



COURT OF APPEAL FOR ONTARIO

CITATION: TriDelta Investment Counsel Inc.
    v. GTA Mixed-Use Developments GP Inc., 2020 ONCA 294

DATE: 20200511

DOCKET: C67118

Doherty, Juriansz and Paciocco
    JJ.A.

BETWEEN

TriDelta Investment Counsel
    Inc., TriDelta Fixed Income Fund and TriDelta High Income Balanced Fund

Applicants (Respondents)

and

GTA Mixed-Use Developments GP
    Inc., Mixed-Use Developments (Ontario) GP Inc. and Wasaga Developments and
    Infrastructure GP Inc.

Respondents (Appellants)

Simon Bieber and Michael Darcy, for the
    appellants

Christopher Naudie and Lauren Tomasich,
    for the respondents

Heard: In-writing

On appeal from the order imposed by
    Justice Michael A. Penny of the Superior Court of Justice, dated May 27, 2019.

REASONS FOR DECISION

[1]

This appeal comes to the court from the
    commercial list. The respondents (TriDelta) are limited partners in three
    limited partnerships. The appellants are the general partners.

[2]

The partnerships were formed to acquire
    interests in various real estate development projects. The limited partnerships
    acquired those interests through project companies controlled by the limited
    partnerships and managed by the same person who controls all of the shares of
    the general partners.

[3]

TriDelta does not have a direct interest in the
    project companies or their assets. TriDelta holds units in the limited
    partnership. Under the limited partnership agreements (LPA), TriDeltas
    investment in the limited partnerships is to be recouped from the profits, if
    any, earned through the development of the projects.

[4]

The working relationship between TriDelta and the
    appellants began to break down in early 2018, when the appellants came under
    new management. Since that time, as observed by the application judge, both
    parties have engaged in conduct giving rise to animosity, suspicion and lack of
    trust.

[5]

The breakdown in their relationship has fuelled
    this application and the cross-application. On the application, TriDelta sought
    an order requiring the appellants to produce certain documentation and
    information referable to the limited partnerships and the real estate
    development projects.

[6]

The parties were able to agree the appellants
    would provide much of the information and documentation sought by TriDelta. The
    disputed issues went before Penny J.

[7]

In his endorsement, Penny J. ordered the
    appellants to produce most of the material sought by TriDelta. He also directed
    that the annual reports and semi-annual reports prepared by the appellants
    contain certain material and information specified in his order. TriDeltas
    cross-application did not proceed.

[8]

The appellants raised two grounds of appeal:

·

Did the application judge err in making orders
    in respect of an issue that was not properly raised before him?

·

Did the application judge err in imposing
    requirements on the contents of the annual report going beyond the requirements
    agreed upon by the parties in the limited partnership agreements (LPA)?

[9]

The first ground of appeal alleges a failure of
    procedural fairness. The appellants argue they did not have adequate notice the
    application judge would be asked to make an order detailing the contents of the
    annual report. They submit that TriDelta sought production of certain
    information and documentation, but did not, until very shortly before the
    hearing, seek an order directing that the information requested be included in the
    annual report. The appellants contend, without adequate notice, they did not have
    a fair opportunity to respond to this issue and place relevant material before
    the application judge.

[10]

It is not clear from the record whether this
    argument was put to Penny J. Counsel made written and oral argument. Penny J.,
    in his endorsement, makes no reference to any submission that he should not
    entertain parts of TriDeltas application because of inadequate notice. Nor do
    the facta filed on appeal make any reference to such arguments.

[11]

The appellants acknowledge they knew that
    TriDelta would be seeking orders in respect of the contents of the annual
    report, although they claim to have been made aware of this only days before
    the argument. In these circumstances, if the appellants did not raise this
    issue before the application judge, it is difficult to give it any credence on
    appeal. In any event, we are satisfied that it cannot succeed.

[12]

This application generated a sizable record. The
    parties went back and forth on what the appellants should and should not be
    obliged to produce to TriDelta. The material demonstrates, well before the
    hearing, both parties were operating on the basis that the annual and semi-annual
    reports could provide the vehicle for production of at least some of the
    material sought by TriDelta.

[13]

TriDeltas initial application did not refer to
    the content of the annual report. This is explained by the timing of the
    application. When the application was launched, the annual report was not due
    for several months. By the time the application was heard, the annual report
    for the fiscal year 2018 was late. It is understandable that TriDelta would
    look to the pending annual report as a means of providing the necessary
    disclosure.

[14]

A review of the cross-application filed by the
    appellants, the cross-examination of the representative of the appellants, and
    proposals made to resolve the application while it was pending demonstrates
    both parties were addressing TriDeltas demand for production of materials and
    information, in part, in the context of the appellants acknowledged obligation
    under the LPA to provide annual and semi-annual reports. It may be that TriDeltas
    position as to exactly what information and material it sought included in the annual
    report did not crystallize until shortly before argument. However, well before
    the application was heard, the parties had joined issue on what the appellants should
    be required to produce and the contents of the annual report in light of any
    production requirements imposed on the application. The appellants had ample
    notice and a full opportunity to make their case in respect of the particulars
    of any order to be made mandating the contents of the annual report.

[15]

The second argument made by the appellant
    engages the intersection of the terms of the LPA and the provisions of the
Limited
    Partnership Act
, R.S.O. 1990, c. L.16 (the Act).

[16]

The appellants submit the contents of the annual
    and semi-annual reports were agreed upon by the parties and fixed by the terms
    of the LPA. They contend that Penny J. could not alter those contractual arrangements
    and place additional obligations on the appellants in respect of the annual
    reports by reliance on the provisions in the Act giving limited partners certain
    rights to the production of information and material relating to the
    partnership.

[17]

Section 10 of the Act provides:

A limited partner has the same rights as a
    general partner,

(a)
to inspect and make copies of or take
    extracts from the limited partnership books at all times;

(b) to be given, on demand, true and full
    information concerning all matters affecting the limited partnership, and to be
    given a complete and formal account of the partnership affairs.

[18]

Section 10 gives limited partners very broad
    rights to information concerning all matters affecting the limited
    partnership. It was open to Penny J. to conclude the information and material
    sought by TriDelta affected the limited partnership. It was also open to him
    to determine the means by which the required disclosure should be made. We see
    no prejudice to the appellants by the direction that the material be included
    in the annual and semi-annual reports. Penny J. could have ordered the material
    disclosed to TriDelta on an annual or semi-annual basis in a separate document to
    be enclosed in the same envelope as the annual or semi-annual report. There is no
    substantive difference between this hypothetical order and the one actually
    made.

[19]

The appellants also argue that by requiring the
    material be placed in the annual report, Penny J. relieved TriDelta of having
    to demonstrate the need for the information and material on an annual basis.
    Instead, the order places the obligation on the appellants to provide the
    information on an annual basis.

[20]

This argument is not persuasive. Obviously,
    TriDelta wants the information to which it is entitled under the Act on an
    ongoing basis. As long as the partnership operates, there is no reason to think
    that TriDelta will not require the information to which it is entitled. There
    is no point in making TriDelta return to the court on an annual, or worse yet
    semi-annual, basis to make repeated applications for the same relief.

[21]

The appellants next argue that some of the information
    ordered produced goes beyond information concerning all matters affecting the
    limited partnership, and may extend to information not available to the
    appellants. This submission raises issues which are, at this point in time,
    hypothetical. The appellants do not point to any specific material or
    information which they claim is beyond the production requirements under the
    Act. Nor do they refer to material or information to which they do not have access.
    Instead, the appellants argue there is no evidence they have the information.

[22]

This argument provides no basis for varying the
    order of Penny J. At best, it points to the possibility of the need to vary the
    order in the future. If a dispute should develop over the applicability of the
    order to certain specific information, or should TriDelta seek information that
    the appellants claim they do not have and cannot get, those issues may have to
    be litigated in the commercial court, unless the parties can resolve them on
    their own.

[23]

Finally, the appellants in their supplementary
    written submissions contend that parts of the order are so vague or so broadly framed
    as to make compliance all but impossible. We think this argument must also be
    addressed in the context of any specific issue that may arise in the course of
    the partnership and the appellants attempts to comply with the order of the
    application judge. None of the terms are so vague or overly broad on their face
    as to justify varying the order. Whether one or more of the terms may prove to
    be unworkable due to vagueness or overbreadth will only become apparent in
    circumstances which may or may not arise as the order is implemented.

[24]

The appeal is dismissed. Costs of the appeal to TriDelta
    in the amount of $7,000, inclusive of disbursements and relevant taxes.

[25]

In their supplementary written argument, the
    appellants requested an opportunity to make additional oral submissions. The
    panel is satisfied that no further submissions are necessary.

Doherty J.A.

R.G. Juriansz J.A.

David M. Paciocco J.A.


