Court File and Parties

COURT FILE NO.: CV-22-00687209-0000 DATE: 20230707 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

LI YANG (CANADA) HOLDINGS CO. LTD. and DANIEL EXECUTIVE (CANADA) HOLDINGS CORP. Plaintiffs – and – LYSR MANAGEMENT LTD., 2708042 ONTARIO INC., RINA SHINCHI, YANGGUANG LIN, ZI MU LI, RENXIANGYU ZHANG, LOCATION WAY INC., WEI ZHENG, JOHN DOE, JANE DOE and OTHER PERSONS UNKNOWN WHO HAVE CONSPIRED WITH THE NAMED DEFENDANTS Defendants

Counsel: Ford Wong, for the Plaintiffs Eric Delouya, for the Defendants, Wei Zheng and Location Way Inc. William Murray, for the Defendant, Lin Samuel Eng, for the Defendants, LYSR Management Ltd., 2708042 Ontario Inc., 2786584 Ontario Inc., Rina Shinchi and Yangguang Lin

HEARD: July 6, 2023 papageorgiou j.

Overview

[1] By reasons dated May 1, 2023, I granted a Mareva injunction as against the defendants Yuangguang Lin (“Lin”), Rina Shinchi (“Shinchi”), 2708042 Ontario Inc. (“270Ont.”) and 2786584 Ontario Inc. (“278Ont.”), LYSR Management Ltd. (“LYSR”), Wei Zheng (“Zheng”) and Location Way Inc. (“Location Way”).

[2] In those reasons I directed that the parties re-attend before me to address living expenses, operating expenses necessary to operate their businesses as well as limitations to the Mareva injunction.

The May 26, 2023 attendance

[3] The parties reattended on May 26, 2023. At that time, the parties had delivered some affidavit materials in respect of their assets. However, the information from the Zheng Defendants was deficient as set out in my May 26, 2023 endorsement. As well, the Lin Defendants had not provided any evidence as to living expenses or business operating expenses which they required.

[4] Finally, the parties were not in a position to address limitations to the Mareva injunction Order.

[5] I did make orders permitting all of the Defendants to access funds in their accounts for living expenses and business operating expenses on an interim interim basis pending examination on their asset disclosure. I also made an Order that the Lin Defendants provide further disclosure as set out in my May 26, 2023 endorsement.

[6] I directed that the parties re-attend to address limitations they sought to the Mareva injunction.

Today’s attendance

[7] The parties attended today before me.

Deficiencies in the Materials

[8] The Lin Defendants did not provide any additional affidavit evidence as directed by me in my May 26, 2023 endorsement.

[9] The Zheng Defendants did provide a short affidavit dated July 5, 2023, but the plaintiffs still take the position that the affidavit material from the Zheng Defendants is deficient and owing to the short service they were not in a position to address its contents in full.

Examinations for Discovery

[10] There is an examination of Mr. Zheng scheduled for July 11, 2023 and the plaintiffs are content with sending a letter to the Zheng Defendants setting out specifically the information which they require and they will seek any such missing information at the scheduled examination.

[11] The plaintiffs have been trying to schedule an examination of the Lin Defendants without success. Mr. Murray who has been appearing for the Lin Defendants indicates that there are communication issues and that he has had a family emergency to deal with. While I am sympathetic, Mr. Murray has been appearing as agent for Samuel Eng who is the solicitor of record for the Lin Defendants. He has a law firm with other lawyers. Counsel for the plaintiffs takes the position that some of the lawyers who work with Mr. Eng speak Chinese and so could communicate with the Lin Defendants. There is no evidence before me on this issue. Nevertheless, this matter has been ongoing since November 2022 when the Defendants first attended in CPC court to schedule the Mareva injunction motion. It is now July 2023. The Mareva Injunction Order was made on May 1, 2023 and it is in that Order that I directed that the parties provide affidavits listing their assets and attend for examination on these affidavits.

[12] I am directing that the Lin Defendants shall attend for examination on their assets to take place within the next two weeks.

[13] I have directed the parties to the following case regarding asset disclosure: Sakab Saudi Holding Company v. Al Jabri, 2021 ONSC 3909.

Statement of Defence

[14] The Zheng Defendants have filed a Statement of Defence.

[15] The Lin Defendants have not yet provided a Statement of Defence. The plaintiffs have attempted to note the Lin Defendants in default but were unable to because the Registrar took the position that they did not serve the Lin Defendants properly.

[16] Counsel for the plaintiffs candidly concedes that there was not personal service on the Lin Defendants. However, the Lin Defendants have been attending in court since November 2022 to defend this matter. The plaintiffs’ Statement of Claim was part of the original motion record which the plaintiffs served. The Lin Defendants attended in CPC court to schedule this motion on November 15, 2022. The Lin Defendants have filed materials. It is clear that this matter has come to their attention even if there may have been technical deficiencies in service. I am thus validating service as of November 15, 2022 when they first attended in court.

[17] Given their counsel’s family emergency, I am directing that they have thirty days from today to serve their Statement of Defence.

Settling of the May 26 Order

[18] Today, we also settled the Order from the May 26, 2023 attendance. Because of difficulties which the parties have had doing so, rather than put the parties through the process of preparing and settling another order from today’s date, with the consent of the parties, I have combined the orders from May 26 and today into one order which was settled with the parties. I shared my screen with them and they approved of the Order which I have signed.

The Bentley’s

[19] As well, there are two Bentley’s currently sitting in storage containers overseas. There are registered security interests in favour of Prime Leasing, one of which has expired. Prime Leasing is not a party or represented here. The plaintiffs asked if the Defendants would consent to the sale of these vehicles as they are depreciating over time; he says it is in everyone’s interests that the vehicles are sold, even if only to have the proceeds held in trust pending the determination of entitlement.

[20] The Defendants advised that they could not consent to this as the security registration for the Bentley’s was in Prime Leasing’s name.

[21] The plaintiffs will write to Prime Leasing seeking Prime Leasing’s position on whether it claims any entitlement to these vehicles and if so, whether it would consent to an order that the vehicles are sold and the proceeds held in trust.

Limitations to the Mareva Injunction

[22] In my view, the examination on the Defendants’ assets must take place before the Mareva Injunction Order is limited. In any event the parties did not attend today with any evidence or argument on this issue.

[23] The Mareva Injunction Order is continued and the parties shall reattend before me on September 15, 2023 at 10:00 am for two hours. At that time, I expect the parties to be prepared to address limitations on the Mareva Injunction Order as well as the issue of living and business operating expenses. When I made the order on May 26, 2023, there was no information or evidence from the Lin Defendants about these but I did make Orders in any event on an interim interim basis as they must have some. Further, the Zheng Defendants’ evidence was not fulsome but in the interests of fairness I made orders based upon the information which they had provided as it is clear they must have some living and operating expenses.

[24] If anything requires urgent attendance before the September 15, 2023 return date, the parties may seek to arrange an attendance with my assistant.

Costs

[25] Costs of this attendance and the May 26 2023 attendance are reserved to the next attendance.

Released: July 7, 2023 Justice Papageorgiou