Court File and Parties

COURT FILE NO.: CV-24-98149 DATE: 2026/03/04 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

KIONAS CONSTRUCTION INC. Plaintiff

– and –

JAY PATRY a.k.a. JASON PATRY, 150 MARKETPLACE AVE INC and 1897365 ONTARIO INC. Defendants

AND BETWEEN

JAY PATRY a.k.a JASON PATRY, 150 MARKETPLACE AVE INC. and 1897365 ONTARIO INC. Plaintiffs by Counterclaim

– and –

KIONAS CONSTRUCTION INC. and SPYRIDON DIMITRAKOPOULOS Defendants by Counterclaim

David Cutler, for the Plaintiff/Defendants by Counterclaim

Christopher P. Morris, for the Defendants/Plaintiffs by Counterclaim

HEARD: January 14, 2026

HOLOWKA J.:

REASONS FOR DECISION

MOTION FOR PARTIAL SUMMARY JUDGMENT

Overview

[1] Kionas Construction Inc. ("Kionas Construction") brings a motion for summary judgment against the defendants. Kionas Construction contends that the defendants owe $2.26 million ($2 million plus HST) for shares purchased. Kionas Construction maintains that this situation warrants granting partial summary judgment.

[2] The defendants Jay Patry, also known as Jason Patry ("Patry"), 150 Marketplace Ave Inc. ("150 Marketplace"), and 1897365 Ontario Inc. ("189"), have asserted a counterclaim. Neither side has brought a motion for summary judgment in relation to the counterclaim, and Kionas Construction is therefore seeking a partial summary judgment.

[3] In my view, this case warrants partial summary judgment. There is no genuine issue for trial with respect to the plaintiff's claim in relation to the promissory note. As discussed below, there exists no risk of duplication or inconsistent findings. Moving forward with partial summary judgment is an appropriate and proportional method of adjudicating the plaintiff's claim regarding the $2.26 million owed. The plaintiff's motion for partial judgment is hereby granted.

[4] I would exercise my discretion and order that the execution of the partial summary judgment be stayed on the condition that the partial summary judgment be paid into court until the counterclaim is adjudicated.

Procedural history

[5] A case conference was conducted by Associate Justice I. Kamal on April 28, 2025. One of the issues canvassed was whether this was an appropriate case for a motion for summary judgment. The parties made both written and oral submissions on the triaging of the motion for summary judgment.

[6] Associate Justice Kamal stated in paragraphs 17 to 22 of his endorsement dated April 29, 2025, that leave to proceed with the motion for summary judgment was granted for the following reasons:

[17] In my view, this issue is appropriate for a summary judgment motion, for the following reasons:

1. Partial summary judgment is a tool used in our civil justice system to promote access to justice and efficient resolution of disputes. The mere existence of a Statement of Defence or Counterclaim does not render a summary judgment motion impossible.

2. There are not significant credibility issues in this case. In any event, the Court has enhanced powers prescribed by Rule 20.04(2.1) of the Rules of Civil Procedure on motion for summary judgment. These powers include weighing the evidence, evaluating the credibility of a deponent, and drawing any reasonable inference from the evidence.

3. This is certainly proportionate and in the interest of justice.

4. The existence of the Counterclaim or the Statement of Defence does not mean this case is not suited for a summary judgment motion.

5. Based on the discreet nature of the Counterclaim, I see no danger of duplicative or inconsistent findings.

6. Based on the materials before me and reviewing the pleadings, I am prepared to schedule the summary judgment for a one-day hearing.

[18] The Supreme Court of Canada has stated that when the process allows the judge to make the necessary findings of fact, to apply the law to those facts, and it is a proportionate, more expeditious and less expensive means to achieve a just result, summary judgment is the appropriate remedy: see Hrvniak v. Mauldin, [2014] 1 SCR 87, 2014 SCC 7 at para. 49.

[19] In cases where a party's straightforward claim based upon a promissory note is met with an unrelated counterclaim, the Court of Appeal has endorsed the approach whereby the plaintiff's claim is determined by way of summary judgment, with the opposing party's counterclaim proceeding independently, after summary judgment is granted, see 1652620 Ontario inc. v. Cornerstone Builders Ltd., 2018 ONCA 973 at paragraphs 4 and 6-7 and Heliotrope investment Corporation v. 1324789 Ontario inc., 2021 ONCA 589 at paragraphs 34-35 and 38-39.

[20] While some of the findings made on the partial summary judgment motion may be material to the counterclaim, they will not be determinative of it. In these circumstances, the parties' interests will still be advanced by an efficient resolution of the main claim. I adopt the Court's comments in Noreast Electronics Co. v. Danis, 2018 ONSC 5169, at paragraph 72 in which the Court stated, "In these circumstances, accepting the defendants' argument would be tantamount to accepting that a summary judgment motion could never succeed in any case where the defendant had counterclaimed."

[21] The Court has found that it is appropriate to proceed with summary judgment matter and narrow the case to go forward as a trial of an issue related to any claims for damages and set-offs in a counterclaim, see Wilson v. Medcap, 2021 ONSC 4048, at paragraph 84. In Wilson, a set-off was also claimed in both the defence and counterclaim, and the Court proceeded with a partial summary judgment motion. This case is similar to the case before me.

[22] The case of Gravina v. Walsh, 2018 ONSC 5638, at para. 73, provides authority to proceed with summary judgment, while permitting the discrete issue of damages in the counterclaim to be litigated.

[7] The plaintiff asserts that, in light of Associate Justice Kamal's ruling, the defendant's arguments opposing the granting of summary judgment ought not to be considered, as the issue has been conclusively determined. The plaintiff contends that the defendants should be precluded from re-litigating the matter.

[8] Respectfully, I disagree. Associate Justice Kamal was tasked with triaging the matter to determine whether a motion for summary judgment should proceed. He was not deciding whether to grant summary judgment itself. While I acknowledge his determination, it does not bind me. The evidentiary basis for the motion before me is markedly different. I conclude that the principle of res judicata does not apply.

Facts giving rise to the motion

[9] The essential facts of the action brought by the plaintiff are not in dispute.

[10] To gain a clearer understanding of the events, I will outline the individuals and corporations involved in this action:

a. Spyridon Dimitrakopoulos: a principal of the plaintiff Kionas Construction, and Kionas Holdings Inc. ("Kionas Holdings"). Kionas Holdings was previously a shareholder of 189. Kionas Holdings is not a party to the action.

b. Kionas Construction: the plaintiff and an Ontario corporation affiliated with Kionas Holdings.

c. Jay Patry: a defendant and principal of the defendants 189 and 150 Marketplace.

d. 189: an Ontario-based corporation that originally developed and now oversees an apartment complex at 150 Marketplace Avenue in Ottawa.

e. 150 Marketplace: A corporation controlled by Patry.

[11] In May 2019, 189, Patry, Kionas Holdings Inc., and two other shareholders of 189 entered into a Unanimous Shareholder Agreement ("the USA") pertaining to the construction and development of a property located at 150 Marketplace Avenue. The USA governed the ownership, development, construction, operation, and financing of the project.

[12] At that time, the plaintiff owned 24% of the shares of 189, while Patry owned 30%. The two other shareholders, who are not parties to the action, collectively owned 46% of the shares of 189.

[13] Construction of the project continued for several years. By December 2023, it was nearing completion, although work was still in progress. During this period, 2019-2023, Patry acquired the shares of the other two shareholders of 189, who held 46% of the shares. As a result, in December 2023, the only shareholders of 189 were 150 Marketplace, controlled by Patry, and Kionas Holdings.

[14] In December 2023, 150 Marketplace and Kionas Holdings entered into a Share Purchase Agreement ("the SPA"). Pursuant to the SPA, 150 Marketplace would purchase 60,000 shares from Kionas Holdings, the remaining shares in the capital of 189 not already owned by 150 Marketplace.

[15] The SPA stipulated that, upon closing, 150 Marketplace would agree to cause 189 to pay a sum of $2 million plus H.S.T. ($260,000) to Kionas Construction. This amount was referred to as the "Payout Price" in section 8 (c) of the SPA. The Payout Price was to be paid in two installments: the first installment of $1,130,000 on or before June 1, 2024, and the second installment of the same amount on or before January 1, 2025.

[16] The Payout Price ($2 million plus H.S.T.) is separate from the Purchase Price of $2.35 million set out in section 2 of the SPA, payable to the vendor Kionas Holdings.

[17] The action concerns only the unpaid Payout Price owed to Kionas Construction, not the Purchase Price owed to the vendor Kionas Holdings.

[18] The SPA specified that 189 issued a promissory note confirming that the Payout Price was payable by 189 to the plaintiff. According to the promissory note, Patry unconditionally guaranteed and covenanted with the plaintiff that 189 would pay the amounts owed under the note.

[19] Although the transactions outlined in the SPA were finalized in December 2023, with Kionas Holdings' shares in 189 transferred to 150 Marketplace, the expected payments were not made.

[20] The action was commenced by the plaintiff in light of the unexplained non-payment of the first payment due June 1, 2024. After the action was commenced, the defendants made allegations of misrepresentation, negligence, and other wrongdoing against Kionas Construction in its Statement of Defence and Counterclaim.

[21] After the second payment was not made by the defendants, the plaintiff amended the Statement of Claim for that second amount. The Amended Statement of Claim is for $2.26 million.

[22] The promissory note and the SPA include provisions regarding the payment of interest on the $2.26 million Payout Price. They are:

a. A basic interest provision stipulates that, commencing December 22, 2023, payments due under the Payout Price will accrue interest at an annual rate of 3.7%, payable on a monthly basis; and

b. An overdue interest provision stipulates that payments and interest overdue under the promissory note will accrue interest at a rate of 12% per annum, payable on demand, commencing from the date of non-payment until the entire amount is settled.

[23] The defendants (plaintiffs by counterclaim) assert contractual and equitable set-off defences and counterclaim in the amount of $8.5 million based on Kionas Construction's breach of:

a. The representations and warranties contained in the SPA;

b. The unwritten Construction Services Agreement ("the CSA") between the parties in relation to the construction project;

c. Negligence; and

d. Negligent misrepresentation.

[24] The counterclaim asserts that defendants are entitled to set-off the damages suffered in relation to the cost overages incurred by them on the project as against any amounts owed pursuant to the SPA and the promissory note. The defendants (plaintiffs by counterclaim) have filed thousands of pages of documents in support of their argument that the defences and counterclaim are complex and will require voluminous documents to be adduced at trial.

[25] After the creation of the USA, the CSA mentioned above was agreed upon by Kionas Construction and 189, with Kionas Construction providing construction services for the project.

[26] The defendants (plaintiffs by counterclaim) also rely upon the following provisions of the SPA:

a. Section 4(h): All compensation paid by the Corporation to Spyro, Maria, the Vendor and/or Kionas Construction has been paid in accordance with the Unanimous Shareholders Agreement. The Corporation has not reimbursed Spyro, Maria, the Vendor or Kionas Construction for any expenses other than valid expenses incurred in furtherance of the completion of the Project, as such term is defined in the Unanimous Shareholder Agreement;

b. Section 4(j) There is no claim, action, suit, proceeding or governmental investigation (each, an "Action") of an nature pending or, to the knowledge of Spyro, Maria, Kionas Construction or the Vendor, threatened against or by:

(ii) the Corporation affecting any of its properties or assets (or by or against the Vendor or Kionas Construction and relating to the Corporation); or

(iii) the Corporation, the Vendor or Kionas Construction that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

c. Section 11(a): All representations, warranties, covenants and agreements contained herein and all related rights to indemnification shall survive the Closing;

d. Section11(b): The Vendor, Spyro, Maria, and Kionas Construction shall, jointly and severally, defend, indemnify and hold harmless the Purchaser, its affiliates and their respective shareholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including legal fees, disbursements and charges, arising from or relating to any:

(i) inaccuracy in or breach of any of the representations or warranties of the Vendor, Spyro, Maria, and Kionas Construction contained in this Agreement or in any document to be delivered hereunder; or

(ii) breach or non-fulfilment of any covenant, agreement or obligation to be performed by Vendor, Spyro, Maria, or Kionas Construction under this Agreement or any document to be delivered hereunder.

e. Section 11(f): Upon notice to the Vendor and Kionas Construction, the Purchaser shall be entitled to set off any amounts owed to it by the Vendor, Spyro, Maria, or Kionas Construction under Sections 11(b) and 11(c) against amounts owed by the Purchaser to the Vendor or Kionas Construction pursuant to the Notes. Such set-off shall be treated as a reduction of the Purchase Price for tax purposes.

Analysis

Is it appropriate to grant partial summary judgment?

Position of the parties

[27] The plaintiff contends that summary judgment ought to be granted on the following grounds:

a. The issue of whether the set-off defence and counterclaim are directly related to the plaintiff's claim was already decided by Associate Justice Kamal and should not be relitigated before this court;

b. There is no genuine issue requiring a trial regarding the plaintiff's claim for the $2.26 million owing, or the associated claim for payment of interest—the claim is simple and straightforward. The SPA and promissory note are clear—the plaintiff is entitled to the unpaid payments;

c. The counterclaim is discreet in nature and poses no risk of duplicative or inconsistent findings. Additionally, there are no major credibility concerns regarding the plaintiff's action;

d. The counterclaim was made for tactical reasons and arose only 13 months after the closing of the SPA and two years after taking control of the construction of the project;

e. There is no basis for the claim of legal or equitable set-off, as the defendant's claim concerns unliquidated damages related to a promissory note; and

f. In instances where a party's clear claim based on a promissory note encounters an unrelated counterclaim, the Court of Appeal has validated the approach whereby the plaintiff's claim is resolved through summary judgment, while the counterclaim launched by the opposing party proceeds independently subsequent to the granting of summary judgment.

[28] The defendants (plaintiffs by counterclaim) argue that summary judgment should not be granted based on the following:

a. The SPA stipulated that 150 Marketplace is entitled to offset any amounts payable to the plaintiff in accordance with the promissory note. Consequently, the set-off defence and counterclaim are directly associated with the plaintiff's claim for breach of the SPA and the promissory note.

b. They highlight several cases where courts have declined to grant partial summary judgment because issues of payment and set-off—being contractually linked or arising from the same transaction or series—were involved. Relevant cases include CIBC Investor Services Inc. v. Chan, 2024 ONSC 1628; SRF Indutex Belting Ltd. v. Pentupa Inc., 2018 ONSC 492; Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438; and 1289867 Ontario Ltd. v. Band World Mobile Stage Inc., 2024 ONSC 3736.

c. There is a risk of inconsistent findings if partial summary judgment were granted, citing the net amount owing to the parties. The plaintiff references the complexity of the interrelated claims, defences, and counterclaim, as well as the voluminous record that would be required along with assessments of credibility.

Discussion

[29] Pursuant to Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (Rules), a plaintiff has the right to move for summary judgment to dismiss all or part of a defendant's claim. Rule 20.04(2) requires that the court grant summary judgment if it is satisfied that there is no genuine issue requiring a trial concerning all or part of the claim.

[30] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 36 and 45, the Supreme Court of Canada reaffirmed that summary judgment constitutes a significant alternative mode of adjudication. Rule 20.04(2.1) endows judges with fact-finding authority, including the power to weigh evidence, assess credibility, and draw inferences as an alternative means.

[31] Determination of a motion for summary judgment involves a two-step approach. A judge must:

a. Determine whether there is a genuine issue requiring trial based only on the evidence before him or her, without using the fact-finding powers. If there is no genuine issue requiring a trial, summary judgment must be granted.

b. If there appears to be a genuine issue requiring a trial, the judge should then determine whether the need for a trial can be avoided by using the fact-finding powers to weigh evidence, evaluate credibility, and draw inferences.

[32] The onus is on the plaintiff to demonstrate that summary judgment is justified. The defendants primarily oppose this motion on the grounds that the plaintiff is pursuing only partial summary judgment, and that the counterclaim would remain unresolved if the motion were granted. Based on this reasoning and the arguments previously outlined, the defendants argue that the motion should be dismissed.

[33] Partial summary judgment is not readily granted and constitutes a rare procedure that is reserved for an issue that may be readily bifurcated from those in the other action. Partial summary judgment remains the exception, not the rule.

[34] Several considerations in deciding whether to grant partial summary judgment were examined in Butera v. Chown, Cairns LLP, 2017 ONCA 783, 137 O.R. (3d) 561, at paras. 29-35:

The caution expressed pre-Hryniak in Corchis is equally applicable in the post-Hryniak world. In addition to the danger of duplicative or inconsistent findings considered in Baywood and CIBC, partial summary judgment raises further problems that are anathema to the stated objectives underlying Hryniak.

First, such motions cause the resolution of the main action to be delayed. Typically, an action does not progress in the face of a motion for partial summary judgment. A delay tactic, dressed as a request for partial summary judgment, may be used, albeit improperly, to cause an opposing party to expend time and legal fees on a motion that will not finally determine the action and, at best, will only resolve one element of the action. At worst, the result is only increased fees and delay. There is also always the possibility of an appeal.

Second, a motion for partial summary judgment may by very expensive. The provision for a presumptive cost award for an unsuccessful summary judgment motion that existed under the former summary judgment rule has been repealed, thereby removing a disincentive for bringing partial summary judgment motions.

Third, judges, who already face a significant responsibility addressing the increase in summary judgment motions that have flowed since Hryniak, are required to spend time hearing partial summary judgment motions and writing comprehensive reasons on an issue that does not dispose of the action.

Fourth, the record available at the hearing of a partial summary judgment motion will likely not be as expansive as the record at trial therefore increasing the danger of inconsistent findings.

When bringing a motion for partial summary judgment, the moving party should consider these factors in assessing whether the motion is advisable in the context of the litigation as a whole. A motion for partial summary judgment should be considered to be a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner. Such an approach is consistent with the objectives described by the Supreme Court of Canada in Hryniak and with the direction that the Rules be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

Lastly, I would observe the obvious, namely, that a motion for partial summary judgment differs from a motion for summary judgment. If the latter is granted, subject to appeals, it results in the disposal of the entire action. In addition, to the extent the motion judge considers it advisable, if the motion for summary judgment is not granted but is successful in part, partial summary judgment may be ordered in that context.

[35] I find the following with regard to this partial summary judgment motion: Firstly, there is no genuine issue concerning the defendant's failure to pay the $2 million, plus H.S.T., pursuant to the clear terms of the promissory note. Secondly, this issue is discrete and readily separable from the counterclaim, rendering partial summary judgment appropriate. Thirdly, granting partial summary judgment will expedite the case by promptly resolving the plaintiff's straightforward claim, thereby leaving only the defendants' complex counterclaim to be adjudicated in a streamlined and more efficient manner. In these circumstances, the parties' interests will still be advanced by an efficient resolution of the main claim.

[36] I find that the counterclaim has a discrete nature in light of the following:

a. The claim pursuant to the promissory note is straightforward and easily determined;

b. There is no dispute that the promissory note is valid and that the defendants have defaulted on the payments in June 2024 and January 2025;

c. The counterclaim emerged only subsequent to the defendants' unexplained default, which occurred 13 months following the closing of the SPA and more than two years after assuming control of the project's construction; and

d. The defendants' claims for legal and/or equitable set-off are not tenable as a matter of law. There is no basis for the claim of legal set-off, as the defendants' claim pertains to unliquidated damages. Furthermore, there is no foundation for an equitable set-off, considering that such a set-off is not permissible against a claim founded upon a promissory note. See Jones Collombin Investment Counsel Inc. v. Fickel, 2016 ONSC 6536 at para. 57, aff'd 2017 ONCA 288,

[37] There are no significant credibility concerns pertaining to the plaintiff's claim. However, I acknowledge that credibility issues will likely arise when assessing the defendant's counterclaim. Nonetheless, I agree with Associate Justice Kamal's initial observation that there is no risk of conflicting or redundant judicial determinations.

[38] The defendants rely on their extensive counterclaim to justify denying summary judgment. I concur with the observation made by Associate Justice Kamal in paragraph 19 of his endorsement, wherein he notes that, "in cases where a party's straightforward claim based on a promissory note is met with an unrelated counterclaim, the Court of Appeal has endorsed the approach whereby the plaintiff's claim is determined by way of summary judgment, with the opposing party's counterclaim proceeding independently, after summary judgment is granted: see 1652620 Ontario Inc. v. Cornerstone Builders Ltd., 2018 ONCA 973, at paras. 4, 6, and7; and Heliotrope Investment Corporation v. 1324789 Ontario Inc., 2021 ONCA 589, 462 D.L.R. (4th) 731 at paras 34-35 and 38-39."

[39] As noted earlier, the defendants cite various cases in which partial summary judgment was denied on the basis of a counterclaim or an asserted set-off defence. In my opinion, the cases cited by the defendants are distinguishable based on their facts.

[40] In CIBC, there were significant and heavily contested credibility issues on several key questions, raising the possibility of inconsistent judicial findings. Furthermore, the court in CIBC found that granting or partially granting summary judgment would not necessarily make the process more cost-effective or faster for the parties.

[41] In SRF Indutex, the plaintiff sought partial summary judgment for unpaid invoices issued to the defendants. The defendants defended the action and asserted a counterclaim alleging breach of contract, breach of fiduciary duty, breach of confidence, unjust enrichment, and breach of the duty of good faith bargaining and conduct. Justice Favreau denied partial summary judgment, stating that to determine the live issues of the initial action, the court would necessarily have to consider matters relevant to the counterclaim, and the issues could not be bifurcated. In my view, no such risk exists in this case.

[42] Bywood Homes and Band World Mobile Stage serve as additional examples where the initial action and the counterclaim were factually interconnected, thereby necessitating a trial and rendering partial summary judgment inappropriate. This is not the case here.

[43] In conclusion, a trial is not necessary for the fair adjudication of the plaintiff's claim. The facts surrounding the plaintiff's claim are readily ascertainable. Partial summary judgment is hereby granted, contingent upon the defendants' request for a stay or, alternatively, for the judgment to be deposited into court.

[44] Partial summary judgment is granted in the following terms:

a. The Defendants shall pay to the Plaintiff the amount of $2,260,000 on account of the Plaintiff's claim set out at paragraph 1(a) of the Amended Statement of Claim dated May 26, 2025; and

b. The Defendants shall pay to the Plaintiff the amount of $478,488.81 on account of pre-judgment interest calculated on January 13, 2026.

Should the partial summary judgment be stayed or paid into court?

Position of the parties

[45] The parties agree that the question of whether partial summary judgment, if granted, should be stayed or, in the alternative, paid into court, is governed by the application of a multifactorial test articulated in Heliotrope Investment Corporation v. 1321789 Ontario Inc., at paras. 56-61.

[46] The plaintiff submits that there is no basis to order a stay and that the defendants are simply attempting to delay having the pay the judgment. The plaintiff again emphasises that the set-off defence and counterclaim is purely tactical in nature.

[47] With respect to the five factors of Heliotrope, the plaintiff submits the following:

a. The first factor (the merits of the counterclaim): The set-off defence and counterclaim lack merit, as shown by the fact that the defendants made no complaint until after the plaintiff served its statement of claim, 13 months following the closing of the SPA and two years after taking control of the project construction. The plaintiff argues that despite the 3818-page responding motion record, there is no evidence supporting the counterclaim other than bald allegations.

b. The second factor (the relationship between the judgment and the counterclaim): The plaintiff asserts that the counterclaim was of a distinct nature, as identified by Associate Justice Kamal.

c. The third factor (the conduct of the defendants): The plaintiff submits that this factor also weighs against granting the stay, emphasizing the points mentioned in the first factor.

d. The fourth factor (prejudice to the parties): The plaintiff estimates that resolving the defendants' set-off or counterclaim will take three to five years, and therefore, the plaintiff would be unfairly prejudiced by being barred from accessing the $2.26 million while 189 continues to benefit from the purchased shares without payment. The plaintiff contends that such unfairness, coupled with accruing interest, raises doubts about the plaintiff's capacity to fully recover the owed amount.

e. The fifth factor (mitigation of the terms of a stay): The plaintiff argues that no conditions can sufficiently lessen the impact of a stay on their position. They highlight the significant delay already caused by the defendants in making the payments.

[48] The plaintiff argues that the cases referenced by the defendants predate Heliotrope and did not incorporate the five-factor test within their analysis. They specifically cite Heliotrope, Brantford Engineering and Construction Limited v. 156772 Ontario Inc., 2007 CarswellOnt 2655, and Waverly Corporate Financial Services Inc. v. Kanwal Inc., 2018 ONSC 1469, to support their argument.

[49] The defendants (plaintiffs by counterclaim) cite several decisions where courts ordered a stay of execution or directed that judgment be paid into court pending the resolution of the counterclaim. They refer to cases such as 118 Market Street Ltd. Partnership v. Wilshire Group Inc., 2011 ONSC 5583; Jones Collombin; Cornerstone Builders; and 2624221 Ontario Inc. v. Matsvayi et al., 2024 ONSC 4167, to support their request for a stay of execution. Additionally, they cite Luxus Pack Packaging Industrial Co. v. Conros Corp., 2006 CanLII 909 (Ont. C.A.), and Inveresk PLC v. Precision Fine Papers Inc., 2008 CanLII 28054 (Ont. S.C.), for their alternative argument regarding the payment of judgment into court.

[50] The defendants also submit that:

a. The counterclaim has merit, and there is a trial and a tenable issue;

b. The plaintiff's claim, along with the defendant's set-off defence and counterclaim, are interconnected and stem from the SPA;

c. The defendants have not engaged in conduct that justifies the denial of a stay of judgment; and

d. The plaintiff will not suffer any prejudice as the adjudication of the set-off defence and counterclaim is necessary to determine what, if any, amounts are owing.

Discussion

[51] In my view, the partial summary judgment award should be paid into court pending the adjudication of the defence and counterclaim.

[52] Rule 20.08 states: "Where it appears that the enforcement of a summary judgment ought to be stayed pending the determination of any other issue in the action or a counterclaim, crossclaim or third party claim, the court may so order on such terms as are just."

[53] In approaching this issue, I have applied the multifactorial test set out in Heliotrope.

[54] Regarding the initial factor—the merits of the counterclaim—I recognize that the defendants' counterclaim was submitted subsequent to the plaintiff's claim. Additionally, I observe that the counterclaim was made well after the execution of the SPA and after the defendants' failure to fulfill their payment obligations as specified in the SPA and the promissory note. Both factors raise questions concerning the substance of the counterclaim.

[55] Filing extensive supporting documents for the counterclaim on this motion without meaningful references in submissions does not significantly clarify its merits, apart from supporting the defendants' argument that it is complex. However, the defendants' evidence, including summaries of overages, raises a triable and tenable issue. In my view, this factor should not be considered overly burdensome. Overall, this factor supports a stay in the proceedings.

[56] The second factor—the relationship between the judgment and the counterclaim—weakly supports a stay. In my view, the plaintiff's claim is distinct from the counterclaim and partial summary judgment is appropriate on that basis. As previously stated, there is no risk of inconsistent findings. However, I do conclude, that there is a potential for circuity of action as described in Jones Collombin, at para. 60.

[57] The third factor—the defendants' conduct—does not justify denying a stay of execution for the partial summary judgment. While the plaintiff emphasizes this point and the delay in filing the counterclaim raises concerns, it cannot be concluded that the defendants' actions in pursuing the counterclaim were inappropriate. I respectfully disagree with the plaintiff's argument that the defendants behaved improperly, whether in relation to their handling of the "relatedness" issue after Associate Justice Kamal's endorsement or regarding the submission of extensive documents.

[58] The fourth factor—prejudice to the parties—favors not granting a stay. In my view, the plaintiff would be prejudiced by the significant delay in receiving the $2.26 million owed through the partial summary judgment, especially as 189 would continue to enjoy the shares purchased but not paid for.

[59] The fifth factor—mitigation of the stay's terms—favours not granting a stay. The plaintiff argues that there are no terms that could mitigate a stay. While the defendants have provided general suggestions about a timetable, neither side presents specific terms that would lessen the conditions of a stay, especially considering the complexity of the defendants' counterclaim. I conclude that there are no terms that could be put into place.

[60] The factors are not aligned. There is a triable and tenable counterclaim, and the defendants' conduct does not warrant a stay. While the plaintiff faces some prejudice, the resolution of the counterclaim is necessary to assess any damages owed by the plaintiff (defendant by counterclaim). Taking all these considerations into account, I would exercise my discretion to order that the partial summary judgment be paid into court until the counterclaim is adjudicated.

Conclusion

[61] Partial summary judgment is granted in the following terms:

a. The Defendants, jointly and severally, shall pay to the Plaintiff the amount of $2,260,000 on account of the Plaintiff's claim set out at paragraph 1(a) of the Amended Statement of Claim dated May 26, 2025; and

b. The Defendants shall pay to the Plaintiff the amount of $478,488.81 on account of pre-judgment interest calculated as of January 13, 2026.

[62] Execution of the partial summary judgment referred to in paragraph 61 above is stayed on the following condition: the defendant will pay into court (the Ontario Superior Court of Justice) to the credit of this action within 45 days of this date of the release of this decision, the amount of $2,738,444.81 in Canadian currency. Failing payment within the time-limit set out, the plaintiff will be able to exercise whatever rights they have to execution on the judgment.

[63] I encourage the parties to settle the costs of the motion. If they cannot, the plaintiff may serve and file written cost submissions, together will a Bill of Costs, by March 18, 2026. The defendants may serve and file responding written cost submissions by April 1, 2026. The cost submissions shall not exceed three pages in length, excluding the Bill of Costs.

Mr. Justice Brian Holowka

Released: March 4, 2026