The British Columbia Supreme Court did not find it just and convenient to grant a lender’s request for the appointment of a receiver upon considering the factors in Maple Trade Finance Inc. v. CY Oriental Holdings Ltd., 2009 BCSC 1527.
In Redford v 1266476 B.C. Ltd., 2026 BCSC 1498, the petitioner lender made two loans to the respondent borrower, secured by separate mortgages relating to two properties in the Cariboo region.
Request for receiver appointment
Claiming multiple defaults by the borrower under the mortgages, the lender sought to appoint C. Cheveldave & Associates Ltd. as receiver and manager over the two properties, plus all associated leases and any rents payable under those leases.
British Columbia Supreme Court doesn’t appoint receiver
The BC Supreme Court dismissed the lender’s petition and refused to exercise its discretion to appoint a receiver. The court based this finding on the following reasons:
- In the absence of a proven default, the lender failed to establish that the mortgage agreements presently authorized the receiver appointment, given that a default was the trigger condition for such under the prescribed standard mortgage terms
- Without a receivership order granted and without the additional non-prescribed standard mortgage terms applying, the lender failed to prove irreparable harm, especially given the sufficient equity remaining in the properties, which would enable the lender to realize on its security
- While some evidence supported that the borrower was insufficiently diligent in maintaining the properties, the lender failed to prove the lack of protection and preservation of the properties or a waste of the lender’s assets
- Although some evidence showed that the borrower failed to cooperate in furnishing the financial documents sought, there were other ways to compel production, apart from appointing a receiver
- There was no evidence regarding the receiver’s proposed plan, fees, and timeframe
- Appointing a receiver would not make maximizing the return to the parties more likely to the extent that would warrant a receiver’s likely cost
Leave to reapply and cost award
The BC Supreme Court granted the lender leave to reapply in the event of a material change in circumstances.
Absent circumstances relevant to costs, the court found the borrower substantially successful and thus entitled to its costs.
Prior insolvency and restructuring cases
The Ontario Court of Appeal issued a June 17 decision granting leave to appeal on the question of whether the Bank of Montreal could use a credit bid to purchase an asset that did not attach to its security – specifically, a potential cause of action against itself – at an auction sale.
The Alberta Court of Appeal made a May 25 decision refusing to permit an administrator working on contract for a construction business to relitigate an issue previously decided in a judgment that found him liable for misappropriation of funds while acting in a fiduciary capacity.
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