The Ontario Superior Court of Justice has appointed a receiver over two commercial properties in Burlington following a protracted legal dispute involving unpaid loans, unauthorized second mortgages, and a failed procedural attempt to transfer the court proceedings to a different judicial region1. In a decision released on November 12, 2025, Justice M. Bordin granted the application brought by The Bank of Nova Scotia against Old Green Inc. and 2014Edin Inc., ruling that the appointment of a receiver was necessary to protect the lender’s security after months of default. The case highlights the significance of procedural rules regarding the location of legal proceedings and the strict requirements for borrowers attempting to stave off enforcement actions through claims of imminent refinancing.
The dispute centered on two real estate assets located in Burlington, specifically a property at 227 Green Street owned by Old Green Inc. and a property at 2014 Edinburgh Drive owned by 2014Edin Inc. The corporate respondents, along with guarantors identified as Mr. Campagnaro and Mr. Hall, had secured significant financing from The Bank of Nova Scotia. The indebtedness was secured by first-ranking collateral mortgages registered against the titles of both properties, along with general assignments of leases and rents and general security agreements. The principal amount of the mortgage on the Green Street property was $4.4 million, while the mortgage on the Edinburgh Drive property stood at $3.8 million.
Trouble regarding the loans began to surface in early 2025. By February of that year, the borrowers were in default of the loan agreement for non-monetary reasons, specifically the failure to provide required financial disclosures. The agreement stipulated that the borrowers were required to submit annual financial statements, corporate notices of assessment, and personal financial summaries for the guarantors. When these documents were not produced, the bank issued a default letter on February 11, 2025. The lender provided the borrowers with a grace period, issuing an exit letter that gave the companies until March 31, 2025, to cure the defaults. However, the deadline passed without the defaults being rectified.
Following the expiration of the cure period, The Bank of Nova Scotia escalated its enforcement efforts. On May 1, 2025, the bank issued formal demands for payment to both the borrowing companies and the guarantors, declaring the entire indebtedness immediately due and payable. At that time, the total amount owed to the bank was calculated at approximately $5,963,534.31, a figure that did not include accumulating legal costs. Despite the demand, the bank entered into a forbearance agreement later that month, offering the borrowers one final opportunity to stabilize their position. Under the terms of a letter dated May 26, 2025, the bank agreed to hold off on legal action if the borrowers paid all arrears by May 30, 2025, and provided proof that property taxes and Canada Revenue Agency obligations were current. The borrowers signed this agreement but ultimately failed to satisfy any of the conditions.
Compounding the financial precariousness of the situation was the discovery of additional registered debt against the properties. The court found that subsequent mortgages had been registered on the titles without the consent of The Bank of Nova Scotia, which constituted a direct breach of the original loan terms. A second mortgage in the amount of $1.4 million was registered on the Green Street property in favor of Magnus Holdings Inc., while a mortgage of $2.105 million was registered against the Edinburgh Drive property in favor of District REIT GP Inc. and District REIT Limited Partnership. Furthermore, the properties had accumulated approximately $40,000 in outstanding property taxes, which legally take priority over the bank’s security interests.
Before the court could address the substantive issue of the receivership, it had to resolve a contentious procedural dispute regarding where the application should be heard. The Bank of Nova Scotia commenced the application in Hamilton, located in the Central South Judicial Region. The respondents, however, argued that the case had no business being in Hamilton. They pointed out that the properties were in Burlington, the corporate head offices were in Burlington, and the principals resided in Burlington. Burlington falls within the jurisdiction of the Central West Region, where the nearest courthouse is in Milton. The respondents asked the court to transfer the proceedings to the Central West Region, arguing that the matter lacked a rational connection to Hamilton.
The procedural history leading up to the hearing was marked by delays and confusion. The application was initially dated June 22, 2025, and first appeared before a judge in August. At that time, the respondents raised the venue issue, leading to an adjournment. Subsequent court dates in September and October saw further delays, with endorsements indicating confusion over whether a formal motion to transfer was required. When the matter finally came before Justice Bordin on November 3, 2025, the respondents argued that the applicant should be directed to transfer the file to the appropriate region.
Justice Bordin conducted a detailed analysis of the rules governing the transfer of proceedings. Under the Consolidated Civil Provincial Practice Direction and the specific rules for the Central South Region, a party seeking to transfer a case must file a formal notice of motion with a supporting affidavit in the court location where they wish the case to be moved. The decision to transfer rests with the Regional Senior Judge of that receiving region. The court noted that the respondents had failed to follow this procedure correctly. Instead of filing the appropriate paperwork in the Central West Region as required by the practice directions, the parties attempted to argue the transfer informally or through a defective process in Hamilton. The court emphasized that parties cannot simply agree to bypass established practice directions and that proper procedure is mandatory for the efficient administration of justice.
Despite the procedural errors, the court examined the merits of the venue argument using the factors outlined in Rule 13.1.02 of the Rules of Civil Procedure. These factors include the location of the subject matter, the convenience of the parties, and the interests of justice. The applicant bank argued that Hamilton was an appropriate venue because the respondents’ lawyer was based there and because the Burlington properties were geographically only eight kilometers closer to the Milton courthouse than to the Hamilton courthouse. The bank also argued that judicial resources were more readily available in Hamilton, claiming that a transfer to Milton would result in significant delays.
Justice Bordin rejected the bank’s assertion regarding the abundance of judicial resources in Hamilton. In a moment of judicial transparency, the ruling revealed that the Hamilton court was currently operating with a shortage of two generalist judges. The decision described the Hamilton court’s lists as uncapped and overcrowded, with short motions lists frequently exceeding twenty matters per day. The court noted that there were currently fifteen matters waiting on the long motion list in Hamilton, some of which had been pending since August. The judge observed that when parties bring matters to Hamilton that have no rational connection to the jurisdiction, it delays access to justice for litigants who are properly before that court.
While Justice Bordin conceded that the connection to Hamilton was tenuous and that the matter technically belonged in the Central West Region, the court ultimately decided against transferring the case. The primary driver for this decision was the avoidance of further delay. The judge reasoned that staying the application to allow for a proper transfer motion before the Regional Senior Judge in the Central West Region would only prolong a situation where the lender was facing clear and undisputed defaults. The court noted that the respondents had already succeeded in delaying the proceedings by three months through their objections to the venue. Given the lack of a viable defense to the receivership application, the court determined that deciding the matter on its merits immediately was the most just and expeditious course of action.
Turning to the merits of the receivership application, the court found that the evidence overwhelmingly supported the appointment of a receiver. The respondents did not dispute the existence of the debt, the mortgages, or the default. Instead, they relied on the argument that they were in the process of refinancing the properties and that a receiver was therefore unnecessary. They argued that the bank could alternatively proceed by way of power of sale or by simply taking possession of the properties to collect rents.
The court found the respondents’ evidence regarding refinancing to be insufficient. The respondents submitted an affidavit referencing appraisals that valued the two properties at a combined $9.4 million. They claimed that replacement financing was imminent and would be completed within weeks. However, the court observed that these promises had been made repeatedly over the preceding months without result. In August, the respondents had sworn that financing would close by late August. In September, they claimed it would be done within thirty to forty-five days. By the time of the November hearing, no refinancing had materialized, and the respondents failed to provide any updated affidavits or binding commitment letters from new lenders.
Furthermore, the court scrutinized the financial equity in the properties. The combined debt, including the bank’s first mortgages and the unauthorized second mortgages, totaled approximately $9.468 million. This figure exceeded the respondents’ own appraised value of $9.4 million. When taking into account the outstanding property taxes, accruing interest, and enforcement costs, the court concluded that there was no equity remaining in the properties. The security of the lender was at risk of deteriorating, and the court expressed a loss of confidence in the management of the debtor companies.
The court applied the legal test for appointing a receiver, which asks whether it is “just and convenient” to do so. Justice Bordin noted that because the loan agreements contained a specific contractual right to appoint a receiver upon default, the burden on the bank was relaxed. In such cases, the appointment of a receiver is not considered an extraordinary remedy but rather the enforcement of a contract. The court held that the bank was not required to prove irreparable harm or urgency.
The continued default, the unauthorized additional debt, the tax arrears, and the lack of equity all weighed in favor of the bank. The court concluded that appointing a receiver would ensure fairness to all stakeholders and allow for an orderly process to monetize the assets. The judge remarked that the respondents’ strategy appeared to be one of delay and that further erosion of the bank’s security had to be prevented. Consequently, the court issued the order appointing the receiver, effective November 12, 2025, bringing the management of the Burlington properties under the control of the court-appointed officer to facilitate their sale and the repayment of the outstanding debts. The decision serves as a reminder to commercial borrowers that procedural arguments regarding venue are unlikely to succeed as a defense against clear evidence of financial default, particularly when the delay threatens the recovery of the lender.
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