Court File and Parties

COURT FILE NO.: CV-19-80062 DATE: 2020/06/16 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

CHASE WONG Applicant – and – 10658987 CANADA INC., MIN ZHOU, also known as ANNA ZHOU and GUO JIE MA, also known as SAM JIE Respondents

Counsel: Robert J. De Toni, for the Applicant Patricia A. Lawson, for the Respondents

HEARD: June 11 and 15, 2020

Endorsement

[1] This endorsement is in follow up to the court’s ruling on a motion by Chase Wong for interim injunctive and non-injunctive relief pursuant to the oppression remedy provisions of the Canada Business Corporations Act, R.S.C. 1985, c. C-44: Wong v. 10658987 Canada Inc. et al., 2020 ONSC 2469 (“the Ruling”). The motion for interim injunctive relief was dismissed; the motion for non-injunctive relief was granted.

[2] Prior to the return of the motion, the parties entered into an undertaking with respect to the continuing operation of the respondent numbered company (“106 Canada”) and the relationship between the parties. In granting the interim, non-injunctive relief, the court did not wish to interfere in matters about which the parties had already agreed and that would be relevant pending a final determination of the related application (Court File No. 19-81726). The parties were therefore given the opportunity to resolve the terms of the order to be made.

[3] The parties were unable to do so, and a case conference was convened. With the assistance of the court, the parties agreed upon the terms of the order. Taking into consideration contents of the Ruling and the consent of the parties, an order is to be issued and entered on the following terms:

1. THIS COURT ORDERS that the motion for an interim injunction is dismissed.

2. THIS COURT ORDERS that 1065987 Canada Inc. (“106 Canada”), shall remain the sole owner of the properties known municipally as 347 Main Street, 448 Kent Street, and 99 Adeline Street, all in the City of Ottawa (collectively referred to as “the Properties”).

3. THIS COURT ORDERS that, pending a final determination of the application bearing court file no. CV-19-81726 (“Proceeding”), 106 Canada shall provide Chase Wong with an accounting, of both the income and expenses attributable to each of the Properties, commencing on July 15, 2020 and every three months thereafter.

4. THIS COURT ORDERS that, pending a final determination of the Proceeding, 106 Canada is prohibited from relying on any of the Properties as security (a) for any purpose other than an encumbrance related to reasonable repair and renovation of one or more of the Properties, and (b) without the consent of Chase Wong or a further order of the Court.

5. THIS COURT ORDERS that 106 Canada is permitted to sell any of the Properties subject to the following terms: a) The following payments shall be made from the proceeds of sale of the Properties (“Proceeds”): i) Payment of any outstanding property taxes; ii) Payment and discharge of any mortgages currently registered against title to the Properties; iii) Payment of the listing agent’s commission; iv) Reasonable legal fees and disbursements incurred on the sale; and v) Normal closing adjustments. b) The Respondents shall, within 60 days of the date of the closing of the sale of any of the Properties, provide Chase Wong with an accounting for the Proceeds; and c) The balance of the Proceeds of sale shall be held, by counsel for the respondents, in trust for 106 Canada, in an interest-bearing account, pending an agreement between the parties or a further order of the Court as to the distribution of the balance of the Proceeds; and d) If, within 90 days of the date of closing of the sale of any of the Properties, the parties are unable to agree upon the distribution of the balance of the Proceeds, then any of the parties may bring a motion to the Court for directions.

6. THIS COURT ORDERS that, with respect to the continuing operation of 106 Canada, the Respondents are prohibited from: a) issuing or transferring any shares; b) distributing or disposing of any funds, other than in the ordinary course of business; c) declaring and/or paying any dividends; d) purchasing any additional properties; e) converting any one of the Properties to anything other than their existing use; and f) dissolving the corporation.

7. THIS COURT ORDERS that in the event the parties are unable, by Friday, July 17, 2020, to resolve the issue of costs of the motion, written submissions with respect to costs shall be delivered in accordance with the endorsement of this Court dated June 16, 2020.

Costs

[4] In the event the parties are unable, by Friday, July 17, 2020, to resolve the issue of costs of the motion, written submissions shall be delivered as follows:

a) The submissions shall be limited to a maximum of four pages, exclusive of a bill of costs; b) Written submissions shall comply with Rule 4 of the Rules of Civil Procedure; c) Written submissions shall include hyperlinks to any case law or other authorities; d) Any party seeking costs shall deliver their costs submissions by 4:00 p.m. on Friday, July 31, 2020; e) Submissions, if any, in response shall be delivered by 4:00 p.m. on Friday, August 14, 2020; f) All submissions shall be filed electronically in accordance with the protocols of the court for electronic filing.

Other Matters

[5] Both on the return of the motion and during the case conference, the respondents raised an issue related to the preparation of financial statements and the completion of tax returns for 106 Canada. It is the respondents’ position that Mr. Wong has failed to satisfy an undertaking given, at his examination for discovery, to provide the respondents with an accounting for monies he received during the time that he was managing the Properties. The respondents sought to include a term in that regard in the order related to Mr. Wong’s motion.

[6] Undertakings that remain outstanding from and refusals given at examinations for discovery are issues separate and apart from those determined on the applicant’s motion. If the parties require relief in that regard, a separate motion must be brought.

[7] If the respondents intend to bring a motion for relief related to the completion of their financial statements and tax returns, they may bring that motion before me. That motion is not, however, to include relief related to undertakings and refusals generally. As discussed with counsel for the parties, given the suspension of usual operations of the court, parties are encouraged to resolve matters such as undertakings and refusals without resort to the court.

Madam Justice Sylvia Corthorn Released: June 16, 2020