Court File and Parties

COURT FILE NO.: CV-23-00700055-0000 DATE: 20231025 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DESJARDINS SECURITIES INC. Plaintiff – and – AVANT BRANDS INC. Defendant

Counsel: Adam Kanji, for the Plaintiff Jon Picone and Kiyan Jamal, for the Defendant

HEARD: October 23, 2023

Papageorgiou

Endorsement

[1] This matter was sent to a case conference in accordance with the practice direction that states that all short motions are to be case conferenced first.

[2] The defendant sought to bring a motion to strike the plaintiff’s Statement of Claim on the basis that there is no cause of action pleaded.

[3] The matter rests on the interpretation of the contract at issue.

[4] The plaintiff Desjardins Securities Inc. (“Desjardins”) says that it entered into a contract with the defendant Avant Brands Inc. (“Avant”) to assist it with efforts to acquire a company, Flowr Corporation (“Flowr”).

[5] It is undisputed that the contract entitled Desjardins to payment of $1,000,000 in cash and shares if Avant or one of its “affiliates” acquired Flowr. This amount was also payable if Avant acquired Flowr within 6 months of termination of the contract.

[6] Within six months of said termination, a related corporation to Avant acquired Flowr. Avant then acquired 100 % of the shares of that related corporation.

[7] Avant says that the corporation was an “affiliate” within the meaning of the contract because “affiliate” as defined in the Business Corporations Act means that Avant must hold at least 51 % of the shares, and it only held 50 %.

[8] Desjardins says that part of its case involves a breach of a duty of good faith performance. It says that Avant did an end run around their contract by purchasing the shares in this manner.

[9] Although case conference judges are empowered pursuant to r. 50.13 to make procedural orders or grant interlocutory relief, it is not possible for me to decide the motion that the defendant seeks to bring at a case conference. It is a complicated matter which involves not only the contract at issue, but surrounding circumstances which are typically part of the interpretive exercise as per Sattva. I do not have any of those surrounding circumstances before me.

[10] As well, there are legal issues such as whether the definition of “affiliate” as used in the contract at issue is the same as the definition in the Business Corporations Act. It may be, but I have no law before me on this issue.

[11] It was my view that proceeding with a motion to strike would not be the most efficient manner of resolving this case.

[12] Instead, I proposed to the parties, and they agreed, that they would have a two-day summary trial during the week of January 13, 2025.

[13] This is the most efficient and least costly manner of proceeding.

[14] The parties have assured me that they will be able to agree to a timetable for the exchange of their materials.

[15] The parties shall schedule a pretrial at least three months before the trial date.

[16] As well, if the plaintiff intends to amend the pleading to plead any causes of action other than breach of contract, it shall advise the defendant by January 1, 2024.

Papageorgiou J. Released: October 25, 2023