ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jiahang Bao
Plaintiff
– and –
Mok Kit Yee, Hip Mok and Wai Ching Tsang
Defendants
D.B. Prentice, for the Plaintiff
M. Donald, for the Defendant, Mok Kit Yee
W. Murray and L. Gilbert, for the Defendants, Hip Mok and Wai Ching Tsang
HEARD: July 7, 2017 and January 23, 2018
REASONS FOR DECISION
Introduction
1The plaintiff in this action entered into a purchase and sale agreement for property located at 2 Marydale Avenue in Markham, Ontario. The Agreement of Purchase and Sale indicates the offer was made by the plaintiff on December 22, 2015 and was accepted by the defendant Mok Kit Yee (“Yee”) on January 2, 2016. The closing date was set for March 30, 2016. At the time the Agreement of Purchase and Sale was entered into, Yee was the registered owner of the property under the Land Titles Act, RSO 1990, c L.5.
2The transaction did not close because the co-defendants Hip Mok (“Mok”) and Wai Ching Tsang (“Tsang”) have asserted that they are the beneficial owners of the property. Mok and Tsang are the parents of Yee and claim they are the beneficial owners of the property. Bao has brought this action claiming specific performance of the Agreement of Purchase and Sale. He has brought a motion for a summary judgment seeking specific performance of the agreement.
3In his factum, the plaintiff has set out the issues this court needs to address on the motion for summary judgment as follows:
(a) Have the defendants Hip and Tsang, produced any evidence that this court should rely on to establish that they are the beneficial owners of the property?
(b) Assuming Hip and Tsang do establish that they are the beneficial owners of the property are they nevertheless estopped from asserting this claim against the plaintiff and, instead, restricted to having any claim they may have converted to an interest in the proceeds of sale?
(c) Is the plaintiff entitled to specific performance?
4The position of the plaintiff is that he is entitled to specific performance of the agreement. He is supported in this regard by the defendant Yee. The defendants Mok and Tsang oppose the plaintiff’s request for specific performance and argue that the motion for summary judgment should be dismissed and the matter proceed to trial for a full determination of the merits of the claim based on their position that Yee did not have any beneficial ownership of the property at the time the purchase and sale agreement was entered into.
5It is significant to note that two actions have been commenced. This action was commenced on April 6, 2016. Prior to this, however, another action was commenced by Mok and Tsang against Yee. This action was filed on February 11, 2016. In that action Mok and Tsang claim a declaration that they are the sole and legal beneficial owners of 2 Marydale Avenue and that the title to that property is being held in trust for Mok and Tsang by Yee.
Chronology
6The following is a chronology for some of the alleged factual circumstances surrounding this claim. For purposes of the chronology I have attempted to set out relevant background facts, many of which are in dispute but which hopefully assist in understanding the issues. The following is that chronology:
1988 – According to the Affidavit of Mok, in around April 1988, he and his wife provided money to two of their sons, Jacky and Tsun to purchase a property at 8 William Honey Crescent in Markham which was to be held in trust on their behalf.
1988 or 1989 – According to the Affidavit of Mok, he and his wife immigrated to Canada following the purchase of the Honey property and then moved into that property.
October, 1990 – According to the Affidavit of Mok, title to the Honey property was transferred from Jacky and Tsun to Tsun and Mok. This information is said to be contained in the Parcel Register for the Honey property.
1995 – According to Mok, he and his wife purchased the property at 2 Marydale Avenue. Because they were retired and unable to obtain a mortgage, they provided money to their son Chun and Yee for a down payment which was used to purchase the property which he says was to be held in trust for the benefit of himself and his wife. Following the purchase, Mok and his wife and the family moved from the Honey property to the Marydale property and began renting out the Honey property. Title to the Marydale property was registered under Chun and Yee’s names as joint tenants on September 28, 1995.
December 17, 1997 – According to the Affidavit of Mok, he and his wife sold the Honey property at this time and used the proceeds from the sale to pay down the mortgage on the Marydale property.
1998 – According to Mok’s Affidavit, his son Chun moved back to Hong Kong and wanted to declare non-residency status in Canada for tax purposes. As such, Chun and Yee transferred title of the Marydale property to Yee.
January 2, 2001 – According to the Parcel Register, the mortgage on the Marydale property was discharged.
2010 – According to the Affidavit of Mok, his son Chun had moved back to Canada and into the Marydale property, but his name was not put back on the title to that property. Yee continued to be the only registered owner of the property.
January 2, 2016 – Yee enters into the Agreement of Purchase and Sale with the plaintiff.
January 29, 2016 – A Caution was registered on title by Mok and Tsang.
February 11, 2016 – Action commenced by Mok and Tsang.
March 21, 2016 – Certificate of Pending Litigation filed by Mok and Tsang.
April 6, 2016 – Plaintiff’s action issued.
June 20, 2016 – Bao files Certificate of Pending Litigation in this action.
Rule 20 – Summary Judgment
7This is a motion for summary judgment under rule 20. In 2014 the Supreme Court of Canada released its decision in Hryniak v. Mauldin, 2015 SCC 7, which considered when it is appropriate to grant summary judgment under Rule 20 of the rules. Rule 20.04(2) provides that,
The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.
8Rule 20.04(2.1) provides that,
In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
9In its decision in Hryniak, the Supreme Court of Canada notes that there will be no genuine issue requiring a trial when a judge is able to reach a fair and just determination on the merits of a motion for summary judgment. This will be the case when the process allows the judge to make the necessary findings of fact, allows the judge to apply the law to the facts, and is a proportionate, more expeditious and less expensive means to achieve a just result. The court notes as well that when a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. The question the court must consider is whether the judge has confidence that he or she can find the necessary facts and apply the relevant legal principles to fairly resolve the dispute.
10It is recognized in the Hryniak decision that there may be cases where given the nature of the issues and the evidence required, a judge cannot make the necessary findings of fact or apply the legal principles to reach a just and fair determination. At the court of appeal level in Hryniak, the court suggested that summary judgment would most often be appropriate when cases were document driven with few witnesses and limited contentious factual issues, or when the record could be supplemented by oral evidence on discrete points. The Supreme Court in its decision agreed that these are helpful observations, but should not be taken as delineating any firm categories of cases where summary judgment is and is not appropriate.
11The Supreme Court also noted that if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice.
12The limits of a motion for summary judgment where there are significant credibility issues was highlighted in the Ontario Court of Appeal decision in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450. In that case the Court of Appeal set aside a summary judgment and referred both the claim and counterclaim to trial. In doing so, Justice Lauwers commented as follows:
What happened here illustrates one of the problems that can arise with a staged summary judgment process in an action where credibility is important. Evidence by affidavit, prepared by a party’s legal counsel, which may include voluminous exhibits, can obscure the affiant’s authentic voice. This makes the motion judge’s task of assessing credibility and reliability especially difficult in a summary judgment and mini-trial context. Great care must be taken by the motion judge to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all.
13It is apparent that the issues in this action are complex and there are significant issues with respect to the credibility of the various parties. According to his affidavit, Mok is 95 years old and his wife is similarly over 90 years old and they have invested their savings in the Marydale property with the intention that they would reside there for the rest of their lives. The price of the property as per the Agreement of Purchase and Sale was $1,142,000. There is evidence from a realtor, Luke Zhang. His Affidavit dated March 15, 2017 states that by that time due to the rapidly increasing price of homes in the Markham area, the subject property would now cost as much as $300,000 more than the purchase price listed in the Agreement of Purchase and Sale.
14In the present case I have concluded that the issues raised in this summary judgment motion do require a trial. For the following reasons I do not believe that I am in a position to make the necessary findings of fact and apply those facts to the law in a way that will reach a fair and just determination on the merits of this case.
Analysis
15The plaintiff argues that there is no reliable evidence that Mok and Tsang were the beneficial owners. They argue that there is no evidence that has been provided to establish where any of the purchase funds came from to purchase the Marydale property. Further, they rely on the fact that there is no documentation of any kind which sets out the alleged beneficial interest. They also rely on the fact that when the property was transferred to Yee only in 1998, the consideration was stated to be $53,880.79 which was the then existing value of the mortgage. They claim that had this transfer involved no change in beneficial ownership, the value of the consideration on that transfer would have been nil. They rely in this regard on the Land Transfer Tax Interpretation Bulletin published in March, 2005.
16There is, however, evidence which tends to support the claim of Mok and Tsang.
17Chun Mok is the son of Mok and Tsang. In an affidavit dated June 29, 2017 he states that after the Marydale property was purchased he was responsible for paying the monthly mortgage payments and that Yee did not contribute to these payments. He also states he contributed to the expenses relating to the property – tax, hydro, gas, property insurance and utilities. He states that he moved back to Hong Kong and wanted to declare non-residency status in Canada for tax purposes. Because of this he transferred the property to Yee’s name to hold for his parents in trust. He states that when the property was transferred to Yee she did not pay any consideration. While the transfer deed showed a consideration in the sum of $53,880, this was entered as a technical requirement because there was a balance payable on the mortgage. He states further that because the intention was that everything would remain the same, no arrangements were made for a new mortgage on the property.
18Chun Mok states that he continued to send $3000 to his parents every month to assist with the mortgage payments and other household expenses and that he would not have sent this money if the house was owned by Yee.
19Chun Mok states that when he moved back to Canada he went back to live in the Marydale property. He did not add his name back on title as he did not feel it was necessary.
20In or around 2014, Chun Mok stated that Yee began to act erratically and began to assert that she was the owner of the Marydale property, that it belonged to her and that she could do whatever she wanted with it.
21Chun Mok further states that in November 2015, Yee brought a real estate agent by the name of Anthony Ma to the house for appraisal. His parents and he confronted Yee and advised that she was not entitled to sell the house. According to Chun Mok his father called Mr. Ma to let him know that they were not selling the house.
22At the end of November, 2015, Chun Mok conducted a search online to ensure that Yee had not listed the Marydale property for sale. He discovered the house for sale on MLS and advised his parents. He states that his parents and he advised Yee that she was to cease any action she had been taking to sell the property as the house was not hers to sell and when he checked the MLS a few days later he noticed that the listing had been suspended. There is independent evidence to confirm the suspension of the listing and this is an exhibit to Chun Mok’s affidavit.
23At the beginning of January, 2006, Chun Mok states that Yee placed a note on the door advising that the house had been sold with a closing date of March 30, 2016. As a result he goes on to state that his parents registered a Caution on title to the Marydale property on January 29, 2016 and commenced a separate action against Yee.
24In contrast to this evidence is the evidence of Yee. In her evidence at examination for discovery she stated that her parents told her the Marydale property would be in her name. Initially she stated that she was told she would own 50% of the property. She went on to testify that in 1998 her parents told her that her brother would transfer his title to her and that they wanted to give the property to her. She suggests that she told her parents that if they gave the property to her then she could do whatever she wanted, even to the point of selling it and her parents agreed with this.
25According to Yee the first time her parents raised an objection about her right to sell the property was sometime in December of 2015 or January of 2016.
26It is apparent that the evidence of Yee is irreconcilable in a number of significant respects with that of other family members. Further, some of her evidence raises questions about her credibility. For example, at her examination for discovery she stated that she started to pay all the expenses for the property by 2013. Her evidence, however was that she last worked at a travel agency until 1999 earning approximately $12,000 a year. When asked how she supported herself she responded “savings and pensions”. This contrasts with the evidence of Chun Mok who in his affidavit states as follows,
A review of my father’s bank account statements appears to indicate that my father continues to pay for the expenses for the house, as thousands of dollars are being withdrawn from his bank account on a yearly basis. My father, however, cannot attend at the bank alone, spends very little money, and has been unable to drive for many years. I have spoken with my other siblings, who have all advised that they do not attend at the bank with my father. It is my belief that Kit (Yee) has been attending at Hip’s bank with him and withdrawing money.
27I have concluded that there are simply too many inconsistencies in the evidence before me to draw any firm conclusion as to whether Yee held the Marydale property in trust for her parents or if she was the legal and beneficial owner. Attempting to sort out the credibility and reliability issues from conflicting affidavit and transcript evidence could well become the means by which substantive unfairness enters in a way that would not likely occur at a trial where a trial judge sees and hears all of the evidence.
28The plaintiff asserts, however, that regardless whether Mok and Tsang do establish that they are the beneficial owners of the property, they are nevertheless estopped from asserting this claim against the plaintiff and are instead restricted to having any claim they may have converted to an interest in the proceeds of sale. In support of this position they rely on the British Columbia Court of Appeal decision in Willoughby Residential Development Corp. v. Bradley, 2002 BCCA 321. In this case the court found that a sibling had a beneficial interest in a property which was registered in his sister’s name. The court found that the plaintiff who negotiated a contract for sale with his sister was entitled to specific performance of the contract. The court found that the contract was enforceable based on the apparent authority of the sister to make the contract as opposed to her actual authority. In this regard the court stated,
I am satisfied that the evidence before the trial judge was sufficient to determine these issues without further exploration of the details of the agency relationship between the appellant and his sister. The issues turn on the apparent authority of Dawne Bradley to make the contract and not her actual authority. The property was acquired by the Bradley family in 1975. The appellant concealed his contribution to the purchase and his interest in the property for 20 years. He was content to allow his sister to take the registered title in her name alone after the death of their parents, and to let her manage the property as if she were the only owner. The appellant not only allowed the property to stand in his sister’s name but also clothed her with all the indicia of ownership, including the management of the property over the years.
29The plaintiff argues that this case is analogous to the case before me and that by allowing Yee to be the registered owner of the property, the parents have clothed her with all the indicia of ownership. There are, however, significant differences between the present case and the Willoughby decision. In the present case the only uncontradicted evidence which would support a conclusion that Yee was clothed with the indicia of ownership is the registration of her name on title. The evidence of the family for example, suggests that Yee was told to stop all her efforts to sell the property in December 2015, and the family took steps to inform the first real estate agent contacted by Yee to tell him that the property was not for sale. While these representations might not create an estoppel against a purchaser who had no knowledge of these alleged actions it is apparent that the strength of the representations that Yee was the true owner may turn out to be significantly weaker than in the Willoughby case. Another relevant factor in this regard may be the purchaser’s knowledge of who lived in the house and any discussions which took place between the purchaser and the occupant’s other than Yee.
30In the Willoughby decision the British Columbia Court of Appeal found that the “balancing of the equities estops the appellant from denying the authority of Dawne Bradley to make a binding contract with Willoughby”. In the present case the balancing of the equities may well depend on the court’s findings of fact in relation to conduct and representations of the various parties involved in this litigation.
31If the evidence of Mok and Tsang is accepted by the court it could lead to a conclusion that a resulting trust has been created. In the Supreme Court of Canada decision in Pecore v. Pecore, 2007 SCC 17, the court notes that a resulting trust arises when titled property is in one party’s name, but that party, because he or she is a fiduciary or gave no value for the property, is under an obligation to return it to the original owner. The court goes on to state that the presumption of a resulting trust is a rebuttable presumption of law and the general rule that applies to gratuitous transfers.
32In Andrade v. Andrade, 2016 ONCA 368, the Ontario Court of Appeal notes that even if a party has transferred ownership of property in one way for a purpose such as trying to defeat creditor’s a resulting trust claim is not precluded. The question is one of the transferor’s intention at the time of the transfer.
33It is apparent as well that specific performance does not necessarily routinely follow on a claim for real estate. This follows the decision of the Supreme Court of Canada in Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 SCR 415. The plaintiff in this case has given evidence that the particular features of the property in question were very important to him. The defence takes the position that other similar properties were available and the damages are an adequate substitute for the plaintiff’s loss. This, however, is not the only issue that will need to be addressed in connection with the plaintiff’s claim for specific performance. In the Ontario Court of Appeal decision 1110049 Ontario Ltd. v. Exclusive Diamonds Inc., 1995 CanLII 524 (ON CA), the Ontario Court of Appeal notes that hardship which would result from an order to specifically perform a contract is a factor to be taken into consideration in determining what remedy to grant. This is consistent with the court’s approach in Willoughby supra. where the British Columbia Court of Appeal talks of the “balancing of the equities” as a basis for preventing the appellant in that case from denying the authority of the sister to make a binding contract with Willoughby. The court specifically comments that,
The prejudice suffered by Willoughby is sufficient to support equitable estoppel. The appellant’s conduct throughout does not raise any competing equities that would offset the equities favoring Willoughby. [Emphasis added]
34In the present case, the effect of granting a motion for a summary judgment would be to require two very elderly parents to vacate their home. The plaintiff’s proposal that the funds be paid into court pending a determination of the beneficial interest of the parents would not assist the parents as they would be left having to find new accommodation pending the outcome of the other action with dramatically reduced financial resources to support themselves.
35It is apparent that a court’s finding of whether there is a beneficial interest in the home by Mok and Tsang may turn out to be an important factor which the court needs to consider on the issue of specific performance. As noted previously, the evidentiary record before me is not adequate to draw a firm conclusion on this motion for summary judgment with respect to the claim of the parents that they are the beneficial owners of the Marydale property. Further, any determination of the beneficial ownership of the Marydale property on this motion has the potential to be inconsistent with findings of the court in the other action commenced by Mok and Tsang when that case goes to trial.
36During the course of argument I raised with counsel whether there was any provision under the Ontario Land Titles Act which would allow the plaintiff in this action the benefit of establishing that she had the right to enforce the Agreement of Purchase and Sale despite any beneficial interest which might exist in favor of Mok and Tsang. Neither counsel presented any relevant authorities to answer this question. It may well turn out to be an issue at trial but for my purposes on the motion for summary judgment, the critical factor is that the plaintiff’s entitlement for specific performance has not been established and may well be affected by findings of the court in the other action which clearly overlap with the issue in this action.
Conclusion
37For the above reasons the plaintiff’s motion for summary judgment is dismissed. However, it is readily apparent that both of the outstanding actions must be moved forward on an expeditious basis given that both Mok and Tsang are in their nineties. Special efforts need to be made to ensure that both actions proceed as quickly as possible to trial. Rule 20.05(1) provides that where summary judgment is refused, the court may make an order that the action proceeds to trial expeditiously and may give such directions or impose such terms as are just. Counsel have not yet made submissions with respect to an order under rule 20.05 and therefore I am not as part of this decision imposing any directions or terms at this time. I am, however, directing the plaintiff’s counsel in both actions which are outstanding to contact my office within 30 days from the release of this decision in order to schedule a hearing where I can receive submissions with respect to a possible order under rule 20.05.
38If the parties are not able to agree on costs, they may speak with the trial coordinator within 30 days of the release of these reasons to take out an appointment to address the issue of costs. In such event, the parties will deliver concise briefs at least two days before their attendance. If no arrangements are made within 30 days for an appointment to speak to costs, there will be no order for costs.
Justice M. McKelvey
Released: March 8, 2018
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jiahang Bao
Plaintiff
– and –
Mok Kit Yee, Hip Mok and Wai Ching Tsang
Defendants
REASONS FOR DECISION
Justice M. McKelvey
Released: March 8, 2018