Court File and Parties

COURT FILE NO.: CV-21-00674438

MOTION HEARD: 20220203

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Tan-Dung Le, Applicant

AND:

Diana Ma, Respondent

BEFORE: Associate Justice B. McAfee

COUNSEL: Varinder Purewal, Counsel, for the Moving Party Diana Ma

Peter Hamiwka, Counsel, for the Responding Party Tan-Dung Le

HEARD: February 3, 2022

REASONS FOR DECISION

[1] This is a motion brought by the respondent Diana Ma (Diana) for and order setting aside the order of Associate Justice Josefo dated January 4, 2022 and discharging a certificate of pending litigation (CPL). Associate Justice Josefo granted the motion of the applicant Tan-Dung Le (Le) and ordered the issuance of a CPL with respect to 24 Gray Avenue, Toronto (the property). The motion before Associate Justice Josefo was heard on an urgent basis, in writing and without notice.

[2] Diana originally submitted the within motion to set aside the order of Associate Justice Josefo for hearing on an urgent basis and in writing. On January 20, 2022, the presiding Associate Justice adjourned the motion for an oral hearing to be heard on an urgent basis and on notice.

[3] The motion then came before me for an oral hearing on February 3, 2022. No responding material was delivered in accordance with the rules. Material was uploaded to CaseLines in advance of the hearing. The underlying motion material, and in particular the affidavit that was before Associate Justice Josefo, was not before me in advance of the hearing of the within motion. I permitted material to be uploaded to CaseLines at the hearing, which is not ideal. The transcript from the cross-examination of Le that took place on January 31, 2022 was uploaded to CaseLines in advance of the hearing. To the extent that any other cross-examinations took place, no other transcripts were filed and/or uploaded to CaseLines and no specific evidence from any other cross-examinations that may have taken place was referred to on the motion. No adjournment of the motion was sought. There is a closing date of February 15, 2022.

[4] Le is the father of Diana. Le is also the father of Diana’s adult siblings Donna Ma (Donna), Donny Le Ma (Donny) and Denny. This is a dispute concerning the property where Donna, Donny and Denny have resided for many years with their mother who is the former common law spouse of Le. Diana resided at the property from 2003 until February 2008 when she moved to another home with her own family. Le has never resided at the property.

[5] On December 12, 2003, by way of instrument no. AT361119, the property was transferred to Diana’s then boyfriend Phong Nguyen (Nguyen). Diana, Donna, Donny, Denny, and their mother moved into the property and resided at the property together with Nguyen.

[6] In 2005 Nguyen and Diana ended their relationship. On June 15, 2005, by way of instrument no. AT830843, Nguyen transferred the property to Diana for $2. Diana has been and remains the sole person on title since June 15, 2005.

[7] In the notice of application issued December 24, 2021, Le seeks an order granting him possession of the property pursuant to a resulting trust, an order transferring the property to him pursuant to a constructive trust, an order registering the foregoing on title, and a CPL. At paragraph 2(q) of the notice of application it is stated that Le and Diana “…entered into an oral trust understanding by which …Diana was to hold the property as trustee for the beneficial owner of the property…Le.”

[8] In Le’s affidavit sworn December 29, 2021, being the affidavit that was before Associate Justice Josefo (Le’s first affidavit), Le deposes that he gave $238,686.14 towards the property over the years. He deposes that he gave $115,686.14 to Donna to be used as a down payment for the purchase of the property in December 2003. He deposes that he gave the further amount of $123,00.00 to Donna over the following years to pay down the mortgage. It is Le’s evidence that he and Diana “entered into an oral trust understanding” by which Diana was to hold the property as a trustee for the beneficial owner of the property Le. Le deposes that only $10,000.00 was ever given to him by Diana, which Diana characterized at the time as partial payment of the alleged loan. Le states that at no time did he intend to loan Diana any funds toward the purchase of the property for her benefit and that it was always his intention that the property would be a legacy handed down to Donna, Donny and Denny.

[9] In support of the within motion Diana, Donna and Donny have sworn affidavits.

[10] In Diana’s affidavit sworn January 19, 2022, she denies that Le loaned any money for the purchase of the property. Diana deposes that in 2005 Le loaned her $60,000.00 to assist her in securing a mortgage with the Bank of Nova Scotia. The loan was repaid within 18-24 months by way of weekly cash payments. Due to the passage of time, Diana states that she is unable to obtain the bank statements in support of the cash withdrawals. Diana denies any discussion with Le that the property would be given to Donna, Donny, and Denny.

[11] In Donna’s affidavit sworn January 19, 2022, Donna confirms that in 2005 Le did loan Diana an amount of money that was repaid in cash within 2 years. She denies ever being given money by Le for the purchase of the property or for mortgage payments. She denies opening or having knowledge of a joint bank account with Le.

[12] In Donny’s affidavit sworn January 19, 2022, he denies being given any money for payment of the mortgage. He confirms that Le did loan an amount of money to Diana which he believes to have been $38,000.00, and which was repaid within 2 years. Donny also provides evidence regarding other court proceedings brought by Le, at least one of which is presently before the court, more of which is said below.

[13] Diana, Donna and Donny all depose that on one occasion Le came to the property to collect a payment and broke Donna’s car windows because she did not have the payment. They all depose that Le has a gambling addiction/problem.

[14] In Le’s further affidavit sworn January 29, 2022, served for the purpose of responding to the within motion (Le’s second affidavit), Le deposes that any funds provided were not a loan and were not repaid. He denies demanding or receiving any “loan repayments.” He denies any circumstances involving violence or aggression or any issues with gambling.

[15] Diana argues that the CPL should be discharged because Le did not fully and fairly disclose all material facts, there is no triable issue with respect to an interest in the property, and the equities of the case favour the discharge.

[16] Le argues that there was full and fair disclosure, that there is a triable issue with respect to an interest in the property, and that the equities of the case do not favour the discharge.

[17] The court’s authority to discharge a CPL is found under rule 42.02 and section 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[18] The applicable legal principles for consideration on a motion to discharge a CPL are set out in Perruzza v. Spantone, 2010 ONSC 841 (Ont. Master). At paragraph 20, Master Glustein, as he then was, summarizes the legal principles as follows:

(i) The test on a motion for leave to issue a CPL made on notice to the defendants is the same as the test on motion to discharge a CPL (Homebuilder Inc. v. Man-Sonic Industries Inc., 1987 CarswellOnt 499 (S.C. – Mast.) (“Homebuilder”) at para. 1);

(ii) The threshold in respect of the “interest in land” issue in a motion respecting a CPL (as that factor is set out at section 103(6) of the Courts of Justice Act, R.S.O. 1990, c.C.43) is whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed (1152939 Ontario Ltd. v. 2055835 Ontario Ltd., 2007 CarswellOnt 756 (Ont. S.C.J.), as per van Rensburg J., citing Transmaris Farms Ltd. v. Sieber, [1999] O.J. No. 300 (Gen. Div. - Comm. List) at para. 62);

(iii) The onus is on the party opposing the CPL to demonstrate that there is no triable issue in respect to whether the party seeking the CPL has “a reasonable claim to the interest in the land claimed” (G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 CanLII 6832 (ON CA), 2002 CarswellOnt 219 (C.A.) at para. 20);

(iv) Factors the court can consider on a motion to discharge a CPL include (i) whether the plaintiff is a shell corporation, (ii) whether the land is unique, (iii) the intent of the parties in acquiring the land, (iv) whether there is an alternative claim for damages, (v) the ease or difficulty in calculating damages, (vi) whether damages would be a satisfactory remedy, (vii) the presence or absence of a willing purchaser, and (viii) the harm to each party if the CPL is or is not removed with or without security (572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 (S.C. - Master) at paras. 10-18); and

(v) The governing test is that the court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL should be granted or vacated (931473 Ontario Ltd. v. Coldwell Banker Canada Inc., 1991 CarswellOnt 460 (Gen. Div.); Clock Investments Ltd. v. Hardwood Estates Ltd., 1977 CanLII 1414 (ON SC), 1977 CarswellOnt 1026 (Div. Ct) at para. 9).

[19] Rule 39.01(6) provides:

(6)Where a motion or application is made without notice, the moving party or applicant shall made full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any order obtained on the motion or application.

[20] On the issue of full and fair disclosure, two decisions were before me. In Chitel v. Rothbart, 1982 CanLII 1956 (ON CA), [1982] O.J. No. 3540 (ONCA) MacKinnon A.C.J.O. states at para. 18:

[18] There is no necessity for citation of any authority to state the obvious that the plaintiff must, in securing ex parte interim injunction, make full and frank disclosure of the relevant facts, including facts which may explain the defendant’s position if known to the plaintiff. If there is less than this full and accurate disclosure in a material way or if there is a misleading of the court on material facts in the original application, the court will exercise its discretion in favour of the plaintiff and continue the injunction.

[21] In Bank of Nova Scotia v. Rawfilm, 1994 CanLII 7277 (ON SC), [1994] O.J. No. 4474 (Ont. S.C.J.) Master Peterson refers to the above quote from Chitel and finds a lack of full and fair disclosure. Notwithstanding that the Master found no intention to mislead the court, he discharged the CPL.

[22] In Pauwa North America Development Group Co. Ltd. v. Skyline Port McNicoll (Development) Inc., 2021 ONSC 18 (Ont. S.C.J.) at paras. 37 and 38, Master McGraw (now Associate Justice McGraw) summarizes the principles regarding the determination of a triable issue with respect to an interest in the land:

[37] The court must first determine whether there is a triable issue with respect to PNA’s claim to an interest in the Lands which would support the granting of a CPL (Saggi v. Grillone, 2020 ONSC 4140 at paras. 31 and 55; Zhao v. 8657181, 2020 ONSC 2864 at paras. 9 and 11). The threshold is not, as SPM suggests in its Factum, whether PNA has a “reasonable claim” to an interest in the Lands, which is an issue to be decided at trial or on a summary judgment motion (Zhao at para. 11). The issue here is whether a triable issue has been raised with respect to a reasonable claim in the Lands by PNA (G.P.I. Greenfield at para. 20; Saggi at para. 67; Boal v. International Capital Management Inc., [2018] O.J. No. 1954 at para. 64). Courts have described the “triable issue” threshold as whether the remedy sought, here, specific performance, is a possible remedy at trial or one which may be available to the plaintiff at trial (Sun Rise Elephant Property Investment Corporation v. Luu, 2018 ONSC 5247 at paras. 10-11). It is not the court’s role to determine whether the plaintiff’s claim will likely succeed at trial, but whether a triable issue exists with respect to a reasonable claim to an interest in land (HarbourEdge Mortgage Investment Corp. v. Timbercreek Mortgage Investment Corp. (Trustee of), [2016] O.J. No. 265 at para. 56; Sun Rise at para. 10). The onus is on the party opposing the CPL to show that there is no triable issue (Boal at para. 64).

[38] In determining if there is a triable issue, the evidentiary bar is low (Saggi at paras. 45 and 62; Bains v. Katri, 2019 ONSC 1401 at para. 36). The court is not to assess credibility or decide disputed issues of fact (Huntjens v. Obradovic, 2019 ONSC 4343; Sunrise at para. 10). Rather, the court must examine the whole of the evidence after cross-examination and, without deciding disputed issues of fact and credibility, consider whether on the whole of the evidence the plaintiff’s case constitutes a reasonable claim to the interest in land claimed (Huntjens at para. 21; Boal at para. 64).

[23] With respect to consideration of the equities of the case, Master McGraw goes on to state as follows at paras. 39 and 40:

[39] A triable issue as to a reasonable interest in land is a gateway requirement for a CPL (Sun Rise at para. 12). If this threshold is met, the court must go on to consider whether it is just and equitable based on all of the circumstances to exercise its discretion to grant a CPL by considering and balancing the equities including the list of factors set out in 572383 Ontario Inc. v. Dhunna, [1987] O.J. No. 1073 (Sun Rise at para. 12; Tribecca Development Corp. v. Danieli, 2015 ONSC 7638; Huntjens at para. 48).

[40] In exercising its discretion, the court must be mindful of the purpose and impact of granting a CPL, in particular, that a CPL effectively acts like an injunction:

“The purpose of a CPL is to provide notice to the world that there is an issue with respect to the title of the property and/or that there is an interest claimed in the property. Once registered, the CPL prevents a subsequent purchaser from asserting the defence of bona fide purchaser for value without notice. It has the same general effect on a subsequent encumbrancer. This has profound consequences for the titleholder; the CPL effectively acts like an injunction because virtually no one will complete a purchase of the property with an outstanding unresolved claim looming. This impact has been judicially recognized: see Matheson v. Gordon, 2004 CanLII 28475 (ON SC) at para. 22; Bowbriar Investments Inc. v. Wellesley Community Homes Inc., [1977] O.J. No. 66 (S.C.) at para. 9.” (Middlesex Centre (Municipality) v. McRobert, 2017 ONSC 4552 at para. 12).

[24] The parties agree that the onus is on Diana to satisfy the court that the CPL should be discharged (G.P.I. Greenfield at para. 20).

[25] I am satisfied that there was a lack of full and fair disclosure of material facts in Le’s first affidavit that may have affected the outcome of the motion before Associate Justice Josefo.

[26] In support of the total amount that Le claims to have provided for the purchase and mortgage, Le includes at Exhibit “G” to Le’s first affidavit a cheque from a law firm’s trust account dated June 22, 2018 payable to Donny in the amount of $38,000.00. However, on cross-examination Le states that he gave Donny, who acted as his litigation guardian, $8,000.00 from the settlement funds and Donny gave Le the remaining $30,000.00 (page 48 of the transcript). By including the amount of $38,000.00, which Le confirms was in part given to Donny and in part given back to Le, he breached his obligation of full and fair disclosure of a material fact.

[27] At paragraph 13 of Le’s first affidavit he deposes that the Bank of Nova Scotia mortgage was entered into without his authorization and direction. However, on cross-examination Le states that he co-signed for the mortgage (page 36 of the transcript). By stating in his first affidavit that the mortgage was entered into without his authorization and direction when, according to his own evidence on cross-examination, he co-signed for the mortgage, Le breached his obligation of full and fair disclosure of a material fact.

[28] In my view this lack of full and fair disclosure of material facts is sufficient to warrant a setting aside of the order and a discharge of the CPL.

[29] Diana also argues that Le’s failure to disclose that he has been represented by a litigation guardian in other proceedings due to a lack of competency constitutes a breach of his obligation of full and fair disclosure. The litigation guardian in the other proceedings is Donny. I understand at least one of the other proceedings wherein Le is represented by a litigation guardian is still before the court. The affidavits filed by the litigation guardian in the other proceedings were not before me, nor were any court file numbers.

[30] In Le’s second affidavit he explains the use of a litigation guardian in his personal injury action at para. 29:

29. Donny further states that in 2014 or 2015, as a result of my involvement in a motor vehicle accident and subsequent litigation, I was assessed by a psychologist and deemed mentally incapable and unable to make decisions on my own; he goes on to state that, due to this diagnosis, he was appointed my Litigation Guardian. It is true that I underwent a medical assessment at that time, but I do not recall the diagnosis. In any event, both the assessment and Donny’s appointment as my Litigation Guardian were tactics suggested and used by my then personal injury lawyer in order to support my case – I had no say in, nor did I fully understand the reason for, this course of action. I was and remain of sound mind, and am fully capable of making my own decisions.

[31] In oral submissions on the within motion, Le’s lawyer confirmed that he has no issue with Le’s capacity and states that Le is very lucid. I note that Le swore two affidavits in this proceeding and was cross-examined.

[32] Le’s explanation for the use of a litigation guardian in at least one of his personal injury proceedings is extremely troubling to say the least. However, as there appears to be no issue of Le’s competency at present, I am not satisfied that the failure to disclose Le’s representation by a litigation guardian in other proceedings is a breach of the obligation of full and fair disclosure of a material fact in this proceeding.

[33] In the event that I am wrong with respect to those matters that I have determined to be in breach the obligation of full and fair disclosure, I will next turn to an examination of whether there is a triable issue with respect to an interest in the property.

[34] There are certainly issues of credibility and disputed facts. Le deposes that there was an “oral trust agreement” entered into between himself and Diana. There are no specifics from Le of when this oral agreement was allegedly entered into. There were no submissions concerning whether any oral agreement with respect to the property, even if made, would be enforceable.

[35] Le deposes that he gave money to purchase the property and pay down the mortgage and that the monies were not a loan and were not repaid. However, there is a letter from Le’s lawyer dated May 31, 2021, attached to Diana’s affidavit wherein repayment of $68,000.00 less the $10,000.00 paid, is sought, plus interest. If, according to Le, none of the monies were a loan, it is unclear why a lawyer would demand repayment of monies on behalf of Le. In my view this letter should have been attached to Le’s first affidavit and a failure to do so also amounts to a breach of the obligation of full and fair disclosure sufficient to set aside the underlying order. I note that the May 31, 2021 letter refers to a letter dated September 5, 2019, that was not before me.

[36] The receipts and invoices attached to Le’s first affidavit do not clearly support payments by him to his children towards the purchase and mortgage. Only one cheque appears to be payable to Diana.

[37] On the other hand, Diana, Donna and Donny do not have documentary support for the withdrawals of cash to pay Le for the amount they say was loaned and repaid in full.

[38] As noted above, the threshold for determination of whether a triable issue with respect to a reasonable claim to an interest in land is low. These issues of credibility and disputed facts are not to be determined on this motion. If it is proven that Le provided money for the purchase of the property and mortgage, and if it is proven that those monies were not repaid, Le may be able to establish the existence of a trust and may be entitled to a remedy. For the purposes of this motion I am satisfied that the low threshold has been met.

[39] Notwithstanding that the low threshold of establishing a triable issue with respect to a reasonable claim to an interest in the land has been met, in my view the equities of the case do not favour the maintaining of the CPL.

[40] The plaintiff is not a shell corporation. There is no evidence concerning the uniqueness of the property. While it is Le’s evidence that he wanted the property as a legacy for Donna, Donny and Denny, there is no evidence before me that anyone else had the same intent when the property was acquired or at all. While Le is not specifically claiming damages, in my view damages would be an appropriate remedy and would be easily calculated. There is a willing purchaser. If the CPL is not discharged the sale will not close. If the CPL is discharged Le will still be able to proceed with the application and seek damages under 1(f) of the notice of application.

[41] As a condition of discharging the CPL, Diana is willing to have a portion of the proceeds of the sale held in trust/paid into court pending the disposition of this proceeding or further order of the court. On the motion when asked for Le’s position as to an amount to be held/paid in the event that such an order was made, Le’s lawyer declined to provide an amount stating that Le’s claim is for the property not the money.

[42] I am satisfied that it is just to order payment into court of a portion of the proceeds of sale as a term of granting the relief sought on this motion. In my view the amount of $190,686.14 is a fair and reasonable amount. This represents the total amount alleged to have been provided by Le less $38,000.00 which appears not to have been paid according to Le’s cross-examination and less $10,000.00 which appears to have been “repaid” according to the May 31, 2021 letter. This amount is not necessarily a cap on the amount that Le could potentially recover if he is entirely successful, but without submissions as to quantum from Le, I am not prepared to order more than the amount Le submits he provided, less those amounts.

[43] For these reasons, the order of Associate Justice Josefo is set aside and the CPL shall be discharged on the term that $190,686.14 from the proceeds of sale be paid into court pending the disposition of this application or further order of the court.

[44] With respect to costs of the motion, if successful, Diana sought $8,358.00. If successful, Le sought costs in the amount of $7,691.91. Diana was successful on this motion and is entitled to costs in the all-inclusive sum of $8,358.00, which in my view is a fair and reasonable amount that Le could expect to pay for costs in all of the circumstances.

[45] Order to go as follows:

1. The order of Associate Justice Josefo dated January 4, 2022, is set aside.

2. The certificate of pending litigation registered pursuant to the order of Associate Justice Josefo dated January 4, 2022, shall be discharged on the term that the sum of $190,686.14 from the proceeds of sale be paid into court to the credit of this action, subject to further order of the court.

3. Costs of the motion are fixed in the all-inclusive sum of $8,358.00 payable by Le to Diana within 30 days.

Date: February 9, 2022

Associate Justice B. McAfee