Axion Ventures Inc. v. Bonner

2023 BCSC 149 Axion Ventures Inc. v. Bonner

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Axion Ventures Inc. v. Bonner, 2023 BCSC 149 Date: 20230202 Docket: S210438 Registry: Vancouver Between: Axion Ventures Inc. and Axion Interactive Inc. Plaintiffs And John Todd Bonner, Nithinan Boonyawattanapisut, Monaker Group, Inc., William Kerby, Cern One Limited, Red Anchor Trading Corp., CC Asia Pacific Ventures Ltd., Jonathan Chen, HotPlay Enterprise Limited, HotPlay (Thailand) Ltd., Christopher Bagguley, Mark Henry Saft, Longroot, Inc., Jane Doe and ABC Corp. Defendants Before: The Honourable Justice Walker Reasons for Judgment Counsel for the Plaintiffs: P.J. Sullivan J. Romanoski S.R. Shuchat Counsel for the Defendants: L.D. Ridgedale L.B. Shepherd C. Thompson, Articled Student Place and Dates of Hearing: Vancouver, B.C. January 10-11 and 27, 2023 Place and Date of Judgment: Vancouver, B.C. February 2, 2023 Table of Contents Introduction. 3 Legal Test for a Stay. 5 Summary of the Plaintiffs' Claims. 7 The Plaintiffs. 8 Mr. Bonner and Jess. 12 Monaker. 13 The Alleged Plan Designed by Mr. Bonner. 13 What Led to the Adjournment of the Plaintiffs' Second Contempt Application. 15 Introductory Comments. 15 What Occurred. 16 Determination. 22 Adjournment Terms in Issue. 23 Background. 23 Circumstances Surrounding August 24 Order 23 Key Terms of the August 24 Order 31 Circumstances Surrounding November 9 Order 32 Key Terms of

the November 9 Order 37 Subsequent Events. 37 The Two Adjournment Terms at Issue on the Stay Application. 39 Serious Question to be Tried. 40 Irreparable Harm.. 41 Balance of Convenience. 44 Introductory Remarks. 44 Production of Documents Concerning the Termination of the Stock Purchase Agreement 47 Notice to Streeterville. 50 Due Process. 51 Determination. 53 Conclusion. 54 Introduction [1] The defendants apply for a stay, pending their application for leave to appeal, of two of a number of orders I made on December 13, 2022, as terms of the adjournment of a contempt application brought by the plaintiffs ("Stay Application"). [2] The form of order is in dispute and has not been entered. For ease of reference, I refer to it as the "December 13 Order". [3] The contempt application was filed on November 21, 2022, concerning an order I made on November 9, 2022 ("November 9 Order"). It is the second of two contempt applications (collectively, "Contempt Applications") brought by the plaintiffs, in which the plaintiffs assert that the defendants are in continuous breach of the November 9 Order and a prior order I made on August 24, 2022 ("August 24 Order"). The first contempt application, concerning the August 24 Order, was filed on November 3, 2022. The parties refer to the contempt application filed on November 3 as "Contempt No. 1" and the application filed on November 21 as

"Contempt No. 2", and for ease of reference, when I refer to them on a stand-alone basis, I will do so as well. [4] At the hearing of their Stay Application, the defendants advised me they brought it before me, as opposed to the Court of Appeal, because they could have it heard faster. [5] Counsel acting for the defendants withdrew shortly before the commencement of the hearing of the Contempt Applications. Argument on the applications was adjourned to allow newly retained defence counsel to prepare. [6] When the hearings began, plaintiffs' counsel advised of his clients' intention to proceed with argument on Contempt No. 2 in light of what he described as clear ongoing non-compliance with the November 9 Order (although the defendants deny contempt, they do not dispute that they have not complied with the November 9 Order). At one point during the plaintiffs' submissions, defence counsel advised of her clients' intention to apply to vary the November 9 Order ("Variation Application"). The defendants subsequently filed a notice of application seeking variation nunc pro tunc. [7] When the plaintiffs' submissions on Contempt No. 2 concluded, on December 13, 2022, defence counsel raised issues concerning the appropriateness of proceeding with that application on a stand-alone basis. That morning, the defendants filed an affidavit of one of the personal defendants, Mr. Todd Bonner,

who is one of the alleged contemnors. Defence counsel argued that the Contempt Applications and the Variation Application should be heard together following cross-examination of Mr. Bonner and another of the personal defendants, Nithinan Boonyawattanapisut, who is also an alleged contemnor (the parties refer to her as "Jess", and without meaning any disrespect, and for ease of reference, I will do so as well). The plaintiffs disagreed, stating that the hearing of Contempt No. 2 should proceed. Contested submissions followed. [8] In my oral reasons, unreported, December 13, 2022 ("December 13 Reasons"), I agreed with defence counsel's submission that all three applications should be heard together. I adjourned the applications over to January 9, 2023. Following contested submissions regarding terms, I ordered some but not all of the terms sought by the plaintiffs. Those terms, discussed below, required the defendants to do certain things by December 20, 2022. I subsequently granted an extension of the date for compliance to January 11, 2023, when advised of the defendants' intention to apply for a stay. [9] The essence of the defendants' position on their Stay Application is: (a) they did not seek the adjournment; (b) they were denied natural justice insofar as they had no notice of the terms sought by the plaintiffs and had no opportunity to prepare or adequately respond; (c)

the impugned terms are unnecessary; (d) they will be prejudiced if a stay is not ordered; and (e) the balance of convenience favours a stay. [10] In oral submissions, the defendants resiled from their initial position that it was the plaintiffs who sought the adjournment but maintained they did not seek one, that it came about as a result of colloquy between the court and counsel. [11] Defence counsel also acknowledged that at no time during the hearing that led to the adjournment did she raise concerns about lack of notice concerning possible terms or otherwise express surprise, ask for an adjournment to consider the terms proposed by the plaintiffs or prepare to defend against them, or suggest that she was not in a position to respond. She now says she wishes she had. Defence counsel also confirmed that she had the opportunity to provide responsive submissions and in fact, did so. With the benefit of additional time between the hearing on December 13 and argument on the Stay Application, defence counsel developed further reasons why the two impugned orders ought not to have been made, and included them in her submissions on the Stay Application (which the plaintiffs responded to). Legal Test for a Stay [12] The parties agree that the factors to be applied in considering whether to exercise discretion to grant a stay of execution are the same as the well‑known test for

granting an injunction: (a) there must be merit to the appeal in the sense that there is a serious question to be tried; (b) the applicants must show that they will suffer irreparable harm if the stay is not granted; and (c) the balance of convenience must favour the granting of a stay. See: Silverado Industries Inc. v. Dycar Pharmaceuticals Ltd., 2018 BCSC 2368 at para. 17; RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311. [13] The burden is on the applicant, to meet all three branches of this test: Dhillon v. Robertson, 2021 BCCA 77, at para. 25. [14] Relying on Silverado, the plaintiffs point out that in approaching whether a stay should be granted, the impugned orders are presumed to be correct, such that they are entitled to the fruits of those orders subject to the court's discretion to order a stay if satisfied that it is in the interests of justice to do so. See also: Rotaru v. Rotaru, 2009 BCSC 480 at para. 11; Gold v. Gold (1992), 70 B.C.L.R. (2d) 216 (S.C.), 1992 CanLII 721 at para. 13. [15] The court's power to grant a stay is discretionary and should be exercised only where necessary to preserve the subject matter of the litigation or to prevent irreparable damage or where there are other special circumstances present. When the order appealed from is an interlocutory discretionary order, there is a substantial burden on the applicant for a stay

to show that the court below based its decision on a wrong principle or did not act judicially: Silverado at paras. 14-15. [16] Citing passages from the reasons in Robak Industries Ltd. v. Gardner, 2006 BCCA 395, excerpted below, the plaintiffs highlight that I am the case management judge assigned to this and related complex litigation (e.g., Vancouver actions S217835; S209245; S2011626; S214550; S213309; S213370; S218677; S227954), and in this respect, submit that the burden on the defendants in this case is especially stringent: [11] It is well settled that with appeals against discretionary interlocutory orders, the burden on an applicant is to show an error in principle or a clearly wrong result or a serious injustice: Yang v. Yang, 2000 BCCA 486. [12] The test is even more stringent when the order in question was made by a case management judge. In this regard I refer to the decision of Mr. Justice Goldie in chambers in G.W.L. Properties Ltd. v. W.R. Grace & Co. of Canada Ltd., 1992 75 B.C.L.R. (2nd) 31 at ¶ 9 and 10: 9. In my view, where one judge has continuing responsibility for pre-trial management for an action such as this, a much stronger case than is present here would have to be made out before this Court would interfere with his discretion. In that respect I note that Mr. Justice Wallace said in Aylsworth v. Richardson Greenshields of Canada Ltd. (December 24,

1987), Docs. Vancouver CA008575 and CA008583 (B.C.C.A.), on an application for leave to appeal: It has been the general practice of this Court respecting appeals from interlocutory orders to not intervene with such orders or to substitute its view for that of the trial judge, where such orders involve the exercise of the chambers judge's discretion and he has applied appropriate legal principles In my view, it would be even less appropriate for this Court to intervene where the discretion exercised by the pre-trail judge is concerned with giving directions incidental to the case-management of complex litigation. Without attempting to state an exhaustive list of conditions which would justify this court interfering with an order of a pre-trial judge, it is my opinion that unless such direction finally disposes of a fundamental issue in the lawsuit or contravenes the rules of natural justice this Court would not review the pre-trial judge's exercise of his discretion.

10. In my view, it is clear that if there are changed circumstances or if circumstances which now appear to be fact turn out to be otherwise a further application will, in the normal course, be made to Mr. Justice Lowry and he will be able to apply to that application the experience he has gained well over a year. [17] The positions of the parties and the effect of the case authorities on the instant Stay Application must be viewed in the overall context of this complex commercial case. Context is also essential for my analysis and determination. For those reasons, I have provided a summary of the plaintiffs' claims and some key background leading up to the orders in issue. Summary of the Plaintiffs' Claims [18] In this action, the plaintiffs claim that the defendants conspired and acted unlawfully in concert in an evolving civil conspiracy and common scheme to unlawfully take control, where possible, of the assets of the plaintiff, Axion Ventures Inc. ("Axion Ventures"), and of its subsidiaries, including their intellectual property, digital marketing and in-game advertising software, and corporate opportunities. Included in the plaintiffs' claim are allegations that since January 2017, Mr. Bonner and Jess: (a) acted secretly with the defendant, Monaker Group, Inc. ("Monaker"), and others to attempt to take control of Axion Ventures and its subsidiaries; (b) wrongfully used

Axion Ventures' funds and funds provided by investors to advance their personal interests; (c) effected an unlawful transfer of control and ownership of the digital assets of Axion Ventures and its subsidiaries, including the plaintiff, Axion Interactive Inc. ("Axion Interactive"), such as its digital marketing and in-game on-line advertising software and intellectual property to entities within their control, including Monaker, for their benefit; and (d) breached their fiduciary duties owed to the plaintiffs. The Plaintiffs [19] Axion Ventures is an investment issuer incorporated in British Columbia. It is a publicly traded company whose shares are listed on the TSX Venture Exchange in Canada under the symbol "AXV". The other plaintiff, Axion Interactive, is a wholly owned subsidiary of Axion Ventures and situated in the British Virgin Islands. [20] A useful description of the complex nature of the plaintiffs' business and those of its subsidiaries in the technology sector (including on-line marketing, advertising, and gaming) and key assets and holdings is set out in their further amended notice of civil claim: 10. In or around May of 2016, Capstream completed its Qualifying Transaction and was renamed Axion Ventures Inc. [Axion] shortly thereafter.

11. Axion has been operating as an Investment Issuer under the policies of the TSX since its Qualifying Transaction.

12. Axion's common shares trade on the TSX under the symbol "AXV" and on the OTCQX® Best Market, a public market in the United States, under the symbol "AXNVF".

13. Axion has been actively engaged in raising capital through private placements at prices from $0.50 to $1.00 per share.

14. Axion operates through and holds majority interests in a number of subsidiaries operating in the technology sector, including several innovative and highly successful video game development and publishing companies based in Asia, and one of only four Initial Coin Offering ("ICO") portals approved under Thailand's securities laws.

15. At the material times, the Axion Assets included Axion's direct and indirect holdings in a number of entities that either operate in the technology sector, or hold interests in operating companies in the technology sector, including but not limited to the following companies: (a) a 100% interest in the Plaintiff Axion Interactive, a British Virgin Island ("BVI") corporation that holds interests in a number of companies, including a 60% interest in True Axion Interactive Ltd. ("TAI"), a Thai video game development company headquartered in Bangkok, Thailand, which was cofounded with True Corporation; (b) via Axion Interactive, a 55% interest in Longroot, a Cayman Islands corporation which in turn owns Longroot Holding (Thailand) Ltd., a Thai company, which owns Longroot (Thailand) Ltd. The latter owns one of the four Thai ICO portals, which were established to facilitate the raising of funds through the offering of digital assets; (c) a 54.22% interest in Axion Games, a Cayman Islands corporation, which is an online video game development and publishing company headquartered in Shanghai, China, which in turn owns a BVI corporation called Mega Marble International Ltd., which in turn owns Ying Pei Digital Technology (Shanghai) Ltd. ("Yingpei Digital"). The details of the 54.22% interest are as follows: (i) 25.74% held directly by Axion; (ii) 12.46% held by Axion Entertainment International Holdings Ltd. ("AEIH"), a wholly owned subsidiary of Axion; and (iii) 16.02% held by AEH, a wholly owned VI subsidiary of Axion; (d) a 100% interest in Axia Corporation Ltd. ("Axia"), a Hong Kong company; and (e) a 15% interest in Red Anchor, a company majority owed by Bonner and Jess.

16. At the material times, the Axion Assets owned a direct or indirect interest in the following assets: (a) the Axion IGA IP; (b) a video game known as Rising Fire (the "Rising Fire Game"), which is an online multiplayer, third person shooting and role-playing game; (c) a video game known as Invictus. Invictus (the "Invictus Game"), which is a card-based mobile RPG fighting game; and (d) an initial coin offering portal technology via Axion Interactive and Longroot. [21] The entity "Longroot" referred to above is Longroot Limited. It is based in the Cayman Islands. The shares of Longroot Limited are wholly owned by its parent company based in Delaware, Longroot, Inc. The parent company is often referred to in this action as "Longroot Delaware", even though it recently changed its name to "Next Fintech Holdings Inc." For convenience, I will refer to it as "Longroot Delaware". [22] The plaintiffs allege that in 2018 they entered into an agreement with an individual named Dr. Jason Morton that resulted in them incorporating Longroot Limited in the Cayman Islands. Axion Interactive held the majority of the shares of Longroot Limited and Dr. Morton held, through Longroot Delaware, close to 40%. They also agreed that Axion Interactive shall have the right of first refusal ("Right of First Refusal") to purchase Longroot Delaware's shareholdings in Longroot Limited, if it decided to

sell them. [23] Axion Interactive asserts that it owns shares of Longroot Limited giving it a direct 55% interest in that company. [24] Longroot Limited holds, inter alia, through wholly-owned subsidiaries incorporated in Thailand, intellectual property for software that facilitates on-line advertising in on-line gaming. It is referred to in the plaintiffs' further amended notice of civil claim as the "Axion IGA IP" and is held or controlled through by Longroot Limited and other entities such "Axion Games". [25] In its pleading, the plaintiffs suggest a value of the shares of Longroot Limited in 2020 was US $60 million: G. Longroot Theft 95. As noted above, at material times, Axion Interactive owned a direct 55% interest in Longroot. Axion Interactive is a wholly-owned subsidiary of Axion. Therefore, Axion owns a 55% indirect interest in Longroot through Axion Interactive.

96. In 2019, Longroot, through its subsidiary Longroot Thailand, was one of the first three ICO portals approved by the Thailand Securities and Exchange Commission to operate in Thailand. The ICO portals must be used by companies seeking to raise funds through the sale of digital assets, such as cryptocurrency, and the owner of the ICO portals has the potential to earn substantial fees.

97. Longroot is a significant asset of Axion [Ventures] and Axion Interactive given the growth of the global cryptocurrency industry and its prime position as one of only a few ICO portal companies in Thailand. In September, 2020, Bonner advised potential investors that the value of Longroot was approximately US $60 million. [Bold and underline in original] [26] The plaintiffs also describe the value placed on Axion Games (one of the entities Mr. Bonner and others are alleged conspired to transfer to Monaker) to be at least US $350 million: F. Axion Games Theft 89. Axion Games is an online video game development and publishing company. Axion Games, together with its subsidiaries, including Yingpei Digital, comprise Axion's Chinese-based video game development and publishing portfolio.

90. As set out above, Axion owns a 54.22% interest in Axion Games directly and through its wholly owned subsidiaries AEH and AEIH.

91. Axion Games has played and continues to play a vital role in the development and sale of several successful video games in the global market and was, at all material times hereto, the largest generator of revenue for Axion.

92. In 2017, the Bonner Defendants represented to the Investors that Axion Games was worth about USD $350,000 and commissioned and obtained a report from Deloitte Tohmatsu that valued Axion Games between USD $420,000,000 to $696,000,000. [Bold and underline in original] [27] The defendants' position in their application materials filed on November 10, 2021, in response to the plaintiffs' summary trial application/injunctive relief in the alternative (discussed below), is that the total value of the assets in issue in the action is in the approximate range of US $2.37 billion to $2.65 billion. [28] The plaintiffs assert a constructive trust over their assets which, they contend, were wrongfully taken by the defendants' misconduct as well loss caused by the misconduct of Mr. Bonner and other defendants (including Axion Ventures' loss of its right to exercise the Right of First Refusal). They seek proprietary remedies, an accounting, damages, and injunctive relief. [29] Central to the contempt applications are the plaintiffs' proprietary claims concerning shares issued by Longroot Delaware and Longroot Limited, as described in part in this excerpt from their pleading: 5. Having unlawfully acquired the Axion Assets, in or about May 2020, the Bonner defendants entered into a further conspiracy (the "Monaker Conspiracy") with the Defendant Monaker Group, Inc., a company trading on

NASDAQ ("Monaker"), and its Chief Executive Officer, William Kerby ("Kerby"), Jane Doe ("Doe"), and ABC Corp. ("ABC", and collectively the "Monaker Defendants"), pursuant to which the Bonner Defendants agreed with the Monaker Defendants: (a) to secretly and unlawfully transfer to Monaker, in return for share of Monaker at a preferred prices, the Axion Assets, including the ownership of the Axion IGA IP from HotPlay Thailand, Axion Games Limited ("Axion Games"), Axion Interactive, Axion Entertainment Holdings Ltd. ("AEH"), and Longroot Limited ("Longroot"); 7. As further described below, Axion and Axion Interactive bring this Action to claim against the Defendants for a constructive trust, an accounting and damages and losses arising from the First Conspiracy and the Monaker Conspiracy, as well as other unlawful actions, including Bonner's numerous breaches of the obligations he owed to Axion and Axion Interactive in order to recover the Axion Assets, and to stop the Defendants from continuing to harm and damage Axion. [Bold in original] Mr. Bonner and Jess [30] Mr. Bonner was a co-founder and formerly a director of Axion Ventures. For part of his tenure with the company, i.e., since May 2016, he was employed as its chief executive officer until his position and employment were terminated at a board meeting (discussed below) in July 2021. Jess, who is Mr. Bonner's spouse, was

also a director and officer of Axion Ventures as well as its subsidiaries (including Axion Interactive). Her employment was also terminated in July 2021, as a consequence of her alleged participation with Mr. Bonner in his alleged plan to take control of the plaintiffs and of their assets and those of their subsidiaries. Mr. Bonner and Jess reside in Thailand. Monaker [31] Monaker is a Nevada corporation with an address in Florida. It is publicly traded on the NASDAQ Stock Market LLC with the trading symbol "MKGI". Although it has changed its name to "Next Play", I will, as the parties and their counsel have in many of the hearings in this case, continue to refer to it as "Monaker". Prior to the material events in issue in this action, Monaker's business was to provide inventory and booking solutions for the alternative rental lodging market. The defendant, William Kerby, is the chief executive officer of Monaker and resides in Florida. The Alleged Plan Designed by Mr. Bonner [32] The plaintiffs allege that in around September 2020, after Mr. Bonner was terminated as chief executive officer but was still a director of both plaintiffs, and to further his failed prior attempts to wrest control of Axion Ventures and its subsidiaries and assets, he and Monaker "designed a transaction" or new "plan" ("Plan") to circumvent the Right of First Refusal to allow Mr. Bonner, through

Monaker, to acquire the plaintiffs' interest in Longroot Limited. Under the Plan, Monaker acquired Dr. Morton's shares of Longroot Delaware, which as noted above, owns shares in Longroot Limited. According to the plaintiffs, in breach of his fiduciary duties as a director of the plaintiffs, Mr. Bonner engineered events that allowed Monaker to exercise the Right of First Refusal and acquire, through Longroot Delaware, the majority interest in Longroot Limited previously held by the plaintiffs by way of a dilution through a fictitious cash call. [33] The plaintiffs allege that as a result of the Plan: (a) Mr. Bonner became the chairman of Monaker and chief executive officer of Longroot Delaware; (b) Jess became Monaker's co-chief executive officer and primary executive officer (a defined role in NASDAQ's policies) as well as a director of Longroot Delaware; (c) Mr. Bonner and Jess have, directly or indirectly, become Monaker's largest shareholders and also taken on other roles with its Longroot Delaware's subsidiaries; (d) Monaker knowingly assisted Mr. Bonner and Jess to implement the Plan; (e) the Axion Ventures assets, including the Axion IGA IP, were unlawfully transferred to either Monaker or companies owned or controlled by Mr. Bonner and Jess; and (f) the Axion IGA IP as well as other key assets are now within the control of Monaker, Longroot Delaware, and Longroot

Limited. [34] Thus, the plaintiffs' injunctive and proprietary claims include the shares of Longroot Delaware and Longroot Limited. I have excerpted below part of their further amended notice of civil claim as it bears directly on some of the issues raised on the instant Contempt Applications and Variation application: Part 2: RELIEF SOUGHT 6. An interim, interlocutory and permanent injunction restraining the Defendants and each of them, by themselves, their servants, agents, or otherwise from transferring, conveying, assigning, charging, encumbering otherwise dealing with the Trust Property [defined as the intellectual property, corporate opportunities, and other assets of the plaintiffs and their subsidiaries].

7. An interim, interlocutory and permanent injunction restraining the Defendants and each of them, by themselves, their servants, agents or otherwise from taking steps to transfer to Monaker the assets of Axion.

8. A constructive trust over all shares of Longroot (Delaware) owned by Monaker including rescission of the issuance of shares of Longroot issued to Longroot (Delaware) or setting aside of transactions required to effect same. Part 3: LEGAL BASIS 24. The Trust Property in the hands of the Defendants or any one or more of them resulted from activities of the Defendants in breach of their fiduciary duties to Axion or the Axion Assets, including Axion Interactive, are a result of the Defendants having knowing participation on breaches of fiduciary duty. VI. KNOWING RECEIPT OF TRUST PROPERTY 26. The Trust Property is subject to a trust in favour of Axion and/or Axion Interactive.

27. The Trust Property which the Defendants or any one or more of them was taken from Axion and/or Axion Interactive in breach of trust.

28. The Defendants or any one or more of them, including Bonner, did not take the Trust Property as bona fide purchasers for value without notice. [Bold and italics in original; underlining added] [35] A claim of knowing assistance is also pleaded against Monaker and certain other defendants. [36] The defendants vehemently deny all of the plaintiffs' allegations. They contend there is no evidence to support their claims. During their submissions on the summary trial application, the defendants also said the claims against them are premised, in part, on concocted evidence designed to distract from the mala fides conduct of some of the plaintiffs' directors and officers who have, in breach of their fiduciary duties, misused corporate assets for their own personal gain. What Led to the Adjournment of the Plaintiffs' Second Contempt Application Introductory Comments [37] The parties stress that what led to the adjournment of the hearing of Contempt No. 2 is a key fact to consider on the Stay Application as it impacts the question of whether the defendants should have anticipated that if an adjournment was granted, terms might be imposed and, also, should be considered when assessing the overall merits of their positions. [38] The plaintiffs argue that the adjournment was granted at the request of the defendants. The defendants say they never sought an adjournment. The defendants'

ultimate assertion in argument on the Stay Application is that the adjournment was consequent upon their counsel's ex tempore submissions during the hearing on December 13. [39] Given the importance placed on this factual matter by the parties, it is useful to set out my factual findings in this separate section. What Occurred [40] I find it clear from my review of the transcript from the hearing on December 13, that the adjournment of Contempt No. 2 was the result of a specific request sought on behalf of the defendants. [41] Although defence counsel initially said she was ready to proceed, during the course of her submissions she suggested an adjournment was necessary, in part because she was not fully prepared: THE COURT: Do you want to outline your client's position for me, then we can stand down till this -- CNSL L. RIDGEDALE: Yeah. I think -- I think there are some things that we could discuss. THE COURT: All right. CNSL P. SULLIVAN: If I just -- THE COURT: Does Mr. Sullivan have the materials? CNSL P. SULLIVAN: I have binder 9 with me. That may assist. THE COURT: Someone's just coming in. CNSL P. SULLIVAN: It may not match your numbering, so... THE COURT: Someone's just coming in the courtroom. CNSL L. RIDGEDALE: Thank you. CNSL P. SULLIVAN: Oh, that's from our office. THE COURT: Okay. Anyway. Look, why don't you outline CNSL L. RIDGEDALE: Certainly. I was having a

discussion with my friend this morning about the order of proceedings and he was asking me my position. So with respect to the response to the contempt application, I'm prepared to proceed with that. My -- my friend takes the position that that should be first. And that's fine. Our position is that's fine. In terms of the order of things, my position, though, is that a finding of contempt should not be made before the application to vary is heard given that the issues are related. THE COURT: So, look, here's the thing. It's not clear to me when counsel got off the record. I don't know. I mean, counsel took a position on behalf of their client -- clients, plural, in that correspondence with Mr. Sullivan, and I don't know if it's because -- they got off the record because there's an order and their clients wouldn't obey with the court order, conform with it, or it's because counsel had a different view that once ‑‑ because the transaction wasn't proceedings. It's not clear to me from that. So the question is counsel withdrew. All right. But there's still an order requiring your clients to produce the order -- the document. And the question now is why hasn't it been produced. And -- and the other day you had indicated that one position might be that they relied on advice of counsel. I don't know if that's still a live position or not. CNSL L. RIDGEDALE: Well, if we had more time,

we -- we could explore those things. But last week standing here I stated on the record that I was of the view -- THE COURT: Yeah. CNSL L. RIDGEDALE: -- that I was not going to be in a position to argue this fully this soon. But I'm here and -- THE COURT: Oh, I don't recall -- I don't recall that. CNSL L. RIDGEDALE: I had suggested next week. And because -- THE COURT: Yeah. CNSL L. RIDGEDALE: -- there were only emergency motions -- THE COURT: Yeah. CNSL L. RIDGEDALE: -- we couldn't do it next week. So I moved my schedule to appear today and I agreed to it. THE COURT: Yeah. CNSL L. RIDGEDALE: But I did make statements that it's going to be challenging. I don't know enough about this case. It's a contempt hearing. I'll ‑‑ I'll appear. And that's why I'm here today and there's some evidence that's not before the court. Some of it is because as -- as the court is aware, there are sensitivities and nuances around advice that was given, privilege, why counsel got off the record and things like that. But -- THE COURT: But that's up to your clients to decide what they want to do with that. CNSL L. RIDGEDALE: Yeah. Yeah, it is. THE COURT: That's -- that is up to your client. CNSL L. RIDGEDALE: And that is not possible to reach those conclusions and decisions in the short time period that we've had. That's just a practical reality. So I'm here arguing what I can based on the evidence

we've been able to get. But I stood up to give you an overview of my position, and now I feel like we're sort of in the substance - [Emphasis added] [42] As defence counsel moved on in her submissions, she articulated why the three applications should be heard together following the cross-examinations on the affidavits of Mr. Bonner (which, as I noted above, had just been filed that morning) and Jess: CNSL L. RIDGEDALE: But I think we could use the time ‑- if my friend still wants to pursue an application to cross-examine Mr. Bonner on his affidavit, I think that's something that is relevant to this application because typically you'd hear from Mr. Sullivan first. But because I'm standing here, my position would be on what basis do you want to cross-examine him on the affidavit? And if you do, don't we need to do that first? Because if you're going to be using evidence from the cross-examination this contempt application, we would have to know what that is before going any further. If you look technically at the issue of whether they handed over the stock agreement that is correct, but now that I'm seeing the interplay between contempt number 1 and contempt number 2, I think they're -- they're connected and I don't think the court can make a finding on contempt number 2 in isolation because that would result in a -- in a perverse result as some of the cases refer to or it's too

blunt of an instrument. -- I was in court on this. I was also standing here last week, mindful of something like this happening where I'm standing here now having learned, you know, most of the background of the case. But it's -- it's only striking me now as I was speaking earlier this morning that -- how interrelated contempt number 1 and number 2 were. Last week I was not in a position to object to Mr. Sullivan's suggestion that we should proceed on contempt number 2 alone because I had no basis to argue with that. But now even when I'm sort of paraphrasing my own submissions, much of the basis for our position on contempt number 2 stems from the facts and the position that we take in number 1. Because without understanding the evidence and the position on number 1, I -- I don't think I can fully argue that the court should -- should use its discretion not to make a finding of contempt even if there's a technical contempt that it is obvious, which seems to be the case in contempt number 2. So my position, given all of the submissions and points that have been made this morning, including the desire to cross-examine Mr. Bonner, is that Jess is scheduled to be cross-examined tomorrow. My understanding is that's in connection with contempt number 1. THE COURT: Right. CNSL L. RIDGEDALE: And now my friend wants to cross-examine Mr. Bonner. THE COURT: Right. CNSL L. RIDGEDALE: I

don't know when that could take place, but my -- my position is that the contempt applications should be heard together after the cross-examinations of Mr. Bonner and Jess. [Emphasis added] [43] Defence counsel also made it clear that she lacked instructions whether the defendants intended to rely on advice of counsel as a defence when stressing the importance of fairness, and in doing so, said the three applications should be "merged": THE COURT: Well, is he putting his communications with counsel in issue? Because counsel signed the order, so he -- Mr. Sullivan's pointing out well, what did he know and when did he know it? CNSL L. RIDGEDALE: Yeah. THE COURT: Who told him? So there's an argument on the face of his affidavit that he's put his -- some of his communications with counsel in issue. CNSL L. RIDGEDALE: Yeah. The only -- so on that point ‑‑ fair. That's fair. ... THE COURT: All right. So you say because of what Ms. Ridgedale said earlier, you want to know if it's going to be an issue on either or both contempt applications. CNSL P. SULLIVAN: It certainly affects my instructions, my position on all of this, the orders that come out of all of this. We need a determination of whether -- either -- either it's an inference that's going to be asked to be drawn. It's -- we can't do it halfway. We're either doing it or we're not. THE COURT: So, Ms. Ridgedale, I suppose that's

really the question is -- is -- CNSL L. RIDGEDALE: Right. THE COURT: -- will this be an argument or position taken? CNSL L. RIDGEDALE: Well, I -- I agree that it can't be done halfway. THE COURT: Yeah. CNSL L. RIDGEDALE: And that's why I'm making the submission that contempt number 1 and 2 should be heard together. THE COURT: Okay. But that still, with respect, doesn't quite answer the question that Mr. Sullivan puts. He wants to know if -- if -- CNSL L. RIDGEDALE: The -- THE COURT: -- something with -- if communication or advice of counsel are going to be put in issue. You had suggested that before -- CNSL L. RIDGEDALE: Yes. THE COURT: -- as a possibility and that's why I asked you this morning. CNSL L. RIDGEDALE: Yeah. And I -- and I -- what I can say standing here without instructions from my client and without a conversation with former counsel that I would have -- THE COURT: Yes. CNSL L. RIDGEDALE: -- is that I think we have to in order to -- THE COURT: You have to put it in issue. CNSL L. RIDGEDALE: I think so. THE COURT: Yeah. Okay. CNSL L. RIDGEDALE: And -- THE COURT: All right. CNSL L. RIDGEDALE: -- you know, we've attempted to address contempt number 2 -- THE COURT: Yeah. CNSL L. RIDGEDALE: -- specifically because that's what scheduled, but if you -- you look at the interests of justice, if you look at a fulsome analysis of what's happened in the record in a case like

this where the parties are pointing fingers at each other for wrongdoing, I just don't see how it's fair or just to hear either one of those contempt allegations on its own. I suppose what I'm doing now is -- is making a submission that the two contempt hearings be merged to be heard at once. And the court and my friend would like to know whether part of our response or position in that merged hearing, if the court were inclined to do that, is going to include the advice of counsel issue. [Emphasis added] [44] The plaintiffs were clear that in spite of the position taken on behalf of the defendants, they did not wish to adjourn the hearing of Contempt No.

2. They wished to proceed with the application. This extract encapsulates their position: CNSL P. SULLIVAN: So this is about should the variation be granted. My position is that we can go ahead with the second contempt and we can go ahead with the fact that it's not produced. I think the issue for the court, in fairness to the court, is my friend made the submission that they're intertwined and I think that's the determination ‑‑ THE COURT: Yeah. CNSL P. SULLIVAN: -- you have to make is that intertwining. I -- on my submission there is an order that the agreement be produced. [Emphasis added] [45] The reference to "agreement" by plaintiffs' counsel in the extract above is to a stock purchase agreement regarding the sale of shares of Longroot Delaware (discussed in detail below) that the defendants were obliged to produce per the November 9 Order ("Stock Purchase Agreement"). [46] Sensing that the hearing might be adjourned, plaintiffs' counsel said, just prior to the lunch recess, that he would consider, over the lunch hour, terms to protect his clients in the event of an adjournment: THE COURT: And the question is what happens, then, if I put over the hearing of contempt 2 over to January as we discussed. What deadlines -- what other orders have to be made? And I'll have to leave you to think about that. You may -- whether you need to let me know today or you need to -- want

to wait and hear your friend's position on communications of counsel or what position you might be taking. THE COURT: Okay. That may take me a little time to sort that all out. Do you want to come back at two o'clock? Think about where this goes. Let's say Ms. Ridgedale comes back tomorrow and says, look, my clients don't intend to raise advice of counsel or communications with counsel. Are you content with that, Mr. Sullivan, or are you still going to maintain your position you did a few moments ago, well, it's clear he's waived privilege, in any event, from his affidavit. So you need to think about all of that. CNSL P. SULLIVAN: I'll -- I'll think about all of that, including sort of the concerns about where we are and what -- what protections are needed. [Emphasis added] [47] Plaintiffs' counsel emailed a document containing possible terms of an adjournment to defence counsel at 1:38 pm, but defence counsel did not retrieve her emails before the hearing resumed. Plaintiffs' counsel handed defence counsel a copy of the document shortly before the continuation. [48] When the hearing resumed, counsel engaged in contested submissions regarding terms. As mentioned at the outset, the defendants did not seek an adjournment to consider the proposed terms and instead, addressed them in submissions. The defendants' objections to some of the proposed terms prevailed (see my December 13

Reasons). Determination [49] It is clear, I find, that defence counsel requested an adjournment of the hearing of Contempt No. 2 on the basis that: (a) she was not in a position to effectively defend against it on behalf of her clients based on the limited evidence adduced on their behalf; (b) she lacked instructions concerning whether the defendants intended to put their state of mind and reliance on counsel in issue as a defence; (c) it was contextually appropriate to have the three applications argued together, following cross-examination on affidavits; and (d) as a matter of fairness, Contempt No. 2 should be adjourned and heard ("merged") at the same time as the other two applications. [50] To say, as the defendants do now on the Stay Application, that they were ready to proceed and did not ask for an adjournment does not accord with the position taken on their behalf. There is no question, I find, that an adjournment was specifically sought on behalf of the defendants. [51] In this respect, the approach taken by Justice Barrow in Sandhu v. Household Realty Corporation Limited, 2011 BCSC 1708 is instructive. [52] In that case, the dispute was about the preamble of an order, and whether it should reflect whether the application was brought on behalf of the Merchant Law Group or as a result of a previous court order. Although the Merchant Law Group did not file a notice of

application contemplated by the Supreme Court Civil Rules, B.C. Reg. 168/2009 [Rules], Barrow J. had no hesitation in finding that the matter proceeded in substance as if it had. He found that the preamble to the order rightfully reflected that it was made on the application of the Merchant Law Group: Sandhu at paras. 6-8. [53] Likewise, in the case at bar, even though the defence submissions did not specifically use the words "apply" or "application" in relation to an adjournment, in substance, that is precisely what they sought. The adjournment was granted as a consequence of a contested oral application made on behalf of the defendants during the hearing. Adjournment Terms in Issue [54] The terms of the December 13 Order in issue on the defendants' Stay Application and their contextual background are summarized in the sections below (the form of the December 13 Order is disputed and has not been entered). Background [55] The first of the two adjournment terms in issue was consequent upon the affidavit evidence of Jess and Mr. Bonner suggesting the Stock Purchase Agreement, said by the plaintiffs to have been entered into in breach of the August 24 Order, had not closed and had in fact, been terminated. The Stock Purchase Agreement called for Monaker to sell 80 of its shares in Longroot Delaware for US $15 million. Circumstances Surrounding August 24 Order [56] The August 24

Order was issued in the midst of the hearing of the plaintiffs' summary trial/injunction application. That application was adjourned part-way through the defendants' response submissions when some of the defendants advised that as a result of recent document disclosures in this action, they discovered the plaintiffs filed misleading and false affidavit evidence in a prior related oppression proceeding ("Oppression Proceeding") brought by Mr. Bonner and Jess flowing from their dismissal from Axion Ventures. [57] Mr. Bonner and Jess commenced the Oppression Proceeding by petition in September 2020 against Axion Ventures and three directors. That proceeding is one of at least ten related proceedings (including the instant action). The petition was dismissed by Justice A. Ross on the merits, who found that the directors had acted reasonably when they learned of Mr. Bonner's planned takeover of Axion Ventures and determined that it would not be in the company's best interests and had to protect it as a result. Justice Ross' reasons are indexed at 2021 BCSC 963 and his supplementary reasons at 2021 BCSC 1899. No appeal was taken. [58] The claims of the plaintiffs in the instant action are grounded, in part, on Ross J.'s findings, which are now challenged by the defendants to be the result of a fraud on the Court perpetrated by the plaintiffs. [59] For example, the plaintiffs rely on

the findings of Ross J. set out in paras. 49, 82, 84-85 of his reasons at 2021 BCSC 963 concerning the reasonableness of the conduct of the directors and his rejection of the complaints of Mr. Bonner and Jess of impropriety on the part of the chairman of Axion Ventures, Mr. Yamazaki (contextual background in paras. 47-48 is also excerpted below): [47] The respondents describe the Monaker LOI as harmful to the company and its shareholders. They submit that, since learning of the Monaker LOI, they have been taking steps to protect Axion from Mr. Bonner's manoeuvres. In turn, those steps form the basis of Mr. Bonner's oppression allegations. [48] With respect to the terms of the Monaker LOI, the respondents say that, in signing the Monaker LOI, Mr. Bonner sought to bind Axion to significant future obligations. He did so without any authority. Further, they argue that Mr. Bonner and Jess negotiated the Monaker LOI for personal gain to the detriment of the company and its shareholders. [49] Having reviewed the document, I accept the respondents' position that the Monaker LOI created significant cause for concern among the respondent directors: a) It was signed by Mr. Bonner in his capacity as CEO of Axion, thus appearing to be an agreement with Axion. b) It allowed Monaker to review the confidential information of Axion. Given the fact that it is in the business of software

development, Axion had a significant interest in keeping its confidential information. c) The shares in Hot Play, Inc. would be converted to 40 million shares in Monaker. The target price of Monaker, post completion, was $1.25US. Hence, Hot Play Inc. was nominally valued at more than $40 million US. d) Axion shares would be converted for Monaker shares at a value of $.17US. At that value the value of all the issued and outstanding shares in Axion was less than $40 million US. e) Hence, the Monaker LOI placed a value on Hot Play, Inc. that was greater than the total value of Axion. f) Although the total number of Axion shares to be acquired was not determined, the agreement required "Sufficient (Axion) shares shall be acquired so that (Monaker's) effective ownership of Axion shall be within the Target Ownership Range." g) Further, Mr. Bonner's demand to the directors was to approve the exchange of the Bonner Family Loans at $0.15US per share. The Monaker LOI provides that the Axion shares would be exchanged at $0.17US per share. Hence, if the directors had acceded to Mr. Bonner's demand to convert the $9 million in Bonner Family Loans into shares at $0.15US, Mr. Bonner and his related companies would have made a secret profit of approximately $180,000US upon flipping the shares to Monaker. [81] However, having heard the entirety of the evidence, which includes the events that

occurred before and during the July 14, 2020 directors' meeting, I do not find that there is evidence of Mr. Yamazaki will potentially misconduct himself. [82] I find that Mr. Yamazaki had reasonable grounds to believe that his actions in the wake of the developments on and after the July 14, 2020, meeting were taken in the best interests of the company and the shareholders in general. Put another way, I see nothing improper in the manner that Mr. Yamazaki conducted himself from July 14, 2020 to the present date that would provide an evidentiary basis for the relief sought in the petitioners' application. [83] The six allegations of misconduct described above can all be explained within the paradigm wherein: a) Mr. Yamazaki believed that Mr. Bonner's actions, while CEO of the company, were not in the best interests of the company, nor the majority of its shareholders. b) Mr. Yamazaki and the remaining board members believed that they had to take steps to protect Axion and its shareholders from the actions of Mr. Bonner. c) Taking those steps, with reasonable grounds to believe that they were taken in the best interests of the company, does not provide evidence to support Mr. Bonner's "reasonable apprehension that the meeting will not be conducted properly." [84] In other words, to the extent that I accept that Mr. Yamazaki was taking steps in the reasonable belief that those

steps to be in the best interests of the company and all the shareholders, those acts cannot be considered to form an evidentiary foundation for the petitioners' apprehension that Mr. Yamazaki will not act in the best interests of the company at the AGM. [85] The fact that Mr. Yamazaki's actions may have been designed to thwart the plans of Mr. Bonner and his allies is not a basis to interfere with the conduct of the company's affairs, if there were reasonable grounds to believe that Mr. Bonner's plans were not in the best interests of all the shareholders. [60] The plaintiffs also rely on Ross J.'s findings in his supplementary reasons (2021 BCSC 1899), such as those concerning the steps taken by Mr. Bonner and Jess in secret and the lack of bad faith on the part of the other directors: [46] However, I find that the petitioners' formulation of their reasonable expectation ignores the most important context. That context is: a) immediately before the July 14 meeting, Jess and Mr. Bonner executed the Monaker LOI that, if completed, would effectively take over control of Axion; b) they negotiated and signed that deal in secret; and c) Mr. Bonner then put into play the (planned) forced conversion of the Bonner Family Loans at $.17 per share. [47] In my opinion, having taken those steps, in secret, it is inconceivable that Jess and Mr. Bonner did not reasonably expect dire

consequences if the Majority Directors discovered the existence of the Monaker LOI. Put simply, the fact that the petitioners kept the existence of the Monaker LOI secret from the Majority Directors establishes that they expected negative consequences if it was disclosed. That inference is inescapable. [48] In that context, I find that the petitioners cannot establish that their reasonable expectations continued to be that the respondents would strike a special committee to investigate the prospect of firing Mr. Bonner. It is clear that any delay in Mr. Bonner's termination could have led to negative consequences for the shareholders. The petitioners must have, or should have, expected that the Majority Directors would immediately terminate Mr. Bonner as CEO. [49] Moving to the second part of the test, I note that the respondents were in possession of the Monaker LOI on July 14. As noted above, they later discovered, and they are pursuing, other alleged breaches. I am not considering those later allegations. [50] In my opinion, the discovery of the Monaker LOI, in the context of Mr. Bonner not having advised the board of its existence, created circumstances wherein the remaining members of the board (now the respondents) reasonably believed that they had to protect the company from Mr. Bonner. In that context, I find that the failure to pursue recommended corporate governance

procedures was not oppressive or unfairly prejudicial to Jess or Mr. Bonner. [51] On that basis, I find that the allegation of oppressive conduct fails on both parts of the s. 227 test. The petitioners have failed to establish they had a reasonable expectation that the board would not immediately terminate Mr. Bonner's employment. Further, I find that the process undertaken by the board in firing Mr. Bonner as CEO, in the circumstances, was not oppressive. As noted, there are certain actions that require immediate termination of an executive. I find the facts of this case fit into that category. [65] Moving to the substantive issue, as discussed above, the actions taken by the respondents (the Majority Directors) must be viewed in the context of the discovery of the Monaker LOI. The steps taken by the respondents were clearly in response to, and defence against, the discovery of that agreement. The question then arises: When, and in what circumstances, are the directors entitled to respond and take defensive measures? [67] I find all of the comments of Berger J. [Teck Corporation Ltd. v. Millar (1972), [1973] 33 D.L.R. (3d) 288 at 314-315 (B.C.S.C.)] to be apposite in the circumstances of this case. The Majority Directors discovered the existence of the Monaker LOI. They were immediately concerned for the best interests of the company and its shareholders. They took steps,

including the resolution to make a private placement of shares (a "poison pill") to fight off the potential takeover of the company. [68] On that basis, I find that the Majority Directors had an honest belief that the Monaker LOI would have a negative impact on Axion and its shareholders. They had reasonable grounds for that belief. As anticipated in Teck, they took steps toward a poison pill private placement that were within the purview of the board. [69] On that basis, the evidence establishes that the directors were acting in good faith. There is no evidence of bad faith. I have already found that there were reasonable grounds for their actions. Hence, the respondents fit within the parameters of acceptable conduct described in Teck. [70] That being the case, the petitioners' claim that the July 27 meeting was oppressive to them fails on both parts of the test. In my opinion, having signed the Monaker LOI, the petitioners should have reasonably expected that if that agreement came to light, the opposing directors would attempt to fight it by issuing shares (a poison pill). The resolution to issue the shares with little or no notice for Mr. Bonner was neither a breach of their reasonable expectations, nor was it oppressive in the circumstances. [61] The August 24 Order adjourning the summary trial/injunction application in view of the defendants' fraud on the Court

allegations was issued following contested submissions (my oral reasons are unreported). [62] One of the terms of the August 24 Order concerned the extent to which the shares of Longroot Delaware could be further pledged as security or otherwise encroached or disposed of. The plaintiffs sought an order restricting any further steps that could erode the value of those shares or result in their transfer or sale to another party. Their concern was motivated in part by their discovery in Monaker's recently filed annual report, required by the U.S. Securities and Exchange Commission ("SEC"), that Monaker had pledged its assets, including its interest in Longroot Delaware and Longroot Limited, to an American lender named Streeterville as security. [63] Monaker and Streeterville entered into their loan transaction, including the security agreement pledging Monaker's assets, in October 2021, after this action was commenced. [64] The financing between Monaker and Streeterville agreement specifically identifies Monaker's shares of Longroot Limited as part of the collateral pledged to Streeterville: "Collateral" has the meaning given to that term in Section 2 hereof.

2. Grant of Security Interest. As security for the Obligations, Debtor hereby pledges to Secured Party and grants to Secured Party a security interest in all right, title, interest, claims and demands of Debtor in and to the property described Schedule A hereto, and all replacements, proceeds, products, and accessions thereof (collectively, the "Collateral"), which Security Interest shall be subordinate to the Permitted Liens.

4. General Representations and Warranties. Debtor represents and warrants to Secured Party that (a) Debtor is the owner of the Collateral and that no other person has any right, title, claim or interest (by way of Lien or otherwise) in, against or to the collateral, other than Permitted Liens

SCHEDULE A

TO SECURITY AGREEMENT All right, title, interest, claims and demands of Debtor in and to all of Debtor's assets owned as of the date hereof and/or acquired by Debtor at any time while the Obligations are still outstanding, including without limitation, the following property: 1. All equity interests in all wholly- or partially-owed subsidiaries of Debtor, including but not limited to, Axion Ventures, Inc., HotPlay Enterprises Limited and Longroot Ltd. [Underlining in original; italics emphasis added] [65] The plaintiffs were particularly concerned about Monaker's report of its significant financial losses (put at over US $40 million) that could trigger default under Streeterville's security agreement, resulting in Streeterville foreclosing on Monaker's assets, including its shares of Longroot Delaware and shares it may own of Longroot Limited. [66] The plaintiffs were also (and remain) concerned that Streeterville is not aware of their constructive trust and proprietary claims in this action in view of certain representations and warranties, contained in a standstill agreement Monaker entered into with Streeterville during the tenure of this litigation ("Standstill Agreement"), to avoid the latter from moving to realize on its security. In the Standstill Agreement, Monaker represented and warranted to Streeterville, inter alia, that there are no proceedings pending before any court: This Standstill Agreement (this "Agreement") is entered into as of May 5, 2022 by and between Streeterville Capital, LLC, a Utah limited liability company ("Lender"), and NextPlay Technologies, Inc., a Nevada corporation (f/k/a Monaker Group, Inc.) ("Borrower") Capitalized terms used in this Agreement without definition shall have the meanings given to them in the note (defined below).

6. Representations, Warranties and Agreements. In order to induce Lender to enter into this Agreement, Borrower, for itself and for its affiliates, successors and assigns, hereby acknowledges, represents, warrants and agrees as follows: (a) Borrower has full power and authority to enter into this Agreement and to incur and perform all obligations and covenants contained herein, all of which have been duly authorized by all proper and necessary action. No consent, approval, filing or registration with or notice to any governmental authority is required a condition to the validity of this agreement or the performance of any obligations Borrower hereunder. (c) All understandings, representations, warranties and recitals contained or expressed in this Agreement are true, accurate, complete, and correct in all respects; and no such understanding, representation, warranty, or recital fails or omits to state or otherwise disclose any material fact or information necessary to prevent such understanding, representation, warranty, or recital from being misleading. Borrower acknowledges and agrees that Lender has been induced in part to enter into this agreement based upon Lender's justifiable reliance on the truth, accuracy, and completeness of all understandings, representations, warranties, and recitals contained in this Agreement. There is no fact known to Borrower or which should be

known to Borrower which Borrower has not disclosed to Lender on or prior to the date hereof which would or could materially and adversely affect the understandings of Lender expressed in this Agreement or any representation, warranty, or recital contained in this Agreement. (g) There are no proceedings or investigations pending or threatened before any court or arbitrator or before or by, any governmental, administrative, or judicial authority or agency, or arbitrator, against Borrower. [Emphasis added] [67] The Standstill Agreement is dated May 5, 2022. [68] The plaintiffs discovered the existence of Monaker's agreements with Streeterville from a search conducted on the Electronic Data Gathering, Analysis, and Retrieval system ("EDGAR") maintained by the SEC. [69] There is no evidence that Streeterville is aware of this action and of the plaintiffs' constructive trust and proprietary claims to the assets pledged as security for Streeterville's financing. The most the defendants have committed to in this respect are submissions of their former counsel that Streeterville must be aware of the action as a result of its due diligence leading up to the signing of the loan transaction documents or the Standstill Agreement. [70] The plaintiffs advise that they have refrained from sending a copy of the amended notice of civil claim and any of orders made in this action in light of

statements made by or on behalf of Mr. Bonner that if they did, they would be sued for interference with economic relations. [71] Based on Monaker's submissions (during the hearing that led to the August 24 Order) that it had no intention to sell or dispose of the shares it held in Longroot Delaware but needed to be able to further encumber its assets in order to remain in business, I accepted its submission that it should be allowed to encumber its assets up to US $12.5 million without notice to the plaintiffs. However, based on the plaintiffs' concern to avoid any further dissipation of assets over which they asserted constructive trust and proprietary claims, I ordered, inter alia, that written notice of any intention to encumber beyond that amount, or to encumber for reasons outside of Monaker's ordinary course or business, or to sell or otherwise dispose of its shares in Longroot Delaware must forthwith be given to the plaintiffs. Key Terms of the August 24 Order [72] The key terms of the August 24 Order, which ground the plaintiffs' first contempt application, are excerpted below: ON THE APPLICATION of the Plaintiffs, Axion Ventures Inc. and Axion Interactive, Inc. (together, "Axion") for injunctive relief coming on for hearing at 800 Smith Street, Vancouver, B.C. on 28/February/2022 to March 8, 2022, 12/July/2022, August 15-18, 2022 and 23/Aug/2022 by MS Teams; AND UPON

hearing Patrick Sullivan, Joseph Romanoski, Sara Shuchat and Lauren Gnanasihamany counsel for Axion, Chris Wilson, Scott Boucher, Nathan Jones and Lindsey Wilson, counsel for John Todd Bonner, Nithinan Boonyawattanapisut, Cern One Limited, Red Anchor Trading Corp., CC Asia Pacific Ventures Ltd., Jonathan Chen, Hotplay Enterprise Limited, Hotplay (Thailand) Ltd., Christopher Bagguley and Mark Henry Saft, and Michael Feder, Patrick Williams, David Brown, Kasey Campbell, Nathalie Nouvet, Jean-François Forget and Eric Azran, counsel for Monaker Group, Inc. ("Monaker"), William Kerby, and Longroot, Inc., and on hearing the adjournment application of the defendants on 15/Aug/2022, and 23/Aug/2022, and on the Court advising the parties that in granting the terms below, it relied on the submissions of counsel and the integrity of the evidence given by representatives of Monaker that they do not intend to sell or dispose of the Property (as defined below); THIS COURT ORDERS that: 1. The application of Axion for an order (the "Injunction Application") enjoining the defendants and each of them from transferring, conveying, assigning, charging, encumbering, or otherwise dealing with the shares of Longroot, Inc, a Delaware Corporation (the "Property") be adjourned until Axion's petition or application seeking declarations and/orders regarding the decision of Justice Ross in the petition filed in the Vancouver Registry of the British Columbia Supreme Court on September 8, 2020 in action number S209078 (the "Fraud on the Court Application") is heard and determined.

2. In the event that Monaker proposes to sell, transfer, assign or otherwise dispose of, or receives notice of a creditor's intention to take enforcement proceedings or otherwise pursue the Property, Monaker shall forthwith give written notice to the Plaintiffs of the intention to do so, and the particulars of same (the "Notice").

3. If Monaker intends to encumber the Property outside its ordinary course of business, and in any event beyond the amount of USD 12.5 million in aggregate, then Monaker shall forthwith provide written notice to the Plaintiffs of such intention (the "Encumbrance Notice").

4. Once the Notice or Encumbrance Notice is given to the Plaintiffs, the Plaintiffs will have five clear days to advise the Defendants as to whether they intend to apply for an interim injunction with regard to the intended dealing of the Property.

5. By this Order, the Plaintiffs have short leave to appear before this Court to apply for an interim injunction over the Property and such other orders as they think appropriate in relation to the Property, upon receipt of the Notice or the Encumbrance Notice (the "Interim Injunction Application"), pending the hearing of a full injunction application.

8. The parties may apply to vary this Order or for further directions with respect to the provisions of this Order on five clear days' notice. [Bold in original; underlining emphasis added] [73] The form of order was the subject of contested submissions and was settled and entered on August 24, 2022. My reasons given on that date are unreported. Circumstances Surrounding November 9 Order [74] In the latter half of October 2022, the plaintiffs learned from a search of EDGAR of the Stock Purchase Agreement. Information concerning the Stock Purchase Agreement is contained in a Form 8-K filing ("Form 8-K") required by the SEC in respect of material definitive agreements (a defined term under legislation in the United States). The impugned 8-K ("8-K") was filed on October 20, 2022 by NextPlay Technologies, Inc. [i.e., Monaker]. It is signed by Jess as co-chief executive officer. [75] The relevant aspect of that filing concerning the sale of Monaker's shares and of warrants in the Stock Purchase Agreement is excerpted below. Note that the reference to Next Fintech Holdings, Inc. is, in fact, to Longroot Delaware. As I have mentioned, the company changed its name to Next Fintech Holdings Ltd. ("Next Fintech"): Item 1.01 Entry Into a Material Definitive Agreement Effective October 16, 2022, NextPlay Technologies Inc., a Nevada Corporation (the "Company") and its wholly-owned

subsidiaries, Next Fintech Holdings, Inc. ("NextFinTech") [Longroot Delaware] a Delaware Corporation and NextBank International, Inc. a Puerto Rico corporation licensed as an Act 273-2012 international financial entity ("NextBank"), entered into a stock purchase agreement (the "Purchase Agreement") with an institutional investor (the "Investor") pursuant to which NextFintech [Monaker] agreed to sell 80 shares of its common stock at a price of $187,500.00 ("NextFintech Common Stock") per share for an aggregate price of $15,000,000, or a $150,000,000 pre-money valuation. In addition, in connection with the above, NextBank (i) agreed to issue warrants (the "Warrant") to purchase 1,000,000 shares of the Company's common stock it beneficially holds to Investor at $0.50 per share and (ii) agreed to issue an exchange option (the "Exchange Option") to the Investor pursuant to which, for a period commencing six (6) months following the closing and ending on the date that is twenty-four (24) months following the closing, at the election of the Investor, the Investor may exchange its 80 shares of NextFintech [Longroot Delaware] Common Stock for equity of NextBank equal to 18.8% of NextBank, subject to compliance with necessary regulatory approvals that are required of NextBank prior to a change in ownership, if any (collectively, the "Offering"). [Underlining emphasis and description in square brackets added] [76] The SEC requires the names of parties to material definitive agreements to be disclosed in a Form 8-K, including the identity of the parties to such an agreement. In this respect, in the SEC's document which provides general instructions regarding Form 8-Ks, the SEC instructs: FORM 8-K

CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities and Exchange Act of 1934

INFORMATION TO BE INCLUDED IN THE REPORT Section 1 - Registrant's Business and Operations Item 1.01 Entry into a Material Definitive Agreement (a) If the registrant has entered into a material definitive agreement not made in the ordinary course of business of the registrant, or into any amendment of such an agreement that is material to the registrant, disclose the following information. (1) the date on which the agreement was entered into or amended, the identify of the parties to the agreement or amendment and a brief description of any material relationship between the registrant or its affiliates and any of the parties, other than in respect of the material definitive agreement or amendment; and (3) For purposes of this Item 1.01, a material definitive agreement means an agreement that provides for obligations that are material to and enforceable against the registrant, or rights that are material to the registrant and enforceable by the registrant against one or more other parties to the agreement, in each case whether or not subject to conditions. [Bold and underlining in original; emphasis in italics added] [77] The defendants do not dispute that the Stock Purchase Agreement is a material definitive agreement. [78] However, the name of the institutional investor party to the Stock Purchase Agreement is not disclosed in the 8-K or Monaker's news release (nor is the

investors' relationship to Monaker and Longroot Delaware disclosed). The identity of the other party has never been disclosed by the defendants despite repeated requests from the plaintiffs and a term contained in the November 9 Order obliging them to do so (discussed below). [79] The plaintiffs were not provided with notice of Monaker's intention to sell those shares as required by the August 24 Order. Immediately, upon learning of the Stock Purchase Agreement in October 2022, the plaintiffs wrote to the defendants advising them they were in breach of the August 24 Order and demanded full particulars, including the identity of the other party. The defendants refused to provide the name, and instead provided a copy of the Stock Purchase Agreement redacting the name of co-party. [80] The plaintiffs then secured a hearing on November 9, 2022, to raise the issue of the defendants' non-compliance with the August 24 Order and to schedule a date for a contempt hearing. During the hearing, the defendants suggested that the August 24 Order should have referred to Longroot Limited and not Longroot Delaware. They described the insertion of Longroot Delaware as the result of confusion, even though it was contained in the draft form of order they prepared. The defendants also characterized the key asset sought by the plaintiffs to be the share of Longroot Limited. To alleviate the

plaintiffs' concerns about dissipation or loss of that asset, the defendants offered to bring the shares of Longroot Limited into the jurisdiction and to place them with an escrow agent pending the outcome of the litigation. [81] The defendants also relied on an affidavit sworn by Jess on November 7, 2022, in which she deposed that the inclusion of Longroot Delaware in the August 24 Order was a mistake and that completion of the Stock Purchase Agreement was essential to Monaker's ongoing financial viability as well as the viability of Longroot Limited and its Thai subsidiaries. The defendants' approach at the hearings leading up to the November 9 Order was that the transaction contemplated by the Stock Purchase Agreement must close or otherwise, there would be "catastrophic repercussions" for Monaker, Longroot Delaware, and Longroot Limited. [82] Key passages from Jess' affidavit are excerpted below. The reference to "Investment" in Jess' affidavit is to capital to be obtained from the Stock Purchase Agreement: Longroot Crypto Asset 4. From Nextplay's and Next Fintech's perspective, and from my perspective personally, the term "Longroot Assets", "Crypto Asset," or "Longroot Crypto Asset" has always meant effective control of Longroot (Thailand) Company Limited ("Longroot Thailand"), which operates a financial advisory service and owns and operates an Initial Coin Offering ("ICO") portal that is approved and regulated by the Securities and Exchange Commission of Thailand (the "Thai SEC"). The ownership structure of Next Fintech and Longroot Cayman 5. Nextplay owns 100% of NextFintech (formerly Longroot, Inc.), which in turn owns 75% of Longroot Limited, a Cayman Islands company ("Longroot Cayman").

6. Longroot Cayman controls more than 99% of the voting shares of its subsidiary Longroot Holding (Thailand) Company Limited ("Longroot Holding Thailand") and therefore effectively controls Longroot Holding Thailand. Longroot Cayman owns 49% of the outstanding ordinary shares of Longroot Holding Thailand (with 51% of the preferred shares owned by two Thai citizen nominee shareholders).

7. Longroot Holding Thailand owns 100% of Longroot Thailand. [image of organizational control redacted] 8. Longroot Thailand owns and operates a licensed ICO portal that provides digital asset financing and investment services that are fully regulated and licensed by the Thai SEC. Longroot Thailand is regulated under the Thai Digital Asset Law which stipulates that all offerings of digital assets have to be conducted via a Thai SEC licensed ICO portal. The Order 39. Although the Order refers to "Longroot, Inc.", Nextplay management's understanding, including mine, was that the Order imposed notification obligations with respect to transactions to divest or to further encumber the Longroot Crypto Asset, i.e. the ICO portal owned by Longroot Thailand which is controlled through Longroot Cayman.

40. It follows that Nextplay management's understanding, including mine, was that the Order pertained to the preservation and effective control of the Longroot Crypto Asset, which is controlled through Longroot Cayman.

41. Therefore, I understood that the Order targeted the Longroot Crypto Asset at the level of the shares of Longroot Cayman, which shares are held by Next Fintech, and not the shares of Next Fintech itself. I further understood that the Order was to provide notification obligations aimed at enabling the Plaintiffs to seek the intervention of the Court should they think a proposed transaction (or a further encumbrance beyond the threshold specified at paragraph 3 of the Order) significantly affected their rights with respect to the property in dispute (i.e., the Longroot Crypto Asset).

50. Nextplay and Next Fintech are in dire need of the financing to be obtained through the Investment for their business operations which include (i) banking (NextBank) and (ii) insurance (Next Insurance) but also (iii) funding the Longroot Crypto Asset. (i) If the Investment is impeded by the Plaintiffs and Next Fintech fails to obtain financing as a result, the operations of Next Insurance (the Malaysian-based insurance and reinsurance operation) will be in jeopardy due to lack of timely funding. The Labuan FSA requires funding on the part of Next Fintech to cover insurance reserves for both primary insurance and reinsurance. (iii) The Longroot Crypto Asset itself also requires funding from the investment to continue its operations, as the Plaintiffs have refused or failed to contribute funding to Longroot Thailand through their shareholding in Longroot Cayman on a few occasions since November 2020. Should the Investment not be completed, Next Fintech will be unable to fund the operations of Longroot Cayman and its subsidiaries, unable to pay the salaries of its employees, and unable to provide the necessary funding to maintain the ICO portal licence with the Thai SEC. It is likely that the Crypto Asset will be lost if it is not funded, and it cannot be funded in short order if the Investment is prevented from closing.

51. In summary, any impediment cased by the Plaintiffs to the Investment closing as planned would thus have catastrophic repercussions for Nextplay, Next Fintech, and Longroot Cayman, which would be starved of the financing necessary for the maintenance and growth of their ongoing business operations.

52. To reassure the Court that the Crypto Asset is in no way put at risk by the Investment, Nextplay and Next Fintech would agree to place Next Fintech's shareholding in Longroot Cayman in trust, with appropriate orders of the Court to be determined by the Court and the parties. [Emphasis added] [83] Following contested submissions, issues concerning the proper identity of the entity that should have been the subject of the August 24 Order as well as others raised by the plaintiffs in their first application were put over to be determined at the hearing of Contempt No.

1. One of the terms I issued pending the hearing to determine those issues is an order requiring the defendants to deliver a complete unredacted copy of the Stock Purchase Agreement by November 14, 2022, and, per their submission, to place their shares of Longroot Limited with an escrow agent located in Vancouver. Key Terms of the November 9 Order [84] The terms of the November 9 Order relied on by the plaintiffs in their second contempt application are as follows: 3. The Defendants shall deliver to the Plaintiffs an unredacted copy of the entire stock purchase agreement made October 13, 2022 and effective October 16, 2022 as between NextPlay Technologies, Inc., Next Fintech Holdings, Inc. (previously, Longroot, Inc. "Next Fintech"), NextBank International, Inc., and the purchaser, an institutional investor (the "Stock Agreement"), including but not limited to, all annexes, schedules, side agreements, and related agreements thereto (together, the "Particulars"), on or before the close of business on November 14, 2022. 4, The Particulars so produced under paragraph 3 above are to be kept confidential by the Plaintiffs, except to the extent they may be disclosed for purposes related to this Action. Subsequent Events [85] The defendants have not complied with those terms of the November 9 Order. They refuse to deliver an unredacted copy of the Stock Purchase Agreement. The

defendants insist they should not disclose the identity of the other party to that agreement. The defendants contend that upon learning that the August 24 Order referred to Longroot Delaware as opposed to Longroot Limited, they took steps to put that transaction to an end, and as such, the identity of the investor is not relevant. [86] As noted at the outset of these reasons, on December 13, 2022, the defendants advised of their application to bring the Variation Application in order to vary the terms of the November 9 Order requiring them to provide an unredacted copy of the Stock Purchase Agreement (more recently, during the hearing of the Contempt Applications and Variation Application, the defendants advised of their intention to apply to further vary the November 9 Order requiring them to bring their shares of Longroot Limited into the jurisdiction to place them with an escrow agent in Vancouver). [87] In respect of the Variation Application, the defendants filed an affidavit of Mr. Bonner, sworn on December 12, 2022, in which he deposed that upon learning of that Longroot Delaware, as opposed to Longroot Limited, was named in the August 24 Order, the defendants took steps to stop the transaction. In his affidavit, he deposed: 12. On November 9, 2022, Mr. Justice Walker ordered the entire Stock Agreement be disclosed to the Applicants on or before the close of business on November 14, 2022.

13. The Respondents took steps to stop the transaction contemplated by the Stock Agreement and to restructure the transaction so as not to be in violation of the August Order.

14. On November 14, 2022, the Respondents gave notice to the Applicants that they would not be proceeding with the transaction contemplated by the Stock Agreement. [88] In his cross-examination on his affidavit, which I was taken to during argument on this Stay Application, Mr. Bonner said he learned of that mistake in either late October or early November 2022. [89] On its face, Mr. Bonner's evidence is inconsistent with the approach taken by the defendants in hearings leading up to the issuance of the November 9 Order and to Jess' November 7 affidavit evidence, i.e., that the Stock Purchase Agreement must close because the investment capital was critical to Monaker and its business operations (as well as to its subsidiaries). [90] As well, to date, there is no evidence that the defendants have filed documents required by the SEC advising that the Stock Purchase Agreement has been terminated. The SEC requires that filing within four days of the termination of a material definitive agreement. [91] I dealt with that issue and the nature of Mr. Bonner's affidavit evidence (as he had not been cross-examined at that point) on the termination issue in my reasons of December 13: [7] The second order sought by the plaintiffs is for production of documents concerning the defendants' stated efforts to terminate the Stock Agreement relevant to both Contempt #1 and Contempt #2

applications is appropriate in the circumstances. I am persuaded that the order should be granted for the following reasons. [8] First, Mr. Sullivan has taken me to the evidence showing that within four days of the Stock Agreement having been terminated, there should have been a filing with the relevant authorities in the United States showing that the transaction was terminated, but none has been filed. Second, the language used in Mr. Bonner's affidavit is far from clear on the point. The Two Adjournment Terms at Issue on the Stay Application [92] As a consequence, in my reasons of December 13, I ordered the defendants to deliver documents relating to their efforts to terminate the Stock Purchase Agreement and to put Streeterville on notice of the plaintiffs' claims. [93] The first of the two impugned terms concerning production of documents concerning the purported termination of the Stock Purchase Agreement is described in my December 13 Reasons as follows (as mentioned, the form of order has not been settled): [9] Accordingly, I order that on or before December 20, 2022, the defendants shall deliver to the plaintiffs all documents and correspondence relating to any one or more of the defendants' efforts to terminate the Stock Agreement and to prevent the transaction from closing, including any efforts made and any documents confirming the transaction contemplated by the

Stock Agreement has been terminated. [94] It is not contested that this term does not include the production of privileged documents. [95] The second impugned term requires the defendants to deliver a copy of the August 24 Order and November 3 Order to "Streeterville": [16] Lastly, the plaintiffs seek an order requiring the defendants to present a copy of the August 24 and November 9, 2022 orders as well as a copy of this order to Streeterville (a current investor) as well as to the parties to the Stock Agreement and the revectored replacement agreement, and to follow it up with delivery by December 20, 2022, with an affidavit from a representative of the defendants stating the following: On [date or dates], I provided copies of the orders in this action made August 24, 2022, November 9, 2022 and December 13, 2022 to the parties identified in paragraph __ of the December 13, 2022 Order. [17] In my view, it is appropriate at this juncture to grant the order sought but only in respect of Streeterville. I think it is appropriate to put a positive obligation on the defendants to so advise Streeterville. I say that because the agreement with Streeterville that is in evidence not only states that there are no claims asserting a proprietary interest in the shares, i.e., in the assets of the Delaware company, the agreement contains warrants and represents that there are no such claims.

Therefore, in my view, it is appropriate to put that obligation on the defendants. [18] I order that the defendants present a copy of the orders made on August 24, 2022 and November 9, 2022, as well as this order to Streeterville, and to provide to the plaintiffs by December 20, 2022 with an affidavit from a representative of the defendants stating "on such and such a date or dates I provided copies of the order in this action to the party identified in paragraph blank of this order". Serious Question to be Tried [96] I turn now to the first of the three tests to be met by the defendants. [97] The first is to establish there is a serious question to be tried. The standard is a relatively low bar. The applicant only needs to demonstrate that there is some merit to the appeal, that it is arguable, and not frivolous: M.N. v. C.G.F, 2020 BCSC 2072 at para. 22. [98] None of the parties suggested or took me to any case authorities suggesting that it was inappropriate for me to consider merits. To the opposite, they asked me to consider merits in relation to the low burden on the defendants. [99] There are decisions by judges, whose orders are in issue, which considered merits in respect of this first part of the test (such as Concord Pacific Acquisitions Inc. v. Oei, 2020 BCSC 832, where the presider considered the merits of the defendants' argument for an application for a stay of

the execution of an order he made). However, following the conclusion of argument, I became aware of recent case authority of this Court stating it is a practice to be avoided. In Etemadi v. Maali, 2021 BCSC 395, Justice Gomery said that addressing the substance of the proposed grounds of a stay application concerning a judge's own reasons for judgment pending appeal "is something to be avoided", as it "might be construed as an explanation or defence" of their written reasons for judgment: at paras 7-10. That reasoning was followed in Jadavji v. Khadjieva, 2022 BCSC 283 at paras. 20-27. I brought those cases to the attention of counsel for further submissions. [100] I find that reasoning persuasive and in accord with a principle of natural justice found in the Latin maxim, nemo judex in causa sua debet esse, which underlies the doctrine of "reasonable apprehension of bias". It translates into the principle that no one ought to be a judge in his own cause. As a general principle, this is not permitted in law because the taint of bias would destroy the integrity of proceedings conducted in such a manner: Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301 at 309, 1989 CanLII 121. [101] I am therefore persuaded that I should refrain from considering merits of the appeal in respect of the first part of the test to be met by the defendants. I will presume, without

analysis, that there is some merit to the appeal, that it is arguable, and not frivolous. Irreparable Harm [102] The second part of the test is whether the defendants will suffer irreparable harm if the stay is not granted. "Irreparable" refers to the nature of the harm suffered and not the magnitude of the harm. The evidence of irreparable harm must be clear and not speculative: Bartch v. Bartch, 2017 BCSC 1381 at para. 60. [103] The defendants assert that they will suffer irreparable harm in two respects if a stay is not granted. [104] First, the defendants assert that the relationship between Streeterville and one or all of the defendants will be negatively affected, to the point of causing irreparable harm, if it is provided with copies of the August 24 Order, the November 9 Order, and the order of December once entered. [105] The defendants contend that no notice should be given at this time before the merits of the Contempt Applications and the Variation Application are determined. They argue they will be prejudiced once Streeterville has knowledge that serious quasi-criminal contempt allegations had been made against them. They point out that if they are successful in defeating them or on the Variation Application, the allegations of contempt will be moot. [106] The plaintiffs correctly point out that the defendants have provided no evidence generally to support their

assertion of irreparable harm nor any evidence specifically relating to Streeterville's reaction on learning of the allegations in the Contempt Applications. [107] The defendants do not disagree. Instead, they ask me to take judicial notice of irreparable harm. [108] The defendants submit that in the context of a lender and borrower relationship, the Court may take judicial notice that the lender will consider contempt proceedings brought against its borrower to comprise very serious and worrisome allegations, such that even if dismissed, there is real risk that those allegations may negatively affect their ongoing relationship. [109] The leading test for a court to take judicial notice is found in R v. Find, 2001 SCC 32: [48] In this case, the appellant relies heavily on proof by judicial notice. Judicial notice dispenses with the need for proof of facts that are clearly uncontroversial or beyond reasonable dispute. Facts judicially noticed are not proved by evidence under oath. Nor are they tested by cross-examination. Therefore, the threshold for judicial notice is strict: a court may properly take judicial notice of facts that are either: (1) so notorious or generally accepted as not to be the subject of debate among reasonable persons; or (2) capable of immediate and accurate demonstration by resort to readily accessible sources of indisputable accuracy: R. v. Potts

(1982), 1982 CanLII 1751 (ON CA), 66 C.C.C. (2d) 219 (Ont. C.A.); J. Sopinka, S. N. Lederman and A. W. Bryant, The Law of Evidence in Canada (2nd ed. 1999), at p. 1055. [Emphasis added] [110] While I agree with the defendants that I can take judicial notice that a contempt application is a quasi-criminal proceeding in nature, I cannot take judicial notice as to how Streeterville, or for that matter, any lender, might or might not react after receiving the three court orders. I cannot find that a lender's reaction when made aware of contempt proceedings is a fact that is "so notorious or generally accepted as not to be the subject of debate among reasonable persons." The defendants have not shown that their assertion of harm to the relationship is "capable of immediate and accurate demonstration by resort to readily accessible sources of indisputable accuracy". [111] The plaintiffs also point out that engaging in judicial notice would also require me to consider whether there would be any difference in effect if only a copy of their amended notice of civil claim, which contains allegations of fraud and breach, conspiracy, and breach of fiduciary duty, is given to Streeterville. [112] The case law is clear. The threshold for judicial notice is stringent. In the absence of evidence, to ask me to consider what might happen if Streeterville is given copies of the orders engages

speculation. [113] The other ground of the defendants' contention of irreparable harm is that if I do not order the stay, then the plaintiffs will gain access to documents and information prior to the determination of the appeal, which the defendants submit, will render the appeal moot. The defendants argue that even if they are successful on appeal, the plaintiffs will have the impugned documents in their possession which they otherwise had no right to review in the absence of a successful document production application brought under the Rules, such that the harm suffered by the defendants can not be cured. [114] I agree with the plaintiffs that this result flows from any instance where a stay application is denied and that the case authorities cited by the defendants are distinguishable. [115] The decision in British Columbia Teachers' Federation v. British Columbia, 2014 BCCA 75, cited by the defendants, is distinguishable for these reasons. First, it concerned disclosure of confidential Cabinet documents. That confidence would be irretrievably lost even if the appeal succeeded. The impugned documents ordered to be produced in my December 13 Reasons fall into a different category as the order does not include documents protected by solicitor-client privilege. Second, as the Court of Appeal points out, citing RJR-MacDonald, at para. 15, the test is less stringent for public

authorities: In the case of a public authority, the onus of demonstrating irreparable harm to the public interest is less than that of a private applicant. This is partly a function of the nature of the public authority and partly a function of the action sought to be enjoined. The test will nearly always be satisfied simply upon proof that the authority is charged with the duty of promoting or protecting the public interest and upon some indication that the impugned legislation, regulation, or activity was undertaken pursuant to that responsibility. Once these minimal requirements have been met, the court should in most cases assume that irreparable harm to the public interest would result from the restraint of that action. [Emphasis in the original] [116] In Blackmore Management Inc. v. Carmanah Management Corporation, 2022 BCCA 159, the Court of Appeal was satisfied from the evidence before it, that if the stay was not ordered, there was a real risk that key employees would leave, resulting in existing commitments not being met and customer relationships being harmed or lost. As I have pointed out, there is no evidence of actual or potential harm adduced by the defendants. [117] Accordingly, I find that the defendants have not met the threshold test to establish irreparable harm. Balance of Convenience Introductory Remarks [118] The third branch of the test concerns the

balance of convenience as between the parties, including which of the parties will suffer the greater harm from the stay being granted or refused: Capital Now Inc. v. Munro, 2022 BCSC 1297 at para. 25. [119] In this part of the test, I find Tracy v. Instaloans Financial Solutions Centres (B.C.) Ltd., 2007 BCCA 481, instructive. While the facts in Tracy concerned a Mareva injunction, a more stringent form of interlocutory injunction, the review of the law in the reasons in that case relating to the test for granting interlocutory injunctions is useful for the purposes of the case at bar. As established above, the test for granting an interlocutory injunction and a stay is the same: Silverado Industries Inc. v. Dycar Pharmaceuticals Ltd., 2018 BCSC 2368 at para. 17. [120] There, the Court of Appeal noted the "danger in slavish adherence to precise formulation" when considering the test of balance of convenience (as well as the others). Citing Justice McLachlin (as she then was) from her reasons in British Columbia (Attorney General) v. Wale (1986), 9 B.C.L.R. (2d) 333 (C.A.), 1986 CanLII 171; aff'd [1991] 1 S.C.R. 62, 1991 CanLII 109, the Court of Appeal said that the test for an interlocutory injunction should be considered in the context of the "nature of evidence relative to the central issue of assessing the relative risks of harm to the parties from granting or withholding

interlocutory relief" [emphasis added]: [31] Madam Justice McLachlin described the essential question at p. 346: Having set out the usual procedure to be followed in determining whether to grant an interlocutory injunction, it is important to emphasize that the judge must not allow himself to become the prisoner of a formula. The fundamental question in each case is whether the granting of an injunction is just and equitable in all the circumstances of the case. Professor Sharp warns against the danger of insisting on slavish adherence to precise formulae in Injunctions and Specific Performance (1983), at paras. 186-89: The terms "irreparable harm", "status quo", "balance of convenience" do not have a precise meaning. They are more properly seen as guides which take colour and definition in the circumstances of each case. More importantly, they ought not to be seen as separate, watertight categories. These factors relate to each other, and strength on one part of the test ought to be permitted to compensate for weakness on another. It is not clear that the Cyanamid approach allows for this, and the decision suggests a misleading mechanical approach. The Manitoba Court of Appeal [in Lambair Ltd. v. Aero Trades (Western) Ltd. (1978), 87 D.L.R. (3d) 500, leave to appeal to the S.C.C. refused October 4, 1978] has quite properly held that "it is not necessary ... to follow the

consecutive steps set out in the American Cyanamid judgment in an inflexible way; nor is it necessary to treat the relative strength of each party's case only as a last step in the process." The traditional "checklist" approach permits the individual judge to analyze all the factors coherently. It does not, however, require him to do so, and the flexibility, which permits one judge to weigh and balance the risk accurately, allows another to depart from the central question and allows for uncertainty and unevenness in approach. The checklist does not specifically relate the factors to one another, and while it provides a valuable guide in coming to the proper result, it has failed to articulate clearly an appropriate overall approach. Treating the checklist as a "multi-requisite test" will often produce results which do not reflect the balance of risks and do not minimize the risk of non-compensable harm.... The checklist of factors which the courts have developed - relative strength of the case, irreparable harm, and balance of convenience - should not be employed as a series of independent hurdles. They should be seen in the nature of evidence relative to the central issue of assessing the relative risks of harm to the parties from granting or withholding interlocutory relief. [Emphasis added in Tracy] [121] The plaintiffs point out that the prejudice to the stay being granted

is presumed. They argue that if a stay is granted, the prejudice to them outweighs the prejudice to the defendants of compliance. [122] The defendants submit that in contrast, a stay of proceedings will result in little or no harm to the plaintiffs and assert that there is no urgency for the production of documents to the plaintiffs and the disclosure of the August 24 Order, the November 9 Order, and the December 13, 2022 Order to Streeterville. [123] In considering the balance of convenience, I am guided by the way McLachlin J. framed the overall test for granting an interlocutory injunction. In her words, which bear repeating, the factors which the courts have developed, should be seen in the nature of evidence relative to the central issue of assessing the relative risks of harm to the parties from granting or withholding interlocutory relief. It is with this framework in mind that I engage in the final analysis of the balance of convenience. Production of Documents Concerning the Termination of the Stock Purchase Agreement [124] The defendants do not seek to vary the August 24 Order. They contend that they are no longer in breach of that order since the Stock Purchase Agreement has been terminated, such that ordering production of documents relating to the termination of the Stock Purchase Agreement is unnecessary. The documents, they argue, are irrelevant to the Contempt

Applications since that agreement is at an end. [125] The defendants' contention is predicated on a factual assertion that has not been established, let alone made clear. Turning to the evidence, the most that can be taken from Mr. Bonner's affidavit evidence is that at some point the defendants took steps to terminate the Stock Purchase Agreement upon learning that the August 24 Order encompasses Longroot Delaware. Whether that means the agreement has been terminated or otherwise amended to exclude the assets that are the subject of the plaintiffs' claims in this action is unclear from Mr. Bonner's affidavit. The defendants have not filed the requisite documents with the SEC requiring notice of termination of a material definitive agreement. Nor is it clear when such steps were taken. In her affidavit, Jess advocated for an order permitting Monaker to complete the Stock Purchase Agreement. [126] In her evidence on cross-examination on her affidavit (December 14-16, 2022), Jess testified that although notice had been given to the investor, the Stock Purchase Agreement had not been terminated: 949 Q And you understood that your counsel would be advising us on behalf of both yourself and NextPlay that you had decided that you would not be proceeding with the investment that was announced on October 20th, 2022? A Correct. 950 Q And I take it was it on this day that NextPlay

formally decided it would not proceed with that transaction? A Well, it must have been, you know, within a day or two of that timeline. 951 Q And was a formal termination letter sent or a formal termination agreement entered into? A There was no formal termination. It was a decision on our part. 952 Q So the decision was made by November 14th, 2022, to terminate the original investment of October 16th, 2022? A Correct. 953 Q And you understood when that agreement was terminated you had four days to post that fact in an 8-K; correct? A I said it was a decision on our part to terminate the agreement. The termination agreement has not been formally sent out and signed by the investor yet. [Emphasis added] [127] In his evidence, Mr. Bonner was less clear, giving at times conflicting testimony about whether the agreement was at an end or amended. For example: 384 Q Why not -- your letter sent by Stikeman Elliott two days later doesn't mention the name of the purchaser. First of all, you were aware we were asking for the name of the purchaser; correct? A The transaction is not closing. It's been restructured We did not close the transaction. So you don't need to know the name of the purchaser. The transaction is not closing. It's been restructured. It's being re-vectored. It's excluding Longroot. You're not going to get the details. It's privileged. It is not your concern. What is

your concern is we are not closing this transaction. 387 Q If you're not closing the transaction, why haven't you announced that to your shareholders? A We re-vectored the transaction to exclude Longroot. If we think it is material enough, we'll disclose it. But the transaction is proceeding as I've said already. 389 Q You'll agree with me that as we sit here today, on January 9th, 2023, that NextPlay has not filed an 8-K announcing it has ended the agreement that it first announced in October 2022; correct? A It has amended the agreement to exclude Longroot; to not be -- to not be Next Fintech Holdings Inc., a new Next Fintech company. And you're not getting -- we are not sending that to you. Q 394 Have you formally amended and signed off on the amendment to the re-vecotered agreement? Yes or no? A I'm not answering the question. 402 Q Your evidence is that the agreement announced by way of an 8-K by NextPlay in October 2022 in relation to a 15 million investment has been amended; correct? A No, that is incorrect. My evidence is that the deal has been re-vectored into a new investment which does not include Next Fintech Holdings, it does not include Longroot Ltd. or Longroot Inc. as you call it, formerly Next -- currently Next Fintech Holdings, in any manner. Same investor. Same investment. Same other assets. Longroot is excluded. It's been restructured. Whether that has been

signed or not is a material, as I understand it, disclosure. And it's irrelevant to this thing. Other than that, I believe that if we tell you -- you're asking me a question, I believe, did you sign a new contract, we did not amend the old contract, to Justice Walker's point. And I will not answer -- if I answer did we sign a new contract, that is material non-public information. As I said, we'll disclose that in an 8-K when the investment closes. 421 Q Sorry. When your wife Jess testified, she said no agreement had been signed as of the time she testified in December ending or terminating this agreement; is that still true? A No, that is not still true. 422 Q So since she testified steps have been taken to terminate the stock agreement from October 2022; correct? A A new agreement has been signed with the investor. The same investment. The same investor. Same assets sans Longroot. Without Longroot being included. A new entity. That is what has been signed. Since Jess testified. 426 Q And when was the stock purchase agreement at tab 53 involving Next Fintech Holdings, formerly Longroot Inc., terminated? A There is no formal termination. We're simply just not going to close it. We've signed a new agreement, as I said, that is not involving that entity. We'll announce that shortly. You will receive an announcement at some point. 427 Q I'm not asking about the new agreement; I'm

asking about the old one. Has it been terminated or not? A Define "terminated." We're not proceeding with it. That investment is not -- by mutual agreement with the investor, it is not proceeding. We've agreed to invest in a new entity. 428 Q Is this that agreement in writing that you are not proceeding with it? A The -- it's not in writing that we're not proceeding with it. The new agreement has been signed, as I've testified. 429 Q So the termination was effected by way of signing - A It supercedes. Yes. I mean, it doesn't say it supercedes it, but, yes. That is the agreement. We have agreed a new agreement. 430 Q When was the agreement -- when was the agreement that supercedes this agreement signed? A Is that important to this discussion? To this - 431 Q Yes. A Well, we started negotiating it almost immediately around October/November. It was not signed. It was agreed at some point orally a few weeks later. I don't know the exact date. And then it was signed around Christmastime or maybe a little bit thereafter. 432 Q So after you swore your affidavit on December 12th, 2022? A Yeah. But it was agreed before then that we would proceed with the new agreement, but it wasn't signed. We didn't have the agreement ready. The agreement was actually signed around -- a little bit after Christmas. [Emphasis added] [128] Thus, I find the current status of the Share Purchase Agreement is

unclear. It is not known whether it remains open for the investor to seek to close, allowing it to purchase the Longroot Delaware shares that are the subject of the plaintiffs' claims. Privileged documents are not included within the ambit of the disclosure order. No evidence of irreparable harm has been adduced, nor has it been suggested. [129] The factual issues surrounding termination, and what steps were taken to effect it and when, are relevant to the issues raised in the Contempt Applications and the Variation Application. That, together with the inconsistent nature of the evidence that arose from the cross-examinations and whether the assets of Longroot Delaware are at risk favours the plaintiffs in my assessment of the balance of convenience. Notice to Streeterville [130] The defendants submit that the order exceeded what was required to address the plaintiffs' concerns about whether Streeterville had notice of the litigation between the parties and that the plaintiffs advance proprietary claims against Monaker's assets, specifically, shares of Longroot Delaware and Longroot Limited. The defendants argue that Streeterville does not need to know of the extant Contempt Applications and the fraud on the Court application to be heard by Ross J. [131] Streeterville's knowledge of the plaintiffs' constructive trust and proprietary claims to assets falling under the ambit of

its security agreement with Monaker is also unknown. The plaintiffs' concerns about the financial status of Monaker and the possibility that Streeterville might foreclose on Monaker's assets, including the shares of Longroot Delaware and Longroot Limited, are substantiated from the evidence. The defendants have not adduced any evidence to demonstrate irreparable harm. Their submissions rely on speculation and distinguishable authorities. [132] The defendants do not challenge the plaintiffs' position that Streeterville ought to be aware of their constructive trust and proprietary claims. The defendants' approach would favour the balance of convenience in their favour had they confirmed that Streeterville is in fact aware of the plaintiffs' claims to Monaker's Longroot assets. However, although they are aware of the plaintiffs' concerns and questions in this respect, the defendants have not taken the opportunity to do so, either in submissions or with evidence. [133] All of those factors favour the plaintiffs in my assessment of the balance of convenience. Due Process [134] The defendants argue that they were denied the opportunity to respond when the adjournment was ordered on terms. In effect, they argue they were denied due process and procedural fairness because they had no prior notice that an adjournment on terms might be considered and lacked sufficient opportunity to

respond. [135] The defendants also maintain that the plaintiffs did not comply with the Rules in seeking terms. [136] According to the defendants, the plaintiffs should have applied for terms through a notice of application per Rule 8-1 (and complied with timelines for service) because they were seeking substantive relief. Insofar as the specific term requiring production of documents regarding the Stock Purchase Agreement, the defendants submit that the order should not have been granted since Rules 7-1(1) and (11) obligated the plaintiffs to formally demand them 35 days prior to seeking their production unless they obtained an order abridging that timeline through a formal application. [137] The defendants' position concerning notice and procedural fairness ignores the circumstances in which the adjournment was granted in the face of the plaintiffs' intention to proceed with Contempt No. 2. [138] One of the long-standing principles of natural justice is found in the Latin maxim, audi alteram partem, which means "hear the other side". For there to be a fair process, a judicial or quasi-judicial decision depriving a person of their rights, including property rights, ought not to be made without giving the person a right to be heard: Party A v. British Columbia (Securities Commission), 2021 BCCA 358 at para. 218. [139] Insofar as notice is concerned, as I have found, the

adjournment was granted based on the strength of defence counsel's submissions that she was not fully prepared to defend against Contempt No. 2, not all the evidence was before the Court, she needed instructions concerning a possible advice of counsel defence, and all three applications were intertwined and should be heard together (or merged). I agree with the plaintiffs that in those circumstances, it should have been clear to the defendants that an adjournment on terms was a possible result, and if it was not, then it ought to have been when plaintiffs' counsel advised shortly before the lunch recess that he would consider over the lunch hour possible terms to protect his clients' interests in the event an adjournment was ordered. [140] The possibility of an adjournment on terms should also have been clear when I raised the prospect of an adjournment on terms when the hearing resumed following the lunch recess: THE COURT: So my thinking, and I'm still -- I'm thinking, is that now that Ms. Ridgedale has told me that she hasn't had sufficient time to prepare and the other -- this other issue of communications with counsel has sort of come up and she's -- and that may very well be an issue. The last thing I want to see is her clients put in a position of being found as contemnors where their new counsel didn't have the opportunity to properly prepare. So that's my thinking. I

-- my view is that certain things need to be put in place for the protection of the assets that are in issue and to avoid prejudice to the plaintiff -- Axion plaintiff by an adjournment. So I'm thinking about that and I'm also thinking about whether or not I should hear -- accede to Ms. Ridgedale's request to start hearing contempt 1 and contempt 2 starting on the 9th at the same time. Contextually whether that -- that request is appropriate. THE COURT: -- if I'm going to adjourn everything and have them all heard together as you've asked for ‑- CNSL L. RIDGEDALE: Mm-hmm. [Emphasis added] [141] In terms of procedural fairness, it was at that point that plaintiffs' counsel handed up his list of terms in the event an adjournment was granted. Fulsome argument then ensued without any objection from the defendants concerning lack of notice, lack of compliance with the Rules, the need to stand down or adjourn to consider the terms, or an inability to respond. Moreover, the defendants have had the opportunity to make additional submissions on their Stay Application they say they would have made with the benefit of additional time. [142] In these circumstances, I find that this aspect of the factor favours the plaintiffs in my assessment of the balance of convenience. Determination [143] In assessing the facts and factors discussed above, I find that the balance of convenience favours the plaintiffs. As the plaintiffs have outlined, they are entitled to the fruits of those orders subject to the Court's discretion. The defendants have not met the burden on them in respect of the second and third tests. There are no special circumstances present favouring a stay. Conclusion [144] The defendants' Stay Application is dismissed. "Walker J."