NEWMARKET COURT FILE NO.: CV-19-00142733-0000 DATE: 20210302 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

BMW FINANCIAL SERVICES CANADA, A DIVISION OF BMW CANADA INC. Plaintiff – and – JINGWE LIU, also known as JUNGWEI LIU Defendant

Counsel: Mr. R. Aisenberg, for the Plaintiff Mr. P. Cui, Mr. M. Saunders, for the Defendant

HEARD: January 27, 2021

REASONS FOR DECISION

CASULLO J.

Overview

[1] The Plaintiff has brought an action for monies due and owing pursuant to a vehicle lease agreement entered into between the Plaintiff and the Defendant.

[2] Against this backdrop, the Plaintiff brings the within motion for summary judgment pursuant to r. 20.01(1), 20.04(2), and 51.06(2).

[3] The Defendant was served with the Notice of Motion on October 13, 2020. The Plaintiff served its Factum in support of the motion in accordance with Rules of Civil Procedure (Ontario), without the benefit of reviewing responding material. The Defendant’s Factum was served and filed thereafter. I do not raise this as a rebuke to the Defendant, but the fact illuminates the direction the motion took, discussed more fully below.

Background

[4] The Plaintiff initially leased the vehicle in question, a 2017 BMW M4 Coupe (the “Vehicle”) to Mr. Zhou Lan in October 2016. The lease provided for monthly payments of $349.89 to October 2018.

[5] On October 2, 2017 Mr. Lan and the Defendant applied for an assignment of the lease. The Defendant submitted a credit application in support of the application, which the Plaintiff approved. On October 17, 2017, the Defendant and Mr. Lan attended at the Plaintiff’s premises to execute the lease documents. Thereafter, as assignee, the Defendant became responsible for all obligations imposed under the lease, including maintaining a valid policy of insurance on the Vehicle.

[6] All was not as it seemed, however. The Defendant submits that the Vehicle’s true assignee is his prior friend and roommate, Jin Wang. According to the Defendant, Mr. Wang wanted to lease the Vehicle from Mr. Lan, but could not because he was under 18. The Defendant agreed to enter into the assignment on Mr. Wang’s behalf, and Mr. Wang would transfer money monthly to the Defendant to cover payments (lease and insurance). The payments would be drawn from the Defendant’s bank account.

[7] This arrangement worked well, until it did not. Mr. Wang missed the installments for June and July of 2018, although it appears he resumed payments thereafter. The insurance policy was cancelled in July 2018 for non-payment, and a notice of cancellation was sent by the insurer. The Defendant did not receive notice of the cancellation because, unbeknownst to him, Mr. Wang gave both the Plaintiff and the insurer the contact information of a completely different individual, his friend Mr. Sun.

[8] The Defendant was also unaware that in the late summer/early fall of 2018, Mr. Wang subleased the Vehicle to a Mr. Zhang. It is unclear whether Mr. Zhang maintained a valid policy of insurance. This is indeed unfortunate, as Mr. Zhang totalled the Vehicle in a collision a month later. The Vehicle is unsalvageable, and remains impounded.

[9] Once he discovered the car was written off, the Defendant pursued payment for the balance of the lease from Mr. Wang, to no avail. The Defendant thereafter brought an action in Toronto against Mr. Wang, seeking damages for fraudulent pre-contractual and post-contractual misrepresentations which induced the Defendant (Plaintiff in the Toronto action) to enter into the lease, as well as damages for breach of contract.

[10] When the Plaintiff became aware that the Vehicle was written off, and the insurance policy had lapsed, it demanded payment from the Defendant pursuant to the lease. When payment was not forthcoming, the within action was commenced in Newmarket. The statement of claim was issued on November 18, 2019. In his statement of defence dated December 30, 2019, the Defendant submits that while he signed the lease, the true assignee is Mr. Wang. Further, the Defendant suggests that BMW is contributorily negligent for failing to catch the differences in addresses/identify the fraud that the Defendant and Mr. Wang were perpetrating.

[11] After serving its Factum, the Plaintiff received the Defendant’s Responding Motion Record, consisting of the Defendant’s affidavit sworn January 18, 2021 with exhibits, as well as the Defendant’s Factum. The Defendant submits that, in addition to Mr. Wang being the true assignee, the lease is not enforceable for the following reasons:

a. The signature on the lease is a forgery, as it is not the Defendant’s; b. The witness who is named on the lease was not present to observe the Defendant executing the document.

[12] Until the Defendant served his material, counsel for the Plaintiff approached this motion as one for summary judgment, grounded on the Defendant’s clear admission, in the statement of defence, that he signed the lease. The Plaintiff had anticipated the Defendant would raise concerns regarding the witness’s signature, but was surprised to learn that the Defendant now took the position that that was not his signature on the lease.

[13] It is the Court’s understanding that the Defendant received a copy of the lease agreement in February of 2020. This motion was heard in January of 2021. At no time between receiving a copy of the lease, and the hearing of the motion – eleven months – did the Defendant raise this issue with counsel. Nor did the Defendant seek an adjournment of the Plaintiff’s summary judgment motion. Most importantly, the Defendant has not brought a motion to withdraw his admission that he signed the lease.

Positions of the Parties

[14] The Plaintiff submits that on the basis of the Defendant’s admission that he signed the lease, it is entitled to summary judgment on the entirety of its claim.

[15] The Defendant submits that in light of the forged signature, and the questionable witness, a trial is the proper venue to arrive at a fair and just resolution. This is particularly so given that credibility is a key issue.

[16] Further, granting summary judgment would risk inconsistent findings, given the parallel proceeding against Mr. Wang.

Discussion

[17] Rule 20.01(1) provides that a plaintiff may, after the defendant has delivered a statement of defence or served a notice of motion, move with supporting affidavit material or other evidence for summary judgment on all or part of the claim in the statement of claim.

[18] Rule 20.04(2) provides that the court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial.

[19] Rule 51.06(2) provides that a party may move for full or partial judgment based on an admission made in a pleading:

Where an admission of the truth of a fact or the authenticity of a document is made by a party in a pleading or is made or deemed to be made by a party in response to a request to admit, any party may make a motion in the same proceeding to a judge for such order as the party may be entitled to on the admission without waiting for the determination of any question between the parties, and the judge may make such order as is just.

[20] The Defendant’s admissions contained in the statement of defence are as follows:

a. … Liu was induced to agree and help Jin Wang to lease the car for him in the name and identification of Liu (para. 6); b. Liu states, that, other than providing legal identification and signing the car lease agreement…(para. 9); c. On the day the assignment of lease was signed… (para. 10); and d. Had the BMW dealership verified […] the information provided, the lease would not have been signed by Liu (para 11).

[21] Appreciating that r. 51.06(2) requires that the admission being relied upon be from the pleading in the particular action, the admission in the Toronto action is illustrative (in the Toronto action, the plaintiff is Mr. Liu, and the defendant is Mr. Wang):

a. On or about October 13th, 2017, instructed by the Defendant, the Plaintiff went to the BMW store with him and signed the 1-year car leasing contract in front of a BMW sales representative (para. 7); b. The Plaintiff states that, other than providing legal identification and signing the car leasing agreement… (para. 8); c. The Defendant knew that BMW Financing would go after the Plaintiff for payoff payment because the Plaintiff was the one who signed the lease agreement (para. 21);

[22] Admissions motions should normally be reserved for straightforward cases: Anand v. Medjuck, [1996] O.J. No. 3157 (Ont. Gen. Div.).

[23] When seeking judgment on the basis of an admission, the moving party is guided by the following principles:

a. The admission must be clear and definite; b. The admission must be of such facts as show that the party is clearly entitled to the order asked for; c. The rule does not apply where there is any serious question of law to be argued; d. The rule does not apply where there is a serious question of fact outstanding; e. The motion is based on admissions and proof of facts is not permitted; f. The motion should be granted only on a clear case and much care must be taken not to take away the right of a trial on viva voce evidence; and g. To succeed, the moving party must show that there is a clear admission on the fact of which it is impossible for the defendants to succeed.

Sigroum Office Management v. Milanis, (1985) 4 C.P.C. (2d) 243 (Ont. Dis. Ct.)

[24] In my view there can be no more straightforward case. The Defendant’s admission is clear and definite. He signed the lease.

[25] There is no serious question of law to be argued. I appreciate the Defendant believes he was duped. However, that is not an issue the Plaintiff need contend with.

[26] The issues of the Defendant’s signature being a potential forgery, and the presence or absence of the witness at the signing of the lease, would be serious questions of fact outstanding if the complexion of the action generally, and this motion in particular, were different. However, the Defendant has never resiled from his admission that he signed the lease.

[27] Proof of facts are unnecessary in light of the Defendant’s clear admission.

[28] On these clear facts the Defendant’s right to trial is not improperly taken away. Nothing submitted by viva voce evidence at trial will alter the fact that the Defendant signed the lease. If it is not the lease that has been submitted, which I make no finding on, he intended to sign a lease, knowingly perpetrating a fraud on BMW.

[29] I also find that the risk of an inconsistent finding in the Toronto action is virtually impossible. The Toronto action is similarly grounded in the fact that the Defendant signed the lease.

Withdrawal of Admission

[30] If I am wrong to determine the Plaintiff is entitled to recovery based on the admission in the pleading, I have undertaken the following analysis as though the Defendant had sought leave to withdraw his admission.

[31] Rule 51.05 provides that an admission in a pleading may be withdrawn on consent or with leave of the court. In The Law of Evidence, Sopinka, Lederman and Bryant have the following to say abut admissions:

A formal admission in civil proceedings is a concession made by a party to the proceedings that a certain fact or issue is not in dispute. Formal admissions made for the purpose of dispensing with proof at trial are conclusive as to the matters admitted. As to these matters, other evidence is precluded as being irrelevant but, if such evidence is adduced, the court is bound to act on the admission even if the evidence contradicts it.

The Law of Evidence in Canada, 2nd ed. (Toronto: Butterworths, 1999)

[32] Admissions are not cast in stone, although the ability to do so appears to be on a sliding scale. Formal admissions of fact can only be withdrawn on consent or with leave. Admissions relating to a question of law can be withdrawn at any time, and admissions of mixed fact and law fall somewhere between the two.

[33] As Gray J. held in Kostruba & Sons Inc. v. Pervez, 2011 ONSC 4894, at para. 41:

There can be little dispute that an admission contained in a pleading is of a different order than other allegations in a pleading. An admission is something on which the other party is entitled to rely. An admission means the other party is not required to prepare its case on a particular issue, or preserve evidence on that issue. The other party will structure its case, in part, on the assumption that an admission can be relied upon.

[34] The caselaw has established that a party seeking to withdraw an admission in his or her pleadings must satisfy the court of three things:

1. The proposed amendment raises a triable issue;
2. Is there a reasonable explanation for the change in position; and
3. The withdrawal would not result in any prejudice that cannot be compensated for in costs.

Antipas v. Coroneos (1988) 26 C.P.C. (2d) 63 (Ont. H.C.), at para. 14

Triable Issue

[35] For the limited purpose of this motion only, I am satisfied that there may be a triable with respect to the signatures on the lease, both the Defendant’s, and the witness’s. Satisfying this test is a low threshold (Suncor Energy Inc. v. B Osmond Scrap Metals Ltd., 2014 ONSC 5404 (Ont. S.J.), at para. 35). However, the moving party must go on to satisfy the remaining parts of the test.

Explanation for Change in Position

[36] The statement of defence containing the admission was served prior to the Defendant receiving a copy of the lease. In the eleven months since receiving a copy, the Defendant has not said his signature was a forgery until the eve of this motion. I find the Defendant included the admission in the pleading because the Defendant signed the lease. I am not satisfied the Defendant has provided a reasonable explanation for the change in position.

Prejudice

[37] I am not satisfied the Plaintiff would not suffer non-compensable prejudice if the withdrawal were permitted. While the action is still in its early stages, it is over a year old, and the Plaintiff has patterned its litigation strategy on the Defendant’s admission. There may be a limitation argument against adding another party, given that the cause of action arose over two years ago. Further, it appears from the Defendant’s affidavit that Mr. Wang has left Canada and resettled in China. Thus, even if the Plaintiff could fashion a claim against Mr. Wang, the potential for recovery is slim.

[38] In my view, the admission in the original pleading is an unambiguous and deliberate statement that the Defendant executed the lease assignment. If the motion to withdraw the admission were before me, I would not grant leave.

Conclusion

[39] The Plaintiff is granted judgment in the amount of $85,500.35.

[40] This may seem a harsh result to the Defendant, but he does not come to court with clean hands. He signed the lease freely. He represented himself to BMW as the assignee, in full knowledge that Mr. Wang would be the party using the Vehicle. This is a clear breach of the lease, which stipulates at paragraph 31 that the Defendant could not “transfer, sublease, rent or assign the lease, the Vehicle, or the Defendant’s right to use the Vehicle” (emphasis added).

Costs

[41] Counsel are encouraged to agree on costs. If they are unable to do so, they may arrange a short costs hearing, before me, through the Trial Coordinator. Concise briefs are to be filed at least two days prior to the hearing. If no arrangements are made within 30 days for an appointment to speak to costs, there will be no order for costs.

CASULLO J. Released: March 2, 2021