Court File and Parties

COURT FILE NO.: CV-15-0108-00 DATE: 2021 02 18

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Can Duc Diep (Plaintiff) v. Hien Cong Pham and Huong Thi Duong (Defendants)

BEFORE: D. E. Harris J.

COUNSEL: Frank G. Carlone for the Applicant Diep Adam Jarvis for the Respondent Duong No one appearing for the Respondent Pham

E N D O R S E M E N T

[1] Plaintiff Can Duc Diep seeks an order by way of summary judgment against the defendant Huong Thi Duong declaring that the transfer of equity from her ex-spouse, co-defendant Hien Cong Pham, was a fraudulent conveyance. Having already been awarded judgment against Pham, Diep now requests judgment against Duong for $296,675. Counsel for Duong raises preliminary objections to the request for summary judgment. This endorsement addresses those objections.

[2] A skeletal outline of the evidence will be sufficient for present purposes. In May of 2012, Diep lent Pham, a close friend, $500,000. The defendant Duong was at the pertinent time defendant Pham’s spouse. A loan agreement was entered into between Diep and Pham. As of 2014, the loan was not paid back in accord with the schedule in the agreement. In January 2015, Diep commenced an action against Pham for breach of contract.

[3] In early February 2015, after a period of separation, Duong commenced family proceedings against Pham. A few days afterwards, on February 9, 2015, Pham and Duong entered into an agreement of purchase and sale of their matrimonial home at 26 Radial Street, Brampton with a purchaser. In the separation agreement between the spouses dated April 17, 2015, Pham agreed to transfer his equity in the matrimonial home to Duong. The sale closed sometime afterwards.

[4] Diep amended his statement of claim in December of 2015 to add Duong and alleged that there had been a fraudulent conveyance of equity from Pham to Duong. The entire net proceeds of the sale of the matrimonial home, it is alleged, were conveyed to Duong.

[5] On July 10, 2019, Justice Emery in written reasons, upon Diep’s application, found summary judgment against Pham with respect to the loan from Diep and awarded $400,000 plus prejudgment interest and costs. The issue in that proceeding was whether the transfer of money was a loan or an investment. Justice Emery held that that the former was the case. Thus far, collection on the judgment has been unsuccessful.

[6] Diep alleges that the conveyance by Pham of his interest and equity in the matrimonial home to Duong by way of the separation agreement was a fraudulent conveyance. Pham was entitled on the face of it to half the equity in the matrimonial home. Several tell-tale indications are relied upon, including a lack of consideration, to establish the fraudulent conveyance.

[7] Mr. Jarvis on behalf of Ms. Duong, argued that this application for summary judgment was inappropriate. Behind this argument were two grounds of contention: 1. This summary judgment motion is an abuse of process; 2. A trial would be a more efficient vehicle for deciding this matter.

[8] I disagree. I think counsel for the defendant is closer to the mark when he says that this allegation of an abuse of process is itself an abuse of process. While Diep’s action has certainly not been a model of economy, it has progressed steadily, albeit slowly.

[9] There was some criticism of the three applications for summary judgement. A previous motion for summary judgment for unjust enrichment with respect to Diep’s claim against Duong was dismissed on consent by Justice Price on June 14, 2017. Justice Emery as already mentioned found for Diep in his action against Pham for breach of contract by reasons dated July 10, 2019. That finding was a logical pre-condition to the action against Duong based on fraudulent conveyance. Those matters could perhaps have been heard together but, arguably, that may have been unwieldy. The present motion is the third application for summary judgment. I do not find that untoward.

[10] There was previously an application by Diep for a certificate of pending litigation brought without notice that was granted, the certificate was rescinded when another judge decided that notice ought to have been given. I do not think that problem is relevant at this stage or impugns the course of litigation.

[11] There was also a concern expressed with respect to whether summary judgment is likely in this case and, related to this, a caution that partial summary judgment would be inefficient and uneconomical. I note that Justice Emery considered this argument made before him by past counsel for Duong and rejected it: see paras. 78-85. Justice Emery said:

83 As Ms. Duong was not a party to either the loan agreement between Mr. Diep and Mr. Pham on one hand, or the sale of shares in Honeycomb on the other, the issues for determination on these motions for summary judgment are entirely between those parties. This motion therefore disposes of substantially all of the claims made by Mr. Diep against Mr. Pham. Had Mr. Diep brought this motion against Ms. Duong as well, this argument would have greater weight, but he did not.

[12] I understand that the context of this application and the arguments made are different than they were there. In any case, the pitfalls of partial summary judgment were stressed by the Court of Appeal in Butera v. Chown, Cairns LLP, 2017 ONCA 783 (Ont. C.A.) at paras. 22-38. The summary judgment objectives of proportionality, efficiency and cost effectiveness may well not be served by partial summary judgment in a given case.

[13] I am not convinced that this is not a case for full summary judgment. There is nothing conspicuous that would lead to a contrary conclusion. I am not in a position to make a final determination of the question before hearing the full argument. It is clear in any case that if summary judgment is granted based on a conclusion of fraudulent conveyance, this finding and the ensuing relief would not leave any outstanding issues to be determined. In that sense, there is nothing presently weighing against summary judgment.

[14] In the interests of efficiency and economy, arguments of the kind made here prefatory to argument on a summary judgment motion should only be made where there is a strong prima facie foundation in the record. Otherwise, the entire concept of proportionate, timely and affordable judgments upon which the Hryniak v. Mauldin, 2014 SCC 7, 366 D.L.R. (4th) 641 (S.C.C.) approach rests may well be wholly or partially defeated.

[15] This matter should proceed to argument on the motion for summary judgment. I would restrict it to a half day. Compendiums can always be filed to facilitate the hearing. Costs are reserved to the summary judgment decision. I am seized of this matter.

D.E. Harris J. DATE: February 18, 2021