COURT FILE NO.: CV-16-549066
DATE: 20190110
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CASTLEFORM DEVELOPMENT INC., Plaintiff
AND:
CHAU CHIEM and ANH CHIEM, Defendants
AND
CHAU CHIEM and ANH CHIEM Plaintiffs by Counterclaim
AND
CASTLEFORM DEVELOPMENT INC. and PETER VOONG, Defendants by Counterclaim
BEFORE: LEDERER J.
COUNSEL: Christine Kellowan, Counsel, for Moving Parties (Chiem)
Scott A. Rosen, Counsel, for Responding Parties (Castleform Developments Inc. and Voong)
HEARD: December 11, 2018
ENDORSEMENT
[1] This is an unfortunate matter. Unfortunate in the sense that while brought forward as a business dispute, it has the undertones of a failing family relationship.
[2] It is a motion for summary judgment. The plaintiff is a corporation, Castleform Development Inc. Peter Voong is the sole director and officer of Castleform. The defendant Anh Chiem is Peter Voong’s mother-in-law. The defendant Chau Chiem is Anh Chiem’s mother. Castleform builds houses. It appears that there was an oral agreement by which land owned in the name of Chau Chiem was to be made available, for development, by Castleform. Castleform was to see that the property was severed into two lots and a home built on each of them. I say there appears to be an agreement because both sides say there was one but there is considerable disagreement as to even the most fundamental constituents of it. This disagreement extends to:
• the identification of the parties (was Chau Chiem a party in her own right or was she a place holder for Anh Chiem as the beneficial owner);
• the cost of construction (Chau Chiem and Anh Chiem say the cost was fixed at $750,000 whereas Peter Voong says, not only was there no understanding as to the cost, it would be impossible to build the two houses for that amount);
• contribution to the cost of construction (Chau Chiem and Anh Chiem note that Chau Chiem was to contribute $250,000; Castleform a further $250,000 with the remaining $250,000 to be financed, presumably against the value of the property. For his part Peter Voong agrees that Castleform was to provide $250,000 but says that the additional $250,000 was to be provided, not by Chau Chiem, but by Anh Chiem with the remainder, whatever the amount, to be financed), and
• the results of the project (Chau Chiem and Anh Chiem understood that one of the houses would be sold with the profit being distributed 60% to them and 40% to Castleform. The other house was to be theirs to live in. Peter Voong believes that both houses were to be sold, the money used to pay for construction paid back, Anh Chiem to be paid for the cost of purchasing the property and any profit distributed, 60% to Anh Chiem and 40% Castleform).
[3] For the purpose of the motion, little, if any of this, matters. On behalf of Chau Chiem and Anh Chiem it is submitted that the dispute was settled and that the settlement is evidenced by a release executed by the parties. The motion for summary judgment is founded on the release. It is said that it resolves the matter; that no dispute remains. There is no genuine issue requiring a trial. The purported release states:
I, Peter Voong agree to accept $150,000 (One Hundred Fifty Thousand) and the land lot 24 ft x 125 ft located on 56 26th Twenty Six St. Etobicoke ON M4V3R7 and agree that the total cost including hard cost, soft cost and any other cost associated) of building the property 28 Elder Ave Etobicoke, ON M8V 2J4 (land lot 25 ft x 125 ft) is equivalent in value. I also agree all debts and encumbrances related to the building of property 28 Elder Ave., Etobicoke are fully paid off. Warranties such as Tarrion or any Warranties related to the build of 28 Elder Ave Etobicoke are still in effect to date.
Chau Chiem
Date:
Peter Voong
Date:
Date: Friday December 4, 2015
[4] The ramifications of what is being argued are that if the release is what, and does what, the moving parties (Chau Chiem and Anh Chiem) submit, the action is over. But if it is not a release then all of the disagreement as to what happened, and what was agreed to, become active issues in the dispute and this proceeding. Although brought as a motion for summary judgment this could just as well have been a motion to enforce a settlement. Rule 49.09 states:
Where a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may,
(a) make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly; or
(b) continue the proceeding as if there had been no accepted offer to settle.
[5] The issue at hand is whether there was a settlement. If there was not one there is no agreement, that is no exchange of consideration. If there was a settlement, what were its terms? There are no minutes of settlement and the so-called release does not provide them. On its face the document is an acknowledgment that $150,000 plus one of the two lots (the one that, by the time the release was signed, had been sold) taken together were equal in value to the cost of constructing the home on the other lot. But that is all. The document gives no indication as to what is to happen to the properties, no recognition that one had been sold or whether the sale had produced revenue such that there were profits to be shared. There is no language saying that either party is foregoing any complaint or damage said to have been suffered through the wrong doing of the other. In short, the reciprocity required for the formation of a contract is not apparent.
[6] Seemingly what Chau Chiem and Anh Chiem are asking is that the court make a series of inferences leading to the determination that the agreement that, with the payment of the $150,000, what each side will be left with being of equal value, was satisfactory to them both and that they had agreed, on that basis, to resolve all the disputes between them. The understanding that all debts associated with building the home on the second property had been paid and all encumbrances removed adds nothing that adds value. It serves only to confirm that the equity is free and clear. The continued presence of the warranties assures the equity is protected should problems develop. The inference the position taken by Chau Chiem and Anh Chiem demands is that this, necessarily, is an indication that the second home was to be theirs. Counsel for Chau Chiem and Anh Chiem submits this inference flows from the acknowledgment that there is no debt associated with that property. For his part Peter Voong denies there was any agreement. He took the $150,000 to be a partial payment, on account. Chau Chiem and Anh Chiem rely on the admission, made by Peter Voong, that he did not tell Anh Chiem that this was his intention. On this basis, she, and Chau Chiem, request that the Court make an adverse inference against both Castleform and Peter Voong with respect to the assertion that the $150,000 and the proceeds of the sale constitute partial payment of the outstanding costs. In other words, the court is asked to take Peter Voong’s apparent failure to explain his understanding of whatever arrangement was made as proof it meant what Chau Chiem and Anh Chiem say it means and, on this basis, to find there is no genuine issue requiring a trial. To my mind what this establishes is that there is plenty in issue. It stands as a demonstration that, on its own, the supposed release raises issues that require a trial. Whether there was a settlement and whether the document in question is a release will be an issue at any trial.
[7] The need to read into the language the fundamental understanding that there was an agreement to settle the dispute is not the only problem. Who is it that is being released and from what?
[8] The document was signed by Peter Voong, but was it on his own behalf or that of Castleform? Counsel for Chau Chiem and Anh Chiem submitted that, for the purposes of this arrangement, the company and Peter Voong were interchangeable. In the factum filed on behalf of Chau Chiem and Anh Chiem much is made of the proposition that the corporate veil should be pierced. To them, this, too, does not raise a genuine issue for trial. It would seem the court is to infer that Peter Voong was signing on behalf of both himself and the company. There is only one signature. Counsel for Castleform and Peter Voong says it’s clear; Peter Voong signed on his own behalf and what is being attempted on behalf of Chau Chiem and Anh Cheim is the writing of Castleform into the document when it is not referred to and is not there.
[9] The name Chau Chiem has been written in but was placed there, not by her, but by her daughter, Anh Chiem. It was submitted on behalf of Anh Chiem that she signed pursuant to a Power of Attorney provided to her by her mother. Peter Voong says he signed knowing that the signature of Chau Chiem was a “forgery”. As with the name of Peter Voong, the question of the impact of the signature is unclear. If it is “forgery” it is not valid for any purpose. If it was signed by Anh Chiem, under a power of attorney it may represent Chau Chiem as a party to the document whatever its legal standing. What this signature does not seem to do is make Anh Chiem a party to the document. The response to this, made on behalf of Chau Chiem and Anh Chiem, is to say that the release is not mutual; only Peter Voong is releasing claims he may have against them. There is nothing in the language to suggest much less unequivocally demonstrate this one-sided proposition.
[10] I am not prepared to find that it is plain and obvious that the document is a release, having the effect of releasing Chau Chiem and Anh Chiem from any claim Castleform or Peter Voong may have against them. To find otherwise would be to consider the document removed from the context in which it was prepared. In the words of Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 OR (3d) 438 at para. 44 this would serve to “decontextualize” the agreement by removing it from the surrounding circumstances. To be clear I am not prepared to find that the document is not a release, only that this poses a question which raises genuine issues requiring a trial.
[11] There are subsidiary questions on which the court is also asked to rule. There is a certificate of pending litigation placed on the second home, the one that Chau Chiem and Anh Chiem claim was to be theirs (28 Elder Avenue, Etobicoke, Ontario). It may or may not be that Peter Voong was less than candid when he failed to reveal the existence of the supposed release, and the payment of the $150,000 it called for, at the time the certificate of pending litigation was granted. However, the significance of that failure and the lifting of the certificate are dependent on the validity and effect of the supposed release. Since that question remains unanswered, I refuse to order the discharge of the certificate of pending litigation.
[12] Finally, the court is asked to strike certain paragraphs from the affidavit sworn by Peter Voong. These paragraphs relate to the prior conviction and civil judgments for casino debts against Anh Chiem. One has to wonder why such allegations are present in respect of a motion that raises the intent and meaning of a document claimed to be a release. They have had no impact on the substance of this Endorsement. Whether the content of these paragraphs may have relevance, as part of a broader trial considering the full range of the dispute between these parties, is a matter for the judge at the trial. For the purpose of the motion it is not necessary and I make no ruling.
[13] The motion is dismissed.
[14] The parties agreed that costs of the motion should be awarded to the successful party in the amount of $37,000. Accordingly, costs of $37,000 to be paid by Chau Chiem and Anh Chiem (they are jointly and severally liable) to Castleform Development Inc.
Lederer J.
Date: January 10, 2019