Court File and Parties

COURT FILE NO.: 13-CV-476170

MOTION HEARD: 20201029

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hee Jung Lee, Plaintiff

AND:

Dong Gown Kim et al., Defendants

BEFORE: Master Abrams

IN ATTENDANCE: D. Silver, counsel to the lawyers for the Plaintiff

Mr. Dong Gown Kim and Mrs. Youngjoo Kim, Defendants (and their son and agent Mr. Eun-Seok Kim), in-person litigants

HEARD: October 29, 2020 (by videoconference)

REASONS FOR DECISION

[1] The plaintiff seeks an Order fixing a litigation timetable for the steps that remain to be taken in this action (this pursuant to R. 48.14(7)(b)(i)). The only parties opposing this motion are the defendants Dong Gown Kim, Youngjoo Kim (Dong Gown Kim’s wife) and Ichiban Sushi House (the “Kim defendants”). While there is reference in Mr. Dong Gown Kim’s evidence, filed on this motion, to this action having been administratively dismissed, I confirm that it has not been. The plaintiff’s R. 48.14(5) motion was brought in a timely fashion. The issue for me to address, therefore, is whether the action should be permitted to continue or be dismissed for delay.

[2] On the return of this motion, the Kim defendants were self-represented (with Ichiban Sushi House being without counsel and not having obtained an Order permitting a non-lawyer to represent it). The Kim defendants participated with the assistance of their son who acted both as their interpreter and agent--this without opposition from counsel to the lawyers for the plaintiff.

[3] This action was commenced by way of statement of claim issued in March of 2013. The statement of claim was amended twice (in March, 2013 and in April, 2013). The plaintiff seeks, inter alia, damages in the amount of $250,000.00 in respect of an investment agreement that she alleges having entered into with, among others, Mr. Dong Gown Kim and Ichiban Sushi House.[^1]

[4] The plaintiff posits that she contracted with Mr. Dong Gown Kim to invest in Ichiban Sushi House on terms that permitted her recovery of her investment (the principal) on two- or three-months’ notice. And indeed, early on, the plaintiff sought to recover her investment (this by way of lawyer’s letter sent in January 2013). On February 9, 2013, Mr. Dong Gown Kim agreed to refund the plaintiff’s monies--by February 14, 2013. That the plaintiff’s monies would be refunded was again confirmed by Mr. Kim on February 21, 2013. When the plaintiff’s monies were not refunded, this action was commenced.

[5] Notices of intend to defend were served by the Kim defendants in April, 2013 (with confirmation of service of the plaintiff’s amended claim on April 10, 2013--in the form of an affidavit of service--having been filed with the court). Defences were not delivered, and a waiver of defences was granted, to permit time for settlement discussions to be undertaken. And they were undertaken--in fits and starts. When negotiations broke down, statements of defence were demanded by then plaintiff’s counsel[^2]. They were promised, but not delivered, by the Kim defendants.

[6] The plaintiff then served a motion for default judgment in November, 2013; and, by Order dated January 7, 2014, Penny, J. granted judgment against the Kim defendants, as sought. New counsel was retained by the plaintiff (counsel now on the record). Immediate steps were taken by the plaintiff to enforce the judgment, including the filing of writs of seizure and sale--before month’s end.

[7] On January 31, 2014, lawyer Harry Hong (someone who the Kim defendants say was assisting them with this litigation, though he was not then on the record for them) advised plaintiff’s counsel that the Kim defendants intended to move to set aside the default judgment. Plaintiff’s counsel waited for some time for them to do so. When nothing was done and nothing more was said by Mr. Hong or the Kim defendants, three notices of garnishment were served by the plaintiff (in July of 2014). One month later, the plaintiff submitted a requisition and paid a deposit to cause the Sheriff’s Office to take steps to enforce the writs of seizure and sale against the personal Kim defendants’ matrimonial home.

[8] Only then did the plaintiff hear back from the Kim defendants. Mr. Hong served a motion to set aside default judgment, returnable October 15, 2014[^3]. The Kim defendants were cross-examined on their respective affidavits, sworn in support of the motion. The cross-examination was in respect of, not only the judgments against them, but, also, the merits of the underlying action. The cross-examination transcripts were ordered and have been preserved.

[9] Default judgment as against the Kim defendants was set aside by Order of Whitaker, J. in October 2014. Efforts to settle the terms of the Order were made by the parties until May, 2015, when Justice Whitaker determined the form of Order to be signed. The Order was issued, entered and sent to Mr. Hong in July, 2015.

[10] In May, 2016 (almost one year later), Mr. Hong advised that, notwithstanding service upon them of the plaintiff’s amended pleading in April of 2013 and their service (and filing) of notices of intend to defend, the Kim defendants denied being in receipt of the plaintiff’s claim.

[11] In the background through much of this period, and most acutely during the period 2014 through to 2017, the plaintiff’s lawyer was suffering from serious sinus problems (with the lawyer undergoing surgery in 2015). While it is true that he continued to work (and the Kim defendants point to examples in the public record of work done by the lawyer), the evidence before me is that the lawyer’s health issues affected the lawyer’s ability to concentrate and focus on all of his work, generally. His uncontroverted evidence is that he was “overwhelmed”, and “found it difficult to maintain [his] practice demands”. Counsel of record (for the plaintiff) has said that he now recognizes that he ought to have told his principal of his difficulties (he was a junior lawyer and kept his difficulties to himself). Part of the reason he did not do so, he explains, is that during part of the same period, 2015-2016, his principal was dealing with critical practice management issues (i.e. Law Society investigations and audits), such that his focus on client work, too, was blurred.

This Motion

[12] In November of 2017, with the fifth-year anniversary of this action on the horizon and with the action not having been set down for trial, the plaintiff confirmed her intention and desire to advance her claims. Out of an abundance of caution and so as not to engage in prolonged wrangling with the Kim defendants’ legal representative (who had earlier said that the plaintiff’s amended claim was not served, though proof of service was in the court file and the Kim defendants had delivered notices of intent to defend), the plaintiff served her amended claim, afresh, in early February 2018. Mr. Hong responded that he was in the process of being retained and, on the Kim defendants’ behalf, would be delivering a defence. On February 26, 2018, the Kim defendants’ delivered defences and asserted counterclaims. I note that, in the hearing before me, Mr. Kim advised (through his son) that he did not know that counterclaims had been asserted and that it was not his wish or desire to pursue a counterclaim. If Mr. Kim is aggrieved, that is for him to address with the lawyer who delivered the counterclaim (ostensibly on his behalf).

[13] On March 9, 2018, a requisition to schedule a status hearing was filed on behalf of the plaintiff (i.e. a few days before the five-year anniversary of the claim). A notice of motion, with a return date of April 30, 2018, was delivered on March 13, 2018. The status hearing did not take place in April 2018, though, because counsel for the plaintiff referred the case to LawPRO. LawPRO appointed the lawyer who argued the status hearing before me, Mr. Silver, and the status hearing was adjourned (on consent) to be heard by way of special appointment in December of 2018.

[14] On March 19, 2018, the plaintiff replied to the Kim defendants’ defences and defended their counterclaims.

[15] One month later, lawyer Bruce Baron confirmed that he would be acting for the Kim defendants, going forward. Mr. Hong’s representation (formal and informal) was at an end. With Mr. Baron’s knowledge and consent, the December 2018 status hearing date was adjourned. The plaintiff served her motion materials in February 2019, with responding materials served by the Kim defendants in January 2020 (this by successor counsel, Mr. D. Kim of Drudi Alexiou Kuchar, LLP—now no longer on the record). The delays to the date of hearing, from March of 2018, were consensual or beyond the control of the plaintiff. Thus the period of consideration, for the court, pre-dates March, 2018.

Status Hearing

[16] On a status hearing, such as this is, the plaintiff must show cause as to why her action ought not to be dismissed. The court must be satisfied that there is an adequate (even if imperfect) explanation for the litigation delay and that, if the action is permitted to proceed, the Kim defendants would not suffer any significant prejudice such as would impair their ability to have a fair trial. In considering these issues, I am required to apply a contextual approach, weighing all of the circumstances here at play, with the goal of seeing justice done.

[17] Where it can be achieved fairly, resolution of the issues among litigants, on their merits, is favoured (Nobosoft Corp. v. No Borders Inc., 2007 ONCA 444, at para. 7). In the words of Sharpe, J.A., as he then was: “[The court] should strive to avoid a purely formalistic and mechanical application of time lines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. [The] Rules [of Civil Procedure]…are construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute” (cited in H.B. Fuller Company v. Rogers, 2015 ONCA 173, at para. 26).

[18] Some contextual factors for the court’s consideration include those set out by the plaintiff (at para. 93) in her factum, namely: passivity on the part of the defendants; continued participation in a lagging action without raising concerns; acts that have frustrated the progress of the action; and considerations of whether the delay was intentional or the result of inadvertence or neglect on the part of counsel. Comments on these, as they relate to this action, will follow.

Analysis

[19] Having regard to, inter alia, the evidence adduced and submissions made, and considering the contextual framework within which this status hearing took place, I must now decide whether the plaintiff ought to be permitted to pursue her claims, still.

(a) Explanation for the Plaintiff’s Delay (Looked at in Context)

[20] In my analysis, I start with the question: Is there a “reasonable, acceptable or satisfactory” explanation for the plaintiff’s delay (Kupets v. Bonavista Pools Limited, 2015 ONSC 7348 (Div. Ct.), at para. 18). To this question, my answer is: ‘yes’.

[21] There were settlement negotiations undertaken in the Spring and Summer of 2013. And though they did not prove successful, this is no reason to penalize the plaintiff (Apotex Inc. v. Relle, 2012 ONSC 3291 (S.C.J.), at paras. 7 and 50-51). Then, while each Kim defendant delivered a notice of intent to defend very early in the proceeding, the Kim defendants failed to deliver defences until months after they were noted in default, default judgment issued, enforcement steps were taken and a motion to set aside default judgment was brought and granted. The Kim defendants delayed and the plaintiff took active steps to enforce her rights, in light of and during the period of their delay.

[22] Thereafter, the Kim defendants moved slowly and took positions that did not accord with what was/wasn’t done by the plaintiff. They filed notices of intent to defend and, later, denied having been served with a claim. They filed their defences and counterclaims, in draft, on their motion to set aside default judgment and then waited some three years before delivering their respective pleadings. How and why this was so, I do not know. The Kim defendants disavow knowledge of much of what Mr. Hong did on their behalf. That notwithstanding, the plaintiff and her lawyers were entitled to rely on Mr. Hong’s representations and actions, which representations and actions caused or contributed to the (unhurried) pace of the litigation.

[23] Then too, the lawyer acting for the plaintiff (throughout much of the putative period of delay) was dealing with medical issues that resulted in his having undergone surgery. And his firm, generally, was dealing with practice management issues that curtailed its ability to be more engaged on behalf of the plaintiff. And while the Kim defendants point to the fact that the plaintiff’s (current) lawyer was able to do other work for other clients during the period of delay, that is not determinative of the issues here (see: Facchini v. Rosen et al., CV-10-01445, June 7, 2017, per Sproat, J.; It does not follow that because a lawyer “with a multitude of problems can do some things, he should have been able to do all things”). The lawyer need not have been totally incapacitated for me to accept (and I do) that his ability to function, and function fully, was impaired. And his limitations ought not to be visited on the plaintiff. “The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor” (H.B. Fuller Company v. Rogers, supra, at para. 27).

(b) Prejudice (Looked at in Context)

[24] I start with the premise that the Kim defendants were given early notice of the plaintiff’s claim and had a fulsome opportunity to investigate and to obtain and preserve relevant evidence. While Mr. Dong Gown Kim now says that, because of the age of the claim, he does not “and cannot recall” what was said in early negotiations that gave rise to his dealings with the plaintiff, he does not explain how or why this is. With his/his wife’s evidence having been memorialized[^4] by virtue of their cross-examination on the return of the motion to set aside default judgment (presumably at a time when their memory of the events was sharper) and with the documents that underly the litigation having been preserved, why can his memory not be jogged? I note, parenthetically, that the personal Kim defendants’ cross-examination was sufficiently fulsome such that the plaintiff feels no need to examine the Kim defendants for discovery. If permitted to advance her claims, the plaintiff is content to move directly to mediation and, then, to set the action down for trial. Then too, and as the Court of Appeal, in Armstrong v. McCall, 2006 17248 (ON CA), [2006] O.J. No. 2055, at para. 25 has said, the availability of productions and transcripts of evidence, as here, can be sufficient to enable a party to refresh his/her memory.

[25] And while an associate in the office of the most recent (former) counsel for the Kim defendants, having reviewed the Kim defendants’ file and having conferred with his principal, deposes that it is “reasonable to conclude that the memory of [all potential] witnesses about the events will no longer be accurate”, that evidence is not at all helpful. It is equally reasonable to conclude that the memory of witnesses, once refreshed, will be accurate.

[26] The Kim defendants submit that they have had no contact with certain persons who might serve as witnesses at trial (Jong Myung Lee and Chang Guk Jang), since these persons left their respective positions at Ichiban Sushi House approximately six years ago. Their evidence in this regard is bald and unsubstantiated. Assuming (and the plaintiff denies this to be so) that Messrs. Lee and Jang have relevant evidence to give, the evidence before me is that the Kim defendants did not, until late, make any effort to contact them or to secure their evidence. In the case of Jong Myung Lee, there is evidence of one call made by Dong Gown Kim to his last known number—this in January 2020. The call went to voicemail. While Mr. Kim says that it was an automated voicemail different from Mr. Lee’s 2013 personalized voicemail, he does not say whether he left a voicemail message (or, even, whether the outgoing message referred to Mr. Lee) or whether he made other inquiries as to Mr. Lee’s whereabouts (even by way of a Google or Canada 411 search).[^5] As for Chang Guk Jang, though Mr. Kim says that he has not spoken with him in several years, his whereabouts are known. Dong Gown Kim deposes that a mutual friend has confirmed that Mr. Jang resides in South Korea. There is nothing before me to suggest that Mr. Kim has reached out to him directly or through their mutual friend. And as for Yoon Yung Chung, whom Mr. Kim also references, he can and has been found. Indeed, the Kim defendants have provided the court with a copy of his LinkedIn profile.

[27] The personal Kim defendants’ immigration status has also been brought into question. That is an issue that is not for the account of the plaintiff. The Kims have been permitted to remain in Canada throughout the currency of the litigation; and, even if that permission should end, there is no credible reason to believe that they would not still be able to participate in the litigation. Mediation can take place virtually; and, arrangements can be made to permit the Kim defendants’ participation at trial, in a manner that is workable for the parties and the court. Further, the Kims have significant economic and familial ties to Ontario, with their ownership of property and their children living (and intending on continuing to live) in Ontario.

[28] Another issue that cannot be visited on the plaintiff is the period of silence on the part of Harry Hong that Mr. Dong Gown Kim alleges. He says that, for more than three years, there were no updates from Mr. Hong. That is an issue for the account of Mr. Hong.

[29] Mrs. Kim complains of the stress of the litigation and points to that stress as being a form of prejudice. I accept that Mrs. Kim may be stressed and find her participation in this lawsuit to be emotionally taxing. But, litigation is stressful, generally, and tends to take a toll on all who are involved in it. Here, no medical or psychological evidence has been adduced as to the causation or aggravation of any (physical or mental) health condition on the part of Mrs. Kim (or her husband) because of the time that it has taken for this action to be litigated. And while Mrs. Kim says that she ought to be released from the litigation, that is relief that she can pursue at another time/in another forum, if so inclined. Ms. Kim says in a letter filed with the court that she “had proven [her] innocence through the cross-examination…in October 2014…”. Being cross-examined on an affidavit on a motion to set aside default judgment is not the same as having a court conclude that a litigant is not liable. There was no finding by the court as to who is or isn’t responsible for any of the damages that the plaintiff claims. Mrs. Kim (and, indeed, all of the Kim defendants) were simply given a further chance to defend the plaintiff’s claims (i.e. to have those claims decided on their merits).

[30] This is a case in which each of the Kim defendants has been content, until late, to allow the action to proceed at its own pace; delayed in asserting the defences and counterclaims proposed in draft form as part of their motion to set aside default judgment; and have taken no steps to advance the claims in their respective counterclaims[^6]. I acknowledge that the Kim defendants now say that they did not give instructions to assert counterclaims; but, the fact is that those counterclaims, as served, have never been withdrawn/discontinued/dismissed. I accept that the “plaintiff bore responsibility for moving the action along [but, the Kim defendants’/Kim defendants’ counsel’s…] lack of display of any sense of urgency undercuts the claim of actual prejudice” (see: H.B. Fuller Company v. Rogers, supra, at para. 42, citing with approval from Aguas v. Rivard Estate, 2011 ONCA 494, at para. 19).

Disposition

[31] Throughout, the plaintiff has evinced an intention to move the action forward to trial.[^7] The delays, such as they are, have been relatively brief and not at the plaintiff’s instance. With this action not yet having crossed the five-year threshold when this status hearing was first requested, with the delays thereafter not being the fault of the plaintiff and being delays that were agreed to by (or on behalf of) the Kim defendants, and in all, I consider it to be in the interests of justice that this action be decided on its merits.

[32] The action will continue, therefore, with the parties to proceed to mediation, next, or, if the Kim defendants prefer, to discovery and then mediation. The Kim defendants are to advise of their intentions by November 30, 2020. If they will be discovering the plaintiff, the plaintiff is to be examined for discovery by the end of February, 2021, with mediation to take place by the end of May, 2021 and this action to be set down for trial by the end of July, 2021. If the plaintiff is not to be examined for discovery or, by November 30, 2020, the Kim defendants fail to notify plaintiff’s counsel that they elect to examine the plaintiff for discovery, mediation is to take place by the end of February, 2021 and this action is to be set down for trial by the end of May, 2021.[^8]

[33] Failing agreement as to the costs of the motion, the plaintiff may (serve and) file[^9] a costs outline and written submissions of no more than 3 pages by December 8, 2020, with the Kim defendants’ costs submissions and any costs outline, in response, to be no more than 5 pages (for the three of them) and served and filed by January 15, 2021.

Original signed by: Master Abrams

Date: November 13, 2020

[^1]: The claims against Youngjoo Kim are, largely, fraudulent conveyance/fraudulent preference claims. [^2]: The plaintiff has since changed lawyers. [^3]: Among the documents in the Kim defendants’ motion record was a draft statement of defence and counterclaim. [^4]: I note that Mrs. Kim disavows any knowledge of the dealings between the plaintiff and the other defendants, in any event. Her knowledge, she now says, is restricted to the “details of a house purchase in 2012”. [^5]: And while Mr. Kim says that he has “serious doubts” as to whether Jong Myung could give evidence or has retained documents, he does not say how or why that is so. [^6]: “The objectives of timely and efficient access to justice, and effective use of court resources require all parties to play their part to move actions forward” (Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592, at para. 53). [^7]: And, in any event, there is some evidence (evidence that Mr. Kim says has been misconstrued) that the plaintiff was promised a refund of monies, by Mr. Kim (to have been paid immediately before this action was commenced). [^8]: Unless the parties otherwise agree, the plaintiff’s examination for discovery (if any) and mediation shall take place by way of videoconference. [^9]: The parties may file their respective costs submissions/costs outlines by emailing them to ATC, Ms. Mahase: jennifer.mahase@ontario.ca.