Skylark v. Minhas, 2017 ONSC 1328

CITATION: Skylark v. Minhas, 2017 ONSC 1328

COURT FILE NO.: CV-12-2249-00

DATE: 2017-02-27

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

SKYLARK HOLDINGS LIMITED

James S.G. Macdonald, for the Plaintiff

Plaintiff

• and -

MOHINDER MINHAS, 2012111 ONTARIO INC. and 2295181 CANADA INC.

Jason Squire, for the Defendants

Defendants

HEARD: August 17, 2016,

at Brampton, Ontario

Price J.

Reasons For Order

OVERVIEW

[1] Mohinder Minhas acquired land through one of his companies, 2012111 Ontario Inc. (“2012 Inc.”). He required financing to enable another of his companies, 2295181 Canada Inc., to build a convention centre on the land.

[2] Skylark Holdings Limited, a mortgage broker owned by Michael Slattery, entered into two agreements with Mr. Minhas, whereby it agreed to arrange the financing Mr. Minhas needed, in return for a 5% interest in each of Mr. Minhas’ two companies. Skylark now seeks a declaration that it owns 5% of the company that owns the land.

[3] Mr. Minhas and his companies say that both its initial agreements with Skylark were superseded by a later agreement, which provided that Skylark, instead of receiving a share of ownership in either company, would receive substantial commissions for arranging the take-out financing. They further argue that, in any event, because the initial agreements required the paperwork for the transfer of shares to Skylark to be given to Skylark by December 31, 2003, when the take-out financing documents were registered, Skylark’s Claim, which was not made until more than eight years later, is barred by the two year limitation period in the Limitations Act, 2002.

[4] Mr. Minhas and his companies now move for summary judgment dismissing Skylark’s action against them on the ground that it is statute-barred. Skylark responds with a motion to amend its Claim, which initially sought remedies for 2012 Inc.’s breach of contract, to limit the remedies it seeks to a declaration that it owns a 5% interest in the company that owns the land. It argues that, pursuant to s. 16 of the Limitations Act, 2002, a claim for a declaration alone is not subject to a limitation period, and that the motion for summary judgment should therefore be dismissed.

[5] The court must decide whether Skylark should be granted leave to amend its Claim, and whether its action is barred by the Limitations Act, 2002. For the reasons that follow, I find that Skylark should be granted leave to amend its Claim and that the motion by Mr. Minhas and his companies for summary judgment dismissing its Claim should be dismissed. Skylark’s proposed Amended Claim discloses genuine issues for trial as to whether it has a beneficial ownership of 5% of 2012 Inc. That claim may not be statute-barred, having regard to s. 16 of the Limitations Act, 2002, which provides that claims for declaratory relief alone are not subject to a limitation period. The defence to an equitable remedy such as declaratory relief is properly made based on the equitable doctrine of latches, on the ground that Skylark knowingly waived its claim, or that its delay caused actual prejudice to Mr. Minhas or his companies.

[6] Skylark may be entitled to a declaration of its beneficial interest, even if its right to the past benefits of legal ownership is statute-barred. The issues of whether Skylark owns a beneficial interest and whether its claim to a declaration to that effect is barred by the equitable doctrine of latches are best left to a trial judge to determine, based on a full evidentiary record. Such evidence will better explain the circumstances in which the initial agreements were made, and whether the Commission Agreement was intended to take their place, and whether Skylark’s delay in asserting its ownership interest amounted to a knowing waiver of its right, and whether it caused actual prejudice to 2012 Inc.

BACKGROUND FACTS

[7] Mohinder Minhas (“Mr. Minhas”) owns and controls 2012 Inc. On August 21, 2002, 2012 Inc. purchased land at 2638 Steeles Avenue E., in Brampton (“the Land”) for $2,289,100. At the time of purchase, the Land was vacant.

[8] Mr. Minhas also owns 2295181 Canada Inc. (“2295 Inc.”). He required financing to enable 2295 Inc. to build the Pearson Convention Centre on the Land. Mr. Minhas arranged the required construction financing himself.

[9] The lender, Royal Bank of Canada (“RBC”), was willing to provide only short-term construction financing to Mr. Minhas. As a condition of that financing, RBC required Mr. Minhas and 2012 Inc. to arrange “take-out financing” to replace the construction financing once construction was completed.

[10] Mr. Minhas and 2012 Inc. hired Skylark Holdings Limited (“Skylark”), a mortgage broker, to arrange the take-out financing. Skylark’s principal, Michael Slattery, spent hundreds of hours brokering a lending arrangement for Mr. Minhas and his companies.

[11] Initially, Mr. Minhas and 2295 Inc. themselves funded the construction. By March 2003, however, they needed to draw on RBC’s construction loan. RBC, before providing access to that loan, required evidence that irrevocable take-out financing was in place.

[12] In 2002, Skylark arranged $2.5 million in take-out financing for 2012 Inc. from the Business Development Bank of Canada (“BDC”). That financing was not sufficient to take out the RBC’s constructive financing, so Skylark agreed to lend Mr. Minhas’ companies a further $2.5 million itself, or to obtain it from a private lender, so that Mr. Minhas and his companies could show the RBC that it had the full $5 million in take-out financing that it required to access the RBC’s construction financing.

[13] Mr. Minhas and his companies say that these initial arrangements for the take-out financing were later replaced by other arrangements, negotiated on different terms, before Mr. Minhas and his companies had drawn from any of the take-out financing.

The Undated Agreements

[14] Before or during construction of the Convention Centre, Mr. Slattery presented Mr. Minhas with two agreements which he had prepared, the Equity Agreement and the Operations Agreement.

a) The Equity Agreement

[15] The Equity Agreement provided that, in consideration of arranging take-out financing for the project, Skylark or its nominee would receive a 5% interest in 2012 Inc., or whoever was the registered owner of the Land. It further provided that any necessary documentation to give effect to Skylark’s 5% interest, including the issuing of share certificates to Skylark, would be completed on or before the mortgage, which secured the take-out loan, was registered.

[16] The Equity Agreement stated:

In consideration of Skylark Holdings Limited arranging the take out financing and the Letter of Credit for the Pearson Convention Centre project, being constructed at Steeles and Airport Road, Brampton, the parties agree that Skylark Holdings Limited, or its nominee, will own a 5% interest in 2012111 Ontario Inc., or the registered owner of the land on which the Pearson Convention Centre is constructed, if not in the name of 2012111 Ontario Inc.

2012111 Ontario Inc., by signing this Agreement, transfers the 5% interest to Skylark Holdings Limited or its nominee.

The parties further agree that any necessary documentation to give effect to the 5% ownership, including the issuing of share certificates by 2012111 Ontario Inc., will be completed on or before the registration of the take out mortgage. [Emphasis added]

b) The Operations Agreement

[17] The Operations Agreement provided that, in consideration for Skylark arranging the take-out financing, Skylark would receive a 5% interest in the business operations of the Pearson Convention Centre. The Agreement stated:

In consideration of Skylark Holdings Limited arranging the take out financing and the Letter of Credit for the Pearson Convention Centre project, being constructed at Steeles and Airport Road, Brampton, Mohinder Minhas, on behalf of the business operations of the Pearson Convention Centre, agrees that Skylark Holdings Limited, or its nominee, will own a 5% share of the business operations carried out as The Pearson Convention Centre at Steeles and Airport Road, Brampton.

Mohinder Minhas, by signing this Agreement, transfers the 5% interest to Skylark Holdings Limited or its nominee.

The parties further agree that any necessary documentation to give effect to the 5% ownership, will be completed on or before the registration of the take out mortgage. [Emphasis Added]

[18] Skylark submits that the two agreements were signed in 2002, early in the construction of the convention centre. Mr. Minhas submits that the agreements were signed in March 2003, when the letter of credit was already overdue, which jeopardized the release of RBC’s construction financing. He says that he felt that he had no choice but to sign the agreements as drafted. The parties agree that the issue as to when the agreements were signed does not need to be determined in the motion for summary judgment.

c) The Commission Agreement

[19] In November 2003, during the construction of the convention centre but before any portion of the take-out financing was advanced, Mr. Minhas advised Skylark that he wanted alternative take-out financing and did not want Skylark to receive an interest in his business. Skylark agreed to try to find alternative take-out financing. The parties entered into a new agreement that provided for $82,000 to be paid to Skylark for sourcing the new take-out financing (“the Commission Agreement”). They cancelled the Operations Agreement, whereby Skylark was to have received a 5% interest in the business of the convention centre.

[20] The undated Commission Agreement between Mohinder Minhas, on behalf of the business operations of The Pearson Convention Centre, and Skylark, provided:

In consideration of Skylark Holdings Limited arranging the take out financing and the Letter of Credit for the Pearson Convention Centre project, being constructed at Steeles and Airport Road, Brampton, Mohinder Minhas, on behalf of the business operations of the Pearson Convention Centre, agrees that Skylark Holdings Limited, or its nominee, will receive a total of 1.5% of 5.5 million over a period of 3 years and also the sum of $25,000.00 is to be deducted from the advance of 5.5 million. [Emphasis added]

[21] Below the signatures of Mohinder Minhas, on behalf of the business operations of The Pearson Convention Centre, and of Mr. Slattery, on behalf of Skylark, the following words were handwritten, and apparently signed by Mr. Slattery:

Skylark Holdings Ltd. has no interest The (sic) The Business of the Pearson Convention Centre. [Emphasis added]

The handwriting makes no reference to Skylark’s interest in 2012 Inc. the company that owns the Land.

The registration of the take-out financing documents

[22] Skylark arranged an irrevocable letter of credit from Fenfam Holdings Inc. in the amount of $2.5 million. 2012 Inc. paid an initial commission of $16,986.30 to Skylark. Skylark’s lawyer prepared the letter of credit, which was not to be drawn upon until the constructive financing was “taken out”. Skylark agreed to indemnify Fenfam in the event that the letter of credit was drawn from.

[23] A mortgage in respect of the letter of credit was registered against the Land on March 26, 2003, with the knowledge of Skylark’s owner, Mr. Slattery. The mortgage securing the credit union’s ultimate take-out financing was registered on December 19, 2003, also with Skylark’s knowledge. This registration satisfied RBC, which began to advance the construction loan funds to Mr. Minhas’ companies.

The statutory limitation issue

[24] Skylark’s representatives met regularly with Mr. Minhas at the Pearson Convention Centre for years after it was in operation, to collect Skylark’s commissions pursuant to the Commission Agreement. During that period, Skylark never asserted an interest in 2012 Inc. or to the rights of a shareholder in that company.

[25] No document was ever issued or delivered to give effect to Skylark’s or its nominee’s interest in 2012 Inc. under the Equity Agreement, either when the take-out mortgage was registered or afterward.

[26] The Limitations Act, 2002, took effect January 1, 2004. It imposed a two year limitation period for claims based on breach of contract, but provided that no limitation period applied to claims for declaratory relief alone.

[27] On May 10, 2010, six and a half years after the mortgage for the take-out financing was registered, Skylark’s lawyer wrote to 2012 Inc., asserting that Skylark owned 5% of that company by virtue of the Equity Agreement. The letter stated that if 2012 Inc. failed to prepare the necessary documentation for the share transfer within seven days, Skylark would commence legal proceedings. Mr. Minhas and his companies took no steps to issue shares of 2012 Inc. to Skylark.

[28] Skylark began the present action on May 28, 2012, more than eight years after Skylark claims that it became entitled to an interest in 2012 Inc., and more than two years after Skylark’s lawyer sent its May 10, 2010, demand to 2012 Inc.

[29] At the examination for discovery of Skylark, Mr. Slattery admitted that he knew that he had not received shares in 2012 Inc. pursuant to the Equity Agreement, which he believed Skylark was entitled to receive in December 2003. Additionally, he knew that he had not been treated as a shareholder, and he took no steps to begin this action until the end of May 2012.

ISSUES

1. Is Skylark entitled to an amendment of its Claim?

2. Is Skylark’s claim barred by operation of the statutory limitation period?

3. Is there a genuine issue requiring trial?

POSITIONS OF THE PARTIES

[30] The parties disagree as to whether, when they entered into the Commission Agreement, they agreed to cancel the Equity Agreement that would entitle Skylark or its nominee to 5% of the ownership of 2012 Inc.

The position of Mr. Minhas and his companies

[31] Mr. Minhas and his companies submit that both the Operations Agreement and the Equity Agreement were cancelled when the Commission Agreement was signed, so Skylark never became entitled to 5% of the shares of 2012 Inc. They say that this is why shares of 2012 Inc. were never issued or conveyed to Skylark. They further submit that, in any event, Skylark is now statute-barred from claiming an ownership interest in 2012 Inc. because it did not commence an action within two years after the Equity Agreement required 2012 Inc. to issue the necessary documentation, including share certificates, to Skylark.

[32] Mr. Minhas and his companies submit that Skylark’s cause of action arose in 2003, because the mortgage securing the initial letter of credit was registered on March 26, 2003, and the mortgage securing the credit unions’ take-out financing was registered on December 19, 2003. They therefore argue that the two year limitation period expired on December 19, 2005, at the latest, well before Skylark’s Statement of Claim was issued on May 28, 2012.

Skylark’s position

[33] Skylark argues that when the parties entered into the Commission Agreement, they cancelled the Operations Agreement, which entitled Skylark to a 5% interest in 2295 Inc., but that they did not cancel the Equity Agreement, which entitled it to a 5% interest in 2012 Inc. They say that this was why Mr. Minhas signed the Commission Agreement on behalf of “the business operations of The Pearson Convention Centre”, and why Mr. Slattery handwrote on the Commission Agreement that Skylark had no interest in the business of the Convention Centre.

[34] Skylark argues that it became the owner of 5% of 2012 Inc. when Mr. Minhas signed the Equity Agreement, and that the parties never rescinded that Agreement. Skylark urges the court to apply the equitable doctrine that the court presumes to have been done what ought to have been done, by treating the parties as if 2012 Inc. had delivered the share certificates to Skylark, as the Equity Agreement required it to do, and by not permitting 2012 Inc. to benefit from its failure to comply with its obligation by not recognizing Skylark’s ownership interest.

[35] Skylark argues that its claim for declaratory relief is not statute-barred. It relies on subsection 16(1)(a) of the Limitations Act, 2002, S.O. 2002, c. 24, which provides that there is no limitation period in respect of “a proceeding for a declaration if no consequential relief is sought.”

The parties’ procedural framing of the issue

[36] In May 2016, Mr. Squire, 2012 Inc.’s lawyer, sent Skylark’s lawyer a detailed Notice of Motion for summary judgment dismissing Skylark’s Claim. The costs of the motion, to that point, were $1,500, and the costs of the action were $24,000.

[37] The same month, in response to 2012 Inc.’s motion, Skylark’s lawyer, Mr. Macdonald, sent a proposed amendment of Skylark’s Claim to Mr. Squire. It approximates the amendment that Skylark now seeks in its Notice of Motion for leave to amend its Claim. Mr. Squire replied, stating that he would not consent to the amendment because it “didn’t solve the problem”. He delivered 2012 Inc.’s motion for summary judgment on August 2, 2016.

[38] Skylark argues that as a result of the proposed amendment of its Claim, it is seeking only a declaratory judgment. It does not seek any monetary relief, nor does it seek to compel Mr. Minhas and his companies to perform any acts under coercive orders from the Court, including an order requiring 2012 Inc. to issue share certificates to it.

[39] Skylark relies on the language of Justice Lang, as she then was, in Harrison v. Antonopoulos, in 2002, in which Justice Lang noted that “a declaratory judgment [is] one that pronounced upon the existence or non-existence of a legal state of affairs. It is restricted to a pronunciation on the parties’ rights.”[^1]

[40] In the alternative, Skylark argues that a trial is needed to determine whether the claim falls under the exception of s. 16(1)(a) of the Limitations Act, 2002.

ANALYSIS AND EVIDENCE

a) General principles applying to motions for summary judgment

[41] Rule 20.04 provides that where there is no genuine issue for trial with respect to a claim or defence, the Court shall grant summary judgment accordingly. Rule 20.04(2) states:

(2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or

(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

[42] Accordingly, the court may grant summary judgment in the following circumstances:

1. Where the parties agree;

2. Where the claim is without merit;

3. Where the motions judge is able to dispose of the matter and where the trial process is not required in the “interest of justice.”[^2] [Emphasis added]

[43] In 2014, the Supreme Court of Canada, in Hyrniak v. Mauldin,[^3] and Bruno Appliances and Furniture Inc. v. Hyrniak,[^4] reinterpreted Rule 20 of the Rules of Civil Procedure, taking into account the need for the court to preserve the public’s access to justice. The Supreme Court held that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely, and just adjudication of claims. It held that a trial is not required if the court hearing a summary judgment motion can make a fair and just adjudication, by making the necessary findings of fact, and applying the law to those facts, and if the process is a proportionate, more expeditious, and less expensive means of achieving a just result than a trial.

[44] The Supreme Court observed that the summary judgment motion judge must assess the interests of justice that would be served by summary judgment, by considering the relative efficiencies that would be served by that process and those that would be served by a trial, including the cost and speed of each procedure, the evidence that is available on the motion versus the evidence that would be available at trial, and the opportunity to evaluate such evidence fairly. As the Supreme Court stated, there will be no genuine issue requiring a trial if the summary judgment process gives the motion judge the evidence required to fairly and justly adjudicate the dispute on its merits, and is a proportionate, more expeditious, and less expensive means to achieve a just result.

[45] In Sweda Farms v. Egg Farmers of Ontario, in 2014, Corbett J. described the current approach to summary judgment motions following the Supreme Court of Canada’s decision in Hryniak v. Mauldin, as follows:

Summary judgment motions come in all shapes and sizes, and this is recognized in the Supreme Court of Canada’s emphasis on “proportionality” as a controlling principle for summary judgment motions. This principle does not mean that large, complicated cases must go to trial, while small, single-issue cases should not. Nor does it mean that the “best foot forward” principle has been displaced; quite the reverse. If anything, this principle is even more important after Hryniak, because on an unsuccessful motion for summary judgment, the court will now rely on the record before it to decide what further steps will be necessary to bring the matter to a conclusion. To do this properly, the court will need to have the parties’ cases before it.[^5]

[46] The Supreme Court of Canada, in Hryniak v. Mauldin, gave guidance as to how Rule 20 should be applied to promote timely and affordable access to the civil justice system. Justice Karakatsanis, on behalf of the court, noted that such motions are an opportunity to simplify pre-trial procedures and move the emphasis away from the conventional trial, in favour of proportional procedures tailored to the needs of the particular case. She stated:

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.[^6] (Emphasis added)

[47] Justice Karakatsanis held that the judge hearing a motion for summary judgment must compare the procedures available in such a motion, supplemented, if necessary, by the fact-finding tools provided by Rules 20.04(2.1) and (2.2), with those available at trial, to determine whether the court can make the necessary findings of fact and apply the principles of law to those facts in a proportionate, most expeditious, and least costly manner, to achieve a just result:

This inquiry into the interest of justice is, by its nature, comparative. Proportionality is assessed in relation to the full trial. It may require the motion judge to assess the relative efficiencies of proceeding by way of summary judgment, as opposed to trial. This would involve a comparison of, among other things, the cost and speed of both procedures. (Although summary judgment may be expensive and time consuming, as in this case, a trial may be even more expensive and slower.) It may also involve a comparison of the evidence that will be available at trial and on the motion as well as the opportunity to fairly evaluate it. (Even if the evidence available on the motion is limited, there may be no reason to think better evidence would be available at trial.)[^7] (Emphasis added)

[48] Based on the guidelines set out in Hryniak v. Mauldin, I must first determine, based on the evidence before me, and without using the new fact-finding powers under Rule 20.04, whether there is a genuine issue requiring trial, whether I can fairly and justly adjudicate the dispute, and whether the motion is a timely, affordable, and proportionate procedure under Rule 20.04(2)(a). If there is no genuine issue requiring a trial, I must grant summary judgment.[^8]

[49] If there appears to be a genuine issue requiring a trial, I must exercise my discretion to determine whether the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2), provided their use will not be contrary to the interests of justice and will lead to a fair and just result, and serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole.[^9]

[50] The party moving for summary judgment has the onus of establishing that there is no genuine issue of material fact requiring a trial. Once that onus is met, the burden shifts to the responding party, opposing summary judgment, to demonstrate that the claim has a “real chance of success”.[^10] A self-serving affidavit is not sufficient to create a triable issue in the absence of detailed facts and supporting evidence.

b) Is Skylark entitled to amend its claim to limit the relief it requests to a declaration as to its ownership of a 5% interest in 2012 Inc.?

[51] Rule 26.01 of the Rules of Civil Procedure provides that on a motion, at any stage of an action, the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. In Spencer v. Tom and Jerry's Bistro (2009), Kelly J., on hearing a motion by the defendant for a summary judgment dismissing the action based on a limitations defence, considered rule 26.01 and granted the plaintiff leave to amend the Claim to plead discoverability.[^11]

[52] In Grant v. Grant (2001), the Court of Appeal held that the motion judge had erred in granting a motion for summary judgment dismissing a defamation action on the basis of a variance between evidence and statement of claim. The court held that the motion judge should have granted plaintiff leave to amend the statement of claim to conform with the evidence of words spoken by the defendant.[^12]

[53] Skylark should not be prevented from proceeding to trial on its proposed Amended Claim if there is a genuine issue for trial as to whether the relief it seeks in that Claim would be barred by a limitations defence. A plaintiff should not be deprived of its right to a trial of its Claim by reason of defective pleading alone, when the defect is capable of being cured by amendment without prejudice to the defendant that cannot be compensated for by an award of costs.

[54] I will now turn to consider whether the Amended Claim raises a genuine issue for trial.

c) Does Skylark have a viable claim to a declaration alone?

Beneficial or Equitable Interest in 2012 Inc.

[55] For the purpose of determining whether Skylark should be permitted to amend its Claim, I turn now to consider whether Skylark may have a beneficial interest in 2012 Inc. and whether that interest has value, apart from the consequential relief that Skylark has abandoned in its proposed Amended Claim.

[56] The threshold issues are whether Skylark may have an equitable interest in 2012 Inc. as a security holder by reason of the Equity Agreement, and whether any limitation period precludes it from seeking a declaration to this effect.

[57] Although Skylark’s ownership of the 5% interest is an issue for trial, it is important for the purpose of the present motion to distinguish between beneficial ownership, which Skylark may have derived from the parties’ signing of the Equity Agreement, and legal ownership, which it would have derived from the issuance of share certificates to it.

Rights arising from beneficial ownership without share certificates

[58] The Equity Agreement states that “2012111 Ontario Inc., by signing this Agreement, transfers the 5% interest to Skylark Holdings Limited or its nominee.” The later term, whereby “The parties further agree that any necessary documentation to give effect to the 5% ownership, including the issuing of share certificates by 2012111 Ontario Inc., will be completed on or before the registration of the take out mortgage.”, is an implementing provision which requires 2012 Inc. to take steps necessary to give effect to the ownership that Skylark already has by reason of the earlier term.

[59] On its face, 2012 Inc. appears to have transferred a 5% interest of itself to Skylark “by signing this Agreement”. If the trial judge determines that this was a valid and binding agreement, 2012 Inc. thereby became entitled to the consideration stated in the Agreement, namely, Skylark’s enforceable obligation to arrange the take-out financing and Letter of Credit for the Pearson Convention Centre project. If the Equity Agreement was not later cancelled, which is a factual issue still to be determined, the signing of the Agreement imposed the obligation on Skylark to arrange the take-out financing. It would not have been open to Skylark, at that point, to refuse to arrange the financing on the ground that it had not received the share certificates for its 5% interest.

[60] If the Equity Agreement was not cancelled, then Skylark may continue to possess rights as a security holder notwithstanding its lack of share certificates. It has the right, for example, to transfer its interest to another. Beneficial ownership of a share, for tax purposes, may be transferred without effecting the transfer by the procedures set out in the OBCA or, more recently, the Securities Transfer Act (“STA”), through the minute book.[^13]

[61] There are numerous other rights of a beneficial shareholder under the OBCA. For example, the OBCA provides that a security holder is entitled to have its interest in the corporation valued and acquired by the corporation in the event of a take-over bid in respect of which the security holder dissents, or in the event that the corporation is required to acquire the securities of its shareholders. Some relevant provisions of the OBCA setting out these rights are set out in Appendix A to these reasons.

[62] I reproduce particularly relevant excerpts from a paper prepared by Joan E. Jung in 2007:

Section 54 of the OBCA… as amended by the [STA], now specifically states that a security issued by a corporation may be represented by a securities certificate or may be an uncertificated security. Unless otherwise provided by the Articles of the corporation, the directors of a corporation may provide by resolution that any or all classes of its shares shall be uncertificated securities. As a result of the foregoing amendment, an OBCA corporation can effectively cease issuing share certificates. This is known as dematerialization. It continues to be required that shares be in registered form[^14] and an OBCA corporation continues to be required to prepare and maintain a securities register which records the name and address of persons registered as shareholders and the number and class of shares registered in each such person’s name.[^14] In the case of a private corporation, paper share certificates would be effectively replaced by the ledger or register maintained in the minute book. In the case of an offering corporation, the replacement may be book based entries maintained electronically by the corporation’s registrar and transfer agent.”[^15] [Emphasis added]

[63] The fact that 2012 Inc. failed to issue share certificates to Skylark does not preclude a finding that Skylark beneficially owned a 5% interest in 2012 Inc. The Canadian Encyclopedic Digest, in its section on Transfer of Shares, states:

§405 …Although a transfer [of shares] is incomplete until it is registered, prior to that registration the transferor holds the shares as a trustee for the transferee,[^16] and thus the transferee has only an equitable title to the shares. The transferee does not become the legal owner until his or her name is entered on the register in respect of the shares so transferred.[^17] Thus the corporation may continue to treat the registered holder of shares as the owner of those shares.[^18] Moreover, the transferor remains the person entitled to vote those shares until the transfer is registered,⁸ although between the vendor and the purchaser the voting rights must be exercised in accordance with the instructions of the purchaser.[^19]

[64] The Ontario Business Corporations Act, in section 1, defines “beneficial interest” in the following terms:

Section 1 definitions: “beneficial interest” or “beneficial ownership” includes ownership through a trustee, legal representative, agent or other intermediary and, in the case of a security, includes the interest of an entitlement holder, as defined in the Securities Transfer Act, 2006, with respect to that security, but does not include the interest of an entitlement holder that is a securities intermediary, as defined in the Securities Transfer Act, 2006, that has established a security entitlement, as defined in the Securities Transfer Act, 2006, in favour of its entitlement holder with respect to that security; (“intérêt bénéficiaire”, “propriété bénéficiaire”) [emphasis added]

[65] In Csak v. Aumon (1990), Justice Lane dealt with an application for a remedy for oppression pursuant to the s. 241 of the Canada Business Corporations Act (1985).[^20] The defendant raised the issue of whether persons claiming under a pre-incorporation contract to be entitled to shares in a corporation could obtain the shares through the use of s. 241. Justice Lane, in holding the claimants to be qualified for the relief claimed, noted that s. 238 of the Act defined "complainant" to mean, (a) a registered holder or beneficial owner, and a former registered holder or beneficial owner, of a security of a corporation or any of its affiliates. Justice Lane then continued:

…Section 2 (of the CBCA) defines “beneficial ownership” as including “ownership through a trustee, legal representative, agent or other intermediary.” The applicants say they are beneficial owners of securities within the meaning of the foregoing definitions. It is apparent from the language of the statute that it contemplates a class of complainant without registered ownership. The applicant argues that any person having an equitable claim to shares in the company would qualify as a beneficial owner whether or not there are shares issued and appropriated to that person but held in the name of someone else. The respondent submits that beneficial owner means a person whose shares have actually been issued but are held in the name of someone else as legal owner. In such circumstances, the acknowledged beneficial owner can bring the application directly without involving the registered owner. On the respondents’ view of things, a person who claims to be the beneficial owner of shares which have not actually been issued is not able to take advantage of Part XX of the CBCA.

In my view, the applicants do fall within the phrase “beneficial owner” as it is used in s. 238. A beneficial owner is one who is the real owner of property even though it is in someone else’s name. The nominal owner has legal title to the property but the real owner can require the nominal owner to convey the property to him and transfer legal title to him. See: MacKeen Estate v. Minister of Finance of the Province of Nova Scotia (1978), 1978 2154 (NS CA), C.T.C. 557 (N.S.S.C., App. Div.). This is the very situation in which the applicants say they find themselves. The respondent Aumon is the registered owner of 100% of the issued shares of Excel and the applicants say he holds 2/3 of them in trust for them or that he is contractually bound to cause the company to issue to each of them the same number of shares as are held by him.[^21]

[66] Section 245 of the OBCA similarly defines “complainant” to include beneficial owner, for the purposes of an application for a remedy for oppression pursuant to s. 248 of the Act.

[67] A beneficial owner possesses rights pursuant to the OBCA, apart from those that derive from the issuance of share certificates to him, and remedies for oppression. These can be found, for example, in the following sections:

Examination of records by shareholders and creditors

145. (1) Registered holders of shares, beneficial owners of shares and creditors of a corporation, their agents and legal representatives may examine the records referred to in subsection 140 (1) during the usual business hours of the corporation, and may take extracts from those records, free of charge, and, if the corporation is an offering corporation, any other person may do so upon payment of a reasonable fee.

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(2) A registered holder or beneficial owner of shares of a corporation is entitled upon request and without charge to one copy of the articles and by-laws and of any unanimous shareholder agreement.

Investigation

161. (1) A registered holder or a beneficial owner of a security or, in the case of an offering corporation, the Commission may apply, without notice or on such notice as the court may require, to the court for an order directing an investigation to be made of the corporation or any of its affiliates. 2006, c. 34, Sched. B, s. 33.

Proposal to amend articles

169. (1) A registered holder of shares entitled to vote, or a beneficial owner of shares that are entitled to be voted, at an annual meeting of shareholders may, in accordance with section 99, make a proposal to amend the articles.

[68] Further, the Court of Appeal in Paragon Development Corporation v. Sonka Properties Inc. (2011) stated:

… Section 1(1) of the Business Corporations Act, R.S.O. 1990, c. B.16 ("OBCA") defines "beneficial interest" and "beneficial ownership" as including "ownership through a trustee, legal representative, agent or other intermediary". The definition in the OBCA indicates that beneficial interest can exist outside a finding that a trust exists or that a fraud has taken place.

Existing jurisprudence also supports the conclusion that a beneficial owner is one who has an equitable claim to shares whether or not they have been issued and appropriated to him. Beneficial ownership is not limited to ownership through a trustee: see Fedel v. Tan (2008), 2008 46697 (ON SC), 93 O.R. (3d) 274, [2008] O.J. No. 3585 (S.C.J.), at paras. 209 and 216.[^22] [Emphasis added]

[69] Because the OBCA recognizes rights of a security holder even where no share certificates have been issued, Skylark may have a claim to a beneficial interest in 2012 Inc. if it can establish at trial that the Equity Agreement transferred a 5% interest in 2012 Inc. to Skylark, and that the Equity Agreement was not later rescinded upon the signing of the Commission Agreement.

d) Statutory limitation on claim for declaration alone

Legislative framework

[70] The Limitations Act, 2002, provides, in part:

16(1) There is no limitation period in respect of,

(a) A proceeding for a declaration if no consequential relief is sought.[^23]

Jurisprudence

[71] The Supreme Court of Canada, in Solosky v. R. (1979), stated:

Declaratory relief is a remedy neither constrained by form nor bounded by substantive content, which avails persons sharing a legal relationship, in respect of which a “real issue” concerning the relative interests of each has been raised and falls to be determined.

As Hudson suggests in his article "Declaratory Judgments in Theoretical Cases: The Reality of the Dispute" (1977), 3 Dalhousie L.J. 706, p. 708:

The declaratory action is discretionary and the two factors which will influence the court in the exercise of its discretion are the utility of the remedy, if granted, and whether, if it is granted, it will settle the questions at issue between the parties.

The first factor is directed to the "reality of the dispute". It is clear that a declaration will not normally be granted when the dispute is over and has become academic, or where the dispute has yet to arise and may not arise. As Hudson stresses, however, one must distinguish, on the one hand, between a declaration that concerns "future" rights and "hypothetical" rights, and, on the other hand, a declaration that may be "immediately available" when it determines the rights of the parties at the time of the decision together with the necessary implications and consequences of these rights, known as "future rights" (p. 710)

Once one accepts that the dispute is real and that the granting of judgment is discretionary, then the only further issue is whether the declaration is capable of having any practical effect in resolving the issues in the case.[^24] [Emphasis added]

[72] In Harrison v. Antonopoulos (2002), Justice Lang, as she then was, stated:

Declaratory relief, being only a declaration of parties’ rights, is mainly sought in commercial matters to help parties define their rights, and as a means to settle matters amicably where reasonable people would otherwise disagree on their mutual obligations and wish to resolve the matter in order to avoid future disputes. In other words, a cause of action need not be extant at the time a party requests declaratory relief. Because declaratory relief is in essence a request for an advance ruling, courts have discretion to refuse such relief. This is the type of relief contemplated by s. 108(2) of the CJA – a declaration of parties’ rights with no coercive effect or remedial entitlement.

The essence of the relief requested by the plaintiff in this case is a declaration of fact for the purpose of obtaining executory or coercive relief. In pith and substance, it is not “declaratory relief” as that term is used in s. 108(2) of the CJA either in a public or a private law context. Accordingly, I dismiss the plaintiff’s motion to strike the jury notice.[^25] [Emphasis added]

[73] In LeBar v. Canada, in 1988, the Federal Court of Appeal stated:

A declaration differs from other judicial orders in that it declares what the law is without pronouncing any sanction against the defendant, but the issue which is determined by a declaration clearly becomes res judicata between the parties and the judgment a binding precedent.[^26]

Applying the legal principles to the facts of this case

[74] Skylark’s claim for a declaration may be viable provided it seeks only guidance as to the legal relationship that exists between it and 2012 Inc., so as to enable them to govern their future conduct toward each other accordingly. If Skylark is seeking the declaration for the sole purpose of enforcing 2012 Inc.’s contractual obligation, embodied in the Equity Agreement, to issue share certificates to it and to grant it the legal rights that those share certificates entailed, then it would be seeking, in pith and substance, a coercive judgment against 2012 Inc. based on a cause of action that is statute-barred.

e) Statutory limitation on the remedies of a beneficial owner

(i) Right to remedy for oppression

[75] I now turn to the question of whether a declaration as to Skylark’s ownership in 2012 Inc., if ordered, could entitle Skylark to apply to the courts, in the future, for remedies, such as relief from oppression. I make no determination on the viability of such a claim should Skylark make one. The case cited below is simply noted for the benefit of facilitating frank discussion between the parties and for the benefit of the Court in the future.

[76] The Ontario Court of Appeal, in Maurice v Alles (2016), held that claims under the OBCA for a remedy for oppression are subject to the general two-year limitation period:

There is a division in the case law regarding the applicability of the general two-year limitation period prescribed by s. 4 of the Limitations Act, 2002, to cases of ongoing oppression. The positions of the parties on this appeal reflect this division.

In my view, an oppression remedy claim under the OBCA is subject to the general two-year limitation period prescribed by s. 4 of the Limitations Act, 2002. Oppression is not listed under s. 16 as a claim to which no limitation period applies, nor is it exempted under s. 19 of the legislation. Special circumstances are also not available to extend the limitation period.

Courts must be careful not to convert singular oppressive acts into ongoing oppression claims in an effort to extend limitation periods. To do so would create a special rule for oppression remedy claims. [^27] [Emphasis added]

[77] Again, I note this case only for the parties’ general benefit.

(ii) Right to issuance of share certificates

[78] The rights that Skylark would have derived from the issuance of share certificates to it on December 19, 2003, or at any time prior to its demand on May 10, 2010, may have become statute barred on May 11, 2012, being the day following the second anniversary of 2012 Inc.’s breach of its contractual obligation. These rights include the rights to vote, receive notices, and to receive dividends or other distributions, at least up until May 11, 2012.

[79] However, if Skylark became an owner of a 5% interest in 2012 Inc. by virtue of the Equity Agreement, and its interest was not later rescinded by a substitution of the Commission Agreement for the Equity Agreement, it acquired rights that exist independently of the share certificates. It should therefore be permitted to amend its Statement of Claim to seek a declaration of its ownership interest.

[80] The Equity Agreement, if valid and binding, entitled Skylark to be issued share certificates on or before the date when the mortgages securing the take-out financing were registered. It is not disputed that the last of the mortgages was registered on December 19, 2003. Therefore, the Equity Agreement gave Skylark a contractual right to be issued share certificates by that date.

Contractual right to share certificates

[81] It is not in dispute that the limitation period was six years on December 19, 2003, when 2012 Inc. failed to deliver the documentation, including share certificates, and Skylark’s contractual cause of action arose. Thus, Skylark’s cause of action, based on 2012 Inc.’s breach of contract, expired on December 19, 2009.

[82] It is also not in dispute that by operation of the transition provisions of the Limitations Act, 2002, if the cause of action was discovered before January 1, 2004, the prior limitation period applies.[^28] Skylark acknowledges that it was aware of 2012 Inc.’s failure to issue share certificates to it by December 19, 2003, when, to Skylark’s knowledge, the last of the mortgages for the take-out financing was registered.

[83] Having regard to the fact that Skylark’s contractual cause of action, based on 2012 Inc.’s failure to deliver share certificates to it, arose on December 19, 2003, and expired on December 19, 2009, its original Claim, based on that cause of action, was statute-barred, pursuant to the Limitations Act, 2002, before May 28, 2012, when that Claim was issued.

Statutory right to share certificates

[84] Assuming, again, that the Equity Agreement was valid and binding between the parties, Skylark, as a “security holder”, arguably also had a statutory entitlement, pursuant to s. 54(1) of the OBCA, to be issued share certificates upon request, at least prior to 2007. Before the Securities Transfer Act, 2006 (Bill 41, or “STA”) came into force on January 1, 2007, subsection 54(1) of the OBCA read:

54(1) Every security holder is entitled, upon request, to a security certificate in respect of the securities held by the security holder that complies with this Act, or to a non-transferable written acknowledgement of the security holder’s right to obtain a security certificate from a corporation in respect of the securities of the corporation held by the security holder, but the corporation is not bound to issue more than one security certificate in respect of a security or securities held jointly by several persons, and delivery of a security certificate to one of several joint security holders is sufficient delivery to all. [Emphasis added]

[85] On January 1, 2007, subsection 54(1) was replaced with the following: “A security issued by a corporation may be represented by a security certificate or may be an uncertificated security.”

[86] Before January 1, 2007, Skylark could have argued that it had a statutory basis to demand the issuance of share certificates, in addition to its contract-based right. Skylark failed to bring its contractual claim in time and is therefore barred from this relief now. However, since a valid security may exist despite being uncertificated, the fact that Skylark was never issued share certificates is not determinative of whether Skylark has a beneficial interest in the shares of 2012 Inc., or even the legal rights that the holder of an uncertified security possesses.

[87] Even before the enactment of the Securities Transfer Act, 2006, the issuance of a share certificate as evidence of the ownership of the interest by the shareholder was an administrative act performed by the corporation or its lawyer pursuant to the statutory obligation existing under the OBCA. In McMurtry v. McMurtry (2016), Keith McMurtry died owning 10 shares of a company. Keith’s widow, Mildred McMurtry, was the beneficiary of the residue of her late husband’s estate. She claimed that the residue included her late husband’s shares. The parties’ eldest son, John, was one of the executors of the estate. He claimed that his father had made a gift of his shares to him before his death. John claimed that in his capacity as executor, he could complete the gift, if his father had not completed it prior to his death.

[88] Mrs. McMurtry claimed a declaration that she was the owner of her late husband’s shares, and, if successful, claimed an oppression remedy against John related to his management of the company. Justice Corthorn granted Mrs. McMurtry the declaration, holding that the gift to John was never completed and that Mrs. McMurtry’s claim was not statute-barred as it was a claim for declaratory relief.

[89] Mrs. McMurtry, in addition to claiming a declaration that she was the lawful owner of her late husband’s shares in the company, claimed “An Order directing that the Corporate Minute Book of the Corporation be updated to indicate the ownership of shares of the Plaintiff at 10 common shares of [the company], as well as an Order removing her son from all positions he held in the company, damages against him, and an order for the company’s assets to be valued and liquidated and for the appointment of a receiver.” On the issue of whether Mrs. McMurtry’s claim was for consequential relief and not simply declaratory relief, and was therefore statute barred, Justice Corthorn stated:

The case law and academic authorities emphasize that “declaratory relief” is to be construed narrowly – specifically because relief in that form is not subject to a limitation period. In the Law of Declaratory Judgments, 3^rd ed. (Toronto: Carswell, 2007) at p. 3, the author introduces the subject as follows:

The essence of a declaratory judgment is a declaration, confirmation, pronouncement, recognition, witness and judicial support to the legal relationship between the parties without an order of enforcement or execution …

If a declaration is merely ancillary to consequential relief which is statute-barred, the entire recourse is considered as consequential relief and will fail.

I find that Mrs. McMurtry’s claim with respect to ownership of the Shares is restricted to declaratory relief. Resort to the Court for additional relief would not be required for Mrs. McMurtry to enjoy the benefits of ownership of the Shares if she were to be declared the owner. It is the potential for additional resort to the judicial process, and not the potential for additional administrative or other steps to be required, that is meant by ‘consequential relief”.[^29] [Emphasis added]

[90] Justice Corthorn elaborated the distinction between administrative relief and consequential relief. She stated:

But for my decision with respect to the equitable defences of laches and estoppel, and the imposition of a constructive trust, the Shares would remain in the residue of the Estate and it would be open to the executors and trustees to take the steps necessary, in the context of the administration of the estate, to facilitate a transfer, unconditionally, of the Shares from the Estate to Mrs. McMurtry.

An order of the Court requiring the executors and trustees of the Estate to fulfill their obligations would not be required as a consequence of the declaration requested being made. Such an order, if required, would arise from and be consequential to a failure on the part of the executors and trustees of the estate to fulfill their obligations in accordance with the terms of the Will (i.e. as relates to the residue of the estate). Such an order would be based on a cause of action distinct from that upon which Mrs. McMurtry’s claim for declaratory relief is based.

Updating the Minute Book would not require an order of the court. The lawyer for [the company], when presented with a copy of the declaration, if made, would take the steps necessary to have the Minute Book up-dated. An order, if required, would be consequential to the process of up-dating the Minute Book. Mrs. McMurtry would have a cause of action independent of the cause of action upon which the claim for declaratory relief is based.

The legal consequences which naturally flow from a declaration which pronounces on a legal position do not constitute “consequential relief”.[^30]

[91] Just as Ms. McMurtry was found to be the owner of her late husband’s shares, even though the share certificates had not yet been transferred from the deceased to his Estate, and from the Estate to Mrs. McMurtry, so Skylark may be the owner of a 5% interest in 2012 Inc., notwithstanding that the company has yet to issue the share certificates to it. This is a genuine issue requiring a trial.

[92] Justice Corthorn held that the transfer of share certificates to Mrs. McMurtry involved merely administrative steps by the company’s lawyer, which could be enforced based on his [statutory] duty to shareholders, and did not require an order wresting possession of the shares from John in his capacity as a beneficiary. Justice Corthorn stated:

Updating the Minute Book would not require an order of the Court. The lawyer for [the company], when presented with a copy of the declaration which pronounces on a legal position do not constitute “consequential relief”. As noted by Verville J. at paragraph 43 of the decision of the Alberta Court of Queen’s Bench in Wasylyk v. Bonnyville (Municipal District No. 87), 2012 ABQB 348:

[T]he policy problem created by a situation where the necessary remedial order is barred by the Limitations Act, resulting in a declaratory order that the defendant does not have to obey, and a plaintiff with a support right but no remedy, … would undermine respect for orders of the Court. But this difficulty would only be avoided where limitations does not pose an issue in the first place. Taking this position to the extreme, no declaratory relief would ever fit the exception contemplated in [section16] of the Limitations Act.

In Joarcam, LLC v. Plains Midstream Canada ULC, 2013 ABCA 118, at para. 5, the relief requested was determined to be remedial (not declaratory only) because the declaration sought was as to: a) ownership of the subject assets; and b) entitlement to recover from the defendant immediate possession of the subject assets. The trial judge, whose decision was upheld on appeal, concluded that the plaintiff was seeking an order that would require the defendant to transfer the subject assets – In other words, more than a pronouncement of rights.[^31]

[93] As noted above, a beneficial interest in a corporation entails rights that exist independently of those that flow from the issuance of share certificates. Additionally, the issuance of share certificates is an administrative act, now rendered unnecessary by the Securities Transfer Act, 2006, which gives rise to future rights without imposing liability on 2012 Inc. for past acts or omissions based on a cause of action that is now statute-barred. A declaration as to Skylark’s beneficial ownership of 5% of 2012 Inc. may therefore have a practical effect and utility to Skylark without a coercive judgment on 2012 Inc. For these reasons, I find that Skylark may be entitled to a declaration as to its beneficial ownership of a 5% interest in 2012 Inc. which, by virtue of s. 16 of the Limitations Act, 2002, may not be statute barred. Accordingly, Skylark should be permitted to amend its Statement of Claim to claim this relief.

Equitable presumption that what ought to have been done was done

[94] I have considered whether the equitable maxim that “the court will deem to have been done what ought to have been done” permits the court to deem that 2012 Inc. issued share certificates to Skylark on December 19, 2003, as the Equity Agreement required, as a basis for affirming Skylark’s 5% ownership interest. I have concluded that the maxim cannot be given that broad an interpretation, as the jurisprudence does not support the conclusion that the maxim prevails over a statutory limitation period.

[95] The Court of Appeal in Re Grant Forest Products Inc. (2010) granted a declaration to the respondent based on an agreement with a corporation, pursuant to which the respondent advanced funds to purchase income tax refunds to the company. The Agreement provided that the respondent acquired no right, title or interest in the refund until the company delivered a transfer to him on January 2, 2009. The company failed to perform its obligation and subsequently obtained protection under the Companies’ Creditors Arrangement Act. Goudge J.A., speaking for the Court, upheld the motion judge. He stated:

In Snell’s Equity, 31^st ed. (London: Sweet & Maxwell, 2005), the maxim is described this way, at p. 107:

This maxim has its most frequent application in the case of contracts. Equity treats a contract to do a thing as if the thing were already done, though only in favour of persons entitled to enforce the contract specifically and not in favour of volunteers. Agreements for value are thus often treated as if they had been performed at the time when they ought to have been performed, with the same consequences as if they had then been completely performed. For example, a person who enters into possession of land under a specifically enforceable agreement for a lease is regarded in any court which has jurisdiction to enforce the agreement as being in the same position as between himself and the other party to the agreement as if the lease had actually been granted to him.

Thus the maxim can clearly be applied if (i) the contract, properly interpreted, imposes an obligation on a contracting party to do something that it has not done; (ii) the contract is one that can be specifically enforced; and (iii) the maxim is invoked not by a stranger, but by a party who would be entitled to specifically enforce the contract.

Where the time for performance required by the contract has passed, the application of the maxim allows the court to give recognition to the obligation from the time it ought to have been performed. This can be compared to the remedy of specific performance which typically carries only prospective effect.[^32] [Emphasis added]

[96] The Re Grant Forest Products Inc. case lends support to Skylark’s request to amend its pleadings to make a claim for declaratory relief. The Equity Agreement required 2012 Inc. to issue share certificates to Skylark for a 5% interest in 2012 Inc. by the date when the mortgage for take-out financing was registered. A mortgage in respect of the letter of credit was registered against the Land on March 26, 2003. The mortgage securing the credit union’s ultimate take-out financing was registered on December 19, 2003. Both mortgages were registered by the latter date, with Skylark’s knowledge.

[97] The court is capable of specifically enforcing the Equity Agreement by requiring 2012 Inc. to issue the share certificates to Skylark. Skylark, which invokes the maxim, is a party to the Equity Agreement, and is entitled to specifically enforce the Agreement.

[98] Re Grant Forest Products Inc. is distinguishable from this case on the ground that it did not involve a statutory limitation period. Re Grant Forest Products Inc. only supports the conclusion that 2012 Inc.’s failure to issue share certificates to Skylark by the agreed upon date or timeline did not, in and of itself, relieve 2012 Inc. of its obligation to issue the shares or deprive Skylark of its interest. However, this equitable maxim is not enough to establish that Skylark’s contractual right to require the issuance of share certificates survived the six year limitation period which ended, at the latest, on December 19, 2009.

f) Mr. Minhas and his companies’ potential defence of laches

[99] The Amended Claim asserts only a claim for the equitable remedy of a declaration as to Skylark’s ownership interest in 2012 Inc. Mr. Minhas and his companies have not yet been called upon to deliver a Defence to that Claim. I will therefore address the proposed Amended Claim in light of a defence that may apply to it.

[100] If I were inclined to deny Skylark’s motion for leave to amend its Claim, I would likely not consider a defence which Mr. Minhas and his companies have not yet raised, without first giving Skylark the opportunity to respond. However, as I propose to grant Skylark leave to amend its pleadings, and to direct that the parties proceed to trial, I will give some general consideration of the available equitable defence based on delay, which Mr. Minhas and his companies did raise in response to Skylark’s original Statement of Claim. This will enable me to articulate more fully the issues that will have to be determined at trial, which may promote settlement. This is consistent with the approach that the Supreme Court in Hryniak directed be taken to motions for summary judgment, in helping to achieve the most expeditious, least costly, and just determination of the issues on their merits.

g) Is Skylark’s claim to a declaration barred by Laches?

[101] The parties have not fully articulated their positions, and I therefore do not propose to determine whether Skylark’s claim for a declaration would be precluded by the equitable doctrine of laches. I will address the issue only to indicate that this, also, raises a genuine issue for trial.

[102] Historically, statutes of limitations did not apply to equitable claims.[^33] As a result, the courts of equity developed their own limitation defences to delayed equitable claims, the most important of which was the defence of laches.

[103] In Haldenby v. Dominion of Canada General Insurance Co. (2001), the Court of Appeal for Ontario described the rationales underlying limitation periods in the following terms:

Limitation periods play an important role in the administration of justice by achieving a balance between every individual's right to justice on one hand and the systemic need for finality on the other. In their operation, limitation periods encourage the timely resolution of legal controversies and reconcile the competing interests of potential claimants, potential defendants and society at large.[^34]

[104] The three rationales underlying limitation periods, were set out by La Forest J. in M. (K.) v. M. (H.), in 1992. They are:

1. Certainty: “A potential defendant should be secure in his reasonable expectation that he will not be held to account for ancient obligations.”

2. Evidentiary: This "concerns the desire to foreclose claims based on stale evidence. Once the limitation period has lapsed, the potential defendant should no longer be concerned about the preservation of evidence relevant to the claim."

3. Diligence: “Plaintiffs are expected to act diligently and not 'sleep on their rights'; statutes of limitation are an incentive for plaintiffs to bring suit in timely fashion."[^35]

[105] In M.(K.), (1992), the Supreme Court discussed the equitable doctrine of laches in defence to a claim in equity. At pp. 77-78, the court stated that mere delay is insufficient to trigger laches. To trigger a laches defence, the defendant must establish one of two things. The delay of the plaintiff must “[constitute] acquiescence or [result] in circumstances that make the prosecution of the action unreasonable.”

[106] In Manitoba Metis Federation Inc. v. Canada (Attorney General), (2013), McLachlin C.J.C. and Karakatsanis J., writing for the majority, citing M.(K.), summarized the doctrine of laches as follows:

The equitable doctrine of laches requires a claimant in equity to prosecute his claim without undue delay. It does not fix a specific limit, but considers the circumstances of each case. In determining whether there has been delay amounting to laches, the main considerations are (1) acquiescence on the claimant’s part; and (2) any change of position that has occurred on the defendant’s part that arose from reasonable reliance on the claimant’s acceptance of the status quo.

As La Forest J. put it in M.(K.), at pp. 76-77, citing Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221, at pp. 239-40:

Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.

This court in Perry, Farley & Onyschuk v. Outerbridge Management Ltd. (2001), 2001 5678 (ON CA), 54 O.R. (3d) 131 (C.A.) – a decision central to the second party insurers’ arguments on this appeal – described, at para. 36, the second branch of M.(K.): “A party relying on the defence must show a combination of delay and prejudice.”[^36]

[107] To rely on the doctrine of laches, a defendant must establish that in all the circumstances the delay was unreasonable and either that:

(1) The delay by the claimant constituted acquiescence of the defendant’s conduct; or

(2) The claimant’s delay resulted in actual prejudice to the defendant that would make the action unreasonable or unjust.[^37]

[108] The Supreme Court, at page 78 of M.(K.), explained what acquiescence means in the context of laches: “after the deprivation of her rights, and in the full knowledge of their existence, the plaintiff delays. This leads to an inference that her rights have been waived.”[^38]

[109] The evidentiary record does not permit me to express a view as to whether 2012 Inc. is able to satisfy the test for establishing the defence of laches. As noted above, the defence of laches, if raised by 2012 Inc. in its defence to Skylark’s Amended Claim for declaration, is an additional issue requiring trial.

h) Is there a genuine issue for trial?

[110] There are circumstances in the present case that may support the exercise of the court’s discretion to grant the declaratory relief requested. There is certain consequential relief that such a declaration might have entailed which, if granted, could have resulted in prejudice to 2012 Inc. by imposing financial obligations on it retroactively, in relation to dividend distributions, for example, that it could have avoided had it known in a timely manner that Skylark was asserting its ownership interest. Avoiding such prejudice is the principal rationale for the limitations applying to legal rights, contained in the Limitations Act, 2002, and the principle of latches, in relation to equitable remedies, including declaratory relief. Skylark has abandoned its claim for such consequential relief in its proposed Amended Claim.

[111] There is genuine value that Skylark would secure in having a declaration as to its beneficial ownership interest at this time. Such a declaration, if supportable by the evidence led at trial, and not precluded by the factors to be considered in relation to the defence of laches, would provide guidance to the parties in their future decisions. With the issue of Skylark’s ownership determined, 2012 Inc. would be able to govern its future conduct in such a way as to avoid unnecessary litigation in connection with Skylark’s rights, and 2012 Inc.’s obligations going forward, and thereby avoid costly litigation that could ensue if 2012 Inc. resisted Skylark’s legitimate claims for the issuance of share certificates to it, with the legal rights that being a registered owner would entail.

[112] A declaration as to Skylark’s ownership interest may facilitate Skylark’s assertion of legal rights in the future, but would not entitle it to retroactive consequential relief against 2012 Inc., which statutory limitation periods and the principle of latches are designed to avoid. The potential for future legal rights, including a beneficial owner’s statutory rights under the OBCA, and a share certificate-holder’s legal rights, if such certificates are issued to it, is not a reason to deny Skylark the declaratory relief it seeks, if its claim is supported by the evidence at trial.

[113] I find that there is a genuine issue for trial as to whether Skylark has a beneficial interest in 2012 Inc. A declaration of that interest could be made which would have value to Skylark without consequential relief. If Skylark is found to have a valid basis for a declaration as to its ownership, such declaration, being a form of equitable relief within the meaning of s. 16 of the Limitations Act, 2002, may not be statute-barred.

[114] Skylark’s proposed Amended Claim raises the following genuine issues for trial:

a) Did Skylark acquire a beneficial interest in 2012 Inc. when the parties signed the Equity Agreement?

b) If Skylark acquired such an interest, did the parties subsequently rescind the Equity Agreement when they entered into the Commission Agreement?

c) Did Skylark, in the full knowledge of its right to a declaration as to its 5% interest in 2012 Inc., delay claiming such a declaration, and did its delay result in actual prejudice to 2012 Inc.?

[115] As I noted above, the evidentiary record is inadequate to permit me to determine these issues on a motion for summary judgment. The record is also insufficient to permit me to determine the extent of evidence that is available to enable the court to determine the issues.

[116] The parties agreed that the issues of when the Operations Agreement and the Equity Agreement were entered into, and when the Commission Agreement was entered into, are in dispute but did not need to be determined for the purposes of the motion. Those issues will likely need to be addressed in order to determine what the parties’ intention was in entering into the Commission Agreement. It is my view that such findings should be made at trial.

[117] The determination as to whether the Commission Agreement was intended to replace only the Operations Agreement, or both that Agreement and the Equity Agreement, would undoubtedly require findings as to credibility of Mr. Minhas and Mr. Slattery.

[118] Additionally, there may be substantial financial evidence as to the value of the commissions provided to Skylark, in relation to the values of a 5% in each of Mr. Minhas’ corporations, to support either party’s position that the commission agreement was intended to replace only the Operations Agreement, or both the Operations Agreement and the Equity Agreement.

[119] Evidence may be required from other witnesses to explain Skylark’s delay and the impact that it may have had on the defendants. Such evidence could be extensive, and the material filed on this motion simply does not permit me to determine what how extensive it would be, whether hearing it on a motion for summary judgment would be practicable, and whether it would enable me to determine whether the defence of laches, if it the defendants raise it, applies.

[120] Given the potential complexity of the issues, and the amounts that may be at stake, it is my view that a trial would be the most efficient and proportionate manner of securing a determination of them. I find that the need for a trial cannot be avoided by using the new powers under Rules 20.04(2.1) and (2.2). Their use in the particular circumstances of this case would be contrary to the interests of justice and would not lead to a fair and just result, or serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole.

CONCLUSION AND ORDER

[121] For the foregoing reasons, it is ordered that:

1. The plaintiff’s motion for leave to amend its claim is allowed. The plaintiff shall deliver its Amended Claim by March 15, 2017.

2. The defendants’ motion for summary judgment is dismissed.

3. If the parties are unable to agree on costs, they may submit written arguments, not to exceed 4 pages, and a Costs Outline, by March 15, 2017.

Price J.

Released: February 27, 2017

Appendix A

Take-over or issuer bid

188. (1) If within 120 days after the date of a take-over bid or an issuer bid, the bid is accepted by the holders of not less than 90 per cent of the securities of any class of securities to which the bid relates, other than securities held at the date of the bid by or on behalf of the offeror, or an affiliate or associate of the offeror, the offeror is entitled, upon complying with this section, to acquire the securities held by dissenting offerees. R.S.O. 1990, c. B.16, s. 188 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, the French version of subsection (1) is amended. See: 2011, c. 1, Sched. 2, ss. 1 (13), 9 (2).

Shares of dissenting offeree

(2) An offeror may acquire the securities of any class to which the bid relates that are held by a dissenting offeree by sending, on or before the earlier of the sixtieth day following the termination of the bid and the one hundred and eightieth day following the date of the bid, an offeror’s notice to each dissenting offeree stating in substance that,

(a) offerees holding more than 90 per cent of the securities to which the bid relates other than securities held at the date of the bid by or on behalf of the offeror or an affiliate or associate of the offeror have accepted the bid;

(b) the offeror is bound to take up and pay for or has taken up and paid for the securities of the offerees who accepted the bid;

(c) a dissenting offeree is required to elect,

(i) to transfer his, her or its securities to the offeror on the terms on which the offeror acquired the securities of the offerees who accepted the bid, or

(ii) to demand payment of the fair value of his, her or its securities in accordance with subsections (13) to (21) by notifying the offeror within twenty days after receipt of the offeror’s notice;

(d) a dissenting offeree who does not notify the offeror in accordance with subclause (c) (ii) is deemed to have elected to transfer his, her or its securities to the offeror on the same terms that the offeror acquired the securities from the offerees who accepted the bid; and

(e) a dissenting offeree must send the certificates, if any, representing his, her or its securities to which the bid relates to the offeree corporation or, in the case of an issuer bid, to the offeror within twenty days after the dissenting offeree receives the offeror’s notice. R.S.O. 1990, c. B.16, s. 188 (2); 2000, c. 26, Sched. B, s. 3 (10); 2011, c. 1, Sched. 2, s. 1 (14).

Notice

(3) In the case of a take-over bid, concurrently with sending the offeror’s notice under subsection (2), the offeror shall send or deliver to the offeree corporation a copy of the offeror’s notice, which constitutes a demand under subsection 88 (1) of the Securities Transfer Act, 2006, that the offeree corporation not register a transfer with respect to each share held by a dissenting offeree. 2006, c. 8, s. 122.

Sending in share certificates

(4) A dissenting offeree to whom an offeror’s notice is sent under subsection (2) shall, within twenty days after receiving that notice,

(a) send the certificates, if any, representing his, her or its securities to which the take-over bid relates to the offeree corporation; or

(b) send the certificates, if any, representing his, her or its securities to which the issuer bid relates to the offeror. R.S.O. 1990, c. B.16, s. 188 (4); 2011, c. 1, Sched. 2, s. 1 (15, 16).

Payment by offeror

(5) Within twenty days after the offeror sends an offeror’s notice under subsection (2), the offeror shall pay or transfer to the offeree corporation the amount of money or other consideration that the offeror would have had to pay or transfer to all dissenting offerees if they had elected to accept the take-over bid under subclause (2) (c) (i). R.S.O. 1990, c. B.16, s. 188 (5).

Trust funds

(6) An offeree corporation is deemed to hold in trust for dissenting offerees the money or other consideration it receives under subsection (5), and the offeree corporation shall deposit the money in a separate account in a financial institution described in subsection (7.1) and shall place the other consideration in the custody of such a financial institution. 2007, c. 7, Sched. 7, s. 181 (1).

Same

(7) The offeror making an issuer bid is deemed to hold in trust for dissenting offerees the money or other consideration that the offeror would have had to pay or transfer to all dissenting offerees if they had elected to accept the issuer bid under subclause (2) (c) (i) and, within 20 days after the issuer sends an offeror’s notice under subsection (2), the issuer shall deposit any such money in a separate account in a financial institution described in subsection (7.1) and shall place the other consideration in the custody of such a financial institution within 20 days after the offeror sends an offeror’s notice under subsection (2). 2007, c. 7, Sched. 7, s. 181 (1).

Same

(7.1) A financial institution referred to in subsection (6) or (7) is,

(a) a bank or authorized foreign bank within the meaning of section 2 of the Bank Act (Canada);

(b) a corporation registered under the Loan and Trust Corporations Act;

(c) a credit union within the meaning of the Credit Unions and Caisses Populaires Act, 1994; or

(d) a retail association as defined under the Cooperative Credit Associations Act (Canada). 2007, c. 7, Sched. 7, s. 181 (1).

Notice of compliance

(8) Within ten days after the offeror complies with subsection (5) or subsection (7), as the case may be, the offeror shall give notice of the date of such compliance to all dissenting offerees. R.S.O. 1990, c. B.16, s. 188 (8).

Application to court

(9) At any time prior to the thirtieth day following the day upon which the offeror’s notice referred to in subsection (2) is sent to dissenting offerees, a dissenting offeree who has demanded payment of the fair value of his, her or its securities in accordance with subclause (2) (c) (ii) may apply to the court for an order requiring the person who has sent the offeror’s notice to provide, in such form as the court considers appropriate, such additional security for payment to dissenting offerees of the fair value of their securities as the court may determine to be necessary, pending the determination of such fair value. R.S.O. 1990, c. B.16, s. 188 (9).

Where shares deemed acquired

(10) The securities of all dissenting offerees shall be deemed to have been acquired by the offeror,

(a) where an application under subsection (9) has not been made within the time set out in subsection (9), upon the expiration of that time; or

(b) where an application has been made under subsection (9), upon compliance with the order made in respect of the application. R.S.O. 1990, c. B.16, s. 188 (10).

Duties of offeree corporation

(11) Within 10 days after the acquisition of the securities of dissenting offerees under subsection (10) by an offeror who has made a take-over bid, the offeree corporation,

(a) shall,

(i) issue to the offeror one or more security certificates in respect of the securities so acquired, or

(ii) if a resolution is passed by the directors under subsection 54 (2) with respect to any class and series of securities so acquired, issue to the offeror uncertificated securities in respect of the securities of such class and series so acquired and send the offeror the notice referred to in subsection 54 (3); and

(b) shall send to each dissenting offeree who elects to accept the take-over bid terms under subclause (2) (c) (i),

(i) the money or other consideration to which the dissenting offeree is entitled as payment for or in exchange for his, her or its securities, if,

(A) the dissenting offeree’s securities were uncertificated, or

(B) the dissenting offeree’s securities were represented by security certificates and the dissenting offeree has sent the certificates to the offeree corporation, or

(ii) if the dissenting offeree’s securities were represented by security certificates and the dissenting offeree has not sent the certificates to the offeree corporation, a notice stating in substance that,

(A) the certificates representing the dissenting offeree’s securities have been cancelled,

(B) the offeree corporation or a designated person holds in trust for the dissenting offeree the money or other consideration to which the dissenting offeree is entitled as payment for or in exchange for his, her or its securities, and

(C) the offeree corporation will, subject to subsections (13) to (21), send that money or other consideration to the dissenting offeree forthwith after receiving the certificates representing the dissenting offeree’s securities. 2011, c. 1, Sched. 2, s. 1 (17).

Payment by offeror

(12) Within 10 days after the acquisition of the securities of dissenting offerees under subsection (10) by an offeror who has made an issuer bid, the offeror shall send to each dissenting offeree who elects to accept the issuer bid terms under subclause (2) (c) (i),

(a) the money or other consideration to which the dissenting offeree is entitled as payment for or in exchange for his, her or its securities, if,

(i) the dissenting offeree’s securities were uncertificated, or

(ii) the dissenting offeree’s securities were represented by security certificates and the dissenting offeree has sent the certificates to the offeror; or

(b) if the dissenting offeree’s securities were represented by security certificates and the dissenting offeree has not sent the certificates to the offeror, a notice stating in substance that,

(i) the certificates representing the dissenting offeree’s securities have been cancelled,

(ii) the offeror or a designated person holds in trust for the dissenting offeree the money or other consideration to which the dissenting offeree is entitled as payment for or in exchange for his, her or its securities, and

(iii) the offeror will, subject to subsections (13) to (21), send that money or other consideration to the dissenting offeree forthwith after receiving the certificates representing the dissenting offeree’s securities. 2011, c. 1, Sched. 2, s. 1 (17).

Application to fix fair value

(13) If a dissenting offeree has elected to demand payment of the fair value of his, her or its securities under subclause (2) (c) (ii), the offeror may, in the case of a take-over bid, within twenty days after it has complied with subsection (5) or, in the case of an issuer bid, within twenty days after it has complied with subsection (7), apply to the court to fix the fair value of the securities of that dissenting offeree. R.S.O. 1990, c. B.16, s. 188 (13).

Idem

(14) If an offeror fails to apply to the court under subsection (13), a dissenting offeree may apply to the court for the same purpose within a further period of twenty days. R.S.O. 1990, c. B.16, s. 188 (14).

Where no application

(15) If no application is made to the court under subsection (13) or (14) within the periods set out in those subsections, a dissenting offeree is deemed to have elected to transfer his, her or its securities to the offeror on the same terms that the offeror acquired the securities from offerees who accepted the take-over or issuer bid and, provided that the dissenting offeree has complied with subsection (4), the issuer or the offeree corporation, as the case may be, shall pay or transfer to the dissenting offeree the money or other consideration to which the dissenting offeree is entitled. R.S.O. 1990, c. B.16, s. 188 (15).

Security for costs not required

(16) A dissenting offeree is not required to give security for costs in an application made under subsection (13) or (14). R.S.O. 1990, c. B.16, s. 188 (16).

Parties

(17) Upon an application under subsection (13) or (14),

(a) all dissenting offerees referred to in subclause (2) (c) (ii) whose securities have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and

(b) the offeror shall notify each such dissenting offeree of the date, place and consequences of the application and of the dissenting offeree’s right to appear and be heard in person or by counsel. R.S.O. 1990, c. B.16, s. 188 (17).

Idem

(18) Upon an application to the court under subsection (13) or (14), the court may determine whether any other person is a dissenting offeree who should be joined as a party, and the court shall then fix a fair value for the securities of all dissenting offerees. R.S.O. 1990, c. B.16, s. 188 (18).

Appointment of appraisers

(19) The court may appoint one or more appraisers to assist the court in fixing a fair value for the securities of each dissenting offeree. R.S.O. 1990, c. B.16, s. 188 (19).

Final order

(20) The final order of the court shall be made against the offeror in favour of each dissenting offeree. R.S.O. 1990, c. B.16, s. 188 (20).

What court may order

(21) In connection with proceedings under this section, the court may make any order it thinks fit and, without limiting the generality of the foregoing, it may,

(a) fix the amount of money or other consideration that is required to be held in trust under subsection (6) or (7);

(b) order that the money or other consideration be held in trust by a person other than,

(i) the offeree corporation, or

(ii) in the case of an issuer bid, the offeror corporation;

(c) allow a reasonable rate of interest on the amount payable to each dissenting offeree from the date the dissenting offeree sends his, her or its security certificates under subsection (4) until the date of payment; or

(d) order that any money payable to a dissenting offeree who cannot be found be paid to the Public Guardian and Trustee. R.S.O. 1990, c. B.16, s. 188 (21).

Section Amendments with date in force (d/m/y)

2000, c. 26, Sched. B, s. 3 (10) - 6/12/2000

2006, c. 8, s. 122 - 1/01/2007

2007, c. 7, Sched. 7, s. 181 (1) - 1/10/2009

CTS 30 AU 10 - 1

2011, c. 1, Sched. 2, s. 1 (13) - not in force; 2011, c. 1, Sched. 2, s. 1 (14-17) - 31/12/2015

Where corporation required to acquire securities

189. (1) Where 90 per cent or more of a class of securities of a corporation, other than debt obligations, are acquired by or on behalf of a person, the person’s affiliates and the person’s associates, then the holder of any securities of that class not counted for the purposes of calculating such percentage shall be entitled in accordance with this section to require the corporation to acquire the holder’s securities of that class. R.S.O. 1990, c. B.16, s. 189 (1).

Notice

(2) Every corporation, within thirty days after it becomes aware that security holders are entitled to require it to acquire their securities under subsection (1), shall send a written notice to each such security holder that the security holder may within sixty days after the date of such notice require the corporation to acquire his, her or its securities. R.S.O. 1990, c. B.16, s. 189 (2).

Idem

(3) The notice sent by the corporation under subsection (2) shall,

(a) set out a price that the corporation is willing to pay for the securities;

(b) give the basis for arriving at the price;

(c) state the location where any supporting material used for arriving at the price may be examined and extracts taken therefrom by the security holder or a duly authorized agent; and

(d) state that if the security holder is not satisfied with the price offered by the corporation in the notice, the security holder is entitled to have the fair value of his, her or its securities fixed by the court. R.S.O. 1990, c. B.16, s. 189 (3).

Election by security holder

(4) Where a security holder receives a notice under subsection (2) and wishes the corporation to acquire his, her or its securities, the security holder may, within sixty days after the date of the notice,

(a) elect to accept the price offered by the corporation by giving notice of acceptance to the corporation and by forthwith sending his, her or its security certificates to the corporation; or

(b) notify the corporation that the security holder wishes to have the fair value of his, her or its securities fixed by the court. R.S.O. 1990, c. B.16, s. 189 (4).

Application to fix fair value

(5) Where a security holder wishes to have the fair value of his, her or its securities fixed by the court, the corporation shall make an application to the court within ninety days after the date of the notice under subsection (2). R.S.O. 1990, c. B.16, s. 189 (5).

Idem

(6) If a corporation fails to send notice under subsection (2), a security holder, after giving the corporation thirty days notice of intention so to do, may apply to the court to have the fair value of his, her or its securities fixed. R.S.O. 1990, c. B.16, s. 189 (6).

Idem

(7) If a corporation fails to make an application to the court as required under subsection (5), a security holder may make the application. R.S.O. 1990, c. B.16, s. 189 (7).

Parties

(8) Upon an application to the court under subsection (5), (6) or (7),

(a) all security holders who have notified the corporation under clause (4) (b) may be joined as parties as the court thinks fit and, if so joined, are bound by the decision of the court; and

(b) the corporation shall notify each security holder entitled to notice under subsection (2) of the date, place and purpose of the application and of the security holder’s right to appear and be heard in person or by counsel. R.S.O. 1990, c. B.16, s. 189 (8).

Idem

(9) Upon an application to the court under subsection (5), (6) or (7), the court may determine whether any security holders should properly be sent or have been sent notice and whether such security holders should be joined as parties. R.S.O. 1990, c. B.16, s. 189 (9).

Appointment of appraiser

(10) The court may appoint one or more appraisers to assist the court in fixing a fair value for the securities. R.S.O. 1990, c. B.16, s. 189 (10).

Final order

(11) The final order of the court shall be made against the corporation in favour of each entitled security holder. R.S.O. 1990, c. B.16, s. 189 (11).

Security not required

(12) A security holder requesting the court to fix the fair value of his, her or its securities is not required to give security for costs on the application. R.S.O. 1990, c. B.16, s. 189 (12).

Costs

(13) The costs under this section shall be on a substantial indemnity basis. 2011, c. 1, Sched. 2, s. 1 (18).

CITATION: Skylark v. Minhas, 2017 ONSC 1328

COURT FILE NO.: CV-12-2249-00

DATE: 2017-02-27

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

SKYLARK HOLDINGS LIMITED

Plaintiff

• and –

MOHINDER MINHAS, 20112111 ONTARIO INC. and 295181 CANADA INC.

Defendants

REASONS FOR ORDER

Price J.

Released: February 27, 2017

[^1]: Harrison v. Antonopoulos, 2002 28725 (ON SC), [2002] O.J. No. 4890

[^2]: Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, at paras. 41-44

[^3]: Hryniak v. Mauldin, 2014 SCC 7 [Hyrniak]

[^4]: Bruno Appliances and Furniture Inc. v. Hryniak, 2014 SCC 8

[^5]: Sweda Farms v. Egg Farmers of Ontario, 2014 ONSC 1200, at para. 32

[^6]: Hryniak,at para. 49

[^7]: Hryniak, at para. 58

[^8]: Hryniak, at para. 66

[^9]: Hryniak, at para. 66

[^10]: Hamilton Kilty Hockey Club Inc. v. Ontario (Attorney General), (2003), 2003 24429 (ON CA), 64 O.R. (3d) 328 at para. 20.

[^11]: Spencer v. Tom and Jerry's Bistro, 2009 16583 (ON SC), para. 24

[^12]: Grant v. Grant, 2001 27938 (ON CA)

[^13]: Joan E. Jung, Canadian Tax Foundation – 2007 Ontario Tax Conference (Toronto: Canadian Tax Foundation)

[^14]: See section 141, OBCA.

[^15]: Joan E. Jung, Canadian Tax Foundation – 2007 Ontario Tax Conference (Toronto: Canadian Tax Foundation), p. 3-4

[^16]: Canada Business Corporations Act, R.S.C. 1985, c. C-44, s. 51(1); Business Corporations Act, R.S.O. 1990, c. B.16, s. 67(1); Montgomery v. Wrights Ltd. (1917), 38 O.L.R. 335 (Ont. H.C.).

[^17]: Tough Oakes Gold Mines Ltd. v. Foster (1917), 1917 514 (ON SC), 39 O.L.R. 144 (Ont. H.C.); Lovibond v. Grand Trunk Railway (1939), 1939 69 (ON CA), [1939] O.R. 305 (Ont. C.A.) (acquisition of shares as between vendor and purchaser not being same thing as entry of sale or transfer on share register of company; former governing in equity right of property as between vendor and purchaser or between transferor and transferee, latter appertaining to voting and dividend rights of vendee or transferee).

[^18]: Montgomery v. Wrights Ltd. (1917), 38 O.L.R. 335 (Ont. H.C.); Kennedy v. Williams (1937), 75 Que. S.C. 65.

[^19]: CED Business Corporations V.10 (Ontario), Canadian Encyclopedic Digest, Business Corporations (Ontario), V — Finance, 10 — Transfer of Shares, para. 405

[^20]: Canada Business Corporations Act, R.S.C. 1985, c. C-44 ("CBCA")

[^21]: Csak v. Aumon, 1990 ONSC 8070, at paras. 7 and 8

[^22]: Paragon Development Corporation v. Sonka Properties Inc., 2011 ONCA 30, at paras. 3 to 4

[^23]: Limitations Act, 2002, S.O. 2002, c. 24

[^24]: Solosky v. R. (1979), 1979 9 (SCC), [1980] 1 S.C.R. 821, [1979] S.C.J. No. 130, at p. 830.

[^25]: Harrison v. Antonopoulos, 2002 28725 (ON SC), 62 O.R. (3d) 463, paras. 27-28

[^26]: LeBar v. Canada (1988), 1988 9391 (FCA), [1988] F.C.J. No. 940, [1989] 1 F.C. 603, (Fed. C.A.) at para. 10

[^27]: Maurice v. Alles, 2016 ONCA 287, paras. 36, 43 and 49

[^28]: Limitations Act, 2002, S.O. 2002, c. 24, Sched. B., s. 24

[^29]: McMurtry v. McMurtry, 2016 ONSC 2853, paras. 134 to 135

[^30]: McMurtry v. McMurtry, above, paras. 138 to 140.

[^31]: McMurtry v. McMurtry, above, paras. 140 to 142

[^32]: Re Grant Forest Products Inc. 2010 ONCA 355, paras 14-17.

[^33]: M.(K.) v. M.(H.), 1992 31 (SCC), [1992] 3 S.C.R. 6, at p. 76

[^34]: Haldenby v. Dominion of Canada General Insurance Co., 2001 ONCA 16603

[^35]: M. (K.) v. M. (H.), 1992 31 (SCC), [1992] 3 S.C.R. 6, 96 D.L.R. (4th) 289 at pp. 28-30 S.C.R., pp. 301-02 D.L.R, since cited by the Ont. C.A. in Haldenby v. Dominion of Canada General Insurance Co., 2001 16603 (ON CA), per Labrosse and Feldman JJ.A., at paras. 17 and 18

[^36]: Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, [2013] 1 S.C.R. 623, at paras. 145-46

[^37]: Manitoba Metis, at paras. 145-46; M.(K.), at pp. 76-78; Perry, at para. 36; Lindsay Petroleum, at pp. 239-240, N.A.P.E. v. Memorial University of Newfoundland (1995), 1995 10527 (NL SCTD), 132 Nfld. & P.E.I.R. 205 (N.L. T.D.), aff’d (1998), 1998 18020 (NL CA), 167 Nfld. & P.E.I.R. 72 (N.L. C.A.), at paras. 42, 44, 49-50, 52-55.

[^38]: M.(K.) v. M.(H.), at p. 78