Court File and Parties

COURT FILE NO.: 1766/19

DATE: 2020/02/07

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Canadian Entertainment Properties Inc., Plaintiffs

AND:

2428399 Ontario Inc., 2680432 Ontario Inc., Boquan (Frank) Wang, Defendants

BEFORE: Justice J.C. George

COUNSEL: John Brennan, counsel for the Plaintiff

Rob Roche & Frank Wang, for the Defendants

HEARD: February 7, 2020

DATE: February 7, 2020

ENDORSEMENT

[1] There are two motions before the court. The first in time was commenced by the Plaintiff. It seeks an order that it be at liberty to have issued a Certificate of Pending Litigation (“CPL”) in respect of lands that were the subject of an agreement of purchase and sale with the Corporate Defendants. While this motion has not yet been disposed of, on December 13, 2019 I made an interim order that required the Defendants to not transfer, sell or otherwise encumber the property in question. I also gave directions with respect to the filing of responding materials. Furthermore, on December 20, 2019 McArthur J. made an order that, pending resolution of the CPL motion, the Defendants are not to sell, dispose of, or encumber the subject property.

[2] This motion is not being addressed today and is adjourned to March 6, 2020 to be spoken to. Pending this adjournment, both my order of December 13^th and McArthur J.’s order of December 20^th remain in effect.

[3] The second in time – which I am addressing now – was commenced by the Defendants. Pursuant to r. 15.01(2) of the Rules of Civil Procedure, it seeks leave for the two Corporate Defendants to be represented by a person other than a lawyer – Vice-President of both corporations and property manager Rob Roche and President, director and sole shareholder Frank Wang.

[4] Messrs. Roche and Wang take the position that they are capable of representing the Defendants. They claim that a Superior Court judge in Toronto, in an unrelated matter, has already granted them leave. They argue that all elements of the applicable test have been met. For instance, their position is leave is warranted as each of them are able to understand the presenting legal issues and can articulate their case in written materials and orally in court. They say both corporations are closely held and are of the view that while both companies are “financially solvent” (meaning, presumably, that each is able to fund legal representation) there is no requirement that they prove they are incapable of retaining counsel.

[5] The Plaintiff argues that Messrs. Roche and Wang have not satisfied the test and that leave should not be granted.

[6] Rule 15.01(2) provides that:

A party to a proceeding that is a corporation shall be represented by a lawyer, except with leave of the court.

[7] The general rule is, a corporation must be represented by a lawyer. To grant leave would be the exception. The rationale for this is clear. It is to facilitate and foster the goals of litigation efficiency and to promote the just resolution of disputes on their merits. There is an element of fairness as well, and, of course, to involve counsel is to bring a reasonable level of confidence that he or she will balance their role as advocates for their client with their obligations as officers of the court.

[8] In what circumstances should the court consider granting leave?

[9] I must consider these factors:

(i) Whether the proposed representative has been duly authorized by the corporation to act as its legal representative.

(ii) Whether the proposed representative has a connection to the corporation.

(iii) The structure of the corporation in terms of shareholders, officers, and directors and whether it is a closely held corporation.

(iv) Whether the interests of the shareholders, officers, directors, employees, creditors and other potential stakeholders are adequately protected by granting leave.

(v) Whether the proposed representative is reasonably capable of comprehending the issues in the litigation and advocating on behalf of the corporation. The proposed representative should be reasonably capable of comprehending the issues and articulating the case on behalf of the corporation.

(vi) Whether the corporation is financially capable of retaining counsel. If the refusal to grant leave would effectively bar a corporation from access to justice, this factor should be given considerable weight.

(vii) Any other relevant factor specific to the circumstances of the individual case.

[10] Some of these factors weigh in favour of granting leave. For instance, the written materials include Directors Resolutions consenting to Messrs. Wang and Roche to “act as a self represented litigant”. Also, I am relatively impressed with both the written materials Messrs. Wang and Roche have filed on this motion and with Mr. Roche’s submissions at the hearing. I find that Mr. Roche is reasonably articulate and that he has demonstrated an ability to communicate the Defendants’ position, at least on the narrow issue raised on this motion. Moreover, there is nothing to suggest he suffers from a mental illness that would preclude him, or Mr. Wang for that matter, from acting as a responsible self-represented litigant.

[11] To be clear, however, I arrive at this conclusion based on my review of the materials and a cursory critique of Mr. Roche’s oral submissions, which lasted for a grand total of about ten minutes. That is to say, this is not a comment on whether they are equipped to competently address the issues raised in this particular case. More on this in a moment.

[12] I am also not convinced that the lack of information in respect of the Corporate Defendants’ ability to finance legal representation, is determinative. While this is a factor to consider, and while evidence that a company is incapable raises access to justice issues, there is some authority in support of Messrs. Wang and Roche’s position (as set out in their factum) that they do not have to prove an inability to retain counsel before leave can be granted; see Murphy v. Stefaniak (2014), 2014 ONSC 4396, 69 C.P.C. (7^th) 182.

[13] Lastly, the only evidence before me supports the contention that both corporations are closely held. As I understand it, Mr. Wang is the President, director and sole shareholder, and Mr. Roche is the Vice-President, director, and property manager.

[14] On the other hand, some of the factors raise concerns and give me pause. For instance, while, as I said, there is no hard and fast requirement that proof be offered confirming a corporate defendant cannot afford legal representation, it is not clear that I have a complete picture of the make up and obligations of these Corporate Defendants. The question I have is, are their employee, creditors, or other potential stakeholders who would not be well served by granting leave in this case? This is unknown.

[15] Furthermore, the overarching consideration is whether the interests of justice and the public can still be served by granting leave. This takes me back to the question of, whether Messrs. Wang and Roche can competently advance the position of these Corporate Defendants, in light of the issues raised.

[16] The allegations raised by the Plaintiff are serious and from what I can gather this action is relatively complex. The Plaintiff is seeking both interim and final relief – including the obtaining of a CPL, which has not yet been addressed – and damages in the amount of $5,000,000.00. In my view, it is reasonable to believe that the legal complexities of this case require the involvement of counsel. In fact, I specifically find that to not preserve the requirement for counsel runs the real risk of prolonging this case which would likely impact other matters and members of the public.

[17] Another consideration is this. While not raised in argument, given the nature of the Plaintiff’s claim, and given these Corporate Defendants are both so closely held, it is presumably, at least in part, the behaviour and conduct of the two individuals who seek to represent the Corporate Defendants that is in question. Also, were it simply Mr. Wang who wanted to represent his own closely held companies I may have been inclined to grant leave. But that is not what is being proposed. Granted, Mr. Roche has a close connection to the companies and at this point he clearly speaks for them and for Mr. Wang, but he is not the owner nor sole shareholder. To grant leave in this case would be to essentially grant Mr. Roche a temporary license to practice law.

[18] This highlights the balancing act required here. On the one hand, individuals are entitled to represent themselves and it is fair to say that the historical reluctance of courts to grant leave does not always make sense in the case of a small, one-man company. On the other hand, while an individual may act for themselves, they, in most cases, cannot act for another person which would be the net effect of granting leave in this case.

[19] In the result, leave is not granted and the motion is dismissed.

[20] Costs to the Plaintiff in the all-inclusive amount of $2,500.00 payable forthwith.

“Justice J.C. George”

Justice Jonathon C. George

Date: February 7, 2020