UD Trading Group Holding Pte. Limited v. TransAsia Private Capital Limited

UD Trading Group Holding Pte. Limited v. TransAsia Private Capital Limited Collection Decisions of the Court of Appeal Date 2022-02-03 Neutral citation 2022 ONCA 100 Docket numbers C69265 Judges Doherty, David H.; Benotto, Mary Lou; Huscroft, Grant Subject Civil Decision Content COURT OF APPEAL FOR ONTARIO CITATION: UD Trading Group Holding Pte. Limited v. TransAsia Private Capital Limited, 2022 ONCA 100 DATE: 20220203 DOCKET: C69265 Doherty, Benotto and Huscroft JJ.A. BETWEEN UD Trading Group Holding Pte. Limited, UIL Singapore Pte. Limited, UIL Malaysia Limited, UIL Commodities DMCC, Vadox Corp. and Prateek Gupta Plaintiffs (Appellants) and TransAsia Private Capital Limited, TA Private Capital Security Agent Ltd., Rutmet Inc. and Export Development Canada Defendants (Respondents) Michael D. Schafler and Ara Basmadjian, for the appellants George J. Pollack and Faiz Lalani, for the respondents TransAsia Private Capital Limited, TA Private Capital Security Agent Ltd. Rahul Shastri and Kristie Jennings, for the respondents Rutmet Inc. Jamie Macdonald, for the respondents Export Development Canada Heard: December 3, 2021 On appeal from the order of Justice C. Gilmore of the Superior Court of Justice, dated March 17, 2021, with reasons reported at 2021 ONSC 1957. REASONS FOR DECISION I [1] The appellants, collectively referred to as “UDG”, are metal traders operating in Asia and the Middle East. The respondents, with the exception of Rutmet Inc. (“Rutmet”), and Export Development Canada (“EDC”), collectively referred to as “TAP”, provide financing through various means to metal traders. TAP operates out of Singapore, Hong Kong and the British Virgin Islands. [2] Rutmet purchases metal and metal products for sale to third-party buyers. Unlike virtually all of the other corporations and individuals involved in the commercial activities underlying this litigation, Rutmet is incorporated in, and does business in, Ontario. EDC is a Canadian Crown corporation that, among other things, provides trade credit insurance to Canadian companies. [3] Over the years, TAP has loaned funds for metal purchases to UDG and to Rutmet. Rutmet is not related to UDG and the two entities operate independently of each other. [4] In 2017-2018, the international commodities market faced serious economic challenges. TAP claimed that UDG was in default on tens of millions of dollars of loans. TAP was looking to realize on its security and enforce its guarantees, both personal and corporate. UDG maintained that TAP had realized on certain collateral, and that receivables had been paid to TAP via another corporate entity. UDG maintained it no longer owed TAP anything. [5] TAP commenced proceedings in Singapore and Dubai on the debts it alleged UDG owed it. Shortly after those proceedings were commenced, UDG commenced this proceeding in Ontario. In its Ontario claim, UDG seeks damages from TAP, a declaration that TAP has been unjustly enriched in the transactions with UDG, a declaration that TAP is no longer entitled to hold certain security or enforce that security, and a declaration that there are no outstanding UDG receivables payable to TAP. In the Ontario proceeding, UDG advances as claims effectively the same allegations it makes as defences in the foreign proceeding. [6] After commencing its Ontario action, UDG brought an anti-suit injunction, seeking to enjoin TAP from pursuing the ongoing litigation in Dubai, UAE, and Singapore in favour of the Ontario proceedings recently commenced by UDG. The motion judge dismissed that motion. There is no appeal from that order. [7] TAP brought a cross-motion to UDG’s anti-suit injunction. TAP sought an order permanently staying UDG’s Ontario proceeding on the basis that the foreign jurisdictions in which litigation was already underway were clearly more appropriate jurisdictions than Ontario. The motion judge granted that motion. UDG appeals. II [8] The decision to stay a proceeding in Ontario in favour of an ongoing proceeding in another jurisdiction involves both fact-finding and the exercise of judicial discretion. This court must defer to the motion judge’s fact-finding and exercise of her discretion, absent an error in law, a material misapprehension of the evidence, or unreasonable factual findings. [9] In the course of her analysis, the motion judge made two important findings of fact. First, the motion judge held, at para. 73(h): The Rutmet loan is a different matter to which UDG is not a party. The security for the Rutmet loan is the receivables owed to Rutmet by UIL Buyers. The UIL Loan Agreements are entirely different and are secured by Hangji and GEM shares. The two debts involved different borrowers and are secured by different assets. The Plaintiff seeks to conflate these unrelated debts. [10] Second, the motion judge observed, at para. 83, that the action initiated in Ontario by UDG “is a step taken by the plaintiffs [UDG] to attempt to gain a jurisdictional advantage where none exists”. [11] Both findings of fact were open to the motion judge. The appellant has not convinced us we should interfere with either. The motion judge’s decision to stay the Ontario proceedings must be seen through the lens of those findings and assessed in light of them. Given those findings, it is hardly surprising the motion judge exercised her discretion as she did. [12] The underlying commercial transactions show little, if any, connection to Ontario, apart from the involvement of Rutmet. The same can be said for the various entities involved in those transactions. However, given the motion judge’s finding, Rutmet’s activities and dealings with TAP cannot open the Ontario courtroom door to a lawsuit brought against TAP by UDG and arising out of transactions between TAP and UDG. [13] The motion judge considered and rejected UDG’s arguments that TAP had attorned to the jurisdiction of the Ontario court when it commenced (and shortly thereafter abandoned) a receivership application in relation to Rutmet, and when it brought an application for a judicial interpretation of an insurance policy issued by Export Development Canada in respect of some of the receivables in issue between Rutmet and TAP. We see no error in the motion judge’s analysis of the attornment arguments. Both the receivership and the application for the interpretation of the insurance policy related to business dealings between Rutmet and TAP. TAP’s involvement in litigation in Ontario in that proceeding cannot become an attornment by TAP in respect of an action brought by UDG against TAP in relation to different loans. [14] The motion judge also considered the impact of the various foreign selection clauses contained in the different applicable security documents governing the transactions. Given the sophistication of all parties, choice of forum clauses, agreed upon by the parties, demanded considerable weight in determining whether the Ontario proceeding should be stayed. The motion judge, at para. 83, held that the applicable forum selection clauses were “clear and unambiguous”. Those clauses effectively put TAP in control of the choice of forum in which to litigate disputes arising out of those agreements and guarantees. [15] The appellant has not demonstrated any error in the motion judge’s interpretation of the applicable forum selection clauses. She properly gave those clauses considerable weight on the motion to stay the Ontario proceedings. [16] In addition to challenging specific aspects of the motion judge’s reasons, UDG takes issue with the adequacy of the reasons as a whole. UDG submits the reasons focus almost exclusively on UDG’s anti-suit injunction and say next to nothing about TAP’s motion to stay the Ontario proceedings, apart from noting that doing so would avoid a multiplicity of proceedings. [17] Reasons must be considered as a whole and their adequacy assessed functionally. Reasons must explain the result. Most importantly, reasons must explain to the losing party why it lost. Reasons must also permit meaningful appellate review of the decision made at first instance. [18] The motion judge’s reasons, read as a whole, clearly explain why she stayed the Ontario proceedings. The motion and the cross-motion involved the same factual matrix and overlapping legal principles. The motion judge’s findings as to the distinction between TAP’s dealings with Rutmet and its dealings with UDG, and her finding as to UDG’s motivation for commencing the Ontario proceedings, were equally applicable to both motions and went a long way to deciding the eventual outcome of those motions. [19] The motion judge diligently worked her way through the dense record provided by the parties. She made no material factual errors. She also dealt at length with all of the arguments advanced by UDG against staying the Ontario proceeding, particularly as they related to attornment, and the effect of the applicable choice of forum clauses. With respect, there is no merit to the submission the reasons do not explain the result arrived at by the motion judge, or permit meaningful appellate review of that result. III The Fresh Evidence Applications [20] UDG and TAP both brought fresh evidence applications on the appeal. UDG produced various documents arising out of litigation in Ontario involving Rutmet and TAP. The litigation arises out of debts allegedly owed by Rutmet to TAP or related companies. [21] The fresh evidence tendered by TAP relates to developments in the ongoing proceedings in Singapore and Dubai. The developments include an unsuccessful attempt by UDG to set aside an earlier order refusing to stay the Singapore proceedings on the basis of forum non conveniens. [22] Both parties are content that the fresh evidence be received. [23] We have considered the fresh evidence. It provides no basis upon which to doubt the correctness of the order under appeal. IV [24] The appeal is dismissed. [25] Counsel for the appellants confirmed there is no freestanding motion for leave to appeal the costs order made by the motion judge. The respondents are entitled to costs of the appeal in the amount of $15,000, inclusive of relevant taxes and disbursements. The costs of the motion before Paciocco J.A., fixed by him at $10,000, are also payable to the respondents. “Doherty J.A.” “M.L. Benotto J.A.” “Grant Huscroft J.A.”