SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-14-4472-00
DATE: 2015 07 22
RE: WEI LU AND DUKE CHEUNG AND D.C. GROUP INC.
BEFORE: Fragomeni J.
COUNSEL:
Rolf M. Piehler, for the Applicant
Bernie Romano, for the Respondents
HEARD: July 17, 2015
E N D O R S E M E N T
[1] The applicant brought this Application for the following relief:
(i) Possession of the property municipally known as 4367 Bethesda Road in the Town of Whitchurch-Stouffville.
(ii) A declaration that the deposit made pursuant to an Agreement of Purchase and Sale entered into between the parties is forfeited to the applicant by reason of the respondents’ default under the Agreement.
(iii) Damages arising from the respondents’ breach of the Agreement and for repairs required to the property arising from the respondents vandalism, misuse, abuse, and unauthorized alterations to the subject premises.
[2] In late December 2014 the respondents abandoned the premises. In these circumstances the only issues left to be determined relate to the applicant’s claim for damages and who is entitled to the deposit of $30,000.
[3] The applicant argues that he is entitled to retain the deposit pending final determination of the damages.
[4] The applicant also submits that the conflicting evidentiary record of the parties necessitates a trial of these issues and as such this Application should be converted into an action.
[5] Cross-examinations on the affidavits of Mr. Lu and Mr. Cheung were conducted on November 19, 2014.
[6] The respondents submit that the subject property was in a hazardous and unsafe condition at all material times and, therefore, the applicant was never able or willing to complete the Agreement of Purchase and Sale. On or about January 27, 2011 an unsafe order was placed at the subject property declaring it to be unfit for habitation.
[7] The respondents submit further that the applicant has failed to answer his undertakings and refusals from his cross-examination. In those circumstances the respondents moved at the outset of the hearing before me for an order to strike out the applicant’s materials and that their motion for the return of the deposit heard in the absence of that material and granting the relief requested.
[8] In their motion record dated June 5, 2015 the respondents set out the refusals and undertakings as follows:
Court File No. CV-14-4472-00
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
WEI LU
Applicant
-and-
DUKE CHEUNG and D.C. GROUP INC.
Respondent
REFUSALS AND UNDERTAKINGS CHART OF WEI LU
UNDERTAKINGS
Outstanding undertakings given on the cross-examination of Wei Lu on behalf of Duke Cheung and D.C. Group Inc.,
dated November 28, 2014
Issue & Relationship to
pleadings or affidavit
Question
No.
Page
No.
Specific undertaking
Date answered or precise
reason for not doing so
Disposition by the Court
(Group the undertakings by issues)
63/65
20-21
To provide a copy of all
inspections, including a home
inspection report
72
23
To read Mr Lu’s affidavit of
September 30, 2014 over and
to make any necessary
corrections by way of translation
73
24
To make any necessary
Changes to Mr. Lu’s affidavit of
November 27, 2014
86
28
To obtain Mr. Lu’s complete
renovation file, including any email
that he can forward to counsel
that he may have exchanged
with contractors. Also, to make
them available for inspection in
counsel’s office and to send a
copy of the file over to upon
request
171
46
To provide documents relating to
mortgage with the bank and the monthly payments
201
54
To produce a copy of the
agreement of purchase and sale
256
74
To request Mr. Jordan provide any
communications that took place
between himself and Mr. Lu with
respect to informing Cheung the
deal was over, deposit forfeited,
and that he was being sued.
263
76
To provide all documents relating
to the original purchase of the
Bethesda property including any
lawyers’ reports and copies of
mortgage
REFUSALS
Refusals to answer questions on the cross-examination of Wei Lu on behalf of Duke Cheung and D.C. Group Inc., dated
November 28, 2014
Issue & Relationship to
pleadings or affidavit
Question
No.
Page
No.
Specific undertaking
Date answered or precise
reason for not doing so
Disposition by the Court
(Group the undertakings by issues)
178
47
To advise it is possible that Mr.
Cheung notified Mr. Lu about the
backup in the septic system before
the contract was signed on April
16, 2014, when the septic system
backup, after that date
188
50
To advise whether he was aware
that people try to sell their
properties in months when the
septic problems are not noticeable,
like in the winter or early spring
192
52
To advise how Mr. Mr. Cheung
have discussed repairing the
septic system with Mr. Lu in April,
before he signed the agreement
when he didn’t know about it and
he didn’t know how much it
would cost to repair.
202
55
To advise how who the potential
purchaser of his current property
is.
208
56
To advise whether there is any
proof that there has been a
deposit paid that is being held
by the sales representative, and
to provide such proof
217
58
To advise why he wanted to sue
Suki for damages?
218
59
To advise why he thought that
Suki had to sign an agreement
with him?
219
59
To advise whether or not he was
trying to force Suki to sign an
agreement to terminate the
tenancy?
250
71
To advise whether he believed Mr.
Cheung should be compensated
for the cost of repairing the septic
system once it’s determined?
251
71
To advise whether he would be
agreeable on a without prejudice
basis, to Mr. Cheung buying the
property for 1.22 million dollars?
252
72
To advise whether he would be
agreeable, with prejudice to
himself, to Mr. Cheung buying the
property for 1.22 million dollars?
57
18
To take under advisement to
produce copies of the invoices
in his possession
UNDERTAKINGS UNDER ADVISEMENT
Undertakings under advisement given on the cross-examination of Wei Lu on behalf of Duke Cheung and D.C. Group Inc.,
dated November 28, 2014
Issue & Relationship to
pleadings or affidavit
Question
No.
Page
No.
Specific undertaking
Date answered or precise
reason for not doing so
Disposition by the Court
(Group the undertakings by issues)
57
18
To take under advisement to
produce copies in his
possession
60
19
To take under advisement to
provide a copy of all documents
relating to the alleged renovations
undertaken by Mr. Lu from the
date that he purchased the
property. That includes invoices,
any proposals or quotes, any
drawings, any permit applications
any cheques, any receipts and
any communications, including
emails or letters between Lu and
the contractors.
[9] The applicant submits that the Court should not strike out the affidavit of the applicant. That remedy is too severe in all of the circumstances. A reasonable and appropriate response from the Court should be to make an order that the applicant comply with the undertakings within a certain period of time.
[10] The applicant also submits that this Application ought to be converted into an Action with the parties proceeding to Examination for Discoveries. The applicant submits that the credibility issues cannot be resolved nor can findings of fact be made to determine the issue of damages and who is entitled to the deposit. The further factor pointed to by the applicant is that the applicant’s insurer is now involved and it may have a subrogated claim against the respondents for a portion of the damages.
[11] It has not been determined whether the applicant’s insurer will take carriage of this application or commence new proceedings against the respondents.
[12] Section 138 of the Courts of Justice Act, R.S.O. 1990, c. 43 as amended states:
As far as possible, multiplicity of legal proceedings shall be avoided.
[13] Section 38.10 of the Rules of Civil Procedure states:
(1) On the hearing of an application the presiding judge may,
(a) grant the relief sought or dismiss or adjourn the application, in whole or in part and with or without terms; or
(b) order that the whole application or any issue proceed to trial and give such directions as are just. R.R.O. 1990, Reg. 194, r. 38.10 (1).
(2) Where a trial of the whole application is directed, the proceeding shall thereafter be treated as an action, subject to the directions in the order directing the trial. R.R.O. 1990, Reg. 194, r. 38.10 (2).
(3) Where a trial of an issue in the application is directed, the order directing the trial may provide that the proceeding be treated as an action in respect of the issue to be tried, subject to any directions in the order, and shall provide that the application be adjourned to be disposed of by the trial judge. R.R.O. 1990, Reg. 194, r. 38.10 (3).
Exception, applications in estate matters
[14] On reviewing the evidentiary record before me I am satisfied that the issues relating to damages and who is entitled to the deposit ought to proceed to trial and to be dealt with by the trial judge. The trial judge will be in the best position to determine the issues of credibility and make the appropriate and necessary findings of fact.
[15] An order shall issue as follows:
The remaining issues in the application, namely damages and entitlement to the deposit shall be converted into an action.
The applicant shall serve and file a Statement of Claim for that relief forthwith. The respondent shall serve and file his Statement of Defence within 30 days.
The parties are entitled to proceed with Examination for Discoveries, in accordance with the Rules of Civil Procedure.
The applicant shall comply with the undertakings given by him at his cross-examinations conducted on November 19, 2014 within 60 days.
The deposit of $30,000 shall be paid into court pending the determination of the issues by the trial judge.
The parties shall file written submissions on costs of the hearing before me within 20 days (two pages in length).
FRAGOMENI J.
DATE: July 22, 2015
COURT FILE NO.: CV-14-4472-00
DATE: 2015 07 22
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: WEI LU AND DUKE CHEUNG AND D.C. GROUP
BEFORE: Fragomeni J.
COUNSEL: Rolf M. Piehler, for the Applicant
Bernie Romano, for the Respondents
ENDORSEMENT
FRAGOMENI J.
DATE: July 22, 2015