Court File and Parties

COURT FILE NO.: CV-17-00587324 MOTION HEARD: 20220408 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jinhang Feng, Plaintiff AND: Han Yun Liu, Defendant AND: Han Yun Liu, Plaintiff by Counterclaim AND: Jinhang Feng and JDL Realty Inc., Defendants to the Counterclaim

BEFORE: Associate Justice B. McAfee

COUNSEL: N. Hooge and A. Huang, Counsel, for the Moving Party, the Plaintiff and Defendant to the Counterclaim Jinhang Feng M. Farace, Counsel, for the Responding Party, the Defendant and Plaintiff by Counterclaim Han Yun Liu

HEARD: April 8, 2022

Reasons for Decision

[1] The plaintiff and defendant to the counterclaim Jinhang Feng (Feng) moves for an order granting leave to amend the statement of claim in the form set out at schedule “A” to the notice of motion.

[2] The statement of claim was issued on November 27, 2017. In the statement of claim the plaintiff claims, inter alia, specific performance of the agreement of purchase and sale (APS) entered with the defendant, plaintiff by counterclaim Han Yun Liu (Liu) for the purchase of property municipally known as Suite PH06, 21 Iceboat Terrace, Toronto (the property).

[3] The statement of claim alleges, inter alia, that:

a. Feng is the assignee of the APS from his wife, Fenglun Ruan (Ruan);

b. Liu requested that Ruan provide a deposit for the purchase of the property in the amount of RMB 5,000,000 (approximately $965,500 in Canadian funds) in China;

c. On or about March 16, 2017, Ruan paid RMB 5,000,000 to Liu by bank transfer. Liu executed a receipt acknowledging receipt of these funds as a deposit towards the purchase of the property;

d. On March 20, 2017, Ruan paid a further $80,000.00 (Canadian funds) deposit to be held by Liu’s real estate agent;

e. By amending agreement dated April 7, 2017, Ruan and Liu agreed upon a closing date of September 28, 2017;

f. Liu refused to complete the sale of the property;

g. Feng has paid deposits on the property in the total amount of $1,045,500, which have not been returned by Liu.

[4] Feng now seeks leave to amend the statement of claim to seek, in the alternative to specific performance, a monetary award for the return of the monies paid to Liu in respect of the purchase price comprising of the amount of Canadian currency to purchase RMB 5,000,000 and $80,000 Canadian funds, together with interest.

[5] Feng also seeks leave to add two paragraphs to the statement of claim as follows:

24. In the alternative, Mr. Liu has been unjustly enriched from the receipt of approximately $1,045,500 (RMB 5,000,000 and $80,000 CAD) in respect of the purchase price for the Property; Mr. Feng has suffered a corresponding deprivation; and, there is no juristic reason for Mr. Liu’s enrichment.

25. In the further alternative, Mr. Feng has suffered damages in the amount of approximately $1,045,500 (comprising of the RMB 5,000,000 and $80,000 CAD payments made in respect of the purchase price of the Property) as a result of Mr. Liu’s breach of the agreement of purchase and sale.

[6] It is Feng’s position that the proposed amendments do not constitute a new case of action and are therefore not statute barred. It is Liu’s position that the proposed amendments give rise to a new cause of action and are subject to an expired limitation period.

[7] Rule 26.01 of the Rules of Civil Procedure provides:

26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[8] Justice van Rensburg in 1100997 Ontario Limited v. North Elgin Centre Inc., 2016 ONCA 848 (C.A.) at para. 19 states:

[19] A cause of action is “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”: Letang v. Cooper, [1965] 1 Q.B. 232 (C.A.), at pp. 242-43, as adopted by this court in July v. Neal (1986), 57 O.R. (2d) (C.A.), at para. 23.

[9] Justice Harvison Young in French v. H & R Property Management Ltd., 2019 ONCA 302 (C.A.) at paras. 26 to 28 states the following with respect to whether a pleading amendment asserts a new cause of action:

[26] However, there is a distinction between pleading a new cause of action and pleading new or alternative relief based on the same facts as originally pleaded. An amendment is not the assertion of a new cause of action where the “original pleading …contains all the facts necessary to support the amendments … [such that] the amendments simply claim additional forms of relief, or clarify the relief sought, based on the same facts as originally pleaded”: Dee Ferraro Ltd v. Pellizzari, 2012 ONCA 55, 346 D.L.R. (4th) 624, at paras. 4, 13-14; see also 1100997 Ontario Ltd. v. North Elgin Centre Inc., 2016 ONCA 848, 409 D.L.R. (4th) 382, at paras. 20-21; Davis v. East Side Mario’s Barrie, 2018 ONCA 410, at paras. 31-32; Quality Meat Packers at para. 65 [United Food and Commercial Workers Canada, Local 175 Region 6 v. Quality Meat Packers Holdings Limited, 2018 ONCA 671].

[27] The relevant principle is summarized in Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 3rd ed. (Toronto: LexisNexis, 2017), at p. 186:

A new cause of action is not asserted if the amendment pleads an alternative claim for relief out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon [which] the original right of action is based.

[28] The trial judge correctly articulated the test at para. 23 of his reasons, when he framed the relevant question as being whether “there were sufficient material facts originally pleaded by [Mr. French] which, liberally construed, could nevertheless support a cause of action in negligence against the [respondents].”

[10] Justice Nordheimer in Farmers Oil and Gas Inc. v. Ontario (Ministry of Natural Resources), 2016 ONSC 6359 (Div.Ct.) at para. 23 states that the court must read “…the original statement of claim generously and with due allowance for drafting deficiencies”. Justice Nordheimer found at para. 24 that proposed amendments alleged facts that are “part and parcel of” or “arise out of the same factual matrix” and do not “…allege some new and distinct claim unrelated to that original claim.”

[11] No evidence of prejudice or responding evidence at all was filed.

[12] Reading the existing statement of claim generously as I am required to do, I am satisfied that the existing statement of claim contains the material facts necessary to ground an alternative claim for damages for the amount of the deposit. The deposit sums paid by Feng to Liu, totalling $1,045,500, are pleaded at paragraphs 5, 6, 9, and 20. Liu’s failure and refusal to complete the sale of the property pursuant to a valid and binding contract are pleaded at paragraphs 14, 18 and 19. The fact that Liu has not returned the deposit paid is pleaded at paragraph 20.

[13] The proposed pleading of unjust enrichment at paragraphs 24 and 25 is a description of the legal consequences arising from the existing pleaded facts that Liu refused to complete the sale and has not returned the deposit paid.

[14] I am satisfied that the proposed amendments do not constitute a new cause of action and are therefore not subject to a limitation period and are not statute barred. The proposed amendments are an alternative claim for relief based on facts already pleaded. The proposed amendments arise out of the same factual matrix of the alleged breach of an agreement of purchase and sale that has already been pleaded. Leave to amend is granted.

[15] With respect to costs, neither party brought a costs outline to the hearing contrary to Rule 57.01(6). In the event that the motion was not successful, Liu seeks costs of the motion on a partial indemnity basis in the all-inclusive amount of $3,164.00. If successful, Feng seeks costs on a substantial indemnity basis in the amount of $5,600.00 plus H.S.T. In the alternative, Feng seeks partial indemnity costs in the same amount sought by Liu.

[16] Feng seeks substantial indemnity costs based on an offer to settle the motion made on December 1, 2021, wherein Feng offered that Liu consent to the proposed amendments and Liu would have leave to plead the alleged expiry of a limitation period, leaving the limitations issue to be resolved by the trial Judge and obviate the need for a contested motion. On December 4, 2021, Liu rejected the offer.

[17] Liu argues that if Feng is successful on the motion, Feng would only be entitled to partial indemnity costs. Liu argues that the offer of December 1, 2021, was not a compromise. Liu argues that, as of right, Liu would be entitled to plead a limitation period defence if leave to amend was granted. I disagree. I was able to determine that the proposed amendments do not constitute a new cause of action and are therefore not subject to a limitation period and are not statute barred. In my view the offer of December 1, 2021, was a compromise. I am satisfied that Feng obtained an order more favourable than the offer of December 1, 2021. I am satisfied that in the circumstances of this matter, Feng is entitled to substantial indemnity costs of the motion.

[18] No cross-examinations took place. No responding motion record was delivered. Having regard to all of the circumstances of this motion, in my view the all-inclusive sum of $5,000.00 is a fair and reasonable amount that Liu could expect to pay for costs on a substantial indemnity basis.

[19] Order to go as follows:

1. Leave is granted to amend the statement of claim in the form of the proposed amended statement of claim found at schedule “A” to the notice of motion.

2. Costs of the motion are fixed on a substantial indemnity basis in the all-inclusive amount of $5,000.00 payable by Liu to Feng within 30 days.

Associate Justice B. McAfee Date: April 19, 2022