Diversified Energy and Resource Corporation et al., 2013 ONSC 5913
COURT FILE NOS.: CV-1209830-00CL and CV-12-449886
DATE: 20130924
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
BETWEEN:
PT ATPK RESOURCES TBK (Indonesia)
Plaintiff
– and –
DIVERSIFIED ENERGY AND RESOURCE CORPORATION
Defendant
A N D B E T W E E N:
PT ATPK RESOURCES TBK (Indonesia) RC No. AHU 60183.A.H.01.02
Applicant
– and –
HOPACO PROPERTIES LIMITED
(Virgin Islands, British) RC No. 178636
Respondent
Brian Illion, for the Plaintiff/Applicant
Orie H. Niedzviecki, for the Defendant and Respondent
HEARD: September 17, 2013
Newbould J.
Nature of motions
[1] PT ATPK RESOURCES TBK (Indonesia) (“ATPK”) applies to have registered and enforced against Hopaco Properties Limited (“Hopaco”) two judgments of the High Court of the Republic of Singapore.
[2] The first judgment dated June 18, 2010 declared that Hopaco held certain shares of ATPK in trust for ATPK and that ATPK has equitable title to the shares which were being held in nominee accounts in Singapore (the “share judgment”). It also ordered that the shares were to be reconstituted and delivered up to ATPK and that Hopaco was to account to ATPK for all benefits obtained from their disposition and all profits or benefits derived from them with interest. An order setting aside this judgment was made on July 16, 2010 but the judgment was reinstated by further order on August 17, 2010. On January 6, 2011 a cost order was made against Hopaco in the action, the amount outstanding of which is SGD 250,131.23
[3] The second judgment dated December 6, 2011 ordered Hopaco to pay to ATPK approximately 110 billion Indonesian dollars (approximately Cdn $10 million). (the “money judgment”). In argument, Mr. Niedzviecki said that Hopaco conceded that the money judgment should be registered in Ontario.
[4] ATPK has also sued Diversified Energy and Resource Corporation (“DEAR”) for a declaration that it holds 85,845,072 shares of ATPK in trust for ATPK. ATPK moves for summary judgment on this claim. DEAR moves to have the claim dismissed because of a limitations issue, failing which it moves to have the claim stayed on a forum non conveniens analysis, failing which it moves for security for costs.
Factual background
[5] The allegations in the Singapore action were that pursuant to a rights offering of ATPK, Hopaco acquired some 112 million shares of ATPK but pursuant to a “financial engineering scheme” failed to pay for them. It alleged that a Mr. Shah and his son who controlled Hopaco also obtained control of ATPK, enabling Hopaco to obtain the shares without paying for them.
[6] In July 2008, Hopaco transferred to DEAR some 85,845,072 shares of ATPK that it had obtained pursuant to the rights offering and received in return 49.57% of the shares of DEAR. When ATPK learned of this is not clear from the record before me, but it appears to have been referred to in an amendment to the Singapore statement of claim made on September 14, 2009.
[7] ATPK sued Hopaco, the Shahs and others in Singapore on September 9, 2009. ATPK alleged that Hopaco acquired its shares in ATPK under an implied or constructive trust pending payment for the shares to ATPK, and that Hopaco failed to make the payment. ATPK also alleged that some of the shares were held by DEAR, which company it alleged was controlled by the same people who controlled Hopaco. DEAR was not named a defendant in the action.
[8] Hopaco appeared to the Singapore action and filed a defence and counterclaim. However, Hopaco failed to produce an affidavit of documents as required by an order of the Singapore Court, as a result of which the registrar granted judgment to ATPK against Hopaco and the other defendants. The judgment declared that Hopaco held its ATPK shares in trust for ATPK and also declared that ATPK had equitable title to the shares. It also held that Mr. Shah’s son was the alter ego of Hopaco. As DEAR was not named as a defendant in the Singapore action, no judgment was made against it. The judgment as against Hopaco was set aside by order of the registrar on July 16, 2010 but restored by order of a judge of the Singapore court on August 17, 2010.
[9] The share judgment declared that Hopaco was to account for the benefits obtained from the shares. The money judgment of December 6, 2011 followed in which Hopaco was ordered to pay to ATPK approximately 110 billion Indonesian dollars (approximately Cdn $10 million).
Claim against DEAR
[10] It is alleged in the action commenced in Ontario by ATPK against DEAR that the share judgment of the Singapore court created a trust over the shares of ATPK acquired by Hopaco and granted ATPK equitable title over the shares. It is further pleaded that the share judgment was a proprietary judgment in rem effective against all persons coming into possession of the shares and that the ATPK shares acquired by DEAR from Hopaco are subject to that judgment, that DEAR holds the shares in trust for ATPK and is required to transfer them to ATPK.
[11] Although DEAR was not a party to the Singapore action, it is contended by ATPK that DEAR is caught by the share judgment, regardless of the fact that DEAR acquired its shares in ATPK in 2008, some two years before the judgment of the Singapore Court.
Registration of the judgments
[12] At the outset, Mr. Niedzviecki said he wished to raise a preliminary objection to the application to register the judgments as such an action should be started by way of a statement of claim. He had not raised this earlier in any material and in light of his concession during argument that ATPK was entitled to have the share judgment recognized, it is difficult to think the preliminary objection was seriously made. In any event, I would not give effect to the argument.
[13] The application to register the judgments is not made under any statute but rather under common law principles involving comity, as set out in Beals v. Saldanha, 2003 SCC 72, [2003] 3 S.C.R. 416 and Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, [2006] 2 S.C.R. 612. Rule 14.05(3)(h) provides that an application may be brought in respect of a matter where it is unlikely that there will be any material facts in dispute. There are no material facts relating to the judgments in dispute and Hopaco has not attempted to question the facts regarding the registration of the judgments. It has filed no affidavit evidence in the application. In any event, rule 2.01 provides that a court shall not set aside an originating process on the ground that the proceeding should have been commenced by an originating process other than the one employed.
[14] Although Mr. Niedzviecki in his factum contended that Ontario should not accept jurisdiction of the application to register the judgments, he withdrew that during argument. I would not have acceded to the argument in any case. Hopaco attorned to the jurisdiction of the Singapore court and there can be little or no argument that there was not a real and substantial connection to the action or the parties. In Beal, supra, Major J. for the majority made clear that by attorning to a foreign court was a sufficient basis to found jurisdiction in that court. He stated:
37 There are conditions to be met before a domestic court will enforce a judgment from a foreign jurisdiction. The enforcing court, in this case Ontario, must determine whether the foreign court had a real and substantial connection to the action or the parties, at least to the level established in Morguard, supra. A real and substantial connection is the overriding factor in the determination of jurisdiction. The presence of more of the traditional indicia of jurisdiction (attornment, agreement to submit, residence and presence in the foreign jurisdiction) will serve to bolster the real and substantial connection to the action or parties. Although such a connection is an important factor, parties to an action continue to be free to select or accept the jurisdiction in which their dispute is to be resolved by attorning or agreeing to the jurisdiction of a foreign court.
[15] In Beal, Major J. also stated that it made no difference if the foreign judgment was delivered after a trial, or as here, was a default judgment. He stated:
31 The appellants submitted that the recognition of foreign judgments rendered by courts with a real and substantial connection to the action or parties is particularly troublesome in the case of foreign default judgments. If the "real and substantial connection" test is applied to the recognition of foreign judgments, they argue the test should be modified in the recognition and enforcement of default judgments. In the absence of unfairness or other equally compelling reasons which were not identified in this appeal, there is no logical reason to distinguish between a judgment after trial and a default judgment.
[16] See also Van Damme v. Gelber (2013), 2013 ONCA 388, 115 O.R. (3d) 470 (C.A.) at para. 3.
[17] Hopaco asserts that the share judgment should not be registered in Ontario because it was superseded by the later money judgment. I do not agree. Nowhere in the money judgment is there any indication that it superseded the share judgment, and indeed it appears to follow from paragraph 3 of the share judgment that Hopaco was to account to ATPK for its profits, etc. received from the shares. In any event, the place for Hopaco to assert that the earlier share judgment was superseded by the money judgment is in the Singapore court that rendered the judgments, not in Ontario.
[18] Hopaco also asserts that the share judgment should not be registered because paragraphs 2 and 3 are inconsistent. Paragraph 2 declared that Hopaco held the ATPK shares as trustees and was to return them to ATPK. Paragraph 3 ordered Hopaco to account for the profits earned from the shares. Again, I do not on the face of the judgment see any inconsistency, but in any event this is a matter that Hopaco should have raised in the Singapore court that rendered the judgment. Although Hopaco appealed from the judgment, it is conceded that this point was not raised in the appeal.
[19] Finally, Hopaco asserts that the judgment should not be recognized in Ontario because it is unclear and ambiguous. It is settled law that a foreign judgment should not be recognized if it is not clear. See Pro Swing Inc. v. ELTA Golf Inc.(2004), 2004 870 (ON CA), 71 O.R. (3d) 566 (C.A.) at paras. 10 and 11; affirmed 2006 SCC 52, [2006] 2 S.C.R. 612.
[20] Hopaco asserts that the ambiguity can be found in paragraph 2 of the judgment that provides that Hopaco holds the shares as trustee for ATPK and “that [Hopaco is] to reconstitute these shares and deliver up these shares to ATPK …”. It is said that the word “reconstitute” is ambiguous. I do not think that a legitimate argument. The evidence was that some of the shares were held for Hopaco in its broker’s custodian account. In order for them to be delivered up to ATPK, those shares would have to be put in a form to be given to ATPK. In any event, the parties had no difficulty in understanding what the judgment meant. After the judgment, a large number of the shares were recovered by ATPK directly from Hopaco which held some of the shares and from the custodian account of the broker for Hopaco. It does not lie in Hopaco’s mouth to now assert that it does not know what the judgment means.
[21] In my view, ATPK is entitled to have the two judgments recognized and enforced in Ontario.
[22] So far as the share judgment is concerned, ATPK has requested an order recognizing and enforcing the judgment. What the form of the order should be is not spelled out. If the parties cannot agree on those terms, further submissions in writing may be made.
[23] ATPK also requests declarations (i) that Hopaco converted the shares into shares of DEAR, (ii) that ATPK has equitable title to the DEAR shares held by Hopaco, (iii) an order directing DEAR to record ATPK as the owner of the DEAR shares. I do not think that ATPK is entitled at this time to such orders. They involve issues that are relevant to the action by ATPK against DEAR. It is agreed that Hopaco holds DEAR shares that it obtained in 2008 in exchange for ATPK shares, and presumably ATPK, if so advised, would be entitled upon registration of the money judgment in Ontario to have the Sherriff seize those shares for the benefit of the creditors of Hopaco, including ATPK.
[24] So far as the money judgment is concerned, ATPK is entitled to a judgment against Hopaco pursuant to section 121 of the Courts of Justice Act for payment of an amount in Canadian currency sufficient to purchase the equivalent of the money judgment and order for costs, as set out in paragraph 1 (c) of the Notice of Application, and for interest as claimed in paragraph 1 (e) of the Notice of Application.
[25] ATPK is entitled to its costs of the application to register the judgments. If these cannot be agreed, ATPK may make brief written submissions no longer than 3 pages in length, along with a proper cost outline, within 10 days and Hopaco shall have 10 days to file a brief written reply no longer than 3 pages.
DEAR action
[26] The claim by ATPK against DEAR is based on the share judgment of the Singapore court. ATPK seeks a declaration that 85,845,072 shares of ATPK held by DEAR are held in trust for ATPK by reason of the trust declaration in the share judgment that declared a trust over 112,542,000 shares of ATPK received by Hopaco[^1].
(a) Is the Singapore share judgment a judgment in rem binding on DEAR?
[27] The ATPK shares acquired by DEAR were acquired from Hopaco in February, 2008, more than two years before the share judgment of June 18, 2010. ATPK claims, however, that the share judgment was a judgment in rem effective against any person coming into possession of the shares impressed with a trust. It claims this catches the shares acquired by DEAR in 2008.
[28] The statement of claim does not include a claim that when DEAR acquired its shares in ATPK from Hopaco in 2008, the shares were then impressed with a trust or that DEAR knew or ought to have known of any such trust. The claim is based solely on the share judgment.
[29] DEAR says that the share exchange in 2008 whereby it acquired the ATPK shares from Hopaco in exchange for the shares of DEAR acquired by Hopaco was a bona fide share exchange for fair market value. ATPK has offered no evidence to counter this position, although I note that the affidavit evidence on behalf of DEAR was provided by Mr. Maricar who became a director of DEAR only 8 days before he swore his affidavit.
[30] I have considerable difficulty with the notion that the share judgment in 2010 in itself could affect the shares acquired by DEAR in 2008, particularly when DEAR was not made a party to the Singapore action. It may be that if there was some implied trust or some constructive trust in 2008 breached by Hopaco in transferring the ATPK shares to DEAR (Hopaco had not paid for them) and DEAR was aware of the facts that gave rise to the implied or constructive trust, some claim might exist against DEAR. While such a claim was pleaded in the Singapore action, it has not been pleaded in the statement of claim in Ontario and Mr. Illion said in argument that the claim was based only on the share judgment being a judgment in rem and binding on DEAR.
[31] It is not clear to me that the judgment is a judgment in rem binding on DEAR, which was not a party to it. The share judgment adjudged in paragraph 2 that Hopaco held the shares of ATPK received by it as trustee for ATPK. It did adjudge in paragraph 5 that ATPK had equitable title to the defendants’ ( there were 5 defendants, including Hopaco) shares of ATPK identified in paragraph 28 of the statement of claim in the Singapore action, including 85,845,072 shares held in a nominee account in Singapore. That nominee account was a DEAR account holding the ATPK shares that it had acquired from Hopaco in 2008. Paragraphs 24 and 28 of the Singapore statement of claim asserted that the shares were disposed of by Hopaco in breach of an implied or constructive trust due to the fact that Hopaco had not paid for the shares. It did not plead that DEAR acquired its ATPK shares from Hopaco knowing of any breach of implied or constructive trust.
[32] What the Singapore share judgment does therefore is to adjudge that ATPK has equitable title to ATPK shares acquired by DEAR two years before the judgment and held by a broker for DEAR. Can ATPK say in Ontario that based on that Singapore judgment in an action to which for some reason DEAR was not made a party, it is not open to DEAR to assert that it acquired the shares earlier in good faith for fair market value and that the Singapore should not be binding on it? In his factum, Mr. Illion provided no authorities whatsoever to support that assertion.
[33] Following the argument, Mr. Illion forwarded to me the case of Law v. Hansen (1895), 1895 116 (SCC), 25 S.C.R. 69. I do not think that the case is of assistance. It involved a case in which the defendant had first sued in the U.S. for damages to his boat claimed to have been the fault of the plaintiff’s boat. It was held in the U.S. that the defendant’s boat was entirely at fault. In an action in Nova Scotia, it was held that the defendant was estopped by principles of res judicata from asserting no liability. The case was not a case of an in rem judgment in the U.S. in the course of the decision in the Supreme Court of Canada, King J. made the following obiter comment:
Judgments in rem are conclusive against all the world, not only as to the rem itself but also as to the ground on which the tribunal presses to decide, or may be presumed to have decided. As to what constitutes proceedings in rem see Castrique v. Imrie L.R. 4 H.L. per Blackburn J. p. 429.
[34] King J. did not need to consider what constitutes proceedings in rem and the case is unhelpful in considering whether as claimed by ATPK the share judgment was a judgment in rem. Like Law v. Hansen, Castrique v. Imrie (1870), L.R. 4 H.L. involved a party who had lost litigation, in that case France, where it was ordered that a party “had a judgment upon” a ship, and that it be sold. The mortgagee of the ship appealed unsuccessfully in France, and then sued in England for conversion of the ship. It was held that the judgment was a judgment in rem and binding in England. Blackburn J. relied on the principle from Story on the Conflict of Laws that proceedings in rem that settle title to a moveable and permit it to be sold are recognized in domestic proceedings if the foreign court had jurisdiction.
[35] In Castel & Walker, Canadian Conflict of Laws, 6th ed (April 2013), it is stated at p. 14-55 s.14.10:
A judgment in rem determines the status of a person or thing or the disposition of a thing, as distinct from the particular interest in it of a party to the litigation. (underlining added)
[36] Cited for authority for this statement is Castrique v. Imrie and Lazarus-Barlow v. Regent Estates Co. Ltd., [1949] 2 K.B. 465. In Lazarus-Barlow, a judgment permitting a landlord to evict a tenant on the grounds that the tenancy was not subject to the applicable rent legislation limiting rents was not binding on a subsequent tenant who contended that the legislation was binding on her lease. Lord Justice Evershed thought the prior judgment was not a judgment in rem but rather a judgment dealing with the particular interests of the prior tenant. He asked rhetorically “Would a judicial determination that certain premises were not within the Acts made in proceedings between a vendor and purchaser bind future tenants?” He clearly thought not.
[37] If what Lord Justice Evershed said is the case, is it not at least arguable that the judicial determination in the Singapore share judgment should not be considered a judgment in rem binding on a party who prior to the judicial determination had acquired the shares in question? Or put another way, is it not arguable that the share judgment did not determine the status of the ATPK shares but rather the particular interest of ATPK as against Hopaco? This is a novel point and should not be determined at this stage without a full factual record. See Romano v. D'Onofrio (2005), 2005 43288 (ON CA), 77 O.R. (3d) 583 (C.A.).
[38] I do not look at this issue with rose coloured glasses, as I understand that Mr. Shah, adjudged in the Singapore action to be the alter ego of Hopaco, was a director of DEAR at the time of the share exchange in 2008. However, I am not persuaded on the material before me that ATPK has made out a case for summary judgment that it is the owner of the ATPK shares held by DEAR.
(b) Is the DEAR action statute barred?
[39] DEAR claims in its motion for summary judgment that the action by ATPK is statute barred because it was commenced in Ontario more than two years after the Singapore share judgment. The share judgment was made on June 10, 2012 and the appeal order that re-instated it was made on August 17, 2010. The Ontario action was commenced on September 7, 2013.
[40] ATPK asserts that while there was no appeal from the re-instatement of the judgment on August 17, 2010, the time for an appeal under the Singapore rules was one month, and therefore the judgment was not final until that appeal period expired on September 17, 2010, within two years of which the Ontario action had been commenced. ATPK also asserts that there is no limitation period by virtue of section 16 (1)(b) of the Limitations Act which provides:
16(1) There is no limitation period in respect of,
(b) a proceeding to enforce an order of a court, or any other order that may be enforced in the same way as an order of a court; . . .
[41] DEAR relies on Commission de la Construction du Québec v. Access Rigging Services Inc. (2010), 2010 ONSC 5897, 104 O.R. (3d) 313 in which McLean J. held that section 16(1)(b) did not apply to a foreign money judgment. The case is distinguishable because a foreign debt judgment is considered to create a debt and an action to enforce the judgment is considered to be an action on a debt, whereas the share judgment does not create a debt but rather passes judgment on ATPK’s interest in shares. The fact that the foreign judgment was for a debt was central to the reasoning in that case. That said, I have some difficulty with the decision.
[42] Section 4 of the Limitations Act proscribes actions more than two years after the date on which the claim was discovered, and section 5 provides that a claim is discovered when the person first knew that an “injury, loss or damage had occurred”. Knowledge of a judgment, in this case knowledge of the Singapore share judgment on which ATPK bases its claim, would not appear to fall within knowledge of “injury, loss or damage”. It makes sense in these circumstances for section 16(1)(b) to provide that there is no limitation period in respect of a proceeding to enforce a court order.
[43] Section 2 of the Limitations Act states that the Act applies to “claims pursued in court proceedings”. I see no reason to read section 16(1)(b) to not apply to a claim pursued to enforce a foreign judgment, or put another way, to limit the section to an Ontario court order. This is particularly so in light of the direction of the Supreme Court of Canada in Beal and Pro Swing that principles of comity should be observed in the recognition of foreign judgments. If the Limitations Act stated clearly that section 16(1)(b) did not apply to a foreign judgment, that would be one thing, but it does not.
[44] I recognize that absent discoverability issues, if the claim by ATPK against DEAR was not based on the Singapore share judgment but rather on a claim for breach of trust, the limitation provisions of section 4 and 5 of the Limitations Act would likely apply. But the statement of claim does not contain such a claim.
[45] If the two year limitation period were applicable to the Singapore share judgment, I would not give effect to the argument of ATPK that it would not commence until the last appeal period had expired. Knowledge of the judgment on which the claim is being made was known at the latest by the time the appeal from the order reversing it had been successful. It is arguable that ATPK first knew of the share judgment when it was first rendered on June 10, 2010, but whether that would be the appropriate date I need not decide.
[46] In the circumstances, I decline to dismiss the claim on the basis of the Limitations Act.
(c) Should the action be stayed on a forum non conveniens analysis?
[47] DEAR contends in the alternative if the action is not statute barred that on a forum non conveniens analysis, the action should be stayed.
[48] DEAR carries the burden of establishing that an alternative forum is clearly more appropriate. See Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572 at para. 108-109. The factors to be considered are discussed in Van Breda. They are:
(i) The comparative convenience and expense for the parties and witnesses in litigating in the alternate forums. DEAR asserts the appropriate forum is Singapore. While the record is not at all clear as to what witnesses will be required and where they reside, and DEAR has not provided evidence on the point, it appears that most personnel involved were from Indonesia. In a case such as this, I expect that the cost of travel is not that significant but I would say that this factor slightly favours DEAR and Singapore being the forum.
(ii) The law to be applied. There is no evidence that the law of Singapore is different from Ontario law, which is not surprising given the common law foundation for Singaporean law. This factor is neutral.
(iii) The desirability of avoiding a multiplicity of legal proceedings. There are no proceedings elsewhere against DEAR. This factor is neutral.
(iv) The desirability of avoiding conflicting decisions. Again, there are no other proceedings against DEAR. This factor is neutral.
(v) The enforcement of an eventual judgment. DEAR is an Ontario company and the shares of ATPK held by it are in an Ontario brokerage account. This factor strongly favours ATPK and the action being tried in Ontario.
(vi) The fair and efficient working of the Canadian legal system as a whole. I think it possible that a consideration of the fair and efficient working of the Canadian legal system as a whole is more apt when considering contests between two Canadian jurisdictions. I confess that I am not sure how the Canadian legal system as a whole is relevant to a contest between one province and a foreign court. In Van Breda, LeBel J. did not refer to this factor in his analysis of the cases before the Court but said that fairness to the parties weighed heavily in favour of the Ontario plaintiffs. I do understand how fairness to the parties can play a role in a forum non conveniens analysis. In this case, fairness weighs heavily in favour of ATPK and this court hearing the matter. DEAR, an Ontario corporation, took steps to move the ATPK shares it acquired from Hopaco from Singapore to Ontario. It can hardly complain that an action has been commenced here in connection with those shares.
[49] In the circumstances, the Van Breda factors weigh in favour of the action against DEAR proceeding in Ontario. It certainly cannot be said that DEAR has established that Singapore would be clearly more appropriate for the case.
(d) Interim injunction
[50] On October 23, 2012, Campbell J. made an interim ex parte interlocutory injunction restraining DEAR from dealing with any of the 85.845,072 shares of ATPK held by DEAR. This injunction was continued by an unopposed order on November 1, 2012, with the right of any party to move on 4 days notice to vary it.
[51] DEAR has not moved to vary the order but in its factum contended that it should be set aside for failure to disclose material facts when it was first obtained. This point was not argued and I take it was not being pursued. The contention is based on a bald statement in the affidavit of Mr. Maricar, who has no first-hand knowledge whatsoever, that it appears that ATPK failed to reveal to the court that the injunctive relief sought was more onerous that the Singapore judgment, that the Singapore judgment was not registered in Ontario, that DEAR was not a party to the Singapore action and ATPK was not entitled to conduct business in Ontario at the time of the motion.
[52] Without more, it is difficult to credit this concern. The motion material before Campbell J. was very complete. The share judgment was referred to in the affidavit material and made an exhibit. The affidavit stated that while ATPK had filed an application to register and enforce the share judgment in Ontario, it had not yet been served because ATPK believed DEAR would dispose of the ATPK shares if alerted before the injunction was ordered. It was clear from the material and share judgment that DEAR was not a party to the judgment. The fact that ATPK was not entitled to conduct business in Ontario at the time of the order is irrelevant.
[53] I am not prepared to set aside the injunction on the basis of non-disclosure of material facts.
(e) Conclusion
[54] In the circumstances, both the motion by ATPK for summary judgment against DEAR and the motion by DEAR for summary judgment dismissing the claim are dismissed.
(f) Costs
[55] As success on the motions in the DEAR action has been divided, there shall be no order for costs.
Security for Costs
[56] DEAR requests an order for security for costs. ATPK is a corporation registered in Indonesia with no assets in Ontario. Under rule 56.01 (d), DEAR is entitled to an order for security for costs.
[57] The bill of costs filed by ATPK contains partial indemnity fees totaling $6,743 for work up to the attendance in court to argue these motions. The work for these motions appears to be $2,568. The bill of costs also includes correspondence with the client, which should not be included in any cost order.
[58] I decline to order any security for costs for any estimated future work as it is completely unclear what work will be required. There is no affidavit evidence from a solicitor, which is normal in a motion for security for costs, setting out what work will likely be required. Mr. Illion asserts the case will require only documentary evidence. Whether that is the case remains to be seen.
[59] In the circumstances, security for costs of $3,500 is ordered to be posted by ATPK within 30 days, without prejudice to DEAR bring a further motion for costs on proper material for any future work. Any such further motion is to be made to a Master.
Newbould J.
Released: September 24, 2013
Diversified Energy and Resource Corporation et al., 2013 ONSC 5913
COURT FILE NOS.: CV-1209830-00CL and CV-12-449886
DATE: 20130924
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
BETWEEN:
PT ATPK RESOURCES TBK (Indonesia)
Plaintiff
– and –
DIVERSIFIED ENERGY AND RESOURCE CORPORATION
Defendant
A N D B E T W E E N:
PT ATPK RESOURCES TBK (Indonesia) RC No. AHU 60183.A.H.01.02
Applicant
– and –
HOPACO PROPERTIES LIMITED
(Virgin Islands, British) RC No. 178636
Respondent
REASONS FOR JUDGMENT
Newbould J.
Released: September 24, 2013
[^1]: The number of shares now said to be held by DEAR is apparently 85,845,072. The share judgment declared a trust over 112,542,000 shares held by Hopaco. The ATPK material states that ATPK has already recovered 85,845,072 shares plus 700,000 shares, leaving a shortfall of 25,996,928 shares. How ATPK would be entitled to recover more than 25,996,928 shares is not clear.