Court File and Parties

COURT FILE NO.: CV-20-636314

DATE: 20210910

ONTARIO SUPERIOR COURT OF JUSTICE

RE: William Fu, Plaintiff -and- John Fung et al., Defendants

BEFORE: F.L. Myers J.

COUNSEL: David Levangie and Martine Garland, for the plaintiffs Jimmie Z. Chen and Alvin Leung, for the defendants

HEARD: September 10, 2021

CASE CONFERENCE ENDORSEMENT

[1] The defendant has moved for default judgment. As set out in the Triage Endorsement dated July 29, 2021, the motion hearing was vacated and this case conference was convened once the defendants indicated a desire to respond.

[2] The plaintiff has evidence establishing that his agents served the defendants with the statement of claim by personal service in Hong Kong. The defendants submit that under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, personal service is not allowed. Case law provides that unless there is an applicable exception, the Hague Convention is mandatory. See: Wang v Lin, 2016 ONSC 3967 (Div Ct). So, although the defendants have actual knowledge of this action and have the statement of claim and a lawyer, they may not yet be properly impleaded.

[3] Mr. Chen advises that he is retained on a limited retainer basis to deal only with the motion to set aside service of the statement of claim. I asked him whether he would be retained to dispute the motion for default judgment in the event that service is held to have been proper. He did not have instructions to allow him to answer that question.

[4] Limited scope retainers are an important tool to promote access to justice by making legal services available to those who might not be able to afford to retain a full service lawyer. But, they are not to be used to try to gain tactical advantage. This claim involves allegations of fraud in the hundreds of thousands of dollars concerning international transactions involving a shipment of oil by a tanker. The defendants seem to carry on a transnational business in Hong Kong if not elsewhere.

[5] In my view, in the circumstances, it would be an abuse of the court’s process were the defendants allowed to delay adjudication of the plaintiff’s claim by retaining counsel on an incremental basis. If service of the statement of claim was validly conducted, then the plaintiff is entitled to proceed to default judgment. If the defendants were to lose the motion to set aside service of the statement of claim, it would not be fair or efficient for them to then ask for further time to retain Mr. Chen to move to set aside the noting in default.

[6] The defendants either wish to participate in this litigation or they do not. If the defendants wish to challenge the noting in default and defend on the merits in the event that service is held to have been valid, they should say so now and get on with it. Part of the test to lift a noting in default is for the defendants to show that they are proceeding with alacrity.

[7] Accordingly, although motions to set aside service and to lift a noting in default are properly brought to associate judges, in my view, this is a case in which efficiency and fairness require that the motions, if brought, be heard by a judge. In that way, the judge can hear the motion for default judgment if he or she determines that it is appropriate to do so.

[8] The plaintiff’s motion for default judgment is scheduled to be heard for two hours on December 16, 2021.

[9] If the defendants choose to do so, they may move to set aside service of the statement of claim and/or to lift the noting in default. If either of these motions are brought, they will be heard on December 16, 2021 immediately prior to the motion for default judgment. If either of the defendants’ motions are brought and succeed, then the motion for default judgment will not proceed.

[10] The defendant will deliver one or more motion records by October 4, 2021; The plaintiff shall deliver any responding record by October 15, 2021; The defendants may deliver a reply record by October 25, 2021.

[11] Cross-examinations are to be held remotely and shall be completed by November 15, 2021. The defendants factum(s) are due by December 2, 2021. The plaintiff’s factum(s) are due by December 9, 2021.

[12] Counsel are reminded of the need to cooperate on scheduling matters despite any positions taken by their respective clients. Counsel are directed to agree on the timing and process for cross-examinations if any are desired by counsel opposite. If any client fails to attend, they are at risk of having their evidence struck at the hearing of the motion(s).

[13] If any matters arise which threaten the implementation of the timetable, counsel may apply for a case conference under section C.1.4 of the Notice to Profession – Toronto; Toronto Expansion Protocol for Court Hearings During COVID-19 Pandemic.

[14] The costs of today’s attendance are in the cause.

F.L. Myers J.

Date: September 10, 2021