COURT FILE NO.: CV-12-451247

DATE: 20180529

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

KATTY MAN NGER TSUI-WONG

Plaintiff

• and -

DANIEL XIAO, also known as Daniel Shao, also known as Daniel Gannon Shao, also known as Daniel G. Shaw; JUNE LU, also known as June June Lu, also known as June Lu Shaw, also known as June L. Shaw; YONGXIN LU and SUQIU CHENG

Defendants

William Murray, for the Plaintiff

No one for the Defendant, Daniel Xiao

Samil Chagpar, for the Defendants, June Lu, Yongxin Lu and Suqiu Cheng

HEARD: March 26 to 29; April 3 to 5, 2018

J. WILSON J.

reasons for decision

The Action

[1] The judgment granted against Daniel Xiao (“Daniel”) in August 2001 for $230,289.40, arose from a shareholder dispute between the Plaintiff and Daniel (the “Oppression Judgment”). The Oppression Judgment underpins this action for fraudulent conveyance. It remains unpaid.

[2] Daniel has effectively disappeared, probably somewhere in China, although for periods of time he was living in British Columbia.

[3] This action for fraudulent conveyance is brought against four family members: Daniel, his former wife June Lu (“June”), and June’s parents, Yongxin Lu (“Father”) and Suqiu Cheng (“Mother”) (the “Parents”).

[4] First, the Plaintiff alleges that Daniel and June fraudulently conveyed a property at 19 Rosebank Drive (the “Toronto Property”) to June’s Parents and then to third parties to avoid the Plaintiff being able to collect on a pending judgment against Daniel. The Plaintiff seeks an accounting from the Parents for funds fraudulently received.

[5] Second, the Plaintiff seeks against June a tracing and an accounting for funds fraudulently received by June from her acquisition of a property 3091 Williams Road, in Vancouver registered in her name (the “Vancouver Property”). She acknowledges that the sole source of funds to acquire the Vancouver Property came from Daniel. The Vancouver Property has been sold. June owns other property.

[6] The Plaintiff alleges that there was a fraudulent conspiracy amongst the family members to prevent the Plaintiff from collecting on the Oppression Judgment.

[7] The Plaintiff seeks recovery of the Oppression Judgment. She seeks damages in the amount of $200,000.00 for the fraudulent conveyance and conspiracy, as well as punitive and exemplary damages in the amount of $100,000.00.

The Issues

[8] The Defendants argue first, that there was no fraudulent conveyance. They assert that the Toronto Property was beneficially owned by the Parents, who had provided a loan for the down payment. The Defendants argue that neither Daniel nor June had an interest in the proceeds of sale of the Toronto Property.

[9] The Defendants argue that if the transfer of the Toronto Property is found to be fraudulent, that the amount that can be traced to the Vancouver Property is limited to half of the sale proceeds of the Toronto Property.

[10] Counsel for the Defendants concedes that the allegations of a fraudulent conveyance in this case is not subject to a limitation period as the fraud occurred before the amendments to the Limitations Act, 2002.[^1] Today, this action would be subject to a two year-limitation period and the principles of discoverability.

[11] However, the Defendants argue, that even if the transactions are found to be fraudulent, the Plaintiff was not diligent in making efforts to locate the Defendants and in pursuing her available remedies. By her conduct she has acquiesced. The Defendants have suffered irreparable prejudice by the lengthy delay. Therefore, counsel argues that the claim should be dismissed based upon the equitable doctrine of laches.

The Oppression Claim and Judgment

[12] In December 1999, the Plaintiff served the oppression claim against Daniel.

[13] There were delays as the matter matured. The matter was argued for two days in August 2000. Justice Spence released his decision on November 9, 2000.

[14] He concluded that Daniel opened a competing business, and diverted funds payable to Wyntek Computer Inc. (“WCI”), for his own use. He ordered that WCI be valued, and that an accounting take place. Further he ordered Daniel or WCI to purchase the Plaintiff’s shares at fair market value.

[15] In August 2001, the Plaintiff sought a money judgment as Daniel had closed both WCI and the competing business, and had disappeared. In the Oppression Judgment, Justice Spence ordered Daniel to pay the sum of $230,289.40 plus costs.

Chronology

[16] The background to this action is convoluted. As will be seen, the finances of this family are intertwined and complex.

[17] This is the second action for fraudulent conveyance, and the third action involving Daniel and the Plaintiff.

[18] Daniel and June were married and immigrated to Canada as students in 1994. According to June, she and Daniel had cash in the amount of $100,000.00 US when they immigrated to Canada. As June’s parents did not provide the $100,000.00 the only inference is that these funds came from Daniel, or his family. June was also given a gift of $20,000.00 from her Mother when she came to Canada in 1994.

[19] Daniel and June attended school and Daniel worked in a computer store. June attended a course at Centennial College in computer programming in 1996 and 1997. Daniel attended the University of Toronto. Daniel generated income, paid the rent, and looked after the financial needs of the family.

[20] In 1996, Daniel and June met the Plaintiff, Katty Man Inger Tsui-Wong at English school in Toronto. They agreed to go into a computer business together. The Plaintiff has a background in accounting, and Daniel had experience with computers. Both invested funds.

[21] The Plaintiff, her husband, Daniel, and June became shareholders, officers, and directors in the company, Wyntek Computer Inc. (“WCI”), incorporated in 1997. Daniel looked after the sales and purchasing, and the Plaintiff looked after the accounting. June helped with some purchasing. The Plaintiff’s husband played no role in WCI.

[22] The business prospered. It went from three employees to ten. I do not have information about the finances of WCI for the first two years of operation. WCI had moved to larger premises. For the year ending September 1999, according to the draft statement prepared by the Plaintiff, WCI had gross sales of $1,900,667.25 and net profits of $217,507.20.

[23] Disagreements occurred between Daniel and the Plaintiff. Daniel did not believe that the Plaintiff was dedicating sufficient effort to WCI.

[24] There had been discussions between the Plaintiff and Daniel for a buy out of her interest in WCI and for her share of the profits for the WCI year ending September 1999, as well as her outstanding capital contribution. These discussions did not come to fruition.

[25] The Plaintiff had spent two months in the summer in China. Her mother was ill and died in September 1999.

[26] The Plaintiff was the accountant for WCI. In September 1999 when the Plaintiff returned from China she found irregularities in the books and records. Payments from clients to WCI were being diverted and paid to an unknown bank account in Daniel’s name, or in the name of the competing company Wintek Computers Distribution Inc.

[27] Unbeknownst to the Plaintiff, Daniel had incorporated the competing company in March 1999: Wintek Computers Distribution Inc. (“WDI”). WDI had a broader scope and different emphasis but was found by Spence J. to be a competing business. Essentially, WCI and WDI were a continuum in an expanding computer business.

[28] The Plaintiff continued working at WCI after the end of September 1999. Her last day of work for WCI was November 7, 1999. She completed the books for WCI for the year ending September 1999 and left the materials with the accountant.

[29] June worked for WDI, the competing business, in accounting from October 1999 to September 2000.

[30] The Plaintiff initiated and served the oppression claim in December 1999. The oppression claim was argued in August 2000.

[31] In September 2000 as the oppression case was coming to fruition, without consultation with the Plaintiff, Daniel and June closed WCI and WDI.

[32] In October 2000, the Plaintiff conducted a corporate search after WCI and WDI closed, and after the family had disappeared. She found that yet a third company: Giant Computers Inc. had been incorporated on March 3, 2000 registered in the Mother’s name.

[33] The third computer business owned by the Mother known as Go Go Computers opened in September 2000. It was allegedly managed by the sister of June. I will comment on this suggestion later in the decision.

[34] In October 2000, the Toronto Property was sold. Prior to its sale it was transferred to the Parents, who in turn transferred it to third parties.

[35] On October 17, 2000, the family: Daniel, June, the Mother, and two children went to China for an undetermined period. From the perspective of the Plaintiff, Daniel and the Defendants disappeared.

[36] On November 9, 2000, shortly after the family left for China, and after the closure of WCI and WDI, Spence, J. released the declaratory judgment confirming the oppression.

First Fraudulent Conveyance Action Brought

[37] In November 2000, the Plaintiff conducted a search of the Property as she was unable to locate Daniel. She learned that the Property registered in the names of June and Daniel had been sold to a third party on November 7, 2000, two days before Spence, J. released his decision.

[38] Shortly before the sale, on October 13, 2000, the Property had been transferred to June’s parents, and then in turn to the bona fide third party purchasers on November 7, 2000.

[39] June’s sister, Quian Lu (the “Sister”), executed the documents for the transfer of title from the Mother and Father to the third parties using a Power of Attorney signed by the Parents on October 16, 2000, one day before the Defendants left for China.

[40] On November 14, 2000, the Plaintiff brought an action for fraudulent conveyance against Daniel, June and the Parents seeking an interest in the Property sale proceeds, damages for conspiracy, as well as punitive damages (the “First Fraudulent Conveyance Action”).

Service of First Fraudulent Conveyance Action on the Defendants

[41] The Plaintiff obtained an order for substituted service of the First Fraudulent Conveyance Action upon the Sister for all four defendants: Daniel, June, and the Parents.

[42] The Sister was served with the claim against the four defendants on December 5, 2000.

[43] The Sister wrote a letter to Plaintiff’s counsel confirming that she had looked at the documents, and contested that she was able to serve Daniel, as “she did not know where he was”. This could not be true. Daniel was in China with her sister, June and their children. Notably, the Sister did not say that she had not served the other Defendants. She stated that she did not want to get involved.

[44] The Sister purported to return some of the documents to counsel for the plaintiff with a letter confirming she did not want to become involved.

[45] Counsel for the Plaintiff responded to the Sister by letter, as follows:

Via Courier

January 5, 2001

Qian Lu

4725 Sheppard Avenue East

Suite 1516

Toronto, Ontario

M1S 5B3

Dear Sir:

Re : Tsui-Wong v. Xiao et al

We acknowledge receipt of the package that you returned to us by courier. Those documents were served upon you pursuant to the court order. You must provide a copy to Daniel Xiao, June Lu, Yongxin and Suqiu Cheng.

Your assertion that you have no knowledge of the whereabouts of Danial Xiao is ridiculous. You acted as the attorney for Yongxin Lu and Suqiu Cheng on the sale of property.

Pursuant to the court order, these documents have been served upon you and are considered to have been served upon all of the defendants. If we do not receive their Statement of Defence within 20 days of the date of this letter, we will continue proceeding to obtain judgement against them. We would advise you to provide a copy of these materials to each of the defendants, for their own benefit, so that they respond to the documents.

[46] Counsel for the Plaintiff noted the Defendants in default.

[47] Counsel for the Plaintiff did not proceed to obtain default judgment. However, the First Fraudulent Conveyance Action was never dismissed. The court file in the First Fraudulent Conveyance Action is still noted as “inactive”.

[48] The family: Daniel, June, the children, and the Mother returned to Canada from China in February 2001. The Father had been living with the Sister since October 17, 2000. They all then lived with the Sister for several months.

[49] The Plaintiff was not aware that they had returned to Toronto.

[50] The Sister had reviewed the claim before returning some of the documents to the lawyer for the Plaintiff.

[51] June confirmed that Daniel had a copy of what was in the package, and that he said he would “look after things”. She then attempted to correct her evidence by saying that he had a copy of just the letters, not the claim.

[52] I find that Daniel, June, and the Parents were well aware of the First Fraudulent Conveyance Action, probably when the Sister was served in December 2000, and certainly by the time they returned to Canada in February 2001. They were living for several months in the same household with the Sister. They made a decision to do nothing.

[53] Although well aware of the claim, neither the Defendants nor their counsel contacted the Plaintiff.

Plaintiff Unable to Locate Daniel and June

[54] In May or June 2001, June and Daniel drove to Vancouver to stay with friends. The reasonable inference is they were leaving the jurisdiction to avoid the Plaintiff’s judgment.

[55] In 2001, the Plaintiff made diligent efforts to locate the Defendants, particularly Daniel and June.

[56] Thereafter, the Plaintiff’s efforts to locate the Defendants ceased for several years. She was litigation weary, frustrated, and fell ill in 2004. She was putting her children through school and recovering financially.

[57] It was not until 2010, that the Plaintiff retained a forensic firm to attempt to locate the Defendants and to determine whether they may have assets making a further chase worthwhile. The Plaintiff determined that June lived in Ontario and owned property. Daniel still has not been located, although June confirmed that he was in Canada last year and visited with his children.

[58] The Plaintiff initiated the second Fraudulent Conveyance Action against Daniel, June, and June’s parents in April 2012 (“this Action”). This Action essentially mirrors the claims advanced in the First Fraudulent Conveyance Action, though with a greater emphasis on tracing funds given the passage of time.

Findings of Credibility

[59] Three witnesses testified: the Plaintiff, June, and the Mother.

[60] The Plaintiff gave her evidence in a straightforward manner. Her evidence was not challenged in any serious way in cross-examination. Her evidence was reliable and credible.

[61] June testified at length. Her evidence was self-serving. It was very difficult to have her answer the questions asked. She would give long speeches, robot-like, not necessarily responsive to the question while looking off to the distance. Her evidence seemed rehearsed. She would endeavour to correct an answer some time later if she thought that she given an answer that was not helpful to her case. Her evidence was not internally consistent and often did not make sense.

[62] She alleges that she left all financial issues to Daniel and was simply a busy wife and mother going to school and caring for her young children. I do not accept this evidence.

[63] June worked in accounting for WDI, the competing company under Daniel’s supervision, from September or October 1999 until it was closed in September 2000. She acknowledged that “she had an intimate knowledge of WDI” at least from an accounting perspective. She prepared cheques, including cheques payable to her parents, and Daniel signed them. Her claim of innocence and of leaving all financial matters to Daniel rings hollow in light of her direct involvement for one year doing the accounting in the competing business prior to the parties selling the Property and leaving abruptly for China.

[64] I conclude that June was well aware of the financial issues of the business, and that she was well aware of the risks Daniel and the family faced due to the case initiated by the Plaintiff. She attended at the hearing before Spence, J. in August 2000. It should not be forgotten that she was a shareholder and director in WCI. I conclude that she was actively taking steps, as Daniel’s wife and partner, to protect the assets in WDI, the competing company from being available to the Plaintiff.

[65] Her evidence that the Parents were the beneficial owners of the Property is inconsistent with the pleadings. It also contradicts the documents that she and Daniel signed with the lawyer at the time the Property was sold. The statutory declaration acknowledged that they were the owners of the Property, and that it was being transferred to the Parents for natural love and affection.

[66] June made many misrepresentations in the court documents filed in British Columbia seeking a divorce, bringing into question both the motivation for the divorce and her truthfulness.

[67] I did not find June’s evidence to be credible or reliable.

[68] The Mother also testified. She has virtually no memory of anything. She was in a serious car accident in 2008 and suffered a head injury. She continually answered that her brain was not working, and that she could not remember anything.

[69] Her evidence of the alleged cash that she had when she came to Canada is not supported by any documents, and in fact her landing documents with her cash declaration are in conflict with her evidence at the trial.

[70] The Mother’s claim that she was the beneficial owner of the Property is in conflict with the Statement of Defence, where it is alleged that she loaned money for the cash contribution to the purchase price, as opposed to being the beneficial owner.

[71] Further, the Mother’s evidence is in direct conflict with the documents that were prepared by the lawyer on the instructions of June and Daniel, and the Parents, at the time the Property was transferred to the Parents.

[72] She had no credible explanation as to how and why she became the registered owner of a third computer company ‑ Giant Computer Inc. in March 2000 in the thick of the proceedings between the Plaintiff and Daniel. That corporation, through Go Go Computers, began operating in September 2000, at the same time as Daniel closed WCI and WDI.

[73] I conclude that the Mother was not a credible or reliable witness. Her evidence was self-serving, vague and inconsistent.

[74] The Father was cross-examined, and on consent his transcript served as his evidence due to his health problems. He did not appear to have any understanding of the issues. He did not allege that he was the beneficial owner of the Property or that he had loaned money for its acquisition. His evidence was not referred to by either counsel during the argument.

The Facts relevant to the Acquisition of the Property

Allegation of Mother of her Financial Contributions

[75] In 1998, June and Daniel entered into an Agreement of Purchase and Sale to purchase the Property. It was being constructed and they purchased from plans. There is no evidence before me as to what the down payment was at the time the agreement was entered into. Normally there would be some sort of down payment. No one addressed this in the evidence.

[76] June and Daniel sent their first child to China for the Parents to look after in 1996 and 1997. The Parents came to Canada first in December 1997, bringing their grandson with them. They lived with June and Daniel in their rental home.

[77] June and Daniel had their second child in January 1999.

[78] The Parents lived in Canada with June and Daniel after the birth until they returned to China in February 1999. They did not work, but helped with childcare for both June and later for her Sister.

[79] In mid-1999, June and Daniel took interim occupation of the Property. There is no evidence before me about what payments, if any, were made at interim occupancy.

[80] On September 16, 1999, the Mother arrived in Canada as a landed immigrant pursuant to the sponsorship of June and Daniel. On October 18, 1999 the Father arrived.

[81] June and Daniel had sponsored the Parents to come to Canada as part of the family reunification programme. One would think that if the Parents had assets, this would assist with their application and these assets would have been disclosed as part of the immigration process.

[82] It is in dispute how much money the parents brought with them when they visited and immigrated to Canada.

[83] The Mother testified that she brought $50,000.00 in cash when she came to Canada in 1997. This was not declared when she arrived. June testified that she was given the $50,000.00 in cash. She did not say what she did with this alleged money. There is no documentary evidence confirming these funds.

[84] The Mother testified at first that she still owns the property assigned to her by her employer as “that is what Chinese people do”. She then testified next that she sold that property, and this is where the $50,000.00 came from that she brought to Canada in 1997. She then testified that she had a second property that she still owns. I find that her first version of events is more likely. It would seem unlikely that the Parents would sell their primary home in China in 1997 until they knew whether their sponsorship application would be approved. This did not happen until late 1999.

[85] The Mother testified that she brought a further sum of $20,000.00 in cash when she came to Canada in September 1999 as a landed immigrant.

[86] The landing papers of the Mother signed by her confirm that she had $2,000.00 when she arrived. She testified that she would not lie, and that the immigration officer made a mistake.

[87] The Father stated in his discovery, filed as his evidence, that he had at least $10,000.00 when he came to Canada. There is a bank transfer note in his passport dated September 13, 1999 for an unspecified amount.

[88] It is curious that the Father would transfer funds, bank to bank, whereas the Mother, an accountant, testified that she came to Canada with undisclosed cash.

[89] The Father’s memory on all issues is very poor, but reading the transcript he did not appear to be testifying with an eye to a lawsuit. He did not allege that any money that he brought to Canada was provided to June and Daniel for the purchase of the Property. He was the head of the union for a petroleum company in China. I accept on a balance of probabilities that the Father had $10,000.00 when he immigrated to Canada that he kept for his own purposes. There is no evidence that he co-mingled funds with Daniel and June.

[90] In September and October 1999, when the Parents became sponsored landed immigrants, they moved in with Daniel, June, and their two children in the Property. The Sister and her new baby, born in September 1999 also moved into the Property for a period of time while she recovered from the birth. Daniel’s father arrived shortly thereafter and he also lived at the Property.

[91] Life was stressful and not harmonious in the Property.

[92] On January 20, 2000, the title to the Property was transferred from Aspen Ridge to June Lu and Daniel Shaw. The purchase price was $167,304.75. There was a mortgage of $100,000.00.

[93] It is contested who paid the cash balance to close the transaction.

[94] June testified that the Parents were the owners of the Property, but that it was taken in the name of June and Daniel as the Parents did not qualify for a mortgage.

[95] The Defendants in the Statement of Defence plead that the Parents paid the $67,000.00 cash required to close the transaction and that June and Daniel contributed no cash to the purchase price.

[96] The Plaintiff contests this allegation as there is no documentary proof to substantiate this claim, and the documents that are available do not support the defence evidence.

[97] The Mother was paid the sum of $2,500.00 per month from WDI beginning January 2000. The Father was paid the sum of $1,200.00 per month from WDI from March 2000. These payments were made until the family went to China in October 2000.

[98] These funds were declared for tax purposes.

[99] A total of $36,200.00 was paid by WDI in the year 2000 to the Parents.

[100] June testified these were repayments of loans for the acquisition of the Property, and to assist the parents to qualify for a mortgage.

[101] If the parents had advanced the $67,000.00 to purchase the Property as alleged in the Statement of Defence, (which is not admitted by the Plaintiff and which has not been proved on the evidence), then the Mother and June acknowledged that $36,200.00 of that amount had been repaid in 2000 prior to the transfer of the Property to the Parents.

[102] On August 8, 2000, the Property was listed for sale for $209,900.00 Daniel looked after the listing. The listing showed Daniel and June as owners.

[103] On August 29 and 30, 2000, the Oppression Remedy application was argued before Justice Spence. He reserved his decision.

[104] Clearly Daniel, and the Defendants were taking steps to leave the jurisdiction after the court hearing.

Conclusion that June and Daniel were the Owners of the Property

[105] I find that the evidence is clear that Daniel and June purchased the Toronto Property as owners, perhaps with some modest financial help from the Parents.

[106] The income statement of WCI presented to Justice Spence confirms that as of September 1999 WCI had annual sales of $1,900,667.25 and net profits of some $217,507.20. Daniel received all of these funds. He also retained the outstanding capital contribution of the Plaintiff in the amount of $70,000.00.

[107] Daniel was also running the competing business in WDI beginning in March 1999 until September 2000, and I infer that additional revenue was generated from that enterprise.

[108] June spoke glowingly of Daniel’s aptitude as a successful businessman in the computer business. She confirmed that it was very easy to make money in the computer business, which is why she encouraged her Mother to incorporate Giant Computers Inc.

[109] Although the Parents were in Canada when the Property purchase closed, June testified that “Daniel and I became the owners” of the Property as the Mother did not qualify for the mortgage. She testified that “it was not convenient for [the Mother] to get the mortgage”.

[110] I do not accept that the payments to the Parents made by WDI were made to facilitate the parents qualifying for a mortgage, as it would have been easy enough for Daniel and June to have guaranteed the mortgage if the Parents were the owners of the Property. At the time of the transfer of the Toronto Property to June and Daniel in January 2000, the Parents were living in Canada and were landed immigrants. They could hold property.

[111] The Mother’s evidence was not credible that it was “her” Property, and that she had come to Canada with significant sums of money. She testified that after coming to Canada, she had not spent a penny, as she was supported fully by her two generous daughters. The daughters not only paid all the living expenses of the Parents, but also generously gave the Mother gifts of cash.

[112] The Father’s transcript evidence was vague and his memory poor to non-existent. He did not allege in his evidence that he contributed to the acquisition of the Property.

[113] I find that from the beginning, June and Daniel were the owners of the Toronto Property and that Daniel, through WCI and WDI, contributed the lion’s share of any cash provided at closing. Daniel and June also assumed the mortgage and made all mortgage payments. They supported the Parents.

[114] The Mother may have made some modest capital contribution to the acquisition of the Property that I find was amply repaid by the $36,200.00 salary received by the Parents in 2000. I find that there was no loan from the Mother with an expectation of repayment, and the Mother was not the owner of the Property.

[115] This conclusion, as will be seen, is supported by the closing documents for the sale of the Toronto Property.

Sale of the Property

[116] The Property was listed for sale on August 8, 2000. The listing agreement was in the name of June and Daniel.

[117] On October 13, 2000, the Property was sold by June and Daniel for $203,000.00 to arm’s length purchasers.

[118] June and Daniel signed the Agreement of Purchase and Sale with the third parties.

[119] The Statutory Declaration signed by June and Daniel as part of the transfer to the Parents is conclusive that June and Daniel were the owners of the Property. It states:

STATUTORY DECLARATION

CANADA

PROVINCE OF ONTARIO

IN THE MATTER OF sale from

SHAW, Daniel Ganan to LU, Yongxin and CHENG, Suquiu

AND IN THE MATTER of the sale of

T.H. 906, 19 Rosebank Drive, Toronto (the “Property”)

I, SHAW, Daniel Ganan and SHAW, June Lu, of the City of Toronto DO SOLEMNLY DECLARE, that:

1. I am the registered owner(s) of the Property and am a party to the transfer as transferor and as such have knowledge of the matters hereinafter declared.

2. I am of the full age of 18 years and am within the meaning of the Family Law Act:

We are spouses of one another.

3. The registered owner(s) was the absolute owner in fee simple in possession of the lands above described and either personally or by my tenants have been in actual, peaceable, continuous, exclusive, open, undisturbed and undisputed possession and occupation of the Lands and the houses and other buildings used in connection therewith since on or about January 20, 2000 when I obtained a conveyance thereof as joint tenants. ……

4. My possession and occupations of the Lands has been undisturbed throughout by any legal proceedings of any nature or adverse possession or otherwise. During my ownership, I have not made any payment or acknowledgement of title to any person or corporation in respect of any right, title, interest or claim upon the Lands and I do not have any knowledge of any other person or corporation having made any such payment or acknowledgement.

5. There are no judgments or executions against me and so far as I am aware, there are none affecting the lands.

WARRANTY

In consideration of and notwithstanding the closing of the above transaction, I hereby warrant and represent as follows:

7. There are no outstanding judgments or executions filed against me and I have never been sued;

[120] On October 13, 2000, June and Daniel transferred their interest in the Property to the Mother and Father for natural love and affection. The deed states:

If consideration is nominal, describe relationship between transferor and transferee and state purpose of conveyance. (see instruction 6) Please see item 7 below.

If the consideration is nominal, is the land subject to any encumbrance? Yes.

Other remarks and explanations, if necessary. The Transferors are the son-in-law and daughter of the Transferees. This transfer is made in consideration of natural love and affection. The existing mortgage with Royal Bank of Canada will be assumed by the Transferees.

[Emphasis added]

[121] There is no mention in the transfer document of any debt owing as part of the transfer.

[122] There is no mention that the Property was owned by the Parents and held in trust by June and Daniel.

[123] Had those been the facts, it would have been simple enough to explain the facts to the lawyer retained for the sale, and these facts would have been reflected in the documents prepared on the instructions of the Defendants.

[124] On October 16, 2000, the Mother and Father signed a Power of Attorney document in favour of their daughter, the Sister.

[125] The family: June, Daniel, the Mother, and the two children travelled to China on October 17, 2000. The father stayed with the Sister in Toronto.

[126] The Property was sold on November 7, 2000. The Sister signed the closing documents for the sale on November 7, 2000, pursuant to the Power of Attorney.

[127] According to the documents, the sale proceeds of $98,143.95 were paid to the Parents. There is no documentary evidence before me as to where the sale proceeds payable to the Parents were deposited.

[128] June testified that the Mother had returned some of the funds to Daniel as part of the “loan” had been repaid. According to June, the mother kept $60,000.00 of the sale proceeds and the balance went to Daniel. The Mother’s evidence on this was vague, but basically confirmed these facts.

[129] June testified that the Mother wanted either repayment of the debt, or title to the Property: “She wanted all proceeds so that they [she and Daniel] would not have to fight who was entitled to the gain.”

[130] I find that the transfer from June and Daniel to the Parents was to try to judgment proof these funds if Daniel was unsuccessful in the oppression action. This was all done in haste, as the parties were leaving for China on October 17, 2000. The parents may well have provided some modest cash to assist with the acquisition of the Property. I find that any amounts that may have been loaned were amply repaid by the salary paid to the Parents in 2000.

The Sister and Mother Begin a New Computer Business “Go Go Computers”

[131] In September or October 2000, the Plaintiff went to the former premises of WCI to find it closed. She was advised by a client that both WCI and WDI had moved and were carrying on business under the name of “Go Go Computers”.

[132] The Plaintiff then conducted a search after the family had disappeared and found that another company: Giant Computers Inc. had been incorporated on March 3, 2000 registered in the Mother’s name. This company was for the repair and retail sale of computers.

[133] The Mother is an unlikely owner of a computer business, due to her age, inability to speak English and her lack of business experience.

[134] On September 7, 2000, the Mother registered the business name “Go Go Computers” for Giant PC Inc. to retail computers.

[135] In September 2000, the Mother signed a two-year lease for the premises for Go Go Computers’ operation.

[136] I do not accept June’s evidence that this was a different type of business. Go Go Computers sold what the predecessor companies had sold, but also included computer retail.

[137] June testified that this was the Mother’s business run by her Sister. The Mother has an accounting background, and no English. The Sister was a nurse in China, then studied accounting. She was a young, recent mother with no business experience.

[138] June testified that she encouraged the Sister to participate as it was easy to make money in the computer business.

[139] I find that the logical inference is that Daniel and probably June were involved directly in setting up and financing Go Go Computers.

[140] Daniel and June had closed both businesses in September 2000. Daniel, to June’s knowledge, disposed of the inventory and kept the proceeds. I find it likely that some or all of the inventory from WCI and WDI found its way into Go Go Computers. Some of the inventory may have been sold, with Daniel retaining all proceeds.

[141] No evidence was provided as to the earnings and financing of Go Go Computers.

[142] A computer retail and repair business requires financing. The Mother testified that she had provided capital in the amount of $40,000.00. This would hardly be sufficient.

[143] Go Go Computers operated from September 2000 until 2005 when it was closed. The Mother, the official owner of Go Go Computers had some modest involvement in the business, picking up inventory after she obtained her driver’s licence.

[144] Notably, the Sister, who allegedly ran Go Go Computers did not testify. She did not explain her role and the earnings in Go Go Computers.

[145] She did not clarify what communications happened following the service of the documents upon her pursuant to the order for substituted service in the First Fraudulent Conveyance Action.

[146] It is reasonable to infer that the Sister’s evidence would not have been helpful for the Defendants.

Subsequent Purchases of Property by June

[147] Daniel and June drove to Vancouver in May or June 2001.

[148] In June 2001, June purchased the property known as 3091 Williams Road, Vancouver. The Plaintiff seeks a tracing to this property. The purchase price was $460,000.00 and it was registered in June’s name alone. The closing occurred on August 30, 2001 (the “Vancouver Property”). The parties obtained a mortgage for $285,000.00.

[149] June confirmed in her evidence that the balance of the cash funds in the amount of $175,000.00 was provided entirely by Daniel.

[150] June testified that none of the funds for the purchase of the Vancouver Property came from the proceeds of the sale of the Toronto Property. It is the evidence of June and the Mother that the Mother retained $60,000.00 from the sale proceeds from the Toronto Property and that Daniel received the balance of $35,200.00.

[151] It is likely that the $35,200.00 from the Toronto Property may be traced to the Vancouver Property. I accept that the Parents kept the remaining $60,000.00 from the proceeds of sale of the Toronto Property.

[152] June suggested that some of the cash for the closing came from Daniel’s father. If this is so, these funds are attributable to Daniel not to June.

[153] I have only a Statement of Income of WCI for the year ending September 1999. The net earnings that Daniel retained were in excess of $216,000.00. I do not have a financial statement showing what inventory was owned by WCI that may have been transferred or co-mingled with WDI, or with Go Go computers. Daniel sold the inventory of WCI and WDI or mingled the inventory in Go Go computers. Any proceeds from the sale of inventory he kept.

[154] The only inference that can reasonably be made is that the lions share of the cash for the closing to acquire the Vancouver Property came from the income generated by WCI, WDI, and the sale or transfer of the inventory to Go Go computers.

[155] I find that the cash to purchase the Vancouver Property came from the funds Daniel received from the proceeds of sale of the Toronto Property, from funds from WCI and WDI, and perhaps some contribution from Daniel’s father.

[156] I do not accept June’s evidence that she wanted the Vancouver Property registered in her name to assist her financial independence. I conclude that title was taken in June’s name alone, although all the cash proceeds came exclusively from Daniel as they were well aware that Daniel had significant unfulfilled obligations pursuant to the Oppression Judgment of Spence, J. released November 9, 2000.

[157] Title to the Vancouver Property was registered in June’s name to avoid creditors, and in particular the Plaintiff.

Monetary Judgment Against Daniel

[158] In light of the changed circumstances, the Plaintiff brought a motion before Justice Spence seeking a monetary judgment against Daniel for his wrongdoing in WCI. The Plaintiff’s interest in WCI could not be valued and purchased by Daniel, pursuant to the November 9, 2000 decision of Spence, J., as the company had been closed and Daniel could not be found.

[159] On August 29, 2001, the day before the closing for the purchase of the Vancouver Property, Spence, J. granted the Oppression Judgment in the amount of $230,289.40 as well as costs in the amount of $39,428.42. The judgment bears interest at 6% per annum.

[160] The measure of damages reflected in the Oppression Judgment was for the outstanding unpaid capital contribution of the Plaintiff in WCI in the amount of $70,000, her exposure on a personal guarantee for $50,100.00, and for 50% of the net profits of WCI for the year ending September 30, 1999 in the amount of $108,753.60.

Divorce of June and Daniel

[161] June did not testify in chief as to the date of separation and simply confirmed the date of the divorce.

[162] On September 9, 2002, June and Daniel were divorced.

[163] June was in a rush.

[164] Her lawyer had advised that she and Daniel must be resident in British Columbia for two years to obtain a divorce.

[165] June provided false information in the Statement of Claim in the Family Law Proceeding. These falsehoods include:

• First she indicated that she had been resident in British Columbia from July 19, 1996.

• She also changed the date of separation to be able to proceed. The court documents confirm that the parties had separated in October 2000, which clearly was false.

• She stated that “the defendant, in October 2000, separated from the plaintiff and resumed his life in China”.

• She also stated in the Statement of Claim that she had been an unemployed homemaker since November 2000. Again, this was not true. She qualified as a Life Insurance Agent while in British Columbia and was working.

[166] I do not accept her suggestion that the errors are the fault of the person who prepared the documents. I find that once the monetary judgment granted by Justice Spence had been rendered in August 2001, June was anxious to protect the equity in the Vancouver Property. It appears clear that June deliberately provided false information that was to her benefit to obtain a speedy divorce.

[167] She testified that she went to China in February 2002 to discuss the finances with Daniel. Regardless of what her pleadings state, February 2002 would be a reasonable date to trigger a separation, if they were truly separated.

[168] It is of interest that June confirmed in the divorce documents that the Vancouver Property was subject to a mortgage of only $170,000.00. It would not be in June’s interest to minimize the mortgage principal, as she wished to retain the Vancouver Property. The mortgage in August 2001 was $285,000.00. Considerable principal had been repaid, presumably by Daniel, from the date of acquiring the Vancouver Property in August 2001 to the date of the family law pleading of March 14, 2002. June also confirmed in that pleading that Daniel had “substantial business assets” in China.

[169] In the division of property, June kept the Vancouver Property, and Daniel kept his business assets. There was no formal separation agreement. The Vancouver counsel prepared a consent order, which was approved by Daniel’s signature and incorporated in the Divorce Judgment dated September 9, 2002.

[170] Counsel for June argues that the divorce settlement protects the Vancouver Property being traced in this action due to the intervening matrimonial settlement.

[171] I disagree. A divorce settlement cannot be used as a shield to protect the parties from fraud.

[172] The facts bring into question the motivation for the divorce.

[173] This concern is reinforced by a loan apparently granted by the Mother to Daniel in 2003, after the divorce. June testified that she wanted to help Daniel, which is unusual given the recent supposed divorce. Daniel apparently wanted to borrow money and June was prepared to facilitate this loan.

[174] Daniel signed the Promissory Note dated September 4, 2003 in favour of the Mother for a loan in the amount of $50,000.00 US and $60,000.00 Canadian. Even if the Mother had the $70,000.00 she stated she had when she came to Canada, it is astounding that she had this amount to loan to Daniel. The loan was to be repaid within one year, and bore interest at 8% per annum.

[175] It is of note that Daniel’s address for the Promissory Note after the parties are divorced is shown to be the Vancouver Property where June and the children resided.

[176] June stated that the Vancouver Property was used as the address on the Promissory Note as it was not possible to use a Chinese address. This makes little sense to me.

[177] It appears that at the time of this loan in September 2003, Daniel and June may well have been cohabiting. It does not make sense to me for the Mother to loan funds to Daniel, and for June to broker a loan, unless there was an ongoing existing relationship between Daniel and June.

[178] June sold the Vancouver Property in 2004 for $580,000.00.

[179] June testified that Daniel had never repaid the Promissory Note loan to her Mother, so she repaid it out of the sale proceeds of the Vancouver Property. Again, this seems odd behaviour for a divorced woman who owns the Vancouver Property. It is more indicative of Daniel having a continuing interest, in the Vancouver Property post-divorce, and that the parties continued to have a relationship.

[180] June purchased Leno Mills in Richmond Hill in 2005 for $460,000.00. It was a cash purchase.

[181] Subsequently, June obtained financing against Leno Mills and purchased other property.

[182] It was the Leno Mills property that June owned in 2010 when the Plaintiff searched June Lu’s name and found she was resident in Ontario and had assets. June also owned other property.

Evidence Relevant to Laches

[183] The Plaintiff and her counsel vigorously conducted searches to try to locate the Defendants in 2000 and in 2001. She was unable to locate Daniel and June, although she did have an address from a driver’s licence search of the Mother.

[184] I have concluded that the Defendants were all aware of the First Fraudulent Conveyance Action, as the documents were served upon the Sister. She and Daniel reviewed the documents. The Defendants chose to do nothing, and now claim prejudice from the delay.

[185] Thereafter, there was a pause of nine years before the Plaintiff renewed the searches to try to find the Defendants to attempt to recoup her losses.

[186] The Plaintiff testified that in 2004 she was ill, and her children advised her to stop the pursuit of the Defendants as it was affecting her health. The Plaintiff agreed with their advice and stopped temporarily to pursue her claim. She stated that she needed to recover financially and both of her children were in university. She did not have the funds or the energy to pursue the Defendants at that time.

[187] She also testified that she had spent close to $40,000.00 to obtain the Oppression Judgment and she had not received a penny. She was reluctant to pursue the claim without having information that there were assets available if she was able to obtain a judgment.

[188] The Plaintiff testified that she was advised by her lawyer that there was no limitation period for the First Fraudulent Conveyance Action.

[189] In 2010, the Plaintiff engaged the services of a civil forensic investigator. The search conducted by Corpa Group in April 16, 2010 confirmed that June was living in Ontario and owned property.

[190] The Report was included in the Joint Document Brief.

[191] There were two interesting pieces of information in the Corpa report.

[192] First, Daniel had attempted in British Columbia to declare bankruptcy in 2009. He showed assets of $14,200.00 and debts of $74,447.00.

[193] The judgment outstanding owing to the Plaintiff was not declared in his bankruptcy documents. His request was denied.

Please note the subject filed for bankruptcy with Stuart Deane Gurney E. Sands & Associates Inc. in July 2009 with assets in the amount of $14,200.00 and liabilities in the amount of $74,447.00.

Please also note the above noted Bankruptcy and Trustee office is located in Surrey, British Columbia.

We have conducted a Bankruptcy Search with the Office of the Superintendent of Bankruptcy Canada which revealed the subject filed for Bankruptcy under the name Daniel Ganan Shaw. The Proposal was rejected. The subject’s address at the time his proceedings began was 820 Lansdowne Road, Unit 708, Richmond, British Columbia.

[194] Second, the investigator spoke to June seeking information about Daniel’s whereabouts. The report states:

Asset Investigation – Shaw et al. (10g810449) dated April 16, 2010.

The subject June Lu continues to reside at the following address and telephone number:

22 Leno Mills Avenue

Richmond Hill, Ontario

L4S 1J6

Telephone No: (905) 787-9383

Cellular No: (647) 836-5530

Please be advised we have spoken with the subject June Lu (under lawful pretext) who would not provide us with Daniel Shaw’s contact information. She stated that we could send correspondence to him at her address and she would ensure he received it. She also stated she has been divorced from Daniel Shaw for several years.

[Emphasis added]

[195] June, in her evidence at trial, stated that the investigator report was a fabrication and a lie. I do not accept her evidence.

[196] This continued shielding of Daniel’s whereabouts in 2010 by June seems very odd after all these years after they are apparently divorced. It also appears clear that June knows the whereabouts of Daniel or his contacts, but chooses not to assist the Plaintiff in locating Daniel.

Law of Fraudulent Conveyance

[197] It is up to the challenger of a transaction to establish on a balance of probabilities that a conveyance was made with the intent to “defeat, hinder, delay or defraud creditors or others”, within the meaning of s. 2 of the Fraudulent Conveyances Act.[^2]

[198] The badges of fraud outlined in Twyne’s case (1601), 76 E.R. 809 include:[^3]

• the donor continued in possession and continued to use the property as his own;

• the transaction was secret;

• the transfer was made in the face of threatened legal proceedings;

• the transfer documents contained false statement as to consideration;

• the consideration is grossly inadequate;

• there is unusual haste in making the transfer;

• some benefit is retained under the settlement by the settlor;

• embarking on a hazardous venture; and

• a close relationship exists between parties to the conveyance.

[199] Where the impugned transaction is between close relatives under suspicious circumstances, it is prudent for the court to require that the debtor's evidence on bona fides be corroborated by reliable independent evidence.[^4]

[200] The badges of fraud are not a closed list. I refer to the decision of Leitch, J. in Mitchell Jenner & Associates Inc. v. Maxine Caroline Saunders, 2011 ONSC 2930, 78 C.B.R. (5th) 169, at para. 71. She confirms many factors indicating fraud in the facts of that case that do not fit squarely in the above noted Twyne’s list.

[201] If a plaintiff raises evidence of one or more of the classic “badges of fraud” that can give rise to an inference of an intent to defraud, the evidentiary burden then falls on those defending the transaction to adduce evidence showing the absence of fraudulent intent.

[202] The plaintiff must prove that the debtor had the mental state of conveying his or her property with the intent to defeat, hinder, delay or defraud creditors of their lawful claims. Proving fraudulent intent of the debtor is a question of fact. Fraudulent intent is to be assessed at the time of the impugned transaction.

[203] The defendant may be able to refute the finding or inference of a fraudulent intent by showing that he or she actually did not have beneficial ownership in the property being conveyed, but rather was holding the property in trust, including a resulting or constructive trust, and that the conveyance was in the nature of a conveyance from a trustee to the beneficial owner of the property.

Conclusion that transfer of Toronto Property is a fraudulent conveyance

[204] First, looking at the Twyne’s list, it is clear that there are several of the traditional badges of fraud: the transfer of the Property to the Parents was done in haste and in secret just before the parties were leaving for China, and when there were outstanding legal proceedings against Daniel. There is a close relationship between the parties.

[205] Further, the facts of this case confirm that the financial interests of the parties are hopelessly intertwined.

[206] The Mother had incorporated a competing computer company in March 2000 that was up and running in September 2000, just after WCI and WDI were closed. In her evidence the Mother was very vague and seemed confused about her ownership interest. Her daughter, the Sister, had a nursing and accounting background. To suggest that Daniel and June were not involved in this third computer company behind the scenes in some way strains credulity. The Sister did not testify.

[207] The family returned from China in February 2001. June and Daniel moved to Vancouver shortly thereafter. They purchased a home registered in June’s name alone with cash provided exclusively by Daniel in the amount of $175,000.00.

[208] The facts and circumstances of this case overwhelmingly confirm a fraudulent intent first, in transferring the Toronto Property to the Parents, and second, in June purchasing the Vancouver Property in her name alone, although the funds came exclusively from Daniel. These funds came from the proceeds of sale of the Toronto Property in the amount of $35,200.00, from funds channeled through WCI and WDI. Perhaps some funds ($70,000.00) came from Daniel’s father. Whether or not funds came from Daniel’s father, clearly these funds did not belong to June.

[209] For the reasons that I have outlined, the explanation of June and the Mother that the Toronto Property was owned by the Parents or, funded by loans from the parents, is not supported by the evidence or by the contemporaneous documents executed at the time of the transfer.

[210] For the reasons that I have previously outlined, I find the evidence of June and the Mother neither credible nor reliable. It appears that this family has circled the wagons and is prepared to say whatever may advance their claims as a family regardless of its veracity.

[211] I have no hesitation in concluding that the transfer to the Parents of the Toronto Property was a fraudulent conveyance made with the intention of defeating the claim of the Plaintiff. The Defendant Parents were not beneficial owners of the Property, and had not financed its acquisition.

[212] I turn to consider the arguments raised by the Defendants as to the equitable principles of laches.

The Defendants knew of the First Fraudulent Conveyance Action

[213] The parties chose to transfer the Toronto Property to the Parents, sell the Toronto Property, and to leave for China to avoid the consequences of the pending potential judgment against Daniel.

[214] The parties returned from China, unbeknownst to the Plaintiff, in February 2001.

[215] Clearly, the only reasonable inference is that all the Defendants were well aware of the decision of Justice Spence dated November 9, 2000 in favour of the Plaintiff granting her oppression remedy.

[216] As well, I find that all the Defendants were well aware of the First Fraudulent Conveyance Action against them, initiated in November 2000, if not at the time of substituted service in December 2000 when they were in China, at least by the time they returned to Canada in February 2001. They were all residing with the Sister.

[217] June confirmed that Daniel had the “package” of the pleadings and that he would look after things: “Chen gave the package to Daniel and asked Daniel to take care of it. I believe Daniel took care of it.”

[218] June’s attempt to allege she did not know of the proceeding is not convincing: “I only knew of the letter and the envelope. [The Sister] did not tell me of the contents of the letter.”

[219] If June and the Parents did not know of the nature of the proceedings, (which I find highly unlikely), they were well aware that there was a proceeding, failed to make any inquiry and chose to be willfully blind to the issues, burying their heads in the sand.

[220] The Defendants made no attempt to contact the Plaintiff. They made no effort to contact counsel acting for the Plaintiff. They made no effort to retain a lawyer to deal with the situation.

[221] The response of Daniel and June to the Oppression Judgment of Spence, J., and the Fraudulent Conveyance Action was to disappear again: to drive to Vancouver in May or June 2001 and to purchase a home in Vancouver in June 2001 registered in June’s name alone.

The Test for the Doctrine of Laches

[222] I adopt the comments of Penny, J. in Indcondo v. Sloan, 2014 ONSC 4018, 121 O.R. (3d) 160, at paras. 157-159 as a succinct and current formulation for the defence of laches:

Laches is an equitable doctrine, akin to estoppel, founded on the principle that one is obliged to assert legal rights in a timely way or risk losing them. Laches is a form of equitable limitation period. Two factors dominate the consideration of this doctrine:

(1) delay and its circumstances; and

(2) prejudice resulting from that delay.

In Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221 (Ontario P.C.), at 239 -240 the principle was stated as follows:

...[it] is not an arbitrary or technical doctrine... Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.

[223] The Supreme Court of Canada discussed these critical factors in M. (K.) v. M. (H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6 (S.C.C.), at pp. 77-78:

What is immediately obvious from all of the authorities is that mere delay is insufficient to trigger laches... Rather, the doctrine considers whether the delay of the plaintiff constitutes acquiescence or results in circumstances that make the prosecution of the action unreasonable. Ultimately, laches must be resolved as a matter of justice as between the parties, as is the case with any equitable doctrine.

[224] The doctrine of laches can be used to defend a claim under the Fraudulent Conveyances Act, R.S.O. 1990, c. F. 29.[^5]

[225] As confirmed in M.(K.), laches must be resolved as a matter of justice between the parties, as in any equitable doctrine.

Acquiescence

[226] The Defendants argue first, that the Plaintiff has acquiesced to the claim being dismissed.

[227] There is a lengthy consideration by Spence, J. in 392278 Ont. Ltd. v. Miletich Estate (2001), 38 R.P.R. (3d) 239, at para. 71, as to the meaning of laches, and acquiescence). The case law confirms that acquiescence must be equivalent of waiver, and is more than simply the passage of time: in that case 43 years.

[228] Spence, J. cited with approval a decision of the British Columbia Court of Appeal in Irvine v. Irvine, 1977 CanLII 2177 (BC CA), [1977] 3 W.W.R. 37 (B.C.C.A), at para. 13, adopting Halsbury’s formulation :

The nature of laches. The legislature, in enacting a statute of limitation, specifies fixed periods after which claims are barred; equity does not fix a specific limit, but considers the circumstances of each case: Smith v. Clay (1767), 3 Bro. C.C. 639, 27 E.R. 419. In determining whether there has been such delay as to amount to laches the chief points to be considered are (1) acquiescence on the plaintiff's part, and (2) any change of position that has occurred on the defendant's part. Acquiescence in this sense does not mean standing by while the violation of a right is in progress, but assent after the violation has been completed and the plaintiff has become aware of it. It is unjust to give the plaintiff a remedy where he has by his conduct done that which might fairly be regarded as equivalent to a waiver of it; or where by his conduct and neglect he has, though not waiving the remedy, put the other party in a position in which it would not be reasonable to place him if the remedy were afterwards to be asserted. In such cases lapse of time and delay are most material. Upon these conditions rests the doctrine of laches: Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221 at 239, per Lord Selborne.

[229] The Court in 392278 Ont. Ltd. concluded that the defendant remained in residence throughout the 43-year period. There was no evidence that she passed up opportunities or changed her position over the years. The delay was long, but did not constitute acquiescence. There was no evidence that the plaintiff had waived her rights.

[230] The trial judge’s findings were upheld by the Court of Appeal in 392278 Ont. Ltd. v. Miletich Estate, [2002] O.J. No. 3795.

[231] I find that the Defendants cannot rely upon the Plaintiff’s acquiescence. Admittedly, there is a significant delay of nine years of inactivity. Had the Plaintiff searched in 2005, she would have found out that June was residing in Ontario. Even after locating the Defendants, and in particular June, the Plaintiff did not commence the second Fraudulent Conveyance Action for almost two years after she located June.

[232] The Plaintiff testified that she was always hopeful that Daniel would surface, and that she could pursue her judgment against him. The Plaintiff was litigation weary and for a period of time was ill and preoccupied by her children pursuing their studies. I accept that the Plaintiff always intended to pursue the Defendants once she was able to locate them, and once she determined that there may be assets to realize upon.

Irredeemable Prejudice

[233] The Defendants also rely on the second branch for laches: a combination of delay causing irredeemable prejudice.

[234] They argue that they are prejudiced as they have not been able to produce documents to substantiate their claim that the Parents provided the funds to acquire the Property. They also suggest that they have been prejudiced as they have proceeded with their lives, assuming that the Plaintiff would not proceed with her action against them.

[235] I refer to paras. 163 and 164 of Indcondo v. Sloan:

Nevertheless, I would be prepared to conclude that the plaintiff has been guilty of inordinate delay in the prosecution of its claims, whether or not those claims are asserted on its own behalf or standing in the shoes of the Trustee. This finding alone, however, as noted above, is insufficient to support a claim of laches. The defendants must also prove circumstances, such as irredeemable prejudice, which show that the continued prosecution of this action is unreasonable. The defendants have failed to do so in this case.

In my view, the prejudice relied on — fading memories and loss of documents — lacks sufficient specificity. While the plaintiff is unquestionably guilty of delay, all parties must take some responsibility for aspects of the more than 23 years which has elapsed since the relevant events. More importantly, while Sloan makes the generic claim that documents were lost or destroyed in the usual and ordinary course of business, there is no evidence of specific documents being destroyed at specific stages of the proceeding as a result of the plaintiff's delay. The relevant property transfers took place between 1987 and 1989. Sloan was first notified of claims in early 1992. Sloan has failed to give any content to the generic complaint that documents that would have been helpful to him were lost or destroyed before that point in time. Since then, while there have been long periods of inactivity on the plaintiff's part, only a fool would have jettisoned important documents with litigation hanging over his head. The fact that Mr. Ford (while not a party nevertheless a friend of Sloan's) produced documents at the eleventh hour also casts some doubt on the rigor with which Sloan fulfilled his document production obligations. While I am sympathetic to the defendants' plea that adverse inferences ought not to be drawn from the loss or destruction of relevant document in the circumstances of this case, the evidence does not rise to the level of proof of acquiescence or actual, material prejudice sufficient to support a claim of laches. For these reasons, the defendants' argument for the dismissal of this action on the basis of laches is dismissed.

[Emphasis added]

[236] I find that fading memories and loss of documents in this case does not come close to reaching the threshold of irredeemable prejudice.

[237] The Defendants were all aware of the Plaintiff’s First Fraudulent Conveyance Action in December 2000, or at the latest, by February 2001. They chose to do nothing. June and Daniel left for British Columbia and June lived there until 2004. I echo the comments of Penny, J. when he said that “only a fool would have jettisoned important documents with litigation hanging over their heads”.

[238] Had the Defendants not been aware of the First Fraudulent Conveyance Proceeding, then maybe there would be some merit in their argument of prejudice. However, June and the Mother chose to ignore the situation and do nothing. June actively avoided detection for several years by moving to British Columbia.

[239] The Defendants’ argument of prejudice is that, although aware of the Plaintiff’s claim, they hoped and later believed that she would not pursue her remedy.

[240] I conclude that although there was a lengthy delay between commencing the First Fraudulent Conveyance Action and This Action, the Defendants’ submissions do not reach the threshold of proof of acquiescence or actual material prejudice sufficient to support a claim of laches.

[241] For these reasons, the request for the dismissal of the claim based upon laches is dismissed.

Damages for Fraud and Conspiracy

[242] In addition to a tracing of the proceeds of the Property into subsequently purchased property, the Plaintiff seeks damages for fraud and conspiracy as well as punitive damages.

[243] I outline the test for civil fraud and conspiracy.

Test for Civil Fraud

[244] A plaintiff asserting a claim for fraud must prove the following four elements on a balance of probabilities:[^6]

• A false representation made by the defendant;

• Some level of knowledge of the falsehood of the representation on the part of the defendant (whether through knowledge or recklessness);

• The false representation caused the plaintiff to act and;

• The plaintiff’s actions resulted in a loss.

[245] It appears clear that the elements of civil fraud of a false representation and knowledge of a falsehood are met. Clearly, the Parents did not own the Toronto Property as confirmed in the Statutory Declaration at the time of the sale. The element of causing the Plaintiff to act, and that act causing a loss is more difficult to prove. As I conclude that there was a fraudulent conveyance of the Toronto Property, therefore a finding of civil fraud is not necessary, and provides no additional benefit to the Plaintiff.

Test for Civil Conspiracy

[246] The requirements of civil conspiracy are that:[^7]

• The defendants acted in combination, that is, in concert, by agreement or with a common design;

• Their conduct was unlawful;

• Their conduct was directed towards the plaintiff;

• The defendants should have known that, in the circumstances, injury to the plaintiff was likely to result; and

• Their conduct caused harm/injury to the Plaintiff

[247] Even though the law of tort may not permit an action against an individual defendant who has caused injury to the plaintiff, the law of tort does recognize a claim against them in combination as the tort of conspiracy if:[^8]

(1) whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants' conduct is to cause injury to the plaintiff; or

(2) where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result.

[248] In both situations above, there must be actual damage suffered by the plaintiff.

[249] A party to a conspiracy is responsible for the damage which was the foreseeable consequence of the conspiracy. See Claiborne Industries Ltd. v. National Bank of Canada, 1989 CanLII 183 (ON CA), 69 O.R. (2d) 65 (C.A.), at p. 29 and pp. 75-76.

[250] I find that Daniel, June and the Mother conspired together to sell the Toronto Property to protect the equity from the sale from being available to satisfy a judgment against Daniel in favour of the Plaintiff. I find that the transfer of the Toronto Property to the Parents was a fraudulent conveyance to try to judgment proof these proceeds, and that the test for conspiracy to commit fraud has been met.

[251] Further, I find that Daniel and June (not the Parents) fraudulently conspired to “judgment proof” the Vancouver Property by registering it in June’s name to avoid the outstanding obligations Daniel had to the Plaintiff. The entire cash for the closing came from Daniel. In law he is the beneficial owner of the Vancouver Property, not June. The questionable bona fides of the divorce and division of assets is further evidence of this conspiracy.

Principles of Tracing

[252] A fraudulent conveyance is void against creditors of the debtor. The transferee of the property becomes a trustee for the creditor, and the creditor can remain entitled to the property. Where the transferee has sold the property to a bona fide purchaser, the creditor’s remedy is the proceeds of the sale.[^9]

[253] As the Ontario Court of Appeal stated in Allen v. Hennessey (1997), 1997 CanLII 1182 (ON CA), 107 O.A.C. 69, at para. 5:

…A creditor is entitled to invoke the Fraudulent Conveyances Act to recover the proceeds of a conveyance void under the statute from a fraudulent transferee. The fraudulent transferee is and bears all the liability of a trustee of the property or its proceeds for the benefit of creditors. As this court stated in Westinghouse Canada Ltd. v. Buchar (1975), 1975 CanLII 638 (ON CA), 9 O.R. (2d) 137 (Ont. C.A.), at 141:

A remedial statute for the protection of creditors’ rights should receive a fair, large and liberal interpretation to ensure the attainment of its objects; the plain intention of the statutes [the Fraudulent Conveyances Act and Assignments and Preferences Act] to be read together is to constitute the fraudulent transferee a trustee of the proceeds replacing the land, for the benefit of the defrauded creditors.

[254] With respect to tracing, when a conveyance is void under the Fraudulent Conveyances Act, the Court of Appeal held in Westinghouse Canada Ltd. v. Buchar (1975), 1975 CanLII 638 (ON CA), 9 O.R. (2d) 137 (C.A.), that the tracing provisions in s. 12 of the Assignments and Preferences Act, R.S.O. 1990, c. A.33 are available. In Allen v. Hennessey, the Court of Appeal held at para. 6 that:

…the fraudulent transferee, Mr Hennessey, conveyed the property to an innocent purchaser for value without notice of the fraudulent intent and held the proceeds of the disposition as trustee for the respondent-creditors. The proceeds were used to acquire another property that increased in value and was similarly conveyed to an innocent purchaser. As the trial judge held, the respondent-creditors are entitled to the proceeds of the subsequent disposition and to obtain a monetary judgment therefor against the transferee in lieu of an order setting aside the fraudulent conveyance which was no longer an available form of relief.

[255] Tracing is not limited to property owned solely by the debtor. In Pilot Insurance Co. v. Foulidis (2005), 2005 CanLII 23679 (ON CA), 199 O.A.C. 391 (C.A.), the Court of Appeal held at para. 40:

Section 12 refers to the conveyance of ‘any property’. Had the legislature wished to limit the scope of s. 12 to property owned solely by the debtor, it could easily have said so. The absence of such limiting language, coupled with the remedial nature of the legislation and its objects, as discussed in Buchar and quoted above, lead me to conclude that the intent of s. 12 is to capture any property in which the debtor has an interest. As already noted, the conveyance to John Foulidis was invalid against Pilot, as creditor, by virtue of the trial judge's finding that it was made with fraudulent intent. Section 12 goes on to provide Pilot with the right to recover ‘the money’ from the appellant because, had the property remained in Filomeni Foulidis and John Foulidis's joint possession, Pilot would have been entitled to seize and sell the property and realize upon that portion attributable to the debtor, in satisfaction of its judgment.

The Court of Appeal further stated at para. 44:

Payment to the person who made the original fraudulent conveyance could not amount to a discharge of his obligations as trustee. Payment of those funds to anyone other than creditors amounts to a breach of trust for which he is liable.

[256] The remedies available under the Fraudulent Conveyances Act were also summarized by Myers, J. in Purcaru v. Seliverstova et al., 2015 ONSC 6679. Myers, J. stated at para. 10:

…the Fraudulent Conveyances Act provides that the court can declare a transfer of property void if the intention of the person who made the transfer was to defeat or delay his or her creditors. The statute is designed to stop a debtor from hiding assets from creditors by fraudulently transferring the assets to another person. If it is applicable, an order under the statute makes property that was fraudulently conveyed available for execution on behalf of the creditors of the transferor. In addition, if the transferred property has been disposed of prior to the transaction being declared void, s. 12 of the Assignments and Preferences Act, R.S.O. 1990, c. A-33 allows the creditors to execute against proceeds received by the transferee.

[257] In Purcaru v. Seliverstova, Myers, J. applied s. 12(1) of the Assignments and Preferences Act, which gives a remedy to creditors of the debtor where the fraudulently conveyed property has been disposed of by the transferee. Myers, J. at para. 115, held that the proceeds of disposition of the fraudulently conveyed cash in that case were in the titles to three properties, and therefore issued judgment binding the respondents’ interests in the title to those properties, and authorizing the sheriff to take position and sell the properties to pay the creditors the sums fraudulently conveyed on each unit, plus interest, and costs. This decision was upheld by the Court of Appeal in Purcaru v. Seliverstova, 2016 ONCA 610.

[258] In Jonas v. Jonas, [2002] O.J. No. 3058, at para. 126, Aitken J. similarly relied on s. 12(1) of the Assignments and Preference Act to trace proceeds from a fraudulent conveyance to property, bank accounts, and credit cards.

[259] In Mitchell Jenner & Associates Inc. v. Saunders, 2011 ONSC 2930, Leitch, J. addressed the issue of whether a spouse who is transferred a matrimonial home in a fraudulent conveyance is liable for the entire net proceeds of the sale, or only for one-half of the net proceeds of sale. Leitch, J. held at para. 87 that “a plaintiff, who is allowed to ‘follow’ proceeds of property fraudulently transferred, cannot recover more than it could have if the property had not been transferred.” Leitch, J. held that only the amount of the spouse’s interest is held in trust for the plaintiff, although interest may accrue on that amount. The decision was upheld by the Court of Appeal.[^10]

Appropriate Remedy

[260] The Plaintiff is attempting to collect the Oppression Judgment against Daniel by tracing the proceeds from the sale of the Toronto Property paid to the Parents and Daniel, and by tracing Daniel’s funds from WCI and WDI and other sources that were used to acquire the Vancouver Property registered in June’s name.

[261] Spence, J. granted the Oppression Judgment as requested in the amount of $230,289.40 as well as costs in the amount of $39,428.42. The judgment bears interest at 6% per annum. The unpaid Oppression Judgment against Daniel underpins the Plaintiff’s claims for fraudulent conveyance involving the Toronto Property and the acquisition and sale of the Vancouver Property.

[262] When I questioned Plaintiff’s counsel during argument, he confirmed that a portion of the Oppression Judgment was for a personal guarantee for $50,000.00. Subsequently, counsel was able to negotiate with the bank, and the Plaintiff was not called upon to pay this amount. Legal fees were incurred to achieve this result.

[263] To make the Plaintiff whole, the amount in issue is therefore $230,289.40, less the $50,000.00, plus the legal fees incurred as well as costs in the amount of $39,428.42. Attributing $4,000.00 to the legal fees for the negotiation with the bank, I conclude that the amount that the Plaintiff lost is $223,717.82, including the cost award to obtain the Oppression Judgment plus interest.

Intertwined Finances in this Family

[264] It is clear from the undisputed facts of this case that the finances of this family are hopelessly intertwined and complex with none of the usual boundaries. This makes it difficult to apply the usual principles of tracing.

[265] June was a shareholder with the Plaintiff in WCI, and actively participated in the finances of WDI, the competing corporation, as their accountant. She prepared the cheques that were paid to her Parents from WDI in 2000 totalling $35,200.00.

[266] She testified that when the family was leaving for China that she did not question what was the future financially for the family. She stated that Daniel advised her that he “would get everything done well”, and that she “didn’t care how he did it as long as he got things done well”.

[267] In my view, she was much more than the passive wife relying on Daniel to make all decisions.

[268] I find that Daniel may well have been the instigator of the plan to close WCI and WDI and for the Mother and Sister to open another computer business, but that the rest of the family including June, the Mother and the Sister went along and actively participated in the plan to sell the Property, go to China and start the third computer business. The Father’s involvement appears to be limited to being briefly on title to the Property prior to the transfer to third parties.

[269] There is no doubt that Daniel was pursuing other business opportunities in China after October 2000. The Sister began running Go Go Computers, registered in the name of the Mother. As the Sister had a nursing and accounting background, and as the Mother had only an accounting background with virtually no ability to speak English, there is no doubt in my mind that Daniel’s hand was in both the startup and operation in Go Go Computers. It operated for five years. There is no financial information before me as to its success, and who contributed what. June confirmed in her evidence that it was easy to make money running a computer business, which is why she encouraged the Sister and the Mother to participate in this venture.

Judgment Against the Parents

[270] The proceeds from the sale of the Property were in round figures ‑ $98,000.00 before legal fees, and $95,200.00 after payment of legal fees.

[271] The Mother testified that she received $60,000.00 from the net proceeds of the sale. The Father passively participated in the fraudulent conveyance. The Parents had already been paid $36,000.00 from WDI. I have concluded that any funds that the Parents contributed to the cash on closing for the purchase of the Property in January 2000, were amply paid back in 2000 with the payments. According to the Mother’s evidence, Daniel received the balance of the funds on closing in the rounded amount of $35,200.00.

[272] Counsel for the Defendants argue that if the Parents received funds properly payable to Daniel and June, that any obligation of the Parents to the Plaintiff should apply to only Daniel’s half of the proceeds, as June was a registered owner on title on the Property and was entitled to one-half of the proceeds.

[273] I do not accept this logic. The Parents, and in particular the Mother, received $60,000.00 from the Property that she was not entitled to. She should be liable to the Plaintiff for what she received that was not hers.

[274] The Defendants argue that none of the Mother’s money found its way into the Vancouver Property and there is no question of tracing with respect to the Parents. I agree with this position. There is no evidence of them buying property shortly after the sale of the Property, and in these circumstances the principles of tracing do not apply.

[275] In these circumstances, I award a judgment in favour of the Plaintiff against the Parents, and in particular the Mother, in the amount of $60,000.00.

Judgment Against June

[276] The title to the Vancouver Property was registered in the name of June alone. The Property was purchased for $460,000.00. She confirmed that the cash contribution of $175,000.00 came from Daniel. The balance of $285,000.00 was financed with a mortgage, paid for by Daniel.

[277] June testified that none of the proceeds from the sale of the Property were used to purchase the Vancouver Property.

[278] The only cash from the sale of the Property given to Daniel that notionally found its way into the Vancouver Property was $35,200.00.

[279] I find that the decision to register the Vancouver Property in June’s name was made to attempt to shield this asset from execution by the Plaintiff. The funds to purchase the Vancouver Property that Daniel contributed could only have come from the windup of WCI and the competitor, WDI. Perhaps some amount came from Daniel’s father, which is irrelevant to this analysis as these funds belonged to Daniel, not June.

[280] The timing of the purchase in June’s name is important. The Vancouver Property was purchased in June 2001 and closed on August 30, 2001. Justice Spence had granted the declaratory oppression remedy judgment on November 9, 2000. The motion to convert the declaration to a money judgment was before Justice Spence on August 29, 2001 resulting in the Oppression Judgment granting the Plaintiff judgment in the amount of $230.289.40 with costs.

[281] In these facts, I conclude that June held the Vancouver Property as trustee for Daniel for his creditors, and in particular the Plaintiff.

Alternative Defence Arguments

[282] Counsel for the Defendants argue that if there was a fraudulent conveyance that the recovery of the Plaintiff in the Vancouver Property is limited to the $95,000.00 from the closing of the sale of the Toronto Property, half which belongs to June.

[283] I disagree.

[284] June’s unequivocal evidence is that none of the proceeds from the sale of the Toronto Property were used to acquire the Vancouver Property.

[285] The more traditional tracing argument may apply in the context of a fraudulent conveyance between husband and wife to protect against creditors, when the wife is a bona fide owner of one half of a jointly owned property, and the husband’s half is fraudulently conveyed to the wife to protect against creditors and subsequent property is purchased. This is the fact situation in the Williams decision of Leitch, J. that the Defendants rely upon.

[286] The facts are very different in this case. There is a very convoluted fact pattern involving a transfer to June’s Parents, with the mother receiving and retaining $60,000.00 from the proceeds. As well, the Vancouver Property is acquired by June from funds from Daniel primarily from the companies that are the subject matter of the oppression remedy.

[287] In these circumstances, I do not accept the argument of the Defendant’s counsel that June should get a notional credit of her “share” of the proceeds from the sale of the Property that can be traced to the Vancouver Property.

Effect of Divorce Settlement

[288] Counsel for June argues that she was entitled to Daniel’s interest in the Vancouver Property as a result of the matrimonial divorce settlement. Daniel retained the “significant assets in China” and she retained the Vancouver Property. June argues therefore none of the Vancouver Property is available for tracing.

[289] I disagree.

[290] A divorce settlement cannot shield the parties’ fraud. When it was acquired, June held the Vancouver Property as trustee for Daniel’s creditors. Daniel provided all of the funds to acquire the Vancouver Property personally, or through funds received from WCI and WDI. June actively and knowingly participated in the scheme to defeat the Plaintiff’s claim by disappearing and by registering the Vancouver Property in her name alone. A subsequent divorce settlement does not undo a fraud, and does not change the fiduciary obligations June owes as trustee holding property for creditors.

[291] In these circumstances, the proceeds from the sale of the Vancouver Property registered in June’s name can traced to other properties owned by June to satisfy the Plaintiff’s judgment.

Judgment Against June

[292] I conclude that the appropriate judgment in these circumstances against June is $175,000.00. This represents the funds contributed by Daniel alone to the acquisition of the Vancouver Property that she held at the date of it was purchased as trustee for creditors. This does not take into account the considerable reduction of the mortgage by Daniel.

[293] If I am incorrect in this conclusion, and if June is entitled to one half of the proceeds received by Daniel from the sale of the Toronto Property that may be notionally traced to the Vancouver Property, then June should have a notional credit for one half of the proceeds received by Daniel from the sale of the Toronto Property in the amount of $35,200.00. This would reduce the judgment against June in favour of the Plaintiff by $17,600.00.

Dismissal of Claim for Punitive Damages

[294] The Plaintiff advances a claim for punitive damages. Although the conduct of the Defendants was high handed and deliberate, I do not think an additional award of punitive damages is appropriate, particularly in light of the considerable delay by the Plaintiff in pursuing this claim.

Pre-Judgment Interest

[295] The Court of Appeal held in Wilson v. Cranley, 2014 ONCA 844, 325 O.A.C. 396, at para. 20, “Pre-judgment interest is ordinarily awarded, absent special circumstances, to reflect the value of the money wrongfully withheld from the plaintiff.” At para. 21, the Court of Appeal also stated, “…pre-judgment interest should be notionally added to the general damages award from the date of the notice of claim…”

Conclusions on Interest Rate for Pre-Judgment Interest

[296] The Judgment of Spence, J. bore interest at 6% per annum.

[297] For the first three years I conclude that the 6% interest rate should fairly be enforced. I reach this conclusion for three reasons.

[298] First, it is the interest rate in the Oppression Judgment. Second, the Mother charged interest in a Promissory Note in 2003 in the amount of 8%, indicative of rates of return expected by the Mother at the time. Third, the Vancouver Property sold in 2004 for $580,000.00. The sale price exceeded the purchase price by some $120,000.00. This increase in the value of the Vancouver property over three years was 20%, which is slightly more than the interest accruing on the Oppression Judgment of 6% per year, or 18%.

[299] In these circumstances, it is reasonable to enforce the interest rate of 6% per annum for the three-year period measured from the date of the First Fraudulent Conveyance Action in November 2000 against the Parents, and against June.

[300] Although I have concluded that the doctrine of laches does not apply, it is clear that for a considerable period of time the Plaintiff was not making active efforts to locate the Defendants and pursue her claim.

[301] I have found that the Defendants were well aware of the First Fraudulent Conveyance Action, and chose to bury their heads in the sand (the Parents) and in the case of June and Daniel to not only avoid dealing with the situation, but to leave the jurisdiction for several years. The onus cannot be solely on the Plaintiff to search out the Defendants, when the Defendants were well aware that there was a claim against them and they chose to do nothing.

[302] Balancing the factor of the Plaintiff’s delay, with the Defendants’ conduct, I conclude in these circumstances that it is appropriate that the Plaintiff be entitled to pre-judgment interest from November 2003 to date at the pre-judgment rate applicable when this action was commenced.

[303] Post judgment interest shall be in accordance with the governing rate in the Courts of Justice Act.

Enforcement Issues

June’s ownership in 15 Shaneen Boulevard Toronto

[304] For the purpose of enforcement, I note that June has a registered interest in a property as tenants in common with Li Lin Hui purchased June 2, 2015 for $600,000.00.

[305] June is registered on title as a 1% interest with the other party having a 99% interest. She confirmed in cross-examination that she is in fact a 50% owner of that property and that she contributed 50% of the cash for the acquisition of that property. Documents were filed with the lawyer who handled the transaction confirming this. The reason apparently that title was taken in this way was because the co-owner is living in this property and it is therefore her principal residence and non-taxable, which is a benefit to June.

[306] If there is an enforcement issue for the judgment against June, the Plaintiff shall be entitled to register a lien for a 50% interest in the property, notwithstanding what is shown as a 1% interest in the registration on title.

Mother’s Assets Registered in Name of Daughters

[307] June gave evidence that she holds assets of her Mother. She has a written document to this effect. Given the close relationship between the Mother and both daughters, and the fluid, intertwined nature of their financial relations, I have concerns that the Mother may have transferred all her assets to her children, particularly the Sister, who is not a party to this proceeding.

[308] If there is an issue of enforcement of the judgment against the Parents, in particularly the Mother, the parties may seek an ex parte order from me for disclosure from June and the Sister, for any assets of the Parents that may be registered in their names, including relevant bank records. I make this as a preventative order given the circumstances of this family.

Costs

[309] The Plaintiff is entitled to costs against the Defendants. If the parties are unable to agree on costs, then brief written submissions not to exceed five pages, shall be submitted with a Bill of Costs prepared by the Plaintiff. Any Offers to Settle should be provided.

J. Wilson J.

Released: May 29, 2018

COURT FILE NO.: CV-12-451247

DATE: 20180529

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

KATTY MAN NGER TSUI-WONG

Plaintiff

– and –

DANIEL XIAO, also known as Daniel Shao, also known as Daniel Gannon Shao, also known as Daniel G. Shaw, JUNE LU, also known as June Lu, also knowns as June Lu Shaw, also known as June L. Shaw, YONGXIN LU and SUQIU CHENG

Defendants

reasons for decision

J. Wilson J.

Released: May 29, 2018

[^1]: Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, s. 15(4)(c)(i).

[^2]: Purcaru v. Seliverstova, 2016 ONCA 610, 80 R.F.L. (7th) 28, at para. 5,

[^3]: Cambone v. Okoakih, 2016 ONSC 792, 67 R.P.R. (5th) 305, at para. 180

[^4]: Fancy (Re) (1984), 1984 CanLII 2031 (ON SC), 46 O.R. (2d) 153 (S.C.J.), at p. 13-14.

[^5]: Perry, Farley & Onyschuk v. Outerbridge Management Ltd. (2001), 2001 CanLII 5678 (ON CA), 54 O.R. (3d) 131 (C.A.), at para. 35.

[^6]: Bruno Appliance and Furniture v. Hryniak, 2014 SCC 8, [2014] 1 S.C.R. 126, at para. 21.

[^7]: Atlas Copco Canada Inc. v. David Hillier, 2018 ONSC 1588, at para. 47; Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460, 106 O.R. (3d) 427, at para. 26.

[^8]: Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd, 1983 CanLII 23 (SCC), [1983] 1 S.C.R. 452, at para. 33.

[^9]: See ss. 2 and 3 of the Fraudulent Conveyances Act, R.S.O. 1990, c F.20 and section 12 of the Assignments and Preferences Act, R.S.O. 1990, c. A.33.

[^10]: See Mitchell Jenner & Associates Inc. v. Saunders, 2012 ONCA 290, 77 E.T.R. (3d) 31.