Court File and Parties

COURT FILE NO.: FS-22-00033553-0000 DATE: 20240304 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MING PAN Applicant – and – GUOYAO ZHAO Respondent

Counsel: Ryan P. Zigler, for the Applicant Warren Milne, for the Respondent

HEARD: February 27, 2024

VELLA J.

Reasons for Decision - Motion for An Anti-Suit Injunction – Foreign Divorce Proceedings

Introduction

[1] The Applicant seeks an order directing the Respondent to withdraw or otherwise terminate his divorce proceedings commenced before the Beijing Doncheng District People’s Court in the People’s Republic of China on April 14, 2023 (“the People’s Court” proceeding), also known as an “anti-suit injunction.”

[2] The Respondent opposes the application and requests that this motion be adjourned “sine die until there is a clear and final outcome of the lawsuits in China” (being two third party lawsuits for recovery of loans against both parties). [1]

[3] For the following reasons, the motion is granted.

Juridical History

[4] The Applicant commenced the within proceedings on December 30, 2022 in which she seeks, inter alia, the following relief:

a. a divorce; b. parenting orders; c. child and spousal support orders; d. equalization of net family property; and e. an order for the sale of jointly owned property.

[5] The Respondent was served the application in Canada.

[6] The Respondent retained a lawyer and filed an Answer on February 3, 2023. In the Answer, the Respondent seeks, inter alia, the following relief:

a. a divorce; b. parenting orders; c. equalization of net family property; and d. an order for the sale of jointly owned property.

[7] The Respondent does not raise the issue of jurisdiction in his Answer; however, he references that he will be commencing a lawsuit in China.

[8] The parties attended a case conference on October 18, 2023.

[9] At the case conference, the Respondent provided a copy of the above-referenced family law proceeding that he commenced in China in April 2023. In that application, the Respondent seeks the following relief:

a. a divorce; b. parenting orders; c. child support; d. a division of jointly owned property; e. an order for the payment of joint debts; and f. compensation for mental damage allegedly caused by the Applicant.

[10] This matter is scheduled for a settlement conference on March 11, 2024.

Issues

[11] The issues to be determined are:

a. Does this court have jurisdiction to adjudicate the claims raised in the current proceeding? b. Should this court assume and exercise this jurisdiction and/or effectively stay these proceedings until third party lawsuits in China are finally determined? c. Should this court grant an anti-suit injunction regarding the divorce proceeding commenced by the Respondent in China?

Evidence and Analysis

Issue 1: This court has jurisdiction simpliciter

[12] There is no doubt that this court has jurisdiction simpliciter over the parties and may exercise in personam jurisdiction over the Respondent.

[13] The Respondent has voluntarily attorned to the jurisdiction of this court. He filed an Answer and seeks substantive relief from this court. He attended a case conference.

[14] The Respondent did not bring a motion challenging jurisdiction under r. 16(12) of the Family Law Rules, O. Reg. 114/99. The Respondent has litigated this proceeding on the merits: Kunuthur v. Govindareddiari, 2018 ONCA 730, 427 D.L.R. (4th) 120, at para. 18. Accordingly, the elements of consent-based attornment are satisfied. These common law elements apply to family law proceedings: Kunuthur; C.C. v J.B., 2021 ONCA 363, at para. 9.

[15] Furthermore, the parties were ordinarily resident in Ontario up until at least the date of separation. The Applicant and the children are still ordinarily resident in Ontario. The parties’ youngest child was born in Canada, and the eldest in China. The two largest assets, being the matrimonial home and a rental property, are located in Ontario. The Respondent travels extensively between Ontario and China. He deposed that “most of the time” he lives and works in China.

[16] No argument was raised on the basis of forum non conveniens.

[17] Accordingly, this court has jurisdiction simpliciter over this matter based on consent-based attornment and also the real and substantial connection test: Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572.

Issue 2: This court should exercise jurisdiction over all the issues raised in the Application without delaying or staying the domestic proceedings.

[18] The Respondent does not contest that the parenting and child support orders ought to be made by this court. This is consistent with s. 22 of the Children’s Law Reform Act, R.S.O. 1990, c. C.12, and my finding of the uncontested fact that the children are habitually resident in Ontario.

[19] The Respondent also concedes that the remedy for divorce ought to be heard by this court. However, he is concerned that if he withdraws his request for a divorce in China, then his whole proceeding will be terminated by the People’s Court. If so, then he will not be able to pursue his claim for civil damages arising from the Mother’s alleged adultery, which he submits is permitted under Chinese divorce law, but not recognized under the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.), or Family Law Act, R.S.O. 1990, c. F.3. Divorce is granted on a no-fault basis in Canada. I will return to this issue below.

[20] The Respondent also urges that this court be pragmatic and defer exercising jurisdiction and/or delay the domestic proceedings until certain debt claims are disposed of in China, as the claims will affect this court’s determination of equalization of the net family property. [2]

[21] There are two debts. The first is a debt claimed by the Applicant’s father, arising from an alleged loan of $3.3 million CDN, ostensibly used by the parties to buy their two properties located in Ontario (the matrimonial home and a rental property). The Applicant’s father sued the parties in China. It is uncontested that judgment has been granted in favour of the Applicant’s father and the first appeal brought by the Respondent has been dismissed. According to the Respondent, he has not yet exhausted his appeals. Therefore, subject to any further appeal, that debt has now crystallized.

[22] The second debt arises from an alleged loan made by the Respondent’s sister to the parties in the sum of 7 million RMB (approximately $1.33 million CDN). The sister has commenced a lawsuit in China for this alleged debt. It is ongoing.

[23] As stated, the Respondent has conceded that the parenting orders, child support, and divorce should be adjudicated by this court.

[24] He also concedes that equalization should be adjudicated by this court.

[25] His point is that, in his view, the Ontario Superior Court cannot properly adjudicate equalization until the two lawsuits in China are finally determined. This way, both debts will be crystallized and can be factored into a determination of the net family property. It is noted that the Applicant’s father’s lawsuit was not only for a monetary debt but may include a remedy for the seizure of the two Ontario properties if the judgment debt is not paid. [3]

[26] The Ontario courts are well able to adjudicate the value of debts that may arise in a different country. The parties are expected to adduce the requisite evidence for such valuations. In the event that the Respondent (and/or Applicant for that matter) obtain a final judgment in relation to the alleged debts prior to trial, they can adduce the appropriate evidence for admission of those judgment debts (or dismissals) at trial for the trial judge’s consideration.

[27] Accordingly, the Respondent’s request that this proceeding be delayed (or stayed) pending the outcoming of the two third party lawsuits in China is denied.

Issue Three: An Anti-Suit Injunction is Warranted

[28] An anti-suit injunction restrains a party from proceeding with his foreign action. In ordering this type of injunction, the court is exercising its in personam jurisdiction over the party. Shaw v. Shaw, 2007 CarswellOnt 4417 (S.C.), at para. 24. It does not restrain the foreign court from proceeding: Shaw, at para. 24. This type of remedy is available to restrain family law litigants from continuing competing family law proceedings commenced in foreign jurisdictions.

[29] The test that must be met by the moving party seeking an anti-suit injunction has been described as follows:

a. It is preferable (not mandatory) that a foreign proceeding is pending; b. It is preferable (not mandatory) that the applicant has not obtained a stay from the foreign court already; c. The domestic court is the “potentially appropriate forum”; d. The domestic forum has the closest connection to the action and the parties, and no other forum is clearly more appropriate; and e. There is no injustice to the parties if the forum proceeding does or does not go forward, and an injunction will not deprive the forum plaintiff of advantages in the foreign jurisdiction, which would be an unjust deprivation: Shaw, at para. 21; Borschel v. Borschel, 2020 ONSC 4395, 43 R.F.L. (8th) 366, at para. 93; Bell’O International LLC v. Flooring & Lumber Co., 2001 CarswellOnt 1701 (S.C.), at para. 9, citing Amchem Products Incorporated v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897, at p. 519.

[30] As can be observed, the elements for an anti-suit injunction are similar to the jurisdiction simpliciter and forum non conveniens analysis. If anything, the anti-suit injunction may have a lower threshold than the real and substantial connection test; i.e., the requirement to show the domestic court is the “potentially” appropriate forum and no other forum is “clearly more appropriate”. However, I do not need to determine the relative thresholds for purposes of this motion.

[31] I will address each of the elements in turn.

[32] First, it is uncontested that there is a foreign proceeding pending that substantially overlaps with some of the relief sought in the domestic proceeding.

[33] Second, the Applicant has not obtained a stay from the People’s Court in China.

[34] Third, there is no suggestion that the domestic court is not the potentially appropriate forum to adjudicate all the issues arising under the Divorce Act and the Family Law Act. As stated, the Respondent concedes that the claims advanced by the Applicant, and by him in his Answer (including the grant of a divorce), are properly before this court and should be decided by this court.

[35] With respect to the fourth element, the Respondent alleges there will be an injustice to him if he is restrained from proceeding with his application in China. He claims that he is entitled to request compensation for alleged adultery within the context of a divorce application under Chinese legislation. The Divorce Act is premised on no-fault divorce. However, the Respondent has not adduced any expert opinion evidence on the law of China concerning whether he is entitled to assert a claim for compensation based on alleged adultery. [4] Accordingly, the Respondent has not proven that he will suffer an injustice if he is enjoined from proceeding with his application before the People’s Court in China.

[36] In my view, not being able to pursue the divorce proceeding before the People’s Court in China, and thus not being able to pursue a claim for compensation based on an alleged adultery, does not amount to an unjust deprivation. As stated, the Respondent has already voluntarily attorned to the jurisdiction of this court and concedes that the domestic law applies to all the claims advanced in the context of this Application and Answer. When he did so, he was aware that this jurisdiction does not recognize a claim for compensation arising from adultery at all, much less in the context of a no-fault based divorce regime.

[37] Furthermore, while the court has, in the past, recognized a tort action for damages for criminal conversation (also then known as adultery) and for alienation of affections, these types of torts have been abolished in Ontario (Kungl v. Schiefer, [1962] S.C.R. 443 (Westlaw) and Frame v. Smith, [1987] 2 S.C.R. 99 at paras 7 and 38).

[38] On the other hand, the Applicant will potentially suffer an injustice if the Respondent proceeds with his claim before the People’s Court. If a divorce is granted in China, (notwithstanding the Respondent’s counsel’s submission that the Respondent will not pursue that specific remedy though plead and necessary in order to seek the compensation), the Applicant will be prevented from seeking spousal support under the Divorce Act or Family Law Act since, as is well established, one cannot seek spousal support from a former spouse. [5]

[39] There will be no injustice to the parties if the foreign proceeding does not go forward, and an injunction will not deprive the Respondent of the advantages in the foreign jurisdiction, which would be an unjust deprivation. On the other hand, there may be injustice to the Applicant if the People’s Court grants a divorce before her claims for spousal support are adjudicated here.

[40] Furthermore, I am not satisfied that the domestic proceeding should be delayed or stayed. This court will not be hampered in its adjudication of the equalization claim by the fact that there are two foreign third party lawsuits against the parties proceeding in China. It may well be that by the time this matter proceeds to trial, the third party lawsuits will be finally determined. In the meantime, it is essential that the issues, particularly as affects the children, be permitted to proceed in the normal course, and the Applicant deserves to have her claim for spousal support adjudicated upon without the fear that the People’s Court may issue a divorce in the interim.

[41] In my view, on balance, and given the Respondent’s concessions that all the remaining issues, aside from possibly a claim for civil compensation based on an alleged adultery, are properly before this court, the justice of this case favours the Applicant’s position.

[42] The Applicant proved that the elements for granting the anti-suit injunction are met.

[43] Accordingly, an anti-suit injunction will be issued enjoining the Respondent from continuing with his divorce proceedings before the Beijing Doncheng District People’s Court in the People’s Republic of China on April 14, 2023.

Disposition and Costs

[44] The following orders are made:

a. A declaration will issue that this court has jurisdiction simpliciter over the Application and the Respondent voluntarily attorned to the jurisdiction of this court; b. An anti-suit injunction is granted in favour of the Applicant enjoining the Respondent from continuing with his divorce proceedings before the Beijing Doncheng District People’s Court in the People’s Republic of China on April 14, 2023.

[45] If the parties cannot agree on costs, the Applicant shall have ten days within which to deliver her cost outline and submissions, and the Respondent shall have ten days thereafter to deliver his cost outline and responding submissions. The submissions shall not exceed three pages double spaced in length. The documents will be filed through the JSO portal to my attention, with a copy to my judicial assistant by email.

Justice S. Vella

Released: March 04, 2024

COURT FILE NO.: FS-22-00033553-0000 DATE: 20240304 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: MING PAN Applicant – and – GUOYAO ZHAO Respondent

REASONS FOR DECISION Vella J. Released: March 04, 2024

[1] This is the relief requested, verbatim, in the Respondent’s Factum, at para. 19. [2] The Respondent did not seek a stay, but this is the relief he is effectively seeking based on his submissions. [3] I state, “appears”, as I did not receive any admissible expert evidence on the foreign law with respect to any of the issues raised in this motion. The Applicant attached a report from a lawyer practicing in China as an exhibit to her affidavit. However, this is not the proper way to tender an expert report. The lawyer who authored the report must be the person through whom the opinion evidence is adduced; e.g.: by way of affidavit from that lawyer. The Respondent simply attached the “No. 21118 Civil Rulings of People’s Court of Dongcheng District, Beijing”, “No. 21119 Civil Rulings of People’s Court of Dongcheng District, Beijing” and excerpts from Chapter IV Divorce, Article 1087 and 1091, to his factum. [4] In his record and factum, the Respondent also asserts that he can pursue criminal liability against the Applicant in China arising from adultery, but during the course of oral submission, the Respondent’s lawyer abandoned that assertion for purposes of this motion. [5] Since argument of this motion, the Ontario Court of Appeal released a decision confirming that a former spouse cannot seek spousal support under either the Divorce Act or the Family Law Act: Vyazemskaya v. Safin, 2024 ONCA 156.