



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Leung v. Yung,









2016 BCCA 64




Date: 20160121

Docket: CA43278

Between:

Tsui Yu Leung

Appellant

(Claimant)

And

Kapo Yung, also
known as Ka Po Yung and
Menno Leendert Vos

Respondents

(Respondents)




Before:



The Honourable Madam Justice Bennett

(In Chambers)




On appeal from: an
order of the Supreme Court of British Columbia, dated
October 29, 2015 (
Leung v. Yung
, 2015 BCSC 2434,
Vancouver Registry No. E120389)

Oral Reasons for Judgment




Appellant appearing In Person:






Counsel for the Respondent:



J.W. Bilawich





Place and Date of Hearing:



Vancouver, British
  Columbia

January 21, 2016





Place and Date of Judgment:



Vancouver, British
  Columbia

January 21, 2016








Summary:

The applicant, V, seeks security
for trial costs, security for protective disbursements pending appeal and other
orders. The case below and instant appeal are delaying Vs attempts to execute
a separate judgment by forcing the sale of certain residential properties
belonging to the former spouse of the appellant, L. Held: security ordered for
trial costs and protective disbursements, among others. L continues to live in
one property and permits strata fees and property taxes to accrue. V made a
protective disbursement by paying outstanding charges and pre-paying fees to
preserve his priority in the property. L made little financial disclosure
except to say she has no assets and earns no income. Yet, she is able to
support herself, received large amounts of credit in the recent past and enjoys
overseas travel. A foreign court found that she participated in frauds and she
is implicated in questionable property transfers which appear to be designed to
defeat creditors.

[1]

BENNETT J.A.
: The applicant, Ms. Leung, seeks directions whether leave
to appeal is necessary, leave to appeal and an extension of time to file
documents relating to the appeal of the chambers order of Mr. Justice Masuhara:
Leung v. Yung
, 2015 BCSC 2434.

[2]

The applicant, Dr. Vos, seeks (i) security for costs in the appeal, (ii)
security for costs at trial, (iii) security for what he refers to as
protective disbursements related to the property involved in the action, and (iv)
a stay pending posting of the security and leave to apply to have the appeal
dismissed as abandoned if security is not posted within 30 days.

Background

[3]

This appeal concerns the order of Mr. Justice Masuhara dismissing Ms.
Leungs family application for 50% interest in the proceeds from the sale of
lease hold interest (also known as the Richmond Property) and a 50% interest
in a condominium (the Vancouver Property), both owned by Mr. Yung.

[4]

Mr. Yung and Ms. Leung were married in 1989, claimed to have separated
in 2003, and divorced in June 2015. Dr. Vos was a former business partner of
Mr. Yung. They had a falling out and Dr. Vos sued Mr. Yung in Hong Kong for
certain wrongs. Ms. Leung was joined as a defendant and default judgment
entered against her, with damages to be later assessed in April 2001. She took
no substantial steps to set aside the default judgment but claims it was
obtained by Dr. Vos and his counsel lying to the Hong Kong court. Dr. Vos
became a judgment creditor of Mr. Yung after obtaining a Hong Kong judgment in 2009.

[5]

The leasehold property in Richmond was under Ms. Leungs name since 1989.
She transferred it to her husband for $1 on November 6, 2001. This was the day
before a Hong Kong order declared her bankrupt with proof of debt of $6,081,850
HKD. She was discharged from bankruptcy in 2005.

[6]

In 2010, Dr. Vos started a Vancouver action (S-105396) to enforce the
Hong Kong judgment against Mr. Yung. He received judgment in B.C. in June 2012
for over $1.2 million. He then proceeded to try and sell the two properties to
satisfy judgment.

[7]

Ms. Leung intervened in Dr. Voss attempts to execute the judgment on
the properties. She cited her outstanding claims over the two properties in
relation to the Vancouver family action (E-120389). She started the family
action in February 2012

under the former
Family Relations Act
,
R.S.B.C. 1996, c. 128. The order dismissing her claim was pronounced orally on October
29, 2015 and is the subject of this appeal. She filed notice of appeal and
leave to appeal November 26, 2015. Both were amended December 23, 2015.


Disposition of Ms. Leungs Application

[8]

From the outset, Ms. Leungs application can be addressed rather
quickly.

[9]

First, Ms. Leung does not need leave to appeal the order. Apparently
counsel for Dr. Vos informed her of this on more than one occasion. An order of
a judge of the Supreme Court of British Columbia only requires leave to appeal,
if it qualifies as a limited appeal order or the act it is made under states
otherwise.
Court of Appeal Act
, ss. 67. The definition of a limited
appeal order is set out in Rule 2.1 of the
Court of Appeal Rules
. Only
interim family law orders and certain procedural rulings made under the
Supreme
Court Family Rules
are listed as limited appeal orders. Since the order in
issue dismissed Ms. Leungs family claim under the
Family Relations Act
,
it constituted a final disposition and she may appeal it as of right.

[10]

Second, Ms. Leung does not require an extension of time at this point.
She is still within 60 days of when she filed her appeal on November 26. Thus she
is not late filing her appeal record and transcripts under Rule 19 and 20 of
the
Court of Appeal Rules
. She has asked today for an additional 30
days, until the end of February, to file her appeal record and transcripts
despite having taken no steps since the filing of this application two months
ago.

II. Facts Relevant
to the Application

The
Order Below

[11]

The issue before the chambers judge was whether Ms. Leung was entitled
to a 50% interest in the proceeds of the leasehold Richmond property and the
Vancouver property as family assets, and if so, whether Dr. Vos had a priority
interest to hers. The hearing also concerned a fair division of family assets
including certain debts.

[12]

The chambers judge found that Ms. Leungs family claims rested on a very
weak foundation at paras. 4143:

[41]       there has been little evidence provided to
support the claim she is pursuing except for an affidavit which provides little
in terms of corroborative, objective evidence. There is a dearth of evidence in
regard to demonstrating whether the Richmond property was a family asset. Certainly
Ms. Leung transferring it back to Mr. Yung in November 2001 militates against
this claim and raises doubts regarding her
bona fides
.

[42]      Similarly, the evidence supporting that the
Vancouver property is a family asset was not particularly strong in showing it
was property being ordinarily used for a family purpose prior to separation.

[43]      Similarly, the evidence
regarding the recovery of family debts identified by Ms. Leung has a thin
foundation.

[13]

Ms. Yeung pleaded she separated from Mr. Yung in 2003, however her tax
returns do not claim separation until 2010. The chambers judge determined the
triggering date for dividing of family assets was the date of divorce: June 9,
2015. He continued:

[45]      Since the British
Columbia judgments against those properties are registered long before this
date, this militates against Ms. Leung having a priority interest over
Dr. Vos' registered interest.

[14]

He concluded that Dr. Voss claim takes priority over Ms. Leungs concerning
the properties and debts. As a result, her application to have an interest
declared in the properties was denied. The chambers judge also ordered that in
relation to division of assets, Mr. Yungs judgment liability is allocated as
against any interest that Ms. Leung has (RFJ at para. 54).

[15]

In proceedings that occurred more recently, the condominium at issue has
been ordered for sale.


Grounds of Appeal

[16]

Ms. Leung raises three grounds of appeal:

1)

The 2001 Hong Kong default judgment was not admissible or alternatively,
unreliable to draw adverse inferences against Ms. Leung because it can be set
aside.

2)

The 2009 Hong Kong judgment concerning Mr. Yung was inadmissible, or
alternatively, unreliable to draw adverse inferences against Ms. Leung because
it contains a mistake regarding her bankruptcy status.

3)

In the
alternative, it is impermissible for Dr. Vos to enforce the 2009 Hong Kong
judgment debt indirectly against Ms. Leung in her family action.


Financial Means of the Appellant

[17]

The chambers judge found that while Ms. Leung volunteers extensively,
she had not sought paid employment. The chambers judge had this to say about
her financial picture:

[29]       in August 2003 Ms.
Leung moved to Blaine, Washington . In 2005 she established an irrevocable
trust over which she is trustee. The assets of the trust include two
residential properties in Blaine. One was purchased in 2005 and the other in
2007. In an affidavit she deposed that she established the trust with her own
funds. The appraised value of the two properties in 2012 were US$53,835 and
US$101,697. She states that there are no family debts except for $22,167 she
borrowed to pay back condominium fees for the Vancouver property and $50,000
she borrowed to pay back the mortgage on the Vancouver property.

[18]

Ms. Leung appears to have been living in the Vancouver property since
2009. Shortly after Dr. Vos moved to execute judgment on that property, strata
fees failed to be paid from about 2011 to 2013. The strata started legal
proceedings to collect. Strata fees stopped being paid again in July 2015. As
of December 1, 2015 the balance owing was $1,690.80 with fees continuing to
accrue monthly at $399.40. Dr. Vos paid the strata $5,000 in early January 2016
to satisfy outstanding fees and pre-pay future expenses in order to preserve
his priority.

[19]

Ms. Leung has filed no affidavit evidence in this application with
respect to her financial situation. She submitted that she has no money but
could borrow $5,000. She offered no explanation when asked about her failure to
pay the strata fees. She advises that she is taking a trip to Hong Kong next
month but does not state how she is paying for it. She has indicated that her
sons have given her money on their line of credit.

III.        The
Law

Security
for Costs of the Appeal

[20]

Section 24(1) of the
Court of
Appeal Act
provides that a justice may order that an appellant pay or
deposit costs in an amount and in a form determined by the justice.

[21]

The ultimate question is whether
the order would be in the interests of justice (
Lu v. Mao
, 2006 BCCA 560
at para. 6). In this regard, Madam Justice Rowles in
Ferguson v. Ferstay,
2000
BCCA 592 at para. 7, identified the following as relevant considerations:

(1) appellants financial means;

(2) the merits of the appeal;

(3) the timeliness of the application; and

(4) whether the costs will be
readily recoverable.

[22]

The appellant against whom an
order is sought bears the onus of showing why security should not be required (
Creative
Salmon Company Ltd. v. Staniford
, 2007 BCCA 285 at para. 9).

[23]

The appellants circumstances are
the paramount consideration in determining whether some, all, or none of the
security be ordered (
AB & A Matthews v. Dixon
, 1999 BCCA 333 at
para. 13).

[24]

The usual order is that the appeal be stayed until the security
is posted:
Pitt Polder Preservation Society v. Pitt Meadows (District)
,
1999 BCCA 593 at para. 5 (Southin J.A. in Chambers).


Security for
Costs at Trial

[25]

A justice has
jurisdiction to order security for costs awarded by the trial court pursuant to
s. 10(2)(b) of the
Court of Appeal Act
. See
Cadinha v. Chemar
Corporation Inc.
(1995), 17 B.C.L.R. 347 (C.A. Chambers);
Paz v.
Hardouin (c.o.b. Fiesta Travel and Fiesta Wayfarer)
(1995), 10 B.C.L.R.
(3d) 232 (C.A. Chambers). This is also the provision that Dr. Vos relies on to
seek security for the strata fees.

10(2)    In an appeal or other matter before
the court, a justice may do one or more of the following:



(b)        make an interim order to prevent
prejudice to any person.

[26]

Security for costs of
the appeal is ordered more readily than security for trial costs:
Siekham v.
Hiebert
, 2008 BCCA 299 at para. 13. In
Adler International Investments
Ltd. v. Central Okanagan (Regional District)
, 2001 BCCA 416, Proudfoot J.A.
(in Chambers) observed at para. 8:

[8]        This is so because
trial costs are generally more substantial than costs of an appeal, and it is
not right to keep an appellant with an appeal of obvious merit away from the
Court by ordering the posting of security which the appellant cannot afford.

[27]

Mr. Justice Lowry provided a concise statement
of the applicable principles on an application for security for costs for a
trial judgment or for trial costs in
Creative Salmon Company Ltd.
at
para. 11:

1)

The onus is on the
applicant to show that it is in the interest of justice to order posting for
security of a trial judgment and/or of trial costs.

2)

The applicant
must show prejudice if the order is not made.

3)

In determining
the interests of justice the chambers judge should consider the merits of the
appeal and the effect of such an order on the ability of the appellant to
continue the appeal.

IV.
Positions of the Parties

Security for
Appeal Costs

[28]

Dr. Vos seeks security
of $16,625 for the costs in the appeal. He has filed a draft bill of costs
based on a one day appeal. He submits that despite filing a financial statement
claiming to have no income or assets in the trial court, Ms. Leung has met her
living expenses since 2003 and formed a trust which purchased two properties in
the Blaine, Washington.

Security for Trial
Costs

[29]

Dr. Vos seeks security
of $13,308 for costs at trial. He has a draft bill of costs prepared as well as
$5,516 for disbursements he made to satisfy accrued strata fees and property
taxes owing against the Vancouver property. I note that the hearing before Mr.
Justice Masuhara lasted one day and the reasons for judgment were released
orally about one week later.

[30]

Dr. Vos submits that
his attempts to execute his Hong Kong judgment in BC have been extraordinary
and already long-drawn out. He submits that the Hong Kong judgment is based on
fraudulent acts which Ms. Leung participated in. He alleges that Ms. Leung
transferred the Richmond Property to her husband in November 2001 to defeat
creditors. He further submits that despite being bankrupt, she has managed to
purchase property in Washington through a trust.

[31]

He submits that the
value of the Vancouver Property is being eroded because strata fees and
property taxes continue to accrue while Ms. Leung receives the benefit of
living in it. Dr. Vos has paid the outstanding fees as a protective
disbursement because they have priority over his claim on the property. Ms.
Leung says she has a good appeal and can raise $5,000 for security.

V.
Discussion

Security for
Appeal Costs

[32]

Ms. Leung disclosed no
information about her financial means. There is some information in the
judgment of Mr. Justice Masuhara and affidavits filed previously in the trial
court. She has been able to support herself for over a decade apparently
without seeking regular paid employment. In her family law action, she
disclosed that since 2003, she sometimes works four to eight hours per week and
claims to have no assets or debts. However, it has been noted that she is
taking a trip to Hong Kong at the end of the month and has not indicated how
that is being funded.

[33]

The merits of the
appeal may not be strong but are not frivolous and meet the tests for all
applications. The application is timely. Dr. Vos filed it January 8, 2016,
which is within one week of Ms. Leungs amended notice of appeal and when she
filed her motions.

[34]

Given that Ms. Leung
claims to have no assets or income, and appears to have a history of avoiding
payment of debt, in my view, the appeal costs are likely to not be readily
recoverable should she lose the appeal.

Security for Trial
Costs

[35]

Whatever assets Ms.
Leung did have in 2005 have been made difficult to reach because they were put
into a trust and used to purchase property outside of this jurisdiction. She
was found to have participated in fraudulent acts by a Hong Kong court, declared
bankruptcy, and was implicated in a questionable 2001 property transfer. She
continues to enjoy the use of the Vancouver Property while tax and strata fees
mount, which further erode its value and utility to Dr. Vos. Furthermore, there
is a history of the parties being delinquent in paying strata fees and property
taxes. Ms. Leung maintains that she does not earn a regular income.

[36]

Given all this, in my
view, Dr. Vos will likely face difficulty collecting trial costs and his protective
disbursements. Counsel for Dr. Vos has submitted a draft bill of costs, as noted,
in the amount of $13,308. He claims he has spent $5,516 in protective
disbursements in relation to the Vancouver property.

[37]

I am not prepared to
find that Ms. Leung will be prejudiced in advancing her appeal if some trial
costs are ordered. Despite Ms. Leung claiming to have no income or assets, in
her affidavit filed in support of the application at issue in this appeal she says
she was able to borrow $60,000 to fund an appeal in Hong Kong. As noted by the
chambers judge, she also was able to borrow a total of $72,167 to pay strata
fees and a mortgage, thus being able to secure $132,000 in credit. It seems to
me that she is getting money from somewhere although has not been forthcoming
with the courts as to its source.

[38]

Ordinarily, it is the
practice of this Court not to order security for trial costs until they have
been assessed. However, given the circumstances, in my view it is in the
interests of justice to order at least partial trial costs in this case.

Other Relief

[39]

Dr. Vos also seeks an order
granting leave to apply to dismiss the appeal, however, his draft bill of costs
is based on a one day appeal and, in my view, that is likely excessive.
Therefore, I would order security for costs of the appeal in the amount of
$8,000, which is half of the amount claims.

[40]

I would grant Dr. Voss
application for security for trial costs and for the protective disbursements
. With respect to the trial costs, it is my
view that the trial costs, as in the draft, for the length of hearing should be
reduced for the purposes of the security. Therefore, I would order $5,000
posted as security for trial costs. In terms of the $5,000 for the protective
costs, in my view, this is a proper claim given that the failure to pay the
strata fees are diminishing the value of the property that he has obtained
judgment for.

[41]

I impose the order that
the appeal will be stayed until such time as security is posted.
If it is not paid within 60 days, Ms. Leung is going
to Hong Kong and will not have necessarily time to gather her resources in 30
days, Dr. Vos may apply for leave to appeal to dismiss the appeal. I add that
that is subject to any other order made by a justice of this Court in terms of
any extension of time.

[42]

If the security for costs are
paid, I would grant Ms. Leung until March 30, 2016 to file her transcripts and
appeal books. If not, her transcripts and appeal books would have to be filed
forthwith upon paying the security for costs.

[43]

I would grant Dr. Vos costs in
this application.

[discussion with appellant re.
filing dates and costs of todays application]

[44]

BENNETT J.A.
: Whoever wins the appeal will receive the costs of
today.

[discussion with
counsel re. dispensing of appellants signature on the order]

[45]

BENNETT J.A.
: Ms. Leung, counsel is asking that you not sign the
order, that I simply sign it. I will make that order because apparently you did
not respond to another one that he submitted.

The
Honourable Madam Justice Bennett


