ONTARIO COURT OF JUSTICE
DATE: 2025-06-11
COURT FILE No.: City of Mississauga
Information No.: 000715
BETWEEN:
City of Mississauga
— AND —
10695025 Canada Ltd.
Before Justice of the Peace N. Krayzman
Heard on January 9, 2025 and April 4, 2025
Reasons for Judgment released on June 11, 2025
A. Cahill ...................................................................................... counsel for the prosecution
No appearance by or on behalf of 10695025 Canada Ltd., even though notified of time and place.
JUSTICE OF THE PEACE N. Krayzman:
[1] The Corporate Defendant 10695025 Canada Ltd. is charged with 16 counts of violations of the Fire Code, being O.Reg. 213/07 of The Fire Protection and Prevention Act, 1997, S.O. 1997 Chapter 4, Section 28(1)(c) on October 4, 2023 [“Fire Code”].
[2] The Information is proper before the court and the Defendant was properly summonsed for the first court date. No one has ever attended for the Defendant corporation in this matter for the 6 appearance dates in court, either virtually or in person, despite numerous adjournments, all of which were proper, and numerous pages both inside and outside of the courtroom. At the request of the Prosecutor, this trial was conducted in absentia as allowed under s. 54(1) of the Provincial Offences Act.
[3] The Prosecution presented one witness, Eugene Nakliutsky, a fire inspector with the City of Mississauga that investigated this matter, and 26 pieces of documentary evidence.
[4] Inspector Nakliutsky testified that on October 4, 2023, he received a request from the RCMP to conduct an inspection of Units 1 and 2 of the municipal address of 6707 the Goreway Drive, Mississauga, Ontario, L4V 1S6, the address listed on the Information as being where the violations occurred. He conducted an inspection on the same day and observed several Fire Code violations. He made notes and took photos of what he saw. He presented those photos to the court. They were marked Exhibits 1-26.
[5] Inspector Nakliutsky described the property as a one-story industrial building. On the ground floor he observed multiple rooms including sleeping accommodations, a kitchen facility, a bathroom, an office, and an industrial portion where cannabis was being grown, cultivated, and harvested throughout the entirety of Units 1 and 2. The following is a summary of the Inspector’s evidence on each of the counts before the court.
[6] Count 1: Inspector Nakliutsky saw several sleeping rooms with beds in them that had no smoke alarms. He looked on the ceiling and walls but saw no smoke alarms. He submitted a series of five photographs marked as exhibit 9A-E that he took while making his observations that day showing 5 of the 7 bedrooms he observed, some of which contained multiple beds, none of which contained any smoke alarms. As such, he testified that the Defendant was in violation of the Fire Code as detailed in Count 1.
[7] Count 2: Inspector Nakliutsky testified that during these same observations he could not find any carbon monoxide alarms as required inside, outside, or adjacent to any bedrooms. He presented the court with a photograph marked Exhibit 10 that he took of a corridor on the property with bedrooms on both sides that had no carbon monoxide alarms. As such, he testified that the Defendant was in violation of the Fire Code as detailed in Count 2.
[8] Count 3: The Inspector noted that there was an exit door for Unit 2 that had bars and a padlock on it which required a key to unlock it. All exit doors must be able to be readily opened without special knowledge or keys under the Fire Code, and this door, he testified was therefore, in violation as detailed in Count 3. He showed the Court photographs he took from the inside of the door, marked Exhibit 11 A-B which indeed showed this padlock that required a key to open it.
[9] Count 4: Inspector Nakliutsky saw exit signs installed in both units but three of them were not illuminated as required, putting the Defendant in violation of the Fire Code, as detailed in Count 4. He presented the Court with photographs marked Exhibit 12 A-C that showed these unilluminated signs within the property.
[10] Count 5: Inspector Nakliutsky observed combustible materials within the property adjacent to the exit from Unit 1, including tires, plastic bags and cardboard boxes with combustible materials inside detailed in the photographs he took and showed the Court, marked Exhibit 13 A-D. He said this created a fire hazard and was a violation of the Fire Code as detailed in Count 5.
[11] Count 6: Inspector Nakliutsky saw temporary wiring, including extension cords being used within the units where permanent sources of electricity were required. Some areas had multiple extension cords plugged into electrical outlets. Some were used to power light fixtures, and an electrical stove. He said that all of them presented fire hazards and all were therefore in violation of the Fire Code as detailed in Count 6. These could all be seen in the photographs taken by the Inspector and marked Exhibit 14 A-F.
[12] Count 7: Under the Fire Code, there must be fire separations between major occupancies. Inspector Nakliutsky presented the court with photographs of two distinct areas in the property; one was the industrial portion, where the cannabis was being grown (classified as “Industrial Group F, Division 2 – medium hazard industrial occupancy”) and the other that was right next to it was the residential portion, where the beds were observed (classified as “Group C Residential”). These are two separate “major occupancies” within the premises. The Fire Code requires that there be a fire separation between major occupancies with a separation that has a 2-hour fire protection rating, which Inspector Nakliutsky explained means that the fire separation must be a wall that will withstand flames for 2 hours. In these premises, there was no separation at all and he showed the Court two photographs, marked Exhibit 15 A and B showing the opening between the two areas from the perspective of each with no separation. The Defendant was, he said, therefore in violation of the Fire Code as detailed in Count 7.
[13] Count 8: Inspector Nakliutsky saw sprinkler heads throughout the property that had protective cups on them. He explained that these cups are meant to protect the sprinkler glass bulbs from damage during transportation and installation, but must be removed once the sprinklers are installed, because keeping them on can delay or prevent the sprinklers from activating in time to do their job. He showed the Court photos of these capped sprinkler heads, marked Exhibit 16 A-D. The Defendant was therefore in violation of the Fire Code as detailed in Count 8.
[14] Count 9: It is an offence to have anything obstructing water discharge from sprinklers. Inspector Nakliutsky saw that the garage door in the Defendant’s property, when opened, would block the water from discharging from the sprinklers above it. He said there should have been an additional sprinkler installed that would be able to discharge water even when the garage door was open. As such, the Defendant was in violation of the Fire Code as detailed in Count 9.
[15] Count 10: Portable fire extinguishers must be inspected on a monthly basis. Inspector Nakliutsky saw three fire extinguishers on the premises. Only one had a maintenance tag, but he could not read the date on it because the ink had faded (see photo, Exhibit 19). He requested the maintenance and inspection records from the Defendant by email on October 10th, 6 days after the inspection. This email exchange was presented to the court (Exhibits 18 and 26). The tenant responded the same day to the Officer that “[he] just terminated the lease with Graduate investment limited today”. He also wrote that he did “not have those records”. Inspector Nakliutsky received no maintenance records from the Defendant and could see no evidence of monthly inspections of the extinguishers. As such, he said the Defendant was in violation of the Fire Code as detailed in Count 10.
[16] Count 11: The Fire Code required this Defendant’s premises to have at least 5 portable fire extinguishers to cover all areas based on its square footage. Inspector Nakliutsky said he saw only three. The Defendant was therefore in violation of the Fire Code as detailed in Count 11.
[17] Count 12: Inspector Nakliutsky saw cardboard boxes, which were combustible, within one metre of the electrical panel (see photo, Exhibit 20) which increased the risk of accidental ignition. He said this failure to remove combustible materials that had accumulated in close proximity to the electrical panel put the Defendant in violation of the Fire Code as detailed in Count 12.
[18] Count 13: The Fire Code requires emergency lights to be tested on a monthly basis. Inspector Nakliutsky tested the emergency lighting in the building, by pressing the “test” button, and found it to be non-operational; it did not light up (see photo, Exhibit 21). He requested the Defendant’s testing records via the same email on October 10, 2023, and received the same response that the lease was terminated and the Defendant did not have those records. As such, the Defendant was in violation of the Fire Code as detailed in Count 13.
[19] Count 14: Inspector Nakliutsky saw during his inspection that an additional premises was constructed on the property for growing cannabis and it had no sprinklers installed within it. New ceilings had been installed in this additional area beneath the original ceiling which blocked the base sprinklers on the original ceiling from discharging water and no sprinklers were installed on the new ceilings (see photos, Exhibit 22 A-D). This put the Defendant in violation of the Fire Code as detailed in Count 14.
[20] Count 15: Inspector Nakliutsky testified that he saw blue metal storage rack parts that he described as “construction elements” had been stacked up in front of exit and egress doors on the premises, obstructing them (see photos, Exhibit 23 A and B). The Defendant was therefore breaching the Fire Code’s requirements that means of egress be free of obstruction as detailed in Count 15.
[21] Count 16: The Fire Code provides that the provisions of “NFPA 25, ‘Standard for the Inspection, Testing and Maintenance of Water-Based Fire Protection Systems” for sprinkler systems” is complied with. Inspector Nakliutsky testified that in a room in the premises labelled “Room #19” by the occupants, there were missing ceiling tiles and this could delay or prevent sprinkler heads from activating and discharging water due to the dissipation of heat from a fire (see photos, Exhibit 24 A and B). Inspector Nakliutsky did not explain what the provisions of “NFPA 25” actually demanded or how these missing ceiling tiles did not accord with its demands. I was not provided with a copy of NFPA 25, nor could I seemingly obtain its contents over the internet when I searched for it. As such, I cannot tell if this section of the Fire Code was breached and there will be an acquittal for Count 16.
[22] I accept the testimony of Inspector Nakliutsky, and the documentary and photographic exhibits presented supporting it that 15 of the 16 offences on the Information were committed at the location on the Information and on the date on the Information.
[23] The only issue left to address is whether the Corporation 10695025 Canada Ltd. is the entity responsible for these offences.
[24] Inspector Nakliutsky obtained a copy of the lease agreement showing that the Corporate Defendant entered into a lease with the landlord being three corporations carrying on business as tenants-in-common as “GRADUATE DIXIE DEVELOPMENTS”, on July 22, 2020 (Exhibits 2 and 3). This agreement and subsequent lease agreements also show that another corporation, Mofun Loft Incorporated acted in the agreements as the second indemnifier to the Corporate Defendant 10695025 Canada Ltd., who signed on as the tenant.
[25] Inspector Nakliutsky obtained a corporate profile report for the Corporate Defendant as well as Mofun Loft Incorporated, which were filed as Exhibits 7 and 25 respectively to this trial. An individual named Shaobo Xie was listed as the Director of both corporations.
[26] Shaobo Xie signed on behalf of both 10695025 Canada Ltd. and Mofun Canada Incorporated as the Second Indemnifier on these leases and associated memorandums.
[27] Interestingly, according to the profile reports, Mofun Canada Incorporated was a live corporation on the date of the offence, but 10695025 Canada Ltd. dissolved in April of 2023. The offences allegedly occurred approximately 6 months after the dissolution. This court has to decide if 10695025 Canada Ltd. can be held liable for offences committed by it, as the tenant occupying and using the premises at the address on the Information, 6 months after it dissolved.
[28] The Canada Business Corporations Act is the Governing Legislation for Corporations in Canada. This is confirmed on the Corporate Profile submitted as Exhibit 7.
[29] The Prosecution drew the court’s attention to Part XVIII Liquidation and Dissolution, s. 226(2) of the Canada Business Corporations Act, which states:
(2) Notwithstanding the dissolution of a body corporate under this Act,
• (a) a civil, criminal or administrative action or proceeding commenced by or against the body corporate before its dissolution may be continued as if the body corporate had not been dissolved;
• (b) a civil, criminal or administrative action or proceeding may be brought against the body corporate within two years after its dissolution as if the body corporate had not been dissolved; and
• (c) any property that would have been available to satisfy any judgment or order if the body corporate had not been dissolved remains available for such purpose.
[30] There are two possible interpretations of this section. The first would be to interpret it as a two-year limitation period that a party has to commence actions against a corporation after it dissolves, for the pre-dissolution actions of the corporation. The second would be to interpret it as a period of two years after dissolution during which a corporation can be held liable for its post-dissolution conduct.
[31] I adopt the second, more expansive interpretation and find that corporations can be held liable for their post-dissolution conduct committed for up to two years after dissolution, particularly if the corporation continues to carry on business post-dissolution, as it seems to have in this case.
[32] If I did not accept this more expansive interpretation, then a corporation could enter into a contract with someone, dissolve the very next day, unbeknownst to the other party, and commit civil, criminal and regulatory misconduct without fear of consequence.
[33] In this case, 10695025 Canada Ltd. entered into lease agreements as the tenant with another corporation as the Landlord. 10695025 Canada Ltd. carried on a cannabis business on the premises from the moment the lease was signed and continued to do so until at least October 10th, 2023 when the Director emailed Inspector Nakliutsky to advise that as of that day, October 10th, it terminated its lease for the property in question (see Exhibit 26). October 4th, 2023, the date of the allegations when Inspector Nakliutsky made his observations of the 16 violations, falls within that time period.
[34] Having made this finding and having accepted Inspector Nakliutsky’s evidence in conjunction with the documentary and photographic evidence presented at this trial, I find the Defendant 10695025 Canada Ltd. guilty of Counts 1-15 on the Information. Count 16 is dismissed for the reasons stated earlier.
Released: June 11, 2025
Signed: Justice of the Peace Natalia Krayzman