ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO: CV-12-444850
DATE: 20121210

B E T W E E N:

Sunlogics Inc. Applicant

• and -
  Dan Giesbrecht and 0803356 B.C. Ltd. and Michael Matvieshen and Sunlogics Power Fund Management Inc., Tammy Drapak and Maximum Sports & Entertainment Ltd. Respondents

David E. Mende, for the Applicant
Thomas S. Kent, for the Respondents

HEARD: September 19, 2012

GOLDSTEIN J.:

FACTS:

The Applicant Acquires the Solar Power Project

[ 1 ] The Applicant is in the solar power business. In July 2011 it acquired the rights and interests in three solar power rooftop projects in Avonmore and Dunrobin, Ontario from Westeinde Family Trust (“ the Westeinde Trust ”). It acquired the rights and interest in the following manner:

• The Applicant purchased all of the issued and outstanding Class “A” shares of 1470310 Ontario Limited (“ 310 Ontario ”) and the right to purchase all of the Class “B” shares of 310 Ontario;

• 310 Ontario had contracts to supply power to the Ontario Power Authority pursuant to the feed-in-tariff (“ FIT ”) program;

• The FIT contracts were for solar rooftop facilities on parcels of land known as Avonmore 5, Avonmore 7, and Vances;

• 310 Ontario acquired Avonmore 5 and Vances;

• The Respondent 0803356 B.C. Ltd. (“ 356 BC ”) purchased Avonmore 7. 310 Ontario leased Avonmore 7 from 356 BC (“ the lease ”). The lease included a provision granting 310 Ontario the right, at its sole discretion, to purchase Avonmore 7 for $25,000.00. Rent paid over the term of the lease was to be applied proportionately to the purchase price;

• The Applicant funded the $25,000.00 cost of 356 BC’s purchase of Avonmore 7. This was set off against the right to purchase provision of the lease.

(Throughout these Reasons I refer to the entire acquisition transaction as “ the July 2011 acquisition ” and the facilitation of the solar power business as “ the solar power project ”.)

[ 2 ] A FIT contract is a contract to supply power to the Ontario Power Authority from a non-conventional source. The real value of the July 2011 acquisition lay in the FIT contracts. Under the lease 310 Ontario had the right to purchase Avonmore 7 from 356 BC. The terms of the lease were drafted in such a way as to comply with the provisions of the FIT program, which require that Avonmore 5 and Avonmore 7 to be owned by different entities. That is why 356 BC was involved.

Giesbrecht Signs the Co-operation Agreement

[ 3 ] The Respondent Dan Giesbrecht is in the sports promotion business, but has also been involved with the Applicant as a consultant and salesperson. He is a shareholder, president, and sole director of 356 BC. It is his personal holding company. His spouse the Respondent Tammy Drapak, and his company Maximum Sports and Entertainment Ltd. (“ Maximum ”) are the other shareholders but he controls 356 BC. Giesbrecht is a friend of Michael Matvieshen. At the time of the July 2011 acquisition in July 2011 Matvieshen was the CEO of the Applicant. Matvieshen asked Giesbrecht to have 356 BC acquire Avonmore 7 and then sign the lease. Giesbrecht agreed.

[ 4 ] Shortly before the closing (which took place on July 18 2011) Giesbrecht signed an Acknowledgement and Cooperation Agreement (“ the Cooperation Agreement ”) with the Applicant on behalf of 356 BC. The Cooperation Agreement requires 356 BC to use commercially reasonable efforts to assist and cooperate with the Applicant to facilitate any transaction in respect of the solar power project. Specifically, the Cooperation Agreement stated in Clauses 3 and 4:

3. The undersigned agree not to interfere in any way with Sunlogics’ development of the Project. The undersigned further agree to use their commercially reasonable efforts to assist and cooperate with Sunlogics in order to facilitate and enable any transaction in respect of the Project, including the disposition of the Project to a Third party pursuant to a share or asset purchase agreement.

4. The undersigned shall promptly do, make, execute, deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as Sunlogics may reasonably require from time to time for the purpose of giving effect to this acknowledgement and agreement and shall use reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this acknowledgement and agreement.

Matvieshen Out as CEO of the Applicant

[ 5 ] In November 2011 Matvieshen was either forced out as CEO of the Applicant or resigned, depending on whose evidence one believes. It is not necessary for me to resolve that issue. Suffice it to say that he was no longer involved with the Applicant.

Sunlogics Sells the Solar Power Project

[ 6 ] On December 21 2011 the Applicant sold the solar power project back to the Westeinde Trust and 1212506 Alberta Ltd. (“ 506 Alberta ”). (I refer to this transaction as “ the December 2011 sale ”.) The December 2011 sale was to have closed on December 29 2011. The December 2011 sale included the following transactions:

• The Applicant sold all of the issued and outstanding Class “A” shares of 310 Ontario and its right to purchase all of the Class “B” shares of 310 Ontario to the Westeinde Trust;

• The Applicant sold Avonmore 7 to 506 Alberta.

[ 7 ] The Share Purchase and Assignment Agreement for the December 2011 sale allocated a price for each of the three parcels of land, including Avonmore 7, of $25,000.00. The FIT contracts were priced at $656,250 of which $218,750 was allocated to Avonmore 7.

[ 8 ] In order for the December 2011 sale to close it was necessary for the Applicant to be able to deliver Avonmore 7. That, in turn, required that Giesbrecht and 356 BC execute and deliver transaction documents that would permit the December 2011 sale. The documents were delivered to Giesbrecht and 356 BC through his lawyer on December 21 2011. Giesbrecht refused to sign the documents. Matvieshen informed Giesbrecht that a company called Sunlogics Powerfund Management Inc. (“ Powerfund ”) had a right of first refusal on the purchase of Avonmore 7. (This right of first refusal is referred to by the parties, and by me in these Reasons, as “ the ROFO ”). Matvieshen is the directing mind behind Powerfund.

[ 9 ] Matvieshen informed Giesbrecht that if he signed the transaction documents permitting the December 2011 sale that he and 356 BC could be named in a lawsuit by Powerfund against the Applicant and other entities. Giesbrecht perceived that he was caught in a catch-22 situation. On the one hand, if he did not sign the December 2011 sale documents he would be in violation of the Cooperation Agreement. On the other hand, if he signed the December 2011 sale documents, he would find himself involved in a lawsuit.

[ 10 ] As a result, the Applicant was forced to close the December 2011 sale by taking other measures, including by giving the Westeinde Trust and 506 Alberta assurances and indemnities that might expose it to damages.

[ 11 ] General Motors Ventures LLC (“ GM Ventures ”) is an investor in Sunlogics PLC and the Applicant. Matvieshen alleges in a Statement of Claim (described below) that the impetus behind the December 2011 sale was a decision by GM Ventures to get out of rooftop solar generation and concentrate on another aspect of solar generation business. This decision is more particularly described below.

The Corporate Structure

Sunlogics PLC is a UK corporation that is publicly traded on the Frankfurt exchange. It owns the Applicant. Its shareholders include GM Ventures, Bryant, and Matvieshen. Bryant is interim co-CEO of the Applicant with Abraham Morris. Powerfund is owned by Salamon Group Inc. (“ Salamon ”), a publicly traded Nevada corporation.

[ 12 ] In December 2010 Matvieshen, Bryant, and Jack DeLiddo entered into an agreement where they would split their shareholdings 40%-30%-30% but that the shares would be voted 50% by Matvieshen and 50% by the other two. The three have investments in Salamon, Sunlogics PLC, and other companies. The structure means that Matvieshen is, in effect, the directing mind of Salamon and Powerfund.

[ 13 ] Prior to the July 2011 acquisition of the solar power project, GM Ventures made a substantial investment in the Applicant through Sunlogics PLC. Sunlogics PLC obtained all of the shares of the Applicant. The shareholders of the Applicant received shares of Sunlogics PLC.

The ROFO

[ 14 ] According to Bryant’s affidavit and cross-examination, the ROFO first came to his attention when gathering documents for the closing involving the investment by GM Ventures. It did not become the subject of discussion at that time.

[ 15 ] There are several versions of the ROFO. A version dated December 30 2010 and attached to Matvieshen’s affidavit is purported to be executed May 2, 2011. It is signed by Matvieshen for both the Applicant and Powerfund. It is appended to a director’s resolution of the Applicant signed by Matvieshen and dated effective December 29 2010.

[ 16 ] A slightly different version of the ROFO dated April 29 2011 is also attached to Matvieshen’s affidavit. He signs on behalf of the Applicant, Powerfund, and Sunlogics PLC. Matvieshen deposes that he updated the document in contemplation of the GM Ventures investment.

[ 17 ] On May 13 2011 Matvieshen caused Salamon to file a version of the ROFO dated May 2 2011 with the U.S. Securities and Exchange Commission. It is Bryant’s position that there is no reference to the ROFO in the minute book of the Applicant except for the version filed with the U.S. Securities and Exchange Commission.

[ 18 ] Bryant maintains in his affidavit that the ROFO was invented by Matvieshen in order to gain leverage over the Applicant and related companies. Matvieshen denies the allegation and takes the position (outlined in the Statement of Claim that I refer to below) that he and Powerfund have been deprived of an important commercial opportunity as a result of the Applicant’s failure to comply with the ROFO.

[ 19 ] The only significant thing that Bryant and Matvieshen appear to agree on is that the Applicant never offered Powerfund the opportunity to invest in the solar power project in accordance with the ROFO prior to the December 2011 sale.

[ 20 ] The validity of the ROFO is therefore an important issue in the dispute between the parties. The parties agree that I do not need to rule on whether or not it is valid. Nonetheless, the ROFO has an impact on the analysis, as I set out below.

Litigation Ensues

[ 21 ] As noted, on January 3 2012 the Applicant issued a Notice of Application against Giesbrecht and 356 BC. That application requested a declaration that the Giesbrecht and 356 were in breach of the Cooperation Agreement and an order that they sign the transaction documents facilitating the December 2011 sale.

[ 22 ] As Matvieshen’s involvement with Giesbrecht and 356 came to light, the Applicant commenced a new Application on January 25 2012 and discontinued the original Notice of Application. The new Application added Matvieshen as a Respondent.

[ 23 ] The Applicant subsequently became aware that a sale of 356 BC’s shares to Matvieshen by Giesbrecht, Drapak, and Maximum was contemplated. The Applicant learned of the possible sale through an examination of Giesbrecht’s emails on the Applicant’s server (Giesbrecht had an account by virtue of his consulting and sales activities). The emails included a draft share purchase agreement selling 356 BC to Matvieshen as well as a commission sales agreement between Giesbrecht and Powerfund. There was also a document indemnifying Giesbrecht for any damages arising out of the alleged refusal to comply with the terms of the Cooperation Agreement. It remains unclear whether Matvieshen has purchased the shares of 356 from Giesbrecht.

[ 24 ] Thus, the Notice of Application was amended by adding Powerfund, Drapak, and Maximum. The current amended Notice Of Application now before me asks for the following relief:

• A declaration that the failure of Giesbrecht, Maximum, Drapak, and 356 BC to sign the transaction documents associated with the December 2011 sale is in contravention of the Cooperation Agreement;

• An Order requiring Giesbrecht, Maximum, Drapak, and 356 BC to sign the transaction documents associated with the December 2011 sale;

• A determination that in the event that Matvieshen or Powerfund obtains control of 356 BC that they are bound by the terms of the terms of the Cooperation Agreement;

• An injunction restraining the Respondents from completing the sale of 356 BC, and, if the sale has been completed, an order requiring Matvieshen, Sunlogics, and 356 BC to sign the transaction documents associated with the December 2011 sale.

[ 25 ] In April 2012, Bryant and Deliddo filed a lawsuit in the Superior Court of California against Matvieshen alleging fraud and breach of contract, among other things.

[ 26 ] On July 11 201 Powerfund issued a Statement of Claim against the Applicant, Sunlogics plc, Bryant, Morris, GM Ventures, and board members of Sunlogics PLC. (I refer to this litigation as “ the Powerfund litigation ”). Powerfund alleges that the December 2011 sale took place without written notice to Powerfund, in violation of the ROFO. As noted above, Powerfund alleges that the Applicant’s decision to dispose of the solar power project in the December 2011 sale was driven by a decision by GM Ventures to get out of the rooftop solar business and concentrate on building solar canopies at GM dealerships in order to provide power stations for the Chevrolet Volt electric car. The Statement of Claim alleges that Bryant and Morris provided misleading information to the Court in their affidavits on this Application. Matvieshen has also took the position in his affidavit on this Application that Bryant and Morris either misled the Court or failed to make full disclosure of all material facts in their affidavits. As noted, Bryant and Morris take the position that Matvieshen failed to fully disclose the ROFO to them and that it is a document that was concocted.

[ 27 ] The Powerfund litigation does not name Giesbrecht, 356 BC, Maximum, or Tammy Drapak.

ANALYSIS

[ 28 ] Despite the somewhat complicated procedural and factual history, this Application comes down to four issues:

1. Is the Applicant entitled to a declaration that the Cooperation Agreement requires 356 BC to sign the transaction documents?

2. Should I exercise my discretion and dismiss the Application in order to have the matters resolved in the Powerfund litigation?

3. Should a mandatory order be granted?

4. Should an injunction be issued injunction restraining the Respondents from completing the sale of 356 BC?

Is the Applicant entitled to a declaration that the Cooperation Agreement requires 356 BC to sign the transaction documents?

[ 29 ] Mr. Mende, for the Applicant, argues that this is a straightforward case of contractual interpretation. He states that the Cooperation Agreement is clear on its face that 356 BC is required to sign the transaction documents to facilitate the December 2011 sale. He argues that the ROFO is, in effect, a red herring and that even if it is valid that is an issue to be worked out in the litigation between Powerfund and the other parties.

[ 30 ] Mr. Kent, for the Respondents, argues that the terms of the Cooperation Agreement simply do not require 356 BC to sign the transaction documents facilitating the December 2011 sale.

[ 31 ] In Venture Capital USA Inc. v. Yorkton Securities Inc., 2005 15708 (ON CA), [2005] O.J. No. 1885, 75 O.R. (3d) 325 MacPherson J.A. set out the “cardinal rule” for the interpretation of contracts:

26 The cardinal rule of contract interpretation "is that the court should give effect to the intention of the parties as expressed in their written agreement", and where the intention of the parties "is plainly expressed in the language of the agreement, the court should not stray beyond the four corners of the agreement": KPMG Inc. v. Canadian Imperial Bank of Commerce, 1998 1908 (ON CA), [1998] O.J. No. 4746 at para. 5 (C.A.); leave to appeal refused, [1999] 2 S.C.R. vi, [1999] S.C.C.A. No. 36; Indian Molybdenum Ltd. v. The King, 1951 378 (SCC), [1951] 3 D.L.R. 497 at 502 (S.C.C.); Eli Lilly & Co. v. Novopharm Ltd., 1998 791 (SCC), [1998] 2 S.C.R. 129 at 166-168.

[ 32 ] An examination of the Cooperation Agreement reveals that the recitals contain the following paragraphs:

AND WHEREAS Sunlogics and the Buyer will entered [sic] into a lease agreement effective as of the 15 th day of July, 2011 (the “Lease”) whereby Sunlogics will agree to lease Avonmore 7 from the Buyer for a term of twenty (20) years for a total rent of Twenty-Five Thousand ($25,000) Dollars;

AND WEHEREAS Sunlogics intends to develop a rooftop solar power generation facility which will be designed, developed, and commissioned under the Ontario Power Authority’s Feed-in Tariff Program (“Project”);

The heart of the Cooperation Agreement is found in clauses 2 and 3:

2. The undersigned acknowledge that the development of the Project will increase the value of Avonmore 7 to the benefit of the undersigned and that the Lease constitutes and essential and integral component of the Project;

3. The undersigned agree not to interfere in any way with Sunlogics’ development of the Project. The undersigned further agree to use their commercially reasonable efforts to assist and cooperate with Sunlogics in order to facilitate and enable any transaction in respect of the Project, including disposition of the Project to a third party pursuant to a share or asset purchase agreement.

[ 33 ] Mr. Kent argues that the wording of the language of the Cooperation Agreement makes it clear that it does not apply to what is merely a real estate transaction. The Project refers specifically to the development of a rooftop solar power generation facility. Mr. Kent’s position is that the December 2011 sale has nothing to do with the development of power, which is the purpose of the Project.

[ 34 ] I respectfully disagree. According to the recital to the Cooperation Agreement the purpose of the Project is to “increase the value of Avonmore 7”. The Cooperation Agreement clearly contemplates that 356 BC is required to use commercially reasonable efforts to facilitate “any transaction in respect of the Project”. Clause 3 of the Cooperation Agreement very clearly contemplates a disposition of the Project to a third party. Clause 3 specifically mentions a sale “pursuant to a share or asset purchase agreement”. The December 11 sale of Avonmore 7 is clearly the sale of land. Land is obviously an asset. On its face the Cooperation Agreement contemplates a situation like the December 11 sale and requires the cooperation of 356 BC. The Applicant is entitled to its declaration.

[ 35 ] The reason that a court interpreting a contract should strive to give effect to the intentions of the parties is because the parties, at the time of the signing of the contract, were in the best position to bargain freely in their best interests. A court should strive to give effect to an agreement that reflects commercial reality, and not strain to interpret it in a way that may have unintended consequences. Enforcement of contracts that are clear on their face is a valuable tool for encouraging certainty and predictability in commercial relations.

Should I exercise my discretion and dismiss the Application in order to have the matters resolved in the Powerfund litigation?

[ 36 ] This Application has been launched under Clause (d) of Sub-rule 14.05(3) of the Rules of Civil Procedure, which states:

(3) A proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is,

(d) the determination of rights that depend on the interpretation of a deed, will, contract or other instrument, or on the interpretation of a statute, order in council, regulation or municipal by-law or resolution

[ 37 ] I turn now the Mr. Kent’s argument that I should exercise my discretion and dismiss this Application so that the dispute between the parties can be dealt with in a format that is more conducive to resolving the factual matters at issue: the Powerfund litigation. Again, I respectfully disagree with Mr. Kent for the three reasons I set out below. I have set out the facts in some detail in these reasons in order to explain the reasons why I do not accept his argument.

[ 38 ] First, as I have already found the Cooperation Agreement is clear on its face and requires no extrinsic evidence to interpret it: Dunn v. Chubb Insurance Co. of Canada, [2009] O.J. No. 2726, 2009 ONCA 538, 97 O.R. (3d) 701 (C.A.). There is no need to resort to a trial to resolve an ambiguity in the language.

[ 39 ] Second, it would not be equitable to allow Mr. Matvieshen to place himself in a position where he can stop the sale of Avonmore 7. Giesbrecht is Matvieshen’s nominee. The evidence of all parties is that he was the driving force behind the July 2011 acquisition and recruited Giesbrecht (and 356 BC) to facilitate it. Matvieshen clearly contemplated that the Solar Power Project might be sold and caused the Cooperation Agreement to refer to that possibility. He may not have been aware that he was no longer going to be involved in the Applicant or Sunlogics PLC, which leads to the issue of the ROFO.

[ 40 ] I agree with the parties that I do not need to decide the issue of the validity of the ROFO and I do not. Notwithstanding the agreement of the parties, I have some suspicion about the origins of the ROFO. It has more than a tinge of self-dealing to it. I do not wish to be taken as speculating, but it is curious that at the time of the July 2011 transaction Matvieshen did not mention the ROFO to Giesbrecht, although Bryant says he was aware of it at that time. The evidence is clear and un-contradicted that Giesbrecht only became aware of the ROFO when Matvieshen mentioned it to him shortly before the December 2011 sale. Certainly a valid and existing ROFO would have been well within the contemplation of the parties to the Cooperation Agreement. Although I make no findings of fact in respect of the ROFO, and I draw no conclusions from it, its existence does nothing to persuade me that I should exercise my discretion and dismiss the application as Mr. Kent argues.

[ 41 ] Third, the validity or invalidity of the ROFO has nothing to do with whether or not 356 BC is bound by the Cooperation Agreement. The effect of dismissing this Application to leave the issues to be sorted out as between the parties would be to give Mr. Matvieshen a tactical advantage and stop the December 2011 sale by default. The Applicant would then be forced to litigate the issue of the Cooperation Agreement by way of a counterclaim in the Powerfund litigation. I can see no equitable or practical reason for doing that when the Cooperation Agreement is clear on its face.

Should a mandatory order be granted?

[ 42 ] Clause (g) of Sub-rule 14.05(3) of the Rules of Civil Procedure states:

(3) A proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is,

(g) an injunction, mandatory order or declaration or the appointment of a receiver or other consequential relief when ancillary to relief claimed in a proceeding properly commenced by a notice of application;

[ 43 ] Although I have granted the declaration sought, it does not necessarily follow that the consequential relief sought by the Applicant should be granted.

[ 44 ] The three-part test for whether an injunction should be granted is well known and is set out by the Supreme Court of Canada in RJR-MacDonald v. Canada (Attorney General), 1994 117 (SCC), [1994] S.C.J. No. 17. To summarize, the test states:

1. The court must make a preliminary assessment of the merits of the case to ensure that there is a serious question to be tried, i.e., that there is a prima facie case.

2. The court must determine whether the applicant would suffer irreparable harm if the application were refused.

3. The court must assess which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits, i.e., the balance of convenience.

[ 45 ] I have little difficulty with the first and third parts of the test. As I have found that the Applicant is entitled to a declaration, there is obviously a strong prima facie case. As well, the balance of convenience obviously favours the Applicant: it will suffer harm if 356 BC does not sign the transaction documents, whereas the consequences to 356 are neutral whether or not it signs.

[ 46 ] I have a great deal of difficulty with the notion that the Applicant will suffer irreparable harm if 356 BC does not sign.

[ 47 ] In R.J.R. MacDonald v. Canada (Attorney General), supra, Sopinka and Cory JJ. for the Court commented as follows with regard to irreparable harm:

59 "Irreparable" refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court's decision (R.L. Crain Inc. v. Hendry (1988), 1988 5042 (SK QB), 48 D.L.R. (4th) 228 (Sask. Q.B.)); where one party will suffer permanent market loss or irrevocable damage to its business reputation (American Cyanamid, supra); or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined (MacMillan Bloedel Ltd. v. Mullin, 1985 154 (BC CA), [1985] 3 W.W.R. 577 (B.C.C.A.)). The fact that one party may be impecunious does not automatically determine the application in favour of the other party who will not ultimately be able to collect damages, although it may be a relevant consideration (Hubbard v. Pitt, [1976] Q.B. 142 (C.A.)).

[ 48 ] In Alltricor Financial Management Inc. v. Nu-Port Homes Inc., [2003] O.J. No. 185 (Sup.Ct.) the plaintiff had invested in a real estate development by way of mortgages. The first mortgagee had exercised its power of sale. The plaintiff, arguing that the sale was a fraudulent conveyance, sought a mandatory order requiring the defendants to pay money into court. Brennan J. set out the R.J.R. MacDonald test for granting an injunction, and then observed the following with regard to granting a mandatory order:

11 For a mandatory order, the test is more stringent. In Ticketnet Corporation v. Air Canada (1987), 21 C.P.C. (2d) 38 (Ont. H.C.J.), White J., citing Megarry J. in Shepherd Homes Ltd. v. Sandham, [1970] 3 All E.R. 402 (Ch. D.) at p. 421, stated that:

the court is far more reluctant to grant a mandatory injunction than it would be to grant a comparable prohibitory injunction. In a normal case the court must, inter alia, feel a higher degree of assurance that at the trial it will appear that the injunction was rightly granted; and this is a higher standard than is required for a prohibitory injunction ... No doubt a mandatory injunction may be granted where the case for one is unusually sharp and clear; but it is certainly not a matter of course.

[ 49 ] On the subject of irreparable harm, Brennan J. stated:

21 In my view the plaintiffs will suffer irreparable harm in the sense that they will be deprived of the security afforded by their mortgages, and a reasonable case has been made that damages may not be recoverable.

[ 50 ] In this case I conclude that the Applicant has not shown that irreparable harm would ensue if the mandatory order were not granted.

[ 51 ] The Applicant is responsible for indemnifying the Westeinde Trust and 506 Alberta as a result of the December 2011 sale. The Applicant’s potential damages are set out in the Share Purchase and Assignment Agreement for the December 2011 sale. As noted, that document allocated a price for the Avonmore 7 land of $25,000.00 and the FIT contract associated with Avonmore 7 of $218,750.00. The Applicant has simply placed no evidence before me that it would be unable to obtain damages totalling $243,750.00 from 356 BC.

[ 52 ] Accordingly, given the high standard required for granting a mandatory order and the lack of evidence regarding irreparable harm, I decline to order 356 BC or any individual to sign the transaction documents in respect of the December 2011 sale.

[ 53 ] I could fashion an order allowing the Applicant to come back before me if difficulties are encountered with sorting out who is currently an authorized signing officer of 356 BC, but the problem is that I believe that once I have disposed of the issues here I would be functus. I recognize that by not compelling 356 BC or any individual to sign the Applicant may well be required to seek further orders of this Court. Notwithstanding that finality is an important consideration in any litigation, if the Applicant is still encountering difficulty let me say that there is no doubt an authorized signing officer of 356 BC is required to sign the transaction documents associated with the December 2011 sale and I have little doubt that, although I cannot issue the mandatory order requested, another judge faced with the same issue might well, on proper material, make that order.

Should an injunction be issued injunction restraining the Respondents from completing the sale of 356 BC?

[ 54 ] Applying the RJR-MacDonald test to the question of whether the Respondents should be restrained from completing the sale of 356 BC, if that is indeed what has happened or is in the course of happening, I find that the Applicant has not met the burden.

[ 55 ] I have some doubts that there is a serious issue to be tried, as 356 BC is bound by the terms of the Cooperation Agreement regardless of who is a shareholder, but I am prepared to accept for the purposes of argument that the Applicant meets this part of the test.

[ 56 ] I am not, however, persuaded that irreparable harm will result or that the balance of convenience favours granting the injunction. As noted, the damages in this case are easily quantified and the Applicant has placed no evidence before the Court that it would be unable to collect. Likewise, there is simply no evidence that the harm to the Applicant is outweighed by the harm to the Respondents if the sale is allowed to proceed. Accordingly, I decline to grant the injunction sought.

DISPOSITION:

[ 57 ] I allow the Application and grant a declaration that 356 BC is required to sign the transaction documents closing the December 2011 sale.

[ 58 ] If the parties are unable to agree on costs, the Applicant may submit, within 14 days, a brief costs submission (not exceeding 2 pages) and a costs outline. The Respondents may submit, within 10 days after that, a brief costs submission (also not exceeding 2 pages) and a costs outline in reply.

GOLDSTEIN, J.

DATE: December 10, 2012

COURT FILE NO: CV-12-444850
DATE: 20121210

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N:

Sunlogics Inc. Applicant - and - Dan Giesbrecht and 0803356 B.C. Ltd. and Michael Matvieshen and Sunlogics Power Fund Management Inc., Tammy Drapak and Maximum Sports & Entertainment Ltd. Respondents

JUDGMENT
GOLDSTEIN J.

Released: December 10, 2012