Executive Summary: Key Legal and Evidentiary Issues

• Yinghe Investment and Mr. Chen filed two new proceedings (a civil action and an oppression petition) arising from the same shareholder dispute over CCM Investment Group Ltd. that had already been the subject of three prior proceedings.

• CCM, Run Guo, and Mr. Liu applied to strike the new proceedings under Rule 9-5(1)(d) as an abuse of process, arguing they were res judicata or should have been raised in earlier litigation.

• Allegations of beneficial ownership of 18 strata units in "The Grand at Lansdowne" building were previously dismissed in the Strata Ownership Action due to Yinghe's repeated non-compliance with court rules and court orders.

• The Swap Agreement Petition, which was amended to include an oppression claim, had been dismissed by Justice Warren for failure to plead material facts and allegations to support an oppression claim despite ample notice of deficiencies.

• Mr. Chen's Management Fee Claim for unpaid management fees, bonuses, and salary was raised for the first time in the New Action and found to be a distinct personal claim permitted to proceed.

• Requests for special costs against Yinghe and Mr. Chen were denied, though scale B costs were awarded to CCM, Run Guo, and Mr. Liu as the largely successful parties.

The shareholder dispute and the building at the centre of the conflict

This case involves a protracted shareholder dispute over CCM Investment Group Ltd. ("CCM"), a company incorporated in 2007 solely for the purpose of developing a mixed-use commercial and residential strata building known as "The Grand at Lansdowne," located at 5599 Cooney Road, Richmond, British Columbia. Yinghe Investment (Canada) Ltd. ("Yinghe"), whose sole shareholder and director is Jian Sheng Chen ("Mr. Chen"), was until recently the largest of CCM's three shareholders, holding 50 percent of its shares. The other shareholders are Run Guo Holdings Ltd. ("Run Guo"), whose principal is the respondent Xin Liu ("Mr. Liu"), and Dasmart International Consulting Inc. During the building's construction, which was completed in 2018, and until 2023, Mr. Chen was a director, the chairman of CCM's board, and was largely responsible for the management and oversight of CCM's day-to-day operations. Mr. Chen did not involve the other shareholders or directors much during this period. Of the over 180 strata units in the building, all but 32 have been sold, with the remaining units registered to CCM (the "CCM Strata Units"). Yinghe claims that 18 of the CCM Strata Units, although registered in CCM's name, are held in trust for it (the "18 Trust Units"). Yinghe has rented the 18 Trust Units to third party tenants and has been collecting rental income from them. The ownership, use and distribution of the CCM Strata Units have been the subject of ongoing disputes throughout the litigation.

The breakdown of the relationship and the 2023 AGM

The shareholder dispute came to a head at CCM's March 20, 2023 annual general meeting (the "2023 AGM") when, in absentia, Mr. Chen's directorship and position as board chairman ended abruptly. On June 27, 2023, Yinghe and Mr. Chen filed a petition and successfully challenged the validity of the 2023 AGM based on procedural irregularities. The 2023 AGM Petition was heard by Justice Stephens on December 18, 2023. In oral reasons delivered the same day and without commenting on either the merits of the shareholder dispute or the validity of a June 8, 2012 board resolution (the "June 2012 Resolution"), Justice Stephens invalidated Mr. Chen's removal from CCM's board because neither he nor Yinghe had received actual notice of the 2023 AGM, a requirement of CCM's articles. Save for the appointment of the company's auditor, confirming its registered and records office, and confirming the appointment of two other directors, Justice Stephens held that the business conducted at the 2023 AGM was invalid as was the board meeting held the same day. He ordered that Mr. Chen continue to be a director and chairman of CCM's board and directed that CCM hold its next annual general meeting by the end of March 2024. Appeals of Justice Stephens' orders were taken by all parties and were dismissed by the Court of Appeal on August 7, 2024.

The share issuances and the dilution of Yinghe's interest

In June 2023, CCM's board (which at that point did not include Mr. Chen) embarked on a plan to make four rounds of large share issuances increasing the number of shares from 20,000 to 1,473,409 — which would have the effect of massively diluting the value and voting power of its original shares. The four share issuances took place on August 8, 2023, February 8, 2024, July 17, 2024, and June 27, 2025. Yinghe reluctantly subscribed to the first two so that its 50% shareholding was maintained. Yinghe did not subscribe to the third and fourth, reducing Mr. Chen's current shareholding to approximately 35%. Run Guo is now CCM's majority shareholder holding approximately 55% of its shares. At CCM's annual general meeting held on January 8, 2025, and for the second time, Mr. Chen was not re-elected to its board.

The Strata Ownership Action and its dismissal

On August 4, 2023, while the 2023 AGM Petition was still outstanding, Yinghe filed a notice of civil claim seeking, among other things, enforcement of alleged agreements and/or resolutions related to ownership of the 18 Trust Units and repayment of its shareholder loans (the "Strata Ownership Action"). On September 15, 2023, CCM filed a counterclaim in the Strata Ownership Action adding Mr. Chen to the proceeding, claiming damages for breach of fiduciary duty, misconduct in his role as director of CCM, and misappropriation and misuse of rental income from the 18 Trust Units. On March 14, 2025, CCM filed an application seeking to have the Strata Ownership Action dismissed on the basis that Yinghe had repeatedly failed to comply with the rules of court and court orders. That application was heard by Justice Matthews on August 19, 2025, who reserved her decision until September 15, 2025. In written reasons, Justice Matthews granted CCM's application, struck both the notice of civil claim and Yinghe and Mr. Chen's response to counterclaim, and allowed CCM to proceed with its counterclaim as if no response had been filed. Justice Matthews noted that the conduct of Yinghe and Mr. Chen seen cumulatively and in context was egregious, demonstrating "a blatant and shocking attitude that these parties do not feel compelled to comply with the Supreme Court Civil Rules or court orders." Justice Matthews' order has not yet been entered because Yinghe has applied to reopen the application, adduce new evidence, and have Justice Matthews reconsider her decision. Yinghe has also launched an appeal of Justice Matthews' decision.

The Swap Agreement Petition and its dismissal

On March 22, 2024, six days before CCM's scheduled annual general meeting and while the Strata Ownership Action was ongoing, Yinghe filed a petition dealing with CCM's overall governance (the "Swap Agreement Petition"). The petition concerned a July 15, 2012 agreement under which, prior to Run Guo's incorporation, Mr. Liu and Yinghe agreed that Yinghe would retain voting control of 1,000 of Run Guo's newly purchased shares, giving Yinghe 55% voting power (the "Swap Agreement"). At the March 28, 2024 AGM, Yinghe attempted to use the proxy votes to take control of CCM. At the same time, Run Guo delivered a revocation of the Swap Agreement and Voting Authorization Letter. The 2024 AGM was chaired by Mr. Liu, Run Guo's representative, who ruled the revocation was valid and accordingly, Yinghe could not vote the proxy votes. On May 14, 2024, Yinghe amended the Swap Agreement Petition to include a claim under ss. 227 and 228 of the Business Corporations Act based on alleged oppressive conduct by CCM and its other shareholders. On August 13, 2024, Justice Warren dismissed the Swap Agreement Petition because it failed to properly raise an oppression claim. He also concluded that the revocation was valid. Justice Warren did not determine the validity of the Swap Agreement or the Voting Authorization Letter and did not comment on the merits of Yinghe's claim. Nor did he decide whether Run Guo was in breach of the Swap Agreement. Instead, he dismissed the petition on the basis that, contrary to the requirements of the Act, it failed to plead material facts and allegations to support an oppression claim. Leave to amend was not granted because Yinghe had been given ample notice that its pleadings were deficient and had failed to take steps to address them. Justice Warren did note, however, that the dispute was "fundamentally a question of contract" and that Yinghe could "seek damages and injunctive relief in an action for breach of the Swap Agreement."

The new proceedings and the applications to strike

On June 23, 2025, Yinghe and Mr. Chen filed the New Action against nine defendants, and on August 1, 2025, Yinghe filed the New Oppression Petition — together reasserting many of the same claims from the prior proceedings and adding new ones, including Mr. Chen's Management Fee Claim for management fees, bonuses, and salary for his services as the de facto manager of CCM during the building's construction. CCM applied on November 5, 2025, to have both new proceedings dismissed under Rule 9-5(1)(d) as an abuse of process. On February 12, 2026, Run Guo and Mr. Liu brought a similar application seeking to have the New Oppression Petition dismissed against them.

The court's ruling and outcome

Justice Weatherill, delivering judgment on April 15, 2026, after a hearing on February 26–27, 2026, largely agreed with the respondents. The court found that the New Oppression Petition must be struck against CCM, Run Guo, and Mr. Liu as being res judicata and an abuse of process, since the issues all stemmed from the same shareholder dispute, relied on virtually the same factual underpinnings, and involved the same basic facts as the prior proceedings. Allowing it to proceed would provide relief to Yinghe from Justice Warren's decision to which Yinghe was not entitled. As the court stated, "Yinghe does not get two kicks at the can." Regarding the New Action, the court ordered a stay pending the outcome of Yinghe and Mr. Chen's application to have Justice Matthews reconsider her decision in the Strata Ownership Action and pending the outcome of the appeal of that decision. Should both the application and the appeal fail, and save for the Management Fee Claim, the New Action will be struck as against CCM as being res judicata. The sole exception was Mr. Chen's Management Fee Claim, which the court permitted to proceed. The court found that Mr. Chen was not initially a party to the Strata Ownership Action and that his personal claims for unpaid salary and bonuses were distinct. As the pleadings stood, it was not clear that the Management Fee Claim was something that Yinghe could have argued in the Strata Ownership Action. The court declined to award special costs, finding that it was not persuaded that Yinghe and Mr. Chen's conduct in commencing the New Proceedings was egregious enough to attract such an order, but concluded that CCM was the largely successful party and entitled to its scale B costs, as were Run Guo and Mr. Liu who were successful in their application. No specific monetary amount was awarded or ordered in favour of any party in this decision.