



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



San Bao Investments Inc. v. Sun,









2019 BCCA 30




Date: 20190125

Dockets:
CA45796; CA45797

Docket: CA45796

Between:

San Bao Investment
Inc.

Respondent

(Plaintiff)

And

Huigang Sun

Appellant

(Defendant)

And

Dejun Yao, San Bao
Investment Inc. and

Joseph Kwok, aka
Joseph Kuen Yu Kwok aka

Joseph Kuen-Yu
Kwok aka Kun Yu Kwok aka Kuen Kwok

Respondents

(Defendants
by Way of Counterclaim)

- and -

Docket: CA45797

Between:

San Bao Investment
Inc.

Respondent

(Plaintiff)

And

Besco
International Investment Co. Ltd.

Appellant

(Defendant)

And

Dejun
Yao, San Bao Investment Inc. and

Joseph
Kwok, aka Joseph Kuen Yu Kwok aka

Joseph
Kuen-Yu Kwok aka Kun Yu Kwok aka Kuen Kwok

Respondents

(Defendants by Way of Counterclaim)




Before:



The Honourable Madam Justice Newbury

(In Chambers)




On appeal from:  An
order of the Supreme Court of British Columbia, dated November 22, 2018 (
San
Bao Investments Inc. v. Sun
, Vancouver Dockets S1611338 and S1611176)




Counsel for the Appellant:



D.K. Fitzpatrick





Counsel for the Respondent:



J.D. Shields





Place and Date of Hearing:



Vancouver, British
  Columbia

December 21, 2018





Place and Date of Judgment with Written Reasons to Follow:



Vancouver, British
  Columbia

December 21, 2018





Place and Date of Written Reasons:



Vancouver, British
  Columbia

January 25, 2019










Summary:

Dismissal of application for
stay of an order of incarceration on a finding of contempt.

Reasons for Judgment of the Honourable
Madam Justice Newbury:

[1]

On December 21, 2018, Mr. Suns application for a stay of an
incarceration order following a finding of contempt was before me in chambers.
I dismissed the application with reasons to follow.

[2]

Mr. Sun was found personally liable, and liable as the principal of
Besco International Investment Co. Ltd. Judgments were granted in the Supreme
Court against them in July and September 2018 respectively, in the total
principal amount of $1,476,823.78 plus (special) costs and interest. As of
November 13, 2018, the total amount owing was $1,652,632.36.

[3]

Thereafter, Mr. Sun failed to attend an examination in aid of
execution, avoided service of appointments for examinations in aid, failed to
produce documents he had agreed to produce, and failed to provide satisfactory
answers to questions on examination. A registrar certified on November 8 and 9,
2018 that Mr. Sun had failed to pay the judgments without reasonable
excuse and had failed to provide satisfactory answers to questions about his
ability to do so.

[4]

The matter then came before Madam Justice Matthews on November 22, 2018.
She ordered
inter alia
that Mr. Sun be incarcerated for six days
and then have 30 days to pay. If payment was not made by December 27, he was to
be incarcerated for a further 30 days. The judge stated in her reasons:

There is evidence that Mr. Sun and Besco have
considerable means to satisfy the judgments. Funds well in excess of the
judgment have gone through the Besco bank accounts. Mr. Sun admitted at
his examination in aid of execution that he is capable of borrowing the funds
to satisfy the judgment. He identified funds in corporate bank accounts which
he has access to which could have been paid in partial satisfaction of the
judgment. He agreed to pay those funds in partial satisfaction of the judgment,
but has not done so.

There is evidence that he has wilfully taken steps to avoid
being able to pay the judgment, including that he gave three vehicles, one
Bentley and two Range Rovers, to friends. He owns a home on the west side of
Vancouver worth five million dollars. It is encumbered by eight million dollars
in debt to friends.

The law pertaining to committal of a party for failing to
comply with a court order was summarized by Mr. Justice Macintosh in
Fitzgerald
Living Trust v. Mountainstar Gold Inc.
, 2018 BCSC 1451, based on the
decision of the Supreme Court of Canada in
Carey v. Laiken
, 2015 SCC 17.
The first element that must be proven beyond a reasonable doubt is that the
order alleged to have been breached must state clearly and unequivocally what
should and should not be done. The second element is that the party alleged to
have breached the order must have actual acknowledge of it. Finally, the party
allegedly in breach must have intentionally done the act that the order
prohibits or intentionally failed to do the act that the order prohibits.

I conclude that each of these
tests [has] been met in this case and the evidence before me is satisfactory to
meet those tests beyond a reasonable doubt. [At paras. 7-10.]

Matthews J. was satisfied Mr. Sun had intentionally
avoided paying the judgments or failed to pay them although he had argued at an
examination that he could borrow the money to do so, and the evidence showed he
had access to assets in excess of the judgment amount and has disposed of some
of his assets to avoid paying the judgment. (At para. 13.)

[5]

In his argument on behalf of Mr. Sun in this court on December 21,
2018, Mr. Kirkpatrick said all that could be said in favour of his client.
He painted Mr. Sun as a person who has many assets but whose ability to
pay is impaired at the present time. He asked for 90 days in which his client
should, he suggested, be able to borrow the money to pay the judgments. At
times he seemed to suggest the money could definitely be found; at other times
he said his client was willing to pay but cannot. He described Mr. Sun as
a poor manager whose finances are intertwined with those of his family, which
makes it difficult for him to extricate the required amount.

[6]

Mr. Shields, on behalf of the creditor, referred on the other hand
to evidence that suggested Mr. Sun has been preferring other creditors
over San Bao and that substantial funds over which Mr. Sun has control
have simply disappeared without explanation. As far as the debt owing to San
Bao is concerned, no real attempts have been made to pay anything; documents
including financial statements and income tax returns of Besco have not been produced
despite being promised; and there is no indication Mr. Sun has made any
effort to persuade his family to help pay his debts. Most tellingly, his
answers to questions regarding his various companies were highly unsatisfactory
and difficult to credit, given the large amounts of money he had previously
claimed to control. All of this conduct is remarkably similar to the conduct
described by Mr. Justice Steeves in his reasons for the original judgment
that confirmed the indebtedness of Mr. Sun and his company: see 2018 BCSC
1128.

[7]

The criteria for the granting of a stay are well known  whether the
applicant has raised an arguable case on appeal; the question of irreparable
harm if a stay should not or should be granted; the balance of convenience; and
most importantly, the interests of justice. On a consideration of these
factors, I am simply unconvinced that interests of justice are such that a stay
should be granted. As I have already observed, Mr. Sun has repeatedly
neglected to obey court orders, to appear at examinations in aid, to provide
documents he has been ordered to provide, and has failed utterly in providing
relevant information to the creditor concerning his financial position and that
of Besco.

[8]

For all the foregoing reasons, the application was dismissed.

The
Honourable Madam Justice Newbury


