Background:

• Mr. To hired Psonic Inc., through Mr. Chan, its sole director, to build a coach house on his property.
• Payments totaling over $143,000 were made by Mr. To to Psonic and Mr. Chan. However, minimal progress was made, and no building permits were applied for.
• Psonic faced financial difficulties, and Mr. Chan suggested dissolving Psonic and creating a new entity.

Legal Issues:

1. Striking Defence for Failure to Pay Costs: Mr. To sought to strike Mr. Chan's defense due to non-payment of a $500 costs award. The court found this disproportionate and declined to strike the defense.
2. Personal Guarantee: Mr. To claimed Mr. Chan personally guaranteed the payments. The court found no evidence of consideration for the guarantee, deeming it a gratuitous promise.
3. Piercing the Corporate Veil: The court did not find sufficient evidence that Mr. Chan used Psonic to shield fraudulent conduct but did find him personally liable for $61,095.50 due to fraudulent misrepresentations.

Outcome:

• The motion was granted in part. Mr. Chan was ordered to pay $61,095.50 plus pre-judgment interest for fraudulent misrepresentation.
• The remainder of the claim will proceed to trial.
• Costs of $12,500 were awarded to Mr. To.