CITATION: Chung v. H & E Copy Services, 2016 ONSC 6824
COURT FILE NO.: CV-14-505796
DATE: 20161108
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Teck Min Chung
Plaintiff
– and –
H & E Copy Services Inc.
Defendant
Heidi Suter for the Plaintiff
Matthew J. Garrett for the Defendant
HEARD: November 2 and 3, 2016
Trial decision
Justice Edward P. Belobaba:
[1] This unfortunate business dispute between an elderly father and his oldest adult son has run the procedural gauntlet. The lawsuit began as an application that was converted into an action. This was followed with a summary judgment motion and min-trial. The motion for summary judgment was dismissed and the matter now returns before me for a short trial.
[2] I have long believed that trials are less about truth than proof. That is, I cannot determine what really happened here and whether the parties actually entered into the business agreement that is alleged. But I can decide, as I do, based on the evidence before me, that no such agreement has been proven on a balance of probabilities and that the action must therefore be dismissed.
Background
[3] This is an unusual business dispute between a 91 year-old father and his 60 year- old son. Unusual because it stems from an oral agreement that was allegedly made between them 25 years ago, has little in the way of supporting documentation and has only recently become the subject of litigation.
[4] The plaintiff, Teck Min Chung, says he helped his eldest son, Herald, purchase the defendant printing business in 1991 on the oral understanding that they would be equal partners and share the profits.
[5] Herald denied any such agreement and moved for summary judgment dismissing the action. He concedes that his father contributed $18,000 to the purchase of the printing franchise,[^1] but says that the plaintiff did so as a father and not as a business partner, and that this law suit, commenced in 2014, shortly after Herald fired his brother (Philip) is nothing more than a misguided attempt by his father to force the defendant to rehire the brother.
[6] In reasons released on June 29, 2016, after hearing a short mini-trial, I dismissed the defendant’s motion for summary judgment and directed that the matter proceed to trial before me.[^2] As I explained in the summary judgment decision, I had no difficulty finding that the reason for the purchase of the printing franchise was to help Philip get a work permit that would allow him to immigrate to Canada. However, I was not able to determine to my satisfaction whether the plaintiff’s $18,000 financial contribution to this purchase was intended to be an investment or a gift. I needed Herald to clarify a discrepancy in his evidence. I also wanted to provide the plaintiff with the opportunity to amend his claim to pursue an unjust enrichment remedy.[^3]
[7] The issues that remained for trial were focussed: (1) did the plaintiff contribute the $18,000 as a gift or as an “equal investment” in the business; and (2) is there any basis for an unjust enrichment claim?
[8] Counsel agreed to a hybrid trial that would supplement the evidence filed on the summary judgment motion. The plaintiff said he would call two of his adult children, Edward and Anne. The defendant advised that it would call Herald and his ex-wife Emily. Counsel agreed to file the witnesses’ affidavits as their evidence in chief and to comply with time-limited cross-examinations.
Analysis
(1) Gift or investment?
[9] The plaintiff’s witnesses, Edward and Anne, were living in California and were not involved in the purchase of the printing franchise. Their evidence, largely second-hand, was that over the years, their father (the plaintiff) mentioned repeatedly that he and Herald had invested in the defendant printing company as equal partners.
[10] The defendant’s witnesses, Herald and his former spouse Emily, said the exact opposite. Their evidence was that in the many years following the purchase of the printing franchise, the plaintiff never said anything to indicate that he thought of himself as an investor or part-owner. It was only in 2014 after a falling out between the parties that the plaintiff commenced this action.
[11] The plaintiff took the stand in reply. He was agitated and emotional and stated repeatedly that Herald had “kicked him out” of the defendant company. However, little else in his testimony was clear or coherent. Sadly, I had to come to the same conclusion as I did at the mini-trial – that the plaintiff’s evidence is not reliable.[^4]
[12] As between Edward and Anne on the one side, and Herald and Emily on the other, I find that the latter two provided the more believable narrative. In my summary judgment decision, I noted that Herald “presented his evidence in a generally straight-forward fashion, and much of his testimony ... was supported by the franchise documentation.”[^5] Herald’s testimony at the short trial was similarly straight-forward and credible. He struck me as a devoted son who cares deeply for his aging father and regrets how this unfortunate litigation has divided his extended family.
[13] I was also impressed with Emily’s testimony. She had been directly involved in the purchase and ongoing operation of the printing franchise (she was the E in the H & E company name) and she provided fair and balanced testimony. For example, she described the plaintiff as a loving and concerned grandfather who was visited often and took care of their children. She also noted that it was “possible” that the plaintiff’s financial contribution may have been “a loan.”[^6]
[14] Emily testified that from 1991 until 2005 (when she separated from Herald) she was directly involved in the ongoing operation of the printing company (as a book-keeper and later as a manager) and would have known if the plaintiff’s financial contribution was intended to be a business investment. She said that over the 14 years of her involvement in the defendant business, the plaintiff never conveyed such intention either by words or conduct. As she put it in her affidavit:
[The plaintiff] did not behave in any way that would lead me to believe that he thought he was an owner or partner in the corporation after it was purchased. He was not involved in any management of the corporation and was never paid by the corporation. He never complained about not receiving any payment out of the corporation, or from Herald or anything of the kind. He never discussed having a stake in the business ... and did not display any interest in the business ...
[15] The plaintiff offered no credible evidence to persuade me otherwise. I find that the plaintiff’s financial contribution to Herald’s purchase of the printing business was motivated by a parental concern about Philip’s immigration situation[^7] and an ongoing generosity that over the years saw the plaintiff bestow gifts of money on his children even after they became adults – for their college education, to help set them up in business, or mark their engagements or marriages. The evidence, frankly, is almost overwhelming that the funds in question were provided by the plaintiff as a gift and not as a business investment.
(2) Unjust enrichment
[16] Because the funds in question were provided as a gift, there is no unjust enrichment. The plaintiff can show no enrichment and no deprivation and, in any event, there is a juristic reason – namely that the monies were intended as a gift.
[17] The defendant was prepared to argue that the funds in question may have come from the $20,000 that the plaintiff had retained after he sold Herald and Emily’s pharmacy business in Malaysia on their behalf. The defendant was also pointed to the significant financial support that Herald has routinely provided over the years to his parents. Neither submission is needed. Having found on a balance of probabilities that the plaintiff’s $18,000 financial contribution to the purchase of the printing business was intended as a gift, it follows that the claim for unjust enrichment does not succeed for this reason alone.
Conclusion
[18] The plaintiff has not established on the evidence that his $18,000 financial contribution to Herald’s purchase of the KP franchise in 1991 was intended as a business investment. I find it more likely than not that the monies were advanced as a gift. There is no basis for an unjust enrichment claim.
[19] I accept Emily’s evidence that it is possible that the monies were advanced as a loan. I only make this point because during closing argument Herald, through his counsel, advised the court that he would agree to an order that he repay his father the current value of the $18,000 contribution that was made in 1991. This amounts to about $31,906 in 2016 dollars. Herald, to his credit, also advised the court through his counsel that if the action is dismissed he would not ask for costs against his father.
Disposition
[20] The action is dismissed but without costs – as per Herald’s request.
[21] I know that Herald offered to repay his father the current value of the 1991 financial contribution ($31,906) but I make no formal order in this regard for two reasons: no such claim was ever advanced by the plaintiff and Herald’s offer of repayment, when it was made in court, was rejected by counsel for the plaintiff. I will leave this “loan repayment” to Herald and his father.
November 8, 2016 Belobaba J.
[^1]: The plaintiff says he contributed $36,000 but only two cheques totaling $18,000 have been produced.
[^2]: Chung v. H & E Copy Services, 2016 ONSC 3880.
[^3]: The plaintiff has since amended his claim accordingly.
[^4]: Supra, note 2, at paras. 16-23.
[^5]: Supra, note 2 at para. 24.
[^6]: I pause here to note that Emily testified that a total of $18,000 was contributed by the plaintiff. However, she recalled only “one cheque for $18,000” payable directly to Herald (as opposed to two cheques that were made payable directly to KP Copy). The plaintiff submits that this must mean that there were actually three cheques totaling $36,000. This is certainly possible. But I cannot make this finding on the evidence before me, particularly when Emily herself recalls that the total amount was only $18,000 and this number is supported by the documentary evidence. In any event, even if the financial contribution was $36,000 it would not dislodge my larger finding – that the monies were provided by the plaintiff as a gift and not as an investment.
[^7]: The fact that Philip may have been content to remain in New Jersey is not determinative. The evidence is clear that his father (the plaintiff) was very concerned that Philip (who had overstayed his visa in New Jersey) would be deported back to Malaysia and become a “stateless person.” As a loving and generous father, the plaintiff was keen to bring his son safely and legally to Canada. The printing business was to provide the vehicle.