COURT FILE NO.: CV-19-00613548-0000 DATE: 2023-07-24
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: YUK-SHUM et al, Plaintiffs AND: JIANG et al, Defendants
BEFORE: ASSOCIATE JUSTICE R. FRANK
APPEARANCES: B. Tustain, for the Moving Parties / Plaintiffs Cheng Yuk-Shum and Yue Mei Li C. Goldson, for the Responding Parties / Defendants Hui An Jiang, Chai Go Ng, Gustavo Chang, Victor Low-Foon, Ting-Tsan Cheng, Paul Shin-Hoi Eng, and Yen-Poo Chion
HEARD: 26 APRIL 2023
REASONS FOR DECISION
[1] This is a motion by two of the plaintiffs in this action, Cheng Yuk-Shum (“Cheng”) and Yue Mei Li (“Yue”, and collectively with Cheng the “Moving Plaintiffs”), for an order validating service of a notice of libel and slander dated December 11, 2018 (the “Libel Notice”) on the seven individual defendants in this action (the “Individual Defendants”). The Moving Plaintiffs are not seeking any relief against the corporate defendants, and the corporate defendants take no position on the motion.
[2] For the reasons that follow, the motion is dismissed.
BACKGROUND
[3] The underlying action was commenced by way of notice of action issued January 30, 2019. The statement of claim is dated March 1, 2019. The action arises from various corporate governance and other related disputes with respect to a not‑for‑profit community organization known as the Enping Fellowship Society of Toronto (the “Enping Fellowship”). In this action, the plaintiffs allege that the defendants, both individual and media, made certain defamatory statements between October 30, 2018 and November 30, 2018.
[4] Prior to the commencement of this action, two separate actions were commenced with respect to claims in connection with various corporate governance and other related disputes with respect to the Enping Fellowship:
(a) In August 2018, the Individual Defendants commenced an action against the two Moving Plaintiffs in this action (Cheng and Yue) alleging, among other things, breach of fiduciary duty, fraud, negligence, breach of trust and breach of contract (Court File No. CV-18-00603512-0000); and
(b) In November 2018, Hui An Jiang, one of the Individual Defendants in this action, commenced a defamation action against Cheng (Court File No. CV-18-00608855-0000).
(together, the “Related Proceedings”). [1]
[5] The Moving Plaintiffs take the position that the Related Proceedings are relevant for purposes of this motion because Mr. Christopher Goldson, counsel for the Individual Defendants in this action, also represents those defendants in the Related Proceedings. Specifically, the Moving Plaintiffs argue that Mr. Goldson’s previously established representation of the Individual Defendants in the Related Proceedings is relevant to the determination of whether service of the Libel Notice on the Individual Defendants should be validated.
[6] When this defamation action was commenced, all of the plaintiffs were represented by Mr. Trent Morris. Mr. Morris is no longer counsel for the Moving Plaintiffs, Cheng and Yue.
[7] Prior to the commencement of this action, Mr. Morris prepared the Libel Notice, which was intended to meet the requirements of section 5(1) of the Libel and Slander Act. [2] On December 11, 2018, Mr. Morris, sent a copy of the Libel Notice along with a cover letter dated December 11, 2018 (the “December 11, 2018 Letter”) to Mr. Goldson. The subject line on the fax transmission sheet read: "Cheng ats Jiang". The December 11, 2018 Letter was sent by fax.
[8] The subject line and body of the December 11, 2018 Letter read as follows:
Re: Cheng Yuk-Shum October 30, 2018 Publication
Please find enclosed a Notice pursuant to the Libel and Slander Act on your clients as follows:
- Ng, Chai Go;
- Victor Low Foon;
- Chion, Yen Poon;
- Chang, Gustavo; and
- Cheng, Ting Tsan.
[9] The December 11, 2018 Letter named only five of the seven Individual Defendants. It does not name Hui An Jiang (“Jiang”) or Paul Shin-Hoi Eng (“Eng”). The Libel Notice, which was enclosed with the letter, does not specifically name any of the Individual Defendants.
[10] In response to the December 11, 2018 Letter, Mr. Goldson sent a letter dated December 12, 2018 by fax to Mr. Morris. This responding letter stated as follows:
"We received your letter of December 11, 2018 containing a purported Notice pursuant to the Libel and Slander Act.
Please be advised that we have no instructions from any of the named persons to accept service of the Notice. We are therefore unable to accept service."
[11] In addition to the December 11, 2018 Letter, the Moving Plaintiffs’ motion record includes various affidavits of service or attempted service with respect to efforts made by Mr. Morris to serve the Libel Notice on the Individual Defendants between December 11, 2018 and January 18, 2019 (the “Affidavits of Service or Attempted Service”).
ISSUES
[12] The issues on this motion are as follows:
(a) Does an associate judge have jurisdiction to validate service of a notice of libel? (b) Should the court validate service of the Notice of Libel on the Individual Defendants by way of the December 11, 2018 Letter sent by fax?
LAW AND ANALYSIS
(i) Does an associate judge have jurisdiction to validate service of a notice of libel?
[13] At a case conference convened before me with respect to the scheduling of this motion, I asked the parties to advise of their respective positions as to whether an associate judge has jurisdiction to validate service of a notice of libel pursuant to section 5(1) of the Libel and Slander Act. Prior to the motion, both parties confirmed their respective positions that the relief sought on this motion is within the jurisdiction of an associate judge. The position of the Individual Defendants was that there is no provision in the Libel and Slander Act that would confer “expressly on a judge” any of the issues that arise on this motion, and those issues do not fall under any of the other exceptions in Rule 37.02(2) of the Rules of Civil Procedure that would exclude an associate judge from hearing the motion. The Moving Plaintiffs concurred on the basis that, among other reasons, the motion seeks relief under Rule 16 (service of documents) of the Rules of Civil Procedure which is within the jurisdiction of an associate judge.
[14] While the parties did not file any caselaw directly on point, the court has considered issues relating to service pursuant to Rule 16 of the Rules of Civil Procedure of a libel notice under the Libel and Slander Act. [3]
[15] Having considered the parties’ submissions, I found that I have jurisdiction with respect to the issue of whether to validate service of the Libel Notice. However, in reaching this conclusion, I distinguish between: (1) jurisdiction to determine issues relating to service of the Libel Notice; and (2) jurisdiction to determine issues relating to whether the content of a libel notice is sufficient to satisfy the requirements of section 5(1) of the Libel and Slander Act. While I have jurisdiction with respect to issues of service of the Libel Notice, issues with respect to the content of that notice are not before the court on this motion and remain to be determined at a hearing of the merits of the claim, or through a motion seeking a final determination of the claim.
(ii) Should the court validate service of the Notice of Libel on the Individual Defendants by way of the December 11, 2018 Letter sent by fax?
[16] Rule 16.08 of the Rules of Civil Procedure provides as follows:
16.08 Where a document has been served in a manner other than one authorized by these rules or an order, the court may make an order validating the service where the court is satisfied that,
(a) the document came to the notice of the person to be served; or
(b) the document was served in such a manner that it would have come to the notice of the person to be served, except for the person’s own attempts to evade service.
[17] On this motion, the Moving Plaintiffs rely on Rule 16.08(a) and ask the court to find that the Libel Notice came to the notice of the Individual Defendants when it was faxed to Mr. Goldson with the December 11, 2018 Letter.
[18] The Moving Plaintiffs acknowledge that they have the onus to demonstrate that the Libel Notice came to the notice of the Individual Defendants. The Moving Plaintiffs also acknowledge that there is no direct evidence that the Libel Notice came to the notice of the Individual Defendants, but argue that the court can infer that they had notice of the Libel Notice based on:
(a) the pre-existing lawyer-client relationship between Mr. Goldson and the Individual Defendants in connection with the Related Proceedings; and
(b) the Moving Plaintiffs’ other attempts to bring the Libel Notice to the attention of the Individual Defendants, as evidenced by the Affidavits of Service or Attempted Service.
[19] The Moving Plaintiffs argue that the December 11, 2018 Letter was proper notice to all seven of the Individual Defendants even though it only names five of the seven Individual Defendants. Specifically, they submit that it can be inferred from the letter and the contents of the attached Libel Notice that the Libel Notice applies to the two unnamed Individual Defendants, Jiang and Eng, in addition to the five Individual Defendants listed in the letter. I do not accept this argument.
[20] For purposes of service, it must be sufficiently clear on whom a document is being served. Here, the December 11, 2018 Letter does not name two of the Individual Defendants (Jiang and Eng), and the Libel Notice does not name any of the Individual Defendants. Given that neither of the documents names Jiang and Eng, I find that the combination of the December 11, 2018 Letter and the Libel Notice are not sufficient service of the Libel Notice to those two defendants. For that reason alone, I am not prepared to validate service of the Libel Notice on the two unnamed Individual Defendants, Jiang and Eng.
[21] I also find that there is insufficient evidence that the Libel Notice came to the notice of any of the seven Individual Defendants, including the five Individual Defendants named in the December 11, 2018 Letter, when it was faxed to Mr. Goldson together with the December 11, 2018 Letter. In this regard, the Moving Plaintiffs acknowledge that a lawyer would ordinarily have to obtain instructions to accept service of a document on behalf of a party. They also acknowledge that Mr. Goldson confirmed on December 12, 2018 that he did not have instructions to accept service of the Libel Notice. Nevertheless, the Moving Plaintiffs submit that, in the context of the pre‑existing lawyer‑client relationship between Mr. Goldson and the Individual Defendants with respect to the Related Proceedings, it remains open to the court to validate service based on Mr. Goldson’s receipt of the December 11, 2018 Letter.
[22] In support of this assertion, the Moving Plaintiffs rely on The Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund v SNC-Lavalin Group Inc. (“SNC”). [4] In that decision, Perell J. references a prior order in which he permitted substituted service of a statement of claim on certain defendants through lawyers representing them in other criminal and employment matters. Perell J. ordered substituted service even though those lawyers did not have instructions to accept service of the pleading. [5]
[23] The Moving Plaintiffs argue that, similar to what the court did in SNC, the court should validate the service on Mr. Goldson even though he was without instructions or authority to accept service. In my view, SNC is distinguishable, and I do not accept the Moving Plaintiffs’ argument. First, while Perell J.’s reasons for making the order for substituted service are only referenced in passing in the SNC reasons for decision, it is clear from those reasons that Perell J. had been satisfied that the defendants with respect to whom the substituted service order was made had “ignored the proceeding to date”. However, based on the evidence in the record for this motion, I am unable to conclude that the Individual Defendants had “ignored the proceeding to date” when the December 11, 2018 Letter was sent to Mr. Goldson.
[24] In any event, the test for validating service pursuant to Rule 16.08(a) is different than the test for substituted service. For Perell J. to have allowed substituted service, he would have had to conclude that there was a reasonable possibility or some likelihood that notice of the statement of claim would come to the attention of the defendants if it was served on their criminal and employment lawyers. Here, the test for validating service under Rule 16.08(a) is whether “the document came to the notice of the person to be served” even though it was not served in a manner authorized by the Rules of Civil Procedure.
[25] I accept that the question of whether service of the Libel Notice should be validated is not determined in the negative simply because Mr. Goldson did not have authority to accept service of that document. In other words, the question is not whether Mr. Goldson had authority to accept service of the Libel Notice. Rather, the question of whether service should be validated turns on the whether the Libel Notice actually came to the attention of the Individual Defendants through the method of service used by the Moving Plaintiffs, i.e. as a result of Mr. Goldson’s receipt of the December 11, 2018 Letter. However, I am not prepared to infer, based on the evidence in the record, that service of the Libel Notice on Mr. Goldson – who represents the Individual Defendants in the Related Proceedings – is sufficient for the court to conclude that the Individual Defendants received notice of the Libel Notice. Specifically, I do not accept the Moving Plaintiffs’ argument that the court should validate service because Mr. Goldson had a “duty of candor”, through separate pre‑existing retainers, to bring the Libel Notice to the attention of the Individual Defendants in a manner that is sufficient to satisfy the requirements of Rule 16.08(a). Rather, I accept the responding parties’ submission that “Lawyer’s offices are not ‘drop boxes’ for service of documents.”
[26] The Moving Plaintiffs’ position would essentially create a rebuttable presumption that service on a lawyer who represents a party in a related proceeding is presumed to be actual notice to that party. In my view, this would be an improper reversal of the onus that is on the Moving Plaintiffs to satisfy the court that the Libel Notice came to the notice of the Individual Defendants, and it would place the onus on the party purportedly served through a lawyer to rebut that presumption. Even if Mr. Goldson had advised his clients of receipt of the December 11, 2018 Letter and Libel Notice in order to confirm that he did not have instructions to accept service of those documents, [6] it would not be appropriate to infer that what was discussed as between Mr. Goldson and any of the Individual Defendants was necessarily sufficient to find that “the document [i.e. the Libel Notice] came to the notice of the person to be served”.
[27] The Moving Plaintiffs argue that the Individual Defendants did not put forward any evidence: (i) to confirm that they did not receive notice of the Libel Notice through the December 11, 2018 Letter; or (ii) about when or how they first learned of the Libel Notice. However, a defendant is not required to prove that a manner of service that is not authorized by the Rules was not effective. Rather, the onus is on the Moving Plaintiffs to show that the otherwise unauthorized method of service was, nevertheless, effective. In these circumstances, I am not prepared to make a negative inference against the Individual Defendants that would effectively reverse the onus on the Moving Plaintiffs to show that the Libel Notice “came to the notice of the person to be served”, i.e. the Individual Defendants. In this regard, the Moving Plaintiffs were entitled to cross‑examine the defendant Jiang, one of the Individual Defendants who swore an affidavit in opposition to this motion. They also had the right to examine the other Induvial Defendants under Rule 39.03 of the Rules of Civil Procedure as witnesses to a pending motion. The Moving Plaintiffs submit that no adverse inference should be drawn from their failure to do so because the Individual Defendants would have refused to answer any questions about whether they received notice of the Libel Notice through the December 11, 2018 Letter on the basis of lawyer‑client privilege. I do not accept this argument. No doubt, certain types of questions would be covered by lawyer-client privilege. However, the straightforward question “when did the Libel Notice first come to your attention” would not have been privileged.
[28] Finally, the Moving Plaintiffs argue that Mr. Goldson’s receipt of the December 11, 2018 Letter should be considered in the context of the numerous other attempts to serve the Individual Defendants. With respect to those other attempts at service, the Moving Plaintiffs advised during oral argument that, for the purposes of this motion, they do not rely directly on the Affidavits of Service or Attempted Service as evidence of proper service of the Libel Notice. However, they argue that the other attempts at service are relevant context because they demonstrate the efforts made by the Moving Plaintiffs to serve the Libel Notice on the Individual Defendants. Specifically, the Moving Plaintiffs submit that in the context of these other attempts at service, the faxing of the December 11, 2018 Letter “finished the job” of service. I do not accept this argument for several reasons.
[29] First, I do not accept the suggestion that the number of attempts a party has made to serve a document personally or by an alternative to personal service is relevant to the assessment of whether service should be validated under Rule 16.08(a). The test under Rule 16.08(a) is whether the Libel Notice came to the notice of the Individual Defendants, not how often the Moving Plaintiffs attempted to provide the notice. In any event, having reviewed the Affidavits of Service or Attempted Service, it is apparent that all or virtually all of the attempts to serve the Individual Defendants personally or by an alternative to personal service occurred after the December 11, 2018 Letter was faxed to Mr. Goldson. In such circumstances, I do not accept that faxing the December 11, 2018 Letter and Libel Notice before the other attempts at service could have somehow “finished the job”.
[30] In the result, I decline to exercise my discretion to validate service of the Libel Notice on any of the Individual Defendants. However, in doing so, I note as follows:
(a) My analysis, reasons and decision relate solely to the issue of validation of service of the Libel Notice through the faxing of the December 11, 2018 Letter to Mr. Goldson. I am not deciding when the Libel Notice came to the attention of any of the Individual Defendants. Specifically, I am not finding that the Individual Defendants were unaware of the Libel Notice at any particular time. I am simply declining to exercise my discretion to validate service of the Libel Notice based on Mr. Goldson’s receipt of the December 11, 2018 Letter.
(b) I make no finding as to whether the content of the Libel Notice is sufficient to satisfy the requirements under s. 5(1) of the Libel and Slander Act, and whether such notice was provided in a timely manner.
These issues remain to be determined at a hearing of the merits of the claim, based on a more complete record.
[31] Having concluded that service should not be validated for the above reasons, I need not consider the Individual Defendants’ alternative submissions as to why the motion should be dismissed.
DISPOSITION AND COSTS
[32] For the reasons outlined above, the Moving Plaintiffs’ motion seeking validation of service of the Libel Notice on the Individual Defendants is dismissed.
[33] With respect to costs, the Moving Plaintiffs submit that, assuming success on the motion, they should be awarded costs in the amount of $10,000. In quantifying costs, they submit that the court should take into account that the motion should not have been opposed and that the Individual Defendants’ materials were unnecessarily complicated because they include submissions with respect to the sufficiency of content of Libel Notice, an issue that be left to trial. In terms of the costs claimed by the Individual Defendants, the Moving Plaintiffs submit that the costs they seek are inflated for a number of reasons, including that: (i) the Costs Outline is based on a “block fee”, such that it is not possible to break the fees down based on the types of tasks undertaken; (ii) the hourly rates claimed for work done by the law clerk are excessive; and (iii) certain disbursements are improperly claimed. The Moving Plaintiffs submit that in the event that the motion is dismissed, the costs payable to the Individual Defendants should be in the amount of $7,000 or an amount to be assessed by the trial judge, and they should only be payable in the cause.
[34] The Individual Defendants submit that, if successful, they should be paid their costs on a partial indemnity basis in the amount of $14,500 inclusive of taxes and disbursements. They take the position that the costs claimed are in an amount that an unsuccessful party could reasonably expect to pay.
[35] In my view, given the Individual Defendants’ success in opposing the motion, costs should be fixed and payable to them now. However, the costs claimed by the Individual Defendants should be partly reduced. First, the Individual Defendants made certain submissions with respect to the sufficiency of the Libel Notice which, as noted above, is not an issue to be determined on this motion. As well, their Costs Outline presents the fees claimed as a “block fee” and does not break the fees down by task.
[36] In all the circumstances, and considering the factors under Rule 57.01(1) of the Rules of Civil Procedure, I find that that it is fair and reasonable for the Moving Plaintiffs to pay to the Individual Defendants costs of this motion fixed in the amount of $10,000 (inclusive of disbursements and taxes) within 30 days.
R. Frank Associate J DATE: July 24, 2023
[1] A third proceeding involving various parties to this action was commenced in August 2019 by way of notice of application (Court File No. CV-19-00619836-0000). In that application, the Individual Defendants (as applicants) sought various forms of relief regarding, among other things, the governance of the Enping Fellowship. Although referenced in the responding motion materials, that application is not directly relevant to the issues to be determined on this motion because it was commenced subsequent to the time period relevant to this motion.
[2] Libel and Slander Act, R.S.O. 1990, c. L.12 (the “Libel and Slander Act”)
[3] See Boyer v Toronto Life Publishing Co, (2000), 48 O.R. (3d) 383; Roach v Now Communications
[4] 2012 ONSC 5288
[5] SNC at para 32
[6] There is no evidence in the record as to what discussions, if any, Mr. Goldson had with the Individual Defendants with respect to receipt of the December 11, 2018 Letter and Libel Notice.