interest had priority over all other creditors, including builders’ lien claimants.
Ultimately, the stay order was not renewed
and the bank had not provided any further
DIP financing. The monitor in the CCAA
proceedings was appointed receiver and
was permitted to borrow up to $21,000,000
to complete the construction project and
to provide security through a receiver’s
borrowing charge on the property. The
bank then commenced foreclosure proceedings and obtained an order giving the
$21,000,000 receiver’s borrowing charge
priority over lien claims filed prior to the
foreclosure proceedings, including Peri’s
lien claim. In granting the priority order,
the chambers judge construed ss. 32( 5)
and 32( 6) of the Builders Lien Act as per-mitting him to make such an order despite
the fact that the advances were not made
to the original debtor, but rather to a
receiver, and despite the fact that the loan
was a new loan on different terms than the
existing mortgage security. On appeal, Peri
argued that the chambers judge erred in
interpreting the provisions of the Builders
Lien Act so broadly.
HELD: Appeal allowed; application
dismissed. The chambers judge did not
have the jurisdiction to make the priority
order under the CCAA as those proceedings had effectively terminated by the time
the order was made. Furthermore, the
chambers judge erred in granting the priority order as ss. 32( 5) and ( 6) could not be
interpreted to include additional advances
given by the bank. There was no link
between the further advances and the original mortgage because of the foreclosure
order and the existence of a new loan
secured by an entirely new charge. The
fresh evidence sought to be admitted by
the bank consisted of affidavits of the
receiver, email exchanges and a receiver’s
certificate that were not of assistance in
determining the matter.
Bank of Montreal v. No. 249 Sea-bright Holdings Ltd., [2012] B.C.J. No.
7, British Columbia Court of Appeal,
L.S.G. Finch C.J.B.C., J.E. Prowse, M.V.
Newbury, N.J. Garson and C.E. Hink-son JJ.A., January 6, 2012.
CORPORATIONS,
PARTNERSHIPS
& ASSOCIATIONS LAW
CORPORATIONS – Liquidation and
dissolution – Revival.
Appeal by the plaintiff from a chambers
judge’s order striking its statement of
claim. The parties were involved in a dis-
pute concerning a construction manage-
ment contract. The plaintiff was struck
from the Corporate Registry in September
2007. Six days later, the plaintiff filed a
builder’s lien against lands owned by the
defendants. The following month, the
plaintiff filed a lis pendens and a statement
of claim to enforce its lien claim. In March
2008, the plaintiff filed a defence to the
defendants’ counterclaim. The plaintiff
also took steps through 2008 and 2009 in
connection with the discovery process. In
January 2008, counsel for the defendants
discovered that the plaintiff had been
struck prior to filing its statement of claim.
Counsel for the defendants advised that it
would not file a defence until the plaintiff
was revived. Two weeks later, plaintiff’s
counsel advised that the plaintiff had been
revived. The defendants filed their defence
and counterclaim the following day. In
November 2008, the defendants con-
ducted a search of the Registry and discov-
ered that the plaintiff had not been revived.
The limitation period expired in Septem-
ber 2009. In February 2010, the defend-
ants moved to strike the statement of claim
on the basis that the plaintiff was a non-
existent entity and lacked capacity to com-
mence its action. Post-filing of the motion,
but pre-hearing, a certificate of revival was
issued. A Master dismissed the defendants’
motion. A chambers judge allowed the
defendants’ appeal and struck the plain-
tiff’s statement of claim. The judge ruled
that the restorative powers of revival were
subject to previously acquired third party
rights, and that the defendants had
acquired and crystallized a right to have
the statement of claim struck at the time
they had filed their motion pre-revival.
CREDITORS
& DEBTORS LAW
RECEIVERS – Court appointed receiv-
ers – Powers – Realization of property.
Appeal by Home Depot from two
orders, the first authorizing the receiver of
Woods to sell a property free and clear of
Home Depot’s lien and refusing to permit
Home Depot to purchase or lease a por-
tion of the property, and the second
approving the purchase of the property by
2204604 Ontario. Woods owned the prop-
erty, subject to a $17,000,000 mortgage in
favour of Romspen. The court appointed a
receiver for Woods in November 2008.
The proposed purchaser of the property,
2204604, was owned and controlled by
Romspen. Home Depot had expended
$14,500,000 to construct a store on the
property. In May 2005, Home Depot and
Woods entered into an agreement pursu-
ant to which Home Depot would purchase
the portion of the property where its store
was situated for $3,250,000. The pur-
chase was conditional upon severance of
Home Depot’s portion of the property. The
agreement was amended in November
2005. Romspen received a copy of the
agreement, but Home Depot failed to
register a caution in relation to its rights
under the agreement on title to the prop-
erty. Home Depot entered into a ground
lease with Woods in May 2006, again fail-
ing to register a notice of ground lease. It
also failed to obtain an express postpone-
ment or subordination of Romspen’s rights
as mortgagee. Woods represented that it
had obtained Romspen’s agreement to a
partial discharge of its mortgage, but
Romspen actually refused to consent to
this. Romspen, Home Depot and the Town
executed a site plan agreement in July
2006, in which Romspen’s rights were
postponed and subordinated to the inter-
est of the Town but not of Home Depot.
Home Depot was unable to obtain sever-
ance of its portion of the property because
no comprehensive subdivision plan was
provided. It completed its store and started
operating it in 2007. Woods also defaulted
on its mortgage in 2007. Payments ceased
on the mortgage in early 2008, leading to
the appointment of the receiver. The
receiver was authorized to market the
property and sought the court’s approval
of an offer by 2204604 to purchase the
property for $14,100,000, free and clear of
any claim by Home Depot. The court
found that Home Depot’s interest ranked
after Romspen’s mortgage and authorized
the receiver to sell the property free and
clear of any lien or claim by Home Depot.
The court refused to approve 2204604’s
purchase agreement, ordering the receiver
to conduct a further sales process. When
these further efforts proved unsuccessful,
the court approved the sale to 2204604,
vesting title to the property to 2204604
free and clear of any lien or claim by Home
Depot. Throughout the court’s reasons, the
motion judge indicated that he was
required to make factual determinations
on the basis of undisputed facts, and that
he could not make findings of fact by way
of inference.
CRIMINAL LAW
POWERS OF SEARCH AND SEIZ-
URE – Search warrants – Scope – Validity.
Appeal by the Crown from the respond-
ent’s acquittal on charges relating to pro-
duction of marijuana. The police obtained
a search warrant to investigate theft of
electricity at a residence. That warrant
authorized the police to search not only for
equipment used to divert electricity but
also for documentation identifying owner-
ship or occupancy of that residence. When
the police executed the warrant, they
found the residence to be occupied only on
a transient basis. There was a large mari-
juana grow-operation in the basement.
The police found two computers and a cel-
lular telephone on the main level. One of
the computers was being used as part of a
security system and was recording images
from a video camera. The second com-
puter was found to contain information
that, in the Crown’s view, connected it to
the respondent. The cellular telephone
contained a photograph said to be of the
respondent. The trial judge held that the
Information to Obtain did not support
that portion of the warrant authorizing the
police to search for documentation identi-
fying ownership or occupancy of the resi-
dence, because the Information to Obtain
did not contain a statement by the officer
that there were reasonable grounds to
believe that such documentation would be
found in the residence, nor any facts to
support such a belief on his part. The trial
judge also rejected the Crown’s contention
that if the police had a valid warrant for
the residence, then they were authorized
to search the computers and cellular tele-
phone. The trial judge opined that a search
warrant for a residence could not implicitly
authorize the search of a computer or a
cellular telephone.
CRIMINAL CODE OFFENCES –
Wilful and forbidden acts in respect of
certain property – Mischief – Attempts,
conspiracies and accessories – Accessories – Counselling.
Appeal by Jeffers from convictions for
counselling murder and mischief under
$5,000. Jeffers was a black man from the
Caribbean. In 2007, he and his family
