



COURT OF APPEAL FOR ONTARIO

CITATION:
Korea
    Data Systems (USA), Inc. v. Aamazing Technologies Inc., 2012 ONCA 756

DATE: 20121106

DOCKET: M41692 (C55916)

Blair J.A. (In Chambers)

BETWEEN

Korea Data Systems (USA), Inc.

Plaintiff (Appellant/Moving Party)

and

Aamazing Technologies Inc. carrying on business
    as Ajay Amazing Technologies Inc.,
Jay Chiang, aka Jay
    Tien Chiang aka Tienchieh Chiang
, Julius Chiang and Christina Chiang aka
    Christian Chiang aka Suh Mei Tasi, aka Suh Mei Tsai aka Christina Suh Mei Tsai,
    aka Suh Mei Tasi Chiang, aka Christina Suh-Mei Chiang aka Suh-Mei Chiang, and
    Dong Liang aka Tung Liang

Defendants (
Respondent in Appeal
)

AND BETWEEN

Mendlowitz &
    Associates Inc., in its capacity as Trustee in Bankruptcy of Jay Tien Chiang,
    and Korea Data Systems (USA) Inc.

Plaintiffs (Appellants/Moving Parties)

and

Jay
    Tien Chiang, aka Jay Chiang, aka Tienchieh Chiang, Christina Chiang, also known
    as Suh Mei Tasi, aka Christian Chiang aka Suh Mei Tsai, aka Christina Suh Mei
    Tsai, aka Suh Mei Tasi Chiang, aka Christina Suh-Mei Chiang aka Suh-Mei Chiang,
Chun Chun Wu,
    Jie Chu Wu
, Chen Cheng-Yueh Tsai, Yu Chang Chiang also knows as Y.C.
    Chiang, En Fu Chiang, Brenda Chang, Samson Chang, David Cheng, Everview Inc.,
    961266 Ontario Inc.,1204360 Ontario Inc., 1243723 Ontario Inc., Aamazing
    Technologies Inc.,
Wen Wang Chiang aka Wen Chiang aka Wen Wang,
    Crystalview Technology Corp., E.C. Holdings Ltd., Telepower International
    (Canada), Inc., Best Buy Electronics Inc.,
Su Feng Tsai
    aka Tsai Su Feng, Tsai Zheng Li, Tsai Zheng Ying, Asia Pacific Gateway (H.K.)
    Ltd., Century Group Holdings Ltd., Albany Investments Ltd., Mei Huang, Winner
    International Group Limited, Huang Chi Lung, Min Huang, Wainwright Ventures
    Ltd., New Global Investment Limited and Floratino Limited

Defendants (
Respondents in Appeal
)

Aaron Blumenfeld and Alessandra Nosko, for the
    appellants, Korea Data Systems (USA), Inc. and Mendlowitz & Associates
    Inc., Trustee in Bankruptcy of Jay Tien Chiang

Hilary Book, for the respondent Christina Chiang

Rebecca Huang, for the respondents Winner International
    Group Limited and Mei Huang

John OSullivan, for the respondents Su Feng Tsai, Tsai
    Zheng Li, Tsai Zheng Ying, Huang Chi Lung and Chen Cheng-Yueh Tsai

Brent Arnold, for the respondents Brenda Chang and Samson
    Chang

Heard: October 23, 2012

Motion to stay the appeal from the judgement of Justice Frank N. Marrocco of the Superior Court of Justice dated July 9, 2012.

[1]

The issues on this motion are the following: (1) Was there a final
    judgment at trial that can form the subject matter of an appeal, given the
    outstanding matters left to be determined, and (2) if there is, should the
    appeal be stayed pending the determination of those outstanding matters?

Background

[2]

The trial was long and complex, and involved many parties.  It dealt
    with two actions together.

[3]

The plaintiff in the first action  Korea Data Systems (USA), Inc.
    (KDS)  is a significant judgment creditor of the defendant, Jay Chiang,
    pursuant to a multi-million dollar judgment obtained against him in the
    California Superior Court.  Shortly after the judgment was rendered, Mr. Chiang
    made an assignment in bankruptcy in Ontario.  KDS nonetheless sued to enforce
    the California judgment in Ontario, arguing that the judgment represented the
    kind of debt that survives a bankruptcy.

[4]

In the second action, KDS and Mr. Chiangs Trustee in Bankruptcy,
    Mendlowitz & Associates Ltd., sued Mr. Chiang and numerous companies and
    related family members claiming damages, different forms of declaratory relief
    and an equitable tracing order.  They alleged fraudulent conveyance of
    property, conspiracy, spoliation and unjust enrichment.  In substance, though,
    the claim was that Mr. Chiang, in conspiracy with the other defendants, was
    hiding and spiriting away assets from his creditors and his Trustee in
    Bankruptcy.

[5]

Justice Marrocco presided over the trial.  After 10 weeks of evidence
    plus lengthy written submissions, he found that Jay Chiang had indeed engaged
    in a conspiracy to defeat the plaintiffs collection efforts and that he had
    used nominees for that purpose and to hide his assets.  But the parties to the
    conspiracy were not Mr. Chiang and these respondents.  They were Mr. Chiang and
    his father and a brother (the latter two are no longer parties to the
    proceedings).  The conspiracy and related claims were dismissed against these
    respondents for varying reasons, but essentially because, although their
    actions may have assisted Mr. Chiangs efforts, they were not part of a
    conspiracy agreement to defeat, hinder, delay or defraud his creditors.

[6]

With respect to the respondents, Winner International Group and Mei
    Huang, the issue was somewhat different.  Winner is the holder of an
    approximately $10 million fund that KDS and Mendlowitz allege belongs to the
    bankrupt, Jay Chiang.  Mei Huang is the registered owner of all of the shares
    of Winner, but the trial judge found that she holds a 50% interest in trust for
    Mr. Chiang.  On appeal, KDS and Mendlowitz will argue that the trial judge
    erred and should have found that 100% of the shares are held in trust for Mr.
    Chiang.

[7]

KDS and the Trustee wish to appeal the dismissal of the actions against
    the other respondents and some of the findings respecting Mr. Chiang, including
    the one just mentioned above.  They have filed a Notice of Appeal solely to
    protect their position. They maintain that there is as yet no need to appeal
    because the trial judge left a number of issues open for subsequent
    determination and there is no final judgment at this point that can be the
    subject of an appeal.  The parties differ over this interpretation as well as
    over whether, if there is a final judgment, any appeal should be stayed at this
    point pending the finalization of the outstanding issues by the trial judge.

[8]

That dispute has given rise to this motion.

[9]

KDS and Mendlowitz seek an order staying the appeal pending the
    disposition of the issues left to be determined by the trial judge.  The
    remaining respondents oppose, arguing that those issues relate only to Jay
    Chiang  who takes no position on the motion  and that the issues respecting
    them are discrete and finalized, and should proceed.

Analysis

[10]

The
    issues still to be determined by the trial judge (the Outstanding Issues) may
    be summarized as follows:

a)

Post-judgment interest
    on the California judgment;

b)

The nature of the
    damages, if any, that KDS is entitled to recover from Mr. Chiang;

c)

The terms of a
Mareva
injunction in aid of execution, to which the trial judge held KDS and
    Mendlowitz were entitled;

d)

The specifics of an
    equitable tracing order against Mr. Chiang, to which the trial judge held KDS
    and Mendlowitz were entitled, should they consider it advisable to apply for a
    specific order (the trial judge held it was not an appropriate case for a
    general imprecise tracing order);

e)

An accounting with
    respect to the sum of $2 million transferred from the respondent, Floratino
    Limited, to Winner; and

f)

Costs.

[11]

On
    behalf of the appellants, Mr. Blumenfeld argues that the Outstanding Issues are
    substantial matters affecting the rights of the parties still remaining to be
    determined by the trial judge and, accordingly, that there is as yet no final
    judgment that disposes of [the] action on its merits:
Byers (Litigation
    Guardian of) v. Pentex Print Masters Industries Inc.,
(2003), 62 O.R. (3d)
    647, at paras. 19 and 41; see also the definition of judgement in Rule 1.03
    of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194.  It follows,
    he says, that the time for appealing under Rule 61.04(1) has not yet begun to
    run, although the appellants have nonetheless filed a Notice of Appeal out of
    an abundance of caution.

[12]

The
    respondents do not quarrel with the
Byers
test, but submit that the
    Outstanding Issues do not relate to the dismissal of the claims against them. 
    Those issues are discrete, finally disposed of, and readily subject to
    determination on appeal without determination of the Outstanding Issues, they
    argue.  The one exception may be the issue respecting the accounting for monies
    transferred to Winner, but the broader issue of whether the shares in Winner
    are held in a constructive trust for Mr. Chiang is one that is ripe for
    determination on appeal now.  The respondents contend that considerations of
    finality militate in favour of their issues being determined in a timely
    fashion on appeal, after more than a decade of litigation with, amongst other
    things, the restraints of a
Mareva
injunction hanging over their
    heads.

[13]

Unfortunately,
    the procedural choice is not so simple.

[14]

While
    I find Mr. Blumenfelds argument that there is not yet a final order to appeal
    from somewhat attractive, it faces both practical and procedural impediments as
    a result of the way in which the proceedings have evolved.  First, a Notice of
    Appeal
has
been filed, and therefore there is an appeal in existence. 
    Secondly, the order the appellants seek in this regard would be tantamount to
    an order quashing the appeal, something I as a single judge have no authority
    to do.  Motions to quash must be determined by a panel of judges:
Courts of
    Justice Act
, R.S.O. 1990, c. C.43, s. 7(3).  Thirdly, no one is asking me
    to quash the appeal.  The respondents, who might have an argument for doing so
    if they brought a motion to that effect, do not want the appeal quashed; they
    want it to proceed as quickly as possible.  The appellants are hardly seeking
    to have their own appeal quashed.

[15]

It
    seems to me, then, that the motion must be determined on the basis that there
    is an appeal in place and a decision to be made whether that appeal should be
    stayed either for a limited period of time or until the Outstanding Issues have
    been dealt with by the trial judge.  In that exercise, the final order debate
    remains relevant, in my view.

[16]

What
    the appellants request here is not a stay of an order or judgment under appeal,
    pending the disposition of the appeal.  Nor is it a stay of another bodys
    proceedings (e.g. an arbitration proceeding or a trial) pending some other
    matter, or an injunction.  In those types of situations it is clear that the
    three-step exercise set out in
RJR-Macdonald Inc. v. Canada (Attorney
    General)
, [1994] 1 S.C.R. 311, applies.  That is, the court must ask
    itself (i) whether there is a serious issue to be determined, (ii) whether the
    applicant will suffer irreparable harm if the stay is not granted, and (iii)
    whether the balance of convenience favours the applicant or the respondent, and
    exercise its discretion based upon the answers to those questions.

[17]

Instead,
    the appellants ask this Court
to stay the appeal itself
, pending the
    decision of another body (the trial court).  In effect, they wish to have the Court
    adjourn the exercise of its own jurisdiction to proceed with the appeal until
    sometime later, pending the other bodys decision.  In those circumstances, the
    Federal Court has adopted a policy that the principles of
RJR-Macdonald
do not apply; rather, it is a matter of the court exercising its discretion and
    determining whether, in all the circumstances, the interests of justice
    support the appeal being delayed:
Mylan Pharmaceuticals ULC

v.
    AstraZeneca Canada, Inc
., 2011 FCA 312, 426 N.R. 167, at paras. 3, 5, 6
    and 14,
per
Stratas J.A.; see also
EpiCept Corp. v. Canada
    (Minister of Health)
, 2011 FCA 209, 425 N.R. 353.

[18]

The
    Federal Courts rationale is rooted in the wording of s. 50 of the
Federal
    Courts Act
, R.S.C. 1985, c. F-7  its statutory power to grant a stay 
    which empowers the court to stay proceedings where it is in the interest of
    justice that the proceedings be stayed.  That is the core tenet underlying any
    courts power to impose a stay of proceedings, in my view, and applies equally
    to the exercise of this Courts jurisdiction to stay an appeal pending the
    disposition of another body.

[19]

I
    prefer the broader interests of justice test to the three-stage
RJR-Macdonald
test in such circumstances because I think it responds more flexibly to the
    somewhat different considerations that are in play when a party seeks to have
    the appeal itself stayed as opposed to an order or judgment appealed from.  In
    the former circumstances, broader considerations regarding the administration
    of justice are also in play.  Factors demonstrating irreparable harm or an
    imbalance of convenience are undoubtedly relevant when a court is contemplating
    delaying its proceedings until a later time, (considerations respecting the
    merits of the appeal, perhaps less so). However, the court must also take into
    account other factors such as the public interest in the fair, well-ordered and
    timely disposition of litigation, and the effective use of scarce public
    resources.

[20]

Taking
    into account all of those considerations, I am satisfied that a relatively
    short, and time-limited, stay of the appeal ought to be ordered in the
    circumstances here but subject to one condition: that the appellants be
    required to order the transcript needed for purposes of the appeal involving the
    respondents now.

[21]

As
    I read the trial judges reasons, resolution of the Outstanding Issues does not
    involve any further evidence.  He has called for submissions.  I see no reason
    why those submissions cannot be made and dealt with within a reasonable period
    of time.

[22]

The
    one exception to the call for submissions may be the trial judges direction
    that the plaintiffs can apply for a specific equitable tracing order when
    they consider it desirable to do so.  It is not clear whether he contemplated
    additions to the evidentiary record in that regard.  Even if he did, however, I
    am not persuaded that the trial judgment would not be final and appealable
    until that determination is made, or that the appeal should be stayed
    indefinitely for that eventuality.  I am inclined to read the trial judges
    reasons as making a final order that the plaintiffs are entitled to an
    equitable tracing order against Jay Chiang, and granting them leave to apply
    later, if so advised, for a specific form of tracing order.

[23]

The
    procedural framework in Ontario does not generally contemplate the disposition
    of appeals in multi-party, multi-issue cases on a party by party basis.  There
    is one judgment following a trial.  This approach avoids a multiplicity of
    proceedings and the potential of inconsistent results.  While there are no
    doubt exceptions to this general policy, this is not such a case.  The trial
    here was not a bifurcated trial and evidence was led, and arguments made, on
    all issues respecting all defendants, including the Outstanding Issues. 
    Ordinarily, one appeal dealing with all of those issues is the most effective
    and fair use of both the public and private resources involved.

[24]

At
    the same time, I have some sympathy for the position in which the responding
    parties find themselves.  They have been successful, for the most part, after a
    decade of pre-trial proceedings and a lengthy, complex, and expensive trial. 
    If there is to be an appeal, they quite understandably and justifiably would
    like to have the appeal disposed of as soon as the
Rules of Civil Procedure
permit.  The allegations against them  and to this point, resolved in their
    favour  are serious (conspiracy and fraud).  There appears to be some merit in
    their view that the issues relating to them on appeal are separate and discrete
    from those remaining to be determined in the Outstanding Issues.  There is
    little prejudice to the appellants, except in terms of costs, if the appeal
    moves forward without finalization of the Outstanding Issues.

[25]

That
    said, the overall interests of justice favour the granting of a short stay, in
    my view, to enable the Outstanding Issues to be determined.  As the Divisional
    Court noted in
Rosenhek v. Windsor Regional Hospital
, [2010] O.J. No.
    2893, at para. 50, citing
Marché D'Alimentation Denis Thériault Ltée v.
    Giant Tiger Stores Ltd.,
2007 ONCA 605, 87 O.R. (3d) 660, at para. 34:

The
Rules of Civil Procedure
must be interpreted in a
    manner that recognizes that expeditious justice is only one value to be weighed
    against others and that delay may be excused where necessary to ensure complete
    justice.

[26]

In
    the result, I grant a stay of the appeal for a period of 120 days from the date
    of this decision or until the Outstanding Issues have
    been finalized by the trial judge, whichever is the earlier.  Notwithstanding
    the stay of the appeal, however, the appellants are to proceed to order the
    transcripts necessary for the appeal as if the
Rules
respecting the
    ordering of transcripts were in effect.

[27]

I
    do not think this is an appropriate motion for an award of costs, and I make no
    order in that regard.

R.A. Blair J.A.


