Aubin v Petrone, 2018 ABQB 973

Court of Queen’s Bench of Alberta Citation: Aubin v Petrone, 2018 ABQB 973 Date: 20181128 Docket: 4803 168361 Registry: Edmonton Between: Renee Lyne Aubin Applicant - and - Sabino Steven Anthony Petrone Respondent ______________________________________________________ Reasons for Judgment on Remedy and Costs of the Honourable Madam Justice R. Khullar _______________________________________________________ I. Introduction [ 1 ] Ms.

Aubin asks this Court for relief in relation to two issues arising from reasons for judgment that I issued after a trial relating to a divorce, spousal support and matrimonial property: 2018 ABQB 536 (Merits Decision) [1] . I ordered that Mr. Petrone make an equalization payment of approximately $5.6 million to Ms. Aubin. In paras 180-182 of the reasons, I reserved jurisdiction to deal with whether any further remedy should be given under s 9 of the Matrimonial Property Act , RSA 2000, c M-8 ( MPA ), and to speak to costs, if the parties could not agree. II.

Background [ 2 ] The full background to the trial can be found in the Merits Decision and it will not be repeated, but referred to as necessary.

It was evident by the end of the trial that any meaningful remedy for Ms. Aubin was going to implicate Quantiam. Mr. Petrone and Ms. Aubin invested over 20 years of their adult life working toward the success of Quantiam. As the success of Quantiam grew so did the standard of living of the family (paras 13-14, Merits Decision). It only makes sense that as the family unit has now separated, that the family wealth needs to be separated. [ 3 ] Mr. Petrone is the majority shareholder of Quantiam (84.7%) and effectively controls the company and the Board.

Unlike some other cases, there are minority shareholders in Quantiam: Ms. Aubin (4%); Mr. Connelly (4.49%); and 18 others (6.81%) (para 37, Merits Decision). Quantiam is a closely held corporation. Mr. Petrone is the driving and controlling force behind it (paras 41-44, Merits Decision). Mr. Petrone and David Connelly are the Directors of Quantiam. Mr.

Connelly is an independent director and the Litigation Director, though I did not find him to be that independent (paras 54-58, Merits Decision). [ 4 ] At trial, neither party got the primary relief they were seeking, which is why I retained jurisdiction to address remedy. While Ms. Aubin provided calculations for an equalization payment, the focus of her submissions on remedy at trial was on implementing the KRP Plan which set out a corporate restructuring of Quantiam as a means of dividing the matrimonial property (para 144, Merits Decision). Mr.

Petrone argued for an in specie division of the shares of Quantiam. I rejected both of these and instead used the value of the shares in Quantiam to calculate an equalization payment (paras 141-151, Merits Decision). [ 5 ] I had hoped that by providing a value for the shares in Quantiam (the parties being $20 million apart in their valuations), the parties would be able to fashion an appropriate remedy with no further involvement by the courts. [ 6 ] Quantiam is a separate entity under our corporate laws and I held that the matrimonial asset was the shares of Quantiam, not Quantiam’s assets.

While the matrimonial property is the shares, the undisputed evidence was that neither party had access to any cash, because their affairs were tied up in Quantiam and 159 Corp. Therefore any meaningful remedy seemed to require the involvement of Quantiam. That is why I directed that if an application for remedy was sought that implicated Quantiam, then notice should be given to Quantiam of this application. Notice was given. Quantiam appeared and filed an affidavit in opposition to the application, along with written and oral submissions. III. Remedy [ 7 ] Ms.

Aubin asks for the following relief, collectively or in the alternative or in combination: (

a) An order declaring that the debt owed by 159 to Quantiam be set off and paid from the matrimonial property equalization payment amount judgment; (

b) An order or direction that Quantiam provide 159 and Aubin with a receipt for payment of the loan and that it issue a Satisfaction Piece in the BC action and discharge its mortgage against the Nixon Road Property; (

c) An order declaring that Mr. Petrone be responsible for paying all interest accruing on 159’s debt to Quantiam after the trial of this action; (

d) An order directing Mr. Petrone to sell a sufficient number of his Quantiam shares to Quantiam to cover all amounts payable by Mr. Petrone to Ms. Aubin under the judgment; (

e) An order declaring that, unless Mr. Petrone satisfies all amounts payable to Ms. Aubin under the judgment, Quantiam shall pay all amounts owing to Ms. Aubin by Mr. Petrone under the judgment; and (

f) An order granting Ms. Aubin a general security interest (in the form of a general security agreement) in all present and after acquired property of Quantiam, which may be registered and perfected forthwith, despite the appeal. [ 8 ] The respondents Mr. Petrone and Quantiam accuse Ms. Aubin of relitigating the trial and asking for remedies that this Court already rejected in the Merits Decision. They also point out that the only jurisdiction the Court has is under s 9(3) of the MPA to “give to effect to” the money judgment I ordered in the Merits Decision.

To the extent that an order may be given under s 9(3)(b), to order a spouse to give security, or s 9(3)(c), to charge property with the payment and provide for enforcement of that charge, it is only with respect to the property of Mr. Petrone, not the property of Quantiam. In other words, only Mr. Petrone’s shares in Quantiam can be subject to a s 9(3)(

b) or (

c) order. [ 9 ] Mr. Petrone and Quantiam also argue that if I was going to give effect to any of the remedies that required Quantiam’s corporate veil to be lifted, I was functus on that issue as I had already determined that the corporate veil should not be lifted in the Merits Decision. Therefore, I could only give a remedy under s 9(3)(

b) or (

c) against the shares in Quantiam. [ 10 ] Mr. Petrone swore an affidavit in this application in which he deposes he cannot do anything to use the assets of Quantiam to satisfy the judgment because of his legal obligations to minority shareholders and as a fiduciary of the company. Clearly, he has legal and fiduciary obligations but I do not accept his evidence that he cannot do anything with Quantiam. While Mr.

Petrone has to be mindful of his obligations to Quantiam, he can make decisions that will benefit him and his family, just as he did when the family unit was intact and he decided to finance the purchase of the Nixon Road Property with a loan from Quantiam. [ 11 ] In response to this application, Mr. Connelly, the independent director of Quantiam, whom I did not find to be truly independent (paras 54-58, Merits Decision), swore an affidavit on October 17, 2018 which said, among other things: 5.

I would prefer that the matters in dispute between Petrone and Aubin be settled so that Petrone’s energy and skill can be employed in furthering the business of Quantiam. For that reason I have consistently supported efforts to engage Aubin and her counsel in settlement discussions in which Quantiam would participate, to be led by mediator experienced in corporate and financial matters.

I believe that the involvement of such a mediator is necessary to fully consider the complex corporate and tax issues which must be addressed if a settlement involving Quantiam is to be achieved, and which can be supported as being in Quantiam’s best interests.

[12] In addition, in its written submissions in this application, Quantiam stated under the heading “The Solution –‘Fashioning aMediated Remedy’”: 25. Despite repeated statements made by Aubin’s counsel to the contrary, Petrone cannot use his position as director or majorityshareholder to withdraw funds from Quantiam for his personal benefit. It should be obvious why using his position for personal benefitwould be improper and in direct conflict with the best interests of Quantiam and its shareholders. Petrone’s Affidavit and cross-examination provide any explanation required. 26.

The implication of counsel’s submissions is that the directors of Quantiam, Petrone and Connelly, will use every effort to thwartcollection of the Money Judgment unless the court intervenes. That implication is unfair, unsupported, and untrue. 27.

Through its counsel, Quantiam has made repeated earnest attempts commencing many months prior to trial, and continuingfollowing the Judgment, to bring the parties together, with Quantiam’s participation, to seek a mediated solution which might allow forQuantiam assets to be used in a way which would meet the requirements of Quantiam’s business, and which would not be oppressive tothe interests of Quantiam’s minority shareholders. All such efforts to engage in mediation have been rejected by Aubin. 28.

Continuing efforts on Aubin’s part to convince or persuade this court, without legal basis, to interfere with Quantiam’s assets doesnothing but unnecessarily expend energy and resources which could be better spent in addressing the complex corporate and tax issuesnecessary to reach a solution which must involve Quantiam’s participation as a corporation. (emphasis added) [13] Quantiam is acknowledging before this Court that its assets will be implicated in satisfying Mr. Petrone’s debt to Ms. Aubin,thereby already lifting its own corporate veil.

Quantiam just does not want a court ordered solution; rather it wants the ability to fashion asolution that “would meet the requirement of Quantiam’s business, and which would not be oppressive to the interests of Quantiam’sminority shareholders”. [14] The parties are at a standoff. Ms. Aubin has a judgment. She wants payment and she wants Quantiam implicated in a way thatmakes sense to her. She does not want to deal with Quantiam as a separate entity because she says Mr. Petrone is Quantiam. Mr.Petrone’s position is that Ms. Aubin obtained a money judgment.

It could be worthless if he goes bankrupt (as part of the stay of theMerits Decision pending appeal, Mr. Petrone undertook not to declare bankruptcy). Mr. Petrone says that he cannot access the assets ofQuantiam because of his legal and fiduciary obligations. Quantiam takes the position that it is a separate legal entity. It would bedangerous and unfair for the court to lift its corporate veil. But Quantiam acknowledges that it has to be involved in the resolution. [15] In this case I agree with Mr.

Petrone and Quantiam that under s 9(3) I have jurisdiction to give effect to the money judgment.First, it seems undisputed that pursuant to s 9(3)(

b) and (

c) I can order Mr. Petrone to grant a security interest in his shares in Quantiamto Ms. Aubin to secure payment of the judgment, and that I can charge his shares with the amount owing under the judgment. And I soorder. (See Appendix A for some wording for the order.) [16] There is evidence that Mr. Petrone has already inquired of Quantiam corporate counsel how to establish a new companywhich would avoid matrimonial property obligations (paras 143, 151 Merits Decision).

I am not confident that Quantiam’s shares willretain any value that would enable enforcement of the judgment. [17] Therefore, it is necessary to consider whether the money judgment should be secured against Quantiam’s assets. This, in turn,requires a consideration of whether it is appropriate to lift the corporate veil in these circumstances. [18] Our law is that a corporation has a personality separate from its shareholders’.

Among the policy reasons for recognizing thisis to provide limited liability to the individuals who start the corporation so they are not liable for corporate activity or debts.Conversely, the corporation is not usually liable for the activities of individual shareholders or directors. Of course, one of the primarypolicy objectives of incorporation is that the corporation can accumulate capital and invest to the benefit of the corporation andultimately the shareholders. [19] Separate corporate personality has long been recognized: Salomon v A Salomon & Co Ltd [1897] AC 22.

Strictly speaking,the corporate veil should only be lifted under very narrow circumstances where the corporation has been incorporated for illegal,fraudulent or improper purposes, or is completely dominated and controlled and being used as a shield for fraudulent or improperconduct: Wildman v Wildman (2006), (ON SCDC), 215 OAC 239 at para 23, 83 OR (3d) 401 (Ont CA) (Wildman). [20] The issue is whether this Court can and should lift the corporate veil of Quantiam in aid of enforcement of the judgmentgranted in favour of Ms. Aubin.

Section 9(3) of the MPA gives the court broad jurisdiction to grant a remedy – “to give effect to” amatrimonial property order. I have already identified in sections 9(3)(

b) and (c), which authorize the Court to order a spouse to givesecurity, or to charge property, to assist enforcement of the judgment.

Section 9(

j) permits the court to “make any other order that in theopinion of the Court is necessary”. [21] I do not read s 9(

j) as necessarily limited to orders concerning the matrimonial property (which I found to be the shares inQuantiam). It contains broad remedial language befitting a statute designed to address the historical inequity of matrimonial property law.Furthermore, s 8 of the Judicature Act, RSA 2000 c J-2 (Judicature Act) gives this Court broad power “in exercise of its jurisdiction inevery proceeding pending before it” to grant “all remedies whatsoever to which any of the parties to the proceeding may appear to beentitled in respect of any and every legal or equitable claim properly brought forward by them in the proceeding”. See also s 5(3)(

i) ofthe Judicature Act. [22] In Wildman, the trial court ordered that a judgment of $800,000 comprised of child support, spousal support, an equalizationpayment, and costs, against Mr. Wildman could be secured and enforced against the various corporate entities through which he operatedhis lucrative construction and landscaping business. Mr. Wildman appealed that part of the judgment, arguing that it constituted animproper piercing of the corporate veil. [23] In Wildman, the Ontario Court of Appeal observed at paragraph 49:

In the end, although a business person is entitled to create corporate structures and relationships for valid business purposes, tax and other reasons, the law must be vigilant to ensure that permissible corporate arrangements do not work an injustice in the realm of family law.

In appropriate cases, piercing the corporate veil of one spouse’s business enterprises may be an essential mechanism for ensuring that the other spouse and children of the marriage receive the financial support to which, by law, they are entitled. [ 24 ] It held, at paragraph 42, that it might be appropriate to lift the corporate veil in a family law context when the following conditions are met: • The individual exercises complete control of finances, policy and business practices of the company; • The control must have been used to commit a fraud or wrong that would unjustly deprive a claimant of his or her rights; and • The misconduct must be the reason for the third party’s injury or loss. [ 25 ] Wildman held that a court should only do so to prevent a flagrant injustice.

A corporation may have been incorporated for a completely valid purpose, as was the case in Quantiam. However, the Court stated (at paragraph 38) that “[t]he real focus must be on the relationship between the company and the controlling spouse and how the spouse is using the corporation after the parties have separated and before the financial issues are resolved”. [ 26 ] Wildman ’s facts are different from the facts of this case. First, in Wildman , the bulk of the judgment was child and spousal support.

I see no principled reason to treat a payment arising from a matrimonial property equalization judgment differently. Second, Mr. Wildman was the sole owner of his corporate interests. Quantiam is a private company with minority shareholders. This is certainly a complicating factual distinction; the court must be cognizant of the rights of minority shareholders if a remedy is to be fashioned.

But, again, the factual distinction is not a principled basis for not following the general approach in Wildman . [ 27 ] This approach to lifting the corporate veil to secure payment of a matrimonial property award was used in Barrett v Barrett , 2004 ABQB 508 , [2004] AJ No 1127 ( Barrett ). The Court considered the argument that the property of the corporation cannot be considered the property of the shareholders.

It held “notwithstanding this basic principle of company law, there are certain situations where the courts have shown themselves willing to ‘lift the veil of incorporation’. …These cases involve situations where corporations are used as devices to defeat claims by other parties or cases in which special circumstances make it equitable to disregard a corporate entity” (para 44). On this basis, the court charged the assets of the corporation with payment of the matrimonial property award pursuant to s 9(3)(

c) of the MPA . [ 28 ] Another factor when considering whether to lift the corporate veil, is that in the family law context, the creditor spouse cannot choose whether to deal with the corporation the way a commercial creditor can. The assets of the family unit are tied to the corporation and the only meaningful remedy has to include the corporation. [ 29 ] In this case, there is no doubt that Mr. Petrone controls Quantiam. Quantiam was incorporated for valid business purposes. However, I have already found that Quantiam, through Mr. Petrone, has committed wrongs that have an impact on Ms.

Aubin’s rights and these actions are the reason Ms. Aubin has not been able to obtain her share of the value of the matrimonial property. The wrongs committed by Quantiam, and or Mr. Petrone as the controlling mind of Quantiam, include: • Mr. Petrone caused Quantiam to call the demand loan on 159 Corp which owned the Nixon Road Property on September 4, 2014, in retaliation for Ms. Aubin commencing matrimonial litigation (paras 18 and 66, Merits Decision). • On November 20, 2016, Mr. Petrone threatened that Quantiam would foreclose on the Nixon Road Property if Ms.

Aubin did not consider his settlement proposal (para 66). • Mr. Petrone and Quantiam’s reactions to Ms. Aubin’s use of the 2016 Share Proceeds, which were to terminate Ms. Aubin’s employment by Quantiam and remove her as a director of Quantiam, were partly motivated by the matrimonial litigation (para 77). • Mr. Petrone on his own, or on behalf of Quantiam, has already sought legal advice about establishing a new company to avoid MPA obligations, leaving the court to wonder about the future value of Quantiam shares (paras 143, 151, Merits Decision). • Mr.

Petrone, and by implication, Quantiam, is “irrational” when it comes to Ms. Aubin (paras 68, 69, 151, Merits Decision). [ 30 ] I have ordered that the judgment be charged and secured against Mr. Petrone’s shares in Quantiam. However, for the same reasons that I did not think an in specie distribution of shares would be a meaningful remedy for Ms. Aubin, securing the judgment amount against the shares may be inadequate to enable Ms. Aubin to enforce it.

I find this case to be like Wildman and Barrett , in that there are special circumstances to lift the corporate veil and secure payment of the judgment against the assets of the Quantiam. I take comfort in this approach by the admission of Quantiam that it recognizes that it must be involved in the resolution of this dispute. I valued the shares in Quantiam to be $15.2 million reflecting the hard assets of Quantiam (para 108, Merits Decision).

One of those assets is the building owned by Quantiam located at 1651 - 94 Street, Edmonton (Building) which has been appraised between $5,201,000 and $6,510,000 depending on the valuation approach (para 94, Merits Decision). [ 31 ] So, in terms of remedy, under s 9(3)(b), (

c) and (

j) I declare that Ms. Aubin’s judgment against Mr. Petrone in the amount of $5,570,394 is protected by a security interest in Mr. Petrone’s shares in Quantiam and a security interest in the Building. Other assets of Quantiam remain unencumbered by this decision. I have chosen a specific asset of Quantiam instead of all assets, in order to recognize and protect the interest of the minority shareholders. The security interest in the Building may be registered. (See Appendix A for the wording of this order.) [ 32 ] These remedies give protection to Ms. Aubin by securing the money judgment against Mr.

Petrone’s shares in Quantiam, and the Building owned by Quantiam. There is an outstanding appeal of the Merits Decision and a stay pending appeal. In light of this, I order that Ms. Aubin can register her security interests but she is stayed from taking any steps in relation to enforcement pending the

appeal. IV. Costs [ 33 ] Ms. Aubin applies for her costs, which Mr. Petrone resists. There are three issues with respect to costs: 1) who is the successful party; 2) whether the draft bill of costs is reasonable; and 3) whether the successful party is entitled to double costs. The first two issues are relatively straightforward, with the real dispute being entitlement to double costs. A. Successful Party [ 34 ] Ms. Aubin applies for costs as she claims to be the successful party. She obtained a judgment for spousal support when Mr.

Petrone initially refused to pay and she obtained a judgment of approximately $5.6 million as a matrimonial property equalization payment. Mr. Petrone argues that Ms. Aubin was not successful because the relief she was seeking, essentially a corporate restructuring, was not granted. [ 35 ] However, the actions of the parties themselves indicate who they thought was successful. Mr. Petrone appealed and successfully obtained a stay of enforcement pending appeal. Ms. Aubin resisted the stay application. This would seem to indicate that Mr. Petrone perceived that he had lost and Ms.

Aubin perceived that she was successful. Ms. Aubin brought the application for costs, and submitted a draft bill of costs. Mr. Petrone made no cross-application for costs. In family law matters sometimes there are no real “winners” but in this litigation I find that Ms. Aubin is the successful party and is entitled to costs. She was successful in her claims for spousal support and for a remedy other than an in specie distribution of shares, which was the position of Mr. Petrone. B. Quantum of Bill of Costs [ 36 ] Ms.

Aubin has submitted a draft bill of costs which show fees based on Column 5 in the amount of $83,250. If the fees are doubled pursuant to one of the formal offers ($68,750), they come to $152,500. The disbursements are $227,390.92 and other charges are $2,105. The calculations provided by Ms. Aubin show a total of $401,055.83 (with the double costs). If the fees are adjusted for inflation, then the total increases to $476,212.97.

I have recalculated these totals without the double costs, and by my calculation the total bill of costs unadjusted for inflation would be $328,868.33, and if adjusted for inflation would be $369,078.32. [ 37 ] Mr. Petrone did not complain about the draft bill of costs claiming column 5 and second counsel fees. He was “ambivalent” about the use of the inflation multiplier. Mr. Petrone did take issue with the expert fees for KRP LLP and Deloitte LLP. He argued that almost $50,000 for the KRP Plan was unreasonable. The amount of $173,692.75 for Deloitte’s fees was also unreasonable, he argued, because Ms.

Aubin had not provided them with all of the relevant information, specifically a copy of the affidavit she had sworn in the oppression litigation (paras 72, 73, 89, Merit Decision). In addition, their refusal to cooperate with Mr. Petrone’s expert meant they spent time trying to analyze the basis of the 2016 Liquidity Event, when they could have obtained a clear explanation from Mr. Petrone’s expert. [ 38 ] While the disbursements for expert fees seem high, I found their evidence helpful, and am not prepared to reduce this amount. Given the concessions by Mr.

Petrone, and subject to my comments on double costs, I accept the draft bill of costs, including the adjustment for inflation. C. Double Costs [ 39 ] Ms. Aubin argues that she is entitled to double costs under Rules 4.24 and 4.29 of the Alberta Rules of Court , Alta Reg 124/2010 ( Rules ), because the result of the trial exceeded the formal offer she made on May 27, 2017. The key elements of that offer included: • Ms. Aubin keeps the Nixon Road Property free and clear. • Ms. Aubin transfers her shares in 159 Corp to Mr.

Petrone and he assumes any CRA tax liability from 159 Corp and assumes the liability from 159 Corp to Quantiam. • Mr. Petrone causes Quantiam to release Ms. Aubin from her personal guarantee. • Ms. Aubin relinquishes her interest in Mr. Petrone’s shares in Quantiam. • Mr. Petrone ensures that Ms. Aubin is not considered an affiliate of his with respect to the shares she retains in her own name in Quantiam. • Ms. Aubin discontinues all litigation against Quantiam or its Board. • Mr. Petrone pays her $3 million as an equalization payment. [ 40 ] Ms.

Aubin argues that the Court can examine the history of the settlement negotiations, including informal offers, to determine if one party was being unreasonable and this can inform the costs award as well. [ 41 ] Mr. Petrone argues that a court cannot ascertain if a formal offer has been ‘beaten’ if the formal offer is uncertain in which case it is invalid: VAS v Grace , 2015 ABQB 7 , [ 2015] AJ No. 16 . Alternatively, he argues that the uncertainty of such an offer constitutes a ‘special reason’ under Rule 4.29(4) sufficient to rebut the presumption of double costs. [ 42 ] Mr.

Petrone points to the uncertainty in both formal offers made by Ms. Aubin. The May 2017 offer described above requires Quantiam to take a number of steps in relation to 159 Corp and there is no guarantee that those steps would be taken by Quantiam; Mr. Petrone cannot ensure Ms. Aubin would not be considered an affiliate; and Mr. Petrone does not have the funds to pay $3 million. All these factors make the offer uncertain. Ms. Aubin also made a formal offer on February 2, 2018, basically of the KRP Plan, and that

offer was not within the control of Mr. Petrone and therefore uncertain. [43] In reply, Ms. Aubin points to the formal offer made by Mr. Petrone on February 1, 2018 which contemplates, among otherthings, paying her $1.5 million over 5 years, leaving the Nixon Road Property with Ms. Aubin and Mr. Petrone assuming the debt of 159Corp to Quantiam and causing “Quantiam to release Renee from any and all liability as a guarantor or otherwise of the debt of [159Corp]”. She argues that this formal offer is proof that Mr. Petrone has control over Quantiam.

Thus, requiring Quantiam to do anythingdoes not make the offer uncertain. [44] When assessing whether double costs are warranted, a subsequent formal offer does not rescind a prior formal offer. Offersexpire in accordance with their terms: Jones v Gerosa, 2016 ABQB 614 at paras 95-98, 45 Alta LR (6th) 243. The relevant offer in thiscontext is the May 2017 formal offer. Ms. Aubin received a judgment of approximately $5.6 million. The May offer included the valueof the Nixon Road Property (appraised at $2.3 million in July 2017), payment of $3 million, and assuming CRA tax liability from 159Corp.

It is unknown what that amount might be or was in May 2017. I find this uncertainty to be more troubling than any concerns aboutMr. Petrone being able to make Quantiam take any steps with respect to Ms. Aubin’s personal guarantee. The double costs provisions ofthe Rules are punitive in nature and therefore demand a high degree of certainty and exactness: Laframboise v Billett, at para 3, 5 Alta LR (2d) 285 (ABQB). I exercise my discretion under Rule 4.29(4) to not award double costs in these circumstances. [45] In conclusion, subject to the parties confirming the math, Ms.

Aubin is awarded costs adjusted for inflation in the amount of$369,078.32. Heard on the 24th days of October, 2018. Dated at the City of Edmonton, Alberta this 28th day of November, 2018. R. Khullar J.C.Q.B.A. Appearances: Robert M. Curtis, QC and Megan Dawson McCuaig Desrochers LLP for the Applicant Ms. Renee Lyne Aubin Dale Tumbach and Jasmine Chu TC Family Law Group For the Respondent Sabino Steven Anthony Petrone Daniel Hagg, QC Daniel Hagg Professional Corporation For the Respondent Quantiam Technologies Inc. Appendix A With respect to Mr.

Petrone’s shares in Quantiam, the following should form part of the judgment: 1. Mr. Petrone shall grant, execute and deliver a security agreement respecting Mr. Petrone’s shares in Quantiam in favour of Ms.Aubin, to stand as security for all indebtedness now or in the future owing to her under any court order granted in this proceeding,including the order for retroactive, existing and future spousal support, the order for the equalization payment in the amount of$5,570,393.90, interest, legal costs; and the costs pertaining to enforcement of the security.

2. Mr. Petrone shall execute and deliver such security documentation to Ms. Aubin within ten days. 3. Until such security documentation has been validly executed, delivered and registered in accordance with all applicable statutory requirements, Mr. Petrone’s shares in Quantiam are charged in favour of Ms.

Aubin as security for all indebtedness now or in the future owing to her under the judgment granted in this proceeding, including for retroactive, existing and future spousal support and the equalization payment, interest, legal costs and the costs pertaining to enforcement of the security; and the charge for that purpose is hereby vested in Ms. Aubin. As well, until the aforesaid security documentation has been validly executed, delivered and registered in accordance with all applicable statutory requirements, Mr.

Petrone is restrained and enjoined from performing any act or executing any document having the effect of disposing, mortgaging, charging, assigning, alienating or otherwise affecting his shares in Quantiam or the legal or equitable title thereto, and from declaring bankruptcy or filing a proposal under the Bankruptcy and Insolvency Act . With respect to the Building owned by Quantiam, the following should form part of the judgment: 1. Quantiam shall grant, execute and deliver a security agreement in the Building in favour of Ms.

Aubin to secure all indebtedness now or in the future owing to her under judgment for $5,570,394, interest, legal costs, and the costs pertaining to enforcement of the security. 2. Quantiam shall execute and deliver such security documentation to Ms. Aubin within ten days. 3. Until such security documentation has been validly executed, delivered and registered in accordance with all applicable statutory requirements, the Building is charged in favour of Ms.

Aubin as security for all indebtedness now or in the future owing to her under the judgment for $ 5,570,393.90, interest, legal costs, and the costs pertaining to enforcement of the security.

As well, until security documentation is validly executed, delivered and registered in accordance with all applicable statutory requirements, Quantiam is enjoined from performing any act or executing any document having the effect of disposing, mortgaging, charging, assigning, alienating or otherwise affecting the Building or the legal or equitable title thereto, and from declaring bankruptcy or filing a proposal under the Bankruptcy and Insolvency Act .