SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Zheng v. Zhuo CV-16-126848 (Newmarket)
CITATION: 2017 ONSC 2561
MOTION HEARD: April 21, 2017
BEFORE: MASTER R.A. MUIR
COUNSEL: Jerome H. Stanleigh for the plaintiff Chris Donovan for the defendants
ENDORSEMENT
[1] There are two motions before the court. The first is a motion by the plaintiff for an order granting him leave to amend his statement of claim. The defendants take no position on this motion. In any event, it appears that the plaintiff is entitled to amend his statement of claim as of right pursuant to Rule 26.02(a) of the Rules of Civil Procedure, RRO 1990, Reg 194. Leave is hereby granted as requested.
[2] The plaintiff has brought another motion. He seeks an order requiring the defendants to answer certain questions refused on the cross-examinations of the defendants Linlong Zheng and Ling Feng Zheng (the “Children”). The defendants are opposed to the relief sought on this motion.
[3] This is an action seeking re-payment of a loan apparently made to the defendants Yanyu Zhuo and Wu Zheng (the “Parents”). These defendants are the parents of the defendants Linlong Zheng and Ling Feng Zheng. Although the Children were named as defendants in the original statement of claim, it does not appear to set out a cause of action against the Children. The cause of action in the statement of claim simply alleges loans made by the plaintiff to the Parents that have not been re-paid. The amendments to the statement of claim now sought by the plaintiff expand the pleading against the Children. The plaintiff now alleges that the Parents improperly transferred property to the Children and such property is impressed with a trust in favour of the plaintiff. It is important to note that these allegations were not part of the statement of claim at the time of the cross-examinations.
[4] The defendants have brought a motion seeking a stay of this action on the basis that this court has no jurisdiction over the subject matter of the action. That motion is scheduled to be heard by a judge on May 10, 2017. The defendants take the position that this action involves a loan made in China among parties resident in China. They submit that the Ontario courts have no jurisdiction to determine the issues in this action. Alternatively, they argue that China is the convenient forum for this claim.
[5] The defendants are opposed to this refusals motion for two reasons. First, they argue that the plaintiff has delayed bringing this motion and is in breach of a timetable order made by Justice Di Luca on December 15, 2016. The defendants take the position that this motion should be dismissed for this reason alone.
[6] I do not accept this argument. Although there has been some delay on the part of the plaintiff in bringing this motion, the delay has not been particularly lengthy or inordinate. The plaintiff’s motion record was delivered within one week after the deadline set out in the order of Justice Di Luca. This motion was then scheduled for the next available date having regard to the schedules of the court and counsel. In my view, this modest delay should not result in a serious sanction that prevents the plaintiff from having the issues on this motion determined on their merits.
[7] The defendants’ alternative position is that the refused questions are simply not relevant to the issues on the jurisdiction motion and are otherwise beyond the scope of proper cross-examination.
[8] The plaintiff takes the position that the court hearing a jurisdiction motion must consider all relevant factors when exercising its discretion. The plaintiff argues that the refused questions seek evidence that will be relevant to the issues and the judge’s exercise of his or her discretion on the jurisdiction motion.
[9] The principles governing the scope of cross-examination are summarized by Justice Perell in Ontario v. Rothman’s Inc., 2011 ONSC 2504 at paragraph 143; leave to appeal refused 2011 ONSC 3685 (Div Ct). For the purposes of this motion, it is important to note that the scope of cross-examination is narrower than an examination for discovery. The questions asked must be relevant to the issues on the pending motion or to matters raised in the deponent’s affidavit, even if not relevant to the issues on the motion. It is also important to note that when dealing with matters raised in an affidavit that are not relevant to the motion, some exercise of proportionality is appropriate. The courts retain a discretion not to order such questions to be answered where they will have little or no probative value to the underlying motion. See Babin v. Bayer Inc., 2016 ONSC 5069 at paragraphs 41 and 42; leave to appeal refused 2016 ONSC 8017 (Div Ct).
[10] The parties agree that the refused questions are accurately summarized in the charts included with the defendants’ responding record. I have carefully considered those questions with the above principles in mind. I have come to the conclusion that none of the questions need to be answered.
[11] The questions in issue on this motion all seek information with respect to the Children’s assets and sources of income. The questions posed are very broad and cover virtually all of the Children’s financial circumstances. The plaintiff seeks production of bank statements, lawyers’ files, mortgage applications and other similar documents. The plaintiff also asks for details about the kind of cars the Children drive and even seeks particulars of the furniture in their apartment.
[12] It is obvious that the plaintiff strongly suspects that the Parents transferred funds to the Children who are now apparently living a very comfortable lifestyle. The difficulty I have with this line of questioning, however, is that the information sought is simply not relevant to the issues on the jurisdiction motion. The statement of claim, as it stood at the time of the cross-examinations, was a simple contract claim seeking re-payment of certain loans made by the plaintiff to the Parents. The pleading does not include a cause of action against the Children. In my view, the financial circumstances of the Children can have no bearing on the outcome of the jurisdiction motion. That motion will consider factors such as where the parties reside and where the loan contracts were made. When determining the convenient forum, the court will look to the convenience and expense to the parties and witnesses, the law to be applied, enforcement issues and other similar factors. See Club Resorts Ltd. v. Van Breda, 2012 SCC 17 at paragraphs 90, 91 and 105.
[13] The Children’s financial circumstances are simply not relevant to any of these factors. In fact, they are not relevant to the matters in issue in the action as it was pleaded at the time of the examinations. The claim at that time was limited to the contract action against the Parents.
[14] Even if the amended pleading had been extant at the time of the examinations, it remains my view that the questions are not relevant to the issues on the jurisdiction motion. The questions are really directed to the merits of the plaintiff’s fraudulent conveyance claim. They do not relate to the question of this court’s jurisdiction to determine the dispute or whether China may be a more convenient forum.
[15] In their affidavits the Children state that the residential properties identified by the plaintiff in the statement of claim were not purchased by the Children with money loaned to the Parents by the plaintiff. While these statements may have opened the door to some limited questioning about how the Children paid for those properties, none of the questions in issue actually ask about the source of the funding for the purchase of those properties.
[16] For these reasons, I have concluded that the disputed questions need not be answered.
[17] I therefore order as follows:
(a) the plaintiff is hereby granted leave to amend his statement of claim in the form of the draft amended statement of claim at tab 2(c) of the plaintiff’s motion record dated March 22, 2017;
(b) the relief requested in the plaintiff’s notice of motion dated January 17, 2017 is dismissed;
(c) the formal order, once approved as to form and content, may be sent directly to me for signing; and,
(d) if the parties are unable to resolve the issue of costs they shall provide the court with brief written submissions by May 26, 2017.
Master R.A. Muir
DATE: April 25, 2017