Huang v. Silvercorp Metals Inc.

2016 BCSC 1052 Huang v. Silvercorp Metals Inc.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Huang v. Silvercorp Metals Inc., 2016 BCSC 1052 Date: 20160524 Docket: S146424 Registry: Vancouver Between: Kun Huang Plaintiff And: Silvercorp Metals Inc. Defendant And: Jon Richard Carnes, One Horizon Foundation, Eos Holdings LLC (Nevada LLC31246-2004), Eos Holdings LLC (Nevada E0542782012-5) and Eos Holdings LLC (Dominica) Third Parties Before: The Honourable Madam Justice Warren Oral Reasons for Judgment (In Chambers) Counsel for Plaintiff: Howard A. Mickelson, Q.C. Lorne M.A. Kotler Counsel for Defendant: Tom A. Hakemi Nathan J. Muirhead Counsel for Third Parties: Shayne P. Strukoff, Q.C. Place and Date of Hearing: Vancouver, B.C. January 28-29, 2016 Place and Date of Judgment: Vancouver, B.C. May 24, 2016 [1] THE COURT: The plaintiff, Mr. Huang, seeks damages for false imprisonment and defamation. He alleges the defendant, Silvercorp Metals Inc. ("Silvercorp"), orchestrated his detention and incarceration in China in retaliation for his involvement in the online publication of reports critical of Silvercorp and its Chinese subsidiary. Those reports have been referred to by the parties as the "Alfred Little Reports". He also alleges that Silvercorp defamed him by claiming that he had profited by taking short positions in Silvercorp's stock and then publishing false and deceptive statements about Silvercorp in the Alfred

Little Reports in order to drive down the price of the stock. The action is scheduled to be tried before a jury for 40 days commencing in late January 2017. [2] The defendant has brought on an application to strike the jury notice and applies today to adjourn that application until after discovery has completed and expert reports have been served. [3] The plaintiff opposes the adjournment and seeks an order scheduling the defendant's application for June 16 and 17, 2016, which days have already been set aside for potential applications on this case. [4] Rule 12-6(5) provides that an application to strike a jury notice pursuant to that Rule is to be brought within seven days of service of the jury notice. The defendant's application was not brought within that time period, but the plaintiff takes no issue with that. The plaintiff does, however, oppose any further delay because the plaintiff anticipates that if the application is not successful the defendant will seek to appeal and, if the application is not heard soon, the prospect of any appeal will jeopardize the January 2017 trial date. [5] The adjournment is the only matter I am addressing today. [6] The interests of justice govern whether to grant the adjournment. Those interests require a balancing of the interests of the plaintiff and the defendant and, in particular, the prejudice to the plaintiff of adjourning the

application and the prejudice to the defendant in not doing so. [7] There is some prejudice to the plaintiff that arises from the risk that the trial date will be lost if the application is delayed and then an appeal is taken from my decision on it. Irrespective of what my decision is, it is my view an appeal is likely. I have considered Mr. Muirhead's submissions to the effect that the trial date might not be lost even if an appeal is taken. I agree that the loss of the trial date is not an inevitable consequence of delaying the application, but given the stage of this litigation with discoveries yet to be completed and expert reports not to be delivered until the fall, there is a real and substantial risk that the trial dates will be lost if the adjournment is granted and the application is not heard until later on in the fall. [8] The more difficult question is whether the defendant will be prejudiced if it is required to argue the application in advance of the completion of discovery and the exchange of expert reports. The defendant submits that without a full record, meaning without first conducting discovery and having expert reports completed, it will be prejudiced in its ability to persuade me that the only way to ensure a fair trial in this case is to require that the trial be conducted by a judge alone. [9] As was observed by Madam Justice Garson in Forliti v.

Woolley, 2003 BCSC 353, it appears to be quite common for a party seeking to strike a jury notice to an apply at an early date, as required by the Rules, and then to postpone the hearing of the application until pre-trial motions are completed and expert reports have been produced. I also accept, as was noted by Mr. Justice Esson in Sadowick v. Dobbay, [1982] B.C.J. No. 447 (S.C.), that the loss of the original trial date is often a regrettable but, in many cases, justifiable result. The reason that is a justifiable result, however, is key to the analysis. As was made clear by Mr. Justice Esson in Sadowick, at para. 14, the delay is justified in cases where the real issues cannot be defined until discovery has been completed and the parties know what the expert evidence will be. [10] Thus the central question is whether the real issues here can be defined without a full record. [11] The defendant asserts that it requires a full record in order to show that fairness requires a judge alone trial. However, the only fairness issue that the defendant raised on the application was the complexity of the legal and factual issues. As I understand it, the defendant says that this case is both legally and factually complex and the record is required in order for me to acquire a full appreciation of those complexities. In other words, this is not a case like Madzar v. Sullivan, 2013 BCSC

819, where the fairness concern identified by Madam Justice Fenlon arose from the risk that the plaintiff, who was unrepresented and had previously made intemperate remarks about the defendant and his lawyers, might say things about the defendant or counsel that would prejudice the jury. Here the only fairness concerns that were articulated flowed directly from the complexity of the factual and legal issues. [12] I accept that it will be necessary for a jury to determine the truth of the Alfred Little Reports and I accept that in doing so it might be necessary for the jury to assess and make findings on somewhat complicated expert evidence. However, I am satisfied by the authorities referred to by the plaintiff on this application that factual complexity will not deprive the plaintiff, in a defamation case, of a jury trial: Lawson v. Baines, 2012 BCCA 117 at para. 51; Pierre v. Pacific Press (1994), 92 B.C.L.R. (2d) 223 at para.

9. Accordingly, I am not persuaded that an adjournment of the defendant's application to strike the jury notice is justified by the need for a full record in order to establish factual complexity. In my view, it is beyond argument that factual complexity will not be enough to strike the jury notice in this case. [13] Turning then to legal complexity. It may be that there is no difference between factual and legal complexity in relation to a plaintiff's right, in a defamation case, to a jury trial. In other words, it may be that the plaintiff has a right to a jury trial in a defamation case notwithstanding the complexity of the legal issues. However, given the novelty of that question I am not going to say anything more about that today. [14] The defendant submits that the legal issues are unusually complex because this case involves some events that occurred in China. Among other things, it will be necessary to determine whether a tort was committed in British Columbia if Silvercorp is found to have directed agents in China to carry out the arrest in China. If a tort has been committed, it will be necessary to determine whether the applicable law is British Columbia law or Chinese law. It may also be necessary to determine the extent to which a British Columbia court is bound by findings of a Chinese court, and if a British Columbia court has, and ought to exercise, a residual

discretion to apply British Columbia law to actions taken by Chinese state authorities in China because it would give rise to an injustice to apply Chinese law. [15] As I understand it, the defendant's position is that these legal issues will have to be determined within the context of the facts that are ultimately found by the jury and this will make it difficult to charge the jury on the law. For the purposes of this adjournment application, I accept that proposition but, in my view, the defendant does not need to know what the facts are in order to make the argument. In other words, I am not persuaded that the defendant's ability to make the argument that the legal issues will be so bound up with the facts that charging the jury would be impracticable, if not impossible, depends on the defendant knowing in advance what the facts are or are likely to be. In the course of arguing the application to strike the jury notice the defendant can present the various factual possibilities and how each of those possibilities will impact on the legal issues in order to attempt to establish the legal complexity the defence says exists. [16] I have not overlooked the submissions that were made concerning the possibility of a summary trial application being brought by the defendant. In my view, those submissions do not assist the defendant on this application. I was not persuaded that the

defendant's ability to argue the application to strike the jury notice would be prejudiced by having to make the application before some yet to be formulated summary trial application. It is still not entirely clear to me what that summary trial might address. In any event, a summary trial application is likely to reduce the complexity. In other words, if a summary trial application is brought and some issues are decided in advance, it could make the case more suitable for a jury. If that is not the case, then I expect the parties will have more to say about that when addressing the suitability of any summary trial application that is ultimately brought. [17] I have also not lost sight of what the plaintiff's counsel referred to as the threshold question. Rule 12-6 suggests that the plaintiff has an absolute right to a trial by jury because this is a case of false imprisonment and defamation. The plaintiff submits this deprives me of jurisdiction to strike the jury notice in this case. I recognize, of course, that the defendant submits that I have the inherent jurisdiction to strike the jury notice notwithstanding the language of that Rule. I do not intend to say anything more about that at this time because it is not material to the adjournment application. [18] The narrow question I am deciding today is whether the arguments the defendant seeks to make in support of its

application to strike the jury notice can only be properly assessed at a later date. For the reasons I have expressed, I am not persuaded that there is anything to be gained by waiting for discoveries and expert reports or a summary trial. In other words, I am not persuaded that the defendant will suffer prejudice as a result of being required to argue the application to strike the jury notice in mid-June. In light of the prejudice to the plaintiff that would arise from a delay, it is in the interests of justice that the adjournment application be dismissed. [19] The defendant's application to strike the jury notice will be heard on June 16 and 17, 2016. [20] I am going to direct that the parties exchange outlines of argument. This is a novel issue and the notice of application and response are quite brief and should be supplemented. [Submissions] [21] THE COURT: The defendant will provide an outline of argument to the plaintiff by Thursday, June 9, and the plaintiff will provide a responding outline of argument by Tuesday, June 14. [22] Given everything I have heard today, I have had quite a preview, so it may be that we do not need two full days. If you come to the conclusion that you definitely do not need two full days, then I would ask you to advise the registry so that my time can be made available to somebody else. I do not want to run out of time, so if you think you

might spill over, then keep the two days. [23] MR. MICKELSON: My Lady, my friend had mentioned his own document motion. If he wants to bring it for that date, can we use the second day for that? [24] THE COURT: Yes. The application to strike the jury notice will have priority because it is ahead in the queue, but I expect we might be able to do both of those things in those two days. [25] Thank you. "WARREN J."