Fung v. Cheung, 2021 ONSC 5001

Court File and Parties

COURT FILE NO.: 21-86892 DATE: 2021/07/16 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sam Fung, Applicant (Moving Party) AND: Wing Chu Cheung, Respondent (Respondent)

BEFORE: Somji J.

COUNSEL: Gib van Ert and Neil Abraham for the Applicant (Moving Party) Judie Chan, for the Respondent

HEARD: July 9, 2021

ENDORSEMENT re certificate of pending litigation

Overview

1Mr. Sam Fung brought an application with respect to a residential property where he lived for thirty years. Mr. Fung alleged that he did not authorize the transfer of any interest in the property to his former fiancé Ms. Wing Chu Cheung. Mr. Fung was surprised to discover that Ms. Cheung was registered as a joint tenant on the property on April 9, 2021, while he was in hospital. He alleged that Ms. Cheung wrongfully obtained her interest in the property to the detriment of him and his family and brought an application to challenge the transfer of that interest (“Application”). He brought the Application while gravely ill with terminal cancer.

2Mr. Fung wished to have the property preserved pending litigation on the Application. Therefore, he also brought a motion for a certificate of pending litigation to be registered against the property (“Certificate”). Ms. Cheung does not oppose the request for a Certificate.

3Mr. Fung brought his Application and the motion for a Certificate on June 23 and 24, 2021, respectively. The motion for the Certificate was scheduled to be heard on July 9, 2021.

4However, Mr. Fung passed away on June 28, 2021. His Counsel requested an Order to Continue the Application and motion for Certificate under Rule 11.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and that the style of cause be amended to reflect an action by his estate. Counsel filed materials in support of the motion for an Order to Continue on July 7, 2021. The motion for an Order to Continue does not require prior notice to the parties.

5I heard both the motion for an Order to Continue and for a Certificate on July 9, 2021. I grant the relief requested for both motions.

Motion for Order to Continue

6Based on the materials filed and counsel’s submissions, I find that there are grounds for an Order to Continue under Rule 11.02, amending the style of cause to “The Estate of Sam Fung v Wing Chu Cheung.” Mr. Fung passed away on June 28, 2021. His Application was stayed upon his death. His interest in the litigation has been transferred to his estate. His children, who are appointed as executors and trustees of his estate, wish to maintain his Application. There will be an Order to Continue under Rule 11.02.

Motion for Certificate of Pending Litigation

7In support of his motion for a Certificate, Mr. Fung filed his own Affidavit dated June 16, 2021, as well as an Affidavit from his daughter Samantha Wright dated June 21, 2021.

8This Court has authority under s. 103 of the Courts of Justice Act, RSO 1990, c C.43 (“CJA”) to issue a Certificate. The purpose of a Certificate is to warn any interested party that there is an outstanding claim against the property in question: 2254069 Ontario Inc. v. Kim, 2017 ONSC 5003 at para 21. A party seeking a Certificate must include a claim for it in the originating process or pleading that commences the proceeding and must provide a description of the property in question that is sufficient for registration of the Certificate: Rule 42.01

9A court may grant leave to register a Certificate where it is satisfied that there is a triable issue on the cause of action and the equities favor this form of relief: Kim at paras 21, 30, and 31. As stated in Kim at para 31, in a contested application, the following factors might be considered in determining the equities, but the list is not exhaustive:

(i) whether the land in question is unique,

(ii) whether there is an alternative claim for damages,

(iii) the ease or difficulty of calculating damages,

(iv) whether damages would be a satisfactory remedy,

(v) the presence or absence of a willing purchaser,

(vi) the balance of convenience, or potential harm to each party, if the CPL is or is not granted,

(vii) whether the CPL appears to be for an improper purpose,

(viii) whether the interests of the party seeking the CPL can be adequately protected by another form of security; and

whether the moving party has prosecuted the proceeding with reasonable diligence.

10Based on the materials filed, applicants’ counsel’s submissions, and the respondent’s consent, I find there are grounds to issue a Certificate with respect to the property in question.

11First and foremost, Ms. Cheung consents to the Certificate. The parties filed a written consent. This is not a contested motion.

12Second, the property has been sufficiently identified for registration. The legal description of the property is taken from the parcel register and included in the motion record. The property is described as follows:

PCL 5-1, SEC 4M-618; LT 5, PL 4m_618

Gloucester Land Registry Office No. 4

PIN 04414-0242

13Third, Mr. Fung’s application was brought with reasonable diligence. Upon discovering in early June 2021 that Ms. Cheung was registered as an owner and joint tenant on title to the property, his daughter registered on his behalf a 60-day caution which is set to expire on August 10, 2021. Mr. Fung then brought the Application and motion for Certificate to be registered on the title of the property by June 24, 2021.

14Fourth, there is a triable issue on whether the respondent’s property interest was wrongfully obtained. The property for which the Certificate is issued constitutes the very subject matter of the dispute. Mr. Fung asserts that he never instructed his lawyer either in person or by video (over WeChat) to transfer to Ms. Cheung any interest in the property as per the instrument OC2334462 registered on April 9, 2021. He did not recall signing any documents in relation to the transfer and that he was in the hospital at the time of the transfer.

15Damages are not a satisfactory remedy in these circumstances. At issue is Mr. Fung’s full ownership of the property and his ability to pass that property onto his children upon his death.

16Finally, I find the issuance of a Certificate would be an equitable order in this case. There are no third party purchasers or mortgagors implicated in this matter and no other equitable considerations related to innocent third parties.

17The sole purpose of the Certificate is to preserve the property until the matter can be litigated. Now that Mr. Fung has died, Ms. Cheung will obtain full ownership of the property given her status as a joint tenant. In the absence of a Certificate registered on title to preserve the status quo, she would be in a position to deal with the property as she chooses. This is contrary to Mr. Fung’s testamentary intentions which was to transfer the property to his children.

18A Certificate does not prejudice Ms. Cheung. She does not live in the house. Payments related to the property continue to be made by the children. The Certificate is not indefinite. Should the application resolve in her favour, she will be able to rely on her ownership interest to leverage the property in the future.

19The balance of convenience favors granting the Certificate. There will be an Order for a Certificate of Pending Litigation.

Somji J.