COURT FILE NO.: CV-20-00644162

MOTION HEARD: 2024-08-15

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nguyen Thanh Viet, Plaintiff

AND:

TD Canada Trust, Nguyen Tung Anh, Pham Ngoc Quang and Cassandra Marchese, Defendants

BEFORE: Associate Justice B. McAfee

COUNSEL: M. Simaan, Counsel, for the moving party, the defendant Nguyen Tung Anh

J. Rosenstein, Counsel, for the responding party, the plaintiff

HEARD: August 15, 2024

ENDORSEMENT

[1] This is a motion brought by the only remaining defendant Nguyen Tung Anh (the defendant) for answers to questions refused on the examination for discovery of the plaintiff Nguyen Thanh Viet (the plaintiff) and for security for costs.

Refusals

[2] In advance of the return of the motion, further answers to refusals were provided. At the return of the motion, defendant’s counsel confirmed that one refusal remained at issue. The one refusal remaining at issue, being refusal no. 4, question 262-263, pages 68-70 as set out in the Form 37C chart, was resolved during oral submissions on the following basis:

The plaintiff agrees to make best efforts to locate the plane ticket and produce same if the plane ticket shows a date of purchase. If the plane ticket cannot be located or does not contain a date of purchase, the plaintiff agrees to make best efforts to produce purchase records showing when the plane ticket was purchased.

Security for Costs

[3] On or about March 24, 2022, these parties agreed that the plaintiff would post security for costs through to the end of discoveries in the all-inclusive amount of $22,000.00. The amount of $22,000.00 continues to be held in the trust account of plaintiff’s counsel. The defendant seeks an order requiring the plaintiff to post security for costs in the further all-inclusive amount of $41,835.82. The plaintiff opposes an order requiring him to post further security for costs.

[4] In support of the request for security for costs the defendant relies on Rule 56.01(1)(a):

56.01(1) The court, on motion by the defendant or respondent in a proceeding, may make such order for security for costs as is just where it appears that,

(a) the plaintiff or applicant is ordinarily resident outside Ontario; …

[5] The application of Rule 56.01(1)(a) involves a two-step analysis. The first step of the analysis requires the defendant to establish that it appears that the plaintiff is ordinarily resident outside Ontario. If the defendant discharges its initial onus and establishes that it appears that the plaintiff is ordinarily resident outside Ontario, the second step of the analysis requires the plaintiff to establish the basis for a broad flexible exercise of discretion that an order for security for costs would be unjust (Coastline Corporation Ltd. v. Cannacord Capital Corporation, 2009 CanLII 21758 (ON SC), [2009] O.J. No. 1790 (S.C.J.) at para. 7; Know Your City Inc. v. The Corporation of the City of Brantford, 2020 ONSC 7364 (Ont. Div.Ct.) at paras. 11, 15-21; Hagshama Canada 9 Gold Ltd. v. Decade Urban Communities Corp., 2021 ONSC 5150 (Ont. S.C.J.) at paras. 13-18)

[6] There is no dispute on this motion that defendant’s initial onus has been satisfied. There is no issue that the plaintiff is ordinarily resident in Vietnam.

[7] The onus now shifts to the plaintiff to satisfy the court that an order for security for costs would be unjust.

[8] In Yaiguaje v. Chevron Corporation, 2017 ONCA 827 at paragraphs 23-25, the Court of Appeal states as follows with respect to consideration of the justness of the order:

[23] The Rules explicitly provide that an order for security for costs should only be made where the justness of the case demands it. Courts must be vigilant to ensure an order that is designed to be protective in nature is not used as a litigation tactic to prevent a case from being heard on its merits, even in circumstances where the other provisions of rr. 56 or 61 have been met.

[24] Courts in Ontario have attempted to articulate the factors to be considered in determining the justness of security for costs orders. They have identified such factors as the merits of the claim, delay in bringing the motion, the impact of actionable conduct by the defendants on the available assets of the plaintiffs, access to justice concerns, and the public importance of the litigation. See: Hallum v. Canadian Memorial Chiropractic College (1989), 1989 CanLII 4354 (ON SC), 70 O.R. (2d) 119 (H.C.); Morton v. Canada (Attorney General) (2005), 2005 CanLII 6052 (ON SC), 75 O.R. (3d) 63 (S.C.); Cigar500.com Inc. v. Ashton Distributors Inc. (2009), 2009 CanLII 46451 (ON SC), 99 O.R. (3d) 55 (S.C.); Wang v. Li, 2011 ONSC 4477 (S.C.); and Brown v. Hudson’s Bay Co., 2014 ONSC 1065, 318 O.A.C. 12 (Div. Ct.).

[25] While this case law is of some assistance, each case must be considered on its own facts. It is neither helpful nor just to compose a static list of factors to be used in all cases in determining the justness of a security for costs order. There is no utility in imposing rigid criteria on top of the criteria already provided for in the Rules. The correct approach is for the court to consider the justness of the order holistically, examining all of the circumstances of the case and guided by the overriding interests of justice to determine whether it is just that the order be made.

[9] With respect to the merits, as summarized in Coastline at para. 7(vi) and (vii):

(vi) The court on a security for costs motion is not required to embark on an analysis such as in a motion for summary judgment. The analysis is primarily on the pleadings with recourse to evidence filed on the motion, and in appropriate cases, to selective references to excerpts of the examination for discovery where it is available (Padnos v. Luminart Inc., 1996 CanLII 11781 (ON SC), [1996] O.J. No. 4549 (Gen.Div.) at para. 7; Bruno Appliance and Furniture Inc. v. Cassels Brock & Blackwell LLP, [2007] O.J. No. 4096 (S.C.J.- Mast.) at para. 37);

(vii) “If the case is complex or turns on credibility, it is generally not appropriate to make an assessment of the merits at the interlocutory stage. The assessment of the merits should be decisive only where (a) the merits may be properly assessed on an interlocutory application; and (b) success or failure appears obvious” (Wall v. Horn Abbott Ltd., 1999 CanLII 7240 (NS CA), [1999] N.S.J. No. 124 (C.A.) at para. 83).

[10] In this action the plaintiff claims damages against the defendant for fraud and conversion in the amount of $1,002,000.00. In the statement of claim the plaintiff alleges that while visiting Canada in May 2017, the plaintiff wanted to open a bank account in Toronto in order to facilitate financial transactions in Canada. The plaintiff pleads that he does not speak English or understand English well and that he asked the defendant, who speaks English and Vietnamese fluently, to accompany him to the bank. The plaintiff alleges that instead of setting up a bank account in the plaintiff’s name only, the bank account was set up in the names of both the plaintiff and defendant, which was not known to the plaintiff due to the language barrier. The plaintiff transferred $1,002,000.00 into the account, which the plaintiff alleges belonged to the plaintiff. The plaintiff pleads that in or about August 2017, he discovered that he was no longer able to access the account remotely because the defendant had changed the remote access code. The plaintiff pleads that he travelled to Toronto on November 18, 2019, for the purpose of re-establishing access to the account at which time he was advised that all the funds had been withdrawn and the account closed. The plaintiff alleges that the defendant withdrew all of the funds from the account and converted them to his own use.

[11] In the statement of defence the defendant alleges that the plaintiff and the defendant’s late father had business dealings in which the plaintiff wanted to purchase medical equipment and other materials from companies in Canada for the construction of a hospital in Vietnam. The defendant pleads that he was advised by his late father that the plaintiff wanted to set up a bank account in Canada for the purpose of facilitating payment for equipment and materials that the defendant’s late father had secured. The defendant alleges that the plaintiff and the defendant’s late father requested that the defendant attend with the plaintiff at the bank to set up the account, which was always contemplated to be a joint account with the plaintiff and the defendant’s late father or the defendant. The defendant pleads that he understood that monies deposited into the account belonged to his late father as payments for services and/or goods rendered to the plaintiff. The defendant pleads that as the joint account holder, he would receive instructions from his late father from time to time and withdraw and transfer amounts to his late father’s account and/or for use by his late father, which instructions he complied with. The defendant pleads that he received no complaints from the plaintiff regarding transfers out of the account in 2017 or 2018, when the transfers took place and that it was not until after the defendant’s father passed away in 2019, that the plaintiff raised an issue with respect to the transfers.

[12] On this motion, the plaintiff filed affidavits stating in part that he did not have an agreement with the defendant’s late father that he would personally pay money to the defendant’s late father for any purpose. The plaintiff also states that he did not tell the defendant or the defendant’s late father that they were permitted to withdraw or transfer funds from the account.

[13] The plaintiff conducted a Rule 39.03 examination of the defendant. In the examination the defendant confirmed that he was not privy to any conversations between his late father and the plaintiff about the account prior to the account being opened and that the instructions to withdraw funds from the account came only from his late father.

[14] In the circumstances of the case before me, in my view the merits are a neutral factor. There are issues of credibility which cannot be resolved on a motion of this nature. There are issues of credibility with respect to the relationship between the plaintiff and the defendant’s late father and whether they had any business dealings, the purpose of and type of account that was to be opened, steps taken by the plaintiff when he lost access to the account, and when the plaintiff first contacted the defendant after learning there was no money left in the account.

[15] The plaintiff does not allege impecuniosity. To the extent that the plaintiff argues he has insufficient assets in Ontario, I was not referred to evidence in support of that assertion. The plaintiff does not allege that he would be unable to proceed with his claim if an order for further security for costs is made. There is no evidence of prejudice to the plaintiff if an order for security for costs is made.

[16] Considering the justness of the order sought holistically, in all the circumstances of this matter, it is just that an order for security for costs is granted.

[17] In the event that further security for costs is ordered, the plaintiff does not take issue with the quantum of further security sought.

[18] The timing of any payment of the further security for costs was not raised during argument. A pre-trial conference is scheduled for October 31, 2024, and a five-day trial is scheduled for January 20, 2025. The further amount of $10,000.00 shall be paid into court on or before October 15, 2024, and the balance being the further amount of $31,835.82 shall be paid into court on or before November 15, 2024.

Costs

[19] The parties agree that the successful party on the relief concerning security for costs shall be entitled to costs of the motion in the all-inclusive amount of $8,500.00, payable within 30 days. The defendant is successful on the relief for security for costs. Accordingly, costs of the motion are fixed in the all-inclusive amount of $8,500.00 payable by the plaintiff to the defendant, within 30 days.

Summary of Order

[20] Order to go as follows:

i. On consent, with respect to refusal no. 4, question 262-263, pages 68-70 as set out in the Form 37C chart, the plaintiff shall make best efforts to locate the plane ticket and produce same if the plane ticket shows a date of purchase. If the plane ticket cannot be located or does not contain a date of purchase, the plaintiff agrees to make best efforts to produce purchase records showing when the plane ticket was purchased.

ii. The plaintiff shall pay into court, or post in such other manner as may be agreed to, the further all-inclusive amount of $41,835.82 as security for costs of this action as follows:

a. The further amount of $10,000.00 on or before October 15, 2024; and,

b. The balance being the further amount of $31,835.82 on or before November 15, 2024.

iii. On consent, costs of the motion are fixed in the all-inclusive amount of $8,500.00 payable by the plaintiff to the defendant within 30 days.

Associate Justice B. McAfee

Date: September 19, 2024