COURT FILE NO.: CV-21-00002482

DATE: 2021-10-04

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: 1852998 Ontario Ltd., and 11877658 Canada Inc. o/a Cannaco the Cannabis Company, Applicants

AND:

Halton Condominium Corporation No. 227, Respondent

BEFORE: Kurz J.

COUNSEL: Shawn Pulver, for the Applicant Erik Savas, for the Respondent

HEARD: September 13, 2021

ENDORSEMENT

Introduction:

[1] The Applicants (“Cannaco”) move against the condominium corporation housing its business, the Respondent, Halton Condominium Corporation No. 227 (“HCC 227”). Cannaco seeks to stay the final consent order of Skarica J. of March 16, 2021 (“the Skarica order”). That order was granted in a separate proceeding between the parties, heard in Hamilton. The key term of the Skarica order called for Cannaco to “permanently cease from engaging in any and all cannabis related business activities from [the premises of HCC 227] by no later than August 31, 2021 (‘the Closure’)” [underlined in the original order].

[2] The Skarica order also prohibited Cannaco “and any persons having an interest in these entities…[from] apply[ing] to this Court to extend the Closure and no such request shall be considered by this Court under any circumstances.” It also contained a term making its terms “immediately enforceable” if Cannaco should fail to comply with the terms of the Closure.

[3] At the heart of this dispute is an HCC 227 rule prohibiting the retail sale of cannabis related products within its units and common areas (“the cannabis rule”). As set out below, the propriety of the cannabis rule and the vote to uphold it was confirmed in a lengthy arbitration decision, which was upheld on a motion for leave to appeal.

[4] About five months after consenting to the Skarica order, Cannaco attempted to convince HCC 227 to repeal the cannabis rule. It requisitioned a general meeting of all owners of HCC 227 condominium units, which was held on August 25, 2021. At that time, its request was rejected by a vote of 15 - 7, with two abstentions.

[5] In this application, Cannaco challenges the process of that meeting and seeks yet another meeting, under different procedural rules of its choosing. In this motion, it seeks to stay the Skarica order until its application is heard.

[6] For reasons that follow, I dismiss this motion.

Background:

[7] The Applicant, 1852998 Ontario Limited is an Ontario corporation which owns four units in HCC 227 (“the Cannaco units”). The Applicant, 11877658 Canada Inc. operating as Cannaco the Cannabis Company, is an Ontario corporation, created to operate as a cannabis store. Both corporations are controlled by their sole shareholder and directing mind, Lien Sen. While the two corporations have different roles in the operation of a cannabis retail business controlled by Ms. Sen, their separate existence is irrelevant to the issues raised in this motion. Accordingly, and for ease of convenience, I refer to them jointly as “Cannaco”).

[8] HCC 227 is a condominium corporation located at 547 & 555 Main Street East, Milton, Ontario. The Cannaco units are located at that address.

[9] HCC 227 passed the cannabis rule on April 24, 2020. On May 13, 2020, Ms. Sen, on behalf of Cannaco, submitted a requisition for an HCC 227 owners meeting in order to challenge the passage of the cannabis rule. The day before that meeting was held, on June 16, 2020, Cannaco began to sell cannabis related retail products from its HCC 227 units, in a “soft launch” for family and friends.

[10] The following day, on June 17, 2020, the HCC 227 owners meeting requisitioned by Cannaco was held (“the first meeting”). Cannaco’s motion to rescind the cannabis rule was defeated by a vote of 17 - 10.

[11] Shortly thereafter, Cannaco commenced a proceeding in Hamilton’s Superior Court to challenge that decision. It alleged procedural irregularities in the first meeting and the impropriety of the cannabis rule itself. By order of Carpenter-Gunn J. of May 10, 2021, the issue was referred to arbitration before the Honourable Robert A. Blair, Q.C., formerly of the Court of Appeal for Ontario. After a two-day hearing and in a detailed 54-page decision, Mr. Blair dismissed Cannaco’s application.

[12] Mr. Blair found that the cannabis rule was validly enacted. Further, the reasons for that enactment, the safety and security of the people and premises in HCC 227, were also valid. He further found that Cannaco’s cannabis business was not entitled to be “grandfathered”; that is, allowed to operate despite the cannabis rule. Mr. Blair ordered Cannaco to obey the cannabis rule by immediately and permanently ceasing operations. On December 23, 2020, Mr. Blair granted Cannaco’s request to extend its closure date to January 5, 2021, in order to allow it to wind down its cannabis business in an orderly manner.

[13] Cannaco moved to for leave appeal the Blair arbitration award. On January 4, 2021, Mr. Justice Goodman dismissed Cannaco’s motion. However, he granted Cannaco’s request to extend the closure date to March 15, 2021, due to the pandemic. Again, this relief was granted to permit the orderly wind-down of Cannaco’s cannabis business and dispose of its inventory.

[14] On March 4, 2021, Mr. Blair issued his ruling respecting the costs of the arbitration. He the fixed the costs payable by Cannaco at $110,776.36. Mr. Blair ordered that those costs may be enforced by HCC 227 against any of the Cannaco units, as common expenses. In other words, HCC 227 was entitled to a lien against Cannaco’s if the costs were not paid. Mr. Blair’s costs award allowed Cannaco a $8,471.40 set off for the amount that it already paid as a special assessment for the costs of the litigation.

[15] In March 2021 Cannaco moved again in the Hamilton proceeding, for a third extension of the time to close its cannabis business. This time, the parties reached the agreement for the permanent closure of Cannaco’s cannabis business and the prohibition of further extension of the final closure date. That agreement was incorporated into the Skarica order of March 16, 2021.

[16] On May 10, 2020, Cannaco moved yet again, on an urgent basis, to enjoin HCC 227 from enforcing the arbitration costs award through its unpaid common expense lien rights. That motion was dismissed by Justice Carpenter-Gunn, with costs fixed at $14,000. She also made those costs of the motion enforceable as common expenses against the Cannaco units.

[17] On July 20, 2021, about six weeks before the Skarica order required it to permanently cease its cannabis retail business, Cannaco completed a requisition to call and hold a meeting of owners of HCC. The meeting was called to consider Cannaco’s request to repeal the cannabis rule. Cannaco asked that the owners meeting take place within the next two weeks.

[18] On July 23, 2021, Cannaco submitted a letter to HCC 227, setting out the rationale for its request to reverse the cannabis rule. It also requested that HCC 227 implement a new rule for holding the vote at the meeting. That process it sought significantly differed from the one of the first meeting. Whereas the first meeting allowed proxy votes, the proposed process eliminated them. Instead, Cannaco proposed using a third-party voting platform to allow for confidential electronic or telephone voting. It would also enable owners to change their votes during the meeting. Cannaco offered to pay the potentially expensive costs of that process.

[19] The board of HCC 227 did not accept Cannaco’s procedural request. But while its Preliminary Notice of Meeting of Owners did not include Cannaco’s July 23, 2021 letter, HCC 227’s August 13, 2021 meeting package included it. Neither document referred to Cannaco’s request to adopt a different voting procedure at Cannaco’s expense.

[20] On August 15, 2021, Cannaco’s counsel, offered on its behalf to pay HCC $50,000.00, to be allocated as it saw fit, in return for overturning the cannabis rule. The offer was not accepted.

[21] The meeting requested by Cannaco was held on August 25, 2021 (“the second meeting”). It was held pursuant to the same rules that applied at the first meeting. Three hours before the second meeting began, Cannaco’s counsel requested that it be adjourned. He cited an allegation that one voter had potentially been “intimidated” and that another had requested information in advance of the meeting. Counsel asked for the time to investigate those allegations and to advocate for the third-party voting process that his client was proposing.

[22] The unit owners voted 18-6 to refuse to adjourn the meeting. They then voted 15-7 against repealing the cannabis rule, with two owners abstaining. Soon thereafter, Cannaco commenced this application and brought this stay motion

Issues:

[23] This motion raises the following issues:

1. What is the applicable test for a stay of the Skarica order?

2. Should the Skarica order be stayed in the circumstances of this case?

Issue No. 1: What is the applicable test for a stay of the Skarica order?

[24] The jurisdiction to grant a stay of an order is found in s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA s. 106”), which reads as follows:

A court, on its own initiative or on motion by any person, whether or not a party, any stay any proceeding in the court on such terms as are considered just.

[25] The ordinary test for a stay of a proceeding is the well-known three-part test found in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311, at para. 43 as follows:

1. Serious issue to be tried;

2. Irreparable harm to the applicant if the request is denied;

3. Balance of convenience between the parties: “which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits.”

[26] However, this is not an ordinary stay motion. It is not, for example, a request to stay a proceeding pending an arbitration, or because there is a parallel proceeding in another venue, or to stay the enforcement of an order pending appeal. Rather, it is a request to stay a final consent order in another proceeding. That rationale for the stay request is not any impropriety in the manner of obtaining the original order. It is not even a request to stay an abusive form of enforcement of the previous order, because HCC 227 has not yet taken any enforcement steps against Cannaco. Rather the rationale for the stay is that events that have occurred since that order was made which do not affect the validity or propriety of the previous order. There appear to be no precedents for staying such an order.

[27] For that reason, HCC 227 says that a more stringent test than the ordinary three-part RJR MacDonald test applies. It points to the two-part test set out in the decision of the Divisional Court in 1247902 Ontario Inc. v. Carlisle Power Systems Ltd., [2003] O.J. No. 6300 (Div. Ct.); affirmed [2005] O.J. No. 118 (C.A) (“Carlisle”). The Carlisle rule has been adopted in a number of subsequent cases.

[28] In Carlisle, the Divisional Court was asked to reverse the stay of a twelve-year old default judgment granted by the motions judge below. It set out the issues before it as: 1) whether the Superior Court has jurisdiction to stay enforcement of a final judgment not involving an appeal or a counterclaim; and 2) if there is such jurisdiction, what principles should guide a judge in the exercise of discretion?

[29] Writing for the Divisional Court, Cunningham A.C.J.S.C.J. found that this court possesses that jurisdiction. He did so by extending the term “proceeding”, set out in CJA s. 106, to include the execution after judgment process. But, “clearly the bar has been set very high” (para. 8) and the court’s “discretion ought to be used very sparingly” (para. 10).

[30] The two-part test for the exercise of that discretion set out in Carlisle was:

1. would the refusal to grant a stay be oppressive or vexatious or an abuse of process of the court? and

2. would the stay cause an injustice to the plaintiff?

[31] On appeal, the Ontario Court of Appeal upheld the Divisional Court’s reversal of the motion judge’s stay. However, it neither adopted nor rejected the Divisional Court’s two-part test. Rather, it assumed, without deciding, that the RJR MacDonald test applied and left the determination of the exact test to another day. The Court of Appeal concluded “whatever the appropriate test may be determined to be in other cases, in this case, on any test, the appellant is not entitled to a stay.” As Glustein J. astutely pointed out in Zenith Aluminum Systems Ltd. v. 2335945 Ontario Inc., 2021 ONSC 1128, (“Zenith”) at para. 51, the Court of Appeal in Carlisle found that the stay should not be granted, even under the less stringent RJR MacDonald test. Therefore it was unnecessary to consider the application of the Divisional Court’s more restrictive test.

[32] In Gruner v. McCormack, [2000] O.J. No. 789, 45 C.P.C. (4th) 273 (S.C.J.) (“Gruner”), Epstein J., as she then was, adopted the substance of the Carlisle test without relying upon that decision. Epstein J. was required to determine whether an action should be stayed because of a parallel proceeding in a religious court. After a careful review of previous authorities, she wrote at para. 30:

30 An analysis and reconciliation of these cases discloses a theme that takes me to the test to be applied in considering how the Court's discretion ought to be exercised in ordering a stay under s. 106 of the Courts of Justice Act. To justify a stay, the defendant must satisfy the Court that continuance of the action would work an injustice because it would be oppressive or vexatious or an abuse of the process of the Court and that the stay would not cause an injustice to the plaintiff. See: Kelly v. Hays (1994), 1994 7517 (ON SC), 120 D.L.R. (4th) 746 (Gen. Div.).

[33] In Buttarazzi v. Buttarazzi (2009), 2009 80136 (ON SC), 84 R.F.L. (6th) 240 (Ont. S.C.), at para. 53 McGee J. granted a stay of a judgment obtained in estate litigation, where she found that a husband’s consent to a judgment in that proceeding represented an abuse of process, designed to improperly defeat the wife’s matrimonial claims. In doing so, she explicitly relied on the Divisional Court’s two-part test for a stay in Carlisle.

[34] Two subsequent Court of Appeal decisions have also adopted the test set out in Carlisle and Gruner. The first such case was Yaiguaje v. Chevron Corporation, 2013 ONCA 758, 370 D.L.R. (4th) 132, aff'd 2015 SCC 42, [2015] 3 S.C.R. 69 (Yaiguaje), a case about the enforcement of a foreign judgment. There, MacPherson J.A., writing for the Court of Appeal, directly referenced the two-part test found in both Carlisle and Gruner. He did so in the context of a stay originally imposed by a motions judge on their own initiative. But he opined that the test should be at least as strict as that in Gruner and Carlisle, writing at para. 55, that:

the onus should be equally high [as it is in Gruner], and should be applied perhaps even more stringently, when, as here, a stay has not been requested. This is particularly true in the context of a recognition and enforcement action”: see 1247902 Ontario Inc. v. Carlisle Power Systems Ltd., [2003] O.J. No. 6300, 2003 CarswellOnt 6433 (Div. Ct.).

[35] It is apposite to this case that MacPherson J. spoke of the need for rigour in the context of the recognition and enforcement of previous orders, in that case, even a foreign order.

[36] While the Supreme Court of Canada upheld the Court of Appeal’s decision in Yaiguaje, it dealt only with issues relevant to the recognition and enforcement of a foreign judgment against a non-Canadian party. It did not comment on the stay issue.

[37] In Peerenboom v Peerenboom, 2020 ONCA 240, the Court of Appeal dealt with an issue similar to the one that confronted McGee J. in Buttarazzi. The court was requested to stay the enforcement of a “friendly” judgment against a family litigant, obtained by his parent. That judgment would reduce his equalization obligations to his wife. On behalf of the Court, van Rensburg J.A. again adopted the Carlisle and Gruner test and cited Yaiguage as well, writing:

34 A stay of execution of a judgment may be granted in rare circumstances where the conduct of the judgment creditor is oppressive or vexatious or an abuse of process of the Court, and where the stay would not cause an injustice to the plaintiff: 1247902 Ontario Inc., at paras. 8, 10, citing Gruner v. McCormack (2000), 45 C.P.C. (4th) 273 (Ont. S.C.), at para. 30, per Epstein J. This test for the stay of proceedings was cited with approval by this court in Yaiguaje v. Chevron Corporation, 2013 ONCA 758, 370 D.L.R. (4th) 132, at paras. 54-55, aff'd 2015 SCC 42, [2015] 3 S.C.R. 69, a case involving the stay of an action for the enforcement of a foreign judgment.

[38] The court stayed the judgment against the husband because it amounted to an abuse of process, doing indirectly what the husband could not do directly: placing his property out of the reach of the wife or the court adjudicating her claims against him.

[39] Most recently, in Zenith, Glustein J. applied both the two-part Carlisle test and the RJR MacDonald test, to stay an arbitral award.

[40] While HCC 227 relied predominantly on the Carlisle test, in its factum, Cannaco argued that it meets both the Carlisle and the RJR MacDonald tests.

[41] I agree with counsel for HCC that the Carlisle test is the appropriate one here. That is because the court is dealing with the enforcement of a validly obtained judgment; more so when the judgment was recently obtained on consent and with the benefit of independent legal advice.

[42] Nonetheless, on an abundance of caution and in the event that I am incorrect regarding the appropriate test, I will also consider the motion under the RJR MacDonald tests as well.

Issue No. 2: Should the Skarica order be stayed in the circumstances of this case?

[43] Very simply, I cannot see how the enforcement of the Skarica order can meet the necessarily high bar of “oppressive or vexatious or an abuse of process of the court”. As set out above, Cannaco agreed to that order just six months ago, with the assistance of its present, very capable counsel. It did so in circumstances that it has not attempted to impeach. It has neither attempted to appeal that order, nor has it offered any grounds to question the propriety of that order. In other words, nothing in the manner of obtaining the order or in its terms meets the first part of the Carlisle test.

[44] Further, it cannot be ignored that the Skarica order represented a deliberate and well-considered compromise for both parties. Cannaco received a third extension, for approximately five months, of the arbitrator’s original December 18, 2020 closure date. Cannaco is unlikely to have received a further extension without consent inasmuch as it had already obtained two previous ones. Both previous extensions were ostensibly intended to allow it to wind up its cannabis retail business in the Cannaco units. But that indulgence came at a fairly negotiated cost. The quid pro quo required Cannaco to cease all of its operations on August 31, 2021 and not ask for an extension. Yet the stay that it now seeks, represents such an extension, in substance if not in form.

[45] Refusing to grant a stay of the Skarica order because of events that occurred more than five months after it was issued, and which are unrelated to its underlying process or validity, cannot be seen as “oppressive or vexatious or an abuse of process of the court.” Nor can Cannaco refer to an oppressive, vexatious or abusive form of enforcement by HCC 227 because it has taken no steps to enforce the Skarica order other than defending this motion. The fact that Cannaco failed to persuade a majority of HCC 227 unit holders to repeal the cannabis rule after a year and a half of litigation confirmed its validity does not meet the first part of the Carlisle test. Nor does the fact that the process that led to the refusal was the same one that led to each of the Blair award, the Goodman decision and the Skarica order.

[46] No authority presented to this court supports the notion that HCC 227 had an obligation to conduct the second meeting in the manner requested by Cannaco or to accept its $50,000 offer. Further, it had no obligation to accept Cannaco’s rationale for setting aside its cannabis rule, particularly after Mr. Blair found, as set out below, that there is evidence to support at least part of its rationale.

[47] Further, HCC 227 would be prejudiced by a stay. As Mr. Blair, found:

As also noted above, there is evidence supporting at least some of the expressed concerns, in my view. The flip side of the compliance-with-all-regulatory- requirements coin is that those requirements are there in the first place because significant risks of criminal-element activity, break-ins, thefts etc. exist. The debate around insurance confirms that to be the case. So, as well, does the fact that Ms. Sen installed a more sophisticated security system for the retail cannabis operation than she had had in place for her appliance business; these measures included sixteen cameras inside and outside, the implementation of a security protocol for employees and the installation of a panic button to be used by employees should the need arise. At the same time – although it may not be the strongest of direct evidence – Mr. Wiebe’s testimony of post-operation complaints from at least two individuals who operate businesses in an adjacent plaza concerning parking issues and loitering provides some confirmation for at least some of the Board’s initial concerns. In addition, the interchange between Ms. Sen and Board members in November 2018 regarding her potential rental to a yoga studio also affirms that parking and traffic issues were known concerns when new uses were contemplated.

[Emphasis added.]

[48] HCC 227 has spent a great deal of time and money fighting Cannaco’s unsuccessful, multi-pronged attack on its cannabis rule. It entered into an agreement to finally and completely end the litigation and Cannaco’s attempts to extend the time for it to close its cannabis business. That would be for naught if a stay were granted and HCC 227 were, in effect, back to square one. While formally, this is a request for a stay rather than an extension, the result would be the same. I do not see how that would be fair or just to HCC 227, after it agreed to a lengthy, third extension of the closure order in the good faith belief that the extension would end the litigation.

[49] I agree with the following comment contained in HCC 227’s factum for this motion:

Indeed, if the [Skarica] Closure Order was stayed, thus permitting the cannabis business to continue to operate without restriction, this would be an unmitigated injustice to the Corporation since it would render the Closure Order meaningless when the Arbitrator had concluded that the Cannabis Rule was validly enacted, for valid reasons to promote the safety and security of the persons and assets, and effective to prevent Ms. Sen’s business from operating.

[50] Accordingly, the request for a stay does not meet the Carlisle test.

Application of the RJR MacDonald Test

[51] In the event that I am wrong about the application of the Carlisle test to this motion, I now consider it within the context of the RJR MacDonald test.

[52] HCC 227 argues that if I enter into that consideration, the first prong of the RJR MacDonald test should be modified because of the unusual nature of the relief sought. Rather than looking to the existence of a serious issue, HCC 227 argues that the first prong of the test should require the more rigorous requirement of a strong likelihood of success. In saying this, it cites the decision Supreme Court of Canada in R. v. Canadian Broadcasting Corp., 2018 SCC 5, [2018] 1 SCR 196, (“R. v. CBC”). There, at para. 13 Brown J., writing for the court, states that the general framework of RJR MacDonald test “is, however, just that – general”. He points out that the court in RJR MacDonald itself “identified two exceptions which may call for ‘an extensive review of the merits’ at the first stage of the analysis”.

[53] Brown J., goes on to find that when a party seeks a mandatory, as opposed to a prohibitory injunction, the “serious issue” prong of the test should be modified to require “a strong prima facie case.” That is because “[a] mandatory injunction directs the defendant to undertake a positive course of action, such as taking steps to restore the status quo, or to otherwise ‘put the situation back to what it should be’, which is often costly or burdensome for the defendant and which equity has long been reluctant to compel.”: para. 15. The court added that:

The potentially severe consequences for a defendant which can result from a mandatory interlocutory injunction, including the effective final determination of the action in favour of the plaintiff, further demand what the Court described in RJR - MacDonald as "extensive review of the merits" at the interlocutory stage.

[54] Here, the relief sought is at least as extraordinary as the granting of a mandatory injunction. It is to stay the effect of a procedurally and substantively valid order agreed upon by the moving party just months ago because of subsequent events unrelated to that order. The substantive result of the stay would be the express opposite of the terms to which the moving party agreed.

[55] Furthermore, the remedy sought here is an extraordinary one; seeking to stay a freely negotiated consent final order because of events unrelated to either the process by which it was obtained or to its validity.

[56] Accordingly, in applying the first arm of the RJR MacDonald test, I find that Cannaco must demonstrate “a strong likelihood on the law and the evidence presented that, at trial, the applicant will be ultimately successful in proving the allegations set out in the originating notice.”: R. v. CBC, at para. 18(1).

[57] Here I cannot find that that high bar has been met, for reasons set out above. In particular I rely on the following factors:

1. I have been presented with no authority which holds that:

i. HCC 227 had an obligation in law to adopt the voting process that Cannaco insists upon. Its process for the first meeting was upheld by Mr. Blair. That is the same process utilized for the second meeting;

ii. HCC 227 had an obligation in law to grant Cannaco the last-minute adjournment of the unit-holders’ meeting that it had requested.

iii. HCC 227 had an obligation in law to accept or even consider Cannaco’s $50,000 offer, whatever its merits. That is particularly the case after 1 ½ years of litigation over the cannabis rule.

iv. HCC 227 had an obligation in law to accept Cannaco’s rationale for reversing the cannabis rule, whatever the merits of its argument. Within the context of this case, it had the right to balance its concerns as it saw fit.

2. Other than in the most exceptional circumstances, HCC 227 has the right to run its own meetings and create its own rules, free from court interference. As Spence J. wrote in Peel Condominium Corp. No. 516 v. Williams, [1999] O.J. No. 770 (Gen. Div.), at para 19:

The [Condominium] Act is structured to place decision making in respect of the affairs of condominium corporations in the hands of those directly affected, i.e. the unit owners. The court should be reluctant to interfere in the internal affairs of a corporation except in very exceptional circumstances.

(see also York Condominium Corporation No. 08 v. Perna, [2005] O.J. No. at para. 14. )

3. In Carlisle, the Ontario Court of Appeal spoke of “[t]he importance of the court's process, being final and enforceable”. The Skarica order is a valid final order. The stay requested would undermine the principle of finality.

4. It is also to be recalled that also in Carlisle, the Divisional Court stated that a stay of a final order should only be granted in “very rare circumstances” and that the discretion to do so “ought to be used very sparingly”. That finding has been repeated in a number of other cases cited above, including Yaiguage at para. 54 and Peerenboom at para. 34. Those rare circumstances do not exist here.

5. Even if Cannaco completely succeeds in this application, it will not be entitled to a recission of the cannabis rule. Instead it will only be entitled to a new, third, unit-owners’ meeting, not the setting aside of the Skarica order. Recall that that order was made in a completely separate proceeding. While those fact are relevant to the balance of convenience arm of the RJR MacDonald test, it is also relevant at this stage because the relief being sought by way of this stay application is not directly related to the relief sought in this application.

6. I recognize that Cannaco is offering the court a somewhat novel argument, that the conduct of HCC 227 amounts to oppression of Cannaco. But it offers no authorities that point to the conduct of HCC 227 as amounting to oppression.

7. Further, as HCC 227 wrote in its factum: “the moving parties do not offer a single authority where the Court stayed the operation and enforcement of a duly issued consent order while the moving parties sought to establish a basis for the order’s nullification relying entirely on alleged events that occurred after the issuance of the subject order.” Further,

[58] I add that, for the reasons set out above, even if the test were simply the lower serious issue test, I would not find that it is met here.

Irreparable Harm

[59] Cannaco argues that it would suffer irreparable harm if the stay is not granted. It would have to close down its cannabis business in the Cannaco units and incur the costs of doing so. What, it asks, if it is successful and is entitled to a further meeting to attempt to rescind the cannabis rule after being forced to close.

[60] Ordinarily, the argument would be a compelling one. However, in March 2021, Cannaco voluntarily accepted the very harm that it relies upon to assert irreparable harm. It did so when, with the assistance of capable counsel, it entered into the agreement to settle its previous litigation with HCC 227. Nothing about that anticipated harm has changed since then.

[61] Further, as set out below, Cannaco has already benefitted from many months and three extensions of the time that it was required to close its cannabis business. The loss is just the end of the third extension, one, again, for which it successfully bargained.

[62] Further the refusal of a stay is not the death-knell of Cannaco’s cannabis business. Nothing prevents it from renting other space elsewhere to move that business. Yet I have no evidence before me that it has attempted to do so. Thus, any alleged irreparable harm that comes from a refusal to stay the Skarica order is self-induced.

[63] For those reasons, I find that this ground is not made out.

Balance of Convenience

[64] This question is essentially answered by my finding regarding irreparable harm. However, if I am wrong in that regard, I still find that the balance of convenience favours HCC 227. I say this because:

1. A rejection of the stay would simply result in a circumstance that Cannaco itself voluntarily agreed to assume; one it had a great deal of time to prepare for and resolve.

2. On the other hand, HCC 227 upheld its end of the bargain with Cannaco. It granted Cannaco a third extension, of five and a half months, allowing it to remain open, contrary to the cannabis rule, until August 31, 2021.

3. As set out above, HCC 227 should be entitled to rely on the finality and enforceability of the Skarica order. As set out above, the principle of upholding the finality and enforceability of this court’s orders is one of central importance to the maintenance of the rule of law and the public’s respect for it. Absent exceptional circumstances, the court should be loath to act contrary to that principle.

4. Cannaco has now had about 9 months since the Blair award and six months since it agreed to the Skarica order to arrange for the final closure of its retail cannabis business in the Cannaco units. Yet there is no evidence that Cannaco has taken any steps to wind up that retail operation. Even the exterior sign for the business continues to be displayed. Cannaco admits that it still has cannabis on site and employees handling it. I acknowledge that Cannaco is presently obeying the Skarica order pending the resolution of this motion. There is no evidence that it is conducting retail cannabis business from the Cannaco units. But that simply amounts to a temporary closure of its retail business. It would be fair to question whether Cannaco ever had any intention of carrying out the terms of the Skarica order.

5. Even if Cannaco is ultimately successful in this application, the only relief that it would obtain is a new meeting and a new vote and perhaps a new voting process. Based on the evidence presented to date, the notion of reversing the two previous votes is, at best, purely hypothetical. HCC 227 recently rejected the request to repeal the cannabis order by an eight-vote 15 - 7 margin (with two abstentions). It did so under the same process that Mr. Blair previously accepted. It is to be recalled that the cannabis rule was originally upheld by a seven-vote 17 - 10 margin at the first meeting. Further as HCC 227 notes, 15 votes belong to members of its board. HCC has only 30 units. Even if every HCC 227 unit holder votes on the cannabis rule (which did not occur in the first two votes), it is unlikely that the cannabis rule will be reversed in light of the strong position of its board in favour of the rule.

6. As set out above, HCC 227 has the right to run its own meetings and create its own rules, free from court interference, other than in the most exceptional circumstances.

[65] Accordingly, I do not find that Cannaco has met the RJR MacDonald test to grant a stay.

Conclusion

[66] For the reasons set out above, I find that Cannaco is not entitled to a stay of the Skarica order Accordingly, I dismiss this motion.

Costs

[67] The parties should attempt to resolve the issue of costs on their own. If they are unable to do so, HCC 227 may submit its costs submissions of up to three pages, double spaced, one-inch margins, plus costs outline and offers to settle within 14 days of release of this endorsement. It need not include the authorities upon which it relies so long as they are found in the commonly referenced reporting services (i.e. , LexisNexis Quicklaw, or WestlawNext) and the relevant paragraph references are included. Cannaco may respond in kind within a further 14 days. No reply submission will be accepted unless I request it. If I have not received any submissions within the time frames set out above, I will assume that the parties have resolved the issue and make no costs order.

“Marvin Kurz J.”

Electronic signature of Justice Marvin Kurz,

Date: October 4, 2021