Executive Summary: Key Legal and Evidentiary Issues

• Settlement Agreement between Gang Wang and W&W International Trade Ltd. clearly obligated W&W to pay a corporate credit card balance of $12,678.57 incurred for the company's benefit, but W&W refused payment.
• Account statements definitively established that credit card charges included postal fees for merchandise delivery, insurance payments, and accountant fees directly benefiting W&W's operations.
• W&W claimed Gang Wang breached his contractual obligations regarding vehicle lease transfers and a WeChat account transfer, but failed to provide convincing or reliable evidence supporting these allegations.
• Vehicle transfer delays resulted from W&W's former associates filing a false theft report on a truck, which they did not retract until January 5, 2023, preventing completion of the lease transfer until February 2023.
• W&W's administrator provided vague, imprecise, and implausible testimony that lacked credibility when compared to Gang Wang's detailed and corroborated account of the transaction's execution.
• Partially redacted text messages produced by W&W regarding the WeChat account transfer were incomplete and unreliable, failing to meet the evidentiary burden required to prove obstruction by Gang Wang.

The business dissolution and settlement agreement

Gang Wang entered into a business relationship with associates who later purchased his shares in various enterprises. To formalize the separation of their business affairs, the parties negotiated and executed a Settlement Agreement. This comprehensive agreement addressed multiple obligations for both parties, including the closure and payment of a corporate credit card issued in Gang Wang's name, the transfer of vehicle lease contracts, and the transfer of a WeChat account. The Settlement Agreement represented the parties' mutual understanding of their respective responsibilities during the transition period following the sale of shares.

Credit card obligations under the settlement agreement

Clause 4.3 of the Settlement Agreement contained explicit provisions regarding the corporate credit card. The provision required that the former associates (referred to as "Purchasers" in the agreement) would cancel the corporation's credit card in Gang Wang's name on the date of signature of the Settlement Agreement. The clause further stated that the former associates would undertake, jointly and severally with the corporation W&W, to pay any balance due on the corporate credit card in Gang Wang's name since August 31, 2022. This language made clear that both the former associates and W&W bore joint and several liability for the outstanding balance.

Failure to cancel the card and subsequent payment by Gang Wang

At the time the Settlement Agreement was signed, neither W&W nor the former associates took the required action to contact the credit card issuer and cancel the account. This inaction left the account open and potentially exposed both parties to ongoing liability. Recognizing this oversight, Gang Wang himself undertook the necessary steps to close the account. He successfully obtained the card's cancellation on September 17, 2022. At that time, the outstanding balance on the card totaled $12,678.57. When W&W subsequently refused to pay its share of this balance, Gang Wang paid the full amount himself on February 13, 2024. Having borne the entire cost that the Settlement Agreement allocated jointly to himself and W&W, Gang Wang commenced legal proceedings to recover the payment from W&W.

W&W's defense regarding the nature of credit card charges

W&W challenged Gang Wang's claim on the ground that it could not verify the charges on the corporate credit card had been incurred for the company's benefit. The defendant contended that without such verification, it bore no obligation to reimburse the balance. However, this defense proved untenable. On January 19, 2024, account statements from the credit card issuer were provided to W&W. These statements clearly documented the nature of the expenses charged to the account. The records revealed postal fees incurred for the delivery of merchandise, payments made toward W&W's insurance policies, and payments rendered to W&W's accountants for professional services. Each category of expense demonstrated a direct and clear benefit to the corporation. The court therefore concluded that the charges on the credit card had unquestionably been incurred for W&W's benefit, rendering W&W's defense on this point without merit.

W&W's counterclaim regarding vehicle lease transfers

W&W advanced a counterclaim alleging that Gang Wang had breached his contractual obligations by delaying the transfer of vehicle lease contracts. According to clause 4.2 of the Settlement Agreement, the former associates and W&W were obligated to transfer vehicle lease contracts to Gang Wang by September 30, 2022. Additionally, Gang Wang was required to assume all expenses associated with these vehicles beginning September 1, 2022. W&W alleged that the transfer was not completed until February 2023 and that it had been forced to bear the vehicle-related costs during the intervening months at Gang Wang's unjust benefit.

Inadequacy of W&W's evidence regarding vehicle expenses

To support its claim regarding vehicle expenses, W&W produced account statements with certain expenses highlighted as apparently relating to vehicles or insurance. However, the court identified multiple fatal defects in this evidence. First, the account statements themselves were issued in the name of a third party and did not relate to W&W's own accounts. Second, W&W failed to produce the actual vehicle lease contracts that would have allowed the court to verify that the highlighted expenses corresponded to the specific vehicles identified in the Settlement Agreement. Third, the administrator's testimony regarding these expenses was vague, imprecise, and unreliable, with no clear accounting of what amounts Gang Wang allegedly owed.

Gang Wang's explanation of vehicle transfer delays

Gang Wang acknowledged that the transfer of leases for two vehicles—a truck and a forklift—had been delayed beyond the contractual deadline. However, he provided a compelling explanation for these delays. Gang Wang testified that his former associates had reported the truck as having been stolen. This theft report created a legal barrier preventing the transfer of the lease and preventing Gang Wang from taking possession and use of the vehicle. The theft report remained in effect, blocking progress on the lease transfer, until the former associates withdrew their complaint on January 5, 2023. Only after this withdrawal was the lease transfer completed in February 2023. Gang Wang's testimony regarding these facts was precise, detailed, and convincing to the court. Moreover, his account was corroborated by documentary evidence presented during the trial. The court found it fundamentally unjust that W&W and its former associates would blame Gang Wang for delays that they themselves had caused through their own actions.

The WeChat account transfer dispute

W&W also contended that Gang Wang was obstructing the transfer of a WeChat account, an obligation expressly provided in clause 4.4 of the Settlement Agreement. W&W alleged that after Gang Wang had signed a request for the account transfer before a notary, he had subsequently interrupted the process. W&W submitted text message exchanges as evidence of this alleged obstruction. However, the court identified a critical problem with this evidence: the text messages were partially redacted or "blacked out," rendering the document incomplete. Gang Wang countered that the redactions were designed to create a false and misleading impression of his conduct. He argued that he had fulfilled all required authorizations for the transfer, including providing certain authorizations before a notary public. He further explained that the final technical reception of the WeChat account could only be completed by his former associates, who had neglected to perform this final step despite Gang Wang's prior authorization. The court found it implausible that Gang Wang, having taken the step of authorizing the transfer before a notary, would subsequently act to block it. The incomplete documentary evidence presented by W&W fell short of meeting its burden of proof on this issue.

Credibility assessment of the parties' testimony

A critical factor in the court's analysis was the relative credibility of the parties' testimony. W&W was represented by its administrator, Lichen Zang, who had managed the enterprise and handled its accounting since 2019. However, Mr. Zang's testimony was marked by vagueness, hesitation, and implausibility. He could not specify with precision what sums Gang Wang allegedly owed to W&W. When confronted with obvious facts within his knowledge—such as whether postal expenses incurred by the company for its operations could be recognized as business expenses—he offered implausible denials. He claimed, despite being the administrator of the company, that he lacked the authority to cancel the corporate credit card. In contrast, Gang Wang's testimony was precise, detailed, and consistent with corroborating documentary evidence. His account of the events was straightforward and credible, demonstrating that he had acted in good faith to fulfill his contractual obligations while his former associates created obstacles beyond his control.

Court's legal conclusions

The court determined that W&W failed to establish, through convincing evidence, that Gang Wang had committed any breach in the performance of his contractual obligations that would justify W&W's refusal to pay the credit card balance. The credit card charges were legitimately incurred for W&W's benefit. The obligation to cancel the card and pay its balance rested with W&W and the former associates, not with Gang Wang. Any delays in completing Gang Wang's obligations regarding vehicle leases resulted from the actions of the former associates, not from any breach by Gang Wang. The evidence regarding the WeChat account transfer was insufficient and unreliable. W&W's defensive posture throughout the litigation was undermined by weak evidence, implausible testimony, and an apparent attempt to use unsubstantiated counterclaims to evade its own contractual obligations.

The court's judgment and award

The Quebec Court rendered judgment in favor of Gang Wang, accepting his claim in full and rejecting W&W's defensive counterclaims. The court ordered W&W International Trade Ltd. to pay to Gang Wang the principal sum of $12,678.57, together with legal interest calculated at the statutory rate and an additional indemnity as provided under Article 1619 of the Quebec Civil Code, with both the interest and indemnity to be calculated from November 26, 2023 (the date of the formal notice of default). The court further ordered W&W to pay court costs of $230 to Gang Wang. These awards reflect the court's determination that Gang Wang had rightfully borne the cost of the credit card balance that W&W was contractually obligated to pay, and that he was entitled to full reimbursement along with the prejudgment interest and costs associated with his successful legal action.