Cityzien Properties v Rosemont Management, 2022 ONSC 5237

COURT FILE NOS.: CV-20-00654767-0000 and CV-21-00665466-0000

DATE: 20221102

ONTARIO

BETWEEN:

SUPERIOR COURT OF JUSTICE

) Albert S. Frank, Lawyer for the Applicants

ROSEMONT MANAGEMENT INC. and ) MCCAUL LEASEHOLD MANAGEMENT ) LIMITED )

-and-

Applicants )

Michael G. McQuade, Lawyers for the Respondent, Cityzien (and Lawrence Wong)

CITYZIEN PROPERTIES LIMITED and ) JOHN FARACI )

Respondents )

) Gregory Weedon, Lawyer for the

-and-

) Respondent. Faraci

TERENCE TSE and BEST MOTORING ) FINE CARS LTD. )

Proposed Intervenors )

ANDBETWEEN: )

Roy Wise, Lawyer for the proposed Intervenors, Terence Tse and Best Motoring Fine Cars Ltd.

CITYZIEN PROPERTIES LIMITED )

-and-

Applicant )

ROSEMONT MANAGEMENT INC. )

G. DOW,J.

Respondent ) HEARD: SEPTEMBER 14, 2022

REASONS FOR DECISION

[1] The moving parties/intervenors, Terence Tse and Best Motoring Fine Cars Ltd. are 40% shareholders and Mr. Tse, is also a director of the respondent, Cityzien Properties Limited in

Application CV-20-654767 and the applicant in Court File CV-21-665466. The applications concern the interest, revenue, expenses and managing of 44 residential and two town home units at 49 McCaul Street in Toronto.

[2] Along with Lawrence Wong and Wai Chung Daisy Chan, Mr. Tse is a party to a unanimous shareholders agreement dated August 14, 2018 in which Mr. Tse alleges his consent is required to any change in the interest of Cityzien Properties Limited in the subject property.

[3] Further, Mr. Tse alleges he was not consulted nor did he consent to a purported settlement reached between the principal of Rosemont Management Inc. and McCaul Leasehold Management Limited, ("Rosemont/McCaul"), being Asif Sajan and Mr. Wong until August, 2021 and immediately took steps to intervene.

(4] Counsel for Cityzien Prope1ties Limited and Mr. Wong were assisted today by a previous counsel despite previous endorsements and orders directing Mr. Wong to obtain (new) counsel or seek leave under Rule 15.01(2). These parties do not object to the intervention order being sought. Counsel for Mr. Faraci took no position. Only counsel for Rosemont/McCaul objected.

[5] Rosemont/McCaul objected on the basis of the "indoor management rule" that is, Mr. Sajan, on behalf of his corporations, dealt with Mr. Wong on the basis Mr. Wong had apparent authority to commit Cityzien Properties Limited to any agreement it reached with Rosemont/McCaul.

[6] My review of Rule 13.01 and the law is that it is a disjunctive test and Mr. Tse/Best Motoring Fine Cars Ltd. has "an interest in the proceeding" as required under Rule 13.0l(l)(a) given his evidence as described above. While this may not be the only or preferred method of resolving the legal dispute between the involved patties, it does bring all the interested parties together in the same proceeding. I was directed to and considered the preferred narrow legal interpretation of Rule 13, notably Authorson (Litigation Guardian of) v. Canada (Attorney General) (2001), 2001 CanLII 4382 (ON CA), 147 O.A.C. 355, (at paragraph 6).

[7] I prefer the reasoning in Abrahamovitz v. Berens, 2018 ONCA 252 which quoted Ontario Federation of Anglers and Hunters v. Ontario (Minister of Natural Resources and Foreshy), 2015 ONSC 7969 (at paragraphs 10 and 11).

"In determining whether a person is a "necessary party" the court must consider whether they are likely to be affected or prejudiced by the order being sought. If the order sought will determine the rights of a person who is not a party, that person is entitled to be added so that his voice will be heard before his rights are determined.

One of the main purposes underlying these rules is to ensure that all parties are before the court when an order is made affecting their rights. This will avoid a multiplicity of proceedings and the risk of inconsistent results" (at paragraph 44 in Abrahamovitz v. Berens, supra).

[8] As a result, I am satisfied this is a proper case to exercise the discretion available to me and grant the request.

[9] I should also note that at the outset of submissions, I raised why the motion was not brought before an Associate Justice given Rule 13.01(2) provides for it to be decided by "the Court". However, rather than adjourn and cause further delay and because the matter seemed relatively straight forward, I proceeded.

[10] Counsel for Rosemont/McCaul also sought limitations as to what evidence the intervenors could tender or examinations they could conduct as well as directions on Terence Tse and Best Motoring Fine Cars Ltd.'s exposure to costs as well as their ability to collect costs. I declined to do so on the basis that such should be left to the parties and, if they cannot agree, to the Court as required.

Costs

[11] Both parties uploaded their Costs Outline as required under Rule 57.01(6) shortly prior to the hearing. By my calculation, they range between $9,540.00 (Tse/Best) and $11,475.00 (Rosemont/McCaul) plus HST and disbursements. Rosemont/McCaul sought its costs on the basis of the indulgence being sought by the intervenors. Terence Tse/Best sought costs based on their success.

[12] I prefer the costs of the motion be deferred to the judicial officer that determines these Applications, if same occurs and so order.

Mr. Justice G. Dow

Released: November 2, 2022

Cityzien Properties v Rosemont Management, 2022 ONSC 5237

COURT FILE NOS.: CV-20-00654767-0000 and CV-21-00665466-0000

DATE: 20221102

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ROSEMONT MANAGEMENT INC. and MCCAUL LEASEHOLD MANAGEMENT LIMITED

Applicants

-and-

CITYZIEN PROPERTIES LIMITED and JOHN FARACI

Respondents

-and-

TERENCE TSE and BEST MOTORING FINE CARS LTD.

Proposed Intervenors

ANDBETWEEN:

CITYZIEN PROPERTIES LIMITED

-and-

ROSEMONT MANAGEMENT INC.

Applicant

Respondent

REASONS FOR DECISION

Mr. Justice G. Dow

Released: November 2, 2022