Liu v. Ling, 2025 ONSC 2503

Court File No.: FS-23-00039484-0000
Date: 2025-04-23
Superior Court of Justice – Ontario

Re: Wentong (Wendy) Liu, Applicant
And: Lan Ling (non-party), Respondent

Before: Sharmila Mathen
Counsel:

• Herschel I. Fogelman / Fausto Amendola, for the Applicant
• Angela Kwok (Counsel for non-party), for the Respondent

Heard: 2025-04-17

Endorsement

Background

[1] The Applicant, Wentong Liu (“Wendy”), has commenced proceedings against her spouse, Yilan Yuan (“Yuan”). The Respondent on this motion, Lan Ling (“Lan”), is Mr. Yuan’s mother. Lan’s husband, and Mr. Yuan’s father, is Chang Ming Yuan (“Ming”).

[2] Lan brings this motion to be added as a party to Wendy and Yuan’s case. She argues that Wendy is seeking equalization of several properties and assets that Yuan is holding in trust for her and Ming.

[3] Yuan did not file materials or appear on this motion. I am advised that he takes no position on Lan’s request.

[4] At the hearing, the parties did not appear to dispute that Lan could be added as a party under Rule 7(5) of the Family Law Rules, O Reg. 114/99. They disagree on the following:

a. How to deal with a related civil claim Lan filed on April 2, 2025;
b. The precise assets over which Lan, as opposed to Ming, can assert an interest.
c. A disclosure order against Lan pursuant to Rule 13 of the Family Law Rules.
d. Costs.

[5] Wendy and Yuan married in 2013. They separated sometime in 2023. They have one child born in 2014.

[6] Wendy’s family law proceeding concerns: net family property and equalization, determining income for support purposes, child and spousal support and divorce.

[7] Wendy issued an Application on November 21, 2023. She says she had to because Yuan refused to provide financial disclosure.

[8] A 10-day trial of the family law issues is scheduled for November 24, 2025.

[9] In his Answer and Financial Statements, Yuan states that he holds certain assets in his name in trust for his parents. His materials do not specify which of his parents is the purported beneficial owner of which property.

[10] Yuan listed the following properties:

a. 6557 Elgin Ave Burnaby, B.C., which is a property in his name (the “Elgin property”);
b. 601, 108, 101, and 107 Daiwang Commercial Building, Shaoqing, China (the “Daiwang properties”), which the Respondent claims are owned personally by him; and
c. Block 6 2 Jie Cui Yuan, Panyu China (the “Panyu property”)

[11] Yuan stated that he has the following additional interests:

a. A 33% interest in DJ Technologies and Systems Inc. (“DJ Tech”);
b. A 33% interest in Newton 0701172 Holding Corp. (“Newton”);
c. A 50% interest in 0701172 B.C. Ltd (“070”), which owns a property in British Columbia.

[12] Following a settlement conference on November 28, 2024, Justice Diamond noted that Yuan had “failed to comply with his financial disclosure obligations, especially those documents to support his claims that he allegedly holds a series of assets/properties in trust for his parents.”

[13] A Trial Management Conference proceeded before Justice Diamond on January 10, 2025. Counsel for Lan appeared and indicated that her client wished to bring an added party motion. At a subsequent TMC on January 30, 2025, Justice Diamond gave leave for the within motion.

[14] Lan served a Notice of Motion and supporting materials on February 21, 2025. The materials are in Lan’s name alone. The state of those pleadings is the subject of some dispute. Lan did not serve a draft Application. Wendy replied that it was difficult to respond to the materials. Lan then submitted a reply Affidavit on March 19, 2025.

[15] Lan was cross-examined on March 20 and 21, 2025. Wendy says that at that time, Lan refused to say whether she would be filing a civil claim.

[16] On April 2, 2025, Lan issued a Statement of Claim against Yuan, in her name and in Ming’s name as his “Litigation Guardian”. Lan and, purportedly, Ming, seek inter alia:

a. a declaration that “Trust Assets” “currently held in the name of [Yuan] are held upon a constructive trust and/or resulting trust for their benefit;
b. a declaration that Lan and Ming are the beneficial owners of the Trust Assets; and
c. if necessary, an order appointing Lan Litigation Guardian for Ming.

Party Positions

Wendy

[17] Although Lan is the moving party, it is helpful to begin with Wendy’s position.

[18] In her factum, Wendy argued that it was not necessary to add Lan as a party. At the hearing however, Wendy no longer took this position with respect to the question of whether an order could issue under Rule 7(5) of the Family Law Rules.

[19] Wendy’s remaining objections are as follows:

a. First, that the civil claim is, essentially, a ruse. Wendy argues that Yuan will not defend it, and the ensuing judgment will obstruct the available remedies in her family law application;
b. Second, that Lan has not established the necessary foundation to act as litigation guardian for Ming. As a result, the civil pleadings are deficient, should be dismissed, and fresh pleadings ordered;
c. Third, that Lan does not have standing to claim an interest in the Panyu property, as she herself recognizes it as a gift to Yuan;
d. Fourth, that Lan does not have standing to claim an interest in 0101172 B.C. Limited as she is not a shareholder.

[20] Wendy says that Lan must be required to file a Form 13.1 financial statement.

[21] Wendy further argues that, as a result of the timeline in this case, she has incurred costs thrown away.

Lan

[22] Lan argues that she is trying not to obstruct the trial, but to safeguard her interests.

[23] Lan seeks an order consolidating the proceedings.

[24] Lan says that Ming is suffering from cancer. She only recently discussed the legal case with him, including her decision to initiate a civil claim. She says that Ming is not able to participate in these proceedings. Lan relies on Ming’s execution of a limited Power of Attorney for Property as authorization for her to act as his litigation guardian pursuant to Rule 7.02(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[25] Lan disputes some of Wendy’s factual claims regarding particular trust assets. However, she agrees that the Panyu property can be characterized as a gift.

The Issues

[26] The issues in this case are:

a. Should Lan’s civil claim be dismissed without prejudice for her to refile?
b. Alternatively, should Lan’s civil and Wendy’s family claims be consolidated and, if so, under what terms?
c. Should Lan be added as a party and, if so, under what terms?
d. Can Lan act for Ming?
e. Should Lan be required to provide financial disclosure?
f. Are costs owing to either party?

Analysis

The Law

[27] Rule 6 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 states:

6.01 (1) Where two or more proceedings are pending in the court and it appears to the court that,
(a) they have a question of law or fact in common;
(b) the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences; or
(c) for any other reason an order ought to be made under this rule,
the court may order that,
(d) the proceedings be consolidated [.]

[28] Rule 7 of the Family Law Rules, O Reg. 114/99 permits for added parties in family law cases:

(3) A person starting a case shall name,
(a) as an applicant, every person who makes a claim;
(b) as a respondent,
(i) every person against whom a claim is made, and
(ii) every other person who should be a party to enable the court to decide all the issues in the case.
(5) The court may order that any person who should be a party shall be added as a party and may give directions for service on that person.

[29] The Rules of Civil Procedure provide the following in respect of Litigation Guardians:

7.01 (1) Unless the court orders or a statute provides otherwise, a proceeding shall be commenced, continued or defended on behalf of a party under disability by a litigation guardian.
7.02 (1) Any person who is not under disability may act, without being appointed by the court, as litigation guardian for a plaintiff or applicant who is under disability, subject to subrule (1.1).
(1.1) Unless the court orders otherwise, where a plaintiff or applicant,
(a) is mentally incapable and has a guardian with authority to act as litigation guardian in the proceeding, the guardian shall act as litigation guardian;
(b) is mentally incapable and does not have a guardian with authority to act as litigation guardian in the proceeding, but has an attorney under a power of attorney with that authority, the attorney shall act as litigation guardian[.]
(2) No person except the Children’s Lawyer or the Public Guardian and Trustee shall act as litigation guardian for a plaintiff or applicant who is under disability until the person has filed an affidavit in which the person,
(a) consents to act as litigation guardian in the proceeding;
(b) confirms that he or she has given written authority to a named lawyer to act in the proceeding;
(c) provides evidence concerning the nature and extent of the disability;
(d) in the case of a minor, states the minor’s birth date;
(e) states whether he or she and the person under disability are ordinarily resident in Ontario;
(f) sets out his or her relationship, if any, to the person under disability;
(g) states that he or she has no interest in the proceeding adverse to that of the person under disability; and
(h) acknowledges that he or she has been informed of his or her liability to pay personally any costs awarded against him or her or against the person under disability.

[30] Rule 1.03 defines “disability” as “mentally incapable within the meaning of … the Substitute Decisions Act, 1992, S.O. 1992, c. 30 in respect of an issue in the proceeding, whether the person has a guardian or not.” That Act states:

A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.

[31] The “primary objective” of the Family Law Rules is to enable the court to deal with cases justly, having regard to, among other things: ensuring that the process is fair to all parties; saving expense and time; and dealing with a case in ways that are appropriate to its importance and complexity: Rule 2.

[32] Rule 13 of the Family Law Rules states:

(1) If an application, answer or motion contains a claim for support, a property claim, or a claim for exclusive possession of the matrimonial home and its contents,
(a) the party making the claim shall serve and file a financial statement (Form 13 or 13.1) with the document that contains the claim [.]

Findings

Dismissal of the Civil Claim

[33] Wendy’s counsel, Mr. Fogelman, suggests that I have the inherent authority to dismiss the civil claim. Lan’s counsel, Ms. Kwok, argues it would be inappropriate to do so.

[34] As the motion judge ruling on Lan’s request to be added to a family law proceeding, and to consolidate her claim, I find it would be inappropriate to strike out the civil claim. There is adequate authority under the Rules to deal with this case fairly without resort to such a drastic step.

[35] Therefore, regardless of whether I have the inherent authority as a judge of the Superior Court to dismiss the civil claim, I decline to exercise that discretion in this case.

Consolidation

[36] Neither of the parties appears to oppose consolidation outright. Lan has asked for it as relief on this motion. Wendy objects to it at present, primarily because Lan purports to act as Ming’s litigation guardian.

[37] I find that the question of consolidation can be addressed separately from whether Lan can act for Ming.

[38] To return to the key issue, Lan has raised a trust claim against Yuan in relation to property that Wendy says is relevant to the question of equalization between her and Yuan. In response to Wendy’s application, Yuan has already stated that he owns at least some of the property in trust for “his parents”.

[39] Clearly, the civil and family law claims have questions of law and fact in common. To permit the claims to run concurrently risks producing inconsistent rulings.

[40] Moreover, Wendy’s counsel suggests that Yuan will not defend the civil claim, in which case a default judgment would be rendered that would be extremely prejudicial to Wendy. This argument, though speculative, has some viability given Yuan’s pleadings, and the fact that he did not appear on this motion and apparently takes no position on it. A similar risk was identified in Stainton v. Stainton, leading the court to add parties to the family law claim.

[41] Consistent with the primary objective of the Family Law Rules, consolidating the claims will ensure that the process is fairer to all parties, and ensure an appropriate allocation of judicial resources.

[42] Lan’s request to consolidate the claims is therefore granted.

[43] My order includes three more provisions. First, Wendy shall be permitted to file an answer to Lan’s claims. Second, the final decision on the property and trust claims shall be rendered by the same judge. For clarity, I leave open the possibility of bifurcating the trial to deal separately with parenting and decision-making responsibility. That decision is best left to the trial management judge.

Adding Lan as a Party

[44] Given that the claims will be consolidated, it is unnecessary to address whether Rule 7 warrants adding Lan as a party to Wendy’s claim. For the purpose of completeness, however, I will note that Rule 7(5) likely grants the court the authority to add Lan as a party, had it been necessary.

Can Lan Act for Ming?

[45] Wendy’s counsel, Mr. Fogelman, objects to consolidating the cases now because of the way that Lan framed her civil claim. In particular, he objects to Lan putting herself forward as Ming’s litigation guardian.

[46] On March 19, Lan produced a limited Power of Attorney executed by Ming which purports to authorize Lan to act on his behalf. She relies on this POA as entitling her to initiate the claim as Ming’s litigation guardian.

[47] Lan’s counsel, Ms. Kwok, cites Rule 7.02(1) as permitting Lan to act as Ming’s litigation guardian “without being appointed by the court”. However, Ms. Kwok did not sufficiently address the condition precedent to that subrule, which is that the plaintiff or applicant be “under a disability”. She did not cite the relevant related provisions of the civil Rules or the Substitute Decisions Act, 1992 reproduced earlier in these reasons.

[48] Ms. Kwok points out that Ming is suffering from cancer and is in ill health. She cited no caselaw for the idea that simply having health challenges, even serious ones, qualifies as a “disability” within the meaning of Rule 7.

[49] I appreciate that Lan wants to protect her husband from the stress of litigation. I accept that Ming has health issues. However, there is simply no evidence before this Court that Ming’s current condition warrants appointing a litigation guardian for him. The Substitute Decisions Act, 1992 states that a person is “incapable of managing property” if they cannot understand information relevant to managing that property or cannot appreciate reasonably foreseeable consequences of failing to make a decision. In March 2026, Ming executed a limited power of attorney for property. Lan relies on that document as justifying her litigation guardianship. It is unlikely that Ming was capable of executing such a document while also being mentally incapable of managing his property.

[50] Rule 7.02(2) requires that a litigation guardian have “no interest in the proceeding that is adverse” to the person for whom they are acting. Mr. Fogelman objects that Lan would not be an appropriate litigation guardian for Ming in any event, as she is a co-plaintiff in the civil claim seeking to protect her beneficial interests. She is therefore not disinterested in the outcome. In addition, it is possible that Lan and Ming could be at odds. For example, Lan now agrees that one of the original listed trust assets, the Panyu property, was a gift. There is as yet no evidence of Ming’s perspective on this. Therefore, while it is not necessary for me to decide whether Ling could ever satisfy the requirements to be appointed a litigation guardian, Mr. Fogelman has raised a fair concern.

[51] Rule 2 of the Family Law Rules provides an additional basis on which to consolidate the claims without acceding to Lan’s assertion of litigation guardianship. A reasonable interpretation of the primary objective must ensure that Lan’s trust claim is adjudicated in a manner that also accommodates Wendy’s rights in the family law proceeding. That does not necessarily require permitting Lan to act as Ming’s litigation guardian.

[52] Therefore, while the two claims should be consolidated in a single proceeding, Lan’s request to act as Ming’s litigation guardian in that proceeding is dismissed for want of evidence. Because this is an interim motion, the dismissal is subject to further court order.

[53] In order to inject some certainty into the proceedings going forward, I make the following additional decisions pursuant to my authority under Rule 2 to “[set] timetables or otherwise [control] the progress of the case” and “[deal] with as many aspects of the case as possible on the same occasion”:

a. Should Ming wish to join the proceedings as a party, he must file appropriate pleadings, including an affidavit, within 30 days of this Order.
b. If Ming is added as a party, Wendy may file an answer to his trust claim, as well as question him on his affidavit.

[54] Finally, since Lan may not assert a trust claim on Ming’s behalf (Karatzoglou v. Commisso, 2023 ONCA 738), the consolidation order made pursuant to this motion cannot extend to assets in which only Ming, not Lan, has an interest. Having reviewed the available materials and considered the arguments, I am persuaded that there is one such asset: 0701172 B.C. Limited. Lan does not dispute the fact that she is not a shareholder for this company; she argues that the shareholder documents were incorrectly executed. Lan can seek to correct this error but the evidence before the court does not permit adding this property to the consolidated claim at present. This ruling is without prejudice to Lan amending her claim on appropriate evidence.

[55] To summarize:

a. Lan’s civil claim shall be consolidated with Wendy’s family law application;
b. The consolidation order for Lan’s claim excludes:
i. the Panyu property; and
ii. 0701172 B.C. Limited.
c. Unless they are withdrawn or settled, all issues related to the trust claims and to equalization shall be finally decided by the same judge.
d. Lan’s request to be appointed Ming’s litigation guardian is dismissed.
e. If he wishes to participate in these proceedings, within the next 30 days, Ming must file his own materials to be added as a party.
f. Wendy shall be permitted to file answers to Lan’s trust claims; and to any request by Ming to be added as a party.
g. Wendy may further question: Lan on her trust claims; and question Ming on any affidavit he files in support of his trust claims.

Disclosure

[56] Under Rule 13 of the Family Law Rules, anyone who makes a claim regarding property must provide a Form 13.1 Financial Statement. Mr. Fogelman requests Lan to provide one. He says that Lan’s resistance to doing so shows that she wants to insert herself into a family law matter without following the Family Law Rules.

[57] Ms. Kwok says that Lan does not object to disclosing financial information, per se, but that disclosure issues should first be canvassed with the Trial Management Judge, Justice Diamond.

[58] I acknowledge that Form 13.1 may require information beyond Lan’s claim in this case. However, I am not persuaded that an order for disclosure should await the parties’ next conference, which may not happen for several weeks. That would insert needless delay into a matter scheduled to go to trial in November 2025. Like any other party, Lan must cooperate to ensure timeliness.

[59] Lan has made a request that affects the property issues between Wendy and Yuan. She has been added to the proceedings two years after they began. Wendy’s request for disclosure is clearly within the scope of Rule 13. An order for disclosure is also consistent with the directive in Rule 2 to deal with as many aspects of a case as possible on a single occasion.

Costs

[60] Wendy asks for costs thrown away. Lan asks for costs in the cause.

[61] Wendy’s counsel, Mr. Fogelman, offered a detailed timeline of how this motion proceeded, the unclear answers from Lan regarding the civil claim, and the fact that the civil claim was filed after to the notice of this motion.

[62] Lan’s counsel, Ms. Kwok, relies on the presumption in the Family Law Rules that costs follow the cause.

[63] In this case, I find that Lan’s initiation of the civil claim after filing a Notice of Motion, and after she had been questioned, unnecessarily complicated these proceedings. I am also satisfied that Lan’s attempt to act as Ming’s litigation guardian is unsupported by her own evidence that shows that Ming executed a limited power of attorney two weeks before she filed the civil claim. I note that Justice Diamond granted Lan and Ming leave to bring a motion to be added to the family law proceeding. Nothing in the materials suggests that Lan advised Wendy or the court that she would proceed in the way that she did.

[64] At the same time, I cannot ignore the fact that Lan was partly successful on the motion.

[65] In the circumstances, I find that success on this motion was divided. The parties therefore shall bear their own costs.

Order

[66] In conclusion, I make the following order:

a. The civil claim commenced by Lan Ling (“Lan”) bearing Court File No. CV-25-00740370-0000, shall be consolidated with the herein Application, bearing Court File No. FS-23-39484-0000. The matter shall be identified by Court File No. FS-23-39484-0000.

b. Lan is permitted to pursue her trust claims with respect to the following assets:
i. The Respondent Yilan Yuan (“Yuan”)’s interest in 6557 Elgin Ave Burnaby, B.C.;
ii. Yuan’s interest in 601, 108, 101, and 107 Daiwang Commercial Building, Shaoqing, China;
iii. Yuan’s 33% interest in DJ Technologies and Systems Inc.;
iv. Yuan’s 33% interest in Newton 0701172 Holding Corp.;

c. Lan may not pursue her trust claim with respect to Yuan’s interest in Block 6 2 Jie Cui Yuan, Panyu China (the “Panyu property”) which she characterizes as a gift;

d. Subject to further court order, Lan may not pursue her trust claim with respect to Yuan’s 50% interest in 0701172 B.C. Ltd.

e. Subject to further court order, Lan may not act as Chang Ming Yuan’s litigation guardian.

f. Should Chang Ming Yuan (“Ming”) wish to pursue a trust claim against the Respondent Yilan Yuan in this case, he shall within 30 days of this Order serve and file a Notice of Motion, including an affidavit, to be added as a party.

g. The Applicant, Wentong Liu, has leave to:
i. File an answer to Lan’s trust claims, including making requests for particulars;
ii. Further question Lan on her trust claims;
iii. File an answer to any application by Ming to be added as a party;
iv. File an answer to any trust claims Ming may make, and question Ming on any affidavit filed in support of such claims;

h. Within 30 days of this Order, Lan shall serve and file a completed Form 13.1 Financial Statement.

i. The issues related to trust, property and equalization shall be finally decided by the same judge.

j. The parties shall bear their own costs.

k. The parties may submit a draft order incorporating these provisions for my signature to [redacted]. Unless explicitly directed to, the parties may not otherwise communicate with the court using this address.

Sharmila Mathen
Date: April 23, 2025