Executive Summary: Key Legal and Evidentiary Issues

• Plaintiffs Jing Luo and Shu Zhou sought leave to issue a Certificate of Pending Litigation (CPL) against two residential properties — 411 Wenlock Avenue, Richmond Hill, and 2 Jarvis Avenue, Aurora — owned by defendant Chong Xia Qiu.
• Central to the dispute is whether funds advanced by the plaintiffs were personal loans to Wang and Qiu, or capital investments into the corporate defendant 2525371 Ontario Inc. (SG Auto).
• No evidence established that Qiu personally received funds from the plaintiffs, and counsel for the plaintiffs conceded this point during submissions.
• Plaintiff Luo improperly registered a notice under s. 71 of the Land Titles Act against 2 Jarvis without notice to Qiu, despite repeated requests for its removal — a factor counted against the plaintiffs in seeking equitable relief.
• Timing of the plaintiffs' advances relative to the property purchases was held to be insufficient, on its own, to raise a triable issue of a constructive trust interest in the land.
• Defendants' motion to permanently remove the LTA notice from title to 2 Jarvis was granted, while the plaintiffs' motion for a CPL and related relief was dismissed in its entirety.

Facts of the case

Plaintiffs Jing Luo and Shu Zhou, common-law partners, commenced an action against defendants Zhe Wang, Chong Xia Qiu, and certain corporations — including 11076779 Canada Inc., 2525371 Ontario Inc. (SG Auto), and Enjoy-Driving Automotive Inc. — claiming over $2.5 million for repayment of loan principal and over $2.2 million in interest, along with claims for breach of contract, breach of trust, deceit, conversion, unjust enrichment, and constructive trust. Wang and Qiu are married and have two school-aged children.

Luo holds a business management degree and worked at a real estate law firm after graduation before becoming a real estate agent. She and Zhou had been in the business of lending money since 2018, advancing "hundreds of thousands" to approximately a dozen parties using funds from her family in China. Zhou, also a real estate agent, acted as Qiu's agent when Qiu purchased 2 Jarvis Avenue and her interest in 411 Wenlock Avenue in June and July 2021.

Wang started Enjoy-Driving Automotive Inc. in 2013 and later discussed with the plaintiffs an investment opportunity in SG Auto, a luxury used car dealer. Wang deposed that the plaintiffs' capital would be used to purchase inventory and that the plaintiffs would share in SG Auto's profits. Luo became a certified salesperson for SG Auto in 2020 and was appointed a director in 2021. SG Auto's total sales from 2018 exceeded $14 million.

The two properties at the centre of the CPL motion are owned by Qiu, not Wang. 2 Jarvis is held solely by Qiu, while 411 Wenlock is held by Qiu (60%) and another person (40%) as an investment property. The defendant Wang has never been an owner of either property. Qiu acquired both properties in 2021 using net sale proceeds of approximately $2.5 million from the sale of her home at 45 Archerhill Court in Aurora — a home she and her father-in-law had progressively purchased and sold over several years before the present dispute arose.

Contractual and statutory provisions at issue

The plaintiffs alleged an oral loan agreement with both Wang and Qiu personally, pursuant to which funds were transferred to them. Luo asserted 26 transfers to Wang between May 2020 and February 2023, a $30,000 transfer purportedly to Qiu on November 16, 2022, and a $100,000 transfer to Qiu on November 28, 2022. However, the $30,000 transaction was revealed to be a payment from Qiu's joint account to Luo, signed by Wang — not a transfer to Qiu — and Qiu deposed she was unaware her husband had made that transfer. The $100,000 transfer carried a memo reading "BMW X7" and coincided with the date Luo, as SG Auto director, bought out the lease on her vehicle. A further allegation of a $20,000 cash payment for renovations to Qiu's property was conceded by Luo to have been repaid shortly after.

On the statutory side, the court addressed two provisions of the Land Titles Act, R.S.O. 1990, c. L.5. Section 71 permits a person with an interest in unregistered estates in registered land to protect that interest by entering a notice on the register. Section 62(1), however, expressly prohibits registration of a notice of an express, implied, or constructive trust.

Court's reasoning and analysis

The court applied the established test for leave to issue a CPL: whether there is a triable issue as to a reasonable claim to an interest in the land, with the onus on the party opposing the CPL to show that no such triable issue exists. The court noted that on a contested motion, affidavit evidence is not accepted uncritically — the court examined all evidence following cross-examination to assess whether the plaintiffs' claim had a reasonable prospect of success.

Justice Newton found that the claim to a constructive trust interest was founded entirely on speculation. There was no evidence that any of the plaintiffs' funds were used to acquire or improve the value of either property. The mere timing of the $400,000 in transfers from Luo to Wang in May and June 2021 — prior to Qiu's purchases of 411 Wenlock and 2 Jarvis — was held to be insufficient to ground an inference of a constructive trust. Luo herself acknowledged on cross-examination that she never informed Qiu of any belief that she held a beneficial interest in either property.

The court further found that the LTA notice registered by Luo on July 25, 2025, against 2 Jarvis (instrument number YR3820184) was clearly improper, as it was grounded in a constructive trust claim — registration of which is expressly prohibited by s. 62(1) of the LTA. The notice was also registered without any notice to Qiu and was not removed despite repeated requests. The court treated this conduct as a factor weighing against granting equitable relief such as a CPL, citing the principle that a CPL is available only in limited circumstances and should not be used as a form of execution before judgment.

Even assuming, without deciding, that a triable issue existed, the court stated it would nonetheless deny the CPL in its discretion: the harm to the defendants and the innocent third-party purchaser (with a sale of 2 Jarvis scheduled to close on June 1, 2026) was extreme, the properties held no unique significance to the plaintiffs, and the plaintiffs retained the right to pursue damages.

Ruling and overall outcome

The defendants were the successful parties. The plaintiffs' motion — for leave to issue CPLs, for orders prohibiting transfer or encumbrance of the properties, and for an order directing net sale proceeds to be paid into court — was dismissed in its entirety. The defendants' motion was granted: the LTA notice registered against 2 Jarvis on July 25, 2025, as instrument number YR3820184, was ordered permanently removed from title, effective immediately. No monetary award or costs order was made at this stage; Justice Newton indicated that costs submissions would be sought from the parties following his decision on the outstanding pleadings motion. The total monetary amount ordered at this stage is therefore not yet specified.