Court File and Parties

COURT FILE NO.: CV-21-00667377-00CL DATE: 2022-12-29 SUPERIOR COURT OF JUSTICE – ONTARIO (COMMERCIAL LIST)

BETWEEN: 2356802 ONTARIO CORP., Applicant AND: 285 SPADINA SPV INC. and RONALD HITTI also known as RONNY HITTI, Respondents

BEFORE: Kimmel J.

COUNSEL: Nicolas Canizares, for the Applicant Adam Wygodny, for the Respondent, 285 Spadina SPV Inc. Ronald Hitti, self-represented John Ormston, for Applicants in CV-21-0062130 (the “Companion Oppression Application”)

HEARD: November 25 and December 5, 2022

ENDORSEMENT (respondents’ fresh evidence motion and Landlord’s Motion to terminate the SPV Lease)

Introduction

[1] The applicant 2356802 Ontario Corp. (the “Landlord”) and respondents, 285 Spadina SPV Inc. (the “Tenant”) and the principal and operating mind of the Tenant, Ronald Hitti, have been embroiled in litigation for years. They are constantly at odds about their respective rights and obligations in respect of part of a heritage building located at 285 Spadina Avenue (“the SPV Premises”), dating back to before they signed their August 26, 2020 lease (the “SPV Lease”).[^1] This is the third time just this year that the parties have appeared before me seeking substantive relief in respect of the SPV Lease.

[2] In this round of motions, Mr. Hitti, supported by the Tenant[^2], seeks leave under r. 59.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to file fresh evidence in respect of the court’s April 25, 2022 decision (2356802 Ontario Corp. v. 285 Spadina SPV Inc., 2022 ONSC 2427 – the “Lease Decision”) and subsequent August 12, 2022 decision (2356802 Ontario Corp. v. 285 Spadina SPV Inc., 2022 ONSC 4674 – the “Lease Termination Decision”). If the fresh evidence motion is allowed and that evidence is considered, the motion further asks the court to vary, on the basis of that evidence, certain declarations made in the earlier decisions about the interpretation of the SPV Lease and, ultimately, to vary the court’s rulings on the Rent Arrears, the ongoing rent payable by the Tenant under the SPV Lease and the Construction Allowance (these and all other capitalized terms not otherwise defined herein shall have the same meaning as in the Lease Decision, or the Lease Termination Decision, as the case may be).

[3] The relief, if granted, would mean that the Tenant would: (i) not be in default of those earlier decisions (or of the SPV Lease) for non-payment of rent, (ii) be relieved of the obligation to account for how the Construction Allowance was used and (iii) be relieved of the obligation to reimburse the Landlord for amounts received under the Construction Allowance that were not applied towards the Landlord’s Work.

[4] In this round of motions, relying upon the court’s earlier Lease Decision and Lease Termination Decision, the Landlord seeks leave to terminate the SPV Lease for defaults (primarily for the non-payment of Rent) by the Tenant arising since those decisions were rendered. This is the fourth time that the Landlord has tried to terminate this tenancy, but the first time that the Landlord will be successful.

[5] There is no question that neither the Rent Arrears nor the ongoing rent ordered to be paid in the court’s Lease Decision and subsequent Lease Termination Decision have been paid, aside from limited monies that the court ordered be remitted from the Tenant’s previous solicitor’s trust account to the Landlord and certain Rooftop Rental Credits that the court has ruled could be applied towards the rent owing under the SPV Lease. The respondents have to succeed on the fresh evidence motion for them to avoid a finding that the Tenant is in default of the SPV Lease. They have not met the requirements for leave to file, or have the court consider, their proposed fresh evidence or for the court to vary its prior Lease Decision and Lease Termination Decision.

Background – Prior Decisions

[6] Some aspects of the earlier decisions provide context for the present motions.

[7] The court’s interpretation of the SPV Lease in the Lease Decision determined (among other things):

1. That the Landlord was not entitled to terminate the lease (as it purported to do in a letter to the Tenant dated November 18, 2021), or alternatively, that relief from forfeiture would have been granted in favour of the Tenant;

2. That the Tenant was required to provide Certificates and supporting documents to account for the use of the Construction Allowance in respect of the Landlord’s Work undertaken by the Tenant and to ultimately reimburse the Landlord for any overpayments (or apply any overpayments towards the remaining installment of the Construction Allowance); and

3. The amounts owing, and that continued to accrue and become payable, as between the Landlord and the Tenant under the lease terms at issue (which terms included but were not limited to the monthly rental amounts due and owing and available credits and set-offs) were determined and the Tenant was ordered to pay the calculated amount of rent owing to the Landlord based on the terms of the SPV Lease, less the Rooftop Credits and certain trust funds.

[8] Aspects of the Tenant’s continuing payment obligations under the SPV Lease were clarified in the Lease Termination Decision. At that time, the Landlord’s termination of the SPV Lease on May 18, 2022 for the alleged non-payment of rents due and payable as of that date was held to have been improper and invalid. The following further rulings were made in the Lease Termination Decision regarding the Rent Arrears, ongoing rent payments and rent abatements:

1. The Tenant owes the Landlord Rent Arrears of $147,150 (inclusive of HST) up to and including May 1, 2022, taking into account the Rooftop Rental Credits that the Tenant was entitled to during this period and rent amounts previously paid into trust and remitted to the Landlord.

2. The Rent Arrears that the Tenant was obligated to pay under the Lease Decision for prior months (from November 1, 2021 to April 1, 2022) became due on May 25, 2022. Without any rent abatement for this period, and even after accounting for the full amount of the Rooftop Lease Credits and rent monies paid into trust, the Tenant would not have had sufficient credit to cover the entirety of all rental payments from November 1, 2021 to May 1, 2022. However, the Landlord’s unilateral action in prematurely terminating the SPV Lease required the court to reset the parties’ respective obligations under the SPV Lease in terms of the rent past due, accruing due and payable up to the date of that decision. These were ordered to be paid by the Tenant to the Landlord within 20 days of the release of that endorsement (by September 20, 2022).

3. The Tenant was not required to pay any rent for the months of June, July and August 2022 as a result of the Tenant having been locked out of the SPV Premises. The rent for the second half of August was deemed to be covered by the Rent Arrears calculated in advance and to be paid as of May 1, 2022 for the latter part of May after the Tenant was locked out. The next month’s rent due and payable by the Tenant was for September 2022.

4. To the extent necessary, paragraphs 65(b) and 157(b) of the Lease Decision were corrected so as to reflect the calculation of 15 rather than 14 months’ of lease payments by Freedom Mobile from August 26, 2020 to November 2021, at $1,512.50 plus HST per month, for a total of $22,687.50 (instead of the indicated amount of $21,175.00) plus HST for the period. That equates to a total of $47,966.95 (plus HST) in Rooftop Lease Credits having been received from the Rooftop Tenants[^3] during that period, rather than the amount of $46,454.45 (plus HST) specified in the Lease Decision.

5. The Tenant’s request for the court to order a pro rata reduction in rent to reflect the Tenant’s limited use of the SPV Premises between November 2021 and February 2022, and to abate all rent for the subsequent months when the Tenant determined that it no longer needed to access the SPV Premises (after the lease applications were adjourned in February 2022 and thereafter until the Lease Decision was rendered) was found to be res judicata and barred by issue estoppel because:

i. When the “lease applications”[^4] were argued, the Tenant could have asked for rent abatements during the disputed period leading up to the Lease Decision. The Tenant sought an order that the SPV Lease be reinstated and for exclusive possession of the SPV Premises. It made various arguments about the amount of rent due and owing under the SPV Lease but did not make any request or argue for an abatement of rent due to its restricted access, use and occupation of the SPV Premises during this disputed period. That was the time to do so.

ii. The “Lease Arrears Issue” was defined at paragraph 9(c) of the Lease Decision as follows:

The proper interpretation of the SPV Lease regarding alleged breaches by the Tenant for non-payment of rent (the “Rent Arrears Issue”):

a. The rental amounts owing by the Tenant to the Landlord for the months of September, October, and November 2021 (taking into account the determination of the Rooftop Credits Issue).

b. The rental amounts payable by the Tenant to the Landlord from December 2021 onwards under the SPV Lease.

The Tenant’s request for rent abatements during these same months was found to fall precisely within the Lease Decision’s previous adjudication of the Lease Arrears Issue.

[9] In the Lease Decision, the Construction Allowance Issue (as defined therein at para. 9) was decided in favour of the Landlord. In particular, it was determined that the Landlord was entitled to receive a compliant Tenant’s Certificate(s) certifying all amounts paid to any contractor, subcontractor, worker, or supplier for the Landlord’s Work completed to date, to be provided along with invoices and proof of payment for all of the Landlord’s Work undertaken for which the Construction Allowance applies.

[10] The Tenant’s Certificate(s) were to provide the foundation for a retroactive accounting and reconciliation of the Construction Allowance. A term was implied into the SPV Lease and Schedule “E” requiring the Tenant to reimburse any overpayment of the Construction Allowance to the Landlord (the “Implied Term”) and the Tenant was ordered to repay to the landlord any amounts not proven through the Tenant’s Certificate(s) and supporting documents to have been expended by the Tenant on account of the Landlord’s Work (except to the extent of any credit to be applied to the remaining installments of the constructions allowance for which milestone(s) have been confirmed by the Payment Certifier) within forty-five days of the delivery of the Tenant’s Certificate(s).

[11] In the Lease Termination Decision, the following further orders and directions were made in connection with the Construction Allowance Issue:

1. Because of disputes that had arisen since the Lease Decision about the sufficiency of the Tenant’s Certificate(s), a reference was directed to an associate judge to deal with any disputes as to the sufficiency of the Tenant’s Certificate, accounting and supporting documentation provided by the Tenant. This reference has since been scheduled for the fall of 2023.

2. The amounts claimed to be owing as between the Landlord and the Tenant in respect of the accounting and reconciliation of the Construction Allowance shall not be added to or claimed payable as rent by the Landlord while the dispute between the parties that is the subject of the reference is pending. Nor shall such amounts be credited or abated against rent payable by the Tenant.

[12] In the Lease Decision, the Rooftop Access Issue was decided in favour of the Rooftop Tenants, who were found to have easements of necessity over the SPV Premises to access their equipment on the Rooftop, which guaranteed them access through the SPV Premises at all reasonable times. The easements of necessity were ordered to remain unless and until the Tenant can establish that it can build a viable external access ladder that is safe for all the access needs of the Rooftop Tenants. In the meantime, the Rooftop Tenants are entitled to access the Rooftop through the Building, including the SPV Premises. The respondents were ordered not to interfere with or frustrate the Rooftop Tenants’ access to the Rooftop through the SPV Premises, and the Landlord was ordered to ensure that the Rooftop Tenants have access at all times to the Rooftop.

The Motions and the Parties’ Positions

[13] There are two motions now before the court:

1. Mr. Hitti’s motion, supported by the Tenant[^5], pursuant to r. 59.06(2)(a) to introduce the Fresh Evidence and to vary or set aside certain aspects of the Lease Decision and the Lease Termination Decision that were decided in favour of the Landlord and for various ancillary relief flowing therefrom; and

2. The Landlord’s motion for leave to terminate the SPV Lease, for vacant possession of the SPV Premises and requiring the Tenant to pay all Rent Arrears (previously determined to be $147,150) and further accrued arrears of rent since the Lease Termination Decision (in the monthly amount of $46,197.23 for four months, September to December 2022), less the $20,000 in costs the Landlord was ordered to pay to the Tenant. The Landlord further asks that the Tenant be restrained from seeking relief from forfeiture unless and until the outstanding rent amounts owing have been paid.

The Legal Framework for Admitting Fresh Evidence

[14] The respondents rely upon r. 59.06(2), which allows a party to seek to:

(a) have an order set aside or varied on the ground of fraud or of facts arising or discovered after it was made;

by making a motion in the proceeding for the relief claimed.

[15] The test applicable to a motion under r. 59.06(2)(a) for fraud requires that the moving party:

(a) prove the alleged fraud on a balance of probabilities;

(b) the fraud must be material to the order that was made;

(c) the evidence of fraud must not have been known to the moving party at the time of the original proceeding;

(d) the moving party applied reasonable or due diligence at the original hearing; and,

(e) the motion to set aside must be brought without delay.

See: Lam v. Chen, 2019 ONSC 2510, at para 22.

[16] Fraud, as used in r. 59.06, is: “a false representation made either knowingly, or without belief in its truth or else recklessly, careless as to whether it is true or false”: see JV Mechanical v. Steelcase, 2010 ONSC 1443, 93 C.L.R. (3d) 109, at para 24.

The Respondents’ Position

i) Alleged Fraud by Omission

[17] Mr. Hitti filed a factum and Aide Memoire (and a subsequent letter dated December 6, 2022 in response to a letter filed by the Landlord on December 5, 2022) in support of this motion, in which various allegations of fraud are asserted against the Landlord and its representatives, dating back to before the Lease Decision. The allotted time for oral argument at the hearing was extended (and the parties returned for a second day of argument, following the filing of supplementary written submissions by Mr. Hitti and the Tenant) so that the court could distill, through the oral submissions of Mr. Hitti and counsel for the Tenant, what precise alleged frauds and new facts are relied upon to satisfy the requirements of r. 59.06(2).

[18] From this, the court was able to ascertain that the alleged fraud perpetrated by the Landlord arises from its failure to tender into evidence on the lease applications certain email exchanges between the Landlord and Tenant’s representatives prior to the SPV Lease being executed. These communications are alleged to contradict the evidence of the Landlord’s representative that was tendered on the lease applications, in which it was stated that the SPV Lease did not:

1. expressly provide that the Tenant could keep any unused portion of the Construction Allowance provided by the Landlord; and/or

2. expressly permit the Tenant to use the Construction Allowance for anything other than expenditures captured by the Landlord’s Work.

[19] In contrast, the omitted email exchanges (described below and comprising part of the “Pre-Hearing Fresh Evidence”), the respondents say, reflect an alleged agreement that the Tenant could keep any cost savings achieved in carrying out the Landlord’s Work under the SPV Lease and that the Tenant would not have to account for the use of the Construction Allowance or reimburse the Landlord for amounts advanced that were not used for the Landlord’s Work. This alleged agreement is based on:

1. An agreement that is said to have been reached in principle through an exchange of emails on July 1 and 2, 2020 about the new lease to be signed that required the Landlord to pay the Tenant the sum of $4 million plus HST as an inducement to carry out all of the Landlord’s Work (the “July 2020 Settlement Emails”). This settlement is said to have been reached, in part, as a result of the Tenant’s discovery of a 2016 roof condition report that the Landlord had, but did not disclose, in connection with an earlier court application that, among other things, held that the Landlord was responsible for remedying the condition of the roof of the SPV Premises (the Perell Decision rendered in March 2020).

2. The final changes that were made to the draft SPV Lease in the course of the negotiations between the parties. The changes were sent by the Tenant’s representative to the Landlord’s representative on August 20, 2020, prior to the SPV Lease being signed on August 25, 2020. This left in the requirement that the Tenant pay for any of the Landlord’s Work that exceeded the amount of the agreed upon Construction Allowance, but deleted a provision that stated that the Tenant would not be entitled to receive the balance of the Construction Allowance if the cost Landlord’s Work was less than the Construction Allowance (the “August 2020 Draft Lease Schedule”).

The respondents argue that the July 2020 Settlement Emails and the August 2020 Draft Lease Schedule, comprising the “Pre-Hearing Fresh Evidence”, demonstrate that the parties had agreed that the $4 million Construction Allowance was to be paid to the Tenant irrespective of the actual cost of the Landlord’s work, and that the Tenant had no obligation to account to the Landlord for how those funds were used.

[20] The respondents contend that, by referring in his evidence to what the SPV Lease did not expressly provide for, the Landlord’s representative fraudulently or recklessly misrepresented to the court (by omitting these emails) that there was no agreement allowing the Tenant to keep the Construction Allowance if there were cost savings and the Landlord’s Work actually cost less than the Construction Allowance. They maintain that these July and August 2020 email exchanges contradict the representation that there was no such agreement and they ought to have been disclosed by the Landlord.

[21] The respondents argue that the Landlord’s misrepresentation (by stating that there was no such agreement) and the failure to disclose these emails about the negotiations and prior understandings resulted in the court implying as a term of Schedule “E” to the SPV Lease a requirement that the Tenant reimburse any overpayment of the Construction Allowance to the Landlord, based on an accounting and reconciliation to be derived from the Tenant’s Certificates. This has, in turn, allowed the Landlord to withhold the final advance on the Construction Allowance which the Tenant claims it needs to complete the Landlord’s Work, leaving the SPV Premises in a state of perpetual incompletion and the Tenant without the means to earn any income.

[22] Further, the Tenant argues that under clause 4.2 of the SPV Lease, the Tenant is only required to accept the SPV Premises subject to the Landlord’s Work being done. Since the Tenant cannot complete this work without the final Construction Allowance advance, the Tenant has not been required to, and has not, accepted possession of the SPV Premises. The Tenant maintains that it does not have to pay rent until the Work is completed (implying an indefinite rent free period as long as any Work remains outstanding, which, as of now, will remain the situation until at least after the reference that was ordered and is now scheduled for September 2023 has been decided).

[23] The Tenant justifies this on the theory that the Landlord is said to have caused the very conditions (lack of the funds from the final installment of the Construction Allowance) that prevented the Tenant from completing the Landlord’s Work during the Rent Free Period (as defined in the SPV Lease to be from August 15, 2020 to May 15, 2021) and the Tenant’s Work during the Base Rent Free Period (as defined in the SPV Lease to be from May 16, 2021 to November 15, 2021). Having deprived the Tenant of the substantial benefit of the Rent Free Period and the Base Rent Free Period, the respondents argue that the Landlord should not be permitted to the SPV Lease for alleged non-payments of rent.

[24] Recognizing that the Tenant and its representative were privy to the very same emails comprising the Fresh Evidence at the time they were exchanged in the summer of 2020 and that, absent some explanation or excuse, it would be presumed that the respondents could have proffered them into evidence if the respondents considered them to be relevant and admissible, the respondents rely upon Mr. Hitti’s evidence about his hospital admissions and medical issues in the fall of 2021 (when the evidence was being compiled for the lease applications).

[25] Mr. Hitti contracted COVID-19 in March of 2020 and was sick for some time. He does not claim to have been cognitively impaired as a result of his illness in the summer of 2020. However, Mr. Hitti does claim to have been suffering from cognitive impairments in the fall of 2021 that he now believes were a function of hypercarbia, a symptom of long-COVID he now says caused him to forget about these emails. He acknowledges that he is a sophisticated businessman and litigant and suggests that the only explanation for him not remembering these emails when the evidence for the lease applications was being developed is that he had a “foggy mind”.

[26] Mr. Hitti claims that the lawyer who represented the Tenant on the lease applications was not directly involved in these negotiations, although he was copied on some of them at the time. Rather, Mr. Hitti says that the lawyer was relying upon him for the evidence that was compiled for the lease applications. Thus, the respondents argue that even though they were privy to these emails, they could not be counted on to have put them into evidence to challenge the Landlord’s evidence, and that the Landlord’s failure to disclose them in the context of the evidence that was put forward is tantamount to fraud.

[27] Mr. Hitti has provided a list of seventeen paragraphs of the Lease Decision to be set aside on the basis of the Fresh Evidence. It is fair to say that they mostly relate to the ultimate goal of the respondents which is to vary the court’s orders requiring the Tenant to:

1. Pay any rent to date, or hereinafter (indefinitely, or it would seem at least until the final installment of the Construction Allowance has been paid and all of the Landlord’s Work and the Tenant’s Work has been completed by the Tenant);

2. Prepare any accounting in respect of the Construction Allowance; and/or

3. Repay the Landlord for any excess amounts of the Construction Allowance not expended on the Landlord’s Work.

ii) Facts Arising or Discovered After the Lease Decision

[28] The respondents also claim that the court’s determination in the Lease Decision that there was an easement of necessity in favour of the Rooftop Tenants is a fact (comprising the other part of the proposed “fresh evidence”) that arose or was discovered by the respondents after the Lease Decision was made that fundamentally undermines the Tenant’s exclusive possession of the SPV Premises and interferes with the Tenant’s ability to obtain a liquor licence, which is fundamental to its use and enjoyment of the SPV Premises.

[29] This is alleged to be a fundamental breach of the SPV Lease by the Landlord. As a result, the respondents maintain that the Tenant should not be required to pay any rent (e.g. rent should be abated) until an alternative arrangement is made for the Rooftop Tenants’ access that does not interfere with the Tenant’s exclusive possession of the SPV Premises.

[30] Further, a reference has been directed and now scheduled for September 2023 in respect of disputes about the Tenant’s Certificate and Accounting (the “Tenant’s Accounting”) provided after the Lease Termination Decision. It appears that the respondents (or at least Mr. Hitti) suggest that this delay, of a year, in the scheduling of the hearing of the reference is a “new fact” that should cause the court to reconsider its order and directions regarding the determination of the dispute about the Tenant’s Accounting, which will in turn delay the payment of any further installments of the Construction Allowance (and also will delay any obligation upon the Tenant to repay any overpayments).[^6]

The Landlord’s Position

[31] Put simply, the Landlord maintains that the Tenant is in default of the SPV Lease and the court’s prior orders and wishes to exercise its remedies. It seeks to terminate the SPV Lease and wants immediate vacant possession, although it acknowledges that it does not require a writ of possession for non-payment of rent. It was clarified in oral argument that the relief in the Landlord’s Notice of Motion that sought a restraining order or injunction restraining the Tenant from taking further litigation steps while the rent remained outstanding was only being sought in the alternative.

[32] In addition to the remedies provided for under the SPV Lease upon the Tenant’s default (for example, under clauses 15.1 and 15.2 thereof), the Landlord relies upon s. 18(1) of the Commercial Tenancies Act, R.S.O. 1990, c. L.7.

[33] Further, the Landlord contends that, to the extent the Tenant is seeking equitable relief (from forfeiture)[^7], it has not come to court with clean hands. The Landlord argues that, since April 2022, the Tenant failed to pay any of the past and continuing rent due despite the court’s prior orders and despite having already been granted a rent abatement for certain specified months (e.g. at para. 86(5) of the Lease Termination Decision). In this regard, the Landlord relies upon 2324702 Ontario v. 1305 Dundas, 2019 ONSC 1885, 100 R.P.R. (5th) 223, at paras. 20-25, 30 and 38.

[34] Although an order for civil contempt was requested in the Landlord’s factum, it was confirmed in oral argument that the Landlord is not seeking such an order at this time.

i) Alleged Fraud by Omission

[35] While the Landlord denies the fraud allegations, its general stance regarding the emails is that they do not actually contradict the Landlord’s evidence. The emails are open to subjective interpretation and can be understood in different ways. Moreover, the emails would be inadmissible even if the respondents had “remembered” them and tendered them as evidence for the lease applications. In any event, the entire agreement clause in the SPV Lease (clause 3.2) would have overridden the emails. Beyond this, the Landlord further challenges the sufficiency and credibility of the respondents’ evidence regarding their lack of awareness and due diligence in respect of these emails at the time of the hearing of the lease applications.

ii) Facts Arising or Discovered After the Lease Decision

[36] With respect to the alleged “new” fact regarding the easement of necessity in favour of the Rooftop Tenants, the Landlord argues that this is not a new fact but rather an entirely foreseeable outcome of the issues (including the Rooftop Access Issue) on the lease applications, part of which included affirmative relief sought by the Rooftop Tenants to protect their pre-existing rights. Mr. Hitti was found to have been aware of, or deemed to have been aware of, the Rooftop Leases at the time the SPV Lease was entered into.

[37] The Landlord also challenges the respondents’ attempt to defer the Tenant’s obligation to accept possession of the SPV Premises (as yet another ground for trying to avoid paying rent), based on the incomplete status of the Landlord’s Work. The Tenant remains responsible for that work, and has been ordered to provide the documentation to demonstrate what work has been done and its cost.

[38] Further, the Landlord argues that the respondents have already raised, and the court has already determined, the question of the Tenant’s entitlement to any rent abatements for alleged breaches of the SPV Lease by the Landlord (including for the failure to give the Tenant exclusive possession of the SPV Premises, on other grounds). The respondents also have, or could have, raised the issue of whether the Tenant was obligated to take possession of the SPV Premises prior to the Lease Termination Decision and that argument was not decided in the Tenant’s favour.

[39] The question of rent abatements for the Landlord’s alleged failure to provide exclusive possession of the SPV Premises to the Tenant under the SPV Lease has already been decided in the Lease Decision and the Lease Termination Decision. This new ground for seeking an abatement of rent under the SPV Lease is res judicata and barred by issue estoppel.

The Position of the Applicants in the Companion Oppression Application

[40] The applicants in the Companion Oppression Application heard and decided at the same time as the Lease Decision claim an interest in the Tenant company and have brought a motion returnable in February 2023 to take over the day-to-day control of the Tenant company. They are concerned about the potential prejudice to the Tenant (and their interests in the Tenant company) if the SPV Lease is terminated.

[41] Accordingly, these applicants are asking that if the court grants the Landlord’s motion and permits the Landlord to exercise its remedies, that such order be stayed pending the determination of their upcoming motion. If the Landlord requires them to pay the continuing rent into their lawyer’s trust account pending this determination, they are prepared to do so. The applicants in the Companion Oppression Application have not offered to pay past Rent Arrears, yet they acknowledge that payment of past rent due and owing would have to be addressed should they wish to cause the Tenant to seek relief from the Landlord’s remedial rights if they are successful in taking over the day-to-day operations of the Tenant company.

[42] Without agreeing to the stay that has been requested, the Landlord has indicated that, if the court adopts this latter approach, there should be a set amount ordered to be paid for monthly rent, and it should be specified who should pay it and to whom it should be paid.

The Position of the Rooftop Tenants

[43] Before the hearing, Mr. Hitti and the Tenant confirmed that no relief was being sought against or that might affect the rights and interests of the Rooftop Tenants. On that basis, they did not appear on this motion.

Issues to be Decided and Summary of Outcome

[44] These motions raise the following issues for the court’s determination:

1. Is the Pre-Hearing Fresh Evidence admissible?

2. Did the Landlord’s representative fraudulently misrepresent the parties’ agreement and understanding (said to be reflected in the Pre-Hearing Fresh Evidence) with respect to the Tenant’s entitlement to keep the Construction Allowance without having to account for how it was spent or whether it was spent to complete the Landlord’s Work?

3. Is the Pre-Hearing Fresh Evidence material to the Lease Decision and/or the Lease Termination Decision, in the sense that it would have likely affected the outcome of those decisions?

4. Can the respondents demonstrate their own due diligence in respect of the Pre-Hearing Fresh Evidence (which they were irrefutably privy to and existed at the time of the lease applications) before the court in connection with the lease applications?

5. Is the court’s finding in the Lease Decision of an easement of necessity in favour of the Rooftop Tenants a new fact that arose or was discovered after the hearing of the lease applications?

6. Is the issue of rent abatement in connection with the Tenant’s right to exclusive possession of the SPV Premises res judicata?

7. Should the Lease Decision and/or the Lease Termination Decision be varied based on the Pre-Hearing Fresh Evidence and/or the “fact” of the determination of the easement of necessity?

8. Conversely, is the Landlord entitled to terminate the SPV Lease for the Tenant’s non-payment of rent and/or exercise its other remedies for the Tenant’s non-payment of rent?

9. If the Landlord is entitled to terminate the SPV Lease and/or exercise other remedies, should that entitlement be stayed pending the upcoming motion in the Companion Oppression Application and, if so, on what terms?

[45] The court’s determination of certain of the above issues is dispositive of the motions.

1. The Pre-Hearing Fresh Evidence is not admissible.

2. The finding of an easement of necessity is not a new fact, and it could and should have been addressed at the time of the Lease Decision.

3. The alleged breaches by the Landlord, and rent abatements sought as a result, are res judicata and the respondents are estopped from raising them.

These determinations lead to the dismissal of the respondents’ motion and to granting the Landlord’s motion for leave to terminate the SPV Lease, subject to the stay requested by the applicants in the Companion Oppression Application. They obviate the need to deal in detail with the remaining issues raised on these motions, although those other issues are addressed in brief to complement the court’s reasons.

[46] The respondents have had many opportunities to put the Tenant into good standing under the SPV Lease. Instead, after each round of court hearings, they devise new arguments to avoid the obligations that they are found to have. They have come to the end of the road.

[47] However, the Landlord’s enforcement remedies are stayed pending the court’s determination of the upcoming motion in the Companion Oppression Application to permit the applicants therein to have their motion to take over the day-to-day operations of the Tenant company heard and to seek relief from forfeiture or other remedies against the Landlord’s termination of the SPV Lease.

[48] That stay is conditional upon the applicants in the Companion Oppression Application paying the full monthly Base Rent under the SPV Lease into their solicitor’s trust account for each month commencing with the month of January 2023[^8] (with confirmation of receipt and deposit of certified funds to be provided by their solicitor to the solicitor for the Landlord by the following day). Further, the stay is conditional upon the motion in the Companion Oppression Application being heard before the end of February 2023, and/or otherwise subject to further conditions being imposed by the court at the return of that motion if it does not proceed as scheduled for any reason.

[49] The Tenant’s obligations under the SPV Lease remain as set out in the Lease Decision and the Lease Termination Decision.

Analysis

[50] I will deal with the identified issues for the court’s determination in turn.

1) The Pre-Hearing Fresh Evidence is Not Admissible

[51] The recognized and accepted principles of contract interpretation were summarized in paragraphs 18-20 of the Lease Decision (quoting from paragraphs 130-137 of the Perell Decision in this same case). Those paragraphs summarize that the court is searching, through the application of these principles, for the objective mutual intent and understanding of the parties, having regard to the factual background and commercial purpose of the contract.

[52] In that context, the court may consider objective evidence of the factual matrix. This includes background facts that ought to have been within the knowledge of both parties at or before they entered into their contract that would have affected the way in which the language of the document would have been understood by a reasonable person.

[53] In contrast, subjective evidence of the intention of the contracting parties about the negotiations and what was intended by them (also known as parole evidence) is inadmissible. Evidence of surrounding circumstances is not permitted to add to, subtract from, vary or contradict the words of the written contract: see Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 46-61.

[54] The respondents concede that drafts of a contract are not admissible as part of the factual matrix, but may be admissible to show the genesis or purpose of the contract and its commercial context: see IFP Technologies (Canada) Inc. v EnCana Midstream and Marketing, 2017 ABCA 157, 53 Alta. L.R. (6th) 96, at para. 85; Dumbrell v. The Regional Group of Companies Inc., 2007 ONCA 59, 85 O.R. (3d) 616, at para. 55. They contend that the July 2020 Settlement Emails and the August 2020 Draft Lease Schedule come within this exception and are admissible to show that the parties had always understood and agreed that the Tenant would not have to account for the use of the Construction Allowance and could keep any cost savings in the Landlord’s Work undertaken by the Tenant.

[55] I do not find that to be a reasonable characterization of the Pre-Hearing Fresh Evidence. Neither the July 2020 Settlement Emails nor the August 2020 Draft Lease Schedule clearly and unambiguously say what the respondents suggest. They are open to other interpretations.

a) The July 2020 Settlement Emails

[56] The respondents seek to characterize the July 2020 Settlement Emails as a “settlement agreement”, which included a provision for an inducement to be paid to the Tenant of $4 million. This alleged “agreement” by the Landlord to pay an inducement to the Tenant is said to be consistent with the assertion that the Tenant could use these funds for purposes other than the Landlord’s Work and was not required to account for them.

[57] However, the email that responded to the summary of the purported “settlement agreement” specifically states that: “I am sure you can appreciate that as there are many issues still to discuss on the lease aside of the roof, we need to have realistic expectations on timing to prepare a complicated and contentious lease agreement.” Following which, there was no written confirmation from the Landlord that an agreement was reached before confirmation of the final form of the SPV Lease (that itself contains an entire agreement clause, in which both parties state that there were no prior promises, agreements or understandings between them).

[58] This leads me to conclude that there was no prior settlement agreement contained in the July 2020 Settlement Emails; rather those emails were simply a precursor to the negotiations that eventually resulted in the SPV Lease. The operative SPV Lease identifies the $4 million to be paid by the Landlord to the Tenant as a Construction Allowance. The respondents’ emphasis on the use of the term “inducement” in the July 2020 Settlement Emails (a concept that was not confirmed by any responding email from or on behalf of the Landlord and is not carried through into the SPV Lease) is inconsistent with the express provisions of the SPV Lease that describe this payment as a Construction Allowance with a budget, installments, certificates etc.

[59] The evidence of Mr. Hitti about his understanding of why the word inducement was changed to allowance is more of the same: evidence about his subjective understanding. More importantly, without Mr. Hitti’s subjective explanations and understandings, the July 2020 Settlement Emails (nor any other documentary record referred to) do not say that the Tenant can keep any cost savings if the Landlord’s Work does not end up costing the $4 million that the Landlord agreed to pay. Further, they do not say that the Tenant does not have to account for the cost of the Landlord’s Work that it undertakes; whereas, the court has found other terms of the SPV Lease, including the requirement for the Tenant’s Certificate, do require a Tenant’s Accounting and support the implication of the requirement of the Tenant to reimburse any overpayments.

b) The August 2020 Draft Lease Schedule

[60] The respondents seek to characterize the August 2020 Draft Lease Schedule as evidence that the parties agreed that the Tenant was entitled to receive and keep the entire Construction Allowance irrespective of whether all the funds provided were needed to complete the Landlord’s Work. The words that were removed stated: In the event that the cost of the Landlord's Work is less than the Construction Allowance, the Tenant shall not be entitled to receive (whether by cash payment, rent credit, rent-reduction or otherwise) the balance of the-Construction Allowance.

[61] The deleted words are directed to the Tenant’s entitlement to receive the Construction Allowance installments, not to what the Tenant can use the funds for or whether it ultimately must account for how the funds were used. One can conceive of other reasonable justifications for not wanting to tie the advances of the Construction Allowance to interim progress costs, especially when the parties had expressly provided elsewhere in Schedule “E” to the SPV Lease that the budget of estimated costs for the Landlord’s Work did not in any way affect the Landlord’s obligation to pay the Construction Allowance.

[62] Without the (inadmissible) evidence of Mr. Hitti’s subjective intentions and understandings, the Pre-Hearing Fresh Evidence does not say what the respondents suggest it does. This is precisely why evidence about negotiations and drafts of agreements is generally inadmissible. Further, the Pre-Hearing Fresh Evidence is being used by the respondents to add provisions to the SPV Lease about the Tenant’s ability to keep any excess portion of the Construction Allowance not used for the Landlord’s Work. This is also impermissible.

[63] Terms can be implied if certain requirements are met. The court did so in the Lease Decision with the Implied Term.[^9] However, those same requirements are not met for the terms that the respondents seek to imply based upon the Pre-Hearing Fresh Evidence (even if it was admissible). Nor can they be implied based on Mr. Hitti’s subjective understandings and interpretations associated with drafts and contract negotiations.[^10]

c) Summary: Pre-Hearing Fresh Evidence is not Admissible

[64] The proposed Pre-Hearing Fresh Evidence is not admissible now and would not have been admissible at the time of the Lease Decision.

[65] These emails and drafts do not shed light on the objective commercial intention, purpose or genesis of the SPV Lease in any way that would inform the court’s interpretation of provisions of the SPV Lease dealing with the Tenant’s obligation to account for expenditures on account of the Landlord’s Work or the Tenant’s entitlement to keep any cost savings. Further, these drafts do not clearly and unambiguously lend themselves to just one interpretation.

2) No Misrepresentation by Omission

[66] The Landlord cannot be found to have fraudulently misrepresented the parties’ agreement by failing to refer to inadmissible evidence about negotiations and drafts leading up to the SPV Lease.

[67] Further, the Pre-Hearing Fresh Evidence the respondents seek to tender does not directly contradict what the Landlord’s representative attested to in his affidavits filed in support of the lease applications. His evidence was about what the SPV Lease did not say. I have found that the negotiations and drafts comprising the Pre-Hearing Fresh Evidence do not expressly state, nor do they necessarily imply, that the Tenant would be entitled to keep any excess amounts not expended for the Landlord’s Work. Thus, they do not contradict even the implication that the respondents ask the court to derive from the evidence of the Landlord’s representative.

3) The Pre-Hearing Fresh Evidence is Not Material

[68] The respondents concede that, to be considered, the Pre-Hearing Fresh Evidence must be material in the sense that it would likely have affected the outcome of the Lease Decision and/or the Lease Termination Decision. They argue that the court would not have implied a term requiring the Tenant to reimburse the Landlord for any excess unused portion of the Construction Allowance and would not have ordered the Tenant’s Accounting if the Pre-Hearing Fresh Evidence was presented.

[69] The Tenant argues that the Pre-Hearing Fresh Evidence, in particular the August 2020 Draft Lease Schedule, is material because it shows that the Landlord and the Tenant turned their minds to whether the Landlord would have the right to demand an accounting of the Construction Allowance beyond what was provided for in the Lease. Further, that the objective intention of the parties was that the Landlord would have no such right. However, I have found that is not a reasonable, objective interpretation of the words contained in the August 2020 Draft Lease (and omitted words), for reasons detailed above.

[70] More to the point, the Pre-Hearing Fresh Evidence cannot be said to be material in the sense that it would likely have affected the outcome of the Lease Decision and/or Lease Termination Decision when it is not admissible.

4) The Respondents’ Explanations for Not Tendering the Fresh Evidence Themselves

[71] Mr. Hitti spent much of his written and oral submissions attempting to explain how it is that the respondents can come to the court after it decided both the Lease Decision and the Lease Termination Decision seeking leave to file the Pre-Hearing Fresh Evidence involving emails and negotiations that he was directly involved in at the time. This prima facie fails to meet the requirements for the admission of fresh evidence under r. 59.06(2)(a), that the moving party demonstrate that it was not known to them and that they had applied reasonable or due diligence in respect of the Pre-Hearing Fresh Evidence at the time of the original hearing.

[72] The arguments presented by Mr. Hitti in this regard were novel. I was not directed to any authority for the proposition that a cognitive impairment at the time of the creation of the evidentiary record (whether due to COVID-19 or any other medical cause) could excuse a party’s failure to tender evidence that they were involved in creating and that unquestionably existed at the time of a hearing that they now say is material and accuse the opposing party of fraudulently failing to disclose.

[73] Here, the difficulty with this novel argument is compounded by the nature of the Pre-Hearing Fresh Evidence, which I have ruled to be inadmissible. That makes it unnecessary for me to deal with the complicated considerations of whether Mr. Hitti’s evidence about his own cognitive difficulties (as he states in his affidavit and reported to his doctor) should and would excuse the failure of the respondents to themselves tender the Pre-Hearing Fresh Evidence.

[74] The added issue of the Tenant’s lawyer on the lease applications having been copied on the Pre-Hearing Fresh Evidence at the time would also have had to be contended with if I had not found the Pre-Hearing Fresh Evidence to be inadmissible. Even accepting Mr. Hitti’s strong assertion that the lawyer was not directly involved in the drafting and negotiation of the SPV Lease, the fact is that he had the relevant correspondence in his possession when the materials were being prepared for the lease applications and it would have been open to the court to infer that he turned his mind to the question of whether to submit the Pre-Hearing Fresh Evidence (even if Mr. Hitti had forgotten about it) and that the lawyer had determined not to for the very same reasons that the court has now found it to be inadmissible.

5) The Easement of Necessity in Favour of the Rooftop Tenants is not a “New Fact”

[75] The easement of necessity found in favour of the Rooftop Tenants in the Lease Decision was one aspect of the relief sought on the lease applications. The finding of this easement was a legal conclusion, not a fact.

[76] The standing of the Rooftop Tenants was confirmed and this relief was considered when the lease applications were heard as part of the Rooftop Access Issue. All these issues were raised as part of the record leading up to the Lease Decision and the respondents actively engaged in arguments on the lease applications dealing with the implications of the Rooftop Tenants’ Leases and their rights in respect of the SPV Premises. It was entirely foreseeable to the respondents that a finding of an easement of necessity in favour of the Rooftop Tenants was a possible outcome of the lease applications.

[77] The finding of the court regarding the easement of necessity of the Rooftop Tenants does not meet the requirements for introduction as fresh evidence under r. 59.06.

[78] It follows that consequences of this finding, namely that the Tenant did not have exclusive possession of the SPV Premises (due to this easement) and the now further consequence that the Tenant claims this interferes with its ability to obtain a liquor licence for the SPV Premises, also does not qualify as fresh evidence. These too were foreseeable consequences of the relief that the respondents were aware was being sought under the umbrella of the Rooftop Access issue in connection with the lease applications.

6) The Request for a Rent Abatement for the Landlord’s Failure to Provide Exclusive Possession is Res Judicata

[79] Since the easement of necessity and its consequence, being that the Tenant does not have exclusive possession of the Leased Premises, do not constitute “new facts” the requirements of r. 59.06 are not met. Thus, there has been no “new” breach by the Landlord for failure to provide the Tenant with exclusive possession of the SPV Premises that could be relied upon to relieve the Tenant of the obligation to pay rent. This rent abatement issue therefore need not be considered.

[80] I would add that, in any event, this issue is res judicata. The Tenant is estopped from seeking an abatement of rent due to the Landlord’s failure to provide it with exclusive possession of the SPV Premises.

[81] This is an after the fact attempt to seek an abatement of rent for the Landlord’s failure to give the Tenant exclusive possession of the SPV Premises at various points during the period of the accrual of the Rent Arrears and ongoing rental obligations. Like the last time the Tenant sought a rent abatement for past rent amounts owing, the claimed rent abatement is bound up in the earlier orders contained in the Lease Decision and the Lease Termination Decision. This issue cannot now be revisited by reason of issue estoppel and abuse of process.

[82] This point, in a slightly different context, was directly addressed in the Lease Termination Decision, at paras. 56-64.

[83] In the Lease Termination Decision (at paras. 60-64) I found that:

1. The determination of the rent owing during the period in which the Tenant now claims to have had restricted access to the SPV Premises and to be entitled to an abatement of rent was bound up in the Rent Arrears Issue already decided by the court in the Lease Decision.

2. The rent abatement arguments now made could have been made during the lease applications. They were not. They cannot be raised now that the Lease Decision has been rendered. See Wasserman v. Bishnu, 2021 ONSC 6848, 94 C.B.R. (6th) 136 at para. 44.

3. It is settled law that the re-litigation of issues that have been before the courts in a previous proceeding can also be an abuse of process: The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, 145 O.R. (3d) 759 at para. 61. The abuse of process doctrine can also be relied upon to preclude re-litigation: Winter v. Sherman Estate, 2018 ONCA 703, 42 E.T.R. (4th) 181 (“Winter”) at para. 7; Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2002] 3 S.C.R. 77 (S.C.C.), at paras. 37, 46.

4. The abuse of process doctrine applies to issues previously raised as well as issues that could have been raised. In Winter, the Court of Appeal for Ontario noted that: “[w]hile the doctrine [of abuse of process] is similar to issue estoppel in that it can bar litigation of legal and factual issues ‘that are necessarily bound up with the determination of’ an issue in the prior proceeding, abuse of process also applies where issues ‘could have been determined’: Danyluk, at para. 54; Aba-Alkhail v. University of Ottawa, 2013 ONCA 633, 363 D.L.R. (4th) 470 (Ont C.A.), at para [12]; McQuillan v. Native Inter-Tribal Housing Co-operative Inc., (1998), 1998 CanLII 6408 (ON CA), 42 O.R. (3d) 46 (Ont C.A.), at paras. 8, 10.”

5. If a party had the opportunity to advance a claim or defence before the court in an earlier proceeding and failed to do so, the abuse of process doctrine will typically preclude re-litigation of the omitted claim: McQuillan, at para. 8; Maynard v. Maynard (1950), 1950 CanLII 3 (SCC), [1951] S.C.R. 346 (S.C.C.) (“Maynard”) at p. 358-59. If a party had the opportunity to raise a matter and did not, whether for negligence, inadvertence or accident, the court may invoke the abuse of process doctrine to bar re-litigation of the issue.

[84] The respondents have now dressed up yet another argument for an abatement of rent said to arise from the Landlord’s failure to provide exclusive possession of the SPV Premises. This time it is due to something that the court decided in the Lease Decision that not only could have been raised at the time of the Lease Decision but also could have been raised at the time that the respondents sought to revisit this issue in the Lease Termination Decision.

[85] Litigation by installment is not appropriate. If an argument is to be made it should be made fully and completely the first time. A party cannot keep coming back to the court arguing the same point (rent abatement) over the same period of time (after the rent free period until now and beyond). This is an abuse of the court’s process that the court cannot and will not countenance.

[86] The same concerns apply to any attempt to argue that the delay in the reference to determine the dispute about the Tenant’s Accounting, and ensuing delay in any prospect of the Landlord paying the final installment of the Construction Allowance, should entitle the Tenant to an abatement of rent. If the Tenant had wanted to ask for a rent abatement while these issues were being determined, the time to do that has passed. This could have been, but was not, argued at the time of the Lease Decision and Lease Termination Decision as yet another basis for the past and continuing abatement of rent that the Tenant was seeking when those decisions were rendered. Not, it is res judicata.

7) No Variation of the Court’s Prior Decisions

[87] Having failed to meet the test under r. 59.06, there is no basis on which the court can or should vary the Lease Decision or the Lease Termination Decision. The Rent Arrears and rent amounts coming due and owing as provided for therein up to as recently as December 1, 2022 are long overdue. The Tenant is in default of the SPV Lease.

8) The Landlord’s Remedies for the Tenant’s Breaches

[88] The respondents were warned previously by the court that they cannot unilaterally withhold the payment of rent that has been determined to be payable by prior court orders. Bringing this motion for the introduction of Fresh Evidence, and seeking a variation of the Lease Decision and the Lease Termination Decision, did not relieve the Tenant of the obligation to pay rent in accordance with the SPV Lease and the court’s prior orders.

[89] The Landlord is entitled to take recourse in accordance with its available rights and remedies under the SPV Lease and the Commercial Tenancies Act. As an initial step, it is entitled to terminate the SPV Lease because of the Tenant’s failure to pay outstanding rent. The exercise of the Landlord’s rights as a result of the Tenant’s default(s) remains subject to whatever defences or remedies the respondents may have in response.

[90] All parties were clear at the hearing that the court was not being asked, at this time, to decide whether or not the Tenant may be entitled to relief from forfeiture. It was noted, however, that the Tenant’s ability to seek such an equitable remedy would be impacted by the Tenant’s failure to pay any of the rent ordered (aside from the credited amounts that were applied as a result of previous court rulings, which still leaves a significant shortfall in the rent amounts now overdue).

9) The Stay Requested by the Applicants in the Companion Action

[91] Notwithstanding the court’s determinations above, there shall be a stay of the Landlord’s exercise of its rights remedies arising from the Tenant’s defaults until the hearing of the motion scheduled in February 2023 in the Companion Oppression Remedy Application (and that may be extended thereafter if the decision is taken under reserve). This is done on the condition that the applicants in the Companion Oppression Remedy Application pay into their solicitor’s trust account the monthly rent as it comes due under the SPV Lease ($46,197.25) for the months of January[^11] and February 2023, so that the Landlord does not face the risk of collection for those months of rent while the requested stay is in place.

[92] The parties should be prepared for the possibility that court may order the release of those funds paid into trust to the Landlord in connection with the motion in February 2023, among other possible outcomes. This includes, but is not limited to, a requirement that other past and ongoing rent obligations of the Tenant be satisfied.

Costs and Final Disposition

[93] None of the parties came to the hearing of these motions with any cost outlines or exchanged submissions. The Landlord is seeking costs for these motions. The respondents are seeking costs for these motions and would like the court to revisit the decision to award no costs on the lease applications, if they are successful in having the Lease Decision varied in their favour.

[94] The Landlord suggested the sum of $20,000 of all-inclusive costs to be paid to the winning party. The respondents did not object to this amount.

[95] No costs were awarded to either party in the Lease Decision. Although the Landlord and Tenant had agreed that the losing party would pay the winning party $45,000 in all-inclusive costs, the court found that there was no real winner or loser on the lease applications and exercised its discretion to award no costs.

[96] In the Lease Termination Decision, the court concluded that the Landlord was the overall losing party on the primary issue of the validity of the Landlord’s May 18, 2022 Notice of Termination. The court ordered the Landlord to pay to the Tenant partial indemnity costs of that motion fixed in the amount of $20,000 within 30 days of the date of the August 12, 2022 endorsement (which costs, at the Tenant’s option, could be deducted or set-off against Rent Arrears payable pursuant hereto).

[97] The Landlord succeeded on these motions and is entitled to costs. The court agrees that a reasonable amount of costs payable to the winning party on these motions is $20,000. The respondents are jointly and severally ordered to pay the Landlord all-inclusive costs of that amount, which offset the previous award of costs in their favour.

[98] For the foregoing reasons, the court makes the following orders and directions on the current motions:

1. Mr. Hitti’s motion under Rule 59.06 is dismissed;

2. The Landlord’s motion, for leave to terminate the SPV Lease is granted; but

3. the relief sought by the Landlord’s motion is stayed pending the hearing of the motion by the applicants in the Companion Oppression Remedy Application scheduled for February 2023 upon the condition that the monthly rent for January and February 2023 coming due under the SPV Lease (of $46,197.25 per month) is paid by those applicants into their solicitor’s trust account (in accordance with the directions contained hearing) pending that hearing and subject to further orders of the court; and

4. The respondents (Mr. Hitti and the Tenant) shall jointly and severally pay to the Landlord all-inclusive costs of $20,000 for these motions, which may be offset against the prior award of $20,000 in costs that the Landlord was ordered to pay in the Lease Termination Decision.

[99] This endorsement and the orders and directions contained in it shall have the immediate effect of a court order without the necessity of the formal issuance and entry of a court order. Any party may, however, take out a formal order by following the procedure for so doing under r. 59.

Kimmel J.

Date: December 29, 2022

[^1]: There is a long history of dealings between the Landlord and the Tenant regarding the SPV Premises. It is detailed in the Lease Decision (defined below) and in 285 Spadina SPV Inc. v. 2356802 Ontario Corp., 2020 ONSC 1645, 18 R.P.R. (6th) 299. That history will not be repeated in this endorsement.

[^2]: The motion is technically only brought by Mr. Hitti (a personal respondent but also the principal and directing mind of the Tenant). It is supported by the Tenant. The relief sought is for the benefit of the Tenant so this endorsement refers to the respondents collectively when positions are described

[^3]: The “Rooftop Tenants” are Rogers Communications (“Rogers”) and Freedom Mobile, each of whom leased space from the Landlord on the roof of the SPV Premises. The Lease Decision determined, among other things, their rights of access and certain priorities as between the Rooftop Tenants and the Tenant.

[^4]: There were two applications relating to the SPV Lease before the court when the Lease Decision was released, one by the Landlord and one by the Tenant, collectively referred to herein and in the court’s prior decisions as the “lease applications”.

[^5]: The motion is technically only brought by Mr. Hitti (a personal respondent but also the principal and directing mind of the Tenant). It is supported by the Tenant. As noted earlier, because the relief sought is for the benefit of the Tenant this endorsement refers to the respondents collectively when positions are described.

[^6]: The Tenant questions the veracity of the Landlord’s challenges to the Tenant’s Accounting because the Landlord’s representative had not even looked at the Tenant’s Accounting when they were attempting to schedule the reference to determine the alleged dispute. However, since then the Landlord has indicated that it has an expert who has identified disagreement over $1 million in expenditures identified in the Tenant’s Accounting, so it appears that the dispute is real and is going to have to be determined.

[^7]: While relief from forfeiture is requested as part of the motion, the respondents did not put forward evidence or positions to support this relief at the hearing.

[^8]: Because this decision is being rendered late in December 2022, regardless of the day on which the Base Rent is due under the SPV Lease for January 2023, the applicants in the Companion Oppression Application shall have until February 15, 2023 to pay the January 2023 Rent into their solicitor’s trust account.

[^9]: The respondents appear to also be suggesting that the court erred in having done so, but that would have been a matter for the Court of Appeal, and is not a relevant consideration on this motion.

[^10]: Mr. Hitti sought production of various documents from the Landlord’s representative in connection with his cross-examination on this motion and asks the court to strike that affidavit, or parts of it, and to draw adverse inferences from the failure of the Landlord to produce the requested documents. Many of these documents would be of a nature similar to the July and August 2020 emails and drafts that the court has determined to be inadmissible. Thus, the criticism of the Landlord’s representative for not producing such emails is not compelling. But in any event, for the same reasons that Mr. Hitti’s subjective evidence and evidence about the negotiations and drafts is not being considered or relied upon on this motion, neither has the court considered or relied upon any corresponding evidence of subjective intention from the Landlord’s representative.

[^11]: Given the timing of the release of this decision just prior to January 1, 2023, they shall have until January 15, 2023 to confirm that they have paid the rent for that month into trust.