SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

IN THE MATTER OF the bankruptcy of Jay Tien Chiang, of the Town of Richmond Hill, in the Regional Municipality of York, in the Province Of Ontario

RE: Mendlowitz & Associates Inc., in its capacity as Trustee in Bankruptcy of Jay Tien Chiang, and Korea Data Systems (USA), Inc., Plaintiffs

AND:

Jay Tien Chiang, aka Jay Chiang, aka Tienchieh Chiang, Christina Chiang, also known as Suh Mei Tasi, aka Christian Chiang aka Suh Mei Tsai, aka Christina Suh Mei Tsai, aka Suh Mei Tasi Chiang, aka Christina Suh-Mei Chiang aka Suh-Mei Chiang, Chun Chun Wu, Jie Chu Wu, Chen Cheng-Yueh Tsai, Yu Chang Chiang also known as Y.C. Chiang, En Fu Chiang, Brenda Chang, Samson Chang, David Cheng, Everview Inc., 961266 Ontario Inc., 1204360 Ontario Inc., 1243723 Ontario Inc., Aamazing Technologies Inc., Wen Wang Chiang aka Wen Chiang aka Wen Wang, Crystalview Technology Corp., E.C. Holdings Ltd., Telepower International (Canada), Inc., Best Buy Electronics Inc., Su Feng Tsai aka Tsai Su Feng, Tsai Zheng Li, Tsai Zheng Ying, Asia Pacific Gateway (H.K.) Ltd., Century Group Holdings Ltd., Albany Investments Ltd., Mei Huang, Winner International Group Limited, Huang Chi Lung, Min Huang, Wainwright Ventures Ltd., New Global Investment Limited and Floratino Limited, Defendants

BEFORE: D. M. Brown J.

COUNSEL: C. Francis and M. Freake, for the plaintiff Trustee, Mendlowitz & Associates Inc.

A. Blumenfeld and J. Gibson, for the plaintiff, Korea Data Systems (USA), Inc. (Disclosure motion)

G. Benchetrit, for KDS (Winner motion)

H. Book, for defendant, Christina Chiang

T. Curry, for the defendant/bankrupt, Jay Chiang

HEARD: Motions in writing

reasons for decision

I. Two outstanding issues

[1] Further to paragraphs 5 and 6 of Case Conference Memorandum No. 2 dated December 3, 2013, the parties have made submissions on the issues of (i) post-judgment interest on the judgment of Justice Seymour made April 20, 1998 (the “California Judgment”), and (ii) the precise terms of a Mareva injunction-in-aid of execution.

II. Post-judgment interest

[2] The parties agreed that simple interest should run on the California Judgment from April 20, 1998 until September 28, 1998, the date Jay Chiang (“Chiang”) made an assignment in bankruptcy, at the rate of 10% per annum, and I so order.

III. Mareva-in-aid of execution

[3] In paragraphs 448 and 691 of his Reasons dated July 9, 2012 (2012 ONSC 3922), A.C.J. Marrocco stated that due to the conduct of Jay Chiang throughout this litigation, it was necessary and appropriate to issue a Mareva injunction in aid of execution, but that this was not a case for a broad, imprecise Mareva injunction.

[4] A.C.J. Marrocco refused the request by KDS (USA) for a declaration that the debt owed to it by Chiang under the California Judgment would survive his discharge from bankruptcy pursuant to BIA s. 178(1)(d).

[5] KDS (USA) sought a Mareva injunction which would prohibit Chiang from (i) dealing with his assets wherever located and (ii) from dealing with any surplus income, as defined in the Bankruptcy Superintendent’s directive 11R2-2013 and, as well, would require him on a continuing basis to identify and disclose the whereabouts of all of his assets and income, including assets and income over which he exercises control or direction, including in respect of payment for his expenses and all documents relevant thereto. KDS submitted that such an order should continue until the earlier of (i) the date of Chiang’s discharge from bankruptcy and (ii) satisfaction by Chiang of his creditors’ claims, costs and damages.

[6] According to the Trustee, Chiang remains subject to the 2000 Mareva until the final disposition of the contempt proceedings. The Trustee submitted that the Mareva sought by KDS (USA) preventing Chiang from dealing with his assets wherever located appeared to be the type of broad and general order against which the trial judge had cautioned. The Trustee contended that the disclosure orders sought by KDS (USA) were redundant given the numerous disclosure orders outstanding against Chiang. The Trustee observed that it intended to interview Chiang on his current financial situation following the conclusion of the contempt proceedings and will file a BIA s. 170 report. The Trustee stated that Chiang had agreed to co-operate in that process. Finally, the Trustee observed that Chiang would be available to provide viva voce evidence at his discharge hearing.

[7] Chiang submitted that the request by KDS (USA) for a Mareva should be declined because it had not identified assets of Chiang over which such an order should attach contrary to the instructions of the trial judge. Chiang also submitted that KDS (USA) had not come to court with clean hands.

[8] On the latter point, counsel for the Trustee provided me with copies of the following Reasons released by A.C.J. Marrrocco since the start of this year: 2014 ONSC 2651, April 29, 2014; 2014 ONSC 2674, April 29, 2014; 2014 ONSC 3070, May 21, 2014; 2014 ONSC 3126, May 22, 2014. In reading those Reasons it became apparent that evidence has emerged since the conclusion of the trial which raises questions about the adequacy of the disclosure of material information made by KDS (USA)/Korea Data Systems Co. Ltd. on the motions to secure the initial ex parte orders. As the trial judge observed in his May 21, 2014 Reasons: “The Trustee is no longer satisfied that KDS Korea and Korea Data Systems (USA), Inc. were ever victims of a massive fraud.”

[9] In light of the evolving issue of the adequacy of the disclosure made by KDS Korea/KDS (USA), an issue which A.C.J. Marrocco will consider at the forthcoming sanction hearing, I think it would be inappropriate for me to deal further with the issue of a Mareva-in-aid of execution being, as it is, equitable relief. It appears that A.C.J. Marrocco will be hearing further material evidence on that point. I therefore decline to rule on this issue as originally contemplated by Case Conference Memorandum No. 2, and I leave the issue in the hands of the trial judge for further consideration in light of the new evidence which has emerged and which he will consider.

D. M. Brown J.

Date: June 13, 2014