ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-13-5248-00
DATE: 20151204
BETWEEN:
Kyoung Ja Yim, Moonho Yim and 2251363 Ontario Inc. c.o.b. Song Cooks Korean Restaurants - Thornhill
Sang Joon Bae, for the Plaintiffs
Plaintiffs
- and -
Chang Bae Song, Koung Ok Lee, 2212237 Ontario Inc. c.o.b. Song Cooks Corean Chilli and 2302632 Ontario Inc. c.o.b. Sharon Garden
Charles C. Chang and Jeffrey R. Baum, for the Defendants
Defendants
HEARD: November 27, 2015
REASONS FOR DECISION ON MOTION
Conlan J.
I. Introduction
[1] Very few things that we see in the context of civil litigation are as disheartening as the typical undertakings motion. This is one of those.
[2] I was to hear this long motion in Brampton on October 28, 2015. The Defendants asked for an adjournment. That request was contested. I granted the adjournment request. The reasons for that decision are included herein.
[3] The matter was argued before me in Owen Sound on November 27, 2015. I thought for sure that the hearing would end up being unnecessary in that the parties and counsel would have resolved the procedural wrangling. I was wrong. The wrangling is not done quite yet. A costs award may do the trick.
The Background
[4] In late 2013, the Plaintiffs issued a Statement of Claim against the Defendants. Principally, the case deals with an alleged breach of contract and alleged copyright/trademark infringements committed by the Defendants. There is a Counterclaim.
[5] From the Plaintiffs’ perspective, as their counsel indicated in submissions at Court on November 27 in answer to my query as to what the Plaintiffs’ theory of the case is, it boils down to the following. The parties were in the restaurant business together. The Plaintiffs allege that they were induced by the Defendants, primarily by Chang Bae Song, to invest money. The Plaintiffs did so. They got very little or nothing back for that investment. They were essentially swindled by Mr. Song.
[6] The Defendants were examined for discovery on December 9, 2014, March 31, 2015 and April 1, 2015.
[7] The Plaintiffs move for an Order compelling the Defendants to answer the undertakings given by them that remain unfulfilled (18 of them as of November 27, according to the Plaintiffs – 14 from the two examinations of Mr. Song and 4 from the one examination of Koung Ok Lee). Further, the Plaintiffs move for an Order that the Defendants answer the questions that were, according to the Plaintiffs, improperly refused – 98 of them, allege the Plaintiffs, as of November 27. All of that must be done within thirty days, the Plaintiffs request.
[8] The Plaintiffs’ motion is supported by Affidavits sworn by a law clerk employed by counsel for the Plaintiffs. Those Affidavits contain numerous Exhibits including correspondence between counsel, transcripts from the examinations and the pleadings. The Plaintiffs also filed Facta and Books of Authorities. The law, in my view, is well settled in this area.
[9] As of October 28, 2015, the Defendants had filed nothing on the motion. Since that time, they have: a two-volume Responding Motion Record, a Factum and a Book of Authorities.
[10] Unfortunately, the moving parties also filed a wealth of additional materials – a Supplementary Supplementary Motion Record, a Supplementary Factum and a Supplementary Book of Authorities.
[11] It all may end up calling for a “Supplementary Costs Order” on top of whatever is awarded to begin with.
The Adjournment Request
[12] At first blush, I thought that there was no merit to the adjournment request made by the Defendants.
[13] The motion date was pre-arranged by counsel on both sides to take place in Brampton during the week of October 26, 2015. That was done in early June 2015, more than four months before October 28.
[14] Further, the Plaintiffs’ motion materials were all delivered by late September 2015, more than a full month before the originally scheduled hearing date.
[15] Third, this is not a complex matter. Undertakings given must be fulfilled – that is the general rule. Questions that have relevance to the issues in the case, as defined by the pleadings, must be answered – that is the general rule.
[16] This is not rocket science. The fact that the Courts are inundated with lengthy motions to deal with disputes arising from examinations for discovery is unfortunate and unnecessary.
[17] After hearing from Mr. Chang on October 28, however, I granted the adjournment. At that time, Mr. Chang was brand new counsel of record for the Defendants. The former counsel had experienced some serious health issues which contributed to the failure of the Defendants to file any materials before October 28.
[18] It appeared to me that Mr. Chang was eager to move the matter along. There was little if any prejudice to the Plaintiffs in granting the adjournment because of the quick turnaround to November 27 and because I endorsed the file that costs up to and including the Court attendance on October 28 were reserved to November 27.
[19] As it turns out, I am relieved that I granted the adjournment request. Mr. Chang’s materials were very helpful to me.
II. The Law
[20] No treatise is necessary to understand the applicable law.
[21] Undertakings given at an examination for discovery, including questions taken under advisement, must be answered within 60 days, failing which the party who gave the undertaking or took the question under advisement is deemed to have failed to answer: subrule 37.01(1) of the Rules of Civil Procedure.
[22] Serious consequences can result from the failure to fulfill an undertaking or answer a proper question, including the striking of the party’s pleading: subrule 34.15(1).
[23] An undertaking given at an examination for discovery is a promise. It binds the party that gave it. It must be honoured. It is not subject to negotiation. Towne v. Miller, 2001 28006 (ON SC), at paragraphs 9 and 11.
[24] At an examination for discovery, questions are permitted on anything that is “relevant to any matter in issue”: Rule 31.06.
[25] The scope of discovery is not unlimited, however. It is defined by the pleadings. Discovery questions must be relevant and material to the issues in the case as defined by the pleadings. Ontario v. Rothmans Inc., 2011 ONSC 2504, [2011] O.J. No. 1896 (ON SC), at paragraph 129.
[26] Discovery is not a “free-for-all” or a fishing expedition. It is not an opportunity for counsel to learn the case as s/he goes and ask any and all questions in the hope of stumbling upon something that will help his or her client. Tanner v. McIlveen, 2009 18676 (ON SC), at paragraphs 7 and 22.
[27] A certain degree of proportionality must come in to play in determining whether it is proper for a party to refuse to answer a question or refuse to give an undertaking at an examination for discovery. If the answer is bound to be useless, for example, what is the point in wasting everyone’s time and money? Fontaine v. Canada (Attorney General), 2015 ONSC 3185, at paragraphs 19 and 21.
[28] I am particularly fond of the following passage from the very recent decision of Aston J. in Kochar v. Kochar, 2015 ONSC 6650, at paragraph 4. I agree with the sentiment that Courts must be careful to not allow the discovery process to hijack the entire case.
[4] One of the major reforms that followed the subsequent work of the Task Force on the Discovery Process in Ontario was an amendment to the Rules of Civil Procedure emphasizing the “proportionality principle” as an overarching and general operative element in those rules. The proportionality principle was already enshrined in the Family Law Rules by Rule 2. Rule 2 encourages courts to downsize the procedure in any given case so long as the court is still able to justly deal with the issue raised. Comprehensive or exhaustive oral examination or production of documents may make access to justice unnecessarily expensive or protracted. Merely proving the relevance of a document may be insufficient to warrant production. To order production the court must be satisfied that it would be “unfair” to the party seeking production to go on with the case without the document or information. In essence the document must be found to be important to a party’s case, especially in relation to the amount at stake: see Himel v. Greenberg, 2010 ONSC 2325 at paras. 27 and 30 – 31.
III. Analysis
A Summary of the Issues and the Positions of the Parties
[29] At the commencement of the hearing in Owen Sound on November 27, 2015, each side complained about the alleged inappropriateness of the other side’s materials on the motion. It was not a good start.
[30] In my view, it was best that we simply move on and determine the motion on its merits. Enough time and money have been expended to date on discovery issues. It is time to progress to other stages of the litigation process.
[31] Quite responsibly, the Plaintiffs are not asking for the moon here. They are not suggesting that the Court strike out the Defence and Counterclaim, for instance.
[32] They merely ask that the Defendants be compelled to do what the law requires them to do.
[33] The problem for the Plaintiffs is that there is a difference between (i) an undertaking fulfilled but the answer being unsatisfactory to the party who sought the information and (ii) an undertaking that is simply unfulfilled (whether ignored completely or only partially answered). This case is an example of the former.
[34] To understand what undertakings remain in issue, one needs to refer to two primary sources: (i) the Supplementary Factum of the Plaintiffs (dated November 17, 2015), starting at page 2, plus (ii) the charts at tabs D and E of Volume 1 of the Responding Motion Record of the Defendants.
[35] The alleged outstanding undertakings arise from the examinations for discovery of Chang Bae Song, the principal Defendant, on December 9, 2014 and March 31, 2015 (14 alleged unfulfilled undertakings), and from the examination of the other individual Defendant, Koung Ok Lee, on April 1, 2015 (4 alleged unfulfilled undertakings).
[36] One of the main submissions advanced by the Plaintiffs is that the Defendants have simply not put forward their best efforts to satisfy the undertakings that they have given. According to counsel for the Plaintiffs, the Defendants must show particulars of what they did and when.
[37] The Defendants submit that they have fulfilled all of the undertakings given.
[38] The crux of the dispute on the alleged outstanding undertakings is whether they have been adequately fulfilled (not whether they were given at all).
[39] As for the alleged improper refusals, counsel for the Plaintiffs listed them for me in his submissions at Court on November 27: (i) numbers 5 and 7 from the examination of Mr. Song in December 2014, (ii) numbers 1, 3-7, 9, 11-12, 17, 18, 20-25, 27-33, 35-42, 46, 52-53, and 55-84 from the examination of Mr. Song in March 2015, and (iii) numbers 1-2, 13-26, and 30-34 from the examination of Ms. Lee in April 2015.
[40] That does not total 98 as indicated by counsel for the Plaintiffs; it totals 88.
[41] In any event, most of the alleged improper refusals are questions that were not answered at the times of the examinations themselves, while about eleven of them are matters that were taken under advisement and have not been answered since.
[42] The Defendants concede the existence of refusals, however, they submit that “all maintained refusals are proper” (paragraph 3 of the Factum of the Defendants).
[43] The crux of the dispute on the alleged improper refusals is whether the items asked about are relevant (not whether there are, in fact, refusals).
[44] With regard to both issues, the alleged unfulfilled undertakings and the alleged improper refusals, the Defendants submit that this is a classic case of the Plaintiffs and their counsel never being satisfied. Further, the Defendants argue that many of the disputed items relate to documentation sought by the Plaintiffs that post-date September 2011, the time when the parties split – one side took over the Mississauga restaurant while the other operated the North York location. That is why, submit the Defendants, they are justified in not providing certain documents after September 2011.
[45] On that point, counsel for the Plaintiffs argues that his clients maintained profit-sharing rights well after September 2011 (even to the present time), and thus, documentation post-September 2011 is relevant and ought to be produced by the Defendants.
Findings
Undertakings
[46] The Plaintiffs allege that the Defendants’ answer to undertaking number 5 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to look for and provide particulars, and documents if available, of the transfers of $70,000.00 and $40,000.00 between the Sharon Garden account and the 221 account (note that 221 is a short form for the corporate Defendant whose number begins with those three digits, and Sharon Garden is another corporate Defendant).
[47] I have examined the documents at tab 4, volume 1 of the Responding Motion Record of the Defendants (“File No. 4”). Those particulars and those documents fulfill the undertaking given. There is nothing deficient about the answer.
[48] The Plaintiffs allege that the Defendants’ answers to undertakings 9 and 38 given during the examination of Mr. Song on March 31, 2015 are deficient. The undertakings given were to provide any receipts available for the setting up of the 221 business (undertaking number 9) and to provide proof of payments that were made to the various parties named at tab 54 of the document brief that Mr. Song was being referred to during his examination (undertaking number 38).
[49] I have examined the documents at tab 16, volume 1 of the Responding Motion Record of the Defendants (“File No. 17”). Those particulars and those documents fulfill the undertakings given. There is nothing deficient about the answer. The Plaintiffs allege that they cannot find some of the documents referred to in the answer. That does not make the answer deficient. It may justify counsel for the Plaintiffs requesting that counsel for the Defendants re-copy the documents referred to in the answer from the Defendants’ Affidavit of Documents, however, that is a separate issue.
[50] The Plaintiffs allege that the Defendants’ answer to undertaking number 13 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to inquire at Toronto Korean Credit Union for documents showing who opened the account for 221 and to provide such documents.
[51] I have examined the answer given by the Defendants (see page 55 of volume 1 of the Responding Motion Record of the Defendants). That answer fulfills the undertaking given. There is nothing deficient about the answer. There are no documents to provide – the Credit Union has none. Besides, the Plaintiffs have the answer as to who opened the account – the President of the corporation. The Plaintiffs complain that they do not have copies of the correspondence between counsel for the Defendants and the Credit Union. That is irrelevant. The answer is what is important. Proof of attempted compliance with an undertaking is only required when the Defendants rely upon the “best efforts” principle (in other words, when the undertaking cannot be fulfilled despite diligent efforts to do so). That is not the case here; the answer as to who opened the account is known.
[52] The Plaintiffs allege that the Defendants’ answer to undertaking number 15 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to provide, within 90 days, clarification of the invoices at tab 5 of the brief that was being referred to at that time during the examination.
[53] I have examined the documents at tab 9 of volume 1 of the Responding Motion Record of the Defendants (“File No. 10”). Those documents fulfill the undertaking given. There is nothing deficient about the answer. The chart provided by the Defendants provides the necessary clarification. It shows, for each item, the payee, the amount, the name of the restaurant that used the item purchased, the payor and payment method.
[54] The Plaintiffs complain that they need to know what specifically was bought. In many cases, actual receipts were provided by the Defendants. In the other cases, where there is no receipt which shows what exactly was purchased, I do not know how anyone would know as many of the amounts are relatively small and relate to purchases made some time ago. The answer may not be perfect but is certainly satisfactory.
[55] The Plaintiffs allege that the Defendants’ answer to undertaking number 16 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to provide a translation of tab 6 of the document brief and evidence that the payments in question were actually made and for what purpose.
[56] I have examined the document at tab 10 of volume 1 of the Responding Motion Record of the Defendants (“File No. 11”). I have also examined the documents at tab 16 of the same brief (“File No. 17”). Those documents fulfill the undertaking given. There is nothing deficient about the answer. The chart at tab 16 shows the name of the payee, the apportionment of the expense, the amount and a reference to the relevant document(s) contained in the Defendants’ Affidavit of Documents.
[57] The Plaintiffs complain that they need to have further particulars, for example, copies of cheques written or credit card slips and receipts to ensure that the payment was actually made and to know what precisely the expense was for. It is true that such documentation would be ideal. The Plaintiffs are not left without a remedy, however. They can now safely assume that there is no such documentation. If the Defendants try to introduce the same at trial, it will very likely not be permitted by the trial judge. Again, the answer may not be perfect but is certainly satisfactory.
[58] The Plaintiffs allege that the Defendants’ answer to undertaking number 17 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to provide a translation of tab 7 of the document brief and evidence that the payments in question were actually made and for what purpose.
[59] I have examined the document at tab 11 of volume 1 of the Responding Motion Record of the Defendants (“File No. 12”). I agree with the Plaintiffs that the document at page 216 of volume 1 of the Responding Motion Record of the Defendants is deficient. Not all of the figures are clearly decipherable. There are no dates or even approximate dates. I cannot tell which amounts pertain to the Rona card. In short, the document is a far cry from the details provided elsewhere by the Defendants.
[60] The Defendants shall, within thirty days of the release of these Reasons, provide something better than that in fulfillment of undertaking number 17. So ordered.
[61] The Plaintiffs allege that the Defendants’ answer to undertaking number 18 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to provide proof of payment regarding tab 8 of the document brief being referred to during the examination.
[62] I have examined the Defendants’ answer to that, found at page 58 of volume 1 of their Responding Motion Record. I see nothing objectionable or deficient about that answer. The undertaking has been fulfilled. The Plaintiffs complain that the answer is confusing because they cannot locate the relevant documents being referred to by the Defendants at either tab 3 or 4 of exhibit 3 (the exhibit having been marked during the examination of Mr. Song). The Plaintiffs have misread the answer. They were not referred to tab 3 or 4 of that exhibit – they were referred in the answer to tabs 5 and 8 of exhibit 3.
[63] The Plaintiffs allege that the Defendants’ answer to undertaking number 33 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to advise whether Mr. Song borrowed money from the 221 corporation in 2010 and, if so, provide proof of the borrowing.
[64] I have examined the Defendants’ answer to that, found at page 64 of volume 1 of their Responding Motion Record. I see nothing objectionable or deficient about that answer. The undertaking has been fulfilled. The answer is, effectively, “no”. Mr. Song did not borrow any money from that corporation in that year. The words used in the answer may be that Mr. Song does not recall having borrowed any money from that corporation in 2010, however, that is a distinction without any practical effect.
[65] The Plaintiffs allege that the Defendants’ answer to undertaking number 34 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to advise whether Mr. Song borrowed money from the 221 corporation in 2011 and, if so, provide proof of the borrowing.
[66] I have examined the Defendants’ answer to that, found at page 64 of volume 1 of their Responding Motion Record. What I found with regard to undertaking number 33 applies equally here. The undertaking has been fulfilled.
[67] The Plaintiffs allege that the Defendants’ answer to undertaking number 35 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to advise whether Mr. Song lent money to the 221 corporation in 2010 and/or 2011 and, if so, provide proof of the lending.
[68] I have examined the Defendants’ answer to that, found at pages 64-65 of volume 1 of their Responding Motion Record. What I found with regard to undertaking number 33 applies equally here. The undertaking has been fulfilled.
[69] The Plaintiffs allege that the Defendants’ answer to undertaking number 45 given during the examination of Mr. Song on March 31, 2015 is deficient. The undertaking given was to provide the signed Articles of Incorporation for the Mississauga and Vaughan restaurants.
[70] I have examined the documents at tab 21 of volume 2 of the Responding Motion Record of the Defendants (“File No. 22”). I agree with the Plaintiffs that the answer is deficient. It is no proper answer to simply state that the Plaintiffs already have the documents requested. If that is the case, then the undertaking ought not to have been given in the first place. Besides, the documents at tab 21 do not state that the Plaintiffs already have the Articles of Incorporation. At their highest, the documents at tab 21 allege that the minute books were, to the best of counsel’s recollection, released to Mr. Yim in 2009.
[71] The undertaking has not been fulfilled. The Defendants shall, within thirty days, either provide the requested documents or advise that they cannot be found. So ordered.
[72] The Plaintiffs allege that the Defendants’ answers to undertakings 50 and 51 given during the examination of Mr. Song on March 31, 2015 are deficient. The undertakings given were both regarding a May 17, 2011 cheque. Plaintiffs’ counsel asked an inordinate number of questions at the examination about that one cheque. The Plaintiffs complain that they do not know exactly what the Defendants asked of the Toronto Korean Credit Union and/or what specifically the latter replied.
[73] My comments above regarding undertaking number 13 apply equally here. The answers have been provided: the cheque was not deposited in to any other bank account besides 1009960, and there is no explanation as to why the date of deposit of the funds as indicated on the bank statement appears to be different than the date on the back of the cheque. Some things are simply inexplicable. The undertakings have been fulfilled.
[74] The Plaintiffs allege that the Defendants’ answers to undertakings 2 and 3 given during the examination of Ms. Lee on April 1, 2015 are deficient. The undertakings given were to make inquiries of the Toronto Korean Credit Union about documents provided to the Credit Union by Ms. Lee (undertaking number 2) and about documents received by Ms. Lee from the Credit Union up to September 2011 (undertaking number 3).
[75] I have examined the Defendants’ answers to those undertakings at page 96 of volume 1 of their Responding Motion Record. There is nothing deficient about those answers. The undertakings have been fulfilled. The Credit Union is unable (or perhaps unwilling) to provide copies of any of those documents, if there are any.
[76] The Plaintiffs complain that they need more particulars of the correspondence to and from the Credit Union regarding the attempts made by the Defendants to fulfill those undertakings. I disagree. If the Plaintiffs are not content to simply rely upon the absence of any evidence, which absence of evidence suggests that there were no documents exchanged between Ms. Lee and the Credit Union during the relevant time period, then the Plaintiffs are free to follow-up further with the Credit Union itself.
[77] The Plaintiffs allege that the Defendants’ answer to undertaking number 6 given during the examination of Ms. Lee on April 1, 2015 is deficient. That is the exact same undertaking as number 5 given during the examination of Mr. Song on March 31, 2015, and thus, my comments are also the same. There is no deficiency. The undertaking has been fulfilled.
[78] The Plaintiffs allege that the Defendants’ answer to undertaking number 11 given during the examination of Ms. Lee on April 1, 2015 is deficient. That relates to the same issue that undertaking number 51 given during the examination of Mr. Song on March 31, 2015 addresses, and consequently, I make the same comments as above. The undertaking has been fulfilled.
Refusals
[79] I repeat below, for convenience, the position of the Plaintiff as outlined earlier in these Reasons.
[80] As for the alleged improper refusals, counsel for the Plaintiffs listed them for me in his submissions at Court on November 27: (i) numbers 5 and 7 from the examination of Mr. Song in December 2014, (ii) numbers 1, 3-7, 9, 11-12, 17-18, 20-25, 27-33, 35-42, 46, 52-53, and 55-84 from the examination of Mr. Song in March 2015, and (iii) numbers 1-2, 13-26, and 30-34 from the examination of Ms. Lee in April 2015.
[81] First, let us deal with the examination of Mr. Song in December 2014. Looking at the chart contained at tab D of volume 1 of the Defendants’ Responding Motion Record, item number 5 is a question posed to Mr. Song about invoices from Hondori Express for things stored there by Mr. Song when he moved to the Thornhill location. The refusal by the Defendants’ then counsel was based on the issue not being relevant. I agree that the issues of storage and storage fees have nothing to do with the claim by the Plaintiffs. The refusal was proper.
[82] As for item number 7, that relates to a question as to whether Mr. Song was running a business (a restaurant) at 1370 Dundas Street East in Mississauga. The refusal by the Defendants’ then counsel was based on his belief that the question was being asked only because one of the Plaintiffs was aware of the location through being contracted as a court interpreter in an unrelated action. I am of the view that the refusal was proper, however, not necessarily for the reason given at the time by the Defendants’ then counsel but more important because the question has absolutely no relevance to the claim by the Plaintiffs.
[83] Turning next to the examination of Mr. Song in March 2015, all of the below references to the word “item” mean the refusal number as provided in the chart found at tab D of volume 1 of the Responding Motion Record of the Defendants.
[84] Item number 1 is virtually the same as item number 7 from Mr. Song’s earlier examination, and thus, my comments above apply equally here. The refusal was proper.
[85] Items 3-6 all deal with the 1370 Dundas Street East location, and therefore, my comments about item number 7 from Mr. Song’s earlier examination apply equally to all of those questions. The refusals were proper.
[86] Item number 7 relates to a request for the articles of incorporation for the Bloor Street restaurant. That request was refused by the Defendants’ then counsel on the basis of non-relevance. The Plaintiff’s counsel countered by pointing out that the said restaurant is mentioned in the Defendant’s pleading. With respect, that alone is insufficient to make the request a relevant one. The refusal was proper. The requested document has nothing to do with the Plaintiff’s claim.
[87] Item number 9 relates to a request for the lease agreement for that same Bloor Street restaurant. My comments regarding item number 7 apply equally here. The refusal was proper.
[88] Items 11-12, 42, 56, 66 (at least to a significant extent), 81 and 84 are no longer contentious/outstanding issues. In fact, item number 84 never was at the time that it was asked because the same question had already been asked and answered earlier in the examination. I suspect that counsel for the Plaintiffs inadvertently misspoke when he listed all of these refusals as still being outstanding at Court on November 27.
[89] It is likely the case that there have been so many undertakings requested and so many questions asked over so many days that even the Plaintiffs are getting confused as to what has been already answered.
[90] Item number 17 is a refusal to answer what Mr. Song’s position was at the 7171 Yonge Street, Thornhill restaurant. The refusal was on the basis of the question being overly broad in that counsel for the Plaintiffs was not willing to state any time period. I agree that the question is overly broad. Stubbornness got in the way of reasonableness. The refusal was proper.
[91] Item number 18 is a refusal to provide lease agreements for yet even more restaurants. The refusal was proper. There is no relevance. My comments regarding item number 7 apply equally here.
[92] Item number 20 is a refusal to provide records of Mr. Song’s credit rating. The refusal was based on non-relevance. I agree. The refusal was proper. Mr. Song’s credit rating could only be tangentially relevant if the argument is that he induced the Plaintiffs to invest money in restaurants because he could not afford to borrow money otherwise due to a bad credit rating. That does not appear to be a part of the Plaintiff’s theory of the case.
[93] Items 21 and 22 are refusals to provide Canada Revenue Agency (“CRA”) documents for Mr. Song, post-September 2011. I agree with the Defendants that those documents are not relevant. The refusals were proper. Remember that the theory of the Plaintiffs is that they were swindled by Mr. Song. They were induced to invest money and got nothing or next to nothing in return. In addition, the Defendants misappropriated corporate funds and improperly withheld profit sharing monies from the Plaintiffs. The documents requested have no relevance at all to the inducement issue – there is no factual or temporal nexus between the investments made by the Plaintiffs and Mr. Song’s financial situation in 2012. As for the misappropriation argument and the profit-sharing issue, the requested documents have a semblance of relevance to those issues but not enough to go down the garden path of disproportionate discovery. In addition, those latter issues (misappropriation and profit-sharing), even according to the Plaintiff’s pleading, were very much alive pre-September 2011. CRA documents for Mr. Song pre-September 2011 have been disclosed, and therefore, the Plaintiffs should have plenty of ammunition already to prosecute their claims.
[94] It is worth repeating that everyone agrees that the parties split in September 2011. Although it is argued by the Plaintiffs that they remained entitled to profit-sharing well after then (in fact, continuing until today), the fact that the split occurred clearly crystalizes the most relevant time period as being that which predates September 2011.
[95] The same comments apply to items 30-33, 35, 36, 38, 53, 61, 63, 65, 67, 68, 71, 80, 82 and 83. Those refusals were proper based on the time periods in question (all post-September 2011, at least in part).
[96] Item number 23 is a refusal to provide Mr. Song’s personal bank account statements for a specified period of time. I agree with the Defendants that those are unnecessary given the answer provided about the transfer of funds in question. The particulars of the transfer were provided. It is overkill to require the personal bank account statements. The refusal was proper.
[97] The same comments apply to items 24, 25, 27, 28 and 29. All of those refusals were proper based on redundancy and disproportionality.
[98] Item number 37 is a refusal to provide the names and addresses of other persons who invested in the Sharon Garden restaurant (specifically, those who contributed money to three separate and specified amounts - $40,000.00, $70,000.00 and $170,000.00). The refusal was based on non-relevance.
[99] That refusal was improper. Sharon Garden is a key part of the litigation. The identities of other investors are pieces of relevant information that ought to be readily available to Mr. Song, if there were any.
[100] Within thirty days of the date of the release of these Reasons, counsel for the Defendants shall provide to counsel for the Plaintiffs the information requested, limited to the time period before the split in September 2011, if there were any other investors. So ordered.
[101] It may very well be that Sharon Garden did not exist, nor had there been any investments made towards it, before September 2011. If that is true, then the order may be satisfied by simply stating that.
[102] The same order is made with regard to items 39-41 and 70, again limited to the time period before September 2011 and again subject to the same stipulation noted immediately above. Those are all relevant for the same reasons as stated for item number 37. Those refusals were improper.
[103] Items 72-79 are different, however. Although they all relate to Sharon Garden, they all appear to be targeted at the period post-September 2011, and thus, for the reasons stated above, those refusals were all proper on the basis of non-relevance.
[104] The same order is made regarding item 55 (which is the same question as item 59 and nearly the same question as item number 64), again limited to the time period before September 2011. That relates to whether Song Cooks Corean Chilli had any accounts other than the one at Toronto Korean Credit Union. That refusal was improper. Song Cooks is a key part of the litigation. The answer ought to be readily known to Mr. Song.
[105] Item number 46 is the same as item number 5 in Mr. Song’s earlier examination. My comments remain unchanged. The refusal was proper.
[106] Frankly, I do not understand the question at item number 52. I doubt that Mr. Song or counsel for him at the time did either. The refusal was proper.
[107] Item number 57 is a refusal to provide personal bank statements for Mr. Song. The refusal was proper. Unless counsel for the Plaintiffs can demonstrate, probably from the CRA documents for Mr. Song pre-September 2011 already disclosed, that there is good reason to believe that the personal bank records of Mr. Song will be relevant to the misappropriation of funds and profit-sharing issues, it is pure fishing.
[108] The same comments apply to item 58. That refusal was proper.
[109] Item number 60 is a refusal to provide employment files for employees of Song Cooks. That refusal was proper. Again, there is absolutely no relevance; just the pole in the lake searching for fish. The same goes for item number 62 (again, employment files) – that refusal was proper.
[110] Finally, let us look at the refusals from the examination of Ms. Lee on April 1, 2015. The references to “item” below all relate to the refusal number as provided in the chart located at tab E of volume 1 of the Responding Motion Record of the Defendants.
[111] Item number 1 is no longer outstanding.
[112] Item number 2 relates to Ms. Lee’s credit rating records. That refusal was proper. My comments about item number 20 from Mr. Song’s March 2015 examination are incorporated here.
[113] Items 13-26 and 30-34 are all redundant. Frankly, I am not sure why Ms. Lee even needed to be examined. It is patently obvious from the pleadings that Mr. Song is the main Defendant. Everything asked of Ms Lee was either already asked of Mr. Song or could not possibly have been helpful to the case given Ms. Lee’s relatively subordinate role in the whole affair. All of those refusals were proper. All of those items illustrate very well the problem of disproportionality.
IV. Conclusion
[114] For all of the reasons outlined herein, except for the very few items where orders were made (regarding just two undertakings and just six refusals), the Plaintiffs’ motion is dismissed.
[115] The Defendants will have their costs of this motion. There will be no costs awarded to either side for the Court attendance in Brampton on October 28, 2015. If the issue of costs cannot be resolved between the parties, I will accept written submissions, limited to two pages in length excluding attachments, delivered electronically to my judicial secretary, Melissa Curtis, at Melissa.Curtis@ontario.ca. The Defendants’ submissions are due by the end of this year. The Plaintiffs’ submissions are due within two weeks of receipt of the Defendants’ submissions. No reply is permitted.
Conlan J.
Released: December 4, 2015
COURT FILE NO.: CV-13-5248-00
DATE: 20151204
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Kyoung Ja Yim, Moonho Yim and 2251363 Ontario Inc. c.o.b. Song Cooks Korean Restaurants - Thornhill
Plaintiffs
- and -
Chang Bae Song, Koung Ok Lee, 2212237 Ontario Inc. c.o.b. Song Cooks Corean Chilli and 2302632 Ontario Inc. c.o.b. Sharon Garden
Defendants
REASONS FOR DECISION ON MOTION
Conlan J.
Released: December 4, 2015