INTRODUCTION

[1] The Plaintiff, Mr. Jung, states that Mr. Lee owes him $180,000.00, plus interest as set out in a promissory note dated January 16, 2010. Mr. Lee paid Mr. Jung interest on the promissory note until the fall of 2014. When Mr. Lee stopped paying interest, Mr. Jung issued a formal demand for repayment. Mr. Lee has not paid any further monies since the demand was made.

[2] Mr. Jung also states that Mr. Lee also owes him $5,000.00 from a business venture that they were involved in.

[3] Mr. Jung commenced his action against Mr. Lee in October 2014 seeking repayment of $185,000.00, plus interest.

[4] Mr. Lee filed a Defence and Counterclaim. He submits that there are a variety of reasons why he should not be required to repay the $185,000.00. He submits that the promissory note is not enforceable because there is no deadline for repaying the principle of the loan. He also submits that the amount owing should be set-off against damages he suffered from Mr. Jung’s improper conduct during business dealings in 2007/08, as well as Mr. Jung’s conduct as Mr. Lee’s real estate agent in 2008/09. In the Counterclaim, Mr. Lee submits that Mr. Jung should also pay damages for harassing his family by speaking ill of him to the Korean-Canadian community.

[5] Two preliminary matters must be addressed prior to considering the summary judgment motion. They are:

a. Should Mr. Lee’s pleadings be struck for his failure to comply with court orders, pursuant to rule 57.03 of the Rules of Civil Procedure?

b. Should the court strike the affidavit that Mr. Lee sought to file on the day of the summary judgment motion?

[6] In considering the summary judgment motion, the court must be satisfied that there are no genuine issues requiring a trial to prove that:

a. Mr. Lee owes Mr. Jung $180,000.00, plus interest pursuant to the promissory note.

b. Mr. Lee owes Mr. Jung $5,000.00, plus interest from the business venture.

[7] The Court must also consider Mr. Lee’s Defence and Counterclaim in determining if summary judgment is appropriate. The court must determine whether there are any genuine issues requiring a trial with respect to whether:

a. Mr. Jung owes Mr. Lee damages from their business dealings in JCL Ltd.

b. Mr. Jung owes Mr. Lee damages because of Mr. Jung’s handling of the sale of Mr. Lee’s home.

c. Mr. Jung owes damages for harassing Mr. Lee and his family.

d. Mr. Jung owes damages to Mr. Lee for misrepresented how the property Mr. Lee purchased could be used.

[8] If there are no genuine issues requiring a trial and the court is satisfied that there are monies owed to either parties, the court must then determine what quantum of damages should be paid.

BACKGROUND FACTS

What was the loan for?

[9] In July 2008, Mr. Lee borrowed $280,000.00 from Mr. Jung and his wife. Mr. Jung believed that Mr. Lee required the money to assist him in two businesses: a post office franchise and a fish business called Apollo Seafood.

[10] Mr. Jung stated that he was comfortable loaning Mr. Lee the money because he knew that Mr. Lee was going to sell his residence at 100 Willowbrook Road, Markham. Mr. Jung believed that Mr. Lee would repay the loan within two months after the Willowbrook property sold. Mr. Lee also promised that he would sell property in Korea worth $500,000.00 CAD to repay him. When it became apparent that Mr. Lee could not repay the loan, the parties signed a promissory noted dated March 18, 2009, for $280,000.00.

[11] Mr. Lee does not dispute that Mr. Jung loaned him $280,000.00. Mr. Lee stated in his Statement of Defence and Counterclaim that the loan was for a venture named JCL, which was a home renovation company started by Mr. Lee, Mr. Jung and Mr. Chang. The company only operated from 2007 to 2008.

[12] In Mr. Lee’s affidavit dated April 27, 2015 and in his cross-examination in May 2018, he stated that the loan from Mr. Jung was used to purchase a post office franchise in a convenience store.

[13] When Mr. Lee sold the Willowbrook residence in 2009, Mr. Lee repaid Mr. Jung $99,657.29.

The Signing of the Promissory Note in 2010

[14] Mr. Lee was unable to repay the remaining loan after he sold the Willowbrook property. Mr. Jung stated that the parties signed a promissory note for $180,000.00, dated January 16, 2010. The promissory note bears an interest rate of TD Prime plus 1% per annum and was payable on December 31, 2013 and on demand.

[15] Mr. Lee stated that the promissory note was extracted from him through fraudulent and male fide conduct. He stated that Mr. Jung, Mr. Lee and Mr. Cho met for drinks in March 2013. Mr. Jung bought Mr. Lee several drinks and Mr. Lee became intoxicated. Mr. Lee could not remember what happened. Mr. Cho told him that he signed a document for Mr. Jung. Mr. Lee believes this is the promissory note. Mr. Jung denies these allegations. In contrast, Mr. Lee stated in his cross-examination that he signed the promissory note voluntarily.

[16] From January 2010 until August 2014, Mr. Lee only paid Mr. Jung the interest owing on the $180,000.00 loan.

The Consumer Proposal 2014

[17] Mr. Lee stated that he could not deal with Mr. Jung’s harassment and reached out for help to end it. Mr. Lee attended at a Trustee in Bankruptcy office. On June 20, 2014, Mr. Lee filed a consumer proposal under Division II of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3. In that proposal, Mr. Lee acknowledged his indebtedness to Mr. Jung for $185,000.00. Mr. Lee stated that he did not understand what a consumer proposal was. He felt that he was ill advised and withdrew the consumer proposal on June 21, 2014. In cross-examination, Mr. Lee admitted that he did not tell the proposed trustee that he denied owing the money to Mr. Jung.

Default on the Promissory Note

[18] On May 7, 2013, Mr. Jung placed a s. 71 Notice pursuant to the Land Titles Act R.S.O. 1990, c. L. 5, on Mr. Lee’s residence located at 14 Thornridge Drive, Thornhill because Mr. Jung was concerned that the residence was the only equity available to repay the loan.

[19] In the Fall of 2014, Mr. Jung learned that Mr. Lee was trying to sell the Thornridge residence. He told Mr. Lee that he would discharge the s. 71 Notice if the Lees agreed to sign a mortgage, but they ultimately refused to do so. The s. 71 Notice was nonetheless discharged in December 2014.

[20] On October 8, 2014, Mr. Jung made a formal demand for repayment for the $180,000.00 set out in the promissory note and for the $5,000.00 owed from the JCL venture.

[21] The Lees ultimately sold the Thornridge property for $1,750,000.00 on December 30, 2015. They did not pay Mr. Jung any monies from the sale of this home.

The $5,000.00 Loan

[22] Mr. Jung submits that when the JCL venture concluded, Mr. Lee owed Mr. Jung and Mr. Chang $15,000.00. Mr. Lee advised Mr. Jung that he did not have the money to repay them. Because they were friends, Mr. Jung agreed that the $15,000.00 would be repayable by Mr. Lee on demand from time to time. Mr. Jung states that Mr. Lee made some payments but, as of July 2014, Mr. Lee still owed him $5,000.00. There is no documentation with respect to this loan.

Mr. Lee’s Claims of Damages caused by Mr. Jung

The JCL Venture

[23] Mr. Lee submits that he is entitled to damages from Mr. Jung because the JCL business venture failed. These damages should be deducted from any amount Mr. Lee owes Mr. Jung.

[24] Mr. Lee states that Mr. Jung and Mr. Chang approached him to enter into a business venture to buy, renovate and sell houses in 2007. Mr. Lee states that he was to be paid $3,000.00 per month for running the business. Mr. Jung denies that Mr. Lee was to be compensated in this fashion.

[25] It is not disputed that Mr. Chang agreed to finance Mr. Lee’s $100,000.00 investment in JCL. Mr. Lee states that, after a few months, Mr. Chang began pressuring Mr. Lee to repay the money. Mr. Lee states that he borrowed money from his line of credit at the HSBC and repaid Mr. Chang.

[26] Mr. Chang confirmed that he loaned Mr. Lee $100,000.00 to invest in the JCL venture. JCL renovated two homes during that period and resold the properties. After August 2007, JCL did not conduct any further business because the venture was not very profitable. JCL banking records were filed that confirmed that no business activity was conducted after August 2007 and the account was closed in November 2008.

[27] Mr. Lee submits that he was very upset with Mr. Chang and Mr. Jung after JCL ceased operating. He relied on Mr. Jung’s promise of employment and, with the loss of employment income, Mr. Lee states that he had to sell the Willowbrook residence. He submits that he should be compensated because of his reliance on Mr. Jung’s representations.

Aborted Sale of the Willowbrook Residence

[28] Mr. Lee also submits that he should be compensated for Mr. Jung’s negligence as his real estate agent. In 2008, Mr. and Ms. Lee wanted to sell the Willowbrook residence. Mr. Jung offered to list the property with his broker, Century 21, and the Lees agreed. On April 18, 2008, an agreement of purchase and sale was signed with prospective buyers with a $20,000.00 deposit. The sale fell through. Mr. Lee claims that Mr. Jung should have insisted on a larger deposit of $50,000.00 because the transaction would have completed if this amount had been required. When the Willowbrook sale did not close, Mr. Lee had to carry the costs of owning two homes for approximately 14 months. Mr. Lee submits that Mr. Jung and another agent, Ms. Chung, should be responsible for damages.

[29] Mr. Jung denies he is responsible for the sale falling through and points out that Mr. Lee made other changes to the agreement of purchase and sale that did not touch on the $20,000.00 deposit.

[30] Mr. Lee and his wife retained Mr. Nadler to sue the prospective purchaser for damages from the aborted real estate transaction. The Lees did not sue either Mr. Jung or Ms. Chung as the agents involved in the transaction. Mr. Lee states that Mr. Nadler never advised him that he could sue the real estate agents.

[31] Mr. Nadler got off the record and the lawsuit did not resolve because the purchasers returned to Korea. Mr. Lee claims that Mr. Nadler is in a conflict of interest in representing Mr. Jung. Mr. Lee could have brought a motion to have Mr. Nadler dismissed as counsel for Mr. Jung, but Mr. Lee declined this opportunity when asked by the court if he wished to do so.

[32] Mr. Lee continued to use Mr. Jung as his real estate agent and the Willowbrook residence sold in 2009. On June 22, 2009, Mr. Lee paid $99,657.29 back to Mr. Jung as reflected in the promissory noted dated January 16, 2010.

Thornridge Property

[33] Mr. Jung also acted as Mr. Lee’s real estate agent for the purchase of 14 Thornridge Drive, Thornhill. Mr. Lee submits that Mr. Jung advised him that he could build seven townhomes on the Thornridge property. Mr. Lee submits that he would not have purchased the property had he known it could not be used to build townhomes. He submits that he is, therefore, entitled to damages from Mr. Jung.

[34] Mr. Jung denies ever making this assertion.

[35] Mr. Lee sold the Thornridge property for $1,750,000.00 on December 30, 2015.

Harassment/Defamation

[36] Mr. Lee submits that Mr. Jung began to pursue “a course of conduct of harassment, scandalizing, embarrassing and intimating” he and his wife within the small Korean-Canadian community. He submits that Mr. Jung made disparaging remarks against him to other members of the community. He attached a copy of a web-posting dated July 27, 2014 that he submits Mr. Jung posted.

[37] Mr. Lee seeks damages as result of this mala fides misconduct.

Procedural History

[38] Mr. Jung filed the Statement of Claim on November 13, 2014. Mr. Lee filed his Statement of Defence and Counterclaim on December 15, 2014.

[39] On April 9, 2015, Mr. Lee requested an adjournment of the summary judgment motion. On consent, the summary judgment motion was adjourned to August 19, 2015, with a detailed timetable that required cross-examination and facta to be delivered by July 22, 2015.

[40] Mr. Lee was ordered to maintain the status quo with respect to the matrimonial home at 14 Thornridge Drive, and to advise Mr. Jung of his intention to list or sell the property. If the house was sold, Mr. Lee was ordered to deposit sufficient funds with the court to cover Mr. Jung’s claim, pending further court order or agreement of the parties. There is no evidence as to what happened with respect to this order. The residence was sold on December 30, 2015.

[41] Mr. Lee failed to attend for his cross-examination on June 10, 2015.

[42] In August 2015, Mr. Nadler got off the record as counsel for Mr. Jung.

[43] On August 19, 2015, counsel for Mr. Lee advised the court that he had not filed responding materials for the summary judgment motion because of settlement discussions. Mr. Jung failed to bring a Notice of Intent to adjourn the motion. With consent, Mr. Lee was given permission to file his materials for the summary judgment motion. The summary judgment motion was adjourned sine die to allow further settlement discussions.

[44] In March 2016, after Mr. Nadler got back on record for Mr. Jung, Mr. Lee was served an appointment for an examination on his affidavit for October 7, 2016. Mr. Lee did not attend.

[45] Nothing appears to have happened to move the litigation forward from October 2016 to February 2018.

[46] On February 2, 2018, Mr. Jung learned that Mr. Lee had filed a new consumer proposal pursuant to s. 66.13 of the Bankruptcy and Insolvency Act. Mr. Jung attended a meeting to consider Mr. Lee’s consumer proposal, but the proposal was rejected.

[47] On February 6, 2018, Mr. Jung brought a motion to strike Mr. Lee’s pleadings for failing to attend his cross-examination. This motion was adjourned sine die pending a motion to lift the statutory stay that resulted from the filing of the consumer proposal under the Bankruptcy Act. Counsel for Mr. Lee advised that his retainer for Mr. Lee was terminated with the filing of the consumer proposal. Ultimately, the stay of the litigation proceedings was lifted.

[48] On May 17, 2018, Mr. Jung brought a motion to strike Mr. Lee’s Statement of Defence and Counterclaim and sought an order that this matter proceed to trial undefended. Mr. Lee did not file any material in response to the motion. Mr. Lee was given the opportunity to file a motion to have Mr. Nadler removed as counsel of record, which he declined. Mr. Lee agreed to attend for cross-examinations, which were to be completed by June 1, 2018. The endorsement notes that if Mr. Lee failed to attend the cross-examinations, his pleadings would be struck on a return court date. Mr. Lee attended cross-examination on May 28, 2018. Mr. Lee was also ordered to pay costs in the amount of $4,000.00.

[49] The matter returned to court on June 6, 2019. This was a contested adjournment of the summary judgment motion before Harris J. Counsel for Mr. Lee was not yet retained. The adjournment was granted but the date of July 23, 2019, was made pre-emptory for the summary judgment motion. It was noted that Mr. Lee had to pay the $4,000.00 cost award from May 17, 2018, before July 5, 2019. In addition, costs were ordered in the amount of $1,250.00. Mr. Lee has not paid either of those cost awards.

New Affidavit

[50] On the day of the summary judgment motion, counsel for Mr. Lee attempted to file a supplement affidavit dated July 15, 2019. This affidavit contained an English translation of a web posting that was previously filed in Korean as an exhibit to Mr. Lee’s affidavit dated April 27, 2015. The new affidavit also provided further evidence of what Mr. Lee describes as continued harassment by Mr. Jung in 2016 at Mr. Lee’s work place. Mr. Lee also referred to flyers that he received in March and May 2017 from Korean restaurants in Toronto that he says Mr. Jung distributed. He stated that he took these print outs to his previous lawyer, but they were never translated to English. He states that he expected his lawyer to do something about these flyers. He states that these fliers created false information about his entire family.

Issue #1: Should the Pleadings be Struck pursuant to Rule 57.03?

[51] Counsel for Mr. Jung states that Mr. Lee’s pleadings should be struck because Mr. Lee breached two court orders. Mr. Lee also failed to attend for cross-examinations on two occasions and failed to pay costs.

[52] Counsel for Mr. Lee submits that Mr. Lee cannot pay the costs order and that the issue of costs should be dealt with at the end of the motion because, if Mr. Lee is successful, there will be a set-off amount. Mr. Lee’s cross-examination has now been completed.

[53] Rule 57.03 of the Rules of Civil Procedure permits the court to dismiss, stay or make any other just remedy for failure to comply with a court order. In considering the whether to strike out an action for failure to pay costs, a court must balance the competing interests of the parties and consider all of the relevant circumstances: see Garret v. Oldfield, Greaves, D’Agostino, 2016 ONCA 424.

[54] I am not inclined to strike Mr. Lee’s Statement of Defence and Counterclaim because he has not paid costs. The matter was marked pre-emptory to Mr. Lee. His counsel states he does not have sufficient funds to pay at this time but rather depending on the outcome of this case the costs could be paid. This is not how litigation proceeds. If costs are owed they are to be paid. Allowing Mr. Lee more time to pay would only further unduly delay the motion to the detriment of Mr. Jung. Despite Mr. Lee’s failure to pay, I am not satisfied that I should strike out his entire proceedings, rather Mr. Lee’s failure to pay costs is a factor that I will consider with respect to striking out Mr. Lee’s new affidavit.

Issue #2: Should the Affidavit be Struck?

[55] Mr. Lee seeks to file a new affidavit on this summary judgment motion sworn on July 15, 2019. Counsel submits that this affidavit is relevant to the proceedings. She was unable to file the affidavit prior to the motion because Mr. Lee’s previous lawyer passed away and she was unable to file a change of solicitor that would permit her to file the affidavit.

[56] Mr. Jung submits that the court should not consider the affidavit because the information contained in it is statute-barred, the defendant did not amend his pleadings and it is prejudicial to Mr. Jung, given the late filing.

[57] Rule 25.11 of the Rules of Civil Procedure states that a court may strike out or expunge all or part of a pleading or other document on the basis that the pleading or document may prejudice or delay the fair trial of the action, it is scandalous, or its admission is an abuse of the process of the court.

[58] I am satisfied that I should strike out the affidavit of Mr. Lee dated July 15, 2019 with the exception of the 2nd paragraph which contains an English translation of a web posting previously filed as an exhibit to Mr. Lee’s affidavit dated April 27, 2015. To permit Mr. Lee to file the rest of the affidavit at this late date would prejudice Mr. Jung and would otherwise delay the summary judgment motion. Its admission is an abuse of the court’s process.

[59] Mr. Lee has had years to prepare and provide his materials properly. This matter has dragged on far too long and the late filing of this affidavit would appear to be yet another tactic to further delay the summary judgment motion that was marked pre-emptory against Mr. Lee.

[60] Mr. Lee has a history of not complying with court orders and not filing responding material with the court. He has failed to attend two appointments for cross-examination. Mr. Lee filed a consumer proposal, which resulted in temporary stay of proceedings. He also failed to pay costs as ordered on two occasions.

[61] No excuse has been provided for why the affidavit was not provided back in 2016 and 2017 when the incidents allegedly occurred, aside from the fact that Mr. Lee expected his lawyer to do something with the fliers. Mr. Lee represented himself at various times and was therefore obligated to do something about this new information himself. Waiting to file this additional information until the day of the summary judgment motion or even a few weeks before the motion prejudices Mr. Jung. He is denied the opportunity to cross-examine Mr. Lee about these allegations, if he wishes to proceed with the summary judgment motion. Mr. Lee’s cross-examination was concluded in May 28, 2018. There is no reason why this affidavit could not have been provided before that date so Mr. Lee could have been cross-examined on the allegations he now raises.

[62] In any event, Mr. Lee did not plead defamation or slander in relation to these flyers in his Statement of Defence and Counterclaim. His ability to do so now is statute-barred. Pursuant to s. 5(1) of the Libel and Slander Act, R.S.O. 1990, c. L. 12, Mr. Lee was required to notify Mr. Jung in writing of the matter complained of within “six weeks after the alleged libel” came to his attention. There is no evidence that Mr. Lee provided proper notice to Mr. Jung.

[63] In all of the circumstances, the affidavit - aside from the English translation of the July 27, 2014 web posting - is not admitted as evidence for the summary judgement motion.

Issue #3: Should Summary Judgment be Granted?

Principles to be Applied to a Summary Judgment Motion

[64] Rule 20.04 (2)(a) of the Rules of Civil Procedure states that the court shall grant summary judgment “if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.” In considering if there is a genuine issue requiring trial, pursuant to r. 20.04(2.1), the judge may exercise certain powers “unless it is in the interest of justice for such powers to be exercised only at a trial.” These powers include:

Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.

[65] The Supreme Court of Canada considered the summary judgment regime in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87. At paragraph 66, Hryniak instructs that the court’s analysis on a summary judgment motion must take place in two stages.

First, the motion judge must determine if there is a genuine issue requiring a trial based only the evidence filed on the motion, without regard to the fact finding powers described in r. 20.04(2.1). No genuine issue requiring a trial will exist if the evidence permits the motions judge to fairly and justly adjudicate the dispute in a timely, affordable and proportional matter. If no genuine issue requiring a trial exists, the motion judge must render summary judgment.
If the motion judge concludes at the first stage that a genuine issue for trial exists, the motion judge is then directed to consider whether a trial may be avoided by using the enhanced fact-finding powers set out in r. 20.04(2.1). The motion judge may exercise those powers, unless doing so would be contrary to the interests of justice.

[66] In a summary judgment motion, each party is required to put their best foot forward with respect to the evidence they rely on to support or defend the motion: see Rahimi et al. v. Hatami et al., 2015 ONSC 4266, at paras. 5-6. This is a particularly important factor in this case because each party has had ample time to put their best foot forward.

[67] Mr. Jung submits that this is a straight-forward case about the repayment of a loan secured by a promissory note for $180,000.00 and the repayment of loan to Mr. Lee for $5,000.00, neither of which have been repaid.

[68] Mr. Lee submits that there are numerous issues that require a trial to resolve what amount, if any, is actually owed given the damages he suffered such that this is not an appropriate case for summary judgment.

[69] I am satisfied that there are no genuine issues for trial that cannot be addressed by utilizing the fact-finding powers set out in r. 20.04 (2.1.). I am also satisfied that it would not be contrary to the interests of justice to resolve this matter by way of summary judgement, for the reasons set out below.

Issue #3(a): Are There Any Genuine Issues that Require a Trial to Determine if Mr. Lee Owes Mr. Jung Monies Pursuant to the Promissory Note?

[70] There are no genuine issues that require a trial to determine if Mr. Lee owes Mr. Jung $180,000.00, plus interest pursuant to the promissory note.

i) The Promissory Note for $180,000.00 is Valid and Payable

[71] I am satisfied that the promissory note for $180,000.00 is valid for several reasons.

[72] First, Mr. Lee does not dispute that he signed two promissory notes for the amount Mr. Jung loaned him.

[73] Second, in his cross-examination, Mr. Lee stated that he voluntarily signed the promissory note.

[74] Third, the amounts owing on the two promissory notes and the dates of the notes are consistent with the evidence. It is not disputed that Mr. Lee borrowed $280,000.00 from Mr. Jung. The first promissory note is for $280,000.00 dated March 18, 2009. Mr. Lee paid Mr. Jung $99,657.29 on June 11, 2009. Mr. Lee signed a new promissory note for $180,000.00 on January 16, 2010 that reflected that $99,657.29 had been paid.

[75] Fourth, the fact that Mr. Lee continued to pay interest for the following four years after the 2010 promissory note was signed further demonstrates that the promissory note was legitimate, and that Mr. Lee owed $180,000.00.

[76] Fifth, Mr. Lee also included an amount of $185,000.00 owing to Mr. Jung in two different consumer proposals, further demonstrating the legitimacy of the promissory note. Mr. Lee’s claim that he did not understand his rights in creating the first consumer proposal, rings hollow in light of the fact that he admitted owing money to Mr. Jung in a subsequent consumer proposal.

[77] I am exercising my limited fact-finding powers to reject Mr. Lee’s statement that he signed the promissory note under false pretenses when he was out drinking with Mr. Jung and Mr. Cho. First, his evidence that the promissory note was not valid is undermined by the points listed above. Second, he stated that he did not recall signing a promissory note when, in fact, he signed two. Third, the information that Mr. Lee signed a promissory note while intoxicated came from Mr. Cho. While information received on belief is permissible in affidavits, the court may draw an adverse inference, if appropriate. If Mr. Lee truly took the position that there was not a valid promissory note – which is the foundation of the litigation – one would have expected him to put his best foot forward and provide an affidavit from Mr. Cho.

[78] The promissory note held that the payment was due on December 31, 2013 and was payable on demand. On October 8, 2014, Mr. Jung made a demand for payment. He has not received any funds since that time.

[79] No triable issue arises from the fact that the promissory note contains both a date of December 31, 2013, when the amount is payable and that it is payable on demand, in this case October 8, 2014. Regardless of what date is used, Mr. Jung commenced this action well within the two-year limitation period, pursuant to ss. 4 and 5 of the Limitations Act, S.O. 2002, c. 24 Sched. B.

[80] In practical terms, Mr. Lee’s true complaint is that damages should be off-set or deducted from the amount Mr. Lee owes Mr. Jung, as set out in his Statement of Defence and Counterclaim.

The $280,000.00 was not for the JCL Business Venture

[81] Given my finding that the promissory note is valid and enforceable, I do not think much turns on the purpose for which the money was loaned to Mr. Lee. In any event, I will address the factual inconsistency between Mr. Lee’s Statement of Defence and his evidence on his cross-examination.

[82] In Mr. Lee’s Statement of Defence, he suggested that the loan arose out the JCL Business Venture. He stated that he did not have the financial resources to make a contribution to the business venture and that each of the parties provided $280,000.00, which Mr. Jung advanced to him for this purpose.

[83] In his affidavit and his cross-examination, Mr. Lee stated that the $280,000.00 advance had nothing to do with JCL. Rather, Mr. Lee stated that the purpose was to borrow money to purchase a postal office inside of a convenience store in July 2008. Mr. Lee operated the post office until 2012. Mr. Lee also admitted that he paid Mr. Jung interest during this time.

[84] I prefer Mr. Lee’s evidence in his affidavit and his cross-examination because, unlike the Statement of Defence, Mr. Lee’s evidence was under oath. In addition, Mr. Chang – the third business partner in JCL – filed an affidavit confirming that he loaned Mr. Lee $100,000.00 to invest in the JCL venture.

Issue #3(b): Are There Any Genuine Issues that Require a Trial to Determine if Mr. Lee owes Mr. Jung $5,000.00 from JCL?

[85] Mr. Jung also submits that Mr. Lee owes him $5,000.00, plus interest based on money owed to him from the JCL venture from 2007/08. I am satisfied that there is no genuine issue requiring a trial to determine if Mr. Lee owes Mr. Jung $5,000.00.

[86] The claim for the $5,000.00 is statute-barred. JCL ceased operating in 2007 and the bank account was closed in 2008. Mr. Jung did not make a claim for the $5,000.00 until he filed his Statement of Claim in 2014. A reasonable person in Mr. Jung’s situation ought to have known that there was a claim shortly after the money was paid back in 2008 given that Mr. Lee also owed him $280,000.00 as reflected in the first promissory note. Permitting him to claim damages for the $5,000.00 was runs contrary to the principles of the Limitation act which is to provide finality and certainty, reliability of the evidence and the requirement of due diligence: See s. 5(b) of the Limitations Act & Independence Plaza 1 Associates LLC v. Figliolini, 2017 ONCA 44 at paras. 19 to 23.

[87] Even if there was not a limitation period, exercising my limited power to weigh the evidence, I am not satisfied that Mr. Jung has demonstrated that Mr. Lee owes $5,000.00, plus interest, from the JCL venture for the following reasons.

[88] First, Mr. Jung has not provided any business records with respect to the $15,000.00 he says Mr. Lee owed after “an accounting of the affairs” of the JCL venture.

[89] Second, Mr. Jung provided no documentation showing what amount was repaid or the terms of repayment, including interest.

[90] Third, Mr. Chang’s affidavit does not assist Mr. Jung in proving that Mr. Lee owes him this money. Mr. Chang states that he was not aware of any loans between Mr. Jung and Mr. Lee at that time. Mr. Chang also stated that he lent Mr. Lee $100,000.00 to invest in JCL. Mr. Chang stated that there was never any arrangement for how funds would be taken out of the venture to pay personal obligations from any one of the partners to another.

[91] Fourth, the promissory notes do not include the $5,000.00 that Mr. Jung states Mr. Lee owed him. If Mr. Lee owed Mr. Jung $5,000.00, one would expect that amount would be reflected in the promissory notes because by the time the notes were signed, JCL was not operating.

[92] Without further documentation as to how the $5,000.00 was arrived at, I am not satisfied that Mr. Lee owes Mr. Jung this additional amount based solely on Mr. Lee’s consumer proposals that indicates he owes Mr. Jung $185,000.00. The loan for $180,000.00 was documented and included payment of interest on the $180,000.00. In contrast, there is no documentary evidence from Mr. Jung that shows that Mr. Lee owes him $5,000.00 from the JCL venture or the terms of repayment aside from Mr. Jung’s demand letter.

Issue #4: Are There any Genuine Issues that Require a Trial to Determine if Mr. Jung Owes Mr. Lee Damages?

[93] Mr. Lee claims that there are triable issues with respect to set-offs and damages he suffered as set out in his Statement of Defence and Counterclaim.

[94] A set-off is a defence to the claim as opposed to a counterclaim, which is an independent claim.

[95] Mr. Lee does not satisfy the requirements for a legal set-off because he seeks damages from Mr. Jung’s actions as opposed to enforcing a debt against him: see Holt v. Telford, 1987 CanLII 18 (SCC), [1987] 2 S.C.R. 193 at 204, per Wilson J.

[96] An equitable set-off is also not applicable to promissory notes or other bills of exchange and therefore cannot be relied upon in this case: see Iraco v. Staiman Steel Ltd., (1986) 1986 CanLII 2739 (ON SC), 27 D.L.R. (4th) 69 (Ont. H.C.J), aff’d 1987 CanLII 4072 (ON CA), [1987] 45 D.L.R. (4th) 158 (Ont. C.A.); Elgrichi v. Hornstein, 2004 CanLII 18996 (Ont. S.C.D.C.); 1652620 Ontario Inc. v. Conerstone Builders Ltd., 2018 ONCA 973, at para. 6. Nor is a counter-claim for unliquidated damages a valid defence on a promissory note: Iraco.

[97] In any event, regardless of whether Mr. Lee’s claims relate to an equitable set-off or a counterclaim, I am satisfied that none of his complaints raise a triable issue for the reasons set out below.

i) Damages from JCL

[98] As noted, there is no connection between JCL and the $280,000.00 that Mr. Lee borrowed from Mr. Jung.

[99] Mr. Lee submits that Mr. Jung owes him damages because he relied on Mr. Jung’s representations that the JCL venture would be successful, and that Mr. Lee would be paid $3,000.00 per month. Mr. Lee submits that Mr. Jung misrepresented that he had the necessary experience to run this business. Mr. Lee submits Mr. Jung failed to provide the inventory of properties and that the business came to an end less than a year after it commenced. Mr. Lee submits that he relied on Mr. Jung’s representations to his detriment and suffered damages because he had to sell his home.

[100] Mr. Lee’s complaint against Mr. Jung is statute-barred. Section 4 of the Limitations Act, states that “a proceeding shall not be commenced in respect of a claim after the 2nd anniversary of the day on which the claim was discovered.” The claim in this case would have been discovered no later than 2008 when JCL’s bank account was closed and Mr. Lee listed his home for sale.

[101] Mr. Lee did not raise his claim for damages until his Statement of Defence was issued in December 2014, more than six years after the business terminated. There is no triable issue with respect to any damages that Mr. Lee says he suffered as a result of the JCL venture.

[102] Moreover, there is a lack of evidence that Mr. Jung is responsible for the failure of the business, aside from Mr. Lee’s bald statement that Mr. Jung was the reason that the business was not profitable. Mr. Chang simply stated that the business was not profitable and, therefore, the business was terminated. There is also a lack of evidence as to the causal connection between Mr. Jung’s actions and the fact that Mr. Lee had to sell his residence, particularly when one considers the other businesses that Mr. Lee operated during this time including the post office which ultimately was unsuccessful.

ii) Damages Arising from the Sale of Willowbrook

[103] Mr. Lee submits that, when Mr. Jung acted as his real estate agent, he breached his fiduciary duty to Mr. Lee. Mr. Lee submits that Mr. Jung should have required a sufficient deposit be taken to ensure the sale was concluded. As a result of the sale falling through, Mr. Lee submits that Mr. Jung caused damages because Mr. Lee had to carry expenses related to two properties for 14 months. In his Statement of Defence, Mr. Lee seeks $500,000.00 in damages arising from the aborted sale of the Willowbrook property.

[104] This complaint does not raise a triable issue. The limitation period has expired with respect to this complaint because the aborted sale of the residence occurred in 2008. Mr. Lee did not raise this matter until 2014 in his Statement of Defence. Mr. Lee knew there an action in relation to the aborted sale of the home because he commenced a lawsuit against the prospective buyers. His statement that he did not know he could sue the real estate agents rings hollow in these circumstances. In addition, Mr. Lee has filed no evidence to support the quantum of damages he seeks.

[105] In any event, even if the limitation period had not expired, exercising my limited power to draw inferences from the evidence, there is no merit to Mr. Lee’s complaint that Mr. Jung was negligent in failing to require a larger deposit and that this failure resulted in the aborted sale. In coming to this conclusion, I considered the following:

• The purchasers paid a 20% deposit or $20,000.00.

• Mr. Lee made several changes to the agreement of purchase and sale but did not change to the amount of the deposit, which he could have varied if he wished.

• Mr. Lee continued to use Mr. Jung’s services and sold the home within a year of the aborted sale. If Mr. Lee was of the view that Mr. Jung was negligent in selling his home, it is counterintuitive that he would continue to use Mr. Jung’s services.

• In the subsequent sale of the residence, the purchaser only put down a 15% deposit. Again, if Mr. Lee was truly concerned that a small deposit was the reason the first sale fell through, why would he agree to a smaller deposit and be at the same risk of the sale falling through?

• Mr. Lee paid Mr. Jung $99,657.29 upon completion of the sale of the home to repay part of the amount owing to Mr. Jung.

• Mr. Lee never commenced litigation proceedings against Ms. Chung or Mr. Jung as the real estate agents involved in the sale of the Willowbrook home.

• Mr. Lee sued the purchasers, but the litigation did not conclude because the purchasers moved back to Korea.

iii) Conflict of Interest against Mr. Nadler

[106] Mr. Lee submits that Mr. Nadler was in a conflict of interest because he represented Mr. Lee in litigation against the aborted purchasers of the Willowbrook Home in 2008. This was before the first promissory note was signed. Mr. Lee was given an opportunity to file a proper motion by Justice Woollcombe on May 12, 2018, which he did not pursue. As such, there is no issue before this court with respect to any conflict.

iv) Alleged Harassment

[107] Mr. Lee also submits that, although there were no terms about repayment, Mr. Jung began a course of conduct of “harassment, scandalizing, embarrassing and intimidating” Mr. Lee and his family to the Korean-Canadian community. Mr. Lee alleges that Mr. Jung made disparaging comments to the effect that Mr. Lee was a dishonourable person who could not be trusted. As a result of these actions, Mr. Lee repaid some of the money.

[108] Mr. Lee also submits that, as part of Mr. Jung’s mala fide and slanderous conduct, he improperly caused a s. 71 Notice under the Land Titles Act to be issued against the Lees’ title to the Thornridge property.

[109] Mr. Lee did not specifically make a claim of general damages or plead defamation in his Statement of Defence and Counterclaim. His position with respect to slander in his Statement of Defence appears to be related to the s. 71 Notice.

[110] Mr. Lee’s complaint of harassment does not raise a triable issue. Any complaint for liable and slander is statute-barred with respect to the July 27, 2014 web posting. He did not refer to this document until he filed his Statement of Defence and Counterclaim on December 15, 2014.

[111] Section 5(1) of the Libel and Slander Act, states that there is no action for libel in a newspaper or in a broadcast unless the plaintiff has – within six weeks after the alleged libel becomes known to the plaintiff – given to the defendant notice in writing, specifying the matter complained of, which shall be served in the same manner as a statement of claim or by delivering it to a grown-up person at the chief office of the defendant: R.S.O. 1990, c. L.12, s. 5 (1).

[112] There is no evidence that Mr. Lee gave Mr. Jung notice in writing within the required time period about his specific complaint so as to allow Mr. Jung to retract what was said. Section 5(1) of the Libel and Slander Act applies to individual defendants and media defendants as explained by the Court of Appeal for Ontario in Watson v. Southam Inc., 2000 CanLII 5758 (ON CA), 189 D.L.R. (4th) 695 (Ont. C.A.), at para. 53. The purpose of the notice requirement is to give a defendant an independent opportunity to issue a retraction, or apology for allegedly defamatory statements, thereby mitigating potential damages.

[113] Even if the court were to consider the flyers from 2017 to be slanderous or libelous, they too would be statute-barred because Mr. Lee did not put Mr. Jung on notice of his complaints, in writing, within the statutory timelines.

[114] Mr. Lee also alleges that Mr. Jung harassed him and his family. There is minimal evidence in support of his argument. Mr. Lee referred to the web posting and made a general statement that Mr. Jung made disparaging remarks that Mr. Lee was a dishonourable individual and could not be trusted. Mr. Lee also seems to suggest that the filing of the Section 71 Notice was a form of harassment.

[115] As noted by the Court of Appeal in Merrifield v. Canada (Attorney General), there is no tort of harassment in Ontario: 2019 ONCA 205, 432 D.L.R. (4th) 433, at paras. 27-43. The only possible applicable tort is intentional infliction of harm, which was not pleaded in this case.

[116] Even if this tort were pleaded, the elements would not be satisfied. Intentional infliction of harm requires proof of: a) flagrant/outrageous behaviour that is; b) calculated to harm, which; c) caused Mr. Lee to suffer a visible and provable illness.

[117] The filing of the s. 71 Notice is not flagrant or outrageous. It is probable that Mr. Jung filed the notice to try and secure the only asset that he thought might result in repayment of the $180,000. There is also no evidence that Mr. Jung’s conduct caused Mr. Lee to suffer a visible and provable illness.

[118] The harassment alleged does not raise any genuine issues that require a trial.

v) Misrepresentations of the Thornridge Residence

[119] Mr. Lee also submits that he suffered damages as a result of buying the Thornridge residence. Mr. Lee states that Mr. Jung, as his real-estate agent, told him that he could build seven townhouses on the Thornridge property. In his cross-examination, Mr. Lee could not remember any details and stated that “I may have bought it, because I heard from the real estate agency that it is worth an investment.” Mr. Lee claims that he would not have bought the property if he had known that he could not build the townhouses. Mr. Lee has not quantified any damages that he suffered as a result of purchasing the home.

[120] This complaint does not raise a triable issue for two reasons. First, the complaint is statute-barred because the purchase of the Thornridge residence closed in 2008. No complaint was made about this until Mr. Lee filed his Statement of Defence in December 2014. If Mr. Lee truly expected that the townhomes could have been built, he could have made an inquiry with the Township within the limitation period. Second, there is no evidence of any damages that Mr. Jung caused as a result of purchasing this property or the inability to build townhomes. Mr. Lee sold the property for 1,750,000 in December 2015.

Conclusion with Respect to Liability

[121] I am satisfied that there are no genuine issues raised by either Mr. Lee or Mr. Jung that require a trial. The matter is not complicated. Mr. Lee failed to repay the $180,000.00 he borrowed from Mr. Jung as required by the promissory note, dated January 16, 2010. The issues that Mr. Lee raises to set-off or reduce the amount owing in his Statement of Defence and Counterclaim also do not raise triable issues. The issues raised are statute-barred and without merit based on the evidence filed.

Issue #5: What is the Quantum of Damages?

[122] Mr. Jung is entitled to judgment of $180,000.00 plus interest for the month of October 2014 at 5% because Mr. Lee did not pay interest for the month of October before Mr. Jung issued his demand for repayment of the loan.

[123] Mr. Jung also seeks prejudgment interest on the promissory note at the TD Canada Trust Prime rate plus 1% per annum in accordance with the provision of the promissory note and pursuant to s. 128 of the Courts of Justice Act, R.S.O. 1990 c. C. 43.

[124] Mr. Jung is presumptively entitled to prejudgment interest. The onus is on him to prove what that amount of prejudgment interest should be: see Graham v. Rourke, 1990 CanLII 7005 (ON CA), [1990] 74 D.L.R. (4th) 1 (Ont. C.A.).

[125] As stated above, the promissory note is valid and enforceable. The promissory note states that Mr. Lee will continue to be liable for the principle and interest under the promissory note. Therefore Mr. Jung is entitled to prejudgment interest based on the interest rate set out in the promissory note from the date of the Statement of Claim until the until the date of this judgment. The interest to be paid is the TD Canada Trust Bank’s Prime rate in effect from time to time plus 1% annum, calculated monthly, not in advanced.

[126] Post-judgment interest will also be awarded in accordance with s. 127(1) of the Courts of Justice Act.

CONCLUSION

[127] The Plaintiff’s application for summary judgment is granted.

[128] The Defendant’s counterclaim is dismissed.

[129] The Defendant is ordered to pay the Plaintiff $180,000.00 plus interest for the month of October 2014 at a rate of 5% as per the promissory note.

[130] The Defendant is ordered to pay the Plaintiff prejudgment interest from the date of the filing of the Statement of Claim to the date of this judgment using the TD Canada Trust Bank’s Prime rate in effect from time to time plus 1% annum, calculated monthly, not in advanced.

[131] The Defendant is ordered to pay the Plaintiff post judgment interest at 3%.

COSTS

[132] The parties are encouraged to work out the issue of costs. If they are not able to do so, counsel for Mr. Jung, the Plaintiff, may provide written submissions of no more than 2 pages, double-spaced, as well as a bill of costs, offers to settle and any authorities within 15 days of receipt of this decision. Within ten days of receipt of the Plaintiff’s submissions on costs, counsel for Mr. Lee, the Defendant, may provide written submissions of no more than two pages, double-spaced, any bill of costs, offers to settle and book of authorities. The Plaintiff may file a one-page reply, double-spaced, within five days of receipt of the Defendant’s submissions.

Dennison J.

Released: October 24, 2019