2344510 Ontario v. Rooftop Energy Solutions, 2015 ONSC 1402
COURT FILE NO.: CV-14-508500
DATE: 20150303
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 2344510 Ontario Inc., Plaintiff
AND:
Rooftop Energy Solutions Inc., Nexxsource Energy Corp., Pat Vescio, Roy Khan, Green Dot Energy Inc., Green Dot Epc Co. Inc., Francesco D'Urzo, 2372511 Ontario Inc., Guycan Aluminum Ltd., Guycan Ltd, Jason Deonarain, Ramdial Randy Deonarian, 1591764 Ontario Incorporated and the Ontario Power Authority, Defendants
BEFORE: Mr. Justice S.A.Q. Akhtar
COUNSEL: Greg Roberts, for the Plaintiff
Gregory Govedaris, for the Defendant(s), 2372511 Ontario Inc., Guycan Aluminum Ltd., Guycan Ltd., Jason Deonarain, and Ramdial Randy Deonarain
HEARD: February 20, 2015
ENDORSEMENT
[1] This is a motion by the plaintiff seeking an interlocutory injunction preventing the defendants, a group of various corporate identities and their principal owners, from transferring or encumbering assets and interests existing on the rooftop of the property located at 20 Bertrand Avenue in Toronto.
[2] The factual backdrop to the motion comprises a complicated series of commercial deals between the parties. A number of companies, including some of the corporate defendants, jointly undertook four projects to provide power generated by solar panels. These companies contracted with the Ontario Power Authority to supply energy for a 20-year period at a set price. When the projects began to run into difficulty, the plaintiff agreed to finance two of the projects. One of those was the project situated at 20 Bertrand Street (“the Bertrand Project”).
[3] After a series of disputes arose, the plaintiff commenced the current litigation. The plaintiff alleges that, without its knowledge, one of the named defendants, Rooftop Energy Solutions, Inc., (“RESI”) sold its interest in the Bertrand project to a co-defendant, 237251 Ontario Inc. (“237”), owned by two other defendants, Jason and Ramdial Deonarain. The plaintiff alleges the transfer constituted a breach of trust and was made on the basis of multiple misrepresentations. Specifically, the plaintiff alleges that the assignment agreements involved in this transaction deliberately concealed the plaintiff’s interest in the Bertrand project.
[4] Accordingly, the plaintiff seeks an interlocutory injunction to prevent further interference with its property rights in respect of the Bertrand Street project.
The Test for an Interlocutory Injunction
[5] Both parties agree upon the test for granting an interlocutory injunction. The test stems from the decision of the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385. The three criteria enunciated in that case are found at p. 334:
Is there a serious question to be tried on the merits of the case?
Would the applicant suffer irreparable harm that cannot be compensated by damages if the application is refused?
Which party will suffer the greater harm from the granting or refusal of the remedy pending a decision on the merits?
Analysis
1. Is There a Serious Question to be Tried?
[6] As the Supreme Court of Canada noted in RJR, the “serious question” threshold is a low one. Once the court is satisfied that the application is neither frivolous nor vexatious, it is to proceed to the second and third branches of the analysis. The court is not to undertake an extensive review of the merits of the case.
[7] The plaintiff in this case raises serious issues involving multiple, deliberate misrepresentations, breach of trust, and unjust enrichment. Since this case is not one in which the application will amount to final determination of the matter, I have no hesitation in concluding that the first limb of the test is satisfied.
[8] The plaintiff argues that, in a case where property rights are at issue, the court must apply a modified version of the RJR test. The proposed variant of the test is found in 459103 Ontario Limited v. Metropolitan Toronto Condominium Corp. No. 67718, [1999] O.J. No. 2572, 89 A.C.W.S. (3d) 1040 and Hamilton (City) v. Loucks, 2003 CanLII 64221 (ON SC), [2003] O.J. No. 3669, 232 D.L.R. (4th) 362. According to the plaintiff, these cases indicate that, where property rights are at issue, the first limb of the RJR test will assume far greater importance and will be the primary focus of whether an injunction is appropriate. As the court in Loucks put it at para. 24, “the first criterion… will be strongly emphasized, to the exclusion of the other two criteria. Assuming this approach is applicable here, an injunction would invariably be the result.
[9] However, I am not persuaded that the law is as broad as the plaintiff argues.
[10] Both 459103 Ontario and Loucks are distinguishable on the facts. I accept the defendants’ argument that plaintiff’s cases concern disputes over the interference with and use of real property, as opposed to the risk of transfer and assignment. Indeed, at para. 24 of Loucks the court cited interference with property rights as one of the three factors that justified the application of a modified test (the other two factors the court in Loucks identified are likewise not present here).
[11] More similar to the case at hand is Isabelle v. Lahaie, [2006] O.J. No. 5030, 153 A.C.W.S. (3d) 1223, which involved a dispute over the ownership of property. The court in Isabelle declined to apply the modified test and distinguished Loucks on the basis that the defendants in that case were breaching a series of city by-laws by physically blocking the construction of a new expressway.
[12] In my view, this application must be determined using the “unmodified” RJR test.
2. Will the Plaintiff Suffer Irreparable Harm?
[13] The irreparable harm alleged by the plaintiff is the risk that, if Jason and Ramdial Deonarian are successful in their attempts to finance the Bertrand Project, the equity held by the plaintiff will be either lost, or become subordinate to that financing. The plaintiff also suggests that there is a risk that the property will be transferred to a bona fide purchaser-for-value without notice of the plaintiff’s interests. The plaintiff further notes that these defendants, who receive monies from the Bertrand Project, owe funds to the landlord and argues that an injunction is required to ensure that the landlord does not act on a potential default of the rent and remove the solar panels.
[14] For the purposes of this application, I accept the fact that the plaintiff (and its associated company Edgecon) has injected a considerable amount of funds into the Bertrand Project, and understand its fears surrounding potential losses. However, I am not persuaded that these concerns rise to the level of irreparable harm required by the RJR test.
[15] Firstly, on January 12, 2015, the defendant provided an undertaking “not to assign, transfer or encumber the assets” of the Bertrand Project “without first seeking a Court Order permitting it to so.” In the same undertaking, the defendant, provided that it was “to only pay funds received pursuant to the FIT Agreement (firstly) to pay rent to the Landlord and (secondly) to discharge liabilities associated with 20 Bertrand and to provide full financial disclosure relating to the said funds to all parties to this action on an ongoing basis.” In my view, this undertaking is a complete answer to the plaintiff’s argument.
[16] Secondly, even if the plaintiff’s fears are realized, any loss sustained would be easily quantifiable and recoverable as damages.
3. Who Suffers the Greater Harm from the Granting or Refusal of a Remedy?
[17] The undertaking provided by the defendant similarly provides an answer to the question posed by the third limb of the test. I accept the assertion of the defendant that an injunction would place 237in a difficult position with respect to meeting the financial liabilities of the Bertrand Project. By contrast, the plaintiff will be in no worse a position if the application is denied as a result of the undertakings previously described.
Conclusion
[18] Since the plaintiff has failed to satisfy the second and third limbs of the RJR, I conclude that the application for an interlocutory injunction must be dismissed.
Costs
[19] At the conclusion of the hearing, both parties agreed to the amount that should be paid by the unsuccessful litigant. I therefore fix costs in the amount of $10,000 to be paid by the plaintiffs within 30 days.
Akhtar J.
Date: March 3, 2015