Court File and Parties
COURT FILE NO.: CV-23-694426 DATE: 20230614 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CHICAGO TITLE INSURANCE COMPANY, Plaintiff AND: FUNGSIN WONG A.K.A. FUNG-SIN WONG A.K.A. FUNG SIN WONG, JOHN DOE, JANE DOE, LIANG YING LI, JACKY LIN, XIAO YONG WANG, JIELI JIANG, DOE CORPORATION o/a GLAM IT UP BEAUTY BAR, and JOHN/JANE DOE c.o.b. as GLAM IT UP BEAUTY BAR, Defendants
BEFORE: Justice A.P. Ramsay
COUNSEL: Michael A. Katzman, for the Plaintiff
HEARD: In Writing
Endorsement
A. Nature of the Motion
[1] The plaintiff, Chicago Title Insurance Company, moves for an interim ex parte order requiring non-party financial institutions to deliver up, among other things, “copies of all documentation and records relating to the accounts of the defendants (“the Accounts”) and the transactions and activities for the period of January 5, 2022 until the date of the expiry of the order”.
B. Background
[2] This action arises as a result of a fraudulent mortgage registered against title to property municipally known as 3005-386 Yonge Street in Toronto, Ontario.
[3] The plaintiff provided insurance coverage to Prompt Financial Solutions Corporation (“Prompt Financial”). Prompt Financial is not a party to the action but commenced an earlier application last year for a Norwich order. Prompt Financial provided a mortgage loan in the principal amount of $218,914.71 with a net amount of $200,000 advanced to an individual who held herself out to be Shirley Yang. Ms. Yang is the true title holder to the subject property.
[4] The impersonator of Ms. Yang is allegedly Fungsin Wong a.k.a. Fung-Sin Wong a.k.a. Fung Sin Wong, who has now been named as a party defendant in the current lawsuit.
[5] The fraud was reported to the Police, who carried out an investigation.
[6] In March of 2022, Prompt Insurance brought an application for a Norwich order (“the first Norwich order”), seeking an order requiring the Scotiabank to disclose and production with respect to an identified Scotiabank bank account. Justice Koehnen granted the order (“the first Norwich order”).
[7] The relief sought in the notice of motion is expansive and extends to the production of all files, communications, records and correspondence, whatsoever of a number of accounts, as well as the identity of any persons or entities who instructed the Banks, or any one of them, to conduct any business in relation to the accounts, and the identity of any persons or entities to whom funds were transferred from the accounts. The plaintiff further seeks an order requiring non-parties to deliver up “copies of all documentation and records relating in any way to the funds or assets of the Defendants and all activities in relation thereto for the period of January 5, 2022, until the date of the expiry of the Order”.
[8] The relief sought is so expansive it verges on a fishing expedition, covering, as it does, assets and funds and “other bank accounts, account numbers, account balances, account statements, cheques, wire transfer confirmations, account opening forms, signature cards, tax returns, financial statements, loan applications, net worth statements, shares, stocks, bonds, commercial paper, real estate, mortgages, leases, insurance policies, motor vehicle license and serial numbers, RRSP’s, RHOSP’s, pensions, term deposits, GIC’s, jewelry, objects of art, furniture, appliances and other records and information in the non-parties’ possession, power or control with respect to the any funds or assets of the Defendants.”
[9] The plaintiff also seeks on this ex parte motion, an order permitting it to use the information obtained pursuant to the order, without providing any basis do so or any authority to assist the court in determining whether this relief was available to the plaintiff, in the circumstances. In its factum, however, the plaintiff focused on the relief for the Norwich order.
C. The Materials
[10] The materials were sent by email with an embedded link for sync.com. I will return to the use of sync momentarily. As for the Motion Record, it would have been helpful to the court and reduce the time spent reviewing the materials, if the Exhibits to the deponent’s affidavit had been affixed to the affidavit and had been housed in the Motion Record as opposed as opposed to uploaded as 24 separate Exhibits, without any description whatsoever save for a number and the description of Exbibit “A” to “Z”.
[11] The motion materials were also sent by Sync.com. This is no longer the document platform used by the court in Toronto. As of at least March 2021, any reference to uploading documents to Sync.com were removed as the court migrated to the exclusive use of the CaseLines document-sharing platform. Rule 4.05.3 of the Rules of Civil Procedure govern the use of Caselines. Clause 4 of the Notice to the Profession, Parties, Public and the Media, effective August 2, 2022 [1], housed on the Superior Court of Justice website, provides some guidance and direction to the profession and litigants alike on uploading materials on CaseLines for use of the Court, and outlines the responsibilities of the parties. The Notice also addresses documents sent by email to the court.
D. Disposition
[12] For the reasons below, the motion is dismissed.
E. Analysis
[13] A Norwich order is an extraordinary remedy employed for pre-litigation disclosure. It is not a substitute for the discovery process under the Rules of Civil Procedure. In my view, the interests of justice would not be served by granting a second Norwich Order in this case. I will explain.
[14] The Ontario Court of Appeal has made it clear that this is an extraordinary remedy. The Court noted in GEA Group AG v. Flex-N-Gate Corporation, 2009 ONCA 619, 96 O.R. (3d) 481, at para. 85, that: “a Norwich order is an equitable, discretionary and flexible remedy. It is also an intrusive and extraordinary remedy that must be exercised with caution.” The jurisprudence has indicated that courts should make an overarching assessment of whether it would be in the interests of justice to grant the extraordinary remedy requested, considering the bona fides and strength of the moving party’s case, as well as its need for the information.
[15] A Norwich order is a form of equitable relief that, if granted, requires a third party to a potential action to disclose information that is otherwise confidential. The court’s jurisdiction to grant the relief sought is rooted in s. 96(1) of the Courts of Justice Act, which provides that the "[c]ourts shall administer concurrently all rules of equity and common law". The rationale for the order was reinforced by the Ontario Court of Appeal in GEA Group AG, citing, as it did so, the following passage from Norwich Pharmacal Co. v. Comrs. of Customs and Excise, [1974] A.C. 133, [1973] 2 All E.R. 943 (H.L.):
The fundamental principle underlying such an Order is that the third party against whom the order is sought has an equitable duty to assist the applicant in pursuing its rights . . . The remedy has been extended in Canada such as to allow the Court to grant an order compelling the disclosure of all information vital to the plaintiff's ability to commence an action from any party involved in the wrongful conduct of the defendant or potential defendant.
[16] In determining whether to grant the order sought, the moving party must satisfy the court that the discovery sought is for a legitimate purpose. In GEA Group AG, at para. 91, Cronk J.A., speaking for the Court explained: “The information sought may be needed to obtain the identity of a wrongdoer (as in Norwich Pharmacal), to evaluate whether a cause of action exists (as in P. v. T.), to plead a known cause of action, to trace assets (as in Bankers Trust and Leahy), or to preserve evidence or property (as in Leahy).”
[17] The factors to be considered by the court in determining whether to grant the order sought are set out in GEA Group AG, at paras. 62 and 91 and 1654776 Ontario Limited v. Stewart, 2013 ONCA 184, 114 O.R. (3d) 745, at paras. 47-59, leave to appeal ref’d, [2013] S.C.C.A. No. 225; Isofoton S.A. v. Toronto Dominion Bank (2007), 85 O.R. (3d) 780 (S.C.), at para. 40; and Bluemoon v. Ceridian, 2022 ONSC 301, at paras. 28-31, aff’d 2022 ONCA 868.
[18] This is not a case where such relief is necessary to identify the suspected wrongdoer. However, the materials before me indicate that the identity of the alleged impersonator of Ms. Yang, the defendant, Fungsin Wong a.k.a. Fung-Sin Wong a.k.a. Fung Sin Wong, is known to the plaintiff and she has been added as a party defendant. On the evidence before me, the mortgage funds were advanced on January 4, 2022, and deposited to a Scotiabank account.
[19] Ms. Wong, the alleged impersonator, had apparently opened the account with another individual. Prompt Financial, as the mortgagee, obtained the first Norwich order and was able to secure financial disclosure from the Scotiabank and is able to trace the proceeds of the mortgage to various other bank accounts.
[20] The individuals identified are party defendants to this lawsuit. The first Norwich order gave the mortgagee access to banking records and other confidential information, unbeknownst to the alleged wrongdoers. This was done to appreciate the extent of the fraud and to trace the mortgage proceeds advanced to Ms. Wong as part of this alleged fraudulent mortgage.
[21] The identity of the principal alleged wrongdoer, Ms. Wong is known, as well as, thanks to the first Norwich order, a number of individuals who are recipients of the mortgage proceeds. An action against these individuals was commenced in February 2023. Well over a year after the first Norwich order, and after the issuance of a statement of claim against them, the plaintiff seeks to obtain a second Norwich order.
[22] The test for a Norwich order articulated by GEA Group AG, is as follows:
a. provided evidence sufficient to raise a valid, bona fide or reasonable claim; b. established a relationship with the third party from whom the information is sought such that it establishes that the third party is somehow involved in the acts complained of; c. established whether the third party from whom the information is sought is the only practicable source of the information; d. whether third-party can be indemnified for costs which may be exposed because of the required disclosure; and e. whether the interests of justice favour the obtaining of the disclosure sought.
[23] The claims asserted by the plaintiff are bona fide and reasonable. The evidence before me includes reference to the involvement of the police to investigate the alleged fraud, the determination by the Deputy Director of Land Registrars following the hearing under the Land Titles Act, R.S.O. 1990, c. L.5, and the ultimate disclosure obtained as a result of the first Norwich order.
[24] Paragraph 44 of the affidavit of Mr. Ulrich sets out the disclosure of bank accounts and the identity of the account holders; all information obtained from the March 22 Norwich order. The plaintiff has not satisfied me that the information and records are sought are “more than mere witnesses”. I pause here to note that Norwich orders are a form of pre-litigation discovery. The statement of claim has now been issued against a number of individuals and the plaintiff has discovery rights which it may exercise.
[25] Bank drafts purchased using the mortgage proceeds, owners of the account, the amount of the draft, the payee, and the accounts to which the funds were deposited are known to the plaintiff. These deposits occurred in January 2022, to the various accounts. The first Norwich order allowed the plaintiff to trace the proceeds of the mortgage loan advanced to the alleged fraudster to these various accounts.
[26] While it is not clear, on the evidence before me, how the plaintiff came to be in possession of the private and confidential information disclosed to Prompt Financial, the sole applicant in the proceeding before Koehnen J., the plaintiff is in possession of such information and has made use of it to commence this action against the various defendants. A second Norwich order is not a necessary measure in all the circumstances to permit the plaintiff to pursue its rights against any of the defendants. The plaintiff appears to be a privy of Prompt Financial, the mortgagee, and, at the very least, may have a subrogated interest. I need not decide either issue as the plaintiff has clearly benefited by the disclosure made to Prompt Financial by virtue of Koehnen J.’s order.
[27] In my view, the identities against whom this relief is sought here are not the only practicable sources of the information. The principal defendant and satellite defendants are now party to the litigation, and there is no basis to circumvent the discovery process under the Rules. No doubt, by virtue of the first Norwich order, the plaintiff has had the pre-litigation advantage not only of pre-litigation disclosure, but also the opportunity of preserving records and documents. On reviewing the evidence, the expansive information and disclosure sought by the plaintiff is not necessary, in the circumstances, for the plaintiff to advance its claims of a fraudulent mortgage transaction against the alleged impersonator, who is a named defendant, nor against individuals to whom the proceeds of the mortgage were transferred, equally named after being identified by the first Norwich order.
[28] To the extent that there are potentially other defendants, which is not established on the evidence before me, their identities are discoverable through the discovery process.
[29] On a final note, any order obtained without notice must be served on a party affected by the order obtained. Koehnen J.’s order includes the usual provision that a party affected by his order may, within ten days of the order coming to their attention, move for directions or to set the order aside. There is nothing before me to indicate that Koehnen J.s order has been served on the parties affected by the order, who are now defendants in this action. I am not satisfied that in all of the circumstances, the interest of justice favours the obtaining of the disclosure sought.
[30] The motion is dismissed.
A.P. Ramsay J. Date: June 14, 2023