Wong v. Jang

2015 BCSC 1540 Wong v. Jang

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Wong v. Jang, 2015 BCSC 1540 Date: 20150831 Docket: S084050 Registry: Vancouver Between: Nelly Wong and Hoi To Wong Plaintiffs And Kalano Jang, Trillion Financial Corp. doing business as Trillion Financial Group, Billion Financial Corp. doing business as Billion Financial Group, Pham Ngoc Professional Corporation doing business as Minh-Ngoc Pham Law Office, and Erica Minh-Ngoc Pham Thi aka Minh Ngoc Thi Pham Defendants Before: The Honourable Madam Justice Burke Reasons for Judgment Counsel for the Plaintiffs: D. Turner L. Morrison The Defendants Pham Ngoc Professional Corporation doing business as Minh-Ngoc Pham Law Office, and Erica Minh-Ngoc Pham Thi aka Minh Ngoc Thi Pham: Appearing In Person The Defendants Kalano Jang, Trillion Financial Corp. doing business as Trillion Financial Group, and Billion Financial Corp. doing business as Billion Financial Group: No Appearance Place and Date of Trial: Vancouver, B.C. February 2-6, 2015 Place and Date of Judgment: Vancouver, B.C. August 31, 2015

INTRODUCTION [1] Nelly and Hoi To Wong brought an action against various parties involved in an alleged fraud by two licensed agents of the defendant Transamerica Life Canada ("Transamerica"); Kalano Jang and Anna Wong, seeking damages for negligence; breach of contract; negligent and fraudulent misrepresentation; and breach of fiduciary duty. [2] The only remaining defendants are Minh Ngoc Pham and her professional corporation, Pham Ngoc Professional Corporation, a law firm. The claims against these defendants are damages for breach of contract; or return and restitution of the loans as money had and received. [3] Mr. and Mrs. Wong have settled their claims against Transamerica. They had claimed vicarious liability against Transamerica for the actions of Mr. Jang and Ms. Anna Wong during the years 2004 and 2005. During that time, Mr. and Mrs. Wong received financial advice from Mr. Jang and Ms. Anna Wong. In addition, Mr. and Mrs. Wong had claimed negligence and breach of duty of good faith against Transamerica for its dealings with them during that time and after the termination of Transamerica's contract with Mr. Jang in 2006. [4] In addition, Mr. and Mrs. Wong have settled their claims against Ms. Anna Wong and Mr. Allen Wong and Associates Insurance Agency Ltd. [5] Mr. Jang and his companies, the defendants Billion Financial Group ("Billion") and Trillion Financial Group ("Trillion"), did not file a defence. Collectively, I will refer to these defendants as the "Jang Defendants." Mr. and Mrs. Wong therefore obtained default judgment against them on August 8, 2008. There is an outstanding issue of the amount of damages attributable to these Defendants.

ISSUES [6] This matter raises four issues: (1) Are Ms. Pham and her law firm liable for breach of two loan contracts between them and the plaintiffs? (2) If not, are Ms. Pham and her law firm jointly and severally liable to the plaintiffs in equity for money had and received? (3) If so, what damages are attributable to Ms. Pham and her law firm? (4) What are the damages attributable to the Jang Defendants?

BACKGROUND [7] Mrs. Nelly Wong provided much of the background in this matter. As her English is better than that of her husband Mr. Hoi To Wong, she was the individual primarily responsible for the family finances, including reviewing documents for Mr. Hoi To Wong to sign. [8] In 2004, Mr. and Mrs. Wong were invited by Ms. Anna Wong, an insurance agent working with Mr. Jang and the wife of Mr. Hoi To Wong's boss, to attend several investment seminars held by Mr. Jang. Mr. Hoi To Wong wished his wife to attend the seminar as well. Mrs. Nelly Wong met Ms. Anna Wong when she invited Mr. Hoi To Wong to that seminar. The couple first met Mr. Jang at this seminar. [9] Mr. and Mrs. Wong were not sophisticated investors nor did either have a university degree or financial education. At the seminar, Mr. Jang represented and introduced himself as an insurance agent of Transamerica. He spoke about providing for the family and pointed to government taxes on assets passed along after death. In order to avoid this, he advised the purchase of life insurance, as the funds would be provided directly to the children. He then introduced an insurance plan from Transamerica, which he indicated provided an investment opportunity which would eventually pay for itself. [10] Mr. and Mrs. Wong attended two seminars, one in Chinese and one in English. When Mrs. Nelly Wong advised Ms. Anna Wong she did

not understand the plan as it was explained in Chinese, Ms. Anna Wong invited Mr. and Mrs. Wong to the English seminar. [11] After the second seminar, Mr. and Mrs. Wong were invited to Mr. Jang's office to speak to him privately about the insurance program. Mr. Jang explained the program; money would be invested and eventually pay for itself. It would involve obtaining loans and making interest payments. While Mr. and Mrs. Wong found the investment scheme confusing, they decided to proceed based on Mr. Jang's advice. [12] As a result, in March 2005, Mr. and Mrs. Wong invested $300,000 into Transamerica investment accounts based on this advice. The couple provided power of attorney forms to Mr. Jang, which he used to manipulate the accounts through a Transamerica arrangement with TD Canada Trust to double the amount of their assets. Mr. and Mrs. Wong were provided with "2 for 1 loans" and advised to use the funds to further invest so they could get a better return on their funds. This, ultimately, resulted in a combined investment of $800,000 in segregated funds in Transamerica. [13] As part of the investment scheme, Mr. and Mrs. Wong obtained large life insurance policies with Transamerica on their lives, as well as on the lives of their two sons, Daniel and David Wong. Subsequently, in September 2005, in order to generate returns sufficient to pay the premiums on the insurance

policies, Mr. Jang advised Mr. and Mrs. Wong to borrow against the life insurance policies and invest in Ms. Pham's law firm. Mr. Jang assured the couple this was a safe investment as Ms. Pham was a lawyer. The interest payments from Ms. Pham would pay for the premiums on the insurance policies. [14] Mrs. Nelly Wong was initially reluctant, but Ms. Anna Wong and Mr. Jang persisted in encouraging Mr. and Mrs. Wong to participate in the scheme. [15] As a result, on September 1, 2005, Mr. Hoi To Wong borrowed $110,000 from his sister and signed what is alleged to be a contract with Ms. Pham and her law firm to lend $110,000 over three years at 18% annually. A bank draft for $110,000 payable to "Minh Ngoc Pham in trust" was deposited into Ms. Pham's bank account. On November 24, 2005, Mrs. Nelly Wong also lent $119,000 for one year at 12% annually, to the same law firm with monies borrowed from each of the four insurance policies, as per a document and advice from Mr. Jang. This was renewed on November 24, 2006. [16] In early to mid-2007, after receiving five interest payments based on the two contracts, the payments from the law firm stopped. As a result, Mr. and Mrs. Wong demanded the return of their principal amounts directly from Ms. Pham. While one more interest payment arrived, three months late, despite further demands from Mr. and Mrs. Wong, no further interest payments

were made. The principle of each loan was never repaid. [17] Essentially, as part of this scheme, Mr. and Mrs. Wong lost a portion of the $300,000 line of credit utilized to initially combine to the scheme; the premium payments paid on the insurance policies and the money loaned plus interest to Ms. Pham and her law firm. Issue 1: Are Minh Ngoc Pham and her law firm liable for breach of two loan contracts between them and the plaintiffs? · Legal Principles [18] The question essentially is whether a contract existed between Mr. and Mrs. Wong and Ms. Pham and her law firm. If so, was it breached? [19] A legally enforceable contract must have three components; offer, acceptance, and consideration. In the absence of the signed contract, acceptance can be implied by conduct: Timberwolf Log Trading Co. Ltd. v. Columbia National Investments Ltd., 2011 BCSC 864 at para.

63. The test of whether the conduct constitutes an acceptance of an offer is objective. The intention will be construed from what his or her conduct reasonably bears. [20] If a party alleges a signature is a forgery, expert evidence is required: Jassar v. Kim, 2009 BCSC 782 at para. 16. · Conclusion [21] A matter must be decided on the basis of the evidence presented. While Ms. Pham has denied the existence of the contracts and outlined a complex series of events to support her position, there is very little evidence, other than her testimony, to support her denials. It is therefore difficult to accept propositions critical to her position and I have not done so. [22] I have concluded, as argued by Mr. and Mrs. Wong, that Ms. Pham and her law firm contracted with Mr. and Mrs. Wong for the loans. Much was made of whether the signature of Ms. Pham was on the contracts received by Mr. and Mrs. Wong. I am satisfied Ms. Pham's signature is present on the contracts. I am also of the view, based on a number of factors including Ms. Pham's extensive history with Mr. Jang, that she was aware of the contracts between her and Mr. and Mrs. Wong. More importantly, her conduct in performing the terms of the contract, which included depositing the bank drafts, making interest payments and not denying their existence when the plaintiffs demanded payment, constituted acceptance of and supports

the validity of the contracts. [23] The following are my reasons for these conclusions. · Relevant Facts and Analysis [24] In 2005, after a series of deposits into the investment scheme created by Mr. Jang, Mr. Jang advised the plaintiffs they needed an investment that would generate sufficient returns to pay the premiums on insurance policies. The insurance policies which Mr. and Mrs. Wong had obtained from Transamerica were in the amount of $1 million for each of the parents and the two children Daniel and David. Mrs. Nelly Wong was the owner of her insurance policy and David's insurance policy. Mr. Hoi To Wong was the owner of his insurance policy and Daniel's insurance policy. [25] Premiums were paid on these various policies to the amount of $7,750 in 2005. [26] As per Mr. Jang's instructions, amongst other transactions, Mr. and Mrs. Wong made lump sum payments in October 2005 of $27,000 and $26,000, respectively, on the policies of Daniel and David Wong. The purpose of this was to allow Mr. and Mrs. Wong to borrow money from their insurance policies to fund further investments which would then pay for further lump sum payments on the insurance policies in the following two years. After three years, the insurance policies would be fully paid. [27] Mr. Jang advised the plaintiffs they needed an investment that would generate sufficient returns to pay the premiums on the

insurance policies. His suggestion was to invest in Ms. Pham's law firm, as this was a safe investment because she was a lawyer. [28] Mr. Hoi To Wong borrowed $110,000 from this sister, which he then used to invest with Ms. Pham. Mr. Jang advised Mr. and Mrs. Wong that Ms. Pham would pay a higher interest than the bank and so it would be a better investment. The interest payments would then pay for the premiums of the insurance policies. [29] On September 1, 2005, Mr. Hoi To Wong provided a bank draft for $110,000 payable to "Minh Ngoc Pham in trust", after he had signed a contract with Ms. Pham. These monies were deposited into Ms. Pham's bank account. Mr. and Mrs. Wong received a copy of the document, indicating a three-year return at an annual interest rate of 18%. The document reflected Ms. Pham's signature, above a notation as "witness". That document reads: LENDER'S REQUISITION AND DIRECTION TO: MINH-NGOC PHAM LAW OFFICE Erica Minh-Ngoc Pham Barrister and Solicitor LENDER: Wong, Hoi-To (the "Lender") INVESTMENT AMOUNT: $110,000.00 (CAD) (the "Principal") TERM OF INVESTMENT: Three (3) years INTEREST RATE: 18% annually - 9% semi-annually & payable every 6 months LOAN CONDITIONS: 1. I/We authorize your law firm to invest the Principal as you deem fit and advisable 2. All funds shall be handled through the law firm by certified cheque or bank draft. GUARANTEE: 1. It is my/our understanding that the Principal and accrued interest will be fully guaranteed by Minh Ngoc Pham Law Office.

2. Minh Ngoc Pham Law Office will indemnify the Lender for any losses incurred in connection with the Loan Dated at Thornhill, Ontario this 01 day of 09, 2005. (signatures) Witness: (Pham, Minh-Ngoc) (signatures) Lender: (Wong, Hoi-To) [30] Ms. Pham testified she is referred to as Erica Pham; although that is not her legal name. [31] Mr. and Mrs. Wong received this document initially from Mr. Jang. At that time, the document was unsigned. The document was then signed by Mr. Hoi To Wong and was handed to Mr. Jang with a draft cheque in the amount of $110,000. Mr. Hoi To Wong then received a copy with Ms. Pham's signature as set out above, from Mr. Jang or Ms. Anna Wong. [32] Later that fall, on November 24, 2005, Mrs. Nelly Wong also invested $119,000, borrowed from the insurance policies under a contract with Ms. Pham for a one-year term. She executed a similar document given to her by Mr. Jang and provided a bank draft of $119,000 made out to Ms. Pham. Mrs. Nelly Wong handed the document along with the cheque for $119,000 to Mr. Jang and Ms. Anna Wong. The $119,000 was again deposited into Ms. Pham's bank account. Mrs. Nelly Wong then received a copy of the contract from Mr. Jang with Ms. Pham's signature affixed after the funds had been sent. [33] On March 1, 2006, September 1, 2006, and March 1, 2007, Mr. Hoi To Wong received cheques of $9,900, each signed by Minh Ngoc Pham,

Barrister & Solicitor, which also set out her business address as 123 Commerce Valley Drive East, #300, Thornhill, Ontario. The March 2007 cheque listed the suite number as #333. The cheques also reflected her phone and fax numbers. These were interest payments on Mr. Hoi To Wong's loan of $110,000, as per the agreement reflected in the signed document. [34] A cheque of $9,900, dated December 1, 2007, was also received from Ms. Pham, reflecting the same information, with the exception the business address was changed to an address in Mississauga, Ontario. The notation "interest payment" was made on this cheque and the March 1, 2007 cheque. [35] On May 24, 2006 and November 24, 2006, Mrs. Nelly Wong received similar cheques of $7,100 respectively, from Ms. Pham. These cheques she took to be the interest payments on the loan, as reflected in the notation "interest payment" on the November 24, 2006 cheque. [36] The document at issue is again headed with the name and address of Ms. Pham's law office in Thornhill, Ontario. It reflects an amount to be invested to the law office by the lender, Mrs. Nelly Wong at 12% annually - 10% payout every six months. The same loan conditions and guarantee are included in this document. The document is dated November 24, 2005 and the signature of Ms. Pham again appears on the left-hand side of the document above the notation of witness. Ms. Pham's

name is printed adjacent to that notation. On the bottom-right portion of the document is Mrs. Nelly Wong's signature. Below that is the notation "lender" and the name typed in. [37] Mr. and Mrs. Wong continued to receive advice from Mr. Jang and Ms. Anna Wong. As Mrs. Nelly Wong had received the interest payments for the first year in her contract, she renewed the contract with Ms. Pham for another year on the advice of Ms. Anna Wong in November 2006. [38] Mrs. Wong therefore signed a similar document on November 24, 2006. This does not, however, have a name as witness on the left-hand portion of the document. [39] During the course of these events, Mr. and Mrs. Wong continued to use their own funds to pay the premiums for the insurance policies and interest on the insurance policy loans. In 2006, they paid $10,800 in premiums on all four insurance policies, and $21,490.17 in interest payments on the loans from all four insurance policies in 2006 and 2007. [40] In September 2007, when the payments on the loan of $110,000 did not arrive, Mrs. Nelly Wong called Ms. Pham to demand the return of her money. Ms. Pham did not deny the existence of the contracts. She asked Mrs. Nelly Wong to provide her with copies of the contracts. On December 3, 2007, Mrs. Nelly Wong sent copies of the contracts and a written demand for repayment by fax to Ms. Pham's office as follows: Ms.

Pham, Here is our demand for payment and documents attached. We relied on the fact that you were a lawyer when we sent you our money because we believe lawyers are expected to be financially responsible and pay their debts. We understand that it's a breach of lawyer's ethics to take monies in trust in this manner. Therefore, we would like to hear from you by Friday, December 7, or we may need to take further action. By fax: Ming Ngoc Pham Law Office Thornhill, Ontario Dear Ms. Pham RE: Demand for Payment I am writing to ask for repayment of the principal and accrued interest on the $119,000 investment guaranteed by your law firm (Lender's requisition attached). The investment matured on November 24. Further, in view of your failure to make timely interest payments on the $110,000 loan in the name of my husband, Hoi To Wong (Lender's requisition attached), we want the immediate repayment of this amount as well (principal and interest). Yours truly, Nelly Wong Hoi To Wong [41] Shortly after this, Mr. and Mrs. Wong received the December 2007 payment of $9,900. Ms. Pham indicated she paid this from her personal account to "assist the parties". This was the last payment received from Ms. Pham. [42] On December 20, 2007, Mrs. Nelly Wong made another demand for repayment to Ms. Pham as follows: December 20, 2007 Ms. Erica Ming-Ngoc Pham Minh Ngoc Pham Law Office 5124 Rothesay

Court Mississauga, ON L5M 4Y3 Dear Ms. Pham: On December 3, I sent to you a Demand for Repayment of the principal and accrued interest on the $119,000 investment guaranteed by your law firm as well as a Demand for Payment of the $110,000 investment in the name of my husband. We received from your office last week a cheque dated December 1 for $9900. We have deposited this cheque as a payment on account for the total amount owing. We do not accept it in satisfaction of your outstanding obligations; nor do we accept it as reinstating in any way the loans or either of them. We have yet to hear from you in response to the demand. The balance owing for Principal and all accrued interest is overdue. May we hear from you immediately, failing which we will have to consult with counsel respecting the enforcement of our rights. Yours truly, Nelly Wong. [43] There was no response. The plaintiffs were unable to afford the insurance premiums and interest payments. The insurance policies therefore lapsed. Mr. and Mrs. Wong, as a result, did not receive the benefit for the policies or the payments that they had made. [44] Ms. Pham says there was no contract between herself and either Mr. Hoi To Wong or Mrs. Nelly Wong. Ms. Pham argued the documents relied upon lack the basic elements of a contract; lacking in form, they show only one party, the lender, with his or her signature and the

signature of a witness. They do not reflect a borrowing party. [45] Ms. Pham also says there was no agreement because although the lenders wanted to loan money she did not want to borrow money. The title on the loan document reads "Lender's Requisition and Direction". It only shows the lender's intention and is effectively only an offer or invitation to deal. Ms. Pham says she did not know Mr. and Mrs. Wong and had no intention to deal with them. [46] Ms. Pham says the rules of contract should be followed strictly, as the parties had never met, the sums involved were large, and interest rates were high - 18% and 12%. The consequences of a finding of a contract would be a windfall to the plaintiffs and a debt of $500,000 for Ms. Pham. [47] Ms. Pham says she did not sign as a borrower on the loan documents and cannot be held liable in contract with the plaintiffs. Ms. Pham was adamant she was not the person who signed these contracts and the signatures on the documents were not hers. [48] I note first it is evident Mr. and Mrs. Wong believed Ms. Pham had signed the documents and believed a contract to be in place. They had given the respective contracts to Ms. Anna Wong and Mr. Jang and received the signed documents back. There was no indication the documents or signature was not authentic. In addition, at least initially, the terms of the arrangement, including interest

payments, were followed. [49] I will deal with the signature issue first. [50] I am satisfied on the evidence before me that Ms. Pham did sign the documents, despite her denial. In denying her signature, she provided examples of differences which, in my view, were not borne out. Indeed, the examples provided were actually very similar. [51] More importantly, however, no expert evidence was led to establish a signature was a forgery. Expert evidence must be led, especially where, as here, the writing is so similar. The court is not in a position to come to such a conclusion, especially in the context of evidence that reflects Ms. Pham's extensive history and dealings with Mr. Jang and his corporate activities. As in Jassar, I find Ms. Pham's denials that she signed the contracts improbable. [52] Ms. Pham essentially says she was unaware of the contracts and was another victim of Mr. Jang. There are a number of difficulties with this argument. First, the bank drafts from Mr. and Mrs. Wong were deposited into Ms. Pham's bank accounts. Second, Ms. Pham made interest payments for one year on the contract for $119,000 and for two years on the contract for $110,000. These payments in the amounts expected under the contract were made by cheque with Ms. Pham's signature below her name and title as Barrister & Solicitor and the address of her law firm on the cheque. In her testimony, Ms.

Pham admits she signed these cheques and knew they were interest payments to clients of Mr. Jang. She says the cheques were simply presented to her by her assistant and she signed them. [53] Further, when Mrs. Nelly Wong demanded the interest payments and repayment of the loan, Ms. Pham did not deny the existence of the contract. Rather, she made another interest payment in furtherance of the obligations set out. [54] The last payment in December 2007 came from a personal account of Ms. Pham. Ms. Pham's explanation was she was attempting to assist parties who were having difficulties because of Mr. Jang's conduct. When she received the faxed demand for payment for Mrs. Nelly Wong, she spoke to Mr. Jang who said he would pay the monies directly to Mr. and Mrs. Wong. This account, however, does not accord with the fact she paid the money herself from her personal account. [55] With respect to the deposit into her bank accounts, Ms. Pham had a number of explanations. She says she had set up and allowed Mr. Jang to use her bank account and became an unwitting accomplice to his scheme. Ms. Pham says in 2005, Mr. Jang asked her to open a personal account for him for his own use. He wanted to deposit lump sums belonging to his insurance clients into the Transamerica life policies. Instead of borrowing from the TD, two for one, he wanted to deposit his own lump sum payments to the

Transamerica life policies. Ms. Pham says he made a different arrangement with his clients - "things kept changing all the time". [56] Ms. Pham said she was advised by the Law Society of Upper Canada she could have an exclusive account for a client. She agreed however she did not advise the Law Society the account would be an investment funds account and not her trust account. [57] In cross-examination, Ms. Pham agreed Mr. Jang asked her to open the account to hide his involvement with his clients and she acquiesced. She viewed Mr. Jang as a very good client. [58] The two met with her bank manager to open what she described as an investment account for Mr. Jang, but in her name. Ms. Pham was a signatory to the account. She testified, however, the account would be attended to by Mr. Jang's assistant, Karen Lam, who was also made a signatory to this account. In retrospect, Ms. Pham says this was a "very stupid mistake" and that Mr. Jang was a bad person. [59] Ms. Pham says it was into this account the monies from Mr. and Mrs. Wong was deposited. Ms. Pham says, although the contracts were forged and she had no knowledge of them, she tried to get Mr. Jang to pay the amounts owing in order to get the matter resolved. There was a loan document and Mr. Jang said he would pay them. She had to "push him" on this. She felt responsible because the account was in her name; the interest

rate was high; and she hoped to have the matters resolved in six months to year. She wanted to avoid a lawsuit such as the present one. [60] Ms. Pham also says she did not deal with the deposits into this account after June 2005. Mr. Jang hired a bookkeeper who did the deposit and reconciled Ms. Pham's trust account and the investment account. Ms. Pham says if the money indicated it was to be held in trust, it should have been deposited into her trust account and not into Mr. Jang's investment account. She says a crooked or incompetent bank manager enabled this, as she had two accounts: a trust account and an investment account. Any cheques marked "in trust" should have gone in her trust account. Ms. Pham maintains the bank manager "helped" Mr. Jang and was ultimately fired. [61] There are some relatively fundamental problems with the propositions advanced by Ms. Pham. Ms. Pham is a very well-educated person, with an LL.B. and an MBA. Her law practice focused on real estate and commercial transactions. She knew significant amounts of money were running through the account she had opened. She says she just signed cheques that were presented to her by her assistant. It is troubling that cheques marked "in trust" were deposited in the general account. She references a corrupt bank manager. She has, however, admitted opening a bank account in her own name for Mr. Jang to allow him

to lend money to his clients while concealing his identity as the lender. [62] Ms. Pham portrayed Mr. Jang as a charming and successful entrepreneur. She indicated he would tell her when he was accused of various improprieties; that he was innocent and it was someone else's fault. In this regard, she maintains, as his lawyer, she continued to try and assist him. From her perspective, this was important in order that he be able to and would repay his debts. Ms. Pham says she became aware of the debts/loans when she received calls from various individuals, including Mr. and Mrs. Wong about the monies owed to them. Ms. Pham says throughout this time, she was essentially trying to help those who have been adversely affected by Mr. Jang's actions. Indeed, Ms. Pham says she had also been adversely affected, in that she had loaned money to Mr. Jang which had not been repaid. [63] Ms. Pham, however, had an extensive history with Mr. Jang. She and Mr. Jang served together as directors of a company called Infinity Investments Inc., when Mr. Jang was accused in September 2001 of lending money to a client, Lawrence Law, to buy insurance. Ms. Pham admits it is improper for an agent to lend money to clients to purchase insurance. In response to inquiries by Transamerica, as reflected in a letter of September 14, 2001, Mr. Jang told Transamerica to contact Ms. Pham if they had any questions

about the loan to Mr. Law. Ms. Pham's evidence that she did not know anything about this loan was, in all the circumstances, not credible. [64] Ms. Pham described Mr. Jang's business ventures in great detail, including the Immigrant Investor Program and bubble tea franchise opportunities. [65] Ms. Pham says in 2004, she loaned $650,000 to Mr. Jang to buy Pender International, which was ultimately found to be part of a stock scam. Ms. Pham was a director of this company. The loan was never repaid. In late 2004, Pender was accused of being a pump and dump scam and its accounts were frozen, the police were involved, and two principals were jailed, including Michael Ciavarella. [66] In 2004, Ms. Pham paid Mr. Jang $70,000 for shares in Armistice Resources Limited, another company associated with Mr. Jang's corporate operations, Pender and IMM Investments Inc. ("IMM"). Ms. Pham was the president and director of IMM, a wholly owned subsidiary of Pender. Mr. Jang did not give her the shares or refund the money. [67] Ms. Pham moved her office to shared space with Mr. Jang in January 2005, so that she could be present to advise on business matters and attend meetings. Mr. Jang paid for her rent, her expenses, and for another lawyer, Derek Chan, to watch her practice because he required her time. Ultimately, Ms. Pham fired Derek Chan at Mr. Jang's request. [68] Ms. Pham says in March

2006, she obtained from Mr. Jang a binder containing copies of loan documents executed by Mr. Jang and Michael Ciavarella's clients, some of which had her signature. She maintains, however, as in this case, they were not her signatures. [69] At some point, the Law Society of Upper Canada began to investigate Ms. Pham but came to no conclusion with respect to her case. [70] Ms. Pham says despite all this, she continued to sign interest cheques for Mr. Jang's clients from her bank account, including the interest cheques the plaintiffs received in 2006 and 2007. The bank account was open until 2008. She paid some of her own personal account to cover the interest payments, including the December 2007 payment to Mrs. Nelly Wong. In 2007, Mr. Jang said she assisted him to raise money by helping to liquidate his assets doing commencing work on the sale of property for $2 million and arranging a loan of $188,000 for him from her Buddhist Temple. [71] None of this testimony supports the claim there was no contract. It is improbable Ms. Pham would continue this activity in the face of both indications that Mr. Jang's clients wrote demanding the return of the money. This is especially so in the context of her particular background. Ms. Pham, as a lawyer, is very familiar with the commercial context and the trust requirements. Her explanation is not consistent with the probability of the

events. According to her own testimony, Mr. Jang owed her over $700,000 since 2004. There is really no explanation as to why she would go to such great lengths to help Mr. Jang, including making interest payments with her on personal funds. [72] Ultimately, I do not find Ms. Pham's explanation probable. Her account is at odds with that of Mr. and Mrs. Wong, and is neither internally nor externally consistent. Furthermore, the evidence provided in discovery is not consistent with the evidence provided at this trial. [73] While Ms. Pham has outlined a variety of factors as to why she would not enter this contract, including her lack of need to do so and the high interest rate, the test as to whether a contract has been concluded is objective. As noted in Waddams' The Law of Contracts, 6th ed (Toronto: Canada Law Book, 2010) at 69, where one party, in this case Ms. Pham, is aware of another's belief in the existence of a contract and does not deny it but rather acts as though the contract exists, they may be estopped from denying the existence of that contract. [74] More importantly, an objective view of the facts as presented, has compelled me to conclude Ms. Pham signed the two contracts in question with Mr. and Mrs. Wong, thereby taking on the responsibilities reflected in those two contracts. Her conduct in particular reinforced this view. This included making interest

payments for one year on Mrs. Nelly Wong's contract and two years on Mr. Hoi To Wong's contract, including the last payment from Ms. Pham's personal account in December 2007. This last payment occurred after Mrs. Nelly Wong had contacted Ms. Pham and wrote to demand repayment of the two loans. Ms. Pham did not deny the existence of the loans and made a further payment as reflected above. [75] There is no real dispute that if the two contracts are found to be in place, they have been breached in this case. The principal and interest amounts of the two contracts at issue have not been repaid to Mr. and Mrs. Wong. Accordingly, those amounts are owing pursuant to the breach of each contract. Issue 2: Are Minh Ngoc Pham and her law firm jointly and severally liable to the plaintiffs in equity for money had and received? [76] Although strictly not necessary, I will deal with the plaintiffs' alternative argument on an abbreviated basis. · Legal Principles [77] Halsbury's Laws of Canada, vol 75, 1st ed (Markham, ON: LexisNexis, 2012) at 787 provides that a plaintiff must prove it had an interest in the money and the money came into the defendant's hands in order to establish an equitable claim for money had and received. As set out in Topouzis v. Abboud, 2012 BCSC 228 at paras. 178-179, aff'd 2012 BCCA 516 the action is for the return of money received where it would be unjust for the

defendant to keep the money. · Conclusion [78] If the monies are not recoverable on the basis of a breach of contract, I conclude Ms. Pham and the law firm are liable to the plaintiffs for monies had and received. The following are my abbreviated reasons for this conclusion. · Analysis [79] With respect to the two outstanding loans, the $119,000 loan, though borrowed from the Transamerica policies was that of Mrs. Nelly Wong to use and invest. She chose to invest as per advice from Mr. Jang. With respect to the $110,000 loan, Mr. Hoi To Wong borrowed from his sister. There is no doubt he had an interest in the money. [80] There is also no doubt the money came into the possession of Ms. Pham and her law firm. Bank records establish the money was received into Ms. Pham's bank account; the cheques were marked "in trust" to Ms. Pham; and interest cheques from her account were written based on the amount of interest calculated in the contracts. [81] Ms. Pham does not dispute this but rather has pointed to the scheme devised by Mr. Jang and says as a result, the monies were not "had and received" by her. She maintains the monies were deposited effectively into Mr. Jang's account, even though the account was in her name. [82] Ms. Pham also says the plaintiffs could have avoided their loss if they had contacted her, advising the funds were sent "in trust", or followed up directly with

her. Ms. Pham effectively maintains the plaintiffs did not give her a chance to either accept or refuse to deal with them as clients. She maintains Mr. Jang was her client and she owed a fiduciary duty to him. She must therefore regard the funds in the investment account belonged to him. As Mr. Jang had full control of the account, any funds deposited to the accounts must have been "had and received" by him, not Ms. Pham. Ms. Pham also says she was not therefore enriched but rather Mr. Jang was the one unjustly enriched in this matter. [83] Ms. Pham also says the plaintiffs are in this position because of their negligence. Their blind faith in Mr. Jang caused her great harm in terms of time and money. The plaintiffs were reckless in sending funds to a perfect stranger simply on the assurance that she was a lawyer. [84] To a great extent, Ms. Pham's arguments are not persuasive for the same reasons set out previously with respect to the finding of the existence of a contract. While she points to Mr. Jang as being the beneficiary of these monies and argues they were not received by her, the reality is they were deposited into her account, for which she had responsibility. She received those monies, as confirmed by documentary evidence. [85] Furthermore, once again, Ms. Pham is a highly-educated individual, who was very aware of the business deals of Mr. Jang as her client.

Indeed, she set up what she characterized as an investment account for this very good client, which enabled these events to occur. The money was paid to Ms. Pham and she, as the recipient, is unjustly enriched. She is not excused of her responsibilities by pointing to the actions of Mr. and Mrs. Wong as reckless and negligent due to "blind faith" in Mr. Jang. Issue 3: What damages are attributable to Minh Ngoc Pham and the law firm? [86] As Ms. Pham and the law firm are both named in the loan agreements, they are jointly and severally liable for the debts. There are two loan agreements providing for interest rates of 18% on the $110,000 contract and 12% on the $119,000 contract. There is, however, no interest rate specified after the expiry of the loan terms. [87] Mr. and Mrs. Wong argue the contractual interest rates should be applied until the date of trial, based on the Supreme Court of Canada's decision in Bank of America Canada v. Mutual Trust Co., 2002 SCC 43 at paras. 49-50, and the Ontario Court of Appeal decision in Pizzey Estate v. Crestwood Lake Ltd., [2004] O.J. No. 246 at paras. 38-39 and 46-47 (C.A.). [88] The statement from the Supreme Court of Canada supports the proposition that the interest rate which governed the loan should apply post-breach, unless there are exceptional circumstances. In view of my findings in this matter, I cannot conclude exceptional

circumstances apply. While Ms. Pham has portrayed herself as a victim in this matter, there is simply insufficient evidence to establish that fact. At some point, Ms. Pham may have realized matters were going awry, as she had ample warning that all was not well in Mr. Jang's corporate affairs through her history of corporate entanglements with him and his companies. These were numerous and spanned a considerable length of time and complexity. Mr. and Mrs. Wong should not suffer because of these series of events. [89] I conclude therefore: [90] The calculation of damages for Mr. Hoi To Wong's contract with Ms. Pham is: (a) Principal: $110,000; (b) Term: three years; (c) Interest 18% annually, 9% semi-annually and payable every six months: $59,400 during the three-year term; (d) Subtract the interest payments made by Ms. Pham: $9,900 x 4 payments = $39,600; (e) Subtotal (loss during three-year term): $129,800; (f) plus simple interest at 18% annually from September 1, 2008 to February 6, 2015, calculated on the principal amount: $127,479.45; and (g) Total: $257,279.45. [91] The calculation of damages for Mrs. Nelly Wong's contract with Ms. Pham is: (a) Principal: $119,000; (b) Term one year, renewed for a second year; (c) Interest 12% annually, 1% monthly and payable every six months: $28,560 during a two-year term; (d) Subtract interest payments made by Ms. Pham: $7,140 x 2

payments = $14,280; (e) Subtotal (loss during two-year term): $133,280; (f) Plus simple interest at 12% annually from November 24, 2007 to February 6, 2015, calculated on the principal amount: $102,933.37; and (g) Total: $236,213.37. Issue 4: What are the damages attributable to the Jang Defendants? [92] Default judgment has been obtained against Mr. Jang and his companies, Billion and Trillion. The essential issue with respect to these defendants is what damages are attributable to Mr. Jang and his companies. [93] These defendants did not contest the claims that Mr. Jang owed the plaintiffs a duty of care as their insurance agent; that he breached the standard of care of an insurance agent and breached his fiduciary duty to Mr. and Mrs. Wong; that he breached the contract to act as the insurance agent and financial advisor for Mr. and Mrs. Wong and misrepresented various parts of the investment scheme; and that Trillion and Billion are vicariously liable for the acts of Mr. Jang. [94] As this is a complicated financial scheme, a flowchart was provided to set out the steps to the investment scheme. The evidence and many financial documents presented by Mr. and Mrs. Wong established the transactions alleged to have occurred. I will not review them in detail. Rather, I will provide an overview to assess what damages are attributable to these defendants. [95] The evidence was

clear that Mr. and Mrs. Wong attended two seminars, in which Mr. Jang outlined an investment scheme. While Mr. and Mrs. Wong did not completely understand the scheme, they were persuaded by Ms. Anna Wong, an insurance agent working with Mr. Jang, to trust him and were assured they would be guided throughout. Mr. and Mrs. Wong thought the investment would provide paid insurance policies for their children's financial future. [96] These transactions summarized by counsel for Mr. and Mrs. Wong establish seven steps to the investment scheme. The uncontroverted evidence established as per Mr. Jang's advice, that Mr. and Mrs. Wong: 1. Borrowed money against their house; 2. Invested that money with Transamerica; 3. Used those Transamerica investments as security for a special loan program between Transamerica and TD Canada Trust, called the "two-for-one loan" which further increased liabilities; 4. Relied on these liabilities to qualify for large insurance policies from Transamerica for each member of the family; 5. Liquidated the Transamerica investments to make large lump sum prepayments [overpayments] of the insurance premiums for their insurance policies. Mr. and Mrs. Wong also contributed their own money to pre-pay on their sons' policies; 6. Borrowed money from the overpaid insurance policies; and 7. Loaned the money borrowed from the insurance policies to Ms. Pham as per

written contracts. [97] On October 26, 2004, as per Mr. Jang's instructions, Mr. and Mrs. Wong obtained an increase to their home line of credit of $300,000, secured by their house. As part of an investment scheme, they then invested the $300,000 into a Transamerica life investment account for each of Mrs. Nelly Wong and Mr. Hoi To Wong, being $150,000 per investment account, on March 4, 2005, on the advice of Mr. Jang through Ms. Anna Wong. [98] Mr. Jang then arranged to participate in the TD Bank "two-for-one loan" program on March 16, 2005, securing an additional $500,000; $250,000 per investment account. By this time, Mr. and Mrs. Wong each had $400,000 in investments with Transamerica. [99] Relying on the inflated debts resulting from the line of credit against their home and the TD two-for-one loan, on August 3, 2005, Mr. and Mrs. Wong obtained insurance policies from Transamerica in the amount of $1 million for each member of the family [100] As per Mr. Jang's direction, further money was invested into the scheme when Mrs. Nelly Wong paid the premiums for the first two or three months from Mr. and Mrs. Wong's personal bank account. These amounts are: (i) $2,200 for Mr. Hoi To Wong's insurance policy (two months' premiums); (ii) $4,200 for Mrs. Nelly Wong's insurance policy (two months' premiums); (iii) $750 for Daniel Wong's insurance policy (three months' premiums);

and (iv) $600 for David Wong's insurance policy (three months' premiums). [101] This resulted in a total of $7,750 of Mrs. Nelly Wong's money paid on policies in 2005. [102] Mrs. Nelly Wong then liquidated the two investment accounts, as per direction from Mr. Jang. Mr. and Mrs. Wong's investment accounts had increased in value from $400,000 to values of $427,868.34 and $427,841.55 respectively. This increased amount, however, was essentially used up by fees. [103] The proceeds from the investment accounts were then distributed as follows, as directed by Mr. Jang: (i) $22,905.01 and $22,904.24 were taken by Transamerica in charges for the transaction from Mrs. Nelly Wong's and Mr. Hoi To Wong's accounts respectively; (ii) $250,215.75 was paid to each of Mrs. Nelly Wong and Mr. Hoi To Wong's loans from TD, repaying the two-for-one loans in full. Mr. and Mrs. Wong each received a $61.64 credit back from TD; (iii) $87,721.56 and $83,747.58 was paid to Mr. and Mrs. Wong respectively. This money was used to make a $171,500 payment on the $300,000 borrowed against their house. $128,500, however, remained outstanding and was not recouped by the plaintiffs; (iv) $71,000 and $67,000 were deposited as an "over-payment" of premiums into Mrs. Nelly Wong and Mr. Hoi To Wong's insurance policies; [104] As per Mr. Jang's instructions, Mr. and Mrs. Wong made lump-sum payments of $27,000 and

$26,000 respectively on the policies of Daniel and David Wong, with their own funds. The purpose of the lump-sum payments was to allow Mr. and Mrs. Wong to borrow money from the insurance policies to fund further investments, which would then pay for two further lump-sum payments on the insurance policies in the following two years and, after three years, the insurance policies would be fully paid. [105] As noted earlier, in order to do this, Mr. Jang advised Mr. and Mrs. Wong they needed an investment that would generate sufficient returns to pay the premiums on the insurance policies. Mr. Jang told Mr. and Mrs. Wong to invest with Ms. Pham. [106] Mr. Hoi To Wong borrowed $110,000 from his sister to invest with Ms. Pham and Mrs. Nelly Wong borrowed $119,000 from the four insurance policies. Mr. and Mrs. Wong invested $229,000 with Ms. Pham pursuant to two contracts. [107] I am accordingly satisfied with respect to damages, these include: (1) $128,530.86 which is the outstanding amount from the original $300,000 line of credit loan. $83,747.58 was repaid from Mrs. Nelly Wong's investments and $87,721.56 repaid from Mr. Hoi To Wong's investments; (2) The life insurance premiums paid, which includes payments that came from redemption of the Transamerica investments, total $71,550, being $7,750 in August and September 2005; $27,000 to Daniel's policy in October 2005; $26,000 to

Daniel's policy in October 2005; and $10,800 in July 2006; (3) $21,490.17 which is the interest payment on the insurance policy loans; $9,590.69 in August 2006; and $11,899.48 in July 2007; (4) $110,000loan from Mr. Hoi To Wong's sister; (5) Total is $331,447.75 and $30,024.43, court order interest (Court Order Interest Act, R.S.B.C. 1996, c. 79) with the total being $361,472.18; [108] The $361,472.18 in damages should be joint and several among the Jang Defendants, Ms. Pham and the Pham Ngoc Professional Corporation. The remainder of the plaintiffs' damages, $132,020.64, which is the difference between the damages attributable to the Jang Defendants and the damages attributable to Ms. Pham and the Pham Ngoc Professional Corporation in breach of contract, should be joint and several only between Ms. Pham and the Pham Ngoc Professional Corporation. Punitive Damages [109] In view of my findings above, I do not find punitive damages against the Jang defendants necessary in this case. While they have not disputed their liability for fraudulent misrepresentation and breach of fiduciary duty, the damages set out above are sufficient in the circumstances of this case. costs [110] Costs are awarded against the Jang Defendants, Ms. Pham and the Pham Ngoc Professional Corporation. "Burke J."