COURT FILE NO.: CV-19-80062 DATE: 2020/04/21 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

CHASE WONG Plaintiff – and – 10658987 CANADA INC., MIN ZHOU, also know as ANNA ZHOU and GUO JIE MA, also know as SAM JIE Defendants

Counsel: Robert J. De Toni, for the Plaintiff Patricia A. Lawson, for the Defendants

HEARD: December 12, 2019

RULING ON MOTION

Introduction

[1] In 2018 and 2019, the parties were involved in the purchase and management of three residential properties in the City of Ottawa (“the Properties”). Title to the Properties is registered in the name of the defendant corporation (“106 Canada”). The parties disagree as to their respective shareholdings in 106 Canada and, therefore, in the Properties.

[2] The plaintiff (“Chase”) alleges that, before the Properties were purchased, he and the individual defendants (“Anna” and “Sam”) agreed that he would be a 50 per cent shareholder in 106 Canada. Anna and Sam are the only two directors of 106 Canada. They deny that there was any agreement with Chase that he would be a 50 per cent shareholder in that corporation.

[3] Anna and Sam allege that, over time, Chase had the potential to become a shareholder in 106 Canada, but no agreement to that effect was ever reached. Anna and Sam allege that Chase’s role with respect to the Properties is limited to that of a real estate agent and property manager.

[4] The relationship between the parties broke down in early 2019. Chase has had no involvement in the Properties since March 2019.

[5] Chase is concerned that Anna and Sam plan to move to another part of the Province of Ontario, 106 Canada will sell the Properties, and he will lose his alleged 50 per cent interest in both the corporation and the Properties. Chase brought this motion on an urgent basis. Chase also commenced a separate application for an oppression remedy (“the Proceeding”).

[6] Chase seeks interim injunctive relief, the effect of which would be to maintain the status quo and prevent 106 Canada from selling, encumbering, or carrying out major renovations to the Properties. He also seeks interim non-injunctive relief related to the finances of 106 Canada. The defendants request that the motion be dismissed and that they be entitled to deal with the Properties and the operation of 106 Canada as they choose.

[7] Prior to the return of the motion, the parties agreed to the terms of an undertaking. Those terms include that 106 Canada is precluded from selling the Properties. The undertaking remains in effect pending the outcome of this motion.

Background

[8] Prior to working together, the three individual parties were introduced to one another through a mutual acquaintance; they met socially on at least one occasion. They disagree as to exactly when and how they came to work together on the purchase of residential rental properties. Regardless, they were working together in that manner by early 2018.

[9] The dispute between the parties arises from the difference in their respective views as to the arrangement in place as of the spring of 2018, when 106 Canada purchased the first of the Properties. Chase alleges that he and the individual defendants had a verbal agreement regarding 106 Canada: a) Anna and Sam would be the sole Directors; and b) Chase would be a 50 per cent shareholder.

[10] Anna and Sam deny the existence of such an agreement. They allege that it was understood by all that Chase was the real estate agent and property manager – nothing more. Anna’s evidence is that as of the spring of 2018, before the first of the Properties was purchased, it was agreed that, if things worked out between them, Chase could after a number of years have the opportunity to purchase a 50 per cent interest in 106 Canada.

[11] Each of the individual parties is originally from China and an experienced business person. Chase is in his mid-fifties. His education and business experience include the following:

• While living in China in the latter part of the 20th century, Chase ran a group of IT companies and managed his personal investments. His evidence is that by the time he came to Canada in 2001, he had a personal portfolio valued in the seven-figure range.
• For approximately 10 years in the early part of the 21st century, Chase worked with a business person based in China. Chase’s work included setting up two factories, helping that individual’s family members emigrate to Canada, and managing that individual’s investments in Canada.
• In 2009, Chase obtained an Executive Masters in Business Administration from a university in China. From 2009 to 2015, Chase managed his personal portfolio, including investments and real property in China.
• On returning to Canada in 2015, Chase obtained his real estate licence, began working as an agent with Choice Realty in Ottawa, and began to invest in real property in Canada. By the time he came to know Anna and Sam, Chase personally, or through numbered companies in which he is a principal, owned at least ten investment properties in the eastern Ontario and western Quebec regions.

[12] Anna is in her early fifties. When living in China, she studied to become a pharmacist but did not complete that aspect of her education. Anna has a degree in, what she describes as, “Tourism” from a college in Manitoba. Since 2003, Anna has been the owner and operator of a travel company in Ottawa. In addition, she owned a Thai Express franchise in Ottawa.

[13] There is no evidence as to Sam’s age. He is a pharmacist. From 2004 to 2017, he owned and operated a pharmacy in Ottawa. He then worked as a pharmacist in a pharmacy owned by another individual. Sam was continuing to work in that manner when he and Anna began to work with Chase with respect to the purchase of the Properties.

[14] Anna and Sam lived in Toronto for several years prior to coming to Ottawa. When in Toronto, they personally purchased investment properties: two residential rental properties and a commercial property. Anna and Sam hired a property manager to oversee the residential properties. Once in Ottawa, Anna and Sam purchased a commercial property. That property is leased to Anna’s travel business. In addition, Anna and Sam purchased two homes for themselves in Ottawa. Prior to working with Chase, Anna and Sam purchased all properties personally, with the title held in both their names.

[15] Chase submits that the issue of whether or not the individual parties agreed, as of the spring of 2018, that he would be a 50 per cent shareholder in 106 Canada is a “serious question to be tried”: R.J.R. MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at p. 22. In support of the existence of a verbal agreement to that effect, Chase relies on the discussions and email or text message exchanges he had with Anna and Sam in early 2018 and thereafter, the latter as the individual parties worked towards reducing their verbal agreement to writing. In response, the defendants also rely on the contents of emails and text messages exchanged with Chase over time.

[16] Many of the text messages and emails upon which the parties rely are in a Chinese dialect. The reliance by all parties on the contents of documents in a Chinese dialect is problematic and gives rise to a preliminary evidentiary issue. In addition, an evidentiary issue arises from the manner in which Chase’s notice of application in the Proceeding is before the court. I deal first with the evidentiary issues and then with the substantive issues.

Evidentiary Issues

a) Translation from Chinese to English

[17] Many of the email and text messages upon which the parties rely are attached as exhibits to either Chase’s first affidavit (of two affidavits) or Anna’s affidavit. The majority of the messages are in a Chinese dialect. The parties also refer to materials from Chase’s website, in which he is said to offer a variety of services to people who have come from China to Canada. The website materials are also in a Chinese dialect.

[18] In their respective affidavits, Chase and Anna provide translations of some of the documents attached as exhibits. Some translations are said to be from “Google Translate”; other translations are provided by the affiant.

[19] In addition to relying on the contents of documents attached as exhibits, in the text of her affidavit Anna includes translations of several documents. Once again, some translations are said to be from “Google Translate”; other translations are provided by Anna. Examples of both Anna’s summaries and Google Translate translations appear in paras. 8, 9, and 10 of Anna’s affidavit. Therein, Anna reviews the contents of Chase’s website in which it is said he outlines the types of services he offers individuals interested in investing in real estate.

[20] In providing translations as they did, the parties overlooked s. 125 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”). Specifically, s. 125(2)(b) provides that, “[e]xcept as otherwise provided with respect to the use of the French language, … documents filed in courts shall be in the English language or shall be accompanied by a translation of the document into the English language certified by affidavit of the translator.”

[21] No certified translation is provided for any of the exhibits or for the translations included in the substantive portion of the affidavits filed on this motion.

[22] The parties have not provided any authority to support a conclusion that the court has the discretion to waive the statutory translation requirements. In any event, none of the parties asked the court to exercise discretion in that regard. Even if such a request had been made, for the following reasons, it would not be granted.

[23] In addition to the failure of the parties to comply with s. 125 of the CJA, the translations are not reliable because they (a) are of poor quality, and (b) may be affected by findings, if made, of credibility.

[24] As an example of the poor quality of the translations, I refer to Exhibit 23 to Chase’s first affidavit. At para. 68 of that affidavit, Chase refers to a text message that he received from Sam in March 2019. Chase says, “attached hereto and marked as Exhibit 23 is a copy of the text message received from Sam, dated March 9, 2019, together with a translation prepared by Google translate” (bold font in original).

[25] From the document attached as Exhibit 23, there appear to be at least four text messages exchanged on March 9, 2019. A translation is provided for only one of them and it says the following: “We decided to hand over house to you. We are not familiar with the ability management and gave up.” This is but one example of the poor quality of the translations provided by the parties.

[26] As another example, at para. 71 of his first affidavit, Chase refers to a series of emails exchanged with Anna and Sam on March 15 and 16, 2019. The emails are said by Chase to deal with the return to him, pending resolution of these proceedings, of expenses he incurred with respect to the Properties. Chase therein says, “Attached hereto and marked as Exhibit 25 is a copy of this email correspondence” (bold font in original). The original chain in Chinese includes more than one message sent or received.

[27] Exhibit 25 consists of four pages of emails. The emails are lengthy and detailed. They include an email that appears to have been sent by Chase to Sam on March 17, 2019 – outside the scope of the dates identified in Chase’s description of the exhibit. The substantive portions of the emails are in English only. Chase does not identify in his affidavit or in Exhibit 25 whether the emails exchanged were in the English language or the messages, as they appear in the exhibit, are a translation from Chinese to English.

[28] The documents in Chinese and for which there is no certified translation are not properly before the court. In deciding the substantive issues on the motion, I have not considered the contents of those documents – regardless of whether an English translation is provided in an exhibit or in the substantive portion of an affidavit.

b) Notice of Application for an Oppression Remedy

[29] The second supplementary record delivered on Chase’s behalf includes a copy of the notice of application issued in October 2019 in Court File No. CV-19-81726. The parties to that application are the same as the parties on this motion, with Chase as the applicant and the defendants as the respondents. In the Proceeding, Chase claims entitlement to an oppression remedy pursuant to the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (“CBCA”).

[30] The notice of application does not form part of the record of the proceeding within which this motion is brought. To be properly before the court as evidence, the notice of application should be included as an exhibit to an affidavit filed in this proceeding. The defendants do not, however, take any issue with the manner in which the notice of application is before the court.

[31] A solution to the deficiency in the evidence regarding the notice of application would be to require Chase to deliver affidavit evidence to the effect that the notice of application has been issued. That affidavit would relate to a simple matter of record; it could be in the name of a law clerk from the office of Chase’s counsel: Mapletoft v. Christopher J. Service, 2008 ONSC 6935, at para. 15.

[32] Subrule 1.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), sets out a general principle to be followed with respect to the application of the Rules. It provides that the Rules “shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.”

[33] In light of r. 1.04(1) and the defendants’ position with respect to this evidentiary issue, I waive the requirement for Chase to provide affidavit evidence with respect to the notice of application. I consider the notice of application to be properly before the court as evidence for the purpose of this motion.

The Issues

[34] The substantive issues to be determined on this motion are:

1. Is the plaintiff entitled to interim injunctive relief generally or in his capacity as a claimant for an oppression remedy?
2. If the answer to Issue No. 1 is “yes”, what interim injunctive relief, if any, is appropriate?
3. If the answer to Issue No. 1 is “no”, is the plaintiff entitled to any interim relief under s. 241(3) of the CBCA?

Issue No. 1 - Is the plaintiff entitled to interim injunctive relief generally or in his capacity as a claimant for an oppression remedy?

a) Positions of the Parties

[35] Chase submits that he is entitled to injunctive relief pursuant to either s. 101 of the CJA or s. 241(3) of the CBCA. He submits that the principles for the granting of an interlocutory injunction (i.e., the three criteria in R.J.R. MacDonald) are applied under either statutory provision. Chase’s position is that he fulfils those three criteria.

[36] Chase also submits that, if he fails to fulfil one of those three criteria, then, in the context of the claim for an oppression remedy, he is entitled to injunctive relief because the dictates of fairness are so overwhelming as to make it appropriate for the court to forego compliance with the R.J.R. MacDonald criteria.

[37] The defendants’ position is that Chase is not entitled to injunctive relief generally. The defendants submit that Chase fails to meet the first of the three R.J.R. MacDonald criteria; he is unable to demonstrate that there is a serious question to be tried with respect to the existence of an agreement that he would be a 50 per cent shareholder in 106 Canada.

[38] With respect to the oppression remedy claim, the defendants’ position is that whatever Chase’s expectations may be regarding a 50 per cent shareholding in 106 Canada, those expectations are not sufficiently reasonable to entitle him to oppression remedy relief, including interlocutory injunctive relief. The defendants submit that in determining whether Chase’s expectations in that regard are reasonable, the court must consider more than Chase’s subjective expectations. The defendants submit that the court must consider other factors including, general commercial practice, the relationship between the parties, and steps that Chase could have taken to protect himself.

b) The Law

▪ Relevant Statutes and Rules

[39] Subsection 101(1) of the CJA gives the court discretion to grant an interlocutory injunction “where it appears to a judge of the court to be just or convenient to do so.” Rule 40.01 of the Rules provides that an interlocutory injunction under s. 101(1) of the CJA “may be obtained on motion to a judge by a party to a pending or intended proceeding.”

[40] The court also has discretion, under s. 241 of the CBCA, to grant injunctive relief. In the context of an oppression remedy claim, a “complainant” may bring an application and “the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing, (a) an order restraining the conduct complained of”.

[41] The notice of motion before the court has a different court file number and different title of proceeding than does the notice of application discussed above. The defendants do not, however, raise a procedural issue in response to the request for an interlocutory injunction in the context of the oppression remedy claim. The request for an interlocutory injunction is therefore determined on the basis that the court has the discretion, on this motion, to grant an interlocutory injunction under either the CJA or the CBCA.

▪ Definition of “Claimant” for Oppression Remedy Relief

[42] For the purpose of oppression remedy relief under the CBCA, a “complainant” includes, amongst others, a shareholder and a creditor: s. 241(1) - (2).

▪ Criteria to be Met for Injunction to be Granted

[43] For an interlocutory injunction to be granted, three criteria must be met. The criteria are set out at p. 22 of R.J.R. MacDonald, as follows:

• On the basis of a preliminary assessment of the merits of the case, is there a serious question to be tried?
• If so, would the moving party suffer irreparable harm if the request of the injunction were refused? and
• Which of the parties will suffer greater harm – the moving party if the injunction is refused or the responding party if the injunction is granted?

[44] Chase relies on two decisions in which the presiding judges reached different conclusions regarding the first criterion when an interlocutory injunction is requested in an oppression remedy claim.

[45] The more recent of the two decisions is Romijay Enterprises Ltd. v. 11 Yorkville Partners Inc., 2017 ONSC 2388, 138 O.R. (3d) 24. At para. 24 of his decision, Cavanagh J. concluded that, in the context of an oppression remedy claim, the “usual requirement” is for the moving party to demonstrate that there is a serious question to be tried. Regardless, the judge hearing a motion or an application for injunctive relief must consider the facts of the case to determine whether the test under the first criterion is a serious question to be tried or a strong prima facie case: Romijay.

[46] The decision of Cavanagh J. in Romijay predates the decision of the Supreme Court of Canada in R. v. Canadian Broadcasting Corporation, 2018 SCC 5 (“CBC”). The decision in Romijay is nonetheless consistent with the latter decision. In para. 16 of CBC, the Supreme Court highlighted that the judge presiding over a motion or an application for injunctive relief must determine whether the relief requested is prohibitive or mandatory in nature. In the former instance, the first criterion is “a serious question to be tried”; in the latter, it is a “strong prima facie case”: at paras. 13-15.

[47] The earlier of the two decisions upon which Chase relies is from this court in 2007: Le Maitre Ltd. v. Segeren, 2007 ONSC 18735, 33 B.L.R. (4th) 224 (Ont. S.C.). At para. 30, Pepall J. (as she then was) concluded that to facilitate certainty and predictability, the three R.J.R. MacDonald criteria are applied where injunctive relief is sought in an oppression remedy claim.

[48] Pepall J. also highlighted at para. 30 that the oppression remedy is, however, intended to be broad in nature. As a result, there may be some circumstances where, in an oppression remedy claim, “[t]he dictates of fairness may be so overwhelming that it may be appropriate to forego compliance with any one or all of the balance of convenience, irreparable harm or an undertaking as to damages”.

[49] Chase relies on the principle set out immediately above in support of his submission that, where the dictates of fairness are overwhelming, the court has the discretion to forego compliance with any one of the three R.J.R. MacDonald criteria. I reject that submission as too broad in its scope.

[50] The passage from Le Maitre upon which Chase relies, does not negate the requirement to satisfy the first of the three R.J.R. MacDonald criteria. I find that the principle established in the passage from Le Maitre upon which Chase relies is restricted to the following: Only after the moving party, in an oppression remedy claim, has satisfied the first criterion is the court entitled to consider whether the dictates of fairness are so overwhelming as to relieve the moving party from satisfying the remaining two criteria from R.J.R. MacDonald.

[51] The case law specific to each of the three R.J.R. MacDonald criteria is discussed below.

c) Analysis

▪ Is Chase a “Claimant” Under the CBCA?

[52] Chase submits that he is entitled to bring an application under the oppression remedy provisions of the CBCA because he is one or both of a creditor and a person seeking to be a shareholder of 106 Canada.

[53] Chase alleges that he is owed money by 106 Canada. He seeks reimbursement of money paid for renovations to and/or management of the Properties. In response, Anna and Sam rely, in part, on a five-page Excel spreadsheet attached as an exhibit to Anna’s affidavit. Anna does not provide an explanation of the significance of the entries in the spreadsheet. Some of those entries are in Chinese.

[54] At para. 100 of her affidavit, Anna acknowledges that she and Sam have not yet received an accounting from Chase for the money he says is owed to him. In the same paragraph, Anna says, “[w]e reserve the right to ask for a refund from the $100,000 paid to [Chase] for the renovations”. Anna’s evidence is that she and Sam are owed $9,800 by Chase for rent he collected for the Properties.

[55] Without making any finding as to whether Chase is owed money by 106 Canada or it is the reverse, I find that Chase is a creditor of 106 Canada. In that capacity, he is entitled to bring an application for an oppression remedy under the provisions of the CBCA.

[56] Chase also submits that a party seeking to be recognized as a shareholder is a “complainant” within the meaning of s. 241 of the CBCA and, therefore, entitled to bring an application for oppression remedy relief. He relies on the decision of Cumming J. in Larmon v. Synergy Hospitality Inc., 2004 ONSC 2562, 1 B.L.R. (4th) 244. The parties to that application disagreed over whether they had reached an agreement that the plaintiff (“Larmon”) would become a shareholder of the defendant corporation (“Synergy”) and therefore have an equity position in the company. The parties were ad idem that if an agreement had been reached, it was never reduced to writing. Like Chase, Larmon relied on the existence of a verbal agreement in support of his oppression remedy claim.

[57] Larmon is distinguishable from the matter presently before the court, because the former decision was on the merits of an application. In Larmon, Cumming J. concluded that a verbal agreement had been reached. The agreement provided that Larmon would receive a 25 per cent interest in a restaurant. In addition, and in realization of that commitment, he would become a 25 per cent shareholder in Synergy: at para. 33.

[58] On Chase’s motion, it is not necessary to determine, on the merits, whether a verbal agreement was reached between him and the individual defendants. The issue to be determined on Chase’s motion is whether the alleged existence of such an agreement is a serious question to be tried.

[59] Regardless of that distinction, Larmon provides authority in support of Chase’s position that an individual seeking to be a shareholder can be a “claimant”, and is therefore entitled to pursue an application under the oppression remedy provisions of the CBCA: para. 33.

[60] In summary, I find that, whether as a creditor or an alleged shareholder, Chase is a “claimant” within the meaning of s. 241 of the CBCA and entitled to bring this motion for interlocutory injunctive (and other) relief.

▪ Serious Question to Be Tried / Strong Prima Facie Case

[61] In R.J.R. MacDonald, the Supreme Court of Canada set out general guidelines to be followed when determining whether there is a serious question to be tried. In summary, the guidelines identified at p. 26 of the decision are as follows:

• There are no specific requirements to be met to establish that there is a serious question to be tried;
• The judge hearing the motion or application must make a preliminary assessment of the merits of the case. It is neither desirable or necessary for the judge to carry out a prolonged examination of the merits; and
• The threshold to be met in establishing that there is a serious question to be tried is low. The judge must be satisfied that the application is neither frivolous or vexatious.

[62] There are a number of similarities between the issues before the court on Chase’s motion and the issues that were before the court in Romijay. The similarities include that the relief sought is a prohibitory injunction. In accordance with Romijay and CBC, Chase must demonstrate that there is a serious question to be tried; he is not required to demonstrate that he has a strong prima facie case.

[63] Only if Chase establishes that there is a serious question to be tried is the court then required to consider the second and third criteria: R.J.R. MacDonald, at p. 22 and Romijay, at para. 24.

[64] The threshold to establish a serious question to be tried is low. Based on a preliminary assessment of the merits, and for the reasons set out immediately below, I am satisfied that the issues raised by Chase are neither frivolous or vexatious.

[65] Anna and Sam are experienced business people. They were, even as of the spring of 2018, experienced in purchasing both residential and commercial real estate for investment purposes. Why did they turn to Chase for assistance? Were they merely looking for someone to assist with the purchase and management of properties? Or, were they looking to expand the scope of their investment in real estate, including with a co-investor?

[66] The discussions between the individual parties over time are important to the determination of Chase’s application on the merits. Findings of credibility will be significant to the outcome of the Proceeding.

[67] The parties had a business relationship that lasted for many months, if not more than a year. Without the benefit of certified translations, it is difficult to assess the individual parties’ respective expectations from the outset and as the parties continued to work together over a number of months. Regardless, there is a significant difference between Chase’s expectations and those of Anna and Sam.

[68] The lack of certified translations of documents means that it is not possible to consider the contents of those documents in assessing whether Chase’s expectations were reasonable. The assessment of Chase’s expectations will not necessarily be determined based on Chase’s and Anna’s evidence alone. Sam was involved in the discussions and email exchanges. Sam’s evidence may be relevant to the context of the discussions between the individual parties and within which Chase developed his expectations.

[69] To succeed with his application for an oppression remedy, it will be necessary for Chase to establish that the defendants’ conduct is oppressive or unfairly prejudicial to him or that it unfairly disregards his interests. If it is found that Chase is a shareholder in 106 Canada, then, whether the defendants have demonstrated a complete disregard for his interest in the corporation and in the Properties is a serious question to be tried.

[70] In summary, I find that Chase has satisfied the first of the three R.J.R. MacDonald criteria for entitlement to interlocutory injunctive relief both generally and as a claimant for an oppression remedy.

▪ Irreparable Harm

[71] For this criterion to be met, the moving party must establish that refusing to grant the interlocutory injunctive relief requested would so adversely affect that party’s interests that the harm could not be remedied if the eventual decision on the merits is in favour of the moving party. It is the nature of the harm and not its magnitude that contributes to the harm being irreparable. The courts have historically considered irreparable to include (a) when the harm cannot be quantified in monetary terms, or (b) harm that cannot be cured because one party cannot collect damages from the other: R.J.R. MacDonald, at p. 31.

[72] Chase submits that he will suffer irreparable harm if the interlocutory injunction is not granted. Chase maintains that the gains that might be realized from holding onto the Properties cannot be measured in dollars if the Properties are sold before his application is determined on the merits. He recognizes that, before or on determination of his application, he may be ordered to buy Anna and Sam out of 106 Canada.

[73] The evidence upon which Chase relies in support of his position with respect to this criterion is based on (a) the text message received from Sam on March 9, 2019, and (b) a telephone conversation with Sam shortly after that date. That text message is Exhibit 23 to Chase’s affidavit; an English translation of the message is as appears in para. 25, above. As noted above, the translation does not comply with s. 125 of the CJA and it is therefore not evidence on this motion.

[74] At para. 78 of his first affidavit, Chase summarizes why he is concerned that Anna and Sam may move from Ottawa to elsewhere in Canada. Chase’s evidence is based on his telephone conversation with Sam, following receipt of the March 9, 2019 text message. Chase’s evidence is that Sam told him the following about the couple’s plans for the future:

• They hope to move to Toronto so as to be near their two children, both of whom are or will be attending university in that city;
• Sam’s hope is that Anna would move to Toronto even before him, so as to be with their children while they are both attending university;
• They sold Sam’s pharmacy and Anna’s Thai Express franchise in 2018 and were planning to sell both their family home and Anna’s travel business; and
• They “may sell the Properties or their shares in 106 [Canada] to a third party at any time”.

[75] Chase’s first affidavit was sworn in May 2019. There is no evidence from Anna in response to Chase’s description of the substance of the information that he received from Sam during that March 2019 telephone conversation.

[76] Whether Sam and Anna move to Toronto or stay in Ottawa, absent a court order or the Undertaking, there is nothing to prevent 106 Canada from selling one or more of the Properties. Chase’s second affidavit was sworn in August 2019. There is no evidence in either of Chase’s affidavits to the effect that, subsequent to March 9, 2019, he learned or observed that any one of the Properties had been listed for sale.

[77] There is no affidavit evidence from Chase that any one of the Properties is unique. The only evidence as to anything unique about any of the Properties is from the transcript of Chase’s cross-examination. That transcript is an exhibit to Anna’s affidavit. With a copy of the transcript included in the defendants’ responding motion record, Chase is entitled to rely on the contents of that transcript: Pereira v. Contardo, 2014 ONSC 6894, 123 O.R. (3d) 271 (Div. Ct.), at para. 44.

[78] During his cross-examination, Chase testified that he owns two properties near one of the Properties (448 Kent Street). His evidence is that there is the potential for large-scale development if several of the connected properties (approximately 20,000 square feet) are sold as a group. Chase’s evidence is that the inclusion of 448 Kent Street in a sale for a large-scale development is a “possibility”. I find that possibility is not sufficient to make 448 Kent Street unique for the purpose of the second of the three R.J.R. MacDonald criterion.

[79] There is no evidence that the defendants are not in a position to pay damages if awarded to Chase. Therefore, the outcome on the second R.J.R. MacDonald criterion turns on whether the harm, if proven, cannot be cured by money. I find that if Chase is able to establish that he is a 50 per cent shareholder in 106 Canada and one or more of the Properties is sold, the harm can be remedied by an award of damages.

[80] Through appraisals of the property values at the date of sale and at the date of the assessment, Chase would be able to establish the loss, if any, that he suffered as a result of the sale of a property prior to the determination of the application. In addition, based on historical records to the date of sale and projections from the date of sale forward, Chase would be able to prove the amount of revenue lost, if any, from the date of the sale to the date of the assessment of damages.

[81] In summary, I find that Chase has not established that he will suffer irreparable harm if the interlocutory injunction prohibiting the sale of the Properties is not granted. That finding does not, however, address all of the relief requested pursuant to s. 241(3) of the CBCA. The additional non-injunctive relief requested is addressed below under Issue No. 3.

▪ Balance of Convenience

[82] The balance of convenience is measured by determining which of the parties will suffer greater harm from the granting or the refusal of interlocutory injunctive relief, pending a determination on the merits: R.J.R. MacDonald, at p. 32.

[83] As Chase has not satisfied the second of the three R.J.R. MacDonald criteria for entitlement to an interlocutory injunction, it is not necessary to consider this third criterion. For reasons including those set out above under the second R.J.R. MacDonald criterion, I would, in any event, have found that Chase has not demonstrated that he will suffer greater harm if the interlocutory injunctive relief is refused than the defendants would suffer if that relief were granted.

Issue No. 2 - If the answer to Issue No. 1 is “yes”, what interim injunctive relief, if any, is appropriate?

[84] The answer to Issue No. 1 is “no”. It is therefore not necessary to address the terms of an interlocutory injunction prohibiting the sale of the Properties.

Issue No. 3 - If the answer to Issue No. 1 is “no”, is the plaintiff entitled to any interim relief under s. 241(3) of the CBCA?

[85] Pursuant to s. 241(3) of the CBCA, Chase seeks both injunctive and non-injunctive relief on an interim basis. Under the latter heading, Chase requests that an order be made

a) declaring that 106 Canada holds the Properties, together with all income generated therefrom, as a constructive trustee for Chase’s benefit, b) requiring 106 Canada Inc. to hold income generated from the Properties in trust pending a determination of the Proceeding, c) appointing an interim property manager to collect rents and pay reasonable costs associated with the management of the property, and d) requiring 106 Canada to deposit all present and future income generated from the Properties into a trust account to be administered for the benefit of the shareholders of 106 Canada (i.e., including Chase), pending a final determination of the Proceeding.

[86] The relief requested under sub-para. 83(a), above, amounts to a final determination on the issue of whether Chase is a 50 per cent shareholder in 106 Canada. That relief is not interim in nature and the request for it is dismissed.

[87] The relief requested under sub-paras. 83(b)-(d) addresses the continued ownership and management of the Properties; it does not require a final determination on the merits of the Proceeding.

[88] The defendants oppose the request for a non-injunctive oppression remedy, even on an interim basis. They submit that Chase is not entitled to an oppression remedy because his expectations with respect to a 50 per cent shareholding in 106 Canada are not reasonable.

[89] The defendants rely on the principles with respect to oppression remedies established by the Supreme Court of Canada in BCE Inc. v. Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560. That decision was on the merits of an oppression remedy claim. In summary, the principles established include the following:

• Reasonable expectations are determined in context and objectively. The facts of each case must be considered together with the relationship in issue, the entire context, and any conflicting claims and expectations (para. 62);
• Even if found to be reasonable, not every unmet expectation of a moving party gives rise to a claim under s. 241 of the CBCA (para. 67); and
• To be oppressive within the meaning of s. 241, the conduct must amount to oppression, unfair prejudice or unfair disregard of relevant interests (para. 67).

[90] The court has before it evidence of Chase’s and Anna’s respective expectations. There is no evidence as to Sam’s expectations. The defendants chose to rely on a single affidavit from Anna.

[91] The only method by which Chase could ensure that Sam’s evidence is before the court on the motion would have been to subpoena Sam to testify and for Sam to have given oral evidence on the motion. For two reasons, I find that it was reasonable for Chase not to take those steps. First, the decision in that regard is a matter of strategy. Second, Chase’s approach to evidence on the motion was cost-effective.

[92] I find that it is because of the defendants’ decision to rely only on Anna’s evidence that the court is not in a position to apply the factors set out in BCE Inc. and assess the reasonableness of Chase’s expectations with respect to the 50 per cent shareholding in 106 Canada. Oppression is an equitable remedy: BCE Inc., at para. 58. It would be inequitable to find against Chase on the issue of “reasonable expectations” when the court’s inability to reach a conclusion in that regard is the result of the defendants’ decision to rely solely on evidence from Anna. That said, I also make no finding on the issue of the reasonableness of Chase’s expectations.

[93] There are a number of similarities between the circumstances in Romijay and those in the matter before this court: the evidentiary record is not complete (including because of the lack of certified translations of relevant documents); the relief sought will not tie up the assets of 106 Canada while the application proceeds; the relief, if granted, will not be regarded as a final determination; and the relief sought is intended to preserve the status quo so that Chase’s ownership interest (if found) is not lost pending a final determination of the application: at para. 25.

[94] I find that an equitable solution is to make an order pursuant to which 106 Canada shall remain the owner of, account for the income generated from, and account for expenses related to the Properties pending a final determination of the Proceeding. I also find that it is equitable for 106 Canada to be precluded from relying on any one of the Properties as security (a) for any purpose other than an encumbrance related to reasonable repair and renovation of the subject property, and (b) without Chase’s consent or a further order of the Court. Lastly, I find that it is equitable to entitle 106 Canada to sell the Properties and account for the proceeds of sale, pending a final determination of the Proceeding.

[95] The parties entered into an undertaking, the terms of which include that 106 Canada is prohibited from selling the Properties. Other terms of the Undertaking were not disclosed to the court. The other terms may address some of the issues raised in sub-paras. 83(b)-(d), above. I do not wish to step into territory over which the parties may already have reached agreement.

[96] The parties require time to either agree upon or make submissions with respect to the terms of the relief granted in para. 94, above. Therefore, the Undertaking shall remain in force until the terms of an interim order are agreed upon by the parties or determined by the court, the latter, if required, following the receipt of written submissions from the parties. The court reserves the right to require oral submissions following receipt of written submissions.

Summary

[97] The request for interlocutory injunctive relief is dismissed. The request for a declaration that 106 Canada holds the Properties, together with all income generated therefrom, as a constructive trustee for Chase’s benefit is also dismissed.

[98] The request for relief addressing the continued ownership and management of the Properties is granted. The Undertaking shall remain in force until the terms of an interim order with respect to ownership and management of the Properties is agreed upon by the parties or determined by the court.

[99] The parties shall have 30 days from the date of release of this ruling within which to agree upon the terms of an interim order.

[100] The parties shall, no later than 35 days from the date of this ruling, advise the court whether they have reached an agreement with respect to the terms of the interim order. Counsel shall provide that advisory by email to SCJ.Assistants@ontario.ca. The email shall include the title of proceeding, court file number, and that the information is to be delivered to my attention.

[101] If the parties are unable to reach an agreement within 30 days of the date of this ruling, then their counsel shall, no later than 40 days from the date of this ruling, contact the Office of the Trial Co-ordinator to arrange a case conference (by telephone) with the court. The purpose of the case conference is to set time lines and parameters for written submissions to be delivered with respect to the terms of the interim order.

[102] The court shall provide directions with respect to costs submissions once the terms of the interim order have been finalized either by agreement or following further submissions to the court.

Madam Justice Sylvia Corthorn Released: April 21, 2020

COURT FILE NO.: CV-19-80062 DATE: 2020/04/21 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: CHASE WONG Plaintiff – and – 10658987 CANADA INC., MIN ZHOU, also know as ANNA ZHOU and GUO JIE MA, also know as SAM JIE Defendants RULING ON MOTION Madam Justice Sylvia Corthorn Released: April 21, 2020