Court File and Parties

COURT FILE NO.: CV-11- 433846 DATE: 20170601 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2383431 Ontario Inc. AND: Rose of Sharon (Ontario) Retirement Community, Woo Kim, Jongho Lee, Adam Yoo, Jeongmin Ryu, Jae Hoon Cho, Richard Yoon, Jane Kim, Helen Huh and Lawrence Kim

BEFORE: Madam Justice J.T. Akbarali.

COUNSEL: J. Baichoo and J. D’Aloisio, for the Plaintiff/Moving Party B.G. McEachern, for the Defendant/Responding Party, Lawrence Kim S. Grayson, for the Defendant/Responding Party Richard Yoon P. Cho, for the Defendants/Responding Parties Jane Kim and Helen Huh S. A. Alexanian, for the Defendants/Responding Parties Woo Kim, Jongho Lee, Jeongmin Ryu, Jae Hoon Cho and Adam Yoo

HEARD: Submissions in writing

Endorsement

[1] On April 18, 2017 I released reasons dismissing the plaintiff’s motion seeking summary judgment on a mortgage guarantee: 2017 ONSC 2351. I found that this was not an appropriate case for summary judgment because the record did not allow me to address the serious questions raised regarding the validity and enforceability of the guarantee. I identified several evidentiary deficiencies, including the lack of information about the relationships between Mr. Hui, Unimac, and IWOK (about which the plaintiff refused questions on cross-examination) and the lack of information about related litigation against Unimac, on which plaintiff’s counsel is retained but about which very little evidence was led. I also expressed reservations about granting partial summary judgment because I did not consider it wise to interpret part of the guarantee when I could not resolve all the issues on the motion, including issues that involved the interpretation of other parts of the guarantee. In the circumstances, I had no confidence that I could reach a just conclusion on the basis of the record before me.

[2] In accordance with the direction of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 I seized myself of this action. I directed the plaintiff to arrange a case conference which was to take place before me by May 31, 2017. Although that day has passed, for reasons unknown to me, no case conference has been arranged, let alone taken place.

[3] I directed the parties to provide me with written submissions on costs so I could address that issue. They have done so. The plaintiff raises additional issues in its costs submissions, asking me to order a mini-trial under r. 20.04(2.2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, or an expedited trial. It suggests that in either case, the affidavits and cross-examinations conducted should form the evidentiary basis for the proposed trial process.

Costs

[4] On this motion, the defendants [^1] seek their partial indemnity costs in the total amount of $90,673.38. They argue that their costs were increased because the plaintiff took certain steps which led to unnecessary attendances. They argue that they allocated work between themselves which reduced the defendants’ costs overall. They argue that the motion, brought before discoveries, was premature, and dismissed for a lack of evidence stemming from the plaintiff’s refusal to answer relevant questions on the issue of the relationship of IWOK, Unimac and Mr. Hui. They argue it would be a disproportionate burden for their clients to bear the entirety of their costs of the summary judgment motion at this time.

[5] The plaintiff argues that the motion was dismissed as an “indulgence” to the defendants to give them a chance to provide more evidence. It argues the defendants made certain admissions on the motion. It argues that the defendants delayed the motion. It argues that liability is yet to be determined, such that it is premature to order costs against the plaintiff. It relies on a term of the guarantee that makes the defendants responsible for all costs incidental to the enforcement of the charge and argues that, if its interpretation of the guarantee is accepted, the defendants will be liable for all its costs. It seeks an order reserving costs to the trial judge, or alternatively, awarding costs in the cause.

[6] Section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43 provides that the costs of a proceeding are in the discretion of the court.

[7] Rule 57.03(1) provides that the court “shall” fix costs of a contested motion “unless the court is satisfied that a different order would be more just”.

[8] In this case, I am satisfied that it is more just to order that costs of this motion be reserved to the trial judge.

[9] The issues – both the claims and defences – raised in the motion remain live. The defendants successfully resisted summary judgment, but the plaintiff may yet obtain judgment. The work that has been done to date will reduce the costs of the trial. How much of the costs, if any, were thrown away on the motion will only be ascertainable after the trial is complete.

[10] I note that I do not accept the plaintiff’s characterization that the dismissal of the motion was an “indulgence” to allow the defendants to improve their evidentiary record. As I stated in my reasons on the merits, the plaintiff refused to answer relevant questions on cross-examination. Those refusals impacted the evidentiary record available on the motion and the ability of the defendants to develop certain defences. I specifically declined to find that the defendants failed to put their best foot forward in the circumstances.

Request for a Mini-Trial or Expedited Trial

[11] The plaintiff seeks a mini-trial under r. 20.04(2.2) or an expedited trial in which the affidavits and transcripts would form the evidentiary record. It cites the failing health of Mr. Hui as reason to proceed expeditiously.

[12] A mini-trial is not an appropriate step in this action. As I noted in my reasons on the merits, the plaintiff’s refusals impacted the defences the defendants were able to advance. The evidence of the relationships between Mr. Hui, Unimac and IWOK must be explored for the record to be properly developed such that the defendants can properly advance their defences. A mini-trial would not allow the defendants to develop their defences – rather, it would be a trial without discovery. Efficiency does not demand an unfair process.

[13] Moreover, the stage of the related litigation against Unimac may have an impact on the proper process for the trial of this action. A mini-trial does not afford a process which could be responsive to the challenges posed by the related litigation.

[14] In any case, the plaintiff suggests the evidence for the proposed mini-trial consist of the affidavits and transcripts filed to date, which I have already found offer only a partial and decontextualized evidentiary record.

[15] Mr. Hui’s failing health is a serious concern. It must be addressed as soon as possible at the case conference the plaintiff was directed, but has failed, to arrange. It may be that an expedited trial is an appropriate order in the circumstances, but I cannot determine that on the basis of the plaintiff’s costs submissions. I again direct the plaintiff to arrange a case conference before me to address the progress of this action. The plaintiff should arrange this case conference with all haste in view of Mr. Hui’s health, and in view of the fact that it was already directed by this court to do so, but it has inexplicably failed to follow that direction.

Madam Justice J. T. Akbarali Date: June 01, 2017

[^1]: I use the term “defendants” in these reasons to refer to the individual defendants. The defendant Rose of Sharon (Ontario) Retirement Community took no part in the motion.