Yen v. Ghahramani

2023 BCSC 1421 Yen v. Ghahramani

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Yen v. Ghahramani, 2023 BCSC 1421 Date: 20230816 Docket: S220213 Registry: Vancouver Between: Vincent Yan and 07568383 B.C. Ltd. Plaintiffs And: Frederick Ghahramani, 0751846 B.C. Ltd, AirG Employee Share Ownership Plan Ltd., and airG Inc. Defendants And: Vincent Yen, Canfleet Logistics Ltd., Studypug Inc., Studypug Holding Inc., Studypug Usa Inc., Studypug Holding (Hk) Limited, Studypug (Hk)-Limited, Manitoulin Global Forwarding Inc., airG Services Inc., and Frederick Ghahramani, 0751846 B.C. Ltd, Airg Employee Share Ownership Plan Ltd., airG Inc. and Tai Management LTD. Defendants by Way of Counterclaim Before: Master Roberson Reasons for Judgment Counsel for Vincent Yen and 0756383 BC Ltd.: J. Cabott B. Fahey Counsel for the defendants, Frederick Ghahramani and 0751846 BC Ltd.: J.D. Shields And no one else appearing Place and Date of Hearing: Vancouver, B.C. June 21, 2023 Place and Date of Judgment: Vancouver, B.C. August 16, 2023 Table of Contents Introduction.. 3 Background.. 4 The Notice to Admit, Reply and Application.. 4 Analysis.. 8 Conclusion.. 16 Introduction [1] For the most part, civil chambers applications are brought as a means to resolve reasonable impasses between parties as to how the Supreme Court Civil Rules, B.C. Reg. 168/2009 (the "Rules") may provide a tool for the efficient determination of

litigation. [2] This does not appear to be one of those cases. [3] This application is brought by the defendants, Frederick Ghahramani ("Mr. Ghahramani") and 0751846 B.C. Ltd. (collectively, the "Ghahramani Parties"), as a result of what they argue is the plaintiffs' unreasonable refusal to answer their 224 page notice to admit by which they sought some 1,804 admissions, the effect of which is, they say, to give them significantly extra time in proving what should be uncontroverted facts and necessitating the relief sought, that being extended discovery time, interrogatories and an adjournment, and lengthening of the trial. [4] The plaintiffs argue that the notice to admit is, on its face, an abuse, which they were entitled to respond to with a one sentence bare denial, without explanation, as it is not their role to parse through over 200 pages to determine if any entries are appropriate. To illustrate their position that a notice to admit of this magnitude is unreasonable, the plaintiffs point to the fact that there is a 14-day time limit for a response. Clearly, this notice to admit could not reasonably be answered within 14 days, which appears to have been acknowledged by the Ghahramani Parties given that they offered to extend the time for response. [5] In bringing and opposing this application, both parties rely on a strict reading of the Rules to advance their own strategy as to how the pre-trial discovery ought to be conducted. [6] While, on its face, it is not inappropriate to use the Rules as a tool for advancing litigation strategically, the Rules are the servants and not the masters of the court. The court is to interpret them in a manner that does justice between the parties: Wong v. Wong, 2006 BCCA 540 at para.

23. I would add to that by saying the court is to interpret and apply the Rules in a manner consistent with their overall objective of securing the just, speedy, and inexpensive determination of every proceeding on its merits. [7] It is hard to envision how either a notice to admit seeking 1,804 admissions, or a one sentence bare denial in response, achieves that objective, notwithstanding that the Rules allow for both. Background [8] This action involves a complicated commercial dispute, which has been recently set out in Yen v. Ghahramani, 2023 BCSC 229, at paras. 7-17. [9] In what may be an over simplification, the high level background is that in or around 2000 Vincent Yen ("Mr. Yen"), Mr. Ghahramani, and a third party no longer involved with the matter, founded a business undertaking operating under the name of airG. AirG was in the business of creating and selling mobile software, including but not limited to entertainment content such as games and chat functions. By all accounts the operations were, or ought to have been, profitable. [10] Over the years, however, certain actions are alleged to have been taken by Mr. Yen and/or Mr. Ghahramani, and the companies that they control, that the other claims were in breach of the various agreements between them, in breach of their fiduciary duties to each other, and/or oppressive under the applicable corporate legislation. The

parties each seek, including by way of counterclaim, damages, accountings, disgorgement of profits, unjust enrichment and constructive trust remedies, among other [11] A 24-day trial has been set to commence on June 10, 2024. The Notice to Admit, Reply and Application [12] On March 1, 2023 the Ghahramani Parties issued the notice to admit. [13] Given the extent of the admissions being sought, rather than rely on the time limits for response in the Rules, counsel for the Ghahramani Parties offered to give the plaintiffs six weeks to respond. [14] Within the 14-day limit set out in the Rules, on March 13, 2023, the plaintiffs provided their reply as follows: [the plaintiffs] deny each fact, the admission of which is requested in paragraphs 1 to 1804 of the Notice to Admit. (the "Denial") [15] Although not directly relevant to this application, counsel for the Ghahramani Parties notes that the airG Parties also delivered a notice to admit to the plaintiffs at that same time, which was responded to with, in some cases, admissions being made. Notably, that notice to admit was 5 pages, and sought 40 admissions. [16] Upon receipt of the Denial, the Ghahramani Parties prepared the subject application, which was filed on March 15, 2023. The relief being sought is: a) An order that the Ghahramani Parties may examine each of the plaintiffs for an additional 180 hours; b) An order that the

Ghahramani Parties may send interrogatories to the plaintiffs (during submissions, this relief was clarified to be that the notice to admit could be converted into interrogatories with the plaintiffs then being compelled to answer them); c) An order that the June 2024 trial date be adjourned generally and reset to a mutually agreeable date or one set by the court, for 34 days; d) Leave to apply to vary these orders; e) Costs. [17] The notice of application does not indicate whether or not the relief being sought is conjunctive or disjunctive, given that neither "and" or "or" is included in the list itself. However, during submissions the Ghahramani Parties' treated them as disjunctive, with their first position being that there ought to be additional discovery time and an adjournment of the trial in order to enable those discoveries to be undertaken and to increase the trial length due to the need to prove those facts that were denied. The use of interrogatories appeared to be a less preferable remedy. [18] In terms of the admissions themselves, with 1,804 being sought they are replete with both entries which could not reasonably be expected to be answered as framed for various reasons, including a lack of clarity or context, and ones that should not be contentious. [19] Examples of the former include: a) Admit that Mr. Yen subsequently did not provide help to Mr. Ghahramani or

airG whenever he could (Q. 70). b) Admit that Mr. Yen did not respond to Mr. Ghahramani (Q. 112, 116, 118, 128, 135, 139, 205, et al. - this is a frequently sought admission). c) Admit that Mr. Yen did not call Mr. Ghahramani (Q. 114). d) Admit that Mr. Yen did not get in touch with Mr. Ghahramani (Q. 214). e) Admit that Mr. Yen was more concerned about his remuneration than reviewing and signing airG's Financial Statements (Q. 160). f) Admit that the plaintiffs received legal advice prior to the Notice of Civil Claim being filed on January 14, 2022 (Q. 225). g) Admit that Canfleet did not reimburse airG for the Fasken Charges (Q. 439). [20] Examples of the latter include the following (although, I note that the plaintiffs argue that it is improper to seek admissions of facts plead): a) Admit that the plaintiff, 0756383 B.C. Ltd. is a company incorporated under the laws of British Columbia (a fact plead in the notice of civil claim); b) Admit that Left Field Systems Inc. changed its name to Air Games Wireless Inc. on April 30, 2002 and was continued federally (a fact plead in the notice of civil claim); c) Admit that airG Inc. is a federally incorporated corporation (a fact plead in the notice of civil claim); d) Admit that on March 8, 2022, the plaintiffs discontinued their claims against the defendant, airG Employee Share Ownership Plan Ltd. (a notice of discontinuance has

been filed); and e) Admit various other facts which track matters either plead in the notice of civil claim or sworn to already in an affidavit filed by Mr. Yen. [21] There are also numerous admissions being sought which could narrow the scope of issues, such as admissions based on the documents as disclosed to date. [22] These include admissions as to the agreements and contents thereof, as well as correspondence between the parties such as admissions to confirm the date of emails and that they had been sent by the author noted therein, which, if admitted, would save time either at discovery or at trial in having witnesses prove those documents. While these are the types of admissions often obtained through document agreements, the plaintiffs describe them as admissions that documents "say what they say" and take the position that they are inappropriate. [23] In addition, they point to some entries which are "wholly inaccurate", using an example of an admission that cites a document for a certain proposition; however, when the document is reviewed it does not state what it purports to state. [24] In any event, the role of the court is not to sift through 1,804 entries and determine which fall into which category. [25] Notably, neither of the parties themselves took time to provide an aid to the court as to any such categorization, with both taking the court to sampled entries.

Each argued that the court could determine the application looking at the notice to admit on a holistic basis, with the Ghahramani Parties arguing that the bare denial of 1,804 admissions establishes the necessity for additional discovery time (or the other relief sought), and the plaintiffs arguing that not only is the notice to admit abusive on its face, but the subject notice of application fails to provide a proper basis for the relief sought, such that the application should be dismissed. Analysis [26] Rule 7-7 provides as follows: Notice to admit (1) In an action in which a response to civil claim has been filed, a party of record may, by service of a notice to admit in Form 26, request any party of record to admit, for the purposes of the action only, the truth of a fact or the authenticity of a document specified in the notice. Effect of notice to admit (2) Unless the court otherwise orders, the truth of a fact or the authenticity of a document specified in a notice to admit is deemed to be admitted, for the purposes of the action only, unless, within 14 days after service of the notice to admit, the party receiving the notice to admit serves on the party serving the notice to admit a written statement that (a) specifically denies the truth of the fact or the authenticity of the document, (b) sets out in detail the reasons why the party cannot make the admission, or (c)

states that the refusal to admit the truth of the fact or the authenticity of the document is made on the grounds of privilege or irrelevancy or that the request is otherwise improper, and sets out in detail the reasons for the refusal. Unreasonable refusal to admit (4) If a party unreasonably denies or refuses to admit the truth of a fact or the authenticity of a document specified in a notice to admit, the court may order the party to pay the costs of proving the truth of the fact or the authenticity of the document and may award as a penalty additional costs, or deprive a party of costs, as the court considers appropriate. [27] The purpose and objectives of notices to admit has been set out in various decisions, including Bene (Oval) Development Ltd. v. 1148538 B.C. Ltd., 2020 BCSC 1608, at para. 15, namely to encourage parties to: a) make concessions and admissions where appropriate and available under R. 7-7, so as to enable them to focus their attention on the live issues in dispute; b) pursue a just, speedy and inexpensive determination on the merits in accordance with R. 1-3; and c) avoid increased discovery time. [28] As noted in Bene, at para. 16, the recipient is entitled to respond to the notice to admit by simply invoking "denied" in accordance with R. 7-7(2)(a), with no requirement to justify such a position. [29] In considering such a response, in Nouhi v.

Pourtaghi, 2021 BCSC 1779 the court confirmed that there is a distinction between a denial of a fact and a refusal or inability to admit a fact. In the latter case, the question becomes whether the explanation given is sufficient and whether the party took adequate steps to inform themselves before responding. However, in the former, no such consideration is required. [30] Thus, decisions often turn on whether or not there was a denial, or a refusal or inability to admit. [31] In Bene in addition to the writing of the word "denied" next to the various admissions sought, the recipient included a cover letter that indicated that they would consider a document agreement at a later time, and subsequently engaged in an email discussion as to the merits of the admissions sought, which they described as a "philosophical debate". The court found that it was entitled to consider the entirety of the communications between the parties, not just the handwritten "denied" response on the notice to admit itself given that the Rules do not require a specific form for such response. As such, the whole of the correspondence did constitute the "written statement". [32] The Ghahramani Parties seemed to argue, although did not say so explicitly, that the same can be said here, where the plaintiffs now include critiques of the admissions being sought with reasons why they are not proper admissions

including among other things, that they are admissions of facts plead by the plaintiff, they are facts already deposed to in sworn affidavits, they are inaccurate, they seek legal conclusions, or are unduly broad or lacking in context. [33] I do not agree that the response to an application being brought on the basis of a denial of admissions can be deemed to be part of the "written statement" in response to a notice to admit itself, as contemplated under R. 7-7(2). [34] The purpose of an application response is to respond to the application. That it may include included alternative arguments about the appropriateness of the admissions sought is not a resiling or watering down of the Denial. It would be unreasonable to tie the hands of a party responding to an application if they were prevented from making alternative arguments for fear that it would re-write the response which is the subject of the application. [35] In this case, there is little doubt that the plaintiffs denied the facts in their entirety, as they were entitled to do under R. 7-7(2)(a). A denial almost identical to the one provided by the plaintiffs here was found to be proper in Luu v. Wang, 2009 BCSC 860, at para. 94. [36] The Ghahramani Parties conceded that if the response is found to be a bare denial under R. 7-7(2)(a), then it would be one that the plaintiffs were entitled to make. However, they argue

that the court can still consider if they were acting unreasonable in refusing to make such admissions and make the orders sought accordingly. In their view there must be a consequence when a party is unnecessarily "obstreperous and difficult". It is not clear which party falls into that category. [37] Regardless, the plaintiffs argue, the only remedy specifically set out in the Rules for an unreasonable refusal to make an admission is an award of costs as provided for in R. 7-7(4). [38] However, there are instances where the court has provided for other remedies. [39] In Nouhi, the court referred to both The Whalen Company v. Olympic International Agencies Ltd., 2017 BCSC 1771, and Bene as authority for the court's jurisdiction to deem the admissions to have been made, despite that in both cases the court declined to do so, with the court in Bene noting that it is a draconian remedy. In Nouhi, the court preferred terms by which the recipient was ordered to provide a more fulsome response. [40] In Bene, having found that the response to the notice to admit was not one under R. 7-7(2)(a), such that the response was inadequate, and that costs would not provide an adequate remedy, the court proceeded to fashion one which "would better reflect the principles set out in R. 1-3", and converted the notice to admit into interrogatories. The court also noted as follows: [34] If I am

incorrect in determining that the response should be struck and the plaintiff granted leave to serve interrogatories, I would have extended the time limited for the examination for discovery of the defendant's representative beyond the prescribed seven hours. I would extend the examination for discovery to ten hours on the basis that if the plaintiff were required to put every fact and document referenced in the notice to admit to the defendant's representative, a great deal more time than seven hours would be required. Such a result, however, would be an unfortunate waste of time and not in keeping with the object of the Rules. [41] More recently, in Gross v. Peak Products Manufacturing Inc., 2023 BCSC 971 the court considered a request by the applicant to have certain specifically identified admissions answered in some cases, and converted into interrogatories in others. Notably, in Gross, the court was provided a specific list of, by my math, 81 questions that the applicant argued should have and could be answered and the 25 admissions to be converted, and was not being asked to do so in a blanket manner. The court found that 30 questions in issue were not properly answered, given that the bare denial was in essence diluted by the correspondence between the parties, and that it was appropriate to convert those specific questions to interrogatories, to be answered prior to

examinations for discovery (at para. 130). [42] The Ghahramani Parties argue that the court should, as was done in Bene and Gross, provide some relief to assist them with advancing their case, given that as a result of the plaintiffs' position they will have to prove each and every one of those 1,804 admissions, meaning asking the necessary questions on discovery with further follow up as appropriate, and either reading in those discoveries at trial or proving them through the witnesses. [43] The estimate of a further 180 hours being required for discovery was based on a rough calculation of it taking about one hour to prove 10 admissions. The calculation of the addition of 10 days of trial was not explained. [44] The plaintiffs take issue with the Ghahramani Parties' proposition that any of the relief being sought is available to the them. The plaintiff's position is that given that they are entitled to make a bare denial under R. 7-7(2)(a), as they have done, there is no wrong, and therefore no right to a remedy under Rule 7-7. [45] In this respect, in each of the cases relied upon by the Ghahramani Parties, the court made a specific finding that the response to the notice to admit was not in compliance with the requirements of R. 7-7(2), as it was not a bare denial under sub-rule (a), and failed to provide the required explanation under sub-rules (b) or (c). [46] I agree

with the plaintiffs that this case is distinguishable from those being relied upon by the Ghahramani Parties for that reason. [47] Having found as I have that the response was properly made by the plaintiffs under R. 7-7(2)(a), it is not open to the court at this stage to order that the admissions are to be answered, or a justification made to not answer them, through some other means, whether that be an order compelling compliance as was done in Whalen, through a conversion into an interrogatory as was done in Bene and Goss, or through extended discovery rights, as discussed in Bene. [48] It is, however, within the court's jurisdiction to make orders to extend the time for discoveries under R. 7-2(2), to grant leave to issue interrogatories under R. 7-3(1), or adjourn a trial under R. 12-1(9), independent of there being a notice to admit issued. [49] While the notice of application did also make a passing reference to these rules, it did so without any further legal analysis for the relief to be granted in accordance with them. As such, the plaintiffs argue that the relief ought not be granted on any such basis, relying upon the comments of this court in Zecher v. Josh, 2011 BCSC 311 as follows: [30] Form 32 of the SCCR lends itself to providing both the opposing party and the court with full disclosure of the argument to be made in chambers. Parties should put in as much

thought to the necessary content of that Form as is done when preparing the supporting affidavits. When a party is represented, responsibility for that content lies with counsel. [31] No doubt the Lieutenant Governor-in-Council intended Part 3 of Form 32 to contain more than a cursory listing of the Rules that might support the particular application. For example, common law authorities can and should be included as well as a brief legal analysis. Such an analysis is particularly helpful given that parties are not able to present a separate written argument in civil chambers unless the application is scheduled to take two hours or more of court time. [50] A failure to follow the formal requirements with full and proper disclosure of the argument to be made risks the application be adjourned or even dismissed entirely. [51] The notice of application is lacking and deficient with respect to the legal basis for the relief being granted independent of the notice to admit. Nonetheless, the plaintiffs were able to, and did, set out a fulsome response to the relief being sought under Rules 7-2(2), 7-3(1), and 12-1(9). [52] Dealing firstly with the conversion of these admissions into interrogatories, I agree with the plaintiffs that there is no basis on which I could reasonably convert these admissions to interrogatories. There is a significant difference between the 160 admissions

sought in Bene, which were primarily comprised of admissions as to the communications between the parties' lawyers and contract documents, or the 30 admissions ordered to be made in Gross, and the 1,804 admissions sought here, with no reasonable ability for the court to determine which, if any, of the admissions sought may be properly converted to an interrogatory. [53] As noted and briefly referred to above, there are various admissions being sought within the notice to admit which lack context or specificity and, on their face, could not adequately be converted. While there does appear to be some that could, it is not possible for the court to mine through them all to determine which are which. [54] As to extending the time for examinations for discovery, I agree with the plaintiffs that the Ghahramani Parties have not established that it is necessary to have a further 180 hours of discovery for each plaintiff. Such relief is, on its face "patently unreasonable" at this stage. [55] This appears to be a random length of time, without consideration as to who will be discovered, or how the discoveries may unfold. [56] The plaintiffs submitted that it is unusual for a court to make an order to extend the time for discoveries prior to discoveries commencing, as the court is to consider the following factors under R. 7-2(3): (a) the conduct of a person who has been or is to be

examined, including (i) the person's unresponsiveness in any examination for discovery held in the action, (ii) the person's failure to provide complete answers to questions, or (iii) the person's provision of answers that are evasive, irrelevant, unresponsive or unduly lengthy; (b) any denial or refusal to admit, by a person who has been or is to be examined, anything that should have been admitted; (c) the conduct of the examining party; (d) whether or not it is or was reasonably practicable to complete the examinations for discovery within the period provided under subrule (2); (e) the number of parties and examinations for discovery and the proximity of the various interests of those parties. [57] The plaintiffs argue that implicit in those considerations is that discoveries have started and been found to be insufficient, having regard to what has transpired during the discoveries to date. Although, I note that considerations specifically include in sub-rule (a) the conduct of a party who "is to be" examined and, in sub-rule (b) a denial or a refusal to admit, which is not specific to discoveries. [58] Other than the comment of the court in Bene that it would have considered extending the discovery time if not for the order to convert the notice to admit to interrogatories, no specific authority was provided by the Ghahramani Parties to support the order sought prior to

discoveries being conducted, and certainly not to the magnitude of the equivalent of 90 further days of discovery, or 45 days (180 hours) for each plaintiff. [59] It is obvious even at this early stage that the set seven hours of discovery is not likely to be sufficient. [60] In keeping with the object of the Rules, there is some attraction to making an order to increase the discovery time to some arbitrary length that sounds reasonable. However, I am unable to conclude in any way how much additional time between the range of 7 and 180 hours for each party would be appropriate. As such, I am not in a position to make any order at this time. [61] Finally, as to adjournment of the trial date, the considerations or factors for the court in making such an order are well known: a) the expeditious and speedy resolution of matters on their merits; b) The reasonableness of the request; c) The grounds or explanation for the adjournment; d) The timeliness of the request; e) The potential prejudice to each party; f) The right to a fair trial; g) The proper administration of justice; h) The history of the matter, including deliberate delay or misuse of the court process; and i) The fact of a self-represented litigant. Navarro v. Doig River First Nation, 2015 BCSC 2173, at para. 20. [62] The Ghahramani Parties have the onus to satisfy the court that it would be in the overall interests of

justice to adjourn a trial date having regard to those factors. [63] However, no argument was made by the Ghahramani Parties other than it will take more time to prove facts if these admissions are not made. [64] There is still some time between now and trial, during which the facts in issue will undoubtedly be narrowed and/or proven, including at the discoveries and through document agreements. It is not possible at this time to find that an adjournment is in the interests of justice. However, as agreed to by the plaintiffs during submissions, if the parties are able to lengthen the trial by a further 10 days, they have liberty to do so. Conclusion [65] The application of the Ghahramani Parties is dismissed in its entirety, but on a without prejudice basis. Specifically, either party may bring an application at a later time on new evidence and a full legal basis under Rules 7-2(2), 7-3(1), or 12-1(9), but not on the basis which is that of the current application, i.e. based on the Denial. [66] If it is necessary for me to do so and will be of assistance to the parties, I do grant the parties liberty to secure a further 10 days of trial, if such days are available through trial scheduling and the parties' schedules. [67] Finally, I note that much of the relief being sought could have been consented to. As my comments throughout these reasons suggest, it behooves counsel to

develop a pre-trial plan to move the discovery process forward in an efficient manner, in keeping with the object of the Rules and common sense, rather than attending multiple chambers days on procedural fights in a vacuum. [68] For example, while I have not made an order at this time for lengthened discovery given that a total of 90 days of discovery of Mr. Yen (with 45 days for discovery of him personally, and 45 as representative of his numbered company) is unreasonable on its face, it is reasonable to assume given the complexity of this matter and the notice to admit that more time will be required. [69] Counsel should be able to agree to a reasonable extension of time for discoveries prior to resorting to another court application. [70] Which leads to the issue of costs of this application. [71] This application was set down for hearing some seven or eight times, with it being adjourned due to lack of court time, prior to today's hearing. [72] If counsel had spent what, conservatively, amounted to the 20 or so hours in chambers waiting for this matter to be heard on reviewing the notice to admit they could have, on the one hand, winnowed down the admissions being sought to remove those that were objectively and obviously improper and, on the other hand, proposed an efficient way to make appropriate admissions that would further the objectives of the Rules. Either party

could have proposed a pre-trial discovery process with reasonable additional discovery time for both parties, or scheduled a case planning conference which could have been held before this application was able to get on for hearing. [73] Perhaps there were such discussions that the court was not privy to. Unfortunately, counsel did not have time to make submissions as to costs, or to advise the court as to any further matters that are relevant to costs. [74] Absent such information, costs of this application will be in the cause. [75] If the parties wish to make submissions on costs before the order is entered, they may do so in writing with the Ghahramani Parties providing their submissions within 21 days, and the plaintiffs their response 21 days after delivery of the Ghahramani Parties' submissions. The submissions are not to exceed 5 pages, excluding any affidavit evidence in support. Otherwise, as noted, costs will be in the cause. "Master Robertson"