidavits in the motion record. He submits that there is no urgency to the motion as the Leslie Street property has now been sold and the funds are available in 228’s Royal Bank account to satisfy the Plaintiffs’ claim to a share of the proceeds of sale.

[5] Ms. Casey states that the Plaintiffs have a claim to more than the amount currently in 228’s Royal Bank account. She also submits that the Shareholder Defendants should not have taken any of the proceeds of sale out of 228’s bank account, and that the fact that a large amount is missing is a matter of great concern to the Plaintiffs.

[6] As a term of adjournment, Ms. Casey seeks an order that the balance of the proceeds of sale be paid into 228’s Royal Bank account by the Shareholder Defendants. She also submits that the entire net proceeds of sale must remain in that account pending the return of the motion.

[7] Mr. Di Iorio opposes any term of adjournment. He submits that the matter should simply be scheduled on a new date far enough in the future to allow for cross-examinations to take place.

[8] In my view, Ms. Casey makes a good argument that the net proceeds of sale must be preserved pending the return of the injunction motion, and that no funds should be dissipated in the meantime.

[9] The Shareholder Defendants are to forthwith pay $348,627.81 into the Royal Bank of Canada chequing account no. 06462-1008010 owned by 228. The entire balance in that account – which will be $581,027.89 after the deposit by the Shareholder Defendants – shall remain in the account for the duration of this adjournment. For greater certainty, neither the Plaintiffs nor the Shareholder Defendants, nor anyone else, shall withdrawal, transfer, or in any other way remove any funds from 228’s Royal Bank account until determination of this motion on the merits or until further order of this court.

[10] In all other respects, the status quo in respect of the business and affairs of 228 shall remain unchanged pending return of the motion. The directors and officers of 228 shall take no steps and engage in no activity on behalf of 228 without the consent of all the shareholders of 228 or further order of this court.

[11] The motion is adjourned. Counsel shall attend at motion scheduling court at the earliest possible opportunity in order to secure a new return date for the Plaintiffs’ motion.

[12] Costs of today’s appearance are reserved to the judge hearing the motion on the merits.

Morgan J.

Date: January 23, 2014