CITATION: Wang v.

Kesarwani, 2017 ONSC 6821

COURT FILE NO.: CV-17-580240
DATE: 20171120

ONTARIO
SUPERIOR COURT OF JUSTICE

2017 ONSC 6821 (CanLII)

BETWEEN: )
)
RONG JUAN WANG and YI HAO ) Michael B. Miller, Patricia L. McLean and
INVESTMENTS INC. ) Rachel H. Pilc for the Plaintiffs
)
Plaintiffs )
)
– and –
)
RAHUL KESARWANI, MALTI ) Bryan C. McPhadden for the Defendants
KESARWANI, 994179 ONTARIO LTD., ) Rahul Kesarwani, Malti Kesarwani and
ARDEN AL, HERSHEY GUEVERA AL, ) 994179 Ontario Ltd.
YAN-LING DING, and SHERRY WONG )
Scott Turton for the Defendants Arden Al,
Defendants )
Hershey Guevera Al, Yan-Ling Ding and
) Sherry Wong
)
) HEARD: October 24, 2017

PERELL, J.

REASONS FOR DECISION

A. Introduction and Overview

[1] In this action, Rong Juan (Judy) Wang and her corporation Yi Hao Investments (“YH-
Investments”) sue: Mr. Arden Al, Ms. Hershey Guevera Al, Yan-Ling Ding, Mr. Rahul
Kesarwani, Mrs. Malti Kesarwani, 994179 Ontario Ltd. (“Kesarwani Corp.”), and Sherry Wong.
The Plaintiffs allege that the Defendants conspired to commit three mortgage frauds and that Mr.
Kesarwani, who is a lawyer and who acted for the Plaintiffs, was professionally negligent and in
breach of his fiduciary duties.
[2] On August 9, 2017, without notice, the Plaintiffs obtained an interim Mareva injunction
(freezing the assets of the Defendants), an interim Norwich Order (requiring the disclosure of
information from the Defendants), and certificates of pending litigation against properties owned
by the Kesarwanis, Ms. Al, and Ms. Ding. The interim orders were continued on August 18,
2017 pending the completion of cross-examinations.
[3] On September 5, 2017, the Plaintiffs abandoned the Mareva injunction as against Mr.
Kesarwani and Kesarwani Corp. On September 12, 2017, the Plaintiffs abandoned the Norwich
 2

Order as against Mr. Kesarwani and Kesarwani Corp. On September 13, 2017, the Mareva
injunction and the Norwich Order as against Mr. Kesarwani and Kesarwani Corp. were vacated.
The injunctions as against the other Defendants were extended until October 24, 2017.
[4] On the return of the main motion to continue the injunctions, in one of the other motions

2017 ONSC 6821 (CanLII)

now before the court, the Plaintiffs seek to have numerous paragraphs stricken from the
affidavits of Mr. Al, Ms. Ding, and Ms. Wong. In the main motion, the Plaintiffs seek to have the
interim interlocutory injunctions continued to trial, and for their part, the responding Defendants
Mr. Al, Ms. Al, Ms. Ding, and Ms. Wong seek to have the interim interlocutory injunctions
vacated. In the third motion, the Kesarwani Defendants seek damages and costs of approximately
$200,000 to enforce the Plaintiffs’ undertaking as to damages.
[5] For the reasons that follow: (a) I dismiss, without costs, the Plaintiffs’ motion to strike
paragraphs in the various affidavits because the Plaintiffs purported to proffer evidence to
contradict or qualify the evidence they sought to strike out as prejudicial and irrelevant, and, in
any event, the impugned paragraphs, if stricken, would have not changed my decision, which can
be based on other evidence, and thus no purpose would be served by striking the paragraphs.
Further, and without getting into the details, much of the challenged paragraphs were admissible
for some purposes; (b) I vacate with costs in the cause, the Mareva injunction, the Norwich
Order, and the certificates of pending litigation; and (c) I dismiss the Kesarwanis’ motion to
enforce the undertaking as to damages with costs in the cause.

B. Factual Background

1. Introduction

[6] Affidavit and or cross-examination evidence were proffered for the motions now before
the court from 16 witnesses; namely: Mr. Al, Ms. Al, Ms. Ding, Adamo Fucile, Neeraj Jain,
Annysha Jaiswal, Mr. Kesarwani, Mrs. Kesarwani, Rachel Pilc, Yan Yan Su, Jack Tannerya,
Susan Turton, Ms. Wang, Ms. Wong, Daniel Woods, and Mr. Zhang.
[7] The Plaintiff Ms. Wang speaks Mandarin and does not speak or read English. She
emigrated to Canada with Mr. Zhang, whom she says she divorced in 2013. They have two
children that live with her. She was a 50% owner of Y-H Investments along with Mr. Zhang
until March 2016, when Mr. Zhang conveyed his 50% interest in the company to her in gratitude
for her having paid for providing the stakes for his high stakes gambling. Mr. Zhang is a
profligate high stakes gambler.
[8] Mr. Al is a former jewellery importer, who emigrated to Canada in 1999, where he
carried on business between China and Malaysia until his bankruptcy in 2014. He has three
children, a son and two daughters, the older daughter being the Defendant Hershey Guevera Al
(Ms. Al). Mr. Al is fluent in English and Cantonese and has a working knowledge of Mandarin.
He was a friend of Ms. Ding, Ms. Wang, and Mr. Zhang, and Mr. Al referred legal work to Mr.
Kesarwani and immigration work to Daniel Woods, a non-lawyer immigration consultant.
[9] Ms. Al is Mr. Al’s 26-year-old daughter and a university student enrolled in a business
management course. She speaks only English.
[10] Ms. Ding is a licensed real estate agent. She was born in China and is fluent in Mandarin
 3

and Cantonese. She emigrated to Canada in 2002 and learned English as a second language. Ms.
Ding met Mr. Zhang in Canada through her husband, and the Plaintiffs engaged Ms. Ding as a
real estate sales agent to sell their properties.
[11] Mr. Jain has an engineering degree but now carries on business as a private investor. He

2017 ONSC 6821 (CanLII)

is an acquaintance of Mr. Kesarwani and his ex-wife from their school days in Ottawa.
[12] Mr. Kesarwani is a lawyer with a general practice in Toronto with an emphasis on
commercial, corporate, and real estate law as well as some family law.
[13] Mrs. Kesarwani is Mr. Kesarwani’s mother. The family emigrated from India. She lives
in Ottawa and has retired from career as a librarian. Apart possibly for this litigation, Mrs.
Kesarwani does not know and has not met, Mr. Al, Ms. Al, Ms. Ding, Ms. Wang, Ms. Wong, or
Mr. Zhang. Kesarwani Corp. is Mrs. Kesarwani’s company, which she owns with her son Mr.
Kesarwani. She leaves the management of the company entirely to him.
[14] Ms. Wong is a businesswoman who operates two businesses; Canadian College of
Healthcare and GC Health and Wellness Centre, that provide healthcare services (massage,
acupuncture, physiotherapy, etc.). She speaks Cantonese and Mandarin. English is her second
language. Ms. Wong emigrated to Canada from Hong Kong in 1990. Ms. Wong is a frequent
gambler at Casino Rama, where she became an acquaintance of Mr. Al, Ms. Ding, and Mr.
Zhang.
[15] Daniel Woods is an immigration consultant, who Ms. Wang and Mr. Zhang referred to
as “the Chief Justice”. He was a federal civil servant for 20 years until 1993, when he went into
private practice, sometimes in association with a law firm. Through a connection with Mr. Al,
Mr. Woods was retained by Ms. Wang and Mr. Zhang to prepare a separation agreement in 2011
and later to process their citizenship applications. There is a controversy about whether Mr.
Woods was retained to apply for a divorce for Ms. Wang and Mr. Zhang. Mr. Woods’ son,
Andrew (Chris) Woods acted as a commissioner of oaths on one of the alleged mortgage
frauds. Mr. Daniel Woods was an acquaintance of Mr. Al, who referred him work, Mr.
Kesarwani, and Ms. Ding. Mr. Woods does not know Ms. Wong.
[16] Mr. Fucile is an articling student at Mr. Kesarwani’s law office. Ms. Jaiswal was an
articling student at Mr. Kesarwani’s law office during the events of 2017. Ms. Pilc is a lawyer at
Dickinson Wright LLP, the Plaintiffs’ lawyers. Ms. Su is an interpreter engaged by the Plaintiffs.
Mr. Tannerya is a partner at Dickinson Wright LLP. Ms. Turton is a law clerk for F. Scott
Turton, who is counsel for Mr. Al, Ms. Al, Ms. Ding, and Ms. Wong.
[17] Eleven witnesses; namely: Mr. Al, Ms. Al, Ms. Ding, Mr. Jain, Ms. Jaiswal, Mr.
Kesarwani, Mrs. Kesarwani, Ms. Wang, Ms. Wong, Mr. Woods, and Mr. Zhang, were examined
under oath.
[18] There are irreconcilable differences in the witnesses’ respective accounts of what
occurred. Most of the accounts of the events have inconsistencies and incredulities. Some
witnesses have alternative versions of their own accounts of the events. In the cross-
examinations, there were reciprocal attacks on the reliability, credibility, and honesty of the
witnesses. I have read the transcripts of the unfocussed, unorganized, and dysfunctional cross-
examinations of the witnesses, and the transcripts are replete with inane, unfair, and improper
questions and evasive and unintelligible answers. There are countless improper interruptions and
 4

interferences. There are countless instances where it is not clear that the witness understood the
question and countless instances where the questions are unintelligible. There are numerous
refusals of proper questions that should have been answered. Large portions of the evidence have
the quality of pulp fiction.

2017 ONSC 6821 (CanLII)

[19] As the action progresses, the judges hearing other interlocutory motions and the trial
judge will have to make their own determinations and they may come to different or other
findings of fact as the evidentiary record develops. My findings of fact and of credibility are not
to be taken beyond the motions now before the court.
[20] I make the following finding of fact hermetically just for the purposes of deciding the
interlocutory motions now before the court.

2. Factual Background

[21] In December 2010, Ms. Wang (born 1977) and Mr. Zhang (born 1964) emigrated to
Canada from China pursuant to the immigrant investor program. Ms. Wang and Mr. Zhang speak
Mandarin and they are non-lingual in English. They have two children, the eldest daughter being
an American citizen having been born during Ms. Wang’s brief visit to the United States.
[22] Ms. Wang and Mr. Zhang arrived in Canada with at least six million dollars. How this
was so and how they have sustained themselves in Canada, where neither of them has any
employment or businesses, apart Mr. Zhang’s gambling and YH-Investments land development
projects, is not explained. On the instructions of counsel, during her cross-examinations, Ms.
Wang refused to answer any questions about the source of her wealth or about her business
affairs in China and about her travel to China. The explanation of some of the Defendants for the
Wang-Zhang wealth is that they believe that Mr. Zhang was a criminal who managed to get his
wealth out of China to become a money launderer in Canada. I make no finding other than
saying that it is unknown how Ms. Wang and Mr. Zhang acquired their considerable wealth or
how they got it out of China for investments in Canada.
[23] In 2011, the Wang-Zhang family moved into a house at 77 May Avenue, Richmond Hill.
The house was purchased for $1,255,000 cash with no financing.
[24] Ms. Wang and Mr. Zhang deposed that in February 2011, they separated. Mr. Zhang may
believe that a separation is the same as divorce. They signed a separation agreement dated
February 10, 2011. The agreement was prepared by the immigration consultant, Daniel Woods,
who was introduced to Ms. Wang and Mr. Zhang by Mr. Al, who had been introduced to them
by Ms. Ding. Mr. Woods was associated with a law firm that reviewed his work outside the
immigration area, and he testified that he recommended that Ms. Wang and Mr. Zhang obtain
independent legal advice because of the extent of their property holdings. Mr. Woods says that
he was not given instructions to proceed with divorce proceedings.
[25] After the separation, Mr. Zhang moved out of the family home, but he would return from
time to time to visit the children. According to Ms. Wang, Mr. Zhang would sometimes stay
overnight in a separate bedroom. According to Mr. Zhang, he would stay overnight only if Ms.
Wang was away.
[26] Although separated, Ms. Wang and Mr. Zhang remained business partners. On
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September 1, 2011, YH-Investments was incorporated. Its books and records are kept by a
Mandarin speaking accountant. The corporation was owned equally by Ms. Wang and Mr. Zhang
and its purpose was to purchase and develop real property.
[27] On November 7, 2011, shortly after YH-Investments’ incorporation, it purchased 55

2017 ONSC 6821 (CanLII)

Avenue Rd., Richmond Hill. The property was purchased for $900,000 cash without any
financing. The property was subsequently severed to become 55 and 57 Avenue Rd. New houses
were constructed on both properties. No explanation is provided as to how the improvements
were paid for.
[28] On November 11, 2011, YH-Investments purchased a property municipally known as 21
Sunnywood Crescent, Richmond Hill, Ontario for $1,050,000 cash without financing. In 2012,
the existing bungalow on the property was demolished, and a new two-storey home was
constructed. No explanation is provided as how the improvements were paid for. Ms. Wang
believes that the Sunnywood property is now worth between $3.75 million and $4.25 million.
[29] In early 2012, Mr. Zhang introduced Ms. Wang to Ms. Ding. Ms. Ding’s husband had
been a countryman of Mr. Zhang in China. Ms. Ding would encounter Mr. Zhang at Casino
Rama, a gambling establishment, north of Toronto. Ms. Ding introduced Ms. Wang and Mr.
Zhang to Mr. Al. Ms. Ding says that she lent hundreds of thousands of dollars to Mr. Zhang who
needed the money to pay for gambling. Mr. Al says he also lent money to Mr. Zhang. Mr.
Zhang’s evidence is that Ms. Ding and Mr. Al were the borrowers and he the lender of hundreds
of thousands of dollars.
[30] On June 30, 2012, Ms. Wang and Mr. Zhang purchased 45 Parr Place, Thornhill, Ontario
for $3.5 million with a $2.3 million mortgage from the Bank of Montreal. The balance of $1.2
million was paid from cash. This property is where Ms. Wang resided with the children. There
are documents in which Mr. Zhang specifies Ms. Wang’s home as his address.
[31] Ms. Wang and Mr. Zhang deposed that they divorced in July, 2013, and Mr. Zhang
produced a copy of the divorce decree purportedly granted by Justice Paisley sitting in
Newmarket on July 25, 2013. Mr. Zhang deposed that Mr. Al had arranged for the divorce
through his connection with Mr. Woods (“the Chief Justice”). Mr. Zhang deposed that Mr. Al
delivered the decree to Ms. Wang’s home. Mr. Zhang said he paid Mr. Al $5,000 for Mr.
Woods’ services. The divorce decree is suspicious, because there is no record of it in Newmarket
and Justice Paisley sits in Toronto, not Newmarket. Moreover, the application for divorce in the
Newmarket file, in which Mr. Zhang is the applicant, is dated July 23, 2013 and a two-day
processing of a divorce is improbable. For the purposes of the motions before the court, I can
and will assume, however, that Ms. Wang and Mr. Zhang were divorced in 2013 and lived
separate lives but carried on business together as co-owners of YH-Investments.
[32] In 2013, the Wang-Zhang family home at 77 May Avenue was sold for $1,355,000. Ms.
Ding was the real estate salesperson acting on the sale. Ms. Wang moved her family into 45 Parr
Place.
[33] In the fall of 2014, Mr. Al made a proposal in bankruptcy. Mr. Al testified that his
bankruptcy was precipitated by him and his wife being reassessed by Revenue Canada for the
money he made in his importing business in Malaysia. Mr. Al said that he was not carrying on
business in Canada, but was reassessed nevertheless. Since the bankruptcy, Mr. Al has had no
 6

income, and he has lived on the support of his family in Malaysia, who provide monthly
payments to him of between $2,000 and $15,000.
[34] Mr. Al deposed that by the time of his bankruptcy, he had loaned Mr. Zhang over
$400,000 for Mr. Zhang’s gambling habits and debts. These loan receivables are not documented

2017 ONSC 6821 (CanLII)

and do not appear as assets in Mr. Al’s bankruptcy proceedings.
[35] Mr. Zhang denies that he borrowed any money from Mr. Al. There is, however, no
denying that Mr. Zhang is a high stakes gambler who has lost hundreds of thousands if not
millions of dollars that Ms. Wang and possibly others were prepared to cover. Although Ms.
Wang did not mention Mr. Zhang’s profligacy until she was cross-examined, she admitted
paying millions of dollars to pay for Mr. Zhang’s gambling activities. Mr. Zhang said that he
asked and was given approximately $6.0 million, largely from the sales of YH-Investments’
properties.
[36] Ms. Wang’s evidence on cross-examination confirmed that she had given millions of
dollars to Mr. Zhang so that he could gamble. During cross-examination, she testified:
1126. Q. You advanced 5 to 6 million dollars to Mr. Zhang. Allow me to clarify that. Was it
actually to Mr. Zhang that you gave the money?
A. Yes.

1127. Q. Did you pay any of that money to anyone else?

A. No.

1128. Q. Did he tell you what he needed that money for?

A. To play at the casino.

1129. Q. Was it to pay any gambling debts that he already had?

A. No.

1130. Q. When did you give him that money, the 5 to 6 million dollars?
A. Ever since coming to Canada, the money was advanced to him at different times.

1131. Q. In what amounts?

A. Sometimes more, sometimes less, different amounts.

1132. Q. What's the most you gave to him at any one time?
A. 2.5 million, I think.
….

1146. Q. Since March 4, 2016, how much money have you given Peter [Mr. Zhang]?
A. Maybe less than 100,000.

1147. Q. Altogether?
A. Yes. No, sorry, less than 1 million.
1148. Q. Less than 1 million.
A. Sorry, yes.
[37] Mr. Zhang frequently gambled at Casino Rama. It seems that Ms. Ding was also a
gambler as was Mr. Al. Ms. Wong, another of the Defendants who gambled at Casino Rama,
says that she met Mr. Zhang at the baccarat tables. Ms. Wong and Mr. Zhang became
acquaintances. In undocumented loans of gambling chips and cash, Ms. Wong says she loaned
 7

Mr. Zhang $180,000. Ms. Wong says that she understood that Mr. Zhang owned YH-
Investments. She testified that he promised to repay his indebtedness to her by selling or
mortgaging the properties of his corporation. Mr. Zhang denies even knowing Ms. Wong.
[38] Ms. Ding testified that she also loaned money to Mr. Zhang for his gambling. This too is

2017 ONSC 6821 (CanLII)

denied by Mr. Zhang.
[39] Because of the bankruptcy, Mr. Al lost his matrimonial home. In 2015, Ms. Wang and
Mr. Zhang allowed Mr. Al to reside rent free at the Sunnywood property. Mr. Al says he paid
rent. In any event, he and his terminally ill wife and two of their three children moved into the
Sunnywood home. Ms. Wang says that the charitable accommodation was to be temporary, but,
to her chagrin, the Als stayed rent free for almost two years. None of this is documented by
leases or payment receipts, but for present purposes, I do not have to decide whether Mr. Al was
a squatter or a renter of the Sunnywood property for almost two years.
[40] In May 2015, at a meeting at 45 Parr Place, Mr. Al introduced Mr. Kesarwani to Mr.
Zhang and Ms. Wang. Mr. Kesarwani thought he was at Ms. Wang’s and Mr. Zhang’s
matrimonial home and that they were married. At the meeting, which had the purpose of possibly
retaining Mr. Kesarwani for legal services, Mr. Kesarwani met Ms. Wang, whom he says was
introduced as Mr. Zhang’s wife. Ms. Ding was also in attendance at the meeting. Mr. Zhang said
that he met with Mr. Kesarwani briefly outside the house and that Mr. Kesarwani never came
inside the house.
[41] After this meeting, Mr. Kesarwani began providing legal services for YH-Investments.
Because Mr. Kesarwani does not speak Mandarin or Cantonese, he would take instructions from
Mr. Zhang with the aid of Ms. Ding and Mr. Al acting as interpreters.
[42] In June 2015, Mr. Kesarwani acted for YH-Investments to place a $900,000 mortgage
from the CIBC on the 57 Avenue Rd. property. Mr. Kesarwani and Ms. Ding deposed that
mortgaging the 57 Avenue Rd. property would not have been possible if Mr. Zhang was shown
to be the owner of YH-Investments. Accordingly, ownership of the corporation was transferred
to Ms. Ding and then the CIBC approved the mortgage. The transaction was completed, and Ms.
Ding says that she paid the money to Mr. Zhang. Mr. Kesarwani says that he understood that the
money was to be used to repay Mr. Zhang’s gambling debts.
[43] Mr. Zhang deposed, however, that when he learned of the transaction, he was enraged
because he had not authorized it and thought that Ms. Ding was stealing the money. He testified
that Ms. Ding promptly repaid the money less $70,000, which he paid of his own money to
redeem the mortgage and repay the indebtedness to the CIBC. Ms. Ding deposed, however, that
Ms. Wang learned about the mortgage on 57 Avenue Rd., and it was Ms. Wang who paid the
CIBC and with the mortgage being discharged, Ms. Ding transferred ownership back to YH-
Investments.
[44] Pausing here, I need not making any finding about the truth and propriety of the
mortgaging of 57 Avenue Rd. beyond noting that it is a very suspicious transaction but one in
which the CIBC ultimately was not harmed. I also observe that if Ms. Wang’s and Mr. Zhang’s
version of this occurrence is true, then it is bizarre that they had anything more to do with Ms.
Ding or with Mr. Kesarwani.
[45] Returning to the narrative, in 2015, Mr. Zhang was living in Montreal where he had
 8

purchased a condominium for approximately $0.5 million. Ms. Ding deposed that she visited Mr.
Zhang and his girlfriend Yang Fang in Montreal. Ms. Ding deposed that she lent Mr. Zhang
more funds to gamble including paying $20,000 interest on his pawning of an expensive watch.
This loan is denied by Mr. Zhang.

2017 ONSC 6821 (CanLII)

[46] In January 2016, Mr. Kesarwani acted on the sale of 55 Avenue Rd. Ms. Ding acted as
real estate salesperson. The sale proceeds of $1.5 million were paid to YH-Investments and then
apparently they went to Mr. Zhang. Ms. Ding says that she paid $30,000 of her own money to
tradespersons who were not paid for renovations to the property. The Plaintiffs dispute that Ms.
Ding made this payment.
[47] On February 1, 2016 Casino Rama sued Mr. Zhang for $195,000 plus interest. Mr. Zhang
said he paid $55,000 to reduce this debt.
[48] In February 2016, Mr. Kesarwani acted on the sale of 57 Avenue Rd. Ms. Ding acted as
real estate salesperson. The property was sold for $1.8 million and YH-Investments was paid in
part by taking back a third mortgage for $270,000 and the net proceeds of sale of $1.5 million
was paid to YH-Investments, and once again, it seems that this money went to Mr. Zhang. Mr.
Kesarwani says that after the closing Mr. Zhang, without explanation, wrote off and discharged
the $270,000 third mortgage.
[49] I pause here to say that the sale and the third mortgage on 57 Avenue Rd. is another
suspicious transaction. One malign interpretation of the facts is that Mr. Zhang, aided by Ms.
Ding, who would have been interested in earning a commission on the sale, conspired with the
purchaser to pull off an “Oklahoma” in which the purchase price is overstated to obtain financing
for the transaction. Mr. Kesarwani, who may have been duped into facilitating this fraud, if that
is what it was, deposed that Ms. Wang may have a claim against Mr. Zhang in respect of the
$270,000 mortgage that was mysteriously discharged. Mr. Zhang denies that he ever discharged
the third mortgage and that the discharge is a forgery. Ms. Wang said that Ms. Ding said that the
$270,000 would be forthcoming but it never was paid and during her cross-examination, Ms.
Wang said: “as I come to think it, it made me very angry and I think it was very suspicious.” For
present purposes, I do not have to make any findings about the probity and propriety of the sale
of the 57 Avenue Rd. property.
[50] On March 4, 2016, Ms. Wang became the sole shareholder of YH-Investments. Mr.
Zhang resigned as director. Mr. Zhang deposed that he transferred YH-Investments to repay Ms.
Wang for all the money she had given him, which money he lost gambling. Mr. Zhang deposed
that he had nothing to do with YH-Investments after March 4, 2016.
[51] In the winter of 2016, Ms. Wang decided to sell the Sunnywood property, where the Al
family was living, and she enlisted the help of Mr. Al and Ms. Ding. In March 2016, Mr. Zhang
signed an agreement to sell the Sunnywood property for $3.9 million, but the transaction was
conditional on financing, and it did not proceed.
[52] On March 21, 2016, Mr. Al’s wife paid $60,000 as the down payment for her daughter
Ms. Al’s purchase of 70 Dunrobin Crescent in Vaughan, which was a house to be constructed. In
the meantime, the family was continuing to live at the Sunnywood property.
[53] It is Mr. Kesarwani’s evidence that around this time, Mr. Zhang attended on Mr.
Kesarwani to arrange a six-month first mortgage of the Sunnywood property, which mortgage
 9

was to be personally guaranteed by Mr. Zhang. Mr. Kesarwani says that apart from indicating
urgency, Mr. Zhang did not explain the purpose of the borrowing, but Mr. Kesarwani came to
understand that the money from the mortgage was to be used to pay gambling debts. Mr.
Kesarwani says that he was not told that Mr. Zhang was not still the owner of the YH-

2017 ONSC 6821 (CanLII)

Investments and that he had no reason to suspect that there had been a change in ownership. Mr.
Zhang, however, denies that he ever gave Mr. Kesarwani instructions to mortgage the
Sunnywood property.
[54] Mr. Zhang’s cross-examination does not probe Mr. Zhang’s meetings with Mr.
Kesarwani. Mr. Zhang testified that he signed documents on only four occasions. Three
occasions, two of which were at a restaurant and one at Mr. Kesarwani’s office, were to sign
failed offers to sell the Avenue Rd. properties and once there was a meeting with respect to his
children’s passports. Thus, during his cross-examination, Mr. Zhang testified:
553. Q. You are...
A. Let me tell you this: with the lawyer, right, I signed...three times. I signed the first offer was
signed in his company [office]. The second and the third time was signed in a restaurant. All
these three didn't go through, failed. Then, another thing I signed with this lawyer was about my
children's passport. And then, after that, I did not sign anything at all with this lawyer. Those are
all the occasions that I signed anything.
[55] It was Mr. Kesarwani’s evidence that he attempted, without success, to find a lender for
Mr. Zhang, and Mr. Kesarwani says that the amount required by Mr. Zhang increased from
$150,000 to $300,000. Mr. Kesarwani also deposed that he learned that the $300,000 was to be
used to repay Ms. Ding who had lent money to Mr. Zhang for gambling. Here it may be noted
that Ms. Ding’s husband had abandoned his family to return to China, but he left her some
money. Mr. Kesarwani also said that he understood that Ms. Ding needed the funds repaid for a
pending purchase of 171 Timber Creek, Kleinburg, Ontario.
[56] Ultimately, Mr. Kesarwani arranged that his acquaintance, Mr. Jain, would lend $150,000
and that Kesarwani Corp. would lend $150,000. The security was to be a $300,000 mortgage
with interest at 8% per annum and also a promissory note from Mr. Zhang with interest at 4%
per month if the loan was not repaid. In other words, the mortgage security and the promissory
note security were not symmetric, and Mr. Zhang would pay higher interest on default.
[57] I pause here to say that the Plaintiffs submit that over and above the fact that they deny
that YH-Investments ever authorized the $300,000 mortgage, such lending would be illegal as
contrary to the Mortgages Act,1 the Interest Act,2 and the Criminal Code3 for charging penalty
interest after default and for charging a criminal rate of interest. For present purposes, this is an
issue that I need not decide for many reasons, including the absence of actuarial evidence about
the effective interest rate.
[58] In any event, on June 2, 2016, a six-month $300,000 mortgage on the Sunnywood
property with interest payable at 8% per annum was apparently granted by YH-Investments and
registered against the title of the property. The mortgagees were Mr. Jain and Kesarwani Corp.,
each as to a 50% interest. Mr. Kesarwani acted for the borrower and the lenders. It seems that

1
R.S.O. 1990, c. M.40.
2
R.S.C. 1985, c. I-15.
3
R.S.C., 1985, c. C-46.
 10

although the mortgage was in the face amount of $300,000, the sum actually advanced by the
lenders was more. Mr. Kesarwani’s trust ledger statement indicates that $331,523 was advanced.
However, the trust ledger statement for the subsequent discharge of the $300,000 mortgage
indicates that the additional principal was $51,600.

2017 ONSC 6821 (CanLII)

[59] With respect to the $300,000 mortgage, Ms. Ding and Mr. Al deposed that they went to
Mr. Kesarwani’s office to translate for Mr. Zhang and to give instructions to Mr. Kesarwani. Mr.
Kesarwani deposed that all of the $300,000 and actually somewhat more was paid to Ms. Ding or
to the vendor-builder of the 171 Timber Creek Boulevard property pursuant to YH-Investment’s
direction provided by Mr. Zhang. Mr. Zhang, however, says that all the documents for this
transaction have his forged signature. He denies receiving any proceeds from the mortgage, and
the Plaintiffs, in essence, say that the Defendants defrauded them of in excess of $300,000.
[60] The evidence with respect to the $300,000 is one of several examples where it would
appear that either Mr. Zhang perjured himself or Mr. Al, Ms. Ding, and Mr. Kesarwani perjured
themselves.
[61] Returning to the narrative, on June 13, 2016, Ms. Ding purchased 171 Timber Creek
Boulevard. The purchase price was $1.4 million. Ms. Ding did use the money she received from
the $300,000 mortgage to purchase 171 Timber Creek. A trust ledger statement from Mr.
Kesarwani’s law office indicates that Ms. Ding directly or indirectly received $306,732.31 and
that Mr. Kesarwani received legal fees of $9,911.19 for acting on the purchase of 171 Timber
Creek and the mortgaging of the Sunnywood property. Ms. Ding’s position is that she was owed
the money raised from the mortgage as repayment of the loans she had made to Mr. Zhang and
as repayment for the sums that she had paid for YH-Investments.
[62] On June 27, 2016, Ms. Wang signed an agreement to sell the Sunnywood property for
$5.9 million, but the transaction, which was conditional on financing, did not proceed.
[63] Mr. Kesarwani deposed that YH-Investments did not make any payments on the
$300,000 mortgage and that as a result the default provisions of the promissory note with the
greater interest rate became enforceable. There is an issue, but one I need not decide, about
whether the default provisions of the promissory note were lawfully triggered.
[64] On July 20, 2016, Casino Rama obtained a default judgment for $198,410.53 against Mr.
Zhang, and in August 2016, it filed a writ of seizure and sale.
[65] Mr. Kesarwani deposed that in November 2016, he was retained by Mr. Zhang to
complete a $2.7 million mortgage on the Sunnywood property. Mr. Kesarwani deposed that it
was around this time that he learned for the first time that Ms. Wang was the sole owner of YH-
Investments. The mortgage transaction did not proceed nor did another sale of the Sunnywood
property in January 2017.
[66] Ms. Wang admitted that in December of 2016, at the direction of Mr. Al and Ms. Ding,
Mr. Kesarwani was retained by YH-Investments to apply for a mortgage loan from Mortgage
Company of Canada (MCC) on the security of the Sunnywood property. She was aware of these
efforts to mortgage the property and aware that the efforts were not successful.
[67] In December 2016, Ms. Wang gave Ms. Ding bank drafts of approximately $140,000 to
pay for Mr. Zhang’s debt at Casino Rama.
 11

[68] In early 2017, Ms. Wong chanced to meet Mr. Zhang at a mall, and he promised to repay
his debt to her. She says that shortly after this meeting, she went with Mr. Zhang to an illegal
casino where she saw Mr. Zhang harassed for repayment of a $700,000 gambling indebtedness.
As noted above, Mr. Zhang deposed that he does not know Ms. Wong, never gambled with her,

2017 ONSC 6821 (CanLII)

and never borrowed money from her.
[69] It is Ms. Wang’s evidence that on February 22, 2017, she attended with Mr. Al and Ms.
Ding at Mr. Kesarwani’s office. She understood that the purpose of the meeting was to sign
documents for the sale of the Sunnywood property. She says that she signed numerous
documents. Ms. Wang deposed that she spoke Mandarin to Ms. Ding, who, in turn, spoke
Cantonese to Mr. Al, who, in turn, spoke English to give instructions to Mr. Kesarwani. Ms.
Wang deposed that February 22, 2017 was the last time she was at Mr. Kesarwani’s office.
[70] Under cross-examination, Ms. Wang’s account of her visit to Mr. Kesarwani’s office
changed. Her initial account was that she believed the purpose of the meeting on February 22,
2017 was to sign documents for a sale of the Sunnywood property but she was deceived into
signing mortgage documents. Ms. Wang’s altered account was that she believed the purpose of
the meeting on February 22, 2017 was to sign sale documents and also to sign a notional
mortgage to facilitate the sale of the Sunnywood property. Ms. Wang admits that she signed the
documents but says that she was deceived about what she was signing. Ms. Wang denies that she
was raising money to discharge her ex-husband’s gambling debts. She also persisted in saying
that she had no meetings with Mr. Kesarwani after February 22, 2017.
[71] It was Mr. Kesarwani’s evidence that there was meeting on February 22, 2017, but that
its purpose was not to sign mortgage or sale documents but to do some corporate business for
YH-Investments.
[72] Mr. Kesarwani testified that there, was, however, a mortgage transaction meeting that
occurred the next day when Ms. Wang, along with Mr. Al and Ms. Ding, attended a meeting at
Mr. Woods’ office. Mr. Kesarwani said he participated by phone. Later, Mr. Kesarwani said the
meeting occurred at Ms. Wang’s home. Mr. Woods’ evidence was that the meeting on February
23rd was at Ms. Wang’s home. Mr. Woods did agree with Mr. Kesarwani that he was not at the
meeting and rather participated by telephone.
[73] Also in attendance on February 23, 2017 were Mr. Woods and his son Andrew, also
known as Chris. Ms. Wang is alleged to have signed the mortgage documents at this meeting.
The dates on the mortgage documents are February 23 and 28, 2017 and March 6, 2017. The
documents were commissioned by Andrew Woods. His father, Mr. Woods, deposed that all the
variously dated documents were signed on the 23rd.
[74] The Defendants’ account of the meeting was that Ms. Wang wished to sell and or to
mortgage the Sunnywood property to repay Mr. Zhang’s gambling debts to loan sharks who
were pressing for payment. The Defendants say that Ms. Wang signed the mortgage documents.
The Defendants assert that Ms. Wang knowingly gave instructions for the mortgaging of the
Sunnywood property and for the distribution of the mortgage proceeds to discharge the first
mortgage on the property and to discharge the gambling debts of her ex-husband and to make
payments to Ms. Ding and Ms. Wong for the moneys owed to them by Mr. Zhang.
[75] The competing evidence about the meeting on February 23, 2017 cannot be reconciled.
 12

Either Ms. Wang is lying or all of Mr. Al, Ms. Ding, Mr. Kesarwani, and Mr. Woods are lying.
[76] In any event, on March 1, 2017, the $1,175,000 mortgage was registered. The one-year
mortgage charged interest at 12% per annum. The mortgage was granted to Maria Kapetanios.
The mortgage funds were paid: (a) $440,600 to discharge the $300,000 mortgage and Mr.

2017 ONSC 6821 (CanLII)

Zhang’s promissory note; (b) $267,180.31 to Ms. Ding; (c) $150,000 to Mr. Al; (d) $150,000 to
Ms. Wong; (e) $70,324.66 for municipal realty taxes; and (f) $34,214.16 to Mr. Kesarwani for
legal fees.
[77] There is no signed direction from the Plaintiffs with respect to the dispersal of the funds
from the $1,175,000 mortgage, and Mr. Kesarwani deposed that he relied on Ms. Wang signing
his Trust Ledger Statement on March 6, 2017. As noted above, Ms. Wang denies any meetings
after February 22, 2017 and Mr. Woods’ evidence was that all the documents were signed on
February 23, 2017.
[78] Pausing here in the narrative of the factual background, if Ms. Wang and Mr. Zhang are
to be believed, by the start of March 2017, Ms. Ding and Mr. Al have either duped Mr.
Kesarwani or he conspired with them to defraud YH-Investments of approximately $1.1 million
which was used to pay Ms. Ding, Mr. Al, and Ms. Wong for Mr. Zhang’s gambling
indebtedness. However, if the Defendants are to be believed, the $300,000 mortgage and the
$1,175,000 mortgage were authorized by Mr. Zhang and by the Plaintiffs. The loss is
approximately $1.1 million because slightly more than $70,000 was paid to Richmond Hill for
property tax arrears on the Sunnywood property.
[79] For present purposes, for reasons that I will explain below, I need not decide whether the
fraud version or an innocent version is the correct version of what transpired about the
$1,175,000 mortgage. I do note that to avoid double counting, the loss to YH-Investments with
respect to the $300,000 was encompassed by the $1,175,000 mortgage. The $300,000 mortgage
was discharged for $440,600 of which a portion went to Mr. Jain and a portion went to
Kesarwani Corp.
[80] In this last regard, Mr. Jain may have a cause for complaint, because it appears that the
$440,600 was not divided evenly and more went to Kesarwani Corp. than to him. Mr. Jain
deposed that he received approximately $171,000. I also note, but make no finding, that whether
Mr. Kesarwani was duped or not and whether or not Mr. Jain has a cause for complaint, Mr.
Kesarwani’s handling of these two mortgage transactions is very problematic. He had numerous
conflicts of interest, he took instructions from Mr. Al and Ms. Wong who were the main
beneficiaries of the transactions, and his accounting and his reporting of the transactions were
sloppy.
[81] The optics of all these transactions is not good for Mr. Kesarwani, and the optics are not
improved by the fact that on March 31, 2017, he and his mother purchased 16 Echo Valley Road,
Toronto, Ontario. Thus, the Plaintiffs allege that part of the purchase price for 16 Echo Valley
Road was derived in part from the $440,600 paid to discharge the $300,000 mortgage. Mr.
Kesarwani, however, deposed that the purchase price was financed from two mortgages; one
from Scotiabank and the other from the CIBC on the security of several properties owned by the
Kesarwanis. For present purposes, I need not decide what use Mr. Kesarwani made of his share
of the $440,600.
 13

[82] Returning to the narrative, in April 2017, Ms. Wong met Mr. Zhang at Casino Rama, and
she deposed that because she had been repaid $150,000, she was prepared again to lend him
more money. In partially documented loans of ATM withdrawals or transfers, Ms. Wong says
she loaned Mr. Zhang and his girlfriend Yang Fang from Montreal another $60,000 raising the

2017 ONSC 6821 (CanLII)

outstanding indebtedness to $90,000.
[83] It is not clear to me why, but sometime between April 1 and 13, 2017, Ms. Wang
attended at the Royal Bank to discuss her investments. Ms. Wang testified that as a result from
her meeting at the bank, she learned there was a $300,000 mortgage and a $1,175,000 mortgage
registered against the title of the Sunnywood property.
[84] On April 13, 2017, the Plaintiffs retained Dickinson Wright LLP. They immediately
arranged for the registration of a restriction against the title to the Sunnywood property. The
restriction stated that no transfer or charge of the lands or any part thereof shall be registered
without the written consent of the registered owner.
[85] It is the Defendants’ evidence that on April 17, 2017, which was Easter Monday, Ms.
Wang, along with Mr. Al and Ms. Ding, attended on Mr. Kesarwani at his office and gave him
instructions and signed the documents to place a one-year $550,000 mortgage on the Sunnywood
property as collateral security for Ms. Al’s purchase of 70 Dunrobin, Vaughan. Mr. Kesarwani
was aware of the restriction registered by Dickinson Wright LLP but essentially ignored it
because Ms. Wang was giving him instructions to prepare the mortgage and she signed the
mortgage documents. Ms. Wang, of course, denies meeting and giving instructions to Mr.
Kesarwani.
[86] Ms. Wang denies that she agreed to the $550,000 collateral mortgage. She denies that she
attended Mr. Kesarwani’s office on April 17, 2017. However, Ms. Jaiswal, who was Mr.
Kesarwani’s articling student, testified that she witnessed Ms. Wang at a meeting that she
understood had the purpose of signing documents for a mortgage.
[87] Pausing here, I shall continue to sidestep from making the very-very hard finding on an
interlocutory motion of frauds, forgeries, and false testimonies and confine myself to saying that
all the Defendants, and most particularly Mr. Kesarwani, will have some explaining to do having
regard to his ignoring the registered restriction and having regard to the discrepancies in his
reporting letter, which, among other inaccuracies, reports that the collateral security was
provided for Ms. Wang’s niece. The truth of the matter is that Ms. Wang and Ms. Al are not
relatives, and Ms. Wang has no nieces.
[88] Returning again to the narrative, on April 19, 2017, a collateral $550,000 mortgage on the
Sunnywood property with interest payable at 12% per annum was granted by YH-Investments to
Global Investment Holdings Inc. The collateral mortgage was part of the security provided by
Ms. Al to complete her purchase of 70 Dunrobin. Ms. Al says that her father was the originator
of this transaction and that she was not aware that YH-Investments had provided a collateral
mortgage.
[89] Meanwhile on April 25, 2017, 45 Parr Place was sold. Ms. Wang then purchased 27
Abner Miles Dr., Vaughan for $2.6 million. She mortgaged the property for $2.6 million to the
Royal Bank.
[90] Ms. Ding deposed that she lent Mr. Zhang $25,000 in May 2017.
 14

[91] On May 5, 2017, Ms. Wang’s lawyers at Dickinson Wright LLP contacted Mr.
Kesarwani making inquiries about the $1,175,000 mortgage. At this time, Ms. Wang’s lawyers
were not aware of the $550,000 mortgage.
[92] Again on May 9, 2017, Ms. Wang’s lawyers requested details about the $300,000

2017 ONSC 6821 (CanLII)

mortgage and the $1,175,000 mortgage. They still were not aware of the $550,000 mortgage.
The requested information was not provided.
[93] On May 31, 2017, still unaware that the $550,000 mortgage had occurred, the Plaintiffs’
lawyers registered another restriction against the title of the Sunnywood property. The restriction
stated that no transfer or charge on the lands may be made without the written consent of YH-
Investments, specifically authorized by Judy Wang, and that notice that consent is required shall
be sent to Ms. Wang c/o of Dickinson Wright LLP.
[94] On June 5, 2017, Ms. Ding granted a $160,000 second private mortgage on 171 Timber
Creek.
[95] On June 7, 2017, the Plaintiffs’ lawyers delivered a direction terminating Mr.
Kesarwani’s retainer and directing him to deliver his YH-Investment files to them.
[96] On June 15, 18, 19, 21, 23, and 26, 2017, Ms. Wang’s lawyers made attempts to obtain
all of Mr. Kesarwani’s files for YH-Investments by communications with Mr. Kesarwani or his
office staff.
[97] On June 22, 2017, the Plaintiffs’ lawyers wrote a letter of complaint to the Law Society
of Upper Canada.
[98] On June 26, 2017, Maria Kapetanios commenced mortgage power of sale proceedings
with respect to the $1,175,000 mortgage.
[99] On June 29, 2017, Mr. Kesarwani delivered some of his file material with respect to the
$1,175,000 mortgage and the $550,000 mortgage, including the reporting letters, which Ms.
Wang denies ever receiving previously. Mr. Kesarwani did not deliver his file with respect to the
$300,000 mortgage.
[100] On June 30, 2017, Ms. Wang, with an interpreter and her lawyers, attended at the York
Regional Police in Richmond Hill to make a complaint and the matter was referred to the fraud
investigation unit.
[101] On July 19, 2017, Ms. Ding listed 171 Timber Creek for sale.
[102] On July 19, 2017, the Law Society advised the Plaintiffs that it was investigating the
matter.
[103] On July 27, 2017, Global Investments Inc. commenced mortgage power of sale
proceedings with respect to the $550,000 mortgage.
[104] On August 3, 2017, Ms. Wang and YH-Investments commenced an action against Mr.
Kesarwani for professional negligence and for breach of fiduciary duty. They also sued Mr. Al,
Ms. Al, Ms. Ding, Mr. Kesarwani, Kesarwani Corp., and Ms. Wong for conspiracy, fraud,
conversion and unjust enrichment. And the Plaintiffs sued Mrs. Kesarwani for conversion and
unjust enrichment.
 15

[105] On August 9, 2017, the Plaintiffs brought motions without notice before Justice Dow and
were granted a Mareva injunction, a Norwich Order, and certificates of pending litigation. Ms.
Wang deposed that all of the $300,000, $1,175,000 and $550,000 mortgage transactions were
frauds and forgeries and that YH-Investments had received no funds from these transactions and

2017 ONSC 6821 (CanLII)

rather that the funds had been misappropriated by the Defendants. As required by Rule 40.03 of
the Rules of Civil Procedure, the Plaintiffs provided the court with an undertaking as to damages.
[106] On August 18, 2017, the interim Orders were continued by me pending cross-
examinations and examinations.
[107] On August 31, 2017, Mr. Zhang swore an affidavit in which he deposed that he had
never-ever borrowed money from Mr. Al, Ms. Ding, or Ms. Wong. He denied knowing Ms.
Wong. He said that he lent substantial sums to Mr. Al and Ms. Ding that have never been repaid.
He said he trusted them to interpret the documents he signed. He said his signature on the
$300,000 mortgage on the Sunnywood property was forged.
[108] On September 5, 2017, the Plaintiffs abandoned the Mareva injunction as against Mr.
Kesarwani and Kesarwani Corp. On September 12, 2017, the Plaintiffs abandoned the Norwich
Order as against Mr. Kesarwani and Kesarwani Corp. On September 13, 2017, I vacated the
Mareva injunction and the Norwich Order as against Mr. Kesarwani and Kesarwani Corp. and I
vacated the certificate of pending litigation against 16 Echo Dr. I also extended the injunctions as
against the other Defendants until October 24, 2017.
[109] On September 15, 2017, the parties appeared before me for a consent order vacating the
injunctions as against the Kesarwani Defendants, continuing the interim Orders until October 24,
2017 against the others, and to provide a schedule for cross-examinations.
[110] Up to October 11, 2017 the Kesarwani Defendants had incurred more than $110,200 in
fees, including HST and $6,090.98 in disbursements. These sums do not include the expenditure
for the motion to enforce the undertaking as to damages. Mr. Kesarwani, who is a lawyer, claims
a business loss of approximately $80,000 because of the time he spent personally engaged in
responding to the interlocutory injunction Orders and for loss of goodwill and for lost retainers.

C. Discussion and Analysis

1. Introduction

[111] I have already explained at the outset why I am dismissing without costs the Plaintiffs’
motion to strike various allegations in the affidavits delivered for the motions.
[112] To explain why I am making orders without costs to vacate the Mareva injunction the
Norwich Order, and the certificates of pending litigation and dismissing the Kesarwanis’ motion
to enforce the undertaking as to damages, I shall in this introduction set out the applicable legal
principles. Then, in the sections that follow, I shall apply the principles to the circumstances of
this bizarre case as it has developed so far.
[113] To obtain a Mareva injunction, a plaintiff must satisfy the normal criteria for an
injunction and also several additional criteria. For a Mareva injunction, the moving party must
establish: (1) a strong prima facie case; (2) that the defendant has assets in the jurisdiction; and
 16

(3) that there is a serious risk that the defendant will remove property or dissipate assets before
the judgment. A Mareva injunction should be issued only if it is shown that the defendant's
purpose is to remove his or her assets from the jurisdiction to avoid judgment. The moving party
must also establish that he or she would suffer irreparable harm if the injunction were not granted

2017 ONSC 6821 (CanLII)

and that the balance of convenience favours granting the injunction. Absent unusual
circumstances, the plaintiff must provide the undertaking as to damages normally required for
any interlocutory injunction.4
[114] When the plaintiff has acted improperly in obtaining the interlocutory injunction or when
the plaintiff’s claim fails, the court will inquire as to damages suffered by the defendant from the
interlocutory injunction, unless there are special circumstances or inequitable conduct by the
defendant.5 The courts take the undertaking as to damages to be a serious matter and are not
sympathetic to those who try to resile from the undertaking.6 There is a strong presumption that a
party who gives an undertaking to obtain an interlocutory injunction should be held to the
undertaking, but the court may dispense with the undertaking in special circumstances.7
[115] The requirements for a Norwich Order are: (1) the plaintiff must have a bona fide claim
or potential claim against a wrongdoer; (2) the defendant to the Norwich proceeding must have a
connection to the wrong beyond being a witness to it; (3) the defendant to the Norwich
proceeding must be the only practical source of the needed information; (4) the interests of the
party seeking the disclosure must be balanced against the interests of the defendant to the
proceeding, including his or her interest in privacy and confidentiality, and any public interest
that would justify non-disclosure; and (5) the interests of justice must favour obtaining the
information.8 The fundamental principle underlying the Norwich Order is that the party against
whom the order is sought has an equitable duty to assist the applicant in pursuing its rights.9
[116] In GEA Group AG v. Ventra Group Co.,10 the Ontario Court of Appeal emphasized that
the jurisdiction to make a Norwich Order is an extraordinary jurisdiction that is only exercised
when the court is satisfied that it is necessary that it should be exercised. Cronk J.A. stated at
para. 85:
… The important point is that a Norwich order is an equitable, discretionary and flexible remedy.
It is also an intrusive and extraordinary remedy that must be exercised with caution. It is therefore
incumbent on the applicant for a Norwich order to demonstrate that the discovery sought is

4
02 Electronics Inc. v. Sualim, 2014 ONSC 5050.
5
Vieweger Construction Co. v. Rush & Tompkins Construction Ltd., [1965] S.C.R. 195; Nelson Burns & Co. v.
Gratham Industries Ltd., [1987] O.J. No. 1100 (C.A.), leave to appeal to S.C.C. refused [1988] S.C.C.A. No. 165;
Ontario (Attorney General) v. Harry (1982), 35 O.R. (2d) 248 (H.C.J.); Metropolitan Toronto (Municipality) v.
N.B. Theatrical Agencies Inc. (1991), 2 O.R. (3d) 260 (Gen. Div.); United States of America v. Yemec, [2013] O.J.
No. 1473, 2013 ONSC 50 at para. 14, affd. 2014 ONCA 274.
6
Nelson Burns & Co. v. Gratham Industries Ltd., supra at paras. 10-11; United States of America v. Yemec, [2009]
O.J. No. 3546 (S.C.J.) at para. 111.
7
United States of America v. Yemec, 2010 ONCA 414 at paras. 54-88, reconsideration allowed 2010 ONCA 845;
Vieweger Construction Co. v. Rush & Tompkins Construction Ltd., supra.
8
1654776 Ontario Ltd. v. Stewart, 2013 ONCA 184, leave to appeal refused [2013] S.C.C.A. No. 225; GEA Group
AG v. Ventra Group Co. (2009), 96 O.R. (3d) 481 (C.A.); Tetefsky v. General Motors Corp., 2010 ONSC 1675,
affd., 2011 ONCA 246.
9
Isofoton S.A. v. Toronto Dominion Bank (2007), 85 O.R. (3d) 780 (S.C.J.); Hudspeth v. Whatcott, 2017 ONSC
1708 at paras. 267-274.
10
(2009), 96 O.R. (3d) 481 (C.A.).
 17

required to permit a prospective action to proceed, although the firm commitment to commence
proceedings is not itself a condition precedent to this form of equitable relief.
[117] On a motion for an interlocutory injunction made without notice, there must be full
and fair disclosure of all material facts.11 A material fact is one that the court may need to
know in coming to its decision and that if not disclosed may affect the outcome of the decision.12

2017 ONSC 6821 (CanLII)

The moving party on a motion without notice must inform the court of any points of fact or law
known to it that favour the other side.13 It is not sufficient to simply attach relevant documentary
evidence as an exhibit to the applicant's supporting affidavit without revealing or
highlighting the material facts.14 If there is material non-disclosure, the court may dissolve the
injunction notwithstanding that it otherwise would have been appropriate to continue it.15

2. Fraud or Folly

[118] The evidence before the court gives me the choice of attributing the Plaintiffs’ loss of
approximately $1.1 million to fraud or to folly. The above description of the factual background
reveals that the Plaintiffs either have a strong prima facie case of being the victims of several
frauds and forgeries or that the Defendants have a strong prima facie defence that the Plaintiffs
are the victims of their own greed and or stupidity.
[119] For present purposes, I prefer the folly version of the facts. In general, I found Ms.
Wang’s, and particularly Mr. Zhang’s evidence, self-serving, implausible, inconsistent, illogical,
incredible, unreliable, evasive, and inconsistent with the documentation. That is not to say that
the Defendants were in every respect credible and reliable witnesses. In particular, Mr. Al’s, Ms.
Ding’s, and Mr. Kesarwani’s evidence is suspect and in many respects, their evidence is
incredible and unreliable.
[120] There is the prospect that some witnesses committed perjury or were dishonest, but for
the purposes of this motion, it is not necessary for me to make a final determination. For present
purposes, I limit myself to saying that the Defendants’ accounts were better collaborated by
common sense, by the documents - to the extent that the documents were reliable, and by the
non-party witnesses who may have had bad memories but who had no or little motive to
prevaricate or to lie or to expose themselves to perjury charges.
[121] I have no doubt that Mr. Justice Dow made the correct interim interlocutory orders based
on the evidence before him, but the factual record is now substantially different.
[122] Since in the context of the Mareva injunction and the Norwich Order, I do not believe
Ms. Wang and Mr. Zhang’s evidence, I conclude that the Plaintiffs have not shown a strong
prima facie case of fraud and this is particularly true with respect to the Plaintiffs’ claims against

11
Chitel v. Rothbart (1982), 39 O.R. (2d) 513 (C.A.); Sherwood Dash Inc. v. Woodview Products Inc., [2005] O.J.
No. 5298 (S.C.J.); Parallel Medical Services Ltd. v. Ward, [2002] O.J. No. 1498 (S.C.J.) at paras. 15- 19.
12
Pazner v. Ontario (1990), 74 O.R. (2d) 130 (H.C.J.).
13
United States v. Friedland, [1996] O.J. No. 4399 (Gen. Div.); United States v. Yemec (2005), 75 O.R. (3d) 52
(Div. Ct.).
14
830356 Ontario Inc. v. 156170 Canada Ltd., [1995] O.J. No. 687 (Gen. Div.); Cimaroli v. Pugliese, [1987] O.J.
No. 2464 (H.C.J.).
15
Forestwood Co- operative Homes Inc. v. Pritz, [2002] O.J. No. 550 (Div. Ct.); Bardeau Ltd. v. Crown Food
Service Equipment Ltd. (1982), 38 O.R. (2d) 411 (H.C.J.).
 18

Ms. Wong. For this reason alone, I shall not continue the Mareva injunction, the Norwich Order,
and I shall vacate the certificates of pending litigation.
[123] The Plaintiffs’ case against Ms. Wong is very weak. Her evidence that she lent money to
Mr. Zhang and that he told her that he would repay her is at least partially corroborated and Mr.

2017 ONSC 6821 (CanLII)

Zhang’s denial of knowing Ms. Wong appears to be a lie or a mistake.
[124] The case against Ms. Al is also weak. On Ms. Wang’s own evidence, albeit somewhat
disgruntled, she extended a great deal of charity to the Al family. There has been no draw down
on the collateral mortgage that YH-Investments gave to support Ms. Al’s purchase of the 70
Dunrobin property. So far, Ms. Al’s purchase of 70 Dunrobin Crescent was paid for by her
mother’s down payment and by the mortgagees.
[125] The Plaintiffs’ cases against Mr. Al and Ms. Ding are better than the cases against Ms.
Wong and Ms. Al, but still the Plaintiffs’ case is filled with holes and inconsistencies such as
why would the Plaintiffs have continued to transact business with Ms. Ding, Mr. Al, and Mr.
Kesarwani: (a) after Ms. Ding purportedly stole $900,000 by mortgaging 57 Avenue Rd; or (b)
after Ms. Ding did not collect the $270,000 missing from the purchase monies from 57 Avenue
Rd.
[126] However, even if I am wrong in concluding that the Plaintiffs have not shown a strong
prima facie case, they also fail to satisfy the other elements of the test for granting the
extraordinary interlocutory relief of pre-judgment execution and pre-pleading and pre-discovery
disclosure of evidence. In this regard, the Plaintiffs have not shown that there is a serious risk
that the Defendants will remove property or dissipate assets for the purposes of avoiding paying
a judgment against them. The Defendants are not fleeing the jurisdiction, and to the extent that
they are using the Plaintiffs’ money, they have an arguable case that it was received to discharge
Mr. Zhang’s indebtedness.
[127] Further, with the exception of Ms. Ding, the Defendants’ assets were not acquired using
the Plaintiffs’ funds. Ms. Al is not leaving the jurisdiction and she is not dissipating assets of
which she personally has none apart from 70 Dunrobin Crescent.
[128] Moreover, I conclude that the Plaintiffs, in moving without notice, did not make full and
fair disclosure of all material facts. In this regard, it is not that the Plaintiffs did not inform the
court of any points of fact or law known to it that favour the Defendants, but it is that the
Plaintiffs did not inform the court of numerous material facts about the relationship between the
parties, the history of transactions between them, the circumstances of Mr. Zhang’s gambling,
and the prior history of selling and mortgaging properties.
[129] In the result, I vacate with costs in the cause the Mareva injunction, the Norwich Order,
and the certificates of pending litigation. I order the costs in the cause because although the
Defendants were successful on the interlocutory motions, it may subsequently be determined that
fraudulently or wrongfully they took advantage of the Plaintiffs. The Plaintiffs may ultimately
succeed against the Defendants. This is a case where a trial judge will be in a better position to
make the just, fair, and appropriate costs award including provisions for claims over against co-
defendants; hence, costs in the cause.
[130] Turning to Mr. Kesarwani’s motion to enforce the Plaintiffs undertaking as to damages.
As I have already said, based on the evidentiary record before Justice Dow, it is understandable
 19

why he made interim interlocutory Orders against Mr. Kesarwani and Kesarwani Corp.
However, the record now clearly reveals that the requirements for a Norwich Order, which is an
extraordinary-extraordinary order, were not satisfied. The Plaintiffs did not need any information
from Mr. Kesarwani to confirm their own knowledge and belief that YH-Investments had not

2017 ONSC 6821 (CanLII)

authorized the three mortgage transactions, and they already knew whom to sue based on the
information they received from Mr. Kesarwani. The Plaintiffs were wise to abandon the interim
interlocutory injunctions against the Kesarwanis in September.
[131] However, it is presumptuous and brazen of Mr. Kesarwani to attempt to claim victory.
He claims some sort of vindication from the circumstance that the Plaintiffs abandoned both
injunctive orders in early September. There is, however, no vindication here. The Plaintiffs’ case
against Mr. Kesarwani has not been abandoned nor discontinued. The Plaintiffs ultimately may
succeed in their claims against Mr. Kesarwani.
[132] From the Plaintiffs’ perspective, the Norwich Order served its purpose, and while it is
true that there should never have been a Mareva injunction or a Norwich order against the
Kesarwanis, it remains to be determined whether Mr. Kesarwani was professionally negligent
and in breach of his fiduciary duties to the Plaintiffs. There is a strong prima facie case against
Mr. Kesarwani for negligence and breach of fiduciary duty, and he may also have some
explaining to do to Mr. Jain.
[133] If Mr. Kesarwani ultimately provides satisfactory explanations and successfully defends
the claims against him, then he can claim vindication and costs. The undertaking as to damages,
is an undertaking given to the court, and I think it premature and presumptuous for Mr.
Kesarwani to ask for damages in the circumstances of this case where the merits of his defence
to the professional negligence claims remains to be determined and where there is enough on the
record to put Mr. Kesarwani to a defence of his conduct.

D. Conclusion

[134] For the above reasons, I dismiss all of the motions without costs.

___________________
Perell, J.

Released: November 20, 2017

 CITATION: Wang v. Kesarwani, 2017 ONSC 6821
COURT FILE NO.: CV-17-580240
DATE: 20171120

ONTARIO

2017 ONSC 6821 (CanLII)

SUPERIOR COURT OF JUSTICE

BETWEEN:

RONG JUAN WANG and YI HAO INVESTMENTS

INC.

Plaintiffs
– and –

RAHUL KESARWANI, MALTI KESARWANI,

994179 ONTARIO LTD., ARDEN AL, HERSHEY
GUEVERA AL, YAN-LING DING, and SHERRY
WONG

Defendants

REASONS FOR DECISION

PERELL J.

Released: November 20, 2017