The Morgan Investments Group Inc. et al. v. Adi Development Group Inc. et al., 2025 ONSC 6527

CITATION: The Morgan Investments Group Inc. et al. v. Adi Development Group Inc. et al., 2025 ONSC 6527

DIVISIONAL COURT FILE NO.: DC-25-00000794-0000

DATE: 20251121

SUPERIOR COURT OF JUSTICE - ONTARIO

DIVISIONAL COURT

RE: THE MORGAN INVESTMENTS GROUP INC., 1000185781 ONTARIO INC. and 1001259155 ONTARIO INC. Appellants

AND

ADI DEVELOPMENT GROUP INC., TARIQ ADI and ADI MORGAN DEVELOPMENTS (LAKESHORE) INC. Respondents

BEFORE: The Honourable Mr. Justice M.D. Faieta

COUNSEL: W. Michael G. Osborne, Steven J. Weisz & Dilina Lallani, for 1000185781 Ontario Inc. and 1001259155 Ontario Inc. Tanya A. Pagliaroli, Alexandra Grishanova & Sydney Bristoll, for the Appellant, The Morgan Investment Group Inc. Avi Bourassa & Viktor Nikolov, for the Respondents Adi Development Group Inc. and Tariq Ali

HEARD: November 13, 2025

ENDORSEMENT

[1] The Morgan Investments Group Inc. (“MIG”), 1000185781 Ontario Inc. (“Affiliate Lender”) and 1001259155 Ontario Inc. (“100 Ontario”), seek a stay of certain parts of the Endorsements of The Honourable Mr. Justice Black dated October 7, 2025, October 30, 2025 and November 5, 2025, pending the appeal from his Endorsement dated August 27, 2025.

Background

[2] The following summary is taken largely from the Endorsements of Justice Black referenced aboe as well as the Endorsement of Steele J. in The Morgan Investments Group v. ADI Development Group Inc. et al., 2025 ONSC 4344.

[3] The Morgan Investments Group Inc (“MIG”), a private equity firm, and the respondent, Adi Development Group Inc. (“ADG”), a condominium developer, each own 50% of the common shares in Adi Morgan Developments (Lakeshore) Inc. (“the Corporation”) which is constructing a condominium project in Burlington. It is the Corporation’s only asset.

[4] The principal of MIG is Nigel Morgan. The principal of ADG is Tariq Adi. They each brought different strengths and played different roles in this project. MIG is the project’s major equity investor. ADG is the project manager and exclusive listing agent. Morgan and Ali are the sole directors and officers of the Corporation. Delays, rising costs and slower sales were some of the impacts of COVID-19 led to a breakdown in the relationship between Morgan and Adi. There remains many unsold condominium units.

[5] In March 2025, MIG commenced an application under s. 248 of the Business Corporations Act, R.S.O. 1990, c. B.16 (the “OBCA”) for various remedies against the Corporation and ADG on the basis that ADG oppressed it by excluding it from management and oversight of the Corporation. Amongst other things, it asked that ADG be replaced as the exclusive listing agent.

[6] The Affiliate Lender is a wholly owned subsidiary of MIG that advanced a loan in 2022 to save it from insolvency (the “Affiliate Loan”). The Affiliate Loan matured in April 2025. It is in maturity default. The outstanding principal (about $3.9 million) and interest, that accrues at 18% per annum, is about $6.6 million. The Affiliate Loan is subordinate to the Corporation’s construction loan (the “Senior Loan”).

[7] The Senior Loan is a secured facility with an original principal amount of $114 million that until recently was held by Kingsett Mortgage Corporation. It matured on May 1, 2025. 1001259155 Ontario Inc. (“100 Ontario”) was incorporated by Mr. Morgan for the purpose of purchasing and taking assignment of the Corporation’s Senior Loan from Kingsett. The current balance of the Senior Loan is about $2.8 million.

[8] In May 2025, ADG commenced a counter-application against IMG and Mr. Morgan, for an order to buy out MIG’s interest in the Corporation under s. 207 of the OBCA. It alleged that MIG acted oppressively, within the meaning of s. 248 of the OBCA, by bringing an oppression application against it

[9] In June 2025, the Senior Loan was assigned to 100 Ontario after it paid the full amount due to KingSett. Steele J. found that: (1) There was no unanimous approval of the directors of the Corporation to the assignment of the Senior Loan to MIG being an entity that is non-arm’s length with one of the shareholders of the Corporation; (2) The assignment appears to have been done surreptitiously.

[10] In July 2025, 100 Ontario served the Corporation with a Notice to Enforce Security. Shortly thereafter, ADG asked the court to impose standstill terms that would prohibit 100 Ontario and the Affiliate Lender from taking steps to enforce the Senior Lona and the Subordinate Loan pending the hearing of their respective oppression applications.

Endorsement - August 27, 2025

[11] On August 20, 2025, the parties appeared before Justice Black to seek the court’s guidance in determining the way forward. The parties did not agree on the way forward. MIG proposed a “shot-gun” buy-sell structure. ADG proposed that it be the buyer of MIG’s interest at a price based on a valuation report.

[12] Each party alleged that the other party had acted in a manner that is oppressive within the meaning of s. 248 of the OBCA. The court found that both parties had acted oppressively. Amongst other things, the court that ADG had disregarded MIG’s interests as it had frustrated MIG’s reasonable expectation to meaningfully participate in the management of the Corporation by unfairly excluded MIG from access to day-to-day operations and information flow once the cash flow for the project became constrained. The court found that MIG, under the direction of Mr. Morgan, had established 100 Ontario and took assignment of the senior loan for the purpose of gaining leverage against ADG and specifically referenced the view expressed earlier by Steele J. that “it appears that MIG may have attempted to circumvent checks and balances [reflected in the Unanimous Shareholder Agreement (“USA”)] in order to gain leverage in these proceedings”. Steele J. found that there was a “strong prima facie case that Morgan, as a director of the Corporation, circumvented the Corporation’s USA”. Justice Black concluded that “… those and other acts on the part of MIG, under the direction of Mr. Morgan, including the threatened use of 100 Ontario to seek receivership even as this motion was pending before the court, were an effort to “gain leverage as found by Steele J. and breached ADG’s reasonable expectations and unfairly prejudiced and/or unfairly disregarded its interests.

[13] Justice Black stated:

… I am satisfied that I have the jurisdiction to impose either a shotgun buy-sell or a buy-out remedy under s. 207 of the OBCA. The latitude for the court to fashion an appropriate reedy or remedies under s. 248(3) is very broad. While it is not clear that I need find oppression before reaching for such remedies, in this case, in which both sides have acted oppressively, the foundation to order appropriate relief is undoubted.

[14] Justice Black considered both options and ordered, pursuant to s. 207 of the OBCA, that ADG purchase MIG’s interest in the Project He relied on Corber v. Henry, 2019 ONSC 3518, and other cases, to conclude that “… s. 207 of the OBCA can be invoked in circumstances in which the court does not find a need for winding-up, but rather as a mechanism for breaking a hopeless deadlock(as in the situation before me). As noted above, these authorities also confirm that I need not find oppression per se before invoking s. 207. I do find oppression on both sides here, so if that were a pre-condition it would in any event be met here”.

[15] Justice Black directed that the purchase price be the mid-point between two prices referenced in the valuation report. This resulted in a purchase price of about $18.4 million. This price includes the price for MIG’s shares in the Corporation as well as discharge of the Affiliate Lender’s second position loan with interest calculated up to the valuation date as of April 30, 2025.

[16] He also directed that the parties should attend a further case conference before him to confirm the details and a schedule for the completion of the buyout.

Endorsement – October 7, 2025

[17] A case conference was held on October 1, 2025 to address the buyout mechanics. The parties were unable to agree on a number of matters.

[18] Justice Black was advised that MIG had appealed the August 27, 2025 Endorsement and that such decision was not stayed and would not be stayed. Accordingly, there was no impediment to addressing the unresolved issues arising from that decision. However, counsel for MIG advised that it would reserve the right to appeal any matters arising from the October 1, 2025 conference.

[19] Amongst other things, Justice Black ordered that

(a) Given that ADG had not finalized financing for the purchase of MIG’s interest, it would confirm within 24 hours a date for closing which is not to be later than October 31, 2025.

(b) The Senior Loan in the amount of about $1.6 million is to be repaid and discharged on closing

[20] In addition, the court addressed whether ADG should be paying interest on the Affiliate Loan at the contractual rate of 18% compounded, or otherwise between April 30, 2025 (the date of the valuation) and the pending date of closing of the buyout. Justice Black found that the steps taken by MIG occupied roughly two months, from June 5, 2026, when 100 Ontario was incorporated for the purpose of unilaterally assuming the Senior Loan, until June 22, 2025. He stated that this reduction reflected that:

… had MIG simply committed to getting on with the application rather than engaging in ill-advised and ill-fated antics and additional litigation, the parties could have saved about two months of litigation time. …

Appreciating that this is an imprecise and impressionistic measure, but noting the parties’ agreement and the extensive case law confirming that under section 207 and in particular 248 of the OBCA, I have very broad discretion to fashion a remedy that I find fair in the circumstances, I am disallowing two months of the interest claimed relative to the Affiliate Loan. It is true that ADG has not formally sought to pierce the corporate veil, but it is equally clear that Mr. Morgan controls the Affiliate Lender as well as 100 Ontario (and of course MIG). Accordingly, while interest should run in my view under the Affiliate Loan, given the time value of money, at the agreed contractual rate of 18%, two months of such interest should be deducted from the total interest accruing between April 30, 2025, and the date of the closing of the buyout transaction.

I sincerely hoe that the parties will now focus their attention on closing the transaction that will allow them to go their separate ways.

[21] That was not to be.

Endorsement – October 30, 2025

[22] A further case conference was held on October 30, 2025. Justice Black noted that their mutual distrust and animosity continues and appears to prevent the parties reach reaching practical business solutions on the following issues.

(a) The Corporation may participate in the acquisition of MIG’s shares, as a buyer or otherwise, subject to ADG’s obligation to indemnify MIG in respect of demonstrated adverse consequences of that arrangement.

(b) If Mr. Morgan is not prepared to sign the required buyout documentation in a timely way, Mr. Morgan should resign as a director, and that ADG may take such steps as required to allow the transaction to close subject to ADG’s obligation to indemnity Mr. Morgan for any adverse material consequences that ensue.

(c) ADG expressed concern that 100 Ontario and 1000 Ontario delivered payout statements for the two loans which include charges of over $570,000 in legal fees incurred by 100 Ontario in relation to the Senior Loan and over $8,000 in respect of the Affiliate Loan as well as three month penalties pursuant to section 17 of the Mortgages Act and substantial closing fees. Justice Black found that there was considerable merit to the view that 100 Ontario is improperly seeking its legal fees for the parallel receivership proceedings which the court found to constitute oppression. Counsel for 100 Ontario submitted that ADG should post security for the full amount of the fees sought. Justice Black rejected this submission and stated:

… I do not think that it would be fair to saddle ADG with an obligation to post security for all such amounts if it is in fact the case that a substantial portion of the fees – which 100 did not deny – relate to the problematic steps taken by 100 (and likely directed by Mr. Morgan)

(d) MIG should contribute its half share of the interest owed on the Affiliate Loan past the valuation date of April 30, 2025 up to the date of closing of the buy-out. The interest charges are an expense for the Corporation, not for ADG alone, and it is fair that MIG should contribute its share until its share are acquired.

(e) The transaction will close next week unless Justice Black directs otherwise.

[23] It did not.

Endorsement – November 5, 2025

[24] The parties contacted Justice Black by email to raise numerous issues including the following issues;

(a) Justice Black confirmed “… that the intention of my October 30, 2025 endorsement, …, was that the mortgages may be discharged upon payment by ADG of charges that it does not dispute, and that, with respect to the balance of the charges that are contested, MIG’s affiliated lenders may convene a hearing before me post-closing, at which time I will make a determination as to which if any additional amounts must be paid. … I am not prepared to order ADG to pay those amounts as a pre-condition to closing the acquisition transaction. The amounts included in the discharge statements are to be dealt with as set out in ADG’s counsel’s email of November 4, 2025 with remaining outstanding amounts to be addressed at a mutually convenient time after the closing. The interest accrued in the last month of $51,927.00 should be included in the items in dispute at the time I address the disputed charges post-closing.

(b) In respect of interest amounts that MIG was directed to pay in the Endorsement dated October 30, 2025, Justice Black stated that he confirms his direction that MIG pay the amounts set out in subparagraphs (i) and (ii) under Issue #2 in the email from ADG’s counsel dated November 4, 2025. … “I confirm my intention that MIG fund its fair share of expenditures, including interest charges, while it remains a shareholder. It is not disentitled to any of the benefits of continued share ownership … and… has continued to receive information concerning the Corporation’s operations …. as a shareholder.

(c) ADG advised that “… MIG had amended its notice of appeal to include an appeal of the Endorsement dated October 30, 2025 and that MIG is taking the position that the delivery of its amended notice of appeal automatically stays the effect of the order requiring MIG to pay its 50% share of interest payments (as an order for the payment of money). … I continue to be of the view that there is no automatic stay in these circumstances. In my view it is not apt to view my determination that MIG is to continue to comply with its obligations qua shareholder as simply an order to pay money.” At ADG’s suggestion, Justice Black ordered that ADG hold MIG’s obligation to pay one half of the interest payable under the two loans in abeyance pending appeal, provided that the Corporation is not required to pay MIG’s (disputed) half share of this interest in order for the transaction to close on November 7, 2025. The treatment of that accrued interest, and the question of whose obligation it is to pay it, would be deferred pending the results of the MIG appeal.

(d) The transaction shall close as scheduled.

[25] An Order has not issued and entered in respect of any of the Endorsements challenged by 100 Ontario and the Affiliate Lender (the “Secured Lenders”). As per Mr. Osborne’s email dated November 13, 2025, the moving parties on this motion dated November 7, 2025, seek an order staying the following parts of the following Endorsements:

(a) Paragraphs 27-29 of the Endorsement dated October 7, 2025:

[27] In my view, the steps taken by MIG, that Steele J. found to reflect a “strong prima case that Mr. Morgan, as director of the Corporation, circumvented and breached the Corporation’s USA” can be seen to have occupied roughly two months, from June 5, 2025 when 100 Ontario was incorporated by Mr. Morgan for the purposes of unilaterally assuming the Senior Loan, until July 22, 2025, when Steele J. released her decision, and encompassing the related steps taken by MIG, including appealing Steele J’s decision, thereafter.

[28] In other words, had MIG simply committed to getting on with the application rather than engaging in ill-advised and ill-fated antics and additional litigation, the parties could have saved about two months of litigation time.

[29] Appreciating that this is an imprecise and impressionistic measure, but noting the parties’ agreement and the extensive case law confirming that under section 207 and in particular 248 of the OBCA, I have very broad discretion to fashion a remedy that I find fair in the circumstances, I am disallowing two months of the interest claimed relative to the Affiliate Loan. It is true that ADG has not formally sought to pierce the corporate veil, but it is equally clear that Mr. Morgan controls the Affiliate Lender as well as 100 Ontario (and of course MIG). Accordingly, while interest should run in my view under the Affiliate Loan, given the time value of money, at the agreed contractual rate of 18%, two months of such interest should be deducted from the total interest accruing between April 30, 2025, and the date of the closing of the buyout transaction.

(b) Paragraphs 17-21 of the Endorsement dated October 30, 2025:

[17] In response to my suggestion that I would be prepared to assess these purported accounts and alleged amounts owing after the transaction closes, and with the benefit of details about the amounts charged, counsel for 100 agreed that would be appropriate, but argued that ADG should in the meantime be required to post security for the full amount of the fees sought.

[18] I disagree.

[19] As I expressed during the course of today’s conference, I am concerned that, assuming that a substantial portion of the fees claimed relate to the receivership proceedings that Steele J. and I have found were likely orchestrated by Morgan for leverage, and that I have found to be oppressive, such amounts should not be paid by ADG.

(c) Paragraphs 7 and 9 of the Endorsement dated November 5, 2025:

[7] I confirm that the intention of my October 30, 2025 endorsement, on this issue, was that the mortgages may be discharged upon payment by ADG of charges that it does not dispute, and that, with respect to the balance of charges that are contested, MIG’s affiliated lenders may convene a hearing before me post-closing, at which time I will make a determination as to which if any additional amounts must be paid. I expressed a concern in my October 30 endorsement, in particular, that the MIG affiliated lenders included on the discharge statement in one instance, the costs of certain proposed receivership proceedings that both Steele J. and I have found to be improper (and in my case, I found them to constitute oppression). Part of my concern, which has not abated based on what I am seeing from the parties today, is that the amounts that the affiliated lenders purport to charge on the discharge statements are not broken down by specific line items or accounts. It is therefore uncertain as to which amounts relate to the affiliate Lender’s fees (in one case) for the receivership proceedings, and which amounts relate to other items. I am not prepared to order ADG to pay those amounts as a pre-condition to closing the acquisition transaction; as noted I am prepared to hear argument about those charges, with the benefit of dockets and/or costs outlines, once the closing has occurred. On this issue, the amounts included on the discharge statements are to be dealt with as set out in ADG’s counsel’s email of November 4, 2025, with remaining outstanding amounts to be addressed at a mutually convenient time after the closing. The parties have asked for specific direction regarding item (iv) under “ISSUE#1” within ADG’s counsel’s November 4 email, being the interest accrued in the last month, in the amount of $51,927.00. I direct that this amount should be included in the items in dispute at the time I address the disputed charges post-closing.

[9] With respect to the third issue raised, “ISSUE#3”, ADG’s counsel advises that MIG has amended its notice of appeal to include an appeal of my October 30 endorsement, and that MIG is taking the position that the delivery of its amended notice of appeal automatically stays the effect of my order requiring MIG to pay its 50% share of interest payments (as an order for the payment of money). I am advised that MIG has not brought any motion to stay that decision, and I continue to be of the view that there is no automatic stay in these circumstances. In my view it is not apt to view my determination that MIG is to continue to comply with its obligations qua shareholder as simply an order to pay money. However, as an alternative position, ADG’s counsel advises that ADG is prepared to hold MIG’s obligation to pay its half of interest payable under the two loans in abeyance pending appeal, provided that the Corporation is not required to pay MIG’s (disputed) half share of this interest in order for the transaction to close on Friday, (November 7, 2025). The treatment of that accrued interest, and the question of whose obligation it is to pay it, would be deferred pending the results of MIG’s appeal. I find that this is a reasonable compromise in the circumstances, and consistent with my finding on ISSUE#1, and direct that the acquisition transaction may close on Friday, (November 7, 2025), without the Corporation being obliged to pay these disputed interest amounts.

[26] Thus, the moving parties seek a stay in respect of Justice Black’s order that:

(a) Two months of interest related to the Affiliate Loan be disallowed.

(b) ADG need not post security for the full amount of the fees sought in relation to the Senior Loan and the Affiliate Loan.

(c) The mortgages may be discharged upon payment by ADG of charges that it does not dispute and that, with respect to the balance of charges that are contested, the Secured Lenders may convene a hearing before me post-closing, at which time I will make a final determination as to which if any additional amounts must be paid.

(d) The interest accrued in the last month, in the amount of $51,927.00, shall be included in the items in dispute at the time that the disputed charges are addressed post-closing.

(e) The notice of appeal issued by MIG in respect of the Endorsement dated October 30, 2025 does not automatically stay the Order that MIG pay 50% of the interest payments on the ground that it is an order to pay money.

(f) ADG shall hold MIG’s obligation to pay its half of the interest payable under the Senior Loan and the Affiliate Loan in abeyance pending appeal. The buy-out transaction may close on November 7, 2025 without the Corporation being obliged to pay these disputed interest amounts.

Analysis

[27] The test for granting a stay of an order pending an appeal was described by Lauwers, J.A. in Miner-Tremblay v. Rintoul, 2025 ONCA 784 as follows:

[7] The principles applicable on a motion for an order granting a stay pending appeal are well known. In RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at p. 334, the Supreme Court of Canada set out a three-part test for obtaining a stay of a judgment pending appeal: (1) whether there is a serious question to be determined on appeal; (2) whether the moving party will suffer irreparable harm if the stay is not granted; and (3) whether the balance of convenience favours granting a stay.

[8] The factors are not “prerequisites” and “[t]he ultimate test for granting a stay is the interests of justice”: M & M Homes Inc. v. 2088556 Ontario Inc., 2020 ONCA 134, 51 C.P.C. (8th) 253, at para 42. The components of the test are to be taken as interrelated considerations such that the strength of one may compensate for the weakness of another: see Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), at p. 677. In many cases, the court’s determination of whether to grant a stay will ultimately depend on where the balance of convenience lies: Circuit World, at p. 677. In the end, the overarching test is “whether the interests of justice call for a stay”: Longley v. Canada (Attorney General), 2007 ONCA 149, 223 O.A.C. 102, at para. 15; Circuit World, at p. 677.

Is there a Serious Issue to be Determined on Appeal?

[28] The general rule is that the court shall “... undertake a preliminary investigation of the merits to decide whether the applicant demonstrates a ‘serious question to be tried’, in the sense that the application is neither frivolous nor vexatious”: R. v. Canadian Broadcasting Corp., 2018 SCC 5, [2018] 1 S.C.R. 196, at para. 12.

Oppression?

[29] The moving parties submit that the court erred in finding that MIG committed oppression by incorporating 100 Ontario to buy the Senior Loan. A review of the Endorsement dated August 20, 2025, particularly paragraphs 27-30, shows that Mr. Morgan’s incorporation of 100 Ontario was only one of many acts on the part of MIG that were found to constitute oppression. More significantly was the finding that 100 Ontario took an assignment of the Senior Loan and 100 Ontario had threatened to seek a receivership during these proceedings in order to gain leverage. The challenge to the finding of oppression on the part of MIG does not raise of a serious issue.

Automatic Stay?

[30] On October 30, 2025, the court ordered MIG to pay half of the Corporation’s interest expenses for the six months period between the April 30, 2025 valuation date until its shares are acquired in the pending transaction. Before the next case conference held on November 5, 2025, MIG filed a notice of appeal in respect of the Endorsement October 30, 2025. On November 5, 2025, the court found, at paras. 8 and 9, that there was no automatic stay [under subrule 63.01(1) of the Rules of Civil Procedure] as:

… I confirm my intention that MIG fund its fair share of expenditures, including interest charges, while it remains a shareholder. It is not “disentitled to an y of the benefits of continued share ownership”; for example, in my October 30 endorsement, I noted that MIG continues to be entitled to receive, as it has asserted, and in fact has continued to receive, information concerning the Corporation’s operations, in keeping with its continued status, pending closing, as a shareholder.

… I continue to be of the view that there is no automatic stay in these circumstances. In my view it is not apt to view my determination that MIG is to continue to comply with its obligations qua shareholder as simply an order to pay money. However, as an alternative position, ADG’s counsel advises that ADG is prepared to hold MIG’s obligation to pay its half of interest payable under the two loans in abeyance pending appeal, provided that the Corporation is note required to pay MIG’s (disputed) half-share of this interest in order for the transaction to close on Friday, (November 7, 2025). The treatment of that accrued interest, and the question of whose obligation it is to pay it, would be deferred pending the results of MIG’s appeal. I find that this is a reasonable compromise in the circumstances, and consistent with my finding on Issue #1, and direct that the transaction may close on Friday (November 7, 2025), without the Corporation being obliged to pay these disputed interest amounts.

[31] The moving parties submit that the court erred in modifying his Endorsement dated October 30, 2025, as it was does to avoid the application of a stay. In my view, the premise of this assertion is incorrect as it assumes that the automatic stay provision of the Rules of Civil Procedure was engaged in these circumstances. I agree with the view expressed by Justice Black and thus find that no serious issue is raised by the assertion that an automatic stay was engaged.

[32] Before leaving this topic, I note that on the return of this motion for a stay, MIG sought a declaration that the order that MIG pay half of the Corporation’s interest expenses was automatically stayed pending the disposition of the appeal. I dismiss that motion as I agree with the views expressed by Justice Black.

Breach of the Affiliate Lender’s Procedural Rights?

[33] The moving parties submit that in his Endorsement dated October 1, 2025, Justice Black deprived the Affiliate Lender of $187,897.00 in interest. They submit that the Secured Lenders were not served with the materials for the case conference, were not represented at the case conference nor were they given the opportunity to make submissions.

[34] This submission does not reflect the fact that Justice Black found that Mr. Morgan controls MIG and the Secured Lenders. More significantly, counsel for MIG made submissions on the Secured Lenders’ behalf in relation to the issue of whether ADG should be paying interest on the Affiliate Loan at the contractual rate of 18% compounded. At paragraphs 15-17 of the Endorsement dated October 7, 2025, counsel for MIG asserts that:

[15] MIG argues that, notwithstanding the Affiliate Lender’s affiliation with MIG, it is nonetheless a third party lender, and should be viewed in that capacity in the same light as one would view a Schedule 1 bank (and counsel used TD as the example in making this argument).

[16] That is, counsel urged, it would be absurd to suggest, if the lender were TD, that TD would somehow have to forego interest on its loan after April 30, 2025, because a valuation was undertaken that day. Like TD would, the Affiliate Lender will have the right, if the loan is in default, to enforce on the loan through all legitimate measures, including by seeking the appointment of a receiver to realize on the security.

[17] More fundamentally, MIG rests its position on the time value of money, and the notion that it is simply unfair for ADG to have the benefit of the Affiliate Loan, which was obtained in circumstances in which the Company was in dire financial straits, without the corresponding ongoing obligation to pay interest. It points out that Mr. Adi (ADG’s principal), freely consented to the loan transaction at the time it was undertaken and cannot now avoid or resile from the terms of his bargain.

[35] Counsel for ADI also notes that Ms. Paglioroli acted as counsel for MIG and the Secured Lenders on the filing of the Notice of Appeal from the Endorsement dated October 7, 2025. I find that no serious issue is raised by the submission that the Secured Lenders did not have notice of the October 1, 2025 case conference nor an opportunity to make submissions.

Orders on Case Conference with No Evidence?

[36] In his Endorsement dated August 27, 2025, on the oppression application in which he approved the buyout, Justice Black agreed to remain involved to assist the parties with confirming the parameters for the buyout if needed at a case conference.

[37] The moving parties submit that various endorsements following case conferences and email exchanges show that Justice Black repeatedly made final determinations without the benefit of any evidence and beyond the submissions of counsel. Remarkably this submission is made in the abstract and without demonstrating how these alleged errors were at play in connection to any of the particular orders in respect of which a stay is sought.

[38] I find that there is no serious issue raised by this submission.

Will the Moving Parties Suffer Irreparable Harm if the Stay if Not Granted?

[39] Irreparable harm is characterized by the nature, rather than the magnitude of harm. It is harm which either cannot be quantified in monetary terms or cannot be cured, usually because one party cannot collect damages from the other: Ahmed v. Abdelmoaein, 2025 ONCA 618, para. 34. While absolute certainty is not required to establish irreparable harm, the evidence must be clear, go far beyond speculation, and satisfy the balance of probabilities: Muslim Association of Canada v. Attorney General of Canada, 2022 ONSC 7284, at para. 17.

[40] The Secured Lenders submit that by ordering the Secured Lenders to discharge the mortgages for less than the amount claimed as owing on them, Justice Black is depriving the Secured Lendes of their security interest. Once the discharge is granted, even if the Secured Lenders succeed in obtaining a judgment for the amounts they claim, they cannot regain their security.

[41] The Secured Lenders submit they will suffer a loss of security in the amount of $1,356,407.66 calculated as shown in the tables below.

[42] They submit that 100 Ontario will suffer a loss of security in the amount of $692,330.12:

Item	Amount	Date of Endorsement
Mortgages Act, s.17 three months’ interest	$59,431.56	October 30, 2025
Last month interest on the loan at 13.95%	$51,927.00	October 30, 2025
Difference between the closing legal fees claimed in discharge statement and closing legal fees paid on discharge	$7,540.00	October 30, 2025
Legal fees claimed on discharge statement	$573,431.56	October 30, 2025
Total	$692,330.12

[43] Thy also submit that the Affiliate Lender will suffer a loss of security in the amount of $664,077.54:

Item	Amount	Date of Endorsement
Two months interest deduction	$187,897.33	October 1, 2025
Mortgages Act, s.17 three months’ interest	$279,515.47	October 30, 2025
Half of interest ordered paid by MIG	$181,073.49	November 5, 2025
Closing legal fees claimed in discharge statement	$7,540.00	October 30, 2025
Difference between the closing legal fees claimed in discharge statement and closing legal fees paid on discharge	$8,051.25	October 30, 2025
Total	$664, 077.54

[44] In H.I.R.A Limited v. Middlesex Standard Condominium Corporation No. 823, 2018 ONSC 3661, at para. 35, a loss of security (in that case, in the amount of $2,744,377.35) was found to be irreparable harm. In Liu v. Xing, 2025 ONSC 880, Papageorgiou J. stated, at para. 90, that “[t]he loss of mortgage security is irreparable because the whole point of obtaining security is that the lender is not simply a judgment creditor at the end of the day”.

[45] While ADG does not dispute the principle that a loss of security is irreparable harm, it submits that the moving parties have not show that there is a serious issue that Justice Black incorrectly found that much of the items claimed were questionable:

(a) In respect of the claim for legal fees claimed on discharge statement in the amount of $573,431.56 arose from MIG’s oppressive actions, including trying to bring a receivership application. Justice Black indicated that he would have to see detailed evidence in support of these charges to determine whether they are appropriate. No such evidence has been adducted on this stay motion.

(b) In respect of Justice Black’s decision to deduct two months’ interest ($187,897.33) on the Affiliate Loan, there has been no serious issue raised nor why there was not authority to do so under s. 207 and s. 248 of the OBCA.

(c) In respect of the decision that if MIG refused to fund $118,000 in interest owed by the Corporation to the Affiliate Lender, then the Corporation should not have to pay that amount, the moving parties have failed to establish that this raises a serious issue.

(d) In respect of the claim for three months’ interest under s. 17 of the Mortgages Act, no serious issue has been raised regarding Justice Black’s concern that these penalties ($59,431.56 and $279,515.47) were not properly charged.

(e) In respect of the claim for closing legal fees ($7,540.00 and $7,540.00) there is no serious issue raised regarding Justice Black’s concern that the closing legal fees charged by the Secured Lenders were exorbitant.

(f) In respect of the claim for legal fees claimed on the discharge statement of $8,051.25, there has been no evidence on this motion to justify them despite Justice Black’s skepticism.

(g) In respect of the last month’s interest of $51,927.00 claimed by 100 Ontario, this is a credit that ADG requested to be added to the discharge statement for the Senior Loan however it was excluded by Justice Black and is to be addressed after closing.

[46] There is clearly no loss of security and no irreparable harm in respect of the last month’s interest claimed by 100 Ontario in the amount of $51,927.00 as it has been paid this amount.

Does the Balance of Convenience Favour Granting a Stay?

[47] The balance of convenience test requires the court to determine which party will suffer the greater harm from granting or refusing a stay: RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at paras. 80, 85. The risk of destroying a court-ordered transaction weighs against granting a stay pending appeal: Re Torstar Corporation and Nordstar Capital LP, 2020 ONSC 4679, at para. 65.

[48] The evidence of Tariq Adi is that if a stay is granted, then the Secured Lenders will not discharge their mortgages and the buyout ordered by the court will be frustrated. The mortgage commitments (of about $25 million) expire in late December 2025. Responding materials on the appeal are not due until the end the January 2026. The hearing of this appeal will likely not be heard by the Divisional Court until the second quarter of 2026. The financiers are not prepared to wait until then to determine whether the buyout will close and will not be able to source alternate financing. Counsel submits that this is because prospective financiers are well aware of the enmity between the parties and the uncertainty associated with the parties completing this transaction. I find that ADG will suffer irreparable harm if the requested stay is granted. It will lose $25 million in financing and the buyout. The extent of the risk of loss to the Secured Lenders is likely far less than presented particularly in light of 100 Ontario’s particularly questionable claim for legal fees of $573,431.56.

[49] I find that irreparable harm to ADG outweighs the irreparable harm that the Secured Lenders will suffer.

CONCLUSIONS

[50] In all the circumstances, I find that it is just and equitable to dismiss the moving parties’ motion for a stay.

[51] ADG shall deliver its costs submissions within one week. The moving parties shall deliver their responding costs within two weeks. Costs submissions shall not exceed three pages excluding a bill of costs.

M.D. Faieta J.

RELEASED: November 21, 2025