Court File and Parties
COURT FILE NO.: CV-22-00687209-0000 DATE: 2023-11-24 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: November 24, 2023
BEFORE: Papageorgiou J.
DECISION
Overview
[1] The plaintiffs bring a motion for contempt.
[2] 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") (collectively the "Lin Defendants"). The Order was also made against other parties who are not subject to the contempt motion before me today.
[3] The May 1 Order required the Lin Defendants to provide affidavits setting out the particulars of their assets with supporting documentation and to submit to examinations under oath in respect of those said affidavits.
[4] The Parties returned before me on a number of occasions relating to issues including living expenses: May 26, 2023, July 6, 2023 and September 15, 2023.
[5] The July 6 Order clearly and unequivocally required:
a. Lin to provide information and supporting documents as to the financing that is outstanding on each of the vehicles set out in Lin's Affidavits sworn May 13, 2023 and May 23, 2023, which are listed in "Schedule B".
b. The Lin Defendants to:
i. prepare and provide to the Plaintiffs a full monthly accounting from the business, as well as full particulars anytime they enter into an agreement to obtain financing or purchase or sell a vehicle;
ii. submit to examinations under oath in respect of their Affidavits and assets at a time mutually acceptable between the parties, which examination shall take place by July 27, 2023; and
iii. serve their Statement of Defence by August 6, 2023
[6] The Lin Defendants have failed to comply with these Orders by failing to attend for examination under oath, and to comply with the provisions of the July 6 Order set out above. Although they did serve a Statement of Defence it was not until August 14, 2023 and it was not filed. They have been noted in default. They have also failed to comply with my costs order dated June 21, 2023.
[7] The Lin Defendants did not attend today. Their counsel did. He advised that he has been sending these motion materials to the Lin Defendants and they do not respond. He will be moving to get off the record. He said that as he received no instructions he was not prepared to argue this contempt motion today and submitted that it should be adjourned.
[8] I add that the Lin Defendants cannot be found and the way in which this contempt motion was served was by way of substituted service ordered by me, to the email address provided by their counsel.
[9] I am not prepared to adjourn this motion. The Lin Defendants have flouted Court Orders considerably. As O'Leary J explained in Canada Metal Co. v. Canadian Broadcasting Corp. (No. 2):
To allow court orders to be disobeyed would be to treat the road towards anarchy. If orders of the Court can be treated with disrespect, the whole administration of justice is brought into scorn. Daily, thousands of Canadians resort to our Courts for relief against the wrongful acts of others. If the remedies that the Courts grant to correct those wrongs can be ignored, then there will be nothing left but for each person to take the law into his own hands. Loss of respect for the Courts will quickly result in the destruction of our society.
Canada Metal Co. v. Canadian Broadcasting Corp. (1974), 4 OR (2d) 585, 1974 835 (Ont HC) at para. 70, affirmed, 1975 544 (Ont CA)
[10] However, I am not persuaded that at this stage it is appropriate to make an Order of contempt.
[11] The exercise of the contempt power is discretionary and Courts discourage the routine use of this power to obtain compliance with court orders. The power should be exercised cautiously and with great restraint as an enforcement tool of last, rather than first, resort: Ruffolo v. David, 2019 ONCA 385.
[12] Before making a contempt finding, a judge should consider other options, such as issuing a declaration that the party breached the order: Carey, at paras. 36-37; Chong v. Donnelly, 2019 ONCA 799, 33 R.F.L. (8th) 19, at paras. 9-12; Valoris pour enfants et adultes de Prescott-Russell c. K.R., 2021 ONCA 366, at para. 41; and Ruffolo, supra, at paras. 18-19.
[13] Thus, I am Ordering the following sanctions for the breaches of my Orders:
I grant a declaration that the Defendants, LYSR Management Ltd., 2708042 Ontario Inc., 2786584 Ontario Inc., Rina Shinchi, and Yangguang Lin also known as Sony Lin (collectively, "Lin Defendants"), have breached paragraphs 8, 9, 10, and 17 of the Order dated July 6, 2023 ("July 6 Order");
I grant an Order striking the Lin Defendants' Statement of Defence, Crossclaim and Counterclaim, if necessary;
I make an Order varying the July 6 Order, freezing the assets of the Lin Defendants, without any further allowance for business expenses;
I make an Order that any further steps taken by the Plaintiffs against the Lin Defendants in this action that requires service may be served by e-mail to Yangguang Lin also known as Sony Lin, LYSR Management Ltd., 2708042 Ontario Inc., and 2786584 Ontario Inc. at xyq114575@gmail.com and to Rina Shinchi at rina.shinchi@gmail.com;
I direct that the plaintiff may bring a motion in writing for default judgment directly to me utilizing the following schedule:
(a) The Plaintiff shall serve its Motion Record on the Defendant, together with a copy of this Endorsement on or before December 7, 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 January 5, 2024 (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 January 12, 2024
(e) If the Defendant notifies counsel for the Plaintiff that it intends to respond to the motion for default judgment, the Plaintiff shall request the scheduling of a Case Conference before me.
(g) The Plaintiff will confirm the motion in the ordinary course.
- The motion for contempt is adjourned. If the Lin Defendants have not complied with the Orders by January 31, 2024, the plaintiff may bring this contempt motion back before on an urgent basis by contacting my assistant polly.diamante@ontario.ca
[14] Costs of today's attendance are fixed in the amount of $12,000 on a partial indemnity basis to be paid within 30 days.
Addendum dated November 27, 2023
[15] The orders herein shall be valid without the need for the Plaintiff to take out a formal order.
Justice Papageorgiou
Released: November 24, 2023
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
REASONS FOR JUDGMENT
Papageorgiou J.
Released: November 24, 2023