Chan v. Chow

2022 BCCA 238 Chan v. Chow

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Chan v. Chow, 2022 BCCA 238 Date: 20220708 Dockets: CA47128; CA47129 Docket: CA47128 Between: Ling Linda Chan Respondent (Claimant) And Chung Yeung Chow Respondent (Respondent) And Wai Yee Cheng Appellant (Respondent) - and - Docket: CA47129 Between: Wai Yee Cheng Appellant (Plaintiff) And Chung Yeung Chow and Ling Linda Chan Respondents (Defendants) Corrected Judgment: The cover page and para. 18 of the judgment was corrected on July 12, 2022. Before: The Honourable Mr. Justice Butler (In Chambers) On appeal from: An order of the Supreme Court of British Columbia, dated October 23, 2020 (Chan v. Chow, New Westminster Dockets E173365 and S192839). Counsel for the Appellant: R.S. Fleming Counsel for the Respondent C.Y. Chow: W. Leung Counsel for the Respondent L.L. Chan: K.J. Learn Place and Date of Hearing: Vancouver, British Columbia June 9, 2022 Place and Date of Judgment: Vancouver, British Columbia July 8, 2022 Summary: The appellant seeks leave to appeal terms of an order made at a trial management conference adjourning the trial that prevent the action from being re-set for trial until the court is satisfied that sufficient documentation has been produced to demonstrate the source of certain deposits into the appellant's bank account. She argues that the trial management judge erred in making an order that was not authorized

by Rule 12-2(9) of the Supreme Court Civil Rules, that required the use of affidavit evidence contrary to Rule 12-2(11), and that has the effect of preventing her from proceeding to trial as she may be unable to obtain further documentation. Held: Application granted. The appeal provides this Court with an opportunity to consider the parameters for orders that may be properly made at a trial management conference. The appeal is of significance to the appellant, as the order arguably prevents her from proceeding with her claim, has sufficient merit to warrant consideration, and will not unduly hinder the progress of the action. Reasons for Judgment of the Honourable Mr. Justice Butler: [1] The appellant, Wai Yee Cheng, applies for leave to appeal an order made at a trial management conference on October 23, 2020 (the "Order"). The Order adjourned the trial that was scheduled to commence on November 23, 2020. The Order also included unusual terms specifying the conditions under which the trial could be re-set for hearing. The appellant seeks leave to appeal only those provisions of the Order. Background [2] The appellant's underlying claim is to recover a significant sum of money that she alleges was taken by her son, the respondent Chung Yeung Chow, from her Toronto Dominion bank account (the "TD Account"). Mr. Chow agrees that he has an obligation to return the funds, but his

wife, the respondent Ling Linda Chow, alleges the funds were always beneficially owned by Mr. Chow. She claims the funds are family property to be divided in divorce proceedings she has commenced. The parties disagree about the amount in issue, but it is in the range of $5 to $10 million. [3] The appellant is elderly, no longer mentally competent and is represented by a litigation guardian. She now lives in Hong Kong and is not capable of giving instructions or evidence. [4] The appellant commenced the underlying action in July, 2017. The respondent Ms. Chan commenced family proceedings in December, 2017. She named the appellant as a defendant in that action, seeking orders that the appellant holds properties and bank accounts in trust for Mr. Chow. The trials of the two actions were ordered to be heard together. [5] A significant issue for trial is the source of funds totaling approximately $9.1 million that were deposited into the TD Account in 2011. Ms. Chan sought full disclosure of information about the source of the funds. Ms. Chan's position is that the money was deposited in that account by Mr. Chow and that he was the beneficial owner of the funds. She suggests that the appellant, or someone acting on her behalf, and the respondent Mr. Chow conspired to misrepresent the true beneficial ownership of the funds. [6] The trial of the two actions was originally scheduled to

be heard on April 20, 2020. However, it was adjourned by Justice Crerar in February 2020 on the application of the appellant. He also ordered that the parties prepare and serve "up to date" lists of documents. In doing so, he ordered the parties to "make their best efforts" to include in their lists internal bank records for the TD Account and documents showing the source of five major deposits into that account in 2011. [7] At the trial management conference on October 23, 2020, the only materials before the judge were the pleadings in the civil action, the appellant's trial brief in that action and Ms. Chan's trial brief in the family proceeding. Ms. Chan sought an adjournment on the basis that the case was not ready for trial. She asserted that the appellant and Mr. Chow had not produced relevant documents and that discoveries had not been completed. The documents that she said had not been produced included medical records speaking to the appellant's capacity in the years preceding the litigation and documents relating to the source of the funds in the TD Account. [8] Counsel for the appellant objected to the adjournment, arguing that the appellant would have difficulty in providing any further document discovery. Counsel said that the appellant had disclosed all bank documents concerning the TD Account but personally had no ability to produce additional documents that

might be relevant to the source of the deposits. Counsel also took the position that the appellant had difficulty in providing instructions to him about additional document discovery. Further, the litigation guardian, a woman in Vancouver, had no personal knowledge of the dispute, no standing to obtain documents in Hong Kong, and was dependent on family and solicitors to do so in that jurisdiction. Though efforts had been made to seek documents from family members and counsel in Hong Kong, these efforts had not been fruitful. Counsel said it was uncertain if any adjournment would improve that state of affairs. [9] Counsel for the appellant further indicated that she would be content at trial to rely on the presumption that the money held in the TD Account in her name is legally hers, and will argue that it is not her burden to prove that she has beneficial title to property to which she has legal title. [10] The judge ordered the adjournment of the trial and also stated that the trial could not be rescheduled "until the court is satisfied that sufficient documentation has been produced demonstrating the source" of the deposits. Appellant's counsel objected to the latter statement, noting that there was no application or evidence for such an order before the court, but the judge indicated that this "[did not] matter" and further that he was "in no way satisfied that best efforts

have been made to produce these documents". [11] The appellant filed the notice of application for leave to appeal the Order on November 23, 2020. The application was not set down for hearing because the terms of the Order were not agreed by counsel. They made efforts to settle the terms of the Order and were directed by the judge to appear before the registrar. Ultimately, they were directed to reappear before the judge. Unfortunately, as a result of scheduling difficulties, the Order was not settled by the judge until April 7, 2022. In the interim, there have been no steps taken in the actions. [12] The contentious terms of the Order that are the subject of this application for leave to appeal are: 2. The action may not be re-set for trial until the court is satisfied that sufficient documentation has been produced demonstrating the source of the following deposits made to the [TD Account]: a. Deposit of $499,990 on February 24, 2011; b. Deposit of $2,465,778 on April 12, 2011; c. Deposit of $2,465,778 on May 2, 2011; d. Deposit of $1,232,884 on May 25, 2011; and e. Deposit of $2,465,778 on May 25, 2011.

3. The parties are at liberty to apply to demonstrate that this matter is ready to proceed to trial. Applicable test [13] There is no doubt that the Order is a limited appeal order and that the appellant requires leave to appeal. [14] The test for determining whether leave to appeal from a limited appeal order should be granted was set out in Goldman, Sachs & Co. v. Sessions, 2000 BCCA 326 (Saunders J.A. in Chambers) as follows: [10] The criteria for leave to appeal are well known. As stated in Power Consolidated (China) Pulp Inc. v. B.C. Resources Investment Corp. (1988), 19 C.P.C. (3d) 396 (C.A.) they include: (1) whether the point on appeal is of significance to the practice; (2) whether the point raised is of significance to the action itself; (3) whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and (4) whether the appeal will unduly hinder the progress of the action. See also Chavez v. Sundance Cruises Corp. (1993), 77 B.C.L.R. (2d) 328 (C.A.). [15] These criteria are "all considered under the rubric of the interests of justice": Vancouver (City) v. Zhang, 2007 BCCA 280 at para. 10 (Saunders J.A. in Chambers). Analysis [16] The appellant says that there are two points in issue: first, that the trial management judge erred by determining that the plaintiff was in breach of the "best efforts" order of Justice Crerar without

evidence, without prior notice, before hearing from the plaintiff, and contrary to Rule 12-2(11); and second, that the trial management judge erred by granting, in effect, a stay of proceedings until the appellant produces certain documents, whether or not those documents are available. [17] Upon reviewing the appellant's written submissions and hearing the appellant's oral submissions, it appears to me that the appellant really seeks to raise three issues, which can be characterized more simply as follows: the appellant seeks leave to appeal the Order on the basis that the judge erred in making an order that was not authorized under Rule 12-2(9), that required the use of affidavit evidence contrary to Rule 12-2(11), and that has the effect of preventing her from proceeding to trial. She submits that an order that prevents her from taking her case to trial based on the legal theory she wishes to advance cannot be considered to be an order that assists "in making the trial more efficient", nor does it further the object of the Rules. [18] The respondents say that the trial management judge's order was a discretionary order. They submit that the impugned terms were reasonable conditions of the adjournment and were within his powers under Rule 12-2, which permitted him to make an order respecting "any other matter that may assist in making the trial more efficient". They further

say that, because the Order provides that the parties may apply to demonstrate that the matter is ready to proceed to trial, any relief that she seeks in this Court is already available to her through application pursuant to the third term of the Order. [19] Before commencing the analysis, I will set out the relevant Rules. Rule 12-2(9) provides: The judge or master presiding at a trial management conference may consider the following and, without limiting the ability of the trial judge or master to make other orders at trial, may, whether or not on the application of a party, make orders respecting one or more of the following: The matters listed in the following sub-rules that may be relevant to the impugned terms of the order in question include: (a) a plan for how the trial should be conducted; (e) admission of documents at trial (l) adjournment of the trial; (q) any other matter that may assist in making the trial more efficient; (s) any orders the judge or master considers will further the object of these Supreme Court Civil Rules. [20] Rule 12-2(11) provides: A trial management conference judge or master must not, at a trial management conference, (a) hear any application for which affidavit evidence is required, or (b) make an order for final judgment, except by consent. Is the point on appeal of significance to the practice? [21] The appellant argues that the appeal

raises questions about the limits of a judge's discretion to make orders at a trial management conference and the ability of a judge to make such orders on their own initiative and without evidence. She submits that there is no appellate authority interpreting Rule 12-2(9) and considering these issues. [22] The appellant also argues that the Order appears to be based on the judge's assessment of whether the parties had made "best efforts" to produce the TD Account documents in accordance with the Crerar order. She says it was improper for the judge to make that assessment at a trial management conference in the absence of an application and without affidavit evidence. She notes that there are no decisions of this Court considering the application of Rule 12-2(11), which provides that a judge at a case management conference must not "hear any application for which affidavit evidence is required". [23] The respondents submit that the point on appeal is not of significance to the practice as the trial management judge's power to order an adjournment with reasonable conditions is clearly articulated in Rule 12-2(9) and the principles are well-settled. In addition, they say that the Order is specific to the particular circumstances of this case and that leave is not usually granted for such orders: Gichuru v. Law Society of British Columbia, 2012 BCCA 159, at para. 20, affirmed on

review, 2012 BCCA 171. They also emphasize that leave is rarely granted from discretionary orders, in particular where the order arises from case management: Gichuru, at paras 17 - 18. [24] I would observe that it is not clear that the impugned terms fall easily within one or more of the sub-rules of Rule 12-2(9) relied upon as a basis for the Order. In that regard, the circumstances are different from those present in Gichuru where the case planning conference rule in question was found to specifically confer jurisdiction on the case planning conference judge to make the order that was made: at para.

26. Further, as the appellant argues, there are no decisions of this Court interpreting Rule 12-2(9) or considering whether there are limits to a judge's discretion to make orders at a trial management conference. [25] While the respondents are correct that judges of the Supreme Court have a broad discretion to regulate practice and procedure in their own court, there would be some benefit in having this Court consider whether there are limits to or parameters for orders that can be made in a proper exercise of that broad discretion at a trial management conference. Is the point on appeal of significance to the parties? [26] There is no question that the issue on appeal is of significance to the appellant. She says the Order effectively brought the action to a halt because she cannot reset it for trial without "satisfying the court" that sufficient documentation as to the source of the funds has been produced, and that the documentation required to meet this obligation may be unobtainable. In other words, the Order creates a risk that she will not be able to have her claim heard on its merits at trial. Is the appeal prima facie meritorious? [27] The merits threshold in determining whether leave to appeal should be granted is relatively low. The test has been expressed as "[w]hether the applicant has identified a good arguable case of sufficient merit to warrant scrutiny by a

division of this Court": Bartram v. Glaxosmithkline Inc., 2011 BCCA 239 (Chambers) at para. 16, citing A.L.J. v. S.J.M. (1994), 46 B.C.A.C. 158 (Chambers). [28] Leave is generally not granted in the case of a discretionary order, particularly where that order is made by a trial management judge: Silver Standard Resources Inc. v. Joint Stock Co. Geolog, [1998] B.C.J. No. 2298 at para. 12 (C.A. Chambers); Robak Industries Ltd. v. Gardner, 2006 BCCA 395 at para. 12 (Chambers). [29] Despite the high threshold, I am of the view that this appeal is not without merit. As I have already indicated, it is not clear that the impugned terms fall within the orders that may be made pursuant to Rule 12-2(9). It is certainly arguable that the effect of the Order is to improperly stay the proceedings until the appellant can provide "sufficient documentation". Further, to the extent that the impugned terms could be ordered as ancillary to an adjournment, it is arguable that the terms are vague and go beyond the type of order properly made at a trial management conference. [30] The respondents' suggestion that the relief that the appellant seeks is unnecessary because the order permits the parties to apply to demonstrate that the matter is ready to proceed to trial does not appear to respond to the appellant's concerns. In order to demonstrate that the matter is ready to proceed to trial, the

appellant will be required to show that sufficient documentation has been provided. As mentioned above, the terms of the order are arguably vague and it is not clear what documentation would be considered sufficient in order to set the matter down for trial. If she is unable to provide such documentation, as she suspects will be the case, she may be unable to proceed with her claim. [31] I am also of the view that there is some merit to the concerns about the making of an order requiring the production of the disputed documents without consideration of affidavit evidence explaining the difficulties in obtaining those documents. While the respondents are correct that trial management judges have the power to make orders respecting matters that will assist in making the trial more efficient or that will further the object of the Rules (see Rule 12-2(9)(q) and (s)), they are also prohibited from hearing applications for which affidavit evidence is required: Rule 12-2(11). It is arguable that the impugned terms of the Order should not have been made without affidavit evidence. I note the comments of Justice Kent in Thomas v. Rio Tinto Alcan Inc., 2019 BCSC 421, relating to orders for production of disputed documents: [46] I wish to make it clear that I do not in any way question the integrity of counsel in this case. Still, when questions are raised about the adequacy of document

production in any given action, it is desirable for counsel to provide the court with a detailed explanation, whether in affidavit form or otherwise, of the extent and manner in which document discovery was pursued. [Emphasis added.] Here, as the Order was made without an application, there was no evidence before the court and the appellant wishes to argue that she was not afforded full opportunity to provide that explanation. [32] I am of the view that the proposed appeal meets the merits threshold for granting leave to appeal. Will granting leave to appeal unduly hinder the progress of the action? [33] As the appellant argues, the effect of the Order has been to put the proceedings on hold until the court is satisfied that sufficient documentation has been produced. In other words, the progress of the action has been delayed, if not hindered, by the terms of the Order. I understand that no steps in the proceeding have been taken since the Order was made. In these circumstances, granting leave to appeal will not unduly hinder the progress of the action. Disposition [34] When I balance the relevant factors, I conclude it is in the interests of justice to grant leave to appeal. "The Honourable Mr. Justice Butler"