Hong v. Yin

2026 BCCA 161 Hong v. Yin COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Hong v. Yin, 2026 BCCA 161 Date: 20260320 Docket: CA51079 Between: Flora Yunying Hong and Andy Ruilong Yin Appellants (Defendants) And Xiao Hai Yin Respondent (Plaintiff) Before: The Honourable Justice Dickson The Honourable Justice Mayer The Honourable Justice Francis On appeal from: An order of the Supreme Court of British Columbia, dated September 23, 2025 (Yin v. Hong, 2025 BCSC 1841, Vancouver Docket S230237). Oral Reasons for Judgment Counsel for the Appellants: R. Lo Counsel for the Respondent: N. Yan F. Karimi Place and Date of Hearing: Vancouver, British Columbia March 13, 2026 Place and Date of Judgment: Vancouver, British Columbia March 20, 2026 Summary: The appeal concerns orders dismissing the appellants' application for relief from forfeiture and directing certain funds to be paid to the respondent in partial satisfaction of a consent order. The judge dismissed the application for relief primarily because he held the remedy was not available to the appellants under the Law and Equity Act. The appellants submit the judge erred by adopting an unduly narrow approach to his interpretation of s. 25 of the Law and Equity Act. Held: Appeal dismissed. The judge made no error in concluding that relief from forfeiture was not an available remedy nor did he err in reaching his alternative discretionary determination that if relief from forfeiture was an available remedy, the appellants had not met their burden to establish a sufficient basis to grant that relief. DICKSON J.A.: Introduction [1] The appellants, Flora Hong and Andy Yin, appeal from an order dismissing their application under s. 24 of the Law and Equity Act, R.S.B.C. 1996, c. 253 [Act] for relief from forfeiture and directing certain funds to be paid to the respondent, Xiao Hai Yin. The funds were paid in partial satisfaction of a consent judgment. The chambers judge denied the application on the basis that the settlement agreement provision entitling Mr. Yin to enter the consent judgment amounted to an acceleration clause, which is not a forfeiture, and the exceptions in s. 25 of the Act providing for relief from that principle were inapplicable. Accordingly, he found the relief sought by the appellants was not available. He also found that if he was wrong and relief from forfeiture was available, the circumstances did not warrant the exercise of his discretion to grant the application. [2] The appellants appeal the order on both bases the judge relied on for dismissing the application. In their submission, he misconstrued s. 25, erroneously prioritized legal formalism over equitable substance, and failed to give proper weight to relevant considerations in the exercise of his discretion. [3] For the following reasons, I would dismiss the appeal. Background [4] As Andy Yin and Xiao Hai Yin share the same last name, I will refer to Andy Yin as "Andy". [5] Ms. Hong and Mr. Yin are former spouses and Andy's parents. In 2001, Ms. Hong and Andy moved to Canada. Mr. Yin continued to reside in China. [6] In 2003, Mr. Yin and Ms. Hong purchased a property located on No. 6 Road in Richmond, British Columbia (the "No. 6 Road"). Although the property was originally purchased in their joint names, title was eventually transferred to Ms. Hong alone. [7] In 2004, Ms. Hong and Mr. Yin formally separated. However, they continued to interact with one another on friendly terms. [8] In 2008, a property located at 10500 Westminster Highway in Richmond ("10500 Westminster") was purchased in Mr. Yin's name. In 2016, title was transferred to Andy, who was 19 years old at the time. [9] In 2017, Mr. Yin and Ms. Hong decided to redevelop both properties. The house on 10500 Westminster was rebuilt. The redevelopment of No. 6 Road is not yet complete. [10] A dispute developed between the parties regarding the properties and their relationship fractured. In January 2023, Mr. Yin commenced an action against Ms. Hong and Andy in connection with the dispute and he filed certificates of pending litigation ("CPLs") against both properties. In the action, he alleged, among other things, that he had advanced approximately $7 million to fund the redevelopments of the properties and that Andy and Ms. Hong held those properties in trust for him. [11] In July 2024, the parties entered into a settlement agreement with respect to the action following extensive negotiations. Pursuant to the terms of that agreement, Ms. Hong and Andy agreed to pay Mr. Yin $3.5 million for the properties. Payment was to be made in two instalments: $1 million within six months of execution of the settlement agreement; and the remainder within two years of its execution. [12] The settlement agreement provided Ms. Hong and Andy with a 30-day extension for the first settlement payment if they required more time to pay, in which case they were to make a $15,000 interest payment. It also provided for an extension of up to 12 months for the second settlement payment, with interest payable at rate of prime plus 5% compounded monthly. To secure payment, counsel for Mr. Yin held an executed consent judgment for the full $3.5 million settlement amount on an undertaking not to use it unless either Ms. Hong or Andy breached the terms of payment, at which time Mr. Yin would be entitled to enter the consent judgment without further notice. [13] Other clauses in the settlement agreement dealt with the CPLs on the properties. Pursuant to their terms, the CPL on No. 6 Road was to be temporarily discharged and then re-registered to allow Ms. Hong to secure construction financing for that property. In addition, the CPL on 10500 Westminster was to be discharged absolutely, with a condition that on entering a contract for sale of that property, Ms. Hong and Andy would instruct counsel to hold $1 million from the net proceeds of sale to facilitate the payment of the first settlement payment if it was still outstanding. Other clauses confirmed that Ms. Hong and Andy would be responsible for all costs and expenses relating to the properties and Ms. Hong would be solely responsible for an outstanding credit card debt. [14] Ms. Hong and Andy were able to refinance the two properties in July and August 2024, which generated over $1 million for them. However, they failed to pay the first payment instalment by either the original due date (January 3, 2025) or the 30-day extension date. Mr. Yin declined their request for a further extension, submitted the consent judgment for entry on February 4, 2025, and notified Ms. Hong and Andy that he would be seeking to recover the entirety of the net proceeds of sale of 10500 Westminster. [15] On February 13, 2025, Andy executed a contract for purchase and sale of 10500 Westminster for a purchase price of $5,380,000. Shortly thereafter, he notified Mr. Yin of the prospective sale. The consent judgment was formally entered in March 2025. Mr. Yin registered the judgment against the title for both properties and took enforcement steps. An examination in aid of execution revealed that Ms. Hong and Andy used some of the funds generated from the mortgages to fund personal expenses and vacations. [16] In May 2025, Ms. Hong and Andy filed the subject application for relief from forfeiture and reinstatement of the settlement terms. In June 2025, the sale of 10500 Westminster completed, yielding net proceeds of sale of $1,764,449. From those net proceeds, $1.2 million was paid to Mr. Yin and the balance of $564,499 was paid into a solicitor's trust account. [17] The judge heard the application for relief from forfeiture on August 26 and 27, 2025. On September 23, 2025, he dismissed the application. Reasons of the Chambers Judge [18] After reviewing the background facts, positions of the parties, and relevant authorities, the judge held that relief from forfeiture was not an available remedy. In particular, based on the principle articulated in Emerald Christmas Tree Company v. Boel & Sons Enterprises Ltd., 105 D.L.R. (3d) 75, 1979 CanLII 607 (B.C.C.A.) and confirmed in Seignoret v. Bakonyi Holdings Ltd., 2019 BCCA 105, he found that the provision of the settlement agreement entitling Mr. Yin to enter the consent judgment for the entire amount owing if Ms. Hong and Andy defaulted on payment was an acceleration clause, which is not a forfeiture. He also found the exceptions to this principle in s. 25 of the Act did not apply because a CPL is not a pledge of property and the settlement agreement did not involve a covenant contained in a mortgage for the sale of land or an agreement for the sale of land: [85] [Mr. Yin] also submits that s. 25 of the [Act] does not apply because the Settlement Agreement is neither a mortgage of land nor an agreement for the sale of land. In answer to [Ms. Hong and Andy's] submission regarding the CPL registered against No. 6 Road, [Mr. Yin] says a CPL is not a pledge of the property as security but is merely notice of a pending claim. In any event, there is no pledge here because the subject CPL was already in place at the time of the Settlement Agreement and it did not arise by operation of any terms of the Settlement Agreement. [86] I conclude that the provision in the Settlement Agreement that entitles [Mr. Yin] to enter judgment for the entire amount owing where [Ms. Hong and Andy] breach the payment terms is, in substance, an acceleration clause. While the subject provision is in a somewhat different form than the more common forms of acceleration clauses, it meets the definition of acceleration clause set out in Emerald. I note that it also accords with the description of acceleration provisions set out in s. 25 of the [Act], as it provides for "the payment of money at an earlier time than would be the case if the default had not occurred". [87] I turn now to s. 25 of the [Act], which provides for two exceptions to the law as stated in Emerald. Essentially for the reasons submitted by [Mr. Yin], I conclude that the Settlement Agreement does not involve a "covenant contained in a mortgage for the sale of land or an agreement for the sale of land", to quote s. 25. Specifically, I agree that a CPL is not a pledge of property as it is merely notice of a claim and, in any event, the subject CPL was pre-existing and was not something created through the provisions of the Settlement Agreement. [88] For these reasons, I conclude that the remedy of relief from forfeiture is not available to [Ms. Hong and Andy]. [19] In the event he was wrong and relief from forfeiture was an available remedy, the judge went on to consider whether he should exercise his discretion in favour of Ms. Hong and Andy. Citing Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490, 1994 CanLII 100, Airside Event Spaces Inc. v. Langley (Township), 2021 BCCA 306 and other authorities, he summarized the relevant factors for consideration: proportionality between the amount forfeited by the lessee and the loss suffered by the lessor; whether it would be unconscionable for relief not to be granted; the conduct of the applicant who seeks relief, including the gravity of their breaches; collateral equitable grounds that reasonably affect the analysis, including a party having "unclean hands"; and whether the applicant is prepared to do what is right and fair under the lease. Then he reviewed each factor in turn. [20] The judge held that the loss to Ms. Hong and Andy should relief from forfeiture not be granted would be the contractual right to delay payment of the remaining debt for up to two years after execution of the settlement agreement and, should relief from forfeiture be granted, the loss to Mr. Yin would be negation of the acceleration provisions. He found this factor modestly favoured Ms. Hong and Andy. He accepted that their breach was not wilful, but noted they knew they did not have the means to make the first settlement payment without selling 10500 Westminster and he was not persuaded they listed it for sale as early as possible, which weighed against granting them relief from forfeiture. In addition, while he did not accept many of Mr. Yin's allegations that Ms. Hong and Andy had engaged in misconduct, he found they failed to properly disclose documents relating to the examinations in aid of execution, which weighed against them in his exercise of discretion. He assumed they were willing to do "what's right and fair" under the settlement agreement but expressed concern with their ability to do so given their straitened financial circumstances. [21] Given the foregoing, the judge was unable to conclude it would be unconscionable not to grant relief from forfeiture. After noting that relief from forfeiture is granted sparingly and the party seeking relief bears the onus of establishing a sufficient basis for it, he held that Ms. Hong and Andy had not met their burden and dismissed the application. Discussion [22] Sections 24 and 25(1) and (2) of the Act provide: 24. Relief against penalties and forfeitures The court may relieve against all penalties and forfeitures, and in granting the relief may impose any terms as to costs, expenses, damages, compensations and all other matters that the court thinks fit. 25. Relief against acceleration provisions (1) Despite an agreement to the contrary, if because of a default in payment of any money due under, or in the observance of a covenant contained in (a) a mortgage of land, or (b) an agreement for sale of land, the payment of money or the doing of anything is or may be required at an earlier time than would be the case if the default had not occurred, then, in a proceeding for the enforcement of rights under the instrument, the court may, before a final disposition of the proceeding, relieve any person from the consequence of the default. (2) In granting relief under subsection (1), the court may impose any terms as to costs, expenses, damages, compensations and all other matters that it considers appropriate. [23] Ms. Hong and Andy contend the judge erred by adopting an unduly narrow approach to his interpretation of s. 25 of the Act. In their submission, he erroneously focused on the formal structure of the settlement agreement rather than its substance, failed to consider whether the parties' common intentions gave rise to an equitable mortgage, and focused too narrowly on whether the CPL constituted a "pledge of property". In addition, they say, as the CPL was registered on No. 6 Road after execution of the settlement agreement, the judge made a palpable and overriding error in finding that it was pre-existing and not created through the provisions of the settlement agreement. [24] According to Ms. Hong and Andy, the settlement agreement demonstrates a clear and express intention to use the subject properties as security over the settlement amount. They submit that s. 25 of the Act applies to equitable mortgages such as the equitable mortgage created by the settlement agreement. Without having sought leave to do so, their counsel also expanded on their written argument at the oral hearing and contended the settlement agreement was both an equitable mortgage and an agreement for the sale of land. Following the hearing and without the consent of opposing counsel, he provided the division with an additional authority, which he characterized as binding authority that directs courts to look past the formal characterization of an instrument to its substance when determining whether an arrangement constitutes a mortgage. Although I have considered both the new argument and authority, I would discourage both practices. [25] I am not persuaded by any of Ms. Hong and Andy's submissions. In my view, the judge made no error in concluding that relief from forfeiture was not an available remedy. [26] In finding that the settlement agreement provision requiring immediate payment of the settlement amount on default and entitling Mr. Yin to enter the consent judgment was an acceleration clause, not a forfeiture, the judge correctly applied the Emerald Christmas Tree test for an acceleration clause, namely, a clause "where, when the payment that is due is not made, the full principal balance then outstanding becomes due": at para. 19. Then he correctly concluded that relief under s. 25 of the Act from the principle established in Emerald Christmas Tree was not available because the settlement agreement was neither a mortgage of land nor an agreement for the sale of land. [27] A mortgage requires a debt and a disposition of an estate or interest in land to secure the debt: Bank of Montreal v. Orr, 4 B.C.L.R. (2d) 1, 1986 CanLII 1088 (C.A.) at para. 25. An equitable mortgage requires a common intention to make property security for a debt due or present advance. It is intended to allow parties to rely on property as security where a formal, or legal, mortgage cannot be obtained because the proposed mortgagor's interest in the property has not yet crystallized or there is a defect in the executed instruments that prevents it from being registered: Vancouver v. Smith, 63 B.C.L.R. 180, 1985 CanLII 461 (C.A.) at para. 12. [28] As the judge concluded, the settlement agreement established a debt, but did not grant, charge, or pledge No. 6 Road or 10500 Westminster as security for the debt. Contrary to Ms. Hong and Andy's submission, it manifestly did not create an equitable mortgage; rather, it created ordinary contractual remedies, not proprietary rights. Nor did it amount to a sale of land; rather, it settled a disputed claim, including claims in respect of land. Accordingly, s. 25 of the Act did not apply because the settlement agreement did not involve a "covenant contained in a mortgage of land, or an agreement for sale of land". [29] It follows that I would not accede to the first ground of appeal and would dispose of the appeal on that basis. However, I also note that I see no error in the judge's alternative discretionary determination that if relief from forfeiture was an available remedy, Ms. Hong and Andy had not met their burden to establish a sufficient basis to grant that relief. Conclusion [30] I would dismiss the appeal. [31] MAYER J.A.: I agree. [32] FRANCIS J.A.: I agree. [33] DICKSON J.A.: The appeal is dismissed. "The Honourable Justice Dickson"