COURT FILE NO.: CV-20-00643170

DATE: 20210604

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: YIFENG DONG Plaintiff

AND:

ZHIWEI LIU, also known as STEVEN LIU Defendant

BEFORE: Mr. Justice Chalmers

COUNSEL: A. Ostrom, for the Plaintiff

HEARD: June 2, 2021

In Writing

ENDORSEMENT

[1] The Plaintiff brings this motion in writing for default judgment in the amount of $105,000.

[2] The Plaintiff states that he entered into a Unanimous Shareholder’s Agreement with the Defendant, Zhiwei Liu dated September 1, 2019 (the “Agreement”). Pursuant to the Agreement, the Plaintiff purchased a 7% minority shareholding interest in the shoe-retail business operated by the Defendant known as Sneaker House Inc. for $105,000. Less than two months after advancing the funds, the Defendant permanently closed the business and liquidated the assets. The Agreement contained a rescission clause which provides that if the income of the business decreases by 15% or more per month for more than four consecutive months, the Plaintiff is entitled to a return of the investment.

[3] The Statement of Claim was issued on June 29, 2020. Efforts to serve Mr. Liu were initially unsuccessful. It was determined that Mr Liu was living in the Vancouver area. On July 24, 2020, Mr. Liu was served personally in British Columbia. The Claim was amended to comply with Rule 17.04(1). Efforts to personally serve Mr. Liu with the Amended Statement of Claim were unsuccessful. The Plaintiff delivered the Amended Claim to Mr. Liu by e-mail on March 1, 2021. Master Jolley granted an order dated March 13, 2021 validating service on the Defendant by e-mail. The Defendant did not respond to the Claim and was noted in default on April 9, 2021.

[4] A defendant who has been noted in default is not technically entitled to notice of any step in the litigation, including a motion for default judgment. However, R. 19.02(3) provides a judge with discretion to order that the defendant be provided with notice of the motion for default judgment. The “far better practice” is to provide the defaulting defendant with the notice of the motion for default judgment so the defendant understands that the claim is about to be considered by the court: Casa Manila Inc. v. Iannuccilli, 2018 ONSC 7083, at para. 16 and 18.

[5] In the circumstances, I exercise my discretion under R. 19.02(3) to order that the Plaintiff serve the Defendant with the motion record for default judgment along with a copy of this endorsement. Service may be made in accordance with Master Jolley’s order dated March 13, 2021. Service must be made forthwith.

[6] I adjourn this matter for 30 days. If the Defendant seeks to respond to the claim and the motion, he must do so within that time period.

[7] I remain seized.

DATE: JUNE 4, 2021