Court File and Parties

Court File No.: CV-23-916 Date: 2025-10-31 Ontario Superior Court of Justice

Main Action

Between: Beechhill Capital Corp., Plaintiff

– and –

P2P Green Power Energy Solutions Inc., 2521059 Ontario Inc., and John Carroll, Defendants

Counterclaim

Between: P2P Green Power Energy Solutions Inc., 2521059 Ontario Inc. and John Carroll, Plaintiffs by Counterclaim

– and –

Niklas Van Haeren, Wilhelmus Van Haeren, 2497895 Ontario Inc., WDSK Inc., WDSK Grow Inc., Ontario Marihuana Growers Inc. and Beechhill Capital Corp., Defendants to Counterclaim

Counsel

For the Plaintiff: Catherine M. Patterson

For the Defendants: Paul Cassan, Orlando Rosa

For the Plaintiffs by Counterclaim: Paul Cassan, Orlando Rosa

For the Defendants to Counterclaim: Catherine M. Patterson

Heard: February 10, 2025

Justice: K. Tranquilli

Introduction

[1] The plaintiff brings this motion for summary judgment in respect of a promissory note. The defendants acknowledge that the loans of $1,373,230.00 remain unpaid.

[2] However, the defendants submit they have a "complete defence" to the enforceability of the promissory note, arising from the defendants' business dealings with the plaintiff and other individuals and entities related to the plaintiff. The defendants allege the plaintiff lender and other parties engaged in oppressive and unfair conduct to the defendants' prejudice. The alleged misconduct includes misrepresentations by these related parties to the defendants about the value of certain publicly traded shares held by the defendants in another corporation and which the defendants pledged as security for the promissory note. The defendants contend they were induced into signing the promissory note by the false assurances that the value of the pledged shares were sufficient to cover the note and that the note was just a formality "for the record." The defendants allege these shares were, in fact, secretly and improvidently sold, dividends improperly retained, and the proceeds wrongfully transferred to the plaintiff, resulting in financial prejudice to the defendants. The defendants pursue remedies for these contractual and oppression claims by way of counterclaim to this action as well as in two other proceedings.

[3] The defendants urge that the plaintiff's motion must be dismissed. They submit the contractual and oppression claims are inextricably connected to the promissory note and raise genuine issues requiring a trial. The obligations under the promissory note cannot be fairly considered when de-contextualized in this motion from the other claims and the underlying complex business dealings amongst the parties. This summary judgment motion is yet one more unfair tactic wielded by the wealthy plaintiff and its related parties as part of a scheme against the vulnerable defendants. Summary judgment affords an unfair strategic advantage to the plaintiff and related parties in the remainder of the litigation, risks findings inconsistent with the balance of that litigation, and is not a proportionate approach to this dispute.

[4] The plaintiff submits there is no genuine issue requiring a trial regarding the existence of this debt and that the defences raised against the promissory note are without foundation.

[5] These reasons will explain why I have granted summary judgment in favour of the plaintiff's claim on the promissory note. In summary, the apparently complex factual matrix raised by the defendants' assertions as a defence to the promissory note does not withstand scrutiny. Notwithstanding the unresolved factual contentions in respect of the contractual and oppression claims, there is no genuine issue requiring a trial about the defendants' obligations under this note. I am satisfied it is in the interests of justice for the promissory note to be addressed separately from the other disputes between the parties. Oppression is not a defence to the promissory note. Even assuming there were misrepresentations about the share value or their disposition, such statements would have been of no consequence. The statements could not have induced the defendants to act to their prejudice in signing the note as the loans were advanced before such statements were made. I am satisfied that summary judgment on the promissory note will not give rise to a risk of inconsistent findings, but rather offers the prospect of a more proportionate, timely and cost-effective manner on which the remainder of the litigation can proceed.

Overview of Evidence

[6] The motion proceeded on a record of these pleadings, pleadings from related proceedings, affidavits and cross-examinations on those affidavits. The plaintiff produced its accountant Cindy Fisher on its behalf. The defendant Carroll was cross-examined on behalf of the defendants.

[7] The following overview of evidence arises from this record and is not in material dispute, unless specifically addressed.

[8] The defendant John Carroll is the sole shareholder and director of the defendant P2P Green Power Energy Solutions Inc. ("P2P"). P2P is in turn the principal of the defendant 2521059 Ontario Inc. ("252"), which operates a greenhouse and was interested in establishing a cannabis production facility.

[9] The defendants Carroll, P2P and 252 began dealing with Niklas Van Haeren in various entrepreneurial endeavours in the emerging cannabis market. The defendants Carroll, P2P and 252 then also began dealing with the plaintiff, Beechhill Capital Corp. ("Beechhill"). Beechhill's sole shareholder and director is Niklas Van Haeren's father, Wilhelmus Van Haeren. The balance of these reasons will refer to the Van Haeren parties by their first names for clarity.

[10] The court heard that Wilhelmus and Niklas and other Van Haeren family members carry on various business activities through what was colloquially referred to as the "Van Haeren group". Among its business activities, Beechhill also provides administrative and bookkeeping services to the various Van Haeren companies. Certified public accountant Cindy Fisher provides accounting services to the group of companies owned or operated by various members of the Van Haeren family, including the plaintiff Beechhill, and the defendants by counterclaim: 2497895 Ontario Inc. ("249"), WDSK Inc., WDSK Grow Inc., and Ontario Marihuana Growers Inc., as well as to another corporation, involved in separate litigation, JCCV.

[11] Niklas' business activities include corporate interests in the defendants by counterclaim: 249, WDSK Inc., WDSK Grow Inc. and Ontario Marihuana Growers Inc. Niklas' spouse and the defendant Carroll were directors of JCCV and Niklas was its president. At one time JCCV was interested in developing a cannabis production facility. JCCV in turn held shares in the defendant corporation 252, along with the defendant P2P.

[12] In 2016, P2P entered into a consulting agreement with 249. P2P was to provide consulting services to 249 on terms that included payment of fees and P2P holding a 6% interest in 249. 249 in turn held shares in a publicly traded cannabis producer, Newstrike Brands Inc., which was then acquired by HEXO Inc. in or about May 2019.

[13] Between August 2018 and July 2019, Beechhill loaned a total of $1,000,000 to the defendants Carroll and P2P under three promissory notes. In each note, the defendants pledged P2P's interest in the Newstrike/HEXO shares held by 249 as security on the loans:

a. By promissory note dated August 31, 2018, Beechhill loaned the principal sum of $650,000 to the defendants Carroll and P2P at an interest rate of 5% per annum, to be paid in full on or before August 31, 2020. The defendants pledged all shares held of Newstrike Brands Inc. held in 249 as security on the principal.

b. By promissory note dated May 7, 2019, Beechhill loaned the principal sum of $50,000 to the defendants Carroll and P2P at an interest rate of 5% per annum and again to be paid in full on or before August 31, 2020. The defendants again pledged all shares held of Newstrike Brands Inc. in 249 as security on the principal.

c. By promissory note dated July 8, 2019, Beechhill loaned the principal sum of $300,000 to the defendants Carroll and P2P at an interest rate of 5% per annum, due in full on or before August 31, 2020. The defendants pledged all shares held of HEXO Inc. in 249 as security for the principal (the change in the name of the shares pledged being consistent with HEXO's acquisition of Newstrike in or about May 2019).

[14] There is no dispute that: 1. The defendant Carroll signed these promissory notes on his and P2P's behalf; 2. The defendants received and used these funds; and 3. These loans were not repaid to the plaintiff by August 31, 2020, as was contemplated in each note.

[15] The plaintiff Beechhill advanced additional sums to the defendants P2P and 252 as interest-free demand loans between September 2019 and December 2020. Beechhill loaned $40,000 to P2P in September 2019. As of December 2020, the plaintiff's demand loan account balance to the defendant 252 was $208,663.75. The defendants did not challenge the accuracy of these loan amounts and again acknowledge the loans have not been repaid.

[16] In April 2021, the defendant Carroll presented a draft promissory note by email to Niklas and asked him to forward it to the in-house accountant Cindy Fisher. The draft note prepared by Carroll combined the three overdue promissory notes into one with a new due date in 2023. Ms. Fisher testified that Niklas and Carroll held shares in another company, GN Ventures. Fisher understood from Niklas that Carroll's consent to a reorganization of the GN Ventures shares was contingent on Beechhill's agreement to the replacement promissory note. By responding email to Carroll, Fisher advised Carroll that he overestimated the outstanding principal by about $10,000. Fisher also amended the agreement to include the outstanding demand loans, the rate of interest, the inclusion of both Carroll and 252 as parties to the note and the pledge of the HEXO shares held by 249 as security. Ms. Fisher explained Carroll would also earn interest on his share of the proceeds of HEXO shares that had been sold by 249 but were yet to be distributed. By responding email Carroll asked for Fisher to include a signature block for Beechhill and to sign it back.

[17] By the promissory note dated April 1, 2021, the defendants Carroll, P2P and 252 agreed to pay Beechhill the principal amount of $1,372,230.00 at a rate of 5% per annum, to be paid in full on or before March 31, 2023. The principal was secured by all shares held of HEXO Inc., including the defendants' share of those previously held but net proceeds not distributed by 249. There is no dispute that this new promissory note was made in substitution for the three previous notes.

[18] The business relationship between the defendants and Niklas soured thereafter. Disputes arose regarding the terms of the consulting agreement between P2P and 249, along with conflict about Carroll or P2P's interests in 249. The defendants claim there was an oral agreement with Niklas and/or 249 which provided that Carroll/P2P would receive a 6% interest in any other related corporation to which P2P provided its consulting services. Carroll and P2P accordingly claim that they have legal, beneficial or equitable interests in other corporations of which either Niklas or 249 are a principal: WDSK Inc., WDSK Grow Inc., and Ontario Marihuana Growers Inc.

[19] These disputes and allegations have crystallized in three court proceedings, including this matter. The court understands the parties agree that the actions should be consolidated; however, this is yet to occur.

CV-22-28915 – Sault Ste. Marie – The "Oppression Action"

[20] The defendants Carroll and P2P first pursued these disputes as plaintiffs by Notice of Action issued April 29, 2022, in Sault Ste. Marie – CV-22-28915 (the "Oppression Action"). They seek damages for breach of contract and oppression remedies pursuant to s. 248 of the Business Corporations Act, naming 249, Beechhill, Wilhelmus, Niklas, JCCV and WDSK Inc as defendants. Carroll and P2P claim legal, equitable or beneficial interests in 249, WDSK Inc. and JCCV. The focus of the oppression claim is 249's disposition of the HEXO shares. Carroll and P2P allege that 249 and its principal Niklas secretly sold the HEXO shares on an improvident basis and then used the proceeds of the sale to make an unauthorized transfer or loan to Beechhill, rather than pay a dividend to Carroll and P2P. Carroll and P2P seek orders requiring Beechhill to disgorge the alleged unauthorized transfer of the proceeds of the HEXO share dispositions.

[21] The defendants deny that Carroll or P2P are shareholders of WDSK Inc. and deny having engaged in oppressive conduct. The defendants specifically plead that Carroll and P2P are indebted to Beechhill through the promissory note for which Carroll pledged the HEXO shares in 249 as security for the loan. The defendants acknowledge that 249 declared a capital dividend but plead that no shareholder was paid the dividend. The defendants further plead that had 249 paid a capital dividend relative to the P2P's interest in the shares, it would have been paid to Beechhill to reduce P2P's outstanding loan.

[22] The court was told this matter has not proceeded beyond the pleadings stage.

CV-23-916 – London – The "Promissory Note Action"

[23] Beechhill then commenced this action on the unpaid 2021 promissory note by statement of claim issued May 15, 2023 – CV-23-916. The defendants deny liability under the promissory note on several grounds, including that there was no new consideration for the note, that the action is statute-barred. The defendants also plead that the note is not enforceable due to misrepresentations by Niklas that the note was only for a "matter of record" and that the defendants' interest in the HEXO shares held by 249 was more than enough to repay the loan. The defendants allege they only found out about this misrepresentation after executing the note and learned that 249 had already sold a significant amount of its holding in HEXO and that 249 then transferred or loaned the proceeds of the sale to Beechhill without the defendants' authorization. P2P, Carroll and 252 plead the Oppression Action and purport to incorporate those claims by reference to the earlier pleading as against Beechhill and Wilhelmus. The defendants also seek the same oppression remedies by counterclaim, adding Beechhill, Wilhelmus, 249, Niklas, WDSK Inc., WDSK Grow Inc. and Ontario Marihuana Growers Inc. as defendants by counterclaim.

[24] The defendants by counterclaim, including Beechhill, again deny contractual liability or having engaged in oppressive conduct, including as it relates to the disposition of the HEXO shares. They also plead that the counterclaim is an abuse of process as these same allegations are already asserted in the Oppression Action.

CV-23-29218 – Sault Ste. Marie – The "Derivative Action"

[25] Finally, by statement of claim issued May 19, 2023 in Sault Ste. Marie, Niklas' spouse, a director of JCCV Inc., commenced a derivative action on JCCV's behalf against Carroll and 252 in response to Carroll's alleged unilateral action in cancelling JCCV's shares in 252 and re-issuing the shares to his own company P2P (the "Derivative Action").

[26] By statement of defence and counterclaim, Carroll and 252 plead the JCCV shares in 252 were properly canceled and plead the Derivative Action was brought in retaliation to the Oppression Action. Carroll and 252 again incorporate the oppression claim into the counterclaim by reference to the Oppression Action and name Wilhelmus, Beechhill, Niklas, Niklas' spouse and JCCV Inc. as defendants by counterclaim.

[27] The court was advised the defendants by counterclaim have brought a motion to strike the defence and counterclaim as an abuse of process. That motion is adjourned pending the disposition of this motion.

Analysis

[28] The principles that must guide this court in the exercise of its discretion and powers on a summary judgment motion have been thoroughly articulated and need not be repeated in these reasons: Hryniak v. Mauldin, 2014 SCC 7, paras. 65-68. It is also well established that in general, the motion judge is entitled to assume the record contains all the evidence the parties would present at trial. The parties must put their best foot forward and "lead, trump or risk losing": Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 at para. 27.

[29] The defendants submit the court should draw an adverse inference from the plaintiff's failure to provide direct affidavit evidence from either Wilhelmus or Niklas. As principals of the plaintiff corporation or other corporate entities involved in the dealings, they would be the individuals with firsthand knowledge about the circumstances of the loans, the promissory notes and the HEXO shares.

[30] I find it is not appropriate to draw such an inference on this record. While the defendants have expanded the footprint of this action to include the contractual dispute and oppression claims, the focus of this action as originally constituted, and the focus of this motion is the promissory note. Beechhill produced its accountant/bookkeeper as its affiant. I have reviewed Ms. Fisher's affidavit and the transcript of her cross-examination. Her responsibilities included oversight of the plaintiff and other family owned or operated companies. She had direct dealings with the defendant Carroll in the preparation of the very promissory note in issue. She demonstrated familiarity with 249's acquisition and disposition of the HEXO shares. It is true that she could not address the allegations regarding misrepresentations (beyond her denial of personal knowledge of or direct participation in making such statements to Carroll), oppressive conduct and the contractual dispute. However, as I will explain, I am satisfied these unresolved issues are not a bar to addressing the validity of the promissory note.

[31] I will now explain why I conclude that each of the defences raised fails to demonstrate a genuine issue requiring a trial.

Consideration for the Promissory Note

[32] The defendants submit the note is unenforceable because there was no new consideration for the April 2021 promissory note. The plaintiff previously advanced the loans to the defendants between 2018 and 2020.

[33] A promissory note is an unconditional promise to pay. Valuable consideration for a promissory note may be constituted by any consideration sufficient to support a simple contract or an antecedent debt or liability: Bills of Exchange Act, R.S.C. 1985, c. B-4, ss. 52(1), 176(1).

[34] There is no genuine issue requiring trial as to whether valuable consideration was given for this note. Valuable consideration is established in this note through two means. First, pursuant to the Bills of Exchange Act, consideration is established through the antecedent debts of the $1 million previously advanced under the expired promissory notes, along with the additional sums by demand loans, and which the defendants acknowledge they received and have not repaid. Second, new consideration is, in fact provided through the plaintiff's forbearance from calling the previous loans when due. The defendants received an additional approximate two and one-half years to repay the loans under the new note, beyond what they originally agreed to in the original promissory notes that were due in August 2020. I find the record establishes that valuable consideration was given for the promissory note.

The Limitations Act, 2002

[35] The defendants plead the plaintiff's action is out of time as it was not commenced within two years of when the loans were first due, on August 31, 2020. This would be correct if the plaintiff's claim was based on the three previous notes that came due in August 2020. However, there is no question that those debts were replaced by the 2021 promissory note that came due on March 31, 2023. The action was commenced by claim issued May 15, 2023, several weeks after the note came due and well within the two-year limitation period. There is accordingly no genuine issue requiring a trial on the limitation period defence, which must fail.

The Oppression Claims

[36] The record on this motion certainly did not plumb the depths of the factual disputes concerning the oppression claims and there is no first-hand evidence of principal witnesses such as Niklas or Wilhelmus. However, the plaintiff observes that the defendants have not pleaded equitable set-off as a defence to the promissory note. The plaintiff submits that in any event, oppression and equitable set-off are not defences to claims under bills of exchange, which include promissory notes. Irrespective of the merits of the oppression claims, of which I make no factual findings, I agree that the oppression claims, an equitable remedy arising from the disposition of 249's HEXO shares are not a valid defence to the promissory note. While a promissory note may not be a bill of exchange for all purposes, the rationale for not allowing the doctrine of equitable set-off to apply to claims under bills of exchanges is applicable to promissory notes: Argiris v. Farley at paras. 7-10.

Misrepresentation

[37] The plaintiff fairly acknowledges that the misrepresentation defence engages factual dispute on this record. However, the plaintiff submits that the record nevertheless establishes there is no genuine issue requiring trial. Taken at its highest, the evidence of misrepresentation fails to establish any inducement or causal connection for the defendants to agree to the promissory note.

[38] I agree with the plaintiff that the alleged misrepresentations or dealings with the HEXO shares can have no bearing on the validity of the promissory note. The defendants' contentions are either contradicted by the record or have no connection to the circumstances in which the promissory note was signed.

[39] The defendants plead that Niklas represented that the promissory note was only a matter of record since Carroll/P2P held a considerable stake in the HEXO shares through the 6% interest in 249. The defendants further contend that shares were, in fact, secretly sold and that this fact was concealed from them before Carroll signed the promissory note.

[40] In his responding affidavit on this motion, Carroll claims that Niklas and Fisher represented to Carroll that the note was a "mere formality" as the amounts which were shown owing would be paid from his interest in the HEXO shares. Carroll claims he believed that there were substantial amounts owing to him given that he owned a "considerable amount" of the shares through 249, which he claimed amounted to 395,657 HEXO shares at the time.

[41] However, the record demonstrates that Carroll, in fact, knew since in or about August 2019 that 249 planned to reduce its risk on this investment through a gradual sale of the HEXO shares, after HEXO acquired Newstrike Brands. Carroll agreed with this plan, including that proceeds would be used to repay a loan made by the plaintiff Beechhill and therefore also knew that his share position was less than claimed in his affidavit.

[42] In August 2019, about one month after the third promissory note was signed and about a year and half before the 2021 promissory note, 249's principal, Niklas circulated a lengthy email to the 249 shareholders regarding 249's interest in HEXO shares, the current share price and concerns about the future growth opportunities for that investment. The communication outlined that cannabis stocks in general were on a decline and that 249 had a lot of risk with the extent of its passive investment in HEXO. Niklas recommended they sell 10-15% of their position that month with a view to paying 249's original investment back to Beechhill and a dividend of any remaining balance to the shareholders. They would then plan to continue to sell 5% of the shares per month over the next 12-14 months. By additional email to Carroll on August 8, 2019, Niklas specifically noted Carroll's current position in the HEXO investment at 394,657 shares and asked for the defendants' thoughts about the proposal. By responding email of August 9, 2019, Carroll advised: "This sounds good!". The authenticity of this communication is not challenged. This evidence contradicts the defendants' bald assertions about the extent of their HEXO holdings, that they did not know or approve of the sale of HEXO shares, or that proceeds of such a sale would be used to pay a loan by Beechhill before signing the 2021 promissory note.

[43] Moreover, the evidence also shows the defendants were aware of and monitoring their position in the HEXO shares as recently as just before they signed the new promissory note. In March 2021, mere weeks before the new note was signed, Carroll emailed the accountant Fisher for an update as to the accounting for the HEXO shares. Fisher responded that as of December 31, 2020, the company retained 605,154 HEXO shares and that his 6% stake in the company would entitle him to 36,309.24 shares. Carroll acknowledged in cross examination that he carefully followed the HEXO share prices at the time. Again, this contradicts the defendants' assertions about not knowing about the true status of the HEXO shares before they executed the new promissory note.

[44] There is an evidentiary dispute as to other particulars the defendants seek to rely upon in support of their allegations of misrepresentations by Niklas and Fisher about the HEXO shares before the defendants signed the promissory note. In cross examination on his affidavit, Carroll acknowledged that the misrepresentations were as set out in his affidavit. On re-examination, Carroll's counsel asked him to expand on the misrepresentations, to which plaintiff counsel objected as improper. Carroll's evidence is that he called "somebody" to make sure the HEXO shares would be sufficient to cover the debt and that this was why he wanted to ensure the pledge included previously held shares "but net proceeds not distributed" by 249. At Fisher's suggestion, he then called Niklas, who told him there was enough capital in what was sold of the HEXO shares to cover the note and that Carroll was going to earn interest down the road.

[45] The plaintiff submits that this evidence should be struck as improper. The parties have an onus to put their best foot forward on a summary judgment motion. To allow additional evidence to be introduced on re-examination deprives the opposing party of providing further evidence, such as, in this case, affidavit evidence from Niklas responding to those contentions.

[46] A re-examination cannot be used as an opportunity to introduce evidence through the witness that could have been included in the affidavit of that person: Arkell v. Brightpath, 2017 ONSC 6612 at para. 43. I accordingly accept the plaintiff's submission that this evidence should be struck from the record.

[47] In any event, and if I am in error on that point, I find that this evidence fails to raise a genuine issue for trial regarding whether the promissory note was induced by misrepresentations regarding the defendants' interest in the HEXO shares. The defendants' contentions of the note being a "mere formality" and just as a "matter of record" make no sense with the uncontradicted and unchallenged evidence that it was Carroll who first sent the draft promissory note to Niklas with a request that it be given to the plaintiff's accountant. The alleged assurances by Niklas and/or Fisher that the defendants had sufficient interest in the HEXO shares to satisfy the loan also conflicts the evidence of Carroll's emails to Fisher shortly before the new promissory note where he asked for an updated accounting of the share holdings.

[48] However, I need not resolve these evidentiary disputes regarding the HEXO shares. I review this evidence only to conclude that I need not find any facts arising from the allegations about the HEXO shares and the promissory note. Even assuming a false statement was made to the defendants, the evidence fails to establish that the statements induced the defendants to enter into the promissory note or that the defendants elected to repudiate the contract within a reasonable period of time after learning of the misrepresentation.

[49] To maintain a defence of misrepresentation, the defendants must establish: 1. The representations complained of were made; 2. That they were false, in fact; 3. That the person making them either knew they were false or made them recklessly without knowing whether they were false or true; 4. That the defendant was thereby induced to enter into the contract; and 5. That immediately on, or at least within a reasonable time after his discovery of the fraud, he elected to avoid the contract and accordingly repudiated it: Robert v. Montreal Trust Co., 56 S.C.R. 342.

[50] Assume that Niklas and/or Fisher made these false, reckless or negligent misrepresentations to Carroll about the HEXO shares before he signed the note. The supposed value of the HEXO shares in relation to the debt could not have been an inducement to the defendants' agreement to the note. The defendants had already received the loans, and the debt was already owing before the note was signed. In fact, the real benefit to this note was that the defendants received another two and half years to pay the debt that was otherwise overdue. If the defendants' position is that they would not have signed the note had they known the true value of the HEXO shares, they would still have owed over $1.3 million to the plaintiff and would have been liable to earlier efforts by the plaintiff to collect on the loans. The note was an advantage to the defendants and not a disadvantage, as alleged.

[51] Finally, even if such misrepresentations were made that induced the defendants to enter into the contract, the record fails to show that the defendants immediately or within a reasonable time after their discovery of the fraud, elected to avoid the contract and repudiate the promissory note. A contract tainted by fraud is not void, but only voidable at the election of the party defrauded: I Trade Finance v. Bank of Montreal, 2011 SCC 26 at paras. 45-46; Bawlf Grain Company v. Ross, 55 S.C.R. 232 at 233.

[52] There is no evidence of repudiation until the delivery of the statement of defence and counterclaim to the Promissory Note Action, nearly two years after the defendants ostensibly learned of misrepresentations that induced them to sign the note. Carroll's evidence is that he learned of misrepresentations regarding the shares in June or August 2021. However, Carroll and P2P did not raise the promissory note or misrepresentations at all in Oppression Action commenced in May 2022. Beechhill pled the promissory note in the defence to the Oppression Action and stated that any dividend that could have issued for Carroll's/P2P's interest in the share disposition would have been applied to reduce that debt. Carroll and P2P did not plead misrepresentation or repudiation in reply to these contentions in the Oppression Action. As noted by Beechhill, this silence on the validity of the 2021 promissory note would have been to the lender's detriment, as there would still have been time to commence an action on the original promissory notes that went overdue in August 2020 if the defendants opted to repudiate the note for misrepresentation.

Is Summary Judgment Advisable in the Context of the Litigation as a Whole?

[53] The defendants urge that summary judgment on the promissory note is not in the interest of justice, given the overlapping oppression and contractual claims raised in the counterclaim and the related actions with which this action should be consolidated.

[54] I have considered the consequences of the motion in the context of the litigation as a whole, including the prospect of overlapping evidence. I am mindful that if used imprudently, partial summary judgment can cause delay, increase expense and increase the danger of inconsistent findings at trial made on a more complete record: Service Mold + Aerospace v. Khalaf, 2019 ONCA 369 paras. 13-18.

[55] I am satisfied there is no risk of inconsistent findings as it relates to the promissory note and its enforceability. The promissory note may be factually intertwined with the defendants' allegations concerning the contractual and oppression claims by virtue of the counterclaim and collateral proceedings; however, for the reasons explained, I am satisfied the circumstances of the promissory note are factually and legally extricable from the balance of the issues between the parties. I find that summary judgment on this note does not raise the prospect of inconsistent findings on the balance of the issues among the parties. Rather, summary judgment in respect of the promissory note affords the opportunity to narrow the issues for an expeditious and cost-effective resolution of the remaining issues between the parties, which are already under a burden of unnecessary complexity through the multiple proceedings in different jurisdictions.

Disposition

[56] For the foregoing reasons, the plaintiff's motion for summary judgment in its favour is granted. An order shall issue requiring the defendants to pay the sum of $1,514,685.16, with pre-judgment and post-judgment interest on the sum of $1,372,230 at the rate of 5% per annum.

[57] If the parties are unable to resolve costs, the plaintiff shall serve and file their cost submissions by November 21, 2025 and the defendants shall serve and file their cost submissions by December 5, 2025. Costs are deemed settled if no submissions are received by December 5, 2025. Submissions are limited to two pages, excluding bills of costs and offers to settle. There is no reply without leave.

Justice K. Tranquilli

Released: October 31, 2025