COURT FILE NO.: CV-19-00618555-000 DATE: 20230720
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: YAN QING (EVA) CHEN Plaintiff
- and – JI CAI SUN and TAI JI INTERNATIONAL AUCTIONS Defendants
Counsel: Marvin B. Shifman for the Plaintiff
HEARD: In writing
PERELL, J.
REASONS FOR DECISION
A. Introduction
[1] On April 23, 2019, the plaintiff, Yan Qing (Eva) Chen commenced an action against Ji Cai Sun and Tai Ji International Auctions, which was an obvious misnaming of Tai Ji International Auctions Corp. The defendants did not defend, and they were noted in default.
[2] Ms. Chen now moves for: (a) an Order amending the style of cause to correct the misnomer; (b) judgment for $313,051.87; (c) prejudgment interest from May 23, 2018 at 1.5% per annum ($24,259.95 as at July 20, 2023 [^1]); (c) post judgment interest pursuant to the Courts of Justice Act [^2] (currently 6.0% per annum); (d) a finding that the defendants’ debt was a result of fraud or false premises as set out in s. 178 of the Bankruptcy and Insolvency Act [^3]; and (e) costs on a substantial indemnity basis of $45,348.78.
[3] For the reasons that follow, Ms. Chen shall have judgment as requested.
B. Procedural and Evidentiary Background
[4] On April 23, 2019, Ms. Chen commenced an action against Ji Cai Sun and Tai Ji International Auctions Corp., misnamed as Tai Ji International Auctions (a misnomer).
[5] The Statement of Claim was personally served on the defendants on April 28, 2019.
[6] Although the defendants were warned that they were at risk of being noted in default, they did not defend the action, and they were noted in default on July 24, 2019.
[7] The action was delayed as Ms. Chen changed her lawyer of record and her former lawyers claimed a solicitor’s lien and there was a dispute about her former lawyer’s account.
[8] It took some time to resolve the lawyer and client dispute but eventually on April 20, 2023, Justice Chalmers made the following endorsement:
The Plaintiff brings this action in conversion. It is alleged that the Defendants stole antiques from the Plaintiff. The Defendants have been noted in default. The Plaintiff moves for default judgment. I make the following orders.
(a) The Plaintiff shall serve its Motion Record on the Defendant, together with a copy of this Endorsement on or before April 28, 2023. Casa Manila Inc. v. Iannuccilli, 2018 ONSC 7083. The Motion Record shall include the Noting in Default and the form of Judgment sought by the Plaintiff.
(b) The affidavit of service should provide particulars of a basis for a judge to find that the Defendant received the Statement of Claim and motion record or otherwise knows about the lawsuit.
(c) The Defendant shall have until May 19, 2023 to notify counsel for the Plaintiff that it seeks to respond to the motion for default judgment.
(d) If the Defendant does not respond within that time, the motion will proceed in writing during the week of May 29, 2023.
[9] Ms. Chen moved for a default judgment on April 22, 2023, and the notice of motion was served on both Defendants by regular mail on April 22, 2023.
[10] On May 10, 2023, a process server served Tai Ji International Auctions Corp. and Mr. Sun with the motion record, the supplementary motion record, and the endorsement of Justice Chalmers by leaving a copy with Mr. Sun, who identified himself to the process server.
[11] Ms. Chen supported her motion with affidavits dated May 27, 2022 and May 4, 2023.
[12] The Defendants did not respond to the motion, and it proceeded as a motion in writing and was heard during the week of July 17, 2023.
C. Facts
[13] Ms. Chen is an antique dealer who stores her antiques at a warehouse that she operates through her corporation, Karmin Investment Trustee.
[14] Mr. Sun is the director and principal of Tai Ji International Auctions Corp. He is a resident of Ontario, and he and Tai Ji International Auctions Corp. carried on business as an importer, purchaser, and auctioneer for Chinese antiques.
[15] On May 23, 2018, as revealed by a surveillance video, Mr. Sun illegally entered the warehouse and he stole antiques owned by Ms. Chen. He stole at least 140 items.
[16] The property misappropriated by Mr. Sun had a value of $313,051.87. The property was not returned. Mr. Sun fraudulently disposed of the antiques by misrepresenting himself as the owner of the property.
[17] Ms. Chen attached an inventory to her affidavit together with photographs of the items that were taken and not returned.
[18] Attached as an exhibit to her affidavit was a chart setting out the prices she paid to purchase the antiques. Based on the applicable exchange rate of March 18, 2021, the value of her purchases was $313,051 (Cdn$).
D. Discussion and Analysis
[19] This is an unopposed motion for a default judgment.
[20] Under rule 19.02(1)(a) of the Rules of Civil Procedure [^4], a defendant who has been noted in default is deemed to admit the truth of all allegations made in the statement of claim. However, a plaintiff is not entitled to judgment merely because the facts are deemed to be admitted. The pleaded facts must entitle the plaintiff to the judgment sought. The rule requires the judge to inquire into whether the deemed factual admissions flow from the pleaded facts and whether as a matter of law the facts entitle the plaintiff to a judgment. [^5]
[21] On a motion for a default judgment, the court undertakes a three-step inquiry; namely: (a) What deemed admissions of fact flow from the Statement of Claim? (b) Do the deemed admissions of fact entitle the plaintiff as a matter of law to judgment? and (c) If the deemed admissions are insufficient for judgment, has the plaintiff adduced admissible evidence that when combined with the deemed admissions entitles it to judgment on the pleaded claim? [^6] Where the pleaded facts are not sufficient to establish liability, the court may consider the affidavit evidence to determine whether the plaintiff is entitled to judgment or whether the evidence disentitles the plaintiff to judgment. [^7]
[22] Unliquidated damages must be proven, and if the claim is for unliquidated damages, the motion for judgment must be supported by evidence given by affidavit. [^8]
[23] In the immediate case, the facts admitted to be true and the evidence of Ms. Chen proves that the Defendants are liable for the torts of trespass, conversion, and fraud and that Ms. Chen has suffered damages of $313,051.87 from the misappropriation of her antiques. She is entitled to a judgment and given the fraudulent conduct of the Defendants, she is entitled to costs on a substantial indemnity basis and for an order pursuant to s. 178 of the Bankruptcy and Insolvency Act.
[24] Judgment accordingly.
E. Conclusion
[25] For the above reasons, Ms. Chen shall have judgment as requested with substantial indemnity costs of $45,348.78, all inclusive of counsel fee, disbursements, and HST.
Perell, J.
Released: July 20, 2023
Footnotes
[^1]: 1,885 days; per diem $12.87 [^2]: R.S.O. 1990, c. 43. [^3]: R.S.C. 1985, c. B-3, s. 30. [^4]: R.R.O. 1990, Reg. 194. [^5]: Gillespie v. Fraser, 2023 ONSC 537; Paul’s Transport Inc. v. Immediate Logistics Limited, 2022 ONCA 2022; Bank of Montreal v. Mathivannan, 2021 ONSC 2538; Canada Mortgage and Housing Corp. v. CMC Medical Centre Inc., 2017 ONSC 7551; Elekta Ltd. v. Rodkin, 2012 ONSC 2062; Fuda v. Conn, [2009] O.J. No. 188 (S.C.J.); Segraves (Fralick) v. Fralick, [1951] O.J. No. 536 (C.A.). [^6]: Gillespie v. Fraser, 2023 ONSC 537; Kaur v Virk, 2022 ONSC 6697; Elekta Ltd. v. Rodkin, 2012 ONSC 2062. [^7]: Martin v. Hurst, 2023 ONSC 2606 (Div. Ct.); Salimijazi v. Pakjou, [2009] O.J. No. 1538. [^8]: Rule 19.05(2). Kaur v Virk, 2022 ONSC 6697; Beals v. Saldanha (1998), 42 O.R. (3d) 127 (Gen. Div.); Family Trust Corporation v. Harrison, [1986] O.J. No. 2555 (Dist. Ct.).