SUPERIOR COURT OF JUSTICE - ONTARIO

B E T W E E N:

XUN LI CHENG

Plaintiff

-AND-

JOHN LEE also known as CHIN LEE, MARY HUANG also known as NING-SHENG MARY HUANG, 7997698 CANADA INC. carrying on business as INTERNATIONAL LEGAL AND ACCOUNTING SERVICES INC., WORLD INCUBATION CENTRE, or WIC (ON), and 1590291 ONTARIO LIMITED

Defendants

BEFORE: F.L. Myers J.

READ: August 14, 2015

endorsement

[1] This motion was referred to me by the registrar’s office pursuant to rule 2.1.01(7) following receipt of a written request of counsel for the plaintiff/defendant by counterclaim under subrule 2.1.01(6).

[2] The plaintiff asks the court to direct the registrar to send a notice in Form 2.1A to the defendant John Lee concerning the counterclaim that he delivered. The plaintiff submits that the counterclaim is frivolous, vexatious, and an abuse of process on its face and that it should be dismissed summarily under Rule 2.1.

[3] In her statement of claim, the plaintiff, a resident of the Republic of China, alleges that she was defrauded by the defendants concerning entrepreneurial immigration investment opportunities that they purported to offer. She seeks a refund of $30,000 that she paid to the defendant 7997698 Canada Inc. based on breach of contract, misrepresentation, and fraud.

[4] The statement of defence and counterclaim was delivered by the defendant Lee on behalf of all of the defendants. Mr. Lee is not a licensed lawyer and has no right to act for the other defendants. The statement of defence essentially claims that the defendants’ investment programmes were legitimate. In their counterclaim, the defendants seek over $25 million in damages and various injunctions against the plaintiff for “sabotaging” their business. The counterclaim pleads that the plaintiff defamed the defendants including making erroneous statements to the Ontario Securities Commission which led that body to freeze assets of the defendants and thereby cause them damage.

[5] There are numerous pleadings and legal issues apparent on the face of the counterclaim. In my view however, when read generously, the counterclaim sufficiently expresses the gravamen of cognizable causes of action. Moreover, while the defendant Lee plainly does not display knowledge of the Rules of Civil Procedure or the purposes of pleadings, the drafting errors and rhetorical excesses are not of the type to raise in my mind issues that suggest that the attenuated process of Rule 2.1 is appropriate. Put another way, I do not see on the face of the counterclaim a significant risk that the defendants will abuse the process of the court if faced with a regular motion procedure. Raji v. Borden Ladner Gervais LLP, 2015 ONSC 801, at paras. 8 and 9.

[6] The plaintiff brought an action in the Superior Court of Justice seeking damages of $30,000 plus interest and costs. The cause of action is not simple or straightforward. It is hard to imagine how it can be economically sensible in this case to sue for $30,000 in this court even utilizing the simplified procedure as has been done here. Even if summary judgment is available, given the nature of the causes of action, the costs of the motion would easily amount to a significant portion of the sum claimed. Holding an affordable trial of a $30,000 claim for fraud that involves understanding a number of different investment programmes and applicable immigration, tax, and securities law is a non-starter. I understand that if Rule 2.1 applied, the counterclaim could be struck or dismissed with little or no cost to the plaintiff. However, Rule 2.1 is not available simply to save money. It has a particular and limited reach to claims that are frivolous, vexatious, or an abuse of process on their face and in which the abbreviated process is needed to avoid the risks presented by a vexatious litigant as discussed in Raji, supra.

[7] I therefore decline to make a direction to the registrar under Rule 2.1 in this case.

________________________________ F.L. Myers J.

Date: August 14, 2015