COURT FILE NO.: CV-14-507549

DATE: 20141209

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

MEI QING SUSAN WU, CHIU YUE NG (by his Litigation Guardian MEI QING SUSAN WU), MEI YING WU (by her Litigation Guardian MEI QING SUSAN WU), MEI AI WU (by her Litigation Guardian MEI QING SUSAN WU) and FUNG TIM NG KWAN (by her Litigation Guardian MEI QING SUSAN WU)

Plaintiffs

– and –

MEI TIM NG

Defendant

Gary J. McCallum for the Plaintiffs

Heng (Pandora) Du for the Defendant

HEARD: December 5, 2014

PERELL, J.

REASONS FOR DECISION

A. INTRODUCTION

[1] The Defendant Mei Tim Ng ( “Mei-Tim”) lives in Toronto. She is sued by her siblings, who respectively live in Toronto, Markham, Vancouver, and Guangzhou City in the People’s Republic of China (“China”).

[2] More precisely, the Plaintiff Mei Qing Susan Wu (“Susan”) lives in Toronto. The Plaintiff Chiu Yue Ng (“Chiu-Yue”) lives alternatingly in Markham, Ontario and in Guangzhou City. The Plaintiff Mei Ying Wu (“Mei-Ying”) lives in Guangzhou City. The Plaintiffs Mei Ai Wu (“Mei-Ai”) and Fung Tim Ng Kwan (“Fung-Tim”) live in Vancouver.

[3] The Plaintiffs join three claims against their sister Mei-Tim.

[4] First, in the major claim, Susan and Chiu-Yue sue Mei-Tim with respect to an alleged interest in a condominium in Guangzhou City.

[5] Second, purportedly pursuant to the Succession Law Reform Act, R.S.O. 1990, c. S.26, Susan, Chiu-Yue, Mei-Ying, Mei-Ai, and Fung-Tim sue Mei-Tim for repayment of a $19,000 loan allegedly made by their mother Yu Zhen Yuang (now deceased) to Mei-Tim in 2004.

[6] Third, Susan sues Mei-Tim for repayment of a $10,000 loan that she alleges she made to Mei-Tim in 2004.

[7] The Defendant Mei-Tim brings a summary judgment motion dismissing all these claims against her on the grounds of: (1) lack of jurisdiction simpliciter; (2) forum non-conveniens; (3) another pending proceeding in Ontario; (4) abuse of process; and (5) the claims being statute- barred under the Limitations Act, 2002, S.O. 2002, c. 24. Sched. B.

[8] The Plaintiffs bring a cross-motion. For the eventuality that Mei-Tim’s summary judgment is dismissed, the Plaintiffs bring a motion: (1) to amend the style of cause to correct the misnomer that Chiu-Yue, Mei-Ying, Mei-Ai, and Fung-Tim sue Mei-Tim have been incorrectly identified as suing by litigation guardian; (2) to correct a currency conversion error in the statement of claim; and (3) transferring Toronto Small Claims Court Action (SC-13-00031251-0000) to the Superior Court and consolidating it with this action.

[9] For the reasons that follow, I dismiss the summary judgment motion and I grant the cross-motion.

B. FACTUAL AND PROCEDURAL BACKGROUND

[10] The evidence for this summary judgment motion was provided by affidavits from Susan and Mei-Tim. There were no cross-examinations.

[11] The parties were born in Guangzhou City, China. In 1990, the Defendant Mei-Tim moved to Hong Kong, and in May 2004, she immigrated to Canada. It seems that most of her family had already immigrated to Canada ahead of her.

[12] Susan, who lives in Toronto, deposed that in May 2000, she and Chiu-Yue and the Defendant Mei-Tim agreed to invest in a condominium in Guangzhou City in China. Susan says that: she contributed $30,000; Chiu-Yue contributed $18,000; and Mei-Tim contributed $19,800.

[13] Mei-Tim’s account of the acquisition of the condominium is different. She says that in May 2000, it happened that she and Chiu-Yue were in Guangzhou City, and they decided to purchase a condominium. She says that Chiu-Yue contributed 100,000 yuan for a 31% ownership interest and she contributed the balance of 223,460 yuan for a 69% ownership interest. She says she also paid 4,852 yuan for deed tax and that she paid the renovation fee.

[14] Mei-Tim says that around this time, she asked Susan to repay $30,000 from outstanding loans made between 1985 and 1991 and Susan wired the money on or about May 5, 2000. Mei-Tim deposes that she used the loan repayment monies to pay for the condominium.

[15] There is evidence of the money transfer to Mei-Tim in May 2000. There, however, is no documentary evidence of the alleged loans to Susan made between 1985 and 1991, and Susan says that since she was employed as a nurse and married to a doctor during this time, she had no need to borrow money from her sister. Mei-Tim responded that nurses and doctors in China receive paltry incomes and she insists that she did lend her sister the money.

[16] In any event, the condominium transaction closed, and payment receipts were received by just Mei-Tim and Chiu-Yue.

[17] However, title of the property is yet to be vested in any of the parties, apparently because of issues between the developer and local authorities. It remains uncertain when registration will occur. Mei-Tim deposed that when registration occurs it should be just for her and Chiu-Yue.

[18] After the incomplete closing, the condominium was nevertheless occupied, and it was used to provide accommodation for a younger brother, Chi Zhu Wu, now deceased, who suffered from mental and physical health problems.

[19] As noted above, in 2004, Mei-Tim came to live in Canada.

[20] In August 2004, Susan says that she lent Mei-Tim $10,000 and that their mother Yu Zhen Yuang (now deceased) lent Mei-Tim $19,000 in order for Mei-Tim to purchase a property in Toronto; i.e. 67 Invergordon Ave., Scarborough, Ontario. Susan says that there was an oral agreement that Mei-Tim would repay the loans once the mortgage on the Invergordon Ave. property was discharged.

[21] These loan transactions in August 2004 are denied by Mei-Tim. There is, however, a $10,000 promissory note dated September 1, 2004 attached as Exhibit “E” to Susan’s affidavit seemingly signed by Mei-Tim. Mei-Tim, however, says she never saw the note before these proceedings and did not sign it.

[22] As for a bank draft for $19,000 from her mother and the promissory note also attached as Exhibit “E” to Susan’s affidavit, Mei-Tim says there is no signature on the note nor does it indicate that the funds were borrowed to purchase the Invergordon Ave. property.

[23] In April 2008, Chi Zhu Wu passed away in Guangzhou City.

[24] In September 2009, Yu Zhen died in Vancouver without a will.

[25] In October 2011, Mei-Tim discharged the mortgage on the Invergordon Ave. property.

[26] Susan says that she did not learn that the mortgage on Mei-Tim’s home was discharged until October 2013.

[27] Meanwhile back in China, in October 2013, the Defendant Mei-Tim evicted Mei-Ying and by a lawyer’s letter from Chinese lawyers, she claimed ownership of the condominium in Guangzhou City.

[28] In November 2013, Susan brought an action at the Toronto Small Claims Court against Mei-Tim (SC-13-00031251-0000) with respect to the Guangzhou City condominium. Mei-Tim delivered a defence. The claim was for $25,000 with Susan waiving $5,000, which was above the monetary limit of the court.

[29] On January 8, 2014, a judge of the Toronto Small Claims Court adjourned the Small Claims Court Action sine die to allow Susan to address the Limitations Act of Ontario.

[30] On July 2, 2014, Susan and her siblings commenced this action against Mei-Tim for damages with respect to the condominium and for repayment of the loans allegedly made to Mei-Tim to assist her in purchasing the Invergordon Ave. property.

[31] In the fall of 2014, Mei-Tim brought this motion for a summary judgment.

C. DISCUSSION AND ANALYSIS

1. The Cross-Motion

[32] Since, I shall be dismissing the summary judgment motion, it is convenient to deal with the cross-motion first.

[33] It was simply a mistake by the Plaintiffs’ former lawyer to identify Chiu-Yue, Mei-Ying, Mei-Ai, and Fung-Tim as suing by litigation guardian. It was a mistake because they are not parties suffering from a disability and have the capacity to sue without a litigation guardian. They have now authorized this action. There is no reason not to amend the style of cause to correct the error and the correction was not opposed.

[34] Although the amendment was opposed, there is also no reason not to allow the Statement of Claim to be amended to correct the currency conversion error.

[35] As for the transfer of the Small Claims Court action, s. 107 (1) of the Courts of Justice Act provides that where two or more proceedings are pending in two or more different courts, then in certain circumstances the court may order that the proceedings be transferred to another court. Section 107 (1) states:

Consolidation of proceedings in different courts

107. (1) Where two or more proceedings are pending in two or more different courts, and the proceedings,

(a) have a question of law or fact in common;

(b) claim relief arising out of the same transaction or occurrence or series of transactions or occurrences; or

(c) for any other reason ought to be the subject of an order under this section,

an order may, on motion, be made,

(d) transferring any of the proceedings to another court and requiring the proceedings to be consolidated, or to be heard at the same time, or one immediately after the other; or

(e) requiring any of the proceedings to be,

(i) stayed until after the determination of any other of them, or

(ii) asserted by way of counterclaim in any other of them.

[36] Section 107 (2) provides that a proceeding in the Small Claims Court shall not be transferred without the consent of the plaintiff in the proceeding in the Small Claims Court. In the immediate case, the motion for transfer is made by the Plaintiffs, and, in my opinion, it is appropriate to make the transfer order. The motion was opposed, but there was no substance to the opposition.

[37] Accordingly, the cross-motion should be granted.

2. The Summary Judgment Motion

[38] As noted above, the Defendant Mei-Tim brings a summary judgment motion dismissing all claims against her on the grounds of: (1) lack of jurisdiction simpliciter; (2) forum non-conveniens; (3) another pending proceeding in Ontario; (4) abuse of process; and (5) the claims being statute-barred under the Limitations Act, 2002, S.O. 2002, c. 24. Sched. B.

[39] The arguments about another pending proceeding in Ontario and abuse of process are now met by the outcome of the countermotion. The Small Claims Court motion will be consolidated with the Superior Court action, so there will be one proceeding in Ontario, and I see no abuse of process.

[40] Mei-Tim argues next that the Plaintiffs’ action should be dismissed because Ontario does not have jurisdiction simpliciter as it is well-settled law that the state where the immoveable land or an interest in land is situated has exclusive jurisdiction over the property. See British South Africa Co. v. Comphania de Mocambique, [1893] A.C. 602 (H.L.). Mei-Tim submits that Susan and Chiu-Yue’s claim, which they purport to characterize as a breach of contract claim, is essentially an ownership to land claim within the exclusive jurisdiction of the Chinese Court.

[41] There is, however, no merit to Mei-Tim’s argument that the Ontario Court does not have jurisdiction simpliciter. Mei-Tim is a resident of Ontario, as are Susan and Chiu-Yue. The situation at bar is not a matter of a foreign defendant having attorned to this court’s jurisdiction. Mei-Tim is an Ontario resident; she is a domestic defendant over which the court has an in personam jurisdiction, and most importantly Susan and Chiu-Yue, also Ontario residents, are asserting a claim for damages enforceable in Ontario, which avoids the problem of the Ontario Court purporting to make an order vesting ownership in the Guangzhou City condominium, which would indeed be an unenforceable judgment, because it would not be recognized in China.

[42] The case at bar is unlike Khan Resources Inc. v. W.M. Mining Co. (2006), 2006 6570 (ON CA), 79 O.R. (3d) 411 (C.A.), where the Court of Appeal upheld a decision staying an action in Ontario involving a dispute about real property located in a foreign land on the ground that there was no real and substantial connection between the relief claimed and the jurisdiction of the Ontario Court.

[43] In the Khan Resources Inc. case, Khan Resources, an Ontario corporation, through three foreign subsidiaries, including two corporations in Mongolia, owned mineral rights in Mongolia. After a board meeting of Khan Resources, Wallace Mays, an American citizen, who had established the various corporations including Khan Resources, purported to have the various subsidiaries assign the mineral rights to his own corporation, W.M. Mining Co., in repayment of a debt owned by Khan Resources. In an action brought in Ontario, Khan Resources sued for a declaration that the assignments were null and void and for an injunction restraining Mr. Mays and his corporation from dealing with the assigned assets.

[44] The Court of Appeal noted that since the mineral rights involved an interest in real property, the general rule is that the court of a country has no jurisdiction to adjudicate on the right and title to lands in another country. See: Duke v. Andler, 1932 32 (SCC), [1932] S.C.R. 734 at p. 738; Catania v. Ginnattasio (1999), 1999 1930 (ON CA), 174 D.L.R. (4th) 170 (C.A.) at para. 11.

[45] The Court of Appeal, however, noted that there was an exception to the general rule if the plaintiff asserts an in personam claim that circumvents the necessity of the domestic court making an unenforceable ruling about the ownership of foreign property. Justice Feldman stated for the Court at paras. 16-18:

16. In contrast, had the appellants sought the remedy of damages against the respondents based on an allegation that they breached a contractual or equitable obligation associated with the impugned assignments, even though the underlying asset is rights in foreign lands, an Ontario court could exercise in personam jurisdiction over the respondents by enforcing a personal obligation rather than purporting to determine the rights to mining interests in a foreign jurisdiction.

17. For example, in Mountain West Resources Ltd. v. Fitzgerald (2002), 2002 BCCA 545, 6 B.C.L.R. (4th) 97 (C.A.), a British Columbia corporation brought a claim for breach of fiduciary duty against its president and director, a resident of Arizona, for taking mining claims in Nevada in his own name rather than in the name of the corporation. The Supreme Court of British Columbia motion judge originally declined jurisdiction on the basis that the claim involved real property outside the jurisdiction. However, the B.C. Court of Appeal referred the matter back to the motion judge to reconsider the case as an in personam claim for appropriation of a corporate opportunity, similar in nature to the claim made in Canadian Aero Systems Ltd. v. O'Malley, 1973 23 (SCC), [1974] S.C.R. 592.

18. In this case, however, there is no in personam claim for damages that might bring the application within the jurisdiction of the Superior Court.

[46] Thus, the case at bar is the converse of Khan Resources Inc. v. W.M. Mining Co., because in the case at bar, Susan and Chiu-Yue seek the remedy of damages against Mei-Tim based on an allegation that she breached a contractual obligation associated with a property right in foreign lands.

[47] Relying on Justice Laskin’s judgment in Catania v. Ginnattasio, supra, the Court of Appeal in Khan Resources Inc. recognized that an Ontario Court has jurisdiction simpliciter in circumstances where it has an in personam jurisdiction over the litigants. In Catania v. Ginnattasio, which involved an impugned transfer of lands in Italy, Justice Laskin stated at paras. 10-12:

10. The general rule is that Canadian courts have no jurisdiction to determine title to or an interest in foreign land. This rule, long recognized in Anglo-Canadian law, was applied by the Supreme Court of Canada in Duke v. Andler, in which Smith J. wrote at 738 and 741: "The general rule that the courts of any country have no jurisdiction to adjudicate on the right and title to lands not situate in such country is not disputed ... The title to real property therefore must be determined by the standard of the laws relating to it of the country where it is situated".

11. This general rule has been criticized but may be justified by its underlying policy. The courts of most countries insist on the exclusive right to decide disputes over their own lands. Thus, ordinarily a judgment by a Canadian court on a disputed title to foreign land would be ineffective. If Canadian courts cannot grant an effective judgment or an enforceable remedy concerning land in a foreign country, they should decline jurisdiction to decide these disputes. The respondent submits, however, that the Ontario courts do have jurisdiction to decide the validity of the deed. He argues that, although the declaration he seeks affects title to the properties in Italy, he is only asking for what amounts to equitable relief against two Ontario residents.

12. I do not accept this argument. Admittedly, as Smith J. points out in Duke v. Andler, a long line of authorities has held that Canadian courts have jurisdiction to enforce rights affecting land in foreign countries if these rights are based on contract, trust or equity and the defendant resides in Canada. In exercising this jurisdiction, Canadian courts are enforcing a personal obligation between the parties. In other words, they are exercising an in personam jurisdiction. This in personam jurisdiction is an exception to the general rule that Canadian courts have no jurisdiction to decide title to foreign land. The exception recognizes that some claims may have both a proprietary aspect and a contractual aspect. Canadian courts, however, will exercise this exceptional in personam jurisdiction only if four criteria are met. These four criteria, of which the second is central to this appeal, are discussed by McLeod [McLeod, The Conflict of Laws, (Calgary: Carswell, 1983) at p. 321]:

In order to ensure that only effective in personam jurisdiction is exercised pursuant to the exception, the courts have insisted on four prerequisites:

(1) The court must have in personam jurisdiction over the defendant. The plaintiff must accordingly be able to serve the defendant with originating process, or the defendant must submit to the jurisdiction of the court.

(2) There must be some personal obligation running between the parties. The jurisdiction cannot be exercised against strangers to the obligation unless they have become personally affected by it ... An equity between the parties may arise in various contexts. In all cases, however, the relationship between the parties must be such that the defendant's conscience would be affected if he insisted on his strict legal rights ...

(3) The jurisdiction cannot be exercised if the local court cannot supervise the execution of the judgment ...

(4) Finally, the court will not exercise jurisdiction if the order would be of no effect in the situs ... The mere fact, however, that the lex situs would not recognize the personal obligation upon which jurisdiction is based will not be a bar to the granting of the order.

[48] In my opinion, the four criteria for the exercise of an in personam jurisdiction are satisfied in the case at bar.

[49] The approach of exercising an in personam jurisdiction in circumstances where the court has no jurisdiction to make an order concerning the ownership of right, title or interest to a foreign property is frequently used in family law cases. For example, in Macedo v. Macedo (1996), 1996 19734 (ON SC), 19 R.F.L. (4th) 65 (Ont. S.C.J.), Justice Beaulieu found that the court did not have jurisdiction to make an order vesting property located in Portugal to the non-titled wife but the court did have the jurisdiction to order the husband to sell the property and divide the proceeds.

[50] Moving on, while I cannot say that Mei-Tim’s argument about forum non-conveniens is devoid of merit, I rather conclude that balancing the various factors that guide the court’s discretion to decline jurisdiction on the grounds of forum non-conveniens, Ontario ought not to decline jurisdiction.

[51] With the exception of Mei-Ying, all of the parties are Canadian residents and three of the living six siblings live in Ontario. The issues in the case are largely about matters of oral agreements and apart from some valuation evidence about the condominium that would require a witness from China, the most important witnesses are in Canada and not in China.

[52] There is no juridical advantage for Mei-Tim having her defence tried by a Chinese court, and it appears that in making the argument that China is the proper forum, Mei-Tim is attempting to inconvenience the Plaintiffs and impair their access to justice knowing full well that her siblings will be discouraged from pursuing their claims against her in China.

[53] I conclude that Mei-Tim’s forum non-conveniens argument fails. This brings the discussion to her summary judgment motion based on the Plaintiffs’ claims with respect to (1) the Guangzhou City condominium and (2) the Invergordon Ave. property loans being statute-barred.

[54] I can begin the discussion here by saying that putting the matter of the application of the Limitations Act aside for the moment, there are genuine issues requiring a trial about whether either of the alleged oral agreements actually existed and if they did exist what the terms or provisions of the respective agreements were.

[55] I also do not understand how it is that Ontario’s Succession Law Reform Act applies if Mrs. Yu Zhen Yuang died in Vancouver, which was her place of residence, without a will. There are genuine issues for trial about this claim.

[56] Coming precisely to the heart of the summary judgment motion and the matter of whether the Plaintiffs’ claims are statute-barred, I conclude that the Plaintiffs have successfully resisted the summary judgment motion to the extent of establishing that there are genuine issues for trial about the limitation period defence

[57] The evidentiary record reveals that there are genuine issues for trial about when the breaches of the alleged agreements were discovered. In other words, if the Plaintiffs’ claims or causes of action based on the oral agreements actually exist, there is not sufficient evidence on this summary judgment motion to fairly and justly adjudicate the dispute between the parties by way of a summary judgment and resort to the powers under rules 20.04 (2.1) and (2.2) of the Rules of Civil Procedure does not avoid the necessity of a normal trial.

[58] I have reviewed the factual record for the summary judgment motion, which, as noted above, was affidavit evidence without any cross-examinations, and there is not sufficient evidence to fairly and justly adjudicate the dispute between the parties by way of a summary judgment.

[59] Further, I also do not see how the summary judgment procedure can be used and a trial can be avoided by using the powers under rules 20.04 (2.1) and (2.2) of the Rules of Civil Procedure in the circumstances of the case at bar.

[60] Using the powers of these rules to yield a fair and just result would be just to have a trial by another name and achieve nothing more than perhaps having the parties jump the queue of the normal trial list, but in terms of achieving access to justice little will be achieved in terms of affordability and proportionality in light of the litigation as a whole. Put simply, a failed summary judgment motion on a limitation period defence with no cross-motion by the plaintiff should not be used simply as a means of queue jumping the trial list. No economies will be achieved by my remaining seized of the action, which should proceed in the normal course.

[61] I, therefore, dismiss the summary judgment motion.

D. CONCLUSION

[62] For the above reasons, I dismiss Mei-Tim’s motion, and I grant the Plaintiffs’ motion.

[63] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the Plaintiffs’ submissions within 20 days of the release of these Reasons for Decision followed by Mei-Tim’s submissions within a further 20 days.

[64] I alert the parties that I am inclined to order costs in the cause because although the Plaintiffs were successful they have caused costs to be wasted by the commencement of a Small Claims action and by the need to amend the pleadings. There is also doubt about the application of the Succession Law Reform Act and about the ultimate merits of the claim and the defence. In these circumstances, I am inclined to order costs in the cause.

Perell, J.

Released: December 9, 2014

COURT FILE NO.: CV-14-507549

DATE: 20141209

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

MEI QING SUSAN WU, CHIU YUE NG, by his Litigation Guardian MEI QING SUSAN WU, MEI YING WU, by her Litigation Guardian MEI QING SUSAN WU, MEI AI WU, by her Litigation Guardian MEI QING SUSAN WU, and FUNG TIM NG KWAN, by her Litigation Guardian MEI QING SUSAN WU

Plaintiffs

– and –

MEI TIM NG

Defendant

REASONS FOR DECISION

PERELL J.

Released: December 9, 2014