Energy FIT 2LP, 2023 ONSC 801

COURT FILE NO.: CV-17-584340-00CL

DATE: 20230131

SUPERIOR COURT OF JUSTICE – ONTARIO

(COMMERCIAL LIST)

RE: THE TORONTO-DOMINION BANK Applicant

AND

STRATHCONA ENERGY FIT 2LP, STRATHCONA ENERGY FIT 2GP INC., 1784 CAPITAL HOLDINGS LLC, 1784 SOLAR, LLC, CURTIS CHANDLER, CHANDLER CAPITAL MANAGEMENT, LLC, THE JAKE MACLEOD FAMILY TRUST, BRUCE CHANDLER, BUSINESS DEVELOPMENT BANK OF CANADA, LAURENTIAN BANK OF CANADA, SHAWANAGA FIRST NATION, SHAWANAGA LIMITED PARTNERSHIP, SFN GENERAL PARTNER INC., KW POWERLOGIC INC. and KING WHEELER HOLDINGS INC. Respondents

BEFORE: Osborne, J.

COUNSEL: R. Seumas Woods and Imad Alame, for Curtis Chandler, Chandler Capital Management, LLC, The Jake MacLeod Family Trust and Bruce Chandler

Jeffrey Levine and Samantha Gordon, for Strathcona Energy Fit 2LP, Strathcona Energy Fit 2GP Inc., 1784 Capital Holdings LLC and 1784 Solar, LLC

HEARD: October 25, 2022

ENDORSEMENT

The Application and This Motion

[1] This proceeding was originally commenced by The Toronto Dominion Bank (“TD”) as an interpleader application relating to funds held in bank accounts of six entities that operate rooftop solar projects (the “FIT 2 Entities”).

[2] The relief sought on this motion, however, essentially consists of an order directing the payment out to certain parties of the funds previously paid into Court, and an order providing advice and direction with respect to the scope and application of an order made earlier in this proceeding.

[3] Accordingly, the relief sought today effectively engages an issue much broader in scope than the interpleader: whether a corporate reorganization is to be set aside and unwound for all purposes, and specifically whether the moving parties, the Respondents Curtis Chandler, Chandler Capital Management, LLC, The Jake MacLeod Family Trust and Bruce Chandler (the “Chandler Respondents”) are the legal and beneficial owners of an entity called Hay Bay Solar LP (“Hay Bay”). That in turn requires an interpretation of an earlier order made in this proceeding.

[4] Some background and context is in order. Defined terms in this Endorsement have the meaning given to them in the motion materials unless otherwise indicated.

The Interpleader

[5] Initially, the funds in the TD accounts were claimed by two groups of entities:

a. the Chandler Respondents on the one hand; and

b. the Respondents, 1784 Capital Holdings LLC and 1784 Solar, LLC (together, the “1784 Companies”) along with Strathcona Energy FIT 2 GP and Strathcona Energy FIT 2 LP (together, the “Strathcona Partnerships”, and all collectively the “1784 Respondents”).

[6] By interpleader judgment of McEwen J. dated November 28, 2017, TD paid the funds into Court pending the outcome of the dispute between and among the Respondents about who owned which entities.

[7] That interpleader judgment extinguished the liability of TD in respect of the funds, and ordered that a trial be held to determine the rights to the funds, according to a trial management protocol set out in the judgment.

[8] TD then had no further involvement in the proceeding. The dispute between and among the Respondents, however, continued.

The Share Sale and the Corporation Reorganization

The Pre-Reorganization Structure

[9] The FIT 2 Entities and Hay Bay were originally owned indirectly by the Chandler Respondents. The Chandler Respondents owned 100% of six entities:

a. 2397591 Ontario Inc. (“591”);

b. Blackstone Energy Solutions Inc. (“BSES”);

c. Blackstone Solar Financial Holdings Ltd. (“BSFHL”);

d. 2394317 Ontario Inc.;

e. 2394305 Ontario Inc.; and

f. Blackstone SFN Inc.

[10] Those six entities are referred to collectively as the “Blackstone Companies”. I pause to observe that those six entities are the same six entities defined as the Blackstone Companies in paragraph one of the February 2022 Order discussed below.

[11] The first of those Blackstone Companies, 591, owned or controlled Hay Bay. The second and third Blackstone Companies, BSES and BSFHL, owned or controlled all of the other entities at the same level in the corporate organization chart as Hay Bay, including the six FIT 2 Entities, as illustrated in the chart below (Ex. 3 to the Affidavit of Bruce Chandler sworn February 7, 2022).

The Sale of the Blackstone Companies and the Share Pledge

[12] In 2015, the Chandler Respondents sold the shares of the Blackstone Companies to an arm’s-length entity called Lavender Glen for total consideration of $3.8 million. A significant portion of the purchase price, however, was not payable on closing. As a result, the purchaser, Lavender Glen, pledged the shares of the Blackstone Companies to the Chandler Respondents pursuant to the terms of the Blackstone Share Pledge Agreement dated April 10, 2015 (the “Pledge Agreement”) as collateral for the future payments owing as against the balance of the purchase price.

[13] That Pledge Agreement prohibited Lavender Glen from entering into certain transactions without the consent of the Chandler Respondents.

The 2015 Reorganization

[14] While funds in respect of the share purchase were still owing to the Chandler Respondents, Lavender Glen subsequently undertook a corporate reorganization (the “Reorganization”) in 2015 without the knowledge or consent of the Chandler Respondents. This had the effect of transferring ownership of the FIT 2 Entities and Hay Bay to Strathcona Energy FIT 2 LP, and away from the Blackstone Companies, the shares of which were still pledged, as illustrated in the chart below (Reply and Defence to Counterclaim of the 1784 Respondents, Schedule “A”, and Appendix “B” to the Factum of the Chandler Respondents).

[15] As reflected in the above chart, the effect of the Reorganization was to, among other things, insert a new entity, Strathcona Energy Power Generation LP, in between the Blackstone Companies and the FIT 2 Entities. The Chandler Respondents took the position that this Reorganization constituted a breach of the Pledge Agreement.

[16] Control of the Strathcona Partnerships was subsequently transferred by Lavender Glen to two Arizona-based companies, 1784 Capital and 1784 Solar, on the default of loans by Lavender Glen. The result was that those entities, which controlled indirectly the FIT 2 Entities and Hay Bay, were no longer owned or controlled by Lavender Glen.

[17] The Chandler Respondents then moved for judgment, seeking among other things declaratory relief to the effect that the Reorganization breached the terms of the Pledge Agreement, and an order that the Reorganization be set aside and unwound.

The Motion for Judgment on the Reorganization

[18] Justice Gilmore determined the motion and made an order dated February 17, 2022 (the “February 2022 Order”).

[19] In the Endorsement released following the motion, Gilmore J. stated the following, inter alia:

a. While the background facts are somewhat complicated, the matter focuses on who will own the FIT 2 Entities;

b. [The Chandler Respondents] were the original owners of the FIT 2 entities. [The 1784 Respondents] were the owners when the dispute in this case arose. They have operated the FIT 2 Entities for the last five years. As a result of the dispute, ownership of certain TD accounts was contested. TD brought an interpleader application. Today’s hearing was the end stage of that application;

c. The [1784 Respondents] also claimed ownership of the TD accounts at the outset and opposed the claim [of the Chandler Respondents] to the funds. However, they now take the position that they no longer wish to involve themselves in this proceeding and do not oppose the motion for judgment. As there is no equity left in the projects given the debt owed to Laurentian and another B.C. entity, the [1784 Respondents] do not see the benefit in spending money on further litigation in this matter. [Their] position today is that while [they] do not oppose the relief sought, the Chandler Respondents are required to prove they are entitled to the relief sought.

[20] The February 2022 Order included various heads of declaratory and other relief. Among other things, it included a declaration that the appointment of Bruce Chandler as officer and director of [the Blackstone Companies] was proper and valid; the Reorganization breached the terms of the [Pledge Agreement] and was oppressive to the Chandler Respondents, and ordered that the Reorganization be set aside.

Issues Arising Subsequent to the February 2022 Order

[21] Unfortunately, that motion heard by Gilmore J. was not, as the Court had hoped, “the end stage of that application”.

[22] Following and pursuant to the February 2022 Order, the Chandler Respondents assumed control of the FIT 2 Entities. Two issues arose, however, with respect to the implementation of the February 2022 Order, ultimately resulting in this motion.

[23] First, the 1784 Respondents took the position that the February 2022 Order did not apply to Hay Bay, with the result, they submit, that they continued to own Hay Bay.

[24] Second, the Accountant of the Superior Court of Justice advised that it required a breakdown of the specific amounts owed by each individual FIT 2 Entity, without which it could not pay out the monies held on interpleader.

The Interpleader Clarification

[25] I will address the second issue first since it now proceeds on consent. The parties advised the Court during the hearing of this motion that the issues relating to the funds held by the Accountant had been resolved on consent, but that the agreement necessitated an amendment to the February 2022 Order.

[26] The parties subsequently provided the Court with a draft consent order to facilitate the payment out of Court of the funds as agreed, which I have signed.

The Dispute Regarding the Scope of the Reorganization and Ownership of Hay Bay

[27] That leaves the first issue of advice and directions with respect to the February 2022 Order and whether it applies to Hay Bay.

[28] Specifically, the Chandler Respondents seek:

a. an order declaring that the February 2022 Order had the effect of setting aside and unwinding the Reorganization in all respects and for all purposes; and

b. an order confirming that the Chandler Respondents, through 591, are the legal and beneficial owners of Hay Bay; or

c. in the alternative, an order declaring that as a result of the February 2022 Order, the 1784 Respondents are estopped from claiming that the transactions comprising the Reorganization breached the terms of the Pledge Agreement and were oppressive, unfairly prejudicial to and unfairly disregarded the interests of the Chandler Respondents.

[29] In short, the Chandler Respondents submit that the February 2022 Order set aside the Reorganization for all purposes, and that control of Hay Bay should be turned over to them.

[30] The 1784 Respondents, on the other hand, submit that the Chandler Respondents are now seeking, through this motion for advice and directions, relief in respect of 591 (and its subsidiary, Hay Bay) that was no part of the Reorganization set aside and unwound pursuant to the February 2022 Order.

Analysis: The February 2022 Order and Hay Bay

[31] I begin with the February 2022 Order itself. Paragraphs 1-5 provide as follows, in full:

1. THIS COURT DECLARES that the appointment of Bruce Chandler as officer and director of 2397591 Ontario Inc., Blackstone Energy Solutions Inc. (“BSES’), Blackstone Solar Financing Holdings Ltd. (“BSFHL”), 2394317 Ontario Inc., 2394305 Ontario Inc., and Blackstone SFN Inc. (collectively the “Blackstone Companies”) was proper and valid.

2. THIS COURT DECLARES that the corporate reorganization (the “Reorganization”) of the Blackstone Companies carried out in the summer and fall of 2015 under which BSES and BSFHL transferred their direct and indirect interests in the Hanover PV Limited Partnership (“Hanover LP”), Solblack SFN Inc. (“Solblack Inc.”), Minton SFN Limited Partnership (“Minten SFN LP”), 7550 LaSalle Limited Partnership (“7550 LaSalle LP”), 5868 Orr Lake Limited Partnership (“5868 Orr Lake LP”) and Boost Power II Limited Partnership (“Boost Power II LP”, all six collectively, the “FIT 2 Entities”) to Strathcona Energy Power Generation Inc. in exchange for non-voting limited partnership units of Strathcona Energy Power Generation LP, breached the terms of the share pledge agreement (the “Blackstone Share Pledge Agreement”) dated April 10, 2015, between the Chandler Respondents and Lavender Glen Holdings Inc. (“Lavender Glen”) and was oppressive, unfairly prejudicial to and unfairly disregarded the interests of the Chandler Respondents.

3. THIS COURT ORDERS that the Reorganization be set aside and unwound such that BSES and BSFHL shall directly own the interests in the FIT 2 Entities they held prior to the Reorganization.

4. THIS COURT DECLARES that following the setting aside and unwinding of the Reorganization, BSES shall be the legal and beneficial owner of 84.99% of the Class A units of Hanover LP, and 42.5% of the common shares of Solblack.

5. THIS COURT DECLARES that following the set aside and unwinding of the Reorganization, BSFHL shall be the legal and beneficial owner of

(a) 42.495% of the Class A units of Minten SFN LP;

(b) 42.495% of the Class A units of LaSalle LP;

(c) 42.495% of the Class A units of 5868 Orr Lake LP; and

(d) 42.5% of the units of Boost Power II LP.

[32] Finally, the February 2022 Order expressly provided that any of the parties shall have the right to seek the Court’s advice and direction with respect to the implementation of that order.

[33] In circumstances in which a judge is required to interpret the order of another judge, a broad and liberal interpretation to achieve the intention of the court that made the order should be applied.

[34] As stated by Penny J. in Bradshaw v. Langley, 2015 ONSC 4909, at para. 42:

Court orders must be interpreted using the same principles as those used to interpret contracts and statutes. The overriding concern is to determine the intent of the instrument, giving the words their ordinary meaning consistent with the surrounding circumstances at the time the order was made. Both court orders and contracts must be interpreted through the lens of commercial reasonableness. They should not be interpreted in such a way as to bring about an absurd or inconsistent result.

[35] That is consistent with the approach of the court in Royal Bank of Canada v. 1542563 Ontario Inc., 2006 CanLII 32639 (Ont. S.C.), at para. 4 (quoted with approval in Forbes v. Forbes, 2022 ONSC 545, at para. 98). This is applicable here notwithstanding that it arose in the context of a family law proceeding:

Rather, I am following those cases that have held, where there is a dispute, a Judge can make an order to ensure the original order is carried out in a manner that makes sense. I refer to the following principles from some of the jurisprudence in this area. These cases make it clear that courts should interpret the language in order to give:

• “a broad and liberal interpretation to achieve the objective of the court in making the order”. See, C & K Mortgage Services Inc. v. Fasken Campbell Godfrey (2000) Carswell Ont. 2119 at paragraph 2.

• “In accordance with the general rules of interpretation, the language used in a judgment or order must be construed according to its ordinary meaning and not in some unnatural or obscure sense.” See, Brosseau v. Berthiaume (1993) Carswell Ont. 3118, at paragraph 9.

• “Even when lawyers take the greatest amount of care in drafting Consent Agreements geared towards resolving problems, every eventuality cannot be covered. Developments beyond the contemplation of the parties often appear. Life is fluid. It is not static. A certain flexibility must be given to the interpretation of Court Orders. See, Tatarenko v. Tatarenko (2005) Carswell Alta 588 at para. 14.

• “Instead, Courts should, on the one hand, examine the context in which the order was issued, and evaluate it according to the specific and particular circumstances of the case and, on the other hand, ask themselves whether or not the defendant could have reasonably been aware that his acts or omissions fall under the order.

In other words, a defendant cannot hide behind a restrictive and literal interpretation to circumvent the order and make a mockery of it and of the administration of justice.” See, Bhang v. Chau (2003) 2003 CanLII 75292 (QC CA), 229 D.L.R. (4th) 298 (Que. C.A.) at paragraphs 31 and 32.

[36] I agree with the submission of the Chandler Respondents that the February 2022 Order means what it says. The Reorganization breached the terms of the Pledge Agreement and was oppressive, unfairly prejudicial to and unfairly disregarded the interests of the Chandler Respondents. The Reorganization was set aside and unwound.

[37] Not only does this flow, in my view, from a plain language reading of the February 2022 Order, it is entirely consistent with the findings made by Gilmore J. (that the Reorganization was oppressive, and should be set aside and unwound).

[38] The submission that the findings of oppression resulting in the order setting aside and unwinding the Reorganization applied so as to give effect to that unwinding to only six of the seven relevant FIT project entities, is entirely inconsistent with those findings and the context within which they were made. It is also consistent, in my view with the chronology of events and what it was that Gilmore J. determined to set aside.

[39] Notwithstanding that as is often (if not invariably) the case that the Reorganization was in fact a series of complicated transactions each of which in turn included a series of steps, it is clear to me that the essence of the dispute determined by Gilmore J. comes down to this:

a. the Chandler Respondents sold the shares they owned in the Blackstone Companies to Lavender Glen;

b. Lavender Glen did not pay the purchase price in full on closing, but rather took on indebtedness in favour of the Chandler Respondents;

c. as security for that indebtedness, Lavender Glen pledged collateral, which in this case happened to be the shares they had just purchased;

d. Lavender Glen then, for its own purposes completely unrelated to the Chandler Respondents, set about to implement the Reorganization;

e. the relevant effect of the Reorganization was to transfer the collateral already pledged to the Chandler Respondents to the Strathcona Partnerships; and

f. control of the Strathcona Partnerships was transferred to the 1784 Companies, which were entities not owned or controlled by Lavender Glen.

[40] It is somewhat ironic that the last step referred to above, the transfer of control of the Strathcona Partnerships to the 1784 Companies, occurred as a result of a default by Lavender Glen on obligations owed to the 1784 Companies. That is precisely the type of default for which the shares were pledged as collateral to the Chandler Respondents in the first place and is exactly why the Pledge Agreement prohibited such a transfer.

[41] The fact that 591 or Hay Bay were not expressly referred to in the originating process in this Application is not determinative of the matter either way. TD commenced the Application for an interpleader order allowing it to pay into Court the funds held in six accounts and wash its hands of this dispute. 591 and Hay Bay did not happen to be among those six account holders, simply because it banked at the Bank of Montréal (“BMO”).

[42] If TD had not commenced the interpleader Application at all, the Chandler Respondents would have commenced a proceeding for the relief they ultimately obtained in the February 2022 Order. On the other hand, if 591 or Hay Bay had been the registered owner of the TD account, TD would have named them as respondents to interplead the funds into Court.

[43] For that reason, I reject the argument that the February 2022 Order applies only to the FIT 2 Entities. The common-sense interpretation, and a plain language reading of the February 2022 Order and the endorsement of Gilmore J. support the conclusion that, just as the February 2022 Order says, the Reorganization is set aside and unwound in its entirety.

[44] The submission by the 1784 Respondents that the February 2022 Order does not apply to, and had no effect on, 591 or Hay Bay because it did not expressly refer to those entities is no more compelling than would be the opposite argument to the effect that the February 2022 Order applies to those entities because they were part of the Reorganization and nothing in the order expressly excludes them. In fact, in my view the submission would be less compelling given the integrated nature of the Reorganization.

[45] In any event, however, the February 2022 Order does in fact refer to 591. I reference paragraph one excerpted above which specifically refers to 591, defines it as one of the Blackstone Companies, and declares that the appointment of Bruce Chandler as officer and director was proper and valid. That was one of the live issues on the motion.

[46] Accordingly, while Hay Bay was not expressly referred to because at the time no specific relief was sought against or in respect of it (i.e., such as an interpleader order by TD), it was clearly part of the corporate reorganization, and the parent company, 591, was expressly the subject of the declaratory relief (since the role of Mr. Chandler was specifically at issue).

[47] Accordingly, paragraph one of the February 2022 Order restores Mr. Chandler as officer and director of 591 on the basis of the declaration that his appointment was proper and valid. As a result, he should have been, and but for the Reorganization would have been, in a position to exercise control over all of the FIT 2 Entities and 591 and therefore Hay Bay, all through the Blackstone Companies.

[48] Paragraph two of the February 2022 Order then defines the Reorganization affected by the order as “the corporate reorganization of the Blackstone Companies carried out in the summer and fall of 2015”. Those are the same Blackstone Companies defined in the paragraph immediately above to include 591, the parent of Hay Bay.

[49] I reject the submission of the 1784 Respondents that because paragraph two of the February 2022 Order goes on to refer to the FIT 2 Entities that it somehow restricts or narrows the definition of the “Reorganization” (i.e., “the corporate reorganization (the “Reorganization”) of the Blackstone Companies carried out in the summer and fall of 2015 under which BSES and BSFHL transferred their direct and indirect interests … in the FIT 2 Entities….”) [Emphasis added].

[50] The submission of the 1784 Respondents is that the Reorganization is by that language narrowed in scope to apply only to certain parts of the Reorganization that affected the FIT 2 Entities that were then named respondents in the Application within which Gilmore J. determined the motion.

[51] I disagree. Rather, the plain language reading of paragraph two is clear, in my view. It defines the Reorganization as the corporate reorganization carried out in the summer and fall of 2015. It then goes on to say that it was under that Reorganization that BSES and BSFHL transferred their interests in the FIT 2 Entities. That is entirely accurate, but it is by no means an exhaustive description of what the Reorganization included.

[52] In my view, the fact that the Reorganization was the umbrella transaction under which the interests in those six FIT 2 Entities was transferred to Strathcona Energy Power Generation Inc. cannot and should not be interpreted to mean that the Reorganization is somehow limited only to the transfer of the interest in those six entities. On the evidence, it plainly was not.

[53] There is no issue that at that time, the Blackstone Companies included 591, the parent of Hay Bay. It is as simple as that. All of the Blackstone Companies were sold by the Chandler Respondents to Lavender Glen. None were carved out, and nor were there two or more Reorganizations at all, let alone multiple Reorganizations carried out in the summer and fall of 2015. There was one.

[54] Lavender Glen pledged all of the shares, of all of the Blackstone Companies, as security to the Chandler Respondents. It then transferred those shares as part of the Reorganization in a manner in which Gilmore J. concluded breached the terms of the Pledge Agreement. The Reorganization was accordingly set aside. It would make no sense, in my view, to have found that the Reorganization was oppressive and unfairly prejudicial to the Chandler Respondents, but only to the extent of six of the seven FIT 2 project entities simply because they happened to bank with TD. There is no basis for that interpretation.

[55] I draw additional comfort in my interpretation that the Reorganization was one integrated transaction or series of transactions from which 591 and its subsidiary Hay Bay were not intended by Gilmore J. to be carved out, from the manner in which the relevant entities were equally integrated and the manner in which financing was obtained.

[56] As noted, 591 was clearly one of the Blackstone Companies sold by the Chandler Respondents to Lavender Glen. All six were rooftop solar companies. Three of the six, being BSES, BSHFL and 591, own interests in FIT 2 projects, being projects which had the second generation of contracts under the Province of Ontario’s Feed in Tariff Program.

[57] Lavender Glen then effected the Reorganization, but the manner in which it did so is relevant to this motion:

a. it incorporated a new Ontario corporation, Strathcona Energy Power Generation Inc., which it continued to own;

b. it then formed a new limited partnership, Strathcona Energy Power Generation LP,

c. the new corporation then became the sole general partner of the limited partnership, and Lavender Glen became the sole Class A limited partner; and then

d. Lavender Glen transferred its interest in the seven FIT 2 project entities (i.e., the six FIT 2 Entities and also 591) to the limited partnership in exchange for non-voting units.

[58] It was during this same period that Lavender Glen entered into commitments for long-term financing for the various projects from CIT Financial Ltd. (“CIT”). CIT provided a long-term loan to Strathcona Energy FIT 2 LP on December 8, 2015. Strathcona Energy FIT 2 LP then advanced monies to the FIT 2 project entities. CIT then assigned the loans to Laurentian Bank of Canada. Again, the Laurentian loan to the Strathcona Partnerships was for all seven entities. The fact that six banked with TD and one banked with BMO was irrelevant.

[59] As can be seen from the second chart reproduced above showing the corporate organization following the Reorganization, that borrower entity, Strathcona Energy FIT 2 LP, (“Borrower LP”), sits below Lavender Glen and atop Strathcona Energy Power Generation LP, which in turn sits atop Hay Bay (as it had done prior to the Reorganization).

[60] Moreover, the findings of Gilmore J. were that the Reorganization, as I have noted above, had the ultimate effect of alienating collateral that had been pledged as security in breach of the Pledge Agreement. It follows in my view that the better interpretation of the February 2022 Order would be to the effect that if the intention were to specifically carve out 591 and its subsidiary Hay Bay, that would have been expressly provided for.

[61] In the same way, it is reasonable to conclude that had the 1784 Respondents been of the view, at any time up to and including the settlement of the terms of the February 2022 Order, that it did not apply to Hay Bay, they would have asserted that position, and that was never done.

[62] In addition, I observe that the interpleader judgment of McEwen J. dated November 28, 2017, referred to above directed that in addition to the Respondents named in the Application, any party identified on Schedule “A” to that judgment was at liberty to apply to the court for further direction with respect to the ownership of the funds in the TD accounts or with respect to such other matters that may arise that require direction from the court.

[63] The parties identified on Schedule “A” include Lavender Glen, 591, and Strathcona Energy Power Generation LP, among others. This too, reinforces my interpretation of the February 2022 Order. That same LP controlled Hay Bay following the Reorganization.

[64] Moreover, I reject the submission of the 1784 Respondents that this Court lacks the jurisdiction to grant the relief sought by the Chandler Respondents, notwithstanding paragraph 11 of the February 2022 Order expressly giving the parties the right to seek the Court’s advice and direction with respect to the implementation of that order.

[65] The submission made is that what the moving parties seek is not advice and direction with respect to the implementation or interpretation of the February 2022 Order, but rather that by seeking the interpretation of “Reorganization” as they do, they are seeking new relief not sought before Gilmore J. For the same reasons set out above, I do not accept this submission.

[66] For all of the above reasons, I interpret the February 2022 Order as setting aside and unwinding the Reorganization of the Blackstone Companies, including for greater certainty 591 and its subsidiary Hay Bay.

[67] Finally, even if I were wrong in the interpretation of the February 2022 Order, I would conclude that issue estoppel applies here. If I were to conclude that the February 2022 Order did not include Hay Bay with the result that it remained under the control of the 1784 Respondents, the inevitable result of that determination would be that the Chandler Respondents would commence a new proceeding seeking declaratory relief and ownership of Hay Bay. That issue should not be relitigated.

[68] In my view, the doctrine of issue estoppel should apply here since:

a. the same question was decided in the previous proceeding (i.e., the motion before Gilmore J. in this proceeding);

b. the judicial decision said to create the estoppel was final; and

c. the parties to the previous proceeding were the same as the parties to the second proceeding.

(See Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, at paras. 25, 33).

[69] The issue of whether the Reorganization of the Blackstone Companies carried out in the summer and fall of 2015 ought to be set aside and unwound because it breached the Pledge Agreement and was oppressive, unfairly prejudicial to and unfairly disregarded the interests of the Chandler Respondents was determined by Gilmore J. That decision was final.

[70] The parties are the same. I also observe the fact that every party who might assert any interest in Hay Bay, beneficial or legal, is a party to this proceeding or received notice of it. In other words, there is no stranger to the dispute affected by the issues.

[71] For all of the above reasons, an order will go declaring that the February 2022 Order had the effect of setting aside and unwinding the Reorganization in all respects and for all purposes, and further declaring that the Chandler Respondents, through 591, are the legal and beneficial owners of Hay Bay.

[72] The Chandler Respondents submitted in their revised factum that they also ought to be entitled to judgment in their counterclaim against the 1784 Companies on the basis that those entities had elected not to participate further in the litigation depending on the result here. If there are issues that need to be addressed given my disposition above, I may be spoken to.

[73] The Chandler Respondents sought costs, in the event they were successful, in the amount of $7500, while the 1784 Respondents sought costs, in the event they were successful, in the amount of $5000.

[74] The Chandler Respondents were successful in the relief they were seeking and are entitled to their costs. Exercising my jurisdiction pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and considering the factors in r. 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, I find the amount claimed of $7500, inclusive of fees, disbursements and HST, to be reasonable, and that amount is payable to the Chandler Respondents by the 1784 Respondents within 60 days.

Osborne, J.

Date: January 31, 2023