Court File and Parties

CITATION: MGM Grand Hotel v. Chiu, 2016 ONSC 1071

COURT FILE NO.: CV-15-527306

DATE: 20160210

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MGM Grand Hotel, LLC and Bellagio, LLC, Plaintiffs

AND:

Yun K. Chiu also known as Yun Kom Chiu also known as Kom Yun Chiu also known as Chiu Yun Kom also known as Yun Chiu Kom also known as Kom Chiu Yun also known as Chium Kom Yun, Defendant

BEFORE: Sean F. Dunphy J.

COUNSEL: S. Green, for the Plaintiff

Defendant in Default

HEARD: February 10, 2016

ENDORSEMENT

[1] This is a motion for default judgment brought by the plaintiffs against a defendant who has been noted in default. The plaintiffs have sued the defendant on various negotiable instruments signed by him at each of the two plaintiff casinos. These instruments were subsequently reduced to default judgment issued by the District Court of Nevada dated December 18, 2014.

Overview of Facts

[2] The evidence before me establishes that the defendant was served with the Amended Statement of Claim by way of an alternative to personal service and has been noted in default. It also establishes the following (all dollar amounts below in US dollars unless otherwise noted):

a. The defendant executed a series of nine negotiable instruments drawn on a Toronto branch of the Royal Bank of Canada totaling US$190,000 in favour of the plaintiff Bellagio, each dated December 12, 2013 and each returned dishonoured on or about December 31, 2013;

b. The plaintiff Bellagio has admitted that the defendant is entitled to US$7,000 in credit as against the amounts due;

c. The defendant executed a series of six negotiable instruments drawn on a Toronto branch of the Royal Bank of Canada totaling US$75,000 in favour of the plaintiff MGM, each dated December 11, 2013 and each returned dishonoured on or about December 26, 2013;

d. The plaintiffs sought and obtained default judgment against the defendant dated December 18, 2014 in the following amounts:

i. Bellagio received judgment of US$183,000 in respect of the dishonoured negotiable instruments (net of the credit of US$7,000), US$12,818.77 in respect of pre-judgment interest at the Nevada statutory rate, US$4,500 in unspecified damages and US$49,150 for “attorney fees” (total of US$249,468.77);

ii. MGM received judgment of US$75,000 in respect of the dishonoured negotiable instruments, US$6,030.31 in respect of prejudgment interest at the Nevada statutory rate, US$3,000 in unspecified damages and US$20,235 in “attorney fees” (total of US$104,265.31);

iii. Both plaintiffs jointly received judgment of US$962.98 for “plaintiffs’ expended costs”.

[3] While the source of the unspecified damages amounts does not appear in the records, the figure works out to $500 per dishonoured instrument (nine for Bellagio and six for MGM) – a mathematical fact that appears evident from the record but is not otherwise explained.

[4] The plaintiffs seek to enforce the default judgment or to enforce the underlying debt in the same amount.

Issues

[5] The following issues are raised by this motion:

a. Should the default judgment from Nevada be enforced?

b. If not, what debt have the plaintiffs proved in this default proceeding?

Analysis and Discussion

(i) Should the default judgment from Nevada be enforced?

[6] In order to enforce the Nevada default judgments on this default proceeding, I must be satisfied that Nevada had personal jurisdiction over the defendant when issuing the judgment in question.

[7] Neither the Nevada judgment itself nor the Amended Statement of Claim provide any indication of why Nevada ought to be found to have validly exercised personal jurisdiction beyond the allegation that the negotiable instruments in question were made while the defendant was at the plaintiffs’ respective places of business in Las Vega, Nevada. The instruments themselves are cheques drawn by a Canadian resident upon a Canadian bank at its Toronto branch.

[8] There is no indication on the record before me of the means of service of the Complaint giving rise to the default judgment (i.e. whether served by some equivalent to service ex juris or whether personally served when the defendant was in the jurisdiction).

[9] The test to applied by me in considering whether to enforce a judgment of a foreign court is the “real and substantial connection” test described by the Supreme Court of Canada in the cases of Morguard Investments Ltd. v. De Savoye, 1990 CanLII 29 (SCC), and Club Resorts Ltd. v. Van Breda, [2012] 1 SCR 572, 2012 SCC 17.

[10] Did Nevada have a real and substantial connection with the lis represented by the default judgment?

[11] A preliminary question is what I should look at to make that determination. The face of the judgment itself – if I am to be restricted to it – is not very informative on the topic. It merely refers the amounts owing for “unpaid credit instruments”. The Statement of Claim seeking to enforce the judgment – containing allegations deemed to be true by reason of the defendant’s default in Ontario – adds the further fact of those instruments being drawn on the Royal Bank of Canada and being given to the plaintiffs in Las Vegas, Nevada.

[12] The plaintiff has filed additional evidence providing further background. This evidence consists of two law clerk’s affidavit from Toronto counsel