Court File and Parties
COURT FILE NO.: 01-0532/18 DATE: 20231030 ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF YUET CHUEN LAU YAU also known as YUET CHUEN YAU, deceased
BETWEEN: CHING PING YAU also known as VINCENT YAU in his personal capacity and in his capacity as Estate Trustee of the Estate of YUET CHUEN LAU YAU also known as YUET CHUEN YAU, deceased, Plaintiff
-and-
WANG PING YAU also known as WAN-PING YAU also known as GARY YAU, ZHI CHEN also known as CHIA CHEN also known as HILARY ZHI CHEN, the ESTATE OF WEI LING QIU, and COM ENTERPRISES INC., Defendants
BEFORE: FL Myers J
COUNSEL: Paul Robson, for the plaintiff Cassandra Ball, for the defendant Wang Ping (Gary) Yau Danielle Muise, for the defendants Hilary Zhi Chen the Estate of Wei Ling Qiu, and CQM Enterprises Inc.
HEARD: October 10, 2023
Endorsement
Motion to Strike After Four Years
[1]
Endorsement
The plaintiffs commenced two actions in 2018. The other action is under Court File Number 01-0534/18. This endorsement applies to both actions.
2In January, 2022, the defendants moved to dismiss the actions under Rule 21 of the Rules of Civil Procedure on the basis that the plaintiff commenced both claims after the expiry of the ultimate 15-year limitation period set out in s. 15 (2) of the Limitations Act, 2002, SO 2002, c 24, Sch B.
3This litigation is now five years old. These actions should be at pretrial and set for trial; not pleadings motions. The motions are dismissed to allow the actions to proceed to a resolution on their merits.
The Plaintiffs’ Pleadings
[4]
The Plaintiffs’ Pleadings
In these two actions, the plaintiff Vincent Yau makes basically identical claims. In one action he makes the claims on his own behalf and on behalf of the estate of his late father. In the other action, he makes the claims personally and on behalf of the estate of his late mother.
5For convenience only, I refer to the Amended Statement of Claim in the action with Court File No. CV-18-00010532-00ES involving Vincent Yau’s mother’s estate.
6The Amended Statement of Claim narrates the story of the family businesses of the Yau family and their cousins the Qui family (represented by the defendant Hilary Zhi Chen).
7The statements of claim describe how Vincent Yau and his spouse immigrated to Canada in 1974. He commenced a successful career in IT in Ottawa.
8In 1980, Vincent Yau sponsored his father, Yuk Yau to come here as well. In 1982 they were joined by Vincent Yau’s mother, Yuet Yau, and his siblings Gary Yau and Rebecca Yau.
9The father, Yuk Yau, was a Chinese medical herbalist by profession.
10The family lived initially in Ottawa. The father wanted to open an herbal medicine business. Vincent Yau was already earning a stable income by then.
11Vincent pleads that he entered into partnership with his parents in November, 1980 to open the business. Vincent invested the majority of the start-up costs incurred by the business to buy a property and open a store.
12The family opened its first store in Ottawa in July, 1981.
13Vincent and his parents decided to open a second store in Toronto. The Toronto store was to be part of the same business. This was discussed and agreed with Vincent Yau’s siblings Gary Yau and Rebecca Yau.
14In August, 1983, the father signed a lease in Scarborough for the Toronto store. He signed on behalf of a corporation to be incorporated. Vincent paid the initial deposit required under the lease.
15In December 1983, the Ottawa store closed. The parents, Gary Yau, and Rebecca Yau all moved to Toronto. Vincent Yau remained in Ottawa.
16In May, 1984, Vincent Yau incorporated Shou Er Kang Chinese Herbs Limited to operate the first Toronto store. The father became the president of the company. Vincent Yau was vice-president, secretary, and treasurer. The parents, Vincent Yau, Rebecca Yau, and Gary Yau were on the board of directors.
17Start-up costs for Shou Er Kang of $56,700 came from the sale of the property on which the initial Ottawa store operated and in which Vincent Yau had been a partner.
18Vincent Yau owned 50% of the shares of Shou Er Kang. The father shared his half of the business with the rest of the family. He kept 20%. The mother, Gary Yau, and Rebecca Yau each owned 10% of Shou Er Kang.
19In 1987, Vincent sponsored his cousins, the Qui family, to immigrate from China. They worked in the first Toronto store.
20Vincent continued to pursue his IT career in Ottawa while the rest of the family ran the Toronto store for Shou Er Kang.
21In 1993, the family decided to open a second Toronto store. Vincent understood it was to be held in Shou Er Kang. But, instead, a new corporation was incorporated without Vincent Yau’s participation or knowledge. The new business was named Tai Kang Enterprises.
22Vincent Yau pleads that Shou Er Kang was dissolved without his knowledge in 1993.
23In the late 1990s the family business began to struggle. The father, Yuk Yau, and brother Gary Yau asked Vincent Yau to provide USD $300 a month towards the operation of the first Toronto store. This was the store initially held in Shou Er Kang before it dissolved some years earlier. The pleadings do not say who held the store in the late 1990s or to whom expressly Vincent Yau paid his USD $300 monthly advances.
24Despite Vincent Yau’s assistance, the first Toronto store went out of business in February, 2000.
25The second Toronto store continued to operate.
26After May 19, 2006, the Yau parents lived in retirement homes. The father, Yuk Yau, passed away on January 22, 2017. He did not leave a will. Vincent Yau is the Estate Trustee of Yuk Yau’s estate.
27Yuet Yau was recognized as being incapacitated in December, 2008. She passed away on January 18, 2018. She too left no will. Vincent Yau is the Estate Trustee of her estate.
28Vincent Yau pleads:
- Vincent states that only following the death of his parents did he become aware that both the First Toronto Store, the Second Toronto Store and related business operations of his family were operated by various separate corporations and/or companies from Shou Er Kang, including but not limited to: (a) Hsing Lin Chinese Herbs; (b) Longevity Ginseng & Herbs Company; (c) Shin Lin Chinese Herbs; (d) Tai Kang Acupuncture & Herbs Ltd.; (e) Tai Kang Enterprise Limited; (f) Tai Kang Enterprises Limited; (g) Tai Kang Ginseng & Herbs Co, and (h) Tai Kong Chinese Herbs (herein collectively the "Herb Companies")
29Vincent pleads that the current family business operates as CQM Enterprises.
30In essence, Vincent pleads that he has been deprived of 50% of the business that he thought belonged to him. He says that he was deprived of his 50% of the amounts distributed or that ought to have been distributed on the dissolution of Shou Er Kang. He then pleads that his funds were used to buy properties into which he is entitled to trace a right of ownership.
31The statements of claim then go on to categorize the claims as raising the causes of action of conversion, breach of fiduciary duty, oppression, and unjust enrichment,
32There are also several additional claims brought by Vincent Yau either on his own or on behalf of his parents’ estates regarding:
a. a loan obtained by Gary Yau from their father when the latter was 96 years old; b. proceeds of an insurance policy on the mother’s life; c. various governmental benefits due to the mother before she passed away; and d. whether a trust should be imposed over the proceeds of the parents’ bank accounts that were held jointly with Gary Yau on the parents’ respective deaths.
33The defendants are not moving to strike these additional claims that will remain ongoing. They seek only to strike the claims relating to the family business.
34The motions require a review of the wording of the various causes of action pleaded by the plaintiffs regarding the family business.
35For conversion, Vincent Yau pleads:
- Vincent states that Gary, Zhi and/or Wei have withdrawn, confiscated and appropriated to their own use or the use of CQM Enterprises, without authorization or right, funds and/or business opportunities belonging to Shou Er Kang, causing damage to the Plaintiff in his personal capacity to the extent of his claim herein.
36Similarly, to plead breach of fiduciary duty, Vincent Yau claims:
- Gary's withdrawal of funds and business opportunities from Shou Er Kang deprived the company of its operating funds and the company's ability to carry on its business and earn profits was hampered as a result.
37The plea of oppression resolves to this:
Without limiting the generality of the foregoing, the Defendant [Gary Yau] obtained financial benefit to the extent of the amount of funds he misappropriated from Shou Er Kang and in respect of business opportunities of the company that were instead taken by the Herb Companies and/or CMQ Enterprises.
38Moreover, the plaintiffs plead expressly that the dissolution of Shou Er Kang prevents a claim being brought against it or the granting of a remedy in favour of that company.
39Finally, on the plea of unjust enrichment, Vincent Yau plead:
- The Plaintiff states that he has been personally deprived of his right to 50% of the profits of Shou Er Kang and moreover, if Yuk and Yuet were excluded from the Herb Companies and/or CQM Enterprises, their estates have been deprived of their 20% and 10% respective interest and the Defendants have been enriched as a result of their actions in misappropriating the profits and opportunities of Shou Er Kang to themselves and that there is no juristic reason for the enrichment of the Defendants.
40The defendants submit that each tort pleaded is grounded in an act that occurred before Shou Er Kang dissolved in 1993. Therefore, they submit that the plaintiffs’ claims as pleaded cannot succeed.
Rule 21 Pleadings Motions
[41]
Rule 21 Pleadings Motions
Just as delay and cost are the enemies of access to civil justice, so too are hopeless claims. Lawsuits that have no realistic chance of succeeding take up scarce resources. They cause costs, distress and, in vexatious cases, can be used to extort settlements simply due to the threat to the defendants that they will have to incur unrecoverable costs to extricate themselves from a hopeless lawsuit.
42There are at least four distinct procedures designed to combat hopeless claims – Rule 2.1, Rule 21.01, Rule 25.11, and s. 140 of the Courts of Justice Act.
43Properly used, a motion to cut short a claim that cannot possibly succeed is a valuable tool. Case law from the Supreme Court of Canada speaks to the importance of weeding out hopeless claims. They are to be nipped in the bud before costs mount, time passes, and the parties suffer the distress of litigation. R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, at para. 20.
44But here, the parties have already been at these claims for years. Pleadings are closed. Substantial documentary discovery has been exchanged. The parties made an unsuccessful attempt to settle in mediation. I am unsure whether some oral examinations for discovery have been held.
45Actions have stages. First come pleadings, then documentary discovery, then oral discovery, trial preparation and pretrial, and then the trial. Irregularities and resolution-defining substantive defences (or substantive success) can appear at any stage. But when something arises that can be the cause of complaint, whether it is a failure to plead a requisite piece of a cause of action, failure to produce proper documents, or admissions made on discovery which show the pleadings to be false or inapt, then efficiency, affordability, and proportionality generally require that the matter be dealt with before further time, cost, and effort are wasted on additional steps in the proceeding.
46Rule 21 is a narrow and technical rule of pleading. It allows a court to dismiss a claim where the facts pleaded, if true, do not amount to a cause of action. With minimal exceptions there is no assessment of evidence or whether the facts as pleaded can be proven. That is for a later stage when the dispute is resolved on its merits.
47A Rule 21 motion allows a case to be nipped in the bud because it is frivolous in the sense that it simply cannot be won based on the plaintiff’s own pleadings.
48The parties agree on the relevant test. Everyone understands that Rule 21 applies only when it is plain and obvious that a claim cannot succeed even if all facts pleaded were to be proven by the plaintiff at a trial. Pleadings are to be read generously to avoid ending a claim based on technical drafting rather than the substance of the claim. Imperial Tobacco at para. 17; McCreight v. Canada (Attorney General), 2013 ONCA 483 at para. 39.
49Moreover, the plaintiff must be given an opportunity to fix a deficient claim by amendment unless it is impossible for the plaintiff to plead a viable claim. Conway v. The Law Society of Upper Canada, 2016 ONCA 72.
50On the motions before me, the defendants take on an additional burden. They ask the court to find that on the face of the statements of claim, the ultimate or 15-year limitation period has run. That is, they say they have impregnable defences to the claims even if they are otherwise validly pleaded.
51The defendants agree that striking claims under Rule 21 based on limitation periods is rare even among the already limited and narrow scope of Rule 21 cases. Kaynes v. BP p.l.c., 2021 ONCA 36 at para. 74. That is because the applicability of a limitation period is usually a question of fact that requires evidence. This is especially so when discoverability is an issue under ss. 4 and 5 of the Limitations Act, 2002.
52The defendants rely on Rule 21.01(a) [dismiss proceeding on a point of law] in addition to Rule 21.01(b) [dismiss for no reasonable cause of action]. The defendants perceive the former rule to be more amenable to the admission of evidence. The defendants seek to adduce evidence to show that the companies about which the plaintiff complains were dissolved in 1993 and 2002. Anything done by the companies before 1993 for Shou Er Kang and before the date of dissolution of for Tai Kang Enterprises in 2002, must necessarily have happened more than 15 years ago they submit. [1]
The Ultimate Limitation Period
[53]
The Ultimate Limitation Period
Unlike the regular two-year limitation period under ss. 4 and 5 of the Limitations Act, 2002, when the ultimate limitation period is invoked, discoverability is not an issue. The relevant statutory provisions are:
Ultimate limitation periods
15 (1) Even if the limitation period established by any other section of this Act in respect of a claim has not expired, no proceeding shall be commenced in respect of the claim after the expiry of a limitation period established by this section.
General
(2) No proceeding shall be commenced in respect of any claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place.
Exception, purchasers for value
(3) Despite subsection (2), no proceeding against a purchaser of personal property for value acting in good faith shall be commenced in respect of conversion of the property after the second anniversary of the day on which the property was converted.
Period not to run
(4) The limitation period established by subsection (2) does not run during any time in which…
(c) the person against whom the claim is made,
(i) wilfully conceals from the person with the claim the fact that injury, loss or damage has occurred, that it was caused by or contributed to by an act or omission or that the act or omission was that of the person against whom the claim is made, or
(ii) wilfully misleads the person with the claim as to the appropriateness of a proceeding as a means of remedying the injury, loss or damage. 2002,
Burden
(5) The burden of proving that subsection (4) applies is on the person with the claim.
[Emphasis added.]
54Rather than considering when the plaintiff discovered his claim, s. 15 (2) looks at whether the plaintiff commenced his claim before 15 years passed from “the day on which the act or omission on which the claim is based took place”. It assumes that there is an identifiable and singular act on which each claim is based.
55In addition, the plaintiff relies on the doctrine of fraudulent concealment to extend the 15-year ultimate limitation period if it applies. Subparagraph 15 (4)(c)(i) provides that the 15-year period does not run during any time in which the defendant “wilfully conceals from the person with the claim the fact that injury, loss or damage has occurred”.
56To decide if the ultimate limitation period applies then, the defendant must show in the pleadings the date on which the act that is the basis of the claim occurred. But in counting 15 years from that date, we do not count any period during which the plaintiff can show that the defendant willfully concealed the fact that the injury, loss, or damage occurred.
57I note that these two relevant facts are different. To start the 15-year period, an act or omission must be identified as the singular “act or omission on which the claim is based”. But to stop the clock, the plaintiff does not need to show that the defendant concealed the occurrence of the key fact that starts the period. Rather, the clock stops when the defendant conceals from the plaintiff that he, she, or it has suffered injury, loss, or damage.
58Two different factual determinations need to be made to decide whether the ultimate limitation period applies in this case. The defendant needs to identify the act or omission to start the period. The plaintiff then needs to identify any time in which the defendant concealed the plaintiff’s suffering from him.
59It is also important that the burdens of proof of these two facts differ. The defendant bears the burden to show that the limitation period has run i.e., that 15 years passed between the occurrence of the key act or omission and the date on which the plaintiff commenced the claim. But under s. 15 (5) of the statute, it is the plaintiff who bears the burden to establish willful concealment.
60The court need not be satisfied with a baldly pled conclusion that the defendant fraudulently concealed the cause of action. The plaintiff should plead particulars of fraudulent concealment to successfully answer a meritorious plea of the ultimate limitation period. Kaynes at para. 83.
61The different burdens of proof lead to a practical problem. The defendant must plead the limitation period as a defence. When a defendant brings a Rule 21 motion against a statement of claim, the defendant essentially argues that if he pleads the limitation period in his statement of defence, one can tell just by reading the statement of claim that the defendant will always win. The court can look at the issue from that hypothetical perspective assessing only whether it is plain and obvious that the claims in the statement of claim run afoul of the limitation period.
62But with the plaintiff bearing the burden to prove willful concealment to answer a plea by way of defence of the ultimate limitation period, is looking at the statement of claim alone enough? Does the plaintiff have to guess in his statement of claim that the defendant might plead the ultimate limitation period and then essentially reply to the defence before it is even raised? Would that not normally be a matter for a reply pleading?
63I am unsure if I can look at the statements of defence to assess the plea of the limitation defence. No statements of defence or replies were included in the parties’ motion records. Counsel for the defendants conceded in this case that the pleas were bald in the sense that they did not alert the plaintiff specifically to the fact that the defendants were relying on the ultimate limitation period as opposed to the regular two-year limitation period based on discoverability.
64I also agree with Mr. Robson, that the phrase “fraudulent concealment” used in the case law is shorthand. The issue does not turn on a plea of the requisite elements of the tort of deceit. Under the statute, the plaintiff needs to show that the defendant has willfully concealed the plaintiff’s injury from him. References to prior equitable doctrines, while instructive on a policy level, are no longer technically relevant.
Analysis
[65]
Analysis
The defendants accept that using Rule 21 motions to review limitation periods is discouraged by the Court of Appeal. The reason for this is self-evident. Proof of the facts establishing a limitation period usually requires factfinding; “but factfinding is not contemplated on a pleadings motion”. Toussaint v. Canada (Attorney General), 2023 ONCA 117, at para. 11.
66In Toussaint, Huscroft JA wrote:
In general, it is appropriate to address limitations issues on a pleadings motion only "where pleadings are closed and the facts relevant to the limitation period are undisputed": Beaudoin Estate, at para. 31; see also Clark, at para. 44, Salewski, at para. 45. This is true whether the motion is brought under r. 21.01(1)(a) or (b).
67The fact that the defendants need to introduce evidence concerning the dates of incorporation and dissolution of the corporations involved is a strong hint that this is not a motion that can be decided on the pleadings. I accept that under Rule 21.02, leave can be granted to admit basically uncontestable facts like incorporation and dissolution dates in a motion for a determination of a point of law under Rule 21.01(a) (although not 21.01(1)(b)). The outcome of this motion does not turn on the dissolution dates. So I do not need to resolve the question of leave. I propose to assume that leave should be granted in light of how I am deciding the motion.
68What I take most from the words of Huscroft JA above though, is that pleadings motions are generally for the pleadings stage of an action. The pleadings must disclose undisputed facts on which the two necessary findings of fact can be made. But the assessment of disputed facts once pleadings are closed is for trial, summary judgment, or other applicable factfinding process.
69So then, the question for me is whether this is one of the rare cases in which the statements of claim (supplemented by corporate dates) establish that it is plain and obvious that the 15-year ultimate limitation period applies? Can I tell from the statements of claim that the plaintiffs have no reasonable chance of success?
70As pleaded, the defendants submit that the triggering “act” on which the plaintiff bases his claim in each and every cause of action alleged is the removal of funds and opportunities from Shou Er Kang. The defendants submit that those acts must have occurred by or at the dissolution of the corporation in 1993. As a matter of law, Shou Er Kang did not exist after 1993. It had no assets or opportunities to usurp thereafter.
71Tai Kang Enterprises is said to be the company that was incorporated for the second Toronto store. It was incorporated in 1993 and dissolved in 2002. That dissolution date too is outside the 15-year ultimate limitation period the defendants submit. So, even if Vincent Yau was to own half of Tai Kang Enterprises and its assets were then moved improperly to CQM or otherwise, the defendants say that Vincent Yau is statute barred from suing about it.
72CQM was incorporated in 2001. It perhaps is the company that ended up with the assets and opportunities of Shou ER Kang and/or Tai Kang Enterprises. If so, the defendants submit, it all happened too long ago.
73Corporate reports filed in evidence by the defendants show that the incorporators of Tai Kang and CQM were the Qui family i.e. the cousins.
74The defendants submit that to the extent that concealment might be in issue, the parents must be taken to have known about whatever steps they took with the rest of the family to exclude Vincent. This does not answer the question posed in the pleading of whether the parents were excluded from the “Herb Companies”.
75In my view, the defendants’ assertion that all misappropriation must have occurred by the dissolution of Shou Er Kang in 1993 is far too technical an approach. These are closely held corporations within an extended family. There is no indication why any of the companies dissolved. Might it have been unintentional – say on the failure to file regulatory returns? There is no indication that there was a formal liquidation with creditors paid by a liquidator and then any remaining equity distributed to shareholders as required by the corporate statutes on dissolution. There is a plea set out above that the first store remained in operation well after the dissolution of its corporate owner. Who thought they owned the store when it continued in operation after its corporate owner ceased to exist? Did anyone even know that the corporate owner had been dissolved? Did they take salaries and dividends from the dissolved corporation? Did the corporation file tax returns after its dissolution?
76I accept that the events in issue took place a long time ago. But I do not accept that one can simply assert that a technical de jure dissolution necessarily precluded real people from taking real steps thereafter purportedly in the name of a dissolved company.
77I cannot tell from the pleadings when Gary Yau and/or CQM are said to have taken assets and opportunities that ought to have belonged to Vincent Yau (if any). I cannot tell if and/or when the parents were said to have been wrongly excluded. I cannot tell when benefits were received, deprivation meted out, and whether or when any juristic reason arose (if ever) for the defendants to keep funds or property that were properly due to the plaintiffs. I cannot tell if the affairs of any of the listed companies involved were managed in a way that unfairly prejudiced Vincent Yau or his parents and, if so, when.
78I cannot tell when Vincent Yau learned that he suffered loss by the deprivations, breaches of duties, oppression, and torts alleged. He pleads that the defendants kept the corporate structure from him until this parents died recently. If true, it is possible that the limitation period was tolled until 2017 or 2018.
79The defendants rely on the decision of the Judicial Committee of the Privy Council on appeal from the Court of Appeal of the Commonwealth of the Bahamas in Galantis v Alexiou & Anor, (Bahamas), [2019] UKPC 15. The case stands for the proposition that under Bahamian corporate law, an oppression remedy cannot be sought after a corporation is dissolved. The Privy Counsel made the point that the Bahamian statute in question was based on the oppression remedy contained in the Canada Business Corporations Act, RSC 1985, c C-44.
80In that case, despite noting that the statute describes the oppression remedy using words that speak in both the present and (past) perfect tenses, the court held that the oppression remedy can only be available when the oppressive conduct continues at the time the action is commenced. The court found that dissolution of a company therefore prevented an oppression remedy from being a timely claim.
81I told Mr. Robson that he did not need to respond to this case. First, unlike the case in Galantis, the plaintiffs here assert that the oppression continues. Vincent Yau asserts a right to trace into the assets he says are wrongly being withheld from him. Second, and in any event, I see no basis to impose a temporal limitation into an oppression remedy apart from the limitation periods already enacted by Parliament and the legislatures. Timeliness may well go to an appropriate remedy. But nothing in the CBCA provides for an arbitrary cut-off on the oppression remedy. The oppression remedy is interpreted broadly to carry out its intention to protect minority shareholders and others from unfairly prejudicial acts. The wording of the remedy includes the past tense as already indicated.
82The court in Galantis did not interpret their statute in accordance with the modern rule of statutory interpretation applicable here. Once a corporation is dissolved and stops operating, it may be too late for an injunction to be granted to stop oppressive conduct. But to generalize that to a rule that an oppression remedy simply can never be brought after a corporation is dissolved assumes (a) oppression can only be remedied by an injunction; and (b) all corporations stop operating and distribute their assets to creditors and shareholders on dissolution. Neither assumption is necessarily correct. A simple and obvious example is that an oppression remedy can include an award of damages to redress past wrongs.
83I read the pleadings allege that the defendants wrongly took and moved the plaintiffs’ corporate assets and opportunities over and over again over a lengthy period of time. The plaintiffs allege that they have been continuously excluded from participating in their business and deprived of the spoils of their investments. I do not agree with the defendants that the pleadings mean that all the wrongs alleged must necessarily have happened prior to the formal dissolution of the companies on the corporate registers. The question of whether and if any of the dissolved corporations continued to operate, even if technically offside the statute, is one of fact.
84Moreover, the questions of identifying each and every “act” that can be the basis for each and every cause of action pled also require findings of fact that I cannot make on these statements of claim.
85Mr. Robson submits that his clients have raised adequately the wilful concealment defence to the ultimate limitation period. The Amended Statement of Claim pleads:
Unbeknownst to Vincent at the time, a new corporation Tai Kang Enterprises ("Tai Kang") was incorporated for the purposes of operating the Second Toronto Store. At all material times Vincent had understood that the Second Toronto Store would be opened using a different operating name, but would be owned by Shou Er Kang.
By the late 1990s the family business began to struggle financially, Yuk and Gary approached Vincent and asked for $300 USD per month to assist in operating the First Toronto Store, to which Vincent agreed. Unbeknownst to Vincent Shou Er Kang had in fact been dissolved as of August 1993.
Despite Vincent's financial contributions to help assist the First Toronto Store, on February 15, 2000, the store went out of business. However, the Second Toronto Store continued to operate. Vincent continued to believe that its operation was part of the family business owned by Shou Er Kang and was being operated in accordance with the original share structure for Shou Er Kang agreed upon by his family.
86Vincent Yau says he did not know that Shou Er Kang dissolved. He did not know that the second store was being held differently than the first store. He was asked to invest and gave USD $300 per month toward the first store after the dissolution of its owner. He says it was all kept from him by the defendants who did know and who intentionally excluded him. He only learned the true state of affairs after his parents died in 2017-2018.
87These are just pleadings. Whether Vincent Yau can actually prove any of the facts that he pleads is not for today.
88Might the claims be statute-barred? Yes.
89Is it plain and obvious that the acts on which all pleaded causes of action are based must necessarily have happened more than 15 years before the commencement of the claims? No.
90Might that be the case? Yes.
91Is it plain and obvious that Gary Yau and Hilary Chen did not willfully conceal from Vincent Yau that he was suffering loss when they moved beyond Vincent Yau’s reach assets and opportunities in which he says he had a 50% interest? No.
92If they moved assets and opportunities to new companies and new properties excluding Vincent and did not tell him, might that be a willful concealment that Vincent suffered loss? Yes.
93Are these the strongest pleadings I have ever seen? No. But that is not the issue.
94Given the need for factfinding to determine when the acts that form the basis of each pleaded tort actually occurred and whether the plaintiff’s injury was concealed from him by secrecy and corporate structure machinations among other the defendants, these motions are not among the rare set of clear cases where the applicability of the limitation period is plain and obvious despite the assumed truth of all allegations pleaded in the statement of claim.
95While there are many examples of cases where pleadings have been struck after pleadings are closed, in my view, there should be a reason to reach backward ignoring all the fresh steps, cost, and effort made since that time. Why is it not preferable for these actions to be resolved on their merits at this stage? Why, for example, is Rule 21 being used, with evidence, instead of summary judgment under Rule 20?
96Counsel for the defendant submits that the fact that several causes of action are being left for trial makes summary judgment unavailable procedurally. The Court of Appeal has held that it is not in the interests of justice, when considered from the perspective of the case as a whole, to grant partial summary judgment when interrelated causes of action will remain for trial. Butera v. Chown, Cairns LLP, 2017 ONCA 783. If it is not in the interests of justice to resolve part of a claim on its merits, it is even harder to see how it can be in the interests of justice to do so this late in the piece on a technical pleadings motion involving an assessment of unknown and disputed facts underlying pleaded limitation period defences.
97If the facts underlying the limitation period are discrete from the remaining issues and if the defendants can show on the facts that there is no genuine issue requiring a trial on those discrete facts, then this could be a case for partial summary judgment. If the facts relating to the limitation periods are intertwined with the remaining facts, then neither form of summary determination would seem apt.
98The motions are dismissed.
99The plaintiffs are entitled to their costs of each motion on a partial indemnity basis. I cannot find the quantum of costs requested by Mr. Robson at the hearing. As I recall, he sought one set of costs that was considerably less in the aggregate than the costs sought by the each of the defendants individually. If the parties cannot agree on the quantum of costs to be paid to the plaintiff, counsel may write to my Judicial Assistant to seek a brief case conference. The parties are advised that at the case conference I will fix the costs payable to the plaintiff and fix the costs of the costs process including that case conference.
Justice FL Myers Date: October 30, 2023
[1] As the plaintiffs plead the 1993 dissolution date for Shou Er Kang, no evidence is required to accept that date.