Court File No. CV-17-11726-OOCL O NTARIO S UPERIOR COURT OF JUSTICE C OMMERCIAL LIST B ETWEEN: HARBOUREDGE MORTGAGE INVESTMENT CORPORATION Applicant - and- 2177427 ONTARIO LIMITED Respondent MOTION RECORD ( Returnable July 7, 2017) June 27, 2017 FOGLER, RUBINOFF LLP 77 King Street West, Suite 3000 PO Box 95 T D Centre North Tower T oronto, ON MSK 1G8 Vern W. Dane (LSUC# 32591E) T el: 416.941.8842 F ax: 416.941.8852 Email: vdare(a~foglers.com L awyers for The Fuller Landau Group Inc., in its c apacity as court appointed receiver of the property of the Respondent TO: SERVICE LIST
Transcript
Court File No. CV-17-11726-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
BETWEEN:
HARBOUREDGE MORTGAGE INVESTMENT CORPORATION
Applicant
-and-
2177427 ONTARIO LIMITED
Respondent
MOTION RECORD(Returnable July 7, 2017)
June 27, 2017 FOGLER, RUBINOFF LLP77 King Street West, Suite 3000PO Box 95TD Centre North TowerToronto, ON MSK 1G8
Vern W. Dane (LSUC# 32591E)Tel: 416.941.8842Fax: 416.941.8852Email: vdare(a~foglers.com
Lawyers for The Fuller Landau Group Inc., in itscapacity as court appointed receiver of theproperty of the Respondent
TO: SERVICE LIST
SERVICE LIST
BALDWIN LAWBarristers and Solicitors54 Victoria AvenueBelleville, ONK8N 1 Z7
Ian Brady/Gregory R.M. ParkerTel.: 613-771-9991Fax: 613-771-9998Email: ibrady~a~,baldwinlaw.ca / gparker(cr~,baldwinlaw.ca
GRUDEFF, BERGBarristers and Solicitors5-3300 Steeles Ave. WestVaughan, OntarioL4K 2Y4
Sheldon J. BergTel: 905.761-9445Fax: 905.761-8500Email: s.ber~oa,rogers.com
Lawyers for Giuseppe Mozzone
ROMSPEN INVESTMENT CORPORATION162 Cumberland StreetSuite 300, Toronto, ON MSR 3N5
diane.winters(a~justice. gc.caJUSTICE CANADATax Section, P.O. Box 36, Exchange Tower3400-130 King Street WestToronto, ON MSX 1K6Tel: 416.973.3172Fax: 416.973.0810Attention: Diane H. A. Winters
Kevin. ohara(a~ ontaxio. caMINISTRY OF FINANCELegal Services Branch33 King Street West, 6th FloorOshawa, ON L1H 8H5Attention: Kevin O'Hara
NATIONAL LEASING GROUP INC.1525 Buffalo PlaceWinnipeg, Manitoba R3T 1L9
Attention: Anna NeustaedterEmail: Anna9093(a,nationalleasin~.com
HEWLETT-PACKARD FINANCIAL SERVICES COMPANY200 Connell DriveBerkeley Heights, New Jersey 07922 U.S.A.
Attention: Lisa A. KelderEmail: lisa.kelder(cr~,hpe. com
Garfin Zeidenberg LLP5255 Yonge Street, Suite 800Toronto, OntarioM2N 6P4
David DownsTel.: 416-642-5406Fax: 416-512-9992Email: dd(a~,gzle al.com
Lawyers for Wildwood Capital Inc.
~~.~
Court File No. CV-17-11726-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
BETWEEN:
HARBOUREDGE MORTGAGE INVESTMENT CORPORATION
Applicant
-and-
2177427 ONTARIO LIMITED
Respondent
INDEX
Tab Description
1 Notice of Motion, returnable July 7, 2017
2 Third Report of the Receiver dated June 27, 2017
A Appendix "A" —Appointment Order
B Appendix "B" — Wildwood Action and Counsels' position re. Security Funds
C Appendix "C" —Settlement Agreement
3 Draft Order in these receivership proceedings
4 Draft Order in the Wildwood Action
Court File No. CV-17-11726-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
BETWEEN:
HARBOUREDGE MORTGAGE INVESTMENT CORPORATION
Applicant
- and -
2177427 ONTARIO LIMITED
Respondent
NOTICE OF MOTION(Returnable July 7, 2017)
The Fuller Landau Group Inc., the court-appointed receiver (the "Receiver") of
the properties, assets and undertakings of 2177427 Ontario Limited ("217"), will make a motion
to the Court on Friday, July 7, 2017 at 10:00 a.m., or as soon after that time as the motion can
be heard at 330 University Avenue, 8th Floor, Toronto, Ontario.
THE PROPOSED METHOD OF HEARING:
The motion is to be heard orally.
THE MOTION IS FOR an order:
1. if necessary, validating the service of this Notice of Motion, the Motion Record and the
Third Report of the Receiver dated June 27, 2017 (the "Third Report") so that this
Motion is properly returnable July 7, 2017 and dispensing with further service thereof;
2. approving the Settlement (defined below) of the Wildwood Action (defined below);
-2-
3. lifting the stay with respect to the Wildwood Action imposed by the Appointment Order
(defined below) for the limited purpose of completing the Settlement; and
4. such further relief as is just.
THE GROUNDS FOR THE MOTION ARE:
Appointment
1. On April 7, 2017, the Receiver was appointed as court-appointed Receiver over the
assets, property and undertaking of 217, including the property municipally known or
commonly known as 500 Brisebois Crescent, Ottawa, Ontario K1 E OA6, which is used
in connection with the business operating the hotel known as Holiday Inn Express &
Suites-Orleans (the "Hotel") (collectively, the "Property") pursuant to the Order of Mr.
Justice Myers of the Ontario Superior Court of Justice (the "Appointment Order");
Stay of Proceedings
2. The Appointment Order imposes, among other things, a stay of proceedings whereby,
under section 9, no proceeding against or in respect of 217 or its property shall be
"commenced or continued except with the written consent of the Receiver or with leave
of this Court", and any and all proceedings "currently under way against or in respect of
[217J or [its property] are hereby stayed and suspended pending further Order of this
Court";
3. The Wildwood Action is caught by the stay of proceedings imposed under the
Appointment Order;
Wildwood Action
4. The Appointment Order authorizes the Receiver to, among other things, settle or
compromise any proceedings now pending with respect to 217, the Property or the
Receiver (s. 3(j));
5. Wildwood Capital Inc. ("Wildwood") is the plaintiff and 217 and Bhupinder Sandhu are
the defendants in the action in the Ontario Superior Court of Justice at Toronto that is
Court File No. CV-14-504414 (the "Wildwood Action");
-3-
6. In the Wildwood Action, Wildwood's claim relates to an alleged unpaid mortgage
brokerage fee payable pursuant to the terms of a mortgage loan application with 217
dated February 4, 2014. Wildwood claims they are owed a brokerage fee of
approximately $233,500 on a mortgage commitment arranged by Wildwood in favour of
217, notwithstanding that the mortgage did not close and the mortgage funds were never
advanced to 217;
7. Wildwood obtained in the Wildwood Action and registered a certificate of pending
litigation (the "CPL") against title of the Hotel. On November 6, 2015, the Court ordered
that 217 pay $234,559.78 into Court as security funds (the "Security Funds") to the
credit of the Wildwood Action and the CPL was discharged from title of the Hotel. The
Security Funds were funded by HarbourEdge and paid into Court by 217's legal counsel
in December 2015. The Receiver is of the view that the Security Funds belong to the
estate of 217 for the benefit of the creditors. Wildwood disputes that position;
Settlement
8. Given the professional costs necessary to litigate the Wildwood Action and the uncertain
outcome of litigating whether the Security Funds, in the circumstances, are part of the
estate of 217 for the benefit of creditors or trust funds for the potential benefit of
Wildwood in the Wildwood Action, the Receiver agreed to settle the Wildwood Action in
accordance with Minutes of Settlement dated June 23, 2017 (the "Settlement"). The
Settlement is subject to court approval in these receivership proceedings;
9. Some of the key terms of the Settlement include the following: (i) the Security Funds,
upon receipt by the Receiver, shall be divided and paid equally between the Receiver
and Wildwood; (ii) the Wildwood Action shall be dismissed without costs; and (iii) the
parties to the Wildwood Action and the Receiver shall sign a mutual release;
10. The Receiver is recommending approval of the Settlement for the following reasons: (i)
to reduce the professional costs of litigating the Wildwood Action; (ii) to reduce the
professional costs of litigating whether the Security Funds belong to the estate of 217 or
are trust funds for the benefit of the successful party in the Wildwood Action including,
potentially, Wildwood; and (iii) to provide certainty, in light of the uncertain legal status of
the Security Funds, ensuring that half of the Security Funds will be paid into the estate of
C'~
217, that the Wildwood Action will be dismissed without costs and that the parties are
mutually releasing each other from liability with respect to the Wildwood Action;
1 1. Rule 72.03(2)(c)(ii) of the Rules of Civil Procedure; and
12. Such further grounds as are just.
THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the Motion:
1. the Third Report of the Receiver; and
2. such further and other materials as counsel may advise and this Honourable Court may
permit.
Date: June 27, 2017 FOGLER, RUBINOFF LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD CentreToronto, Ontario M5K 1 G8
Vern W. Dane (LSUC# 32591E 1 D)Tel: 416-941-8842Fax: 416-941-8Lawyers for The Fuller Landau Group Inc.,in its capacity as court appointed receiverof the property of the Respondent
TO: Service List
HARBOUREDGE MORTGAGE INVESTMENT CORPORATION
Applicant
- and - 2177427 ONTARIO LIMITED
Respondent
Court File No. CV-17-11726-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
Proceedings commenced at Toronto
NOTICE OF MOTION
FOGLER, RUBINOFF LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD CentreToronto, Ontario M5K 1 G8
Vern W. Dane (LSUC# 32591 E)Tel: 416-941-8842Fax: 416-941-8852
Lawyers for The Fuller Landau GroupInc., in its capacity as court appointedreceiver of the property of theRespondent
Court File No. CV-17-11726-OOCL
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
BETWEEN:
HARBOUREDGE MORTGAGE INVESTMENT CORPORATION
-and-
2177427 ONTARIO LIMITED
Applicant
Respondent
THIRD REPORT OF THE FULLER LANDAU GROUP INC. IN ITSCAPACITY AS COURT APPOINTED RECEIVER
JUNE 27, 2017
TABLE OF CONTENTS
I. INTRODUCTION AND BACKGROUND .....................................................................1
II. PURPOSE OF THIS REPORT ........................................................................................3
III. NOTICE TO READER .....................................................................................................3
IV. WILDWOOD ACTION ....................................................................................................4
V. SUMMARY AND RECOMMENDATIONS ...................................................................5
APPENDICES
A Appointment Order
B Wildwood Action and Counsels' position regarding Security Funds
C Settlement Agreement
I. INTRODUCTION AND BACKGROUND
1. 2177427 Ontario Limited ("217" or the "Debtor") is an Ontario company incorporated on
June 25, 2008. 217 owns and operates a 5 storey Holiday Inn Express hotel located on
approximately 1 acre of land at 500 Brisebois Crescent, Ottawa, Ontario (the "Hotel
Property"). The Hotel Property has approximately 100 rooms, including 51 suites, an
indoor pool, fitness centre, meeting rooms, and a parking lot with approximately 100
spaces.
2. By an order of the Ontario Superior Court of Justice (the "Court") dated Apri17, 2017, The
Fuller Landau Group Inc. was appointed receiver (the "Receiver") of the assets, undertaking
and property of 217. Attached as Appendix "A" to this Third Report (as defined below) is
a true copy of the said Order appointing the Receiver.
3. The First Report of the Receiver dated May 10, 2017 (the "First Report") provided the Court
with information on the:
(a) activities of the Receiver since the Receivership Date;
(b) details of the Hotel Property;
(c) the Receiver's plans to offer the Hotel Property for sale, including:
(i) the terms of the stalking horse asset purchase agreement (the "Stalking
Horse APA") entered into by the Receiver with the Purchaser (as defined
in the Stalking Horse APA) for the sale of the Hotel Property including the
Break Fee (as defined in the Stalking Horse APA); and
(ii) the details of the proposed marketing process and proposed bidding
procedures;
(d) the funds paid to CRA from Z 1 T s bank account prior to CRA cancelling the
Requirement to Pay on April 10, 2017;
(e) [and particularly relevant to this Motion:] the issues regarding priority to the
Security Funds (as defined in the First Report) paid into Court by 217, as part of
the Wildwood Litigation (as defined in the First Report);
(~ the Receiver's statement of receipts and disbursements to May 9, 2017; and
(g) the fees and disbursements of the Receiver and its independent legal counsel, Fogler
Rubinoff LLP ("Fogler"), billed to date.
4. On May 17, 2017, the Court issued an order (the "May 17th Order"):
(a) approving the First Report and the conduct and activities of the Receiver described
therein;
(b) approving the Stalking Horse APA, and the Break Fee;
(c) approving the Sale Process and the Bidding Procedures;
(d) [and particularly relevant to this Motion:] setting a return date of July 7, 2017
regarding the determination of priority to the Security Funds paid into Court by 217
as part of the Wildwood Litigation;
(e) sealing the Confidential Appendices to the First Report until the completion of a
sale of the Hotel Property, or until further Order of this Court;
(~ approving the Receiver's statement of receipts and disbursements to May 9, 2017;
and
(g) approving the fees and disbursements of both the Receiver and Fogler as set out
therein.
5. The Second Report of the Receiver dated June 15, 2017 (the "Second Report"), provided the
Court with information on:
(a) the Receiver's activities since the First Report;
(b) the results of the Sale Process;
(c) the terms and conditions of the Accepted APA (as defined in the Second Report),
which had been accepted by the Receiver for the sale of the Hotel Property (the
"Sale Transaction"), which was subject to approval by the Court;
(d) estimated potential priority claims against 217;
(e) the review completed by Fogler regarding the validity and priority of the
HarbourEdge mortgages;
(fl the Receiver's statement of receipts and disbursements to June 13, 2017; and
(g) the fees and disbursements of the Receiver and Fogler.
6. On June 23, 2017, the Court issued an order:
(a) approving the Second Report and the conduct and activities of the Receiver
described therein;
2
(b) approving the Sale Transaction in accordance with the terms and conditions set out
in the Accepted APA;
(c) on a successful closing of the Sale Transaction, vesting in the Purchaser (as defined
in the Accepted APA) all of the Debtor's right, title and interest in the Purchased
Assets (as defined in the Accepted APA), free and clear of all liens, claims and
encumbrances except as provided for in the Accepted APA or the said court order;
(d) sealing the Confidential Appendices to the Second Report, in order to preserve the
integrity of the Sale Process, until the completion of the Sale Transaction, or until
further Order of the Court;
(e) authorizing the payout of the First Mortgage and Second Mortgage indebtedness
following completion of the Sale Transaction; and
(~ approving the fees and disbursements of the Receiver and Fogler as set out therein.
II. PURPOSE OF THIS REPORT
7. The purpose of this third report of the Receiver (the "Third Report") is to:
(a) provide the Court with information on the results of the Receiver's efforts to settle
the priority issues regarding the Security Funds (as defined below) paid into Court
by 217, as part of the Wildwood Litigation (as defined below); and
(b) recommend to the Court that it issue an order approving the Settlement (as defined
below) entered into by the Receiver, Wildwood (as defined below), Bhupinder
Sandhu, and the Debtor to settle the priority issues and directing the Court or
Accountant of the Superior Court of Justice in the Wildwood Action to release the
Security Funds to the Receiver to be paid pursuant to the Settlement.
8. For reference purposes, any capitalized terms not otherwise defined in the Third Report shall
have the meanings ascribed to them in the First Report and/or the Second Report.
9. All amounts referred to in the Report are in Canadian dollars unless otherwise noted.
III. NOTICE TO READER
10. This report is prepared solely for the use of the Court, for the purpose of assisting the Court in
making a determination whether to approve the relief being sought. It is based on the
Receiver's analysis of information provided to it by the management and the officers and
3
director of the Debtor, which includes unaudited financial statements and internal financial
reporting. The Receiver's procedures did not constitute an audit or review engagement of the
Debtor's financial reporting. The Receiver has relied upon the financial statements and
financial and other records of the Debtor in reaching the conclusions set out in this report.
IV. WILDWOOD ACTION
11. As reported in the Receiver's First Report, 217 (along with Bhupinder Sandhu, also known as
Bobby Sandhu, a shareholder of 217) is a defendant in an action before the Ontario Superior
Court of Justice at Toronto dated May 16, 2014 that is Court File No. CV-14-504414 (the
"Wildwood Litigation" or "Wildwood Action") brought by Wildwood Capital Inc.
("Wildwood") as plaintiff. Wildwood's claim relates to an alleged unpaid mortgage brokerage
fee payable pursuant to the terms of a mortgage loan application with 217 dated February 4,
2014. Wildwood claims they are owed a brokerage fee of approximately $233,500 on a
mortgage commitment arranged by Wildwood in favour of 217, notwithstanding that the
mortgage did not close and the mortgage funds were never advanced to 217.
12. Wildwood's pleading sought a certificate of pending litigation (the "CPL") and on November
6, 2015, the Court in the Wildwood Litigation ordered that 217 pay $234,559.78 into Court as
security funds (the "Security Funds") in exchange for the CPL to be lifted. The Security
Funds were funded by HarbourEdge and paid into Court by 217's legal counsel during
December 2015. The Receiver is of the view that the Security Funds belong to the estate of
217 for the benefit of the creditors according to priority. Wildwood disputes that
position. Attached as Appendix "B" to this Third Report are true copies of the Wildwood
Action pleadings and emails between counsel for the Receiver and Wildwood setting out their
respective positions regarding the status of the Security Funds.
13. The May 17th Order set a date of July 7, 2017 for a hearing of a motion regarding the priority
to the Security Funds. Since the May 17th Order, the Receiver's counsel and Wildwood's
counsel have held discussions regarding the terms of a settlement of this matter.
14. Given the professional costs necessary to litigate the Wildwood Action and the uncertain
outcome of litigating whether the Security Funds, in the circumstances, are part of the estate
of 217 or trust funds for the potential benefit of Wildwood in the Wildwood Action, the
Receiver agreed to settle the Wildwood Action in accordance with Minutes of Settlement dated
June 23, 2017 (the "Settlement"). The Settlement is subject to court approval in these
4
receivership proceedings. Attached as Appendix "C" to this Third Report is a ~nze copy of
the Settlement.
15. Some of the key terms of the Settlement include the following: (i) the Security Funds, upon
receipt by the Receiver, sha11 be divided or paid equally between the Receiver aid Wildwood;
(ii}the Wildwoad Acfion shall be dismissed without costs; and (iii) the parties to the Wildwood
Action and the Receiver sha11 sign a mutual release.
I6. Baldwin Law acted for the defendants in the Wildwood Action and was familiar with the issues
in the Vi~ildwood Action. To minimize costs, the Receiver retained Baldwin Lativ, in a limited
capacity, to attempt to settle the Wldwo~d Action.
V. SUMIVI~RY A1VD RECOn~fMENDATIONS
17. The Receiver is recommending approval of the Settlement for the follovaing reasons:
(a) to reduce the professional costs of litigating the Wildwood Action;
(b} to reduce the professional costs of litigating whether the Security Funds belong to
the estate of 217 or are trust funds for the benefit of the successful paz-ty in the
Wildwood Action including, potentially, Wildwood; and
(c) to provide certainty, in light of the uncertain legal status of the Security Funds,
ensuring that half of the Security Funds will be paid into the estate of 217, that the
Wildwood Acfiion wi11 be dismissed without costs and that the parties are mutually
releasing each other from liability with respect to the ~ildwoad Action.
18. The Receiver respectfully recommends that the Court grant an Order approving the Settlement
and directing the Court or Accountant of the Superior Court of Justice in the Wildwood Action
to release the Security Funds to the Receiver to be paid pursuant to the Settlement.
This Report is respectfully submitted to this Court as of this 27th day of June, 20l 7.
THE FULLER LANDAU GROUP INC.,solely in its capacity as Court-appointed Receiver of2177427 Ontario Limitedand not in its personal or corporate capacityPer:
Ken. Pearl, MBA, CPA, CA•CI ~,, LITSenior Vice President
Court File No. CV-17-11726-OOCL
ONTARIO
SUPERIOR COURT OF JUSTICE
(COii~I~12CIAI~ LIST)
THE HONOURABLE ) FRIDAY, THE 7~' DAY
NSTICE MYERS ~ OF APRIL, 2017y ----
.__..
-' _H~IRBOUREDGE MORTGAGE INVESTMENT CORPORATION
-- ==--- - Applicant
-and-
2177427 ONTARIO LIMITED
Respondent
ORDER
(appointing Receiver)
THIS APPLICATION made by the Applicant for an Order pursuant to section 243(1) of
the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the "BIA") and section 101
of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended {the "CJA") appointing The Fuller
Landau Group Inc. as receiver (in such capacities, the "Receiver") without security, of all of the
assets, undertakings and properties of 2177427 Ontario Limited {the "Debtor") acquired for, or
used in relation to a business carried on by the Debtor, was heard this day at 330 University
Avenue, Toronto, Ontario.
177I742v3
~ !
/' / / /
V~ ~f~ ~ /
ON READING the affidavit of Tim Dwyer sworn March 20, 201 ~ d the E~ibits ✓~
thereto and on hearing the submissions of counsel for the Applicant, no one else appearing-
although duly served as appears from the affidavit of service of Silvana Pocino sworn March 22,
2017, and on reading the consent of The Fuller Landau Group Inc. to act as the Receiver,
SERVICE
1. THIS COURT ORDERS that the time for service of the Notice of Application and the
Application is hereby abridged and validated so that this Application is properly returnable today_
and hereby dispenses with further service thereof.
APPOINTMENT
2. THIS COURT ORDERS that pursuant to section 243(1) of the BIA and section 101 of
the CJA, The Fuller Landau Group Inc. is hereby appointed Receiver, without security, of all of
the assets, undertakings and properties of the Debtor acquired for, or used in relation to a
business carried on by the Debtor, including all proceeds thereof (the "Property").
RECEIVER'S POWERS
3. THIS COURT ORDERS that the Receiver is hereby empowered and authorized, but not
obligated, to act at once in respect of the Property and, without in any way limiting the generality
of the foregoing, the Receiver is hereby expressly empowered and authorized to do any of the
following where the Receiver considers it necessary or desirable:
(a) to take possession of and exercise control over the Property and any and
all proceeds, receipts and disbursements axising out of or from the
Property;
{b) to receive, preserve, and protect of the Property, or any part or parts
thereof, including, but not limited to, the changing of locks and security
codes, the relocating of Property to safeguard it, the engaging of
independent security personnel, the taking of physical inventories and the
placement of such insurance coverage as maybe necessary or desirable;
1771742v3
-3-
(c) to manage, operate, and carry on the business of the Debtor, including the
powers to enter. into any agreements, incur any obligations in the ordinary
course of business, cease to carry on all or any part of the business, or
cease to perform any contracts of the Debtor;
(d) to engage consultants, appraisers, agents, experts, auditors, accountants,
managers, counsel and such other persons from time to time and on
whatever basis, including on a temporary basis,, to assist with the exercise
of the Receiver's powers and duties, including without limitation those
conferred by this Order;
(e) to purchase or lease such machinery, equipment, inventories, supplies,
premises or othex assets to continue the business of the Debtor or any part
or parts thereof;
(~ to receive and collect all monies and accounts now owed or hereafter
owing to the Debtor and to exercise all remedies of the Debtor in
collecting such monies, including, without limitation, to enforce any
security held by the Debtor;
(g) to settle, extend or compromise any indebtedness owing to the Debtor;
{h) to execute, assign, issue and endorse documents of whatever nature in
respect of any of the Property, whether in the Receiver's name or in the
name and on behalf of the Debtor, for any purpose pursuant to this Order;
(i} to undertake environmental or workers' health and safety assessments of
the Properly and operations of the Debtor;
(j) to initiate, prosecute and continue the prosecution of any and all
proceedings and to defend all proceedings now pending or hereafter
instituted with respect to the Debtor, the Property or the Receiver, and to
settle or compromise any such proceedings. The authority hereby
1771742v3
conveyed shall extend to such appeals or applications for judicial review
in respect of an;~ order or judgment pronounced in any such proceeding;
(k) to market any or all of the Property, including advertising and soliciting
offers in respect of the Property or any part or parts thereof and
negotiating such terms and conditions of sale as the Receiver in its
discretion may deem appropriate;
(1} to sell, convey, transfer, lease or assign the Properly or any part or parts
thereof out of the ordinary course of business,
(i) without the approval of this Court in respect of any transaction not
exceeding $100,000.00, provided that the aggregate. consideration
for all such transactions does not exceed $500,000.00; and
(ii) with the approval of this Court in respect of any transaction in
which the purchase price or the aggregate purchase price exceeds
the applicable amount set out in the preceding clause;
and in each such case notice Ztnder subsection 63(4) of the Ontario
Personal Property Security Act, [or section 31 of the Ontario Mortgages
Act, as the case may be,] shall not be required, and in each case the
Ontario Bulk Sales Act shall not apply.
(m} to apply for any vesting order or other orders necessary to convey the
Property or any part or parts thereof to a purchaser or purchasers thereof,
free and clear of any liens or encumbrances affecting such Property;
(n) to report to, meet with and discuss with such affected Persons (as defined
below) as the Receiver deems appropriate on all matters. relating to the
Property and the receivership, and to share information, subject to such
terms as to confidentiality as the Receiver deems advisable;
(o) to register a copy of this Order and any other Orders in respect of the
Property against title to any of the Property;
i 1771742v3
-5-
(p) to apply for any permits, licences, approvals or permissions as may be
required by any governmental authority and any renewals thereof for and
on behalf of and, if thought desirable by the Receiver, in the name of the
Debtor;
(c~ to enter into agreements with any trustee in banlci-uptcy appointed in
respect of the Debtor, including, without limiting the generality of the
foregoing, the ability to enter into occupation agreements for any property
owned or leased by the Debtor;
(r} to exercise any shareholder, partnership, joint venture or other rights
which the Debtor may have; and
(s) to take any steps reasonably incidental to the exercise of these powers or
the performance of any statutory obligations.
and in each case where the Receiver takes any such actions or steps, it shall be exclusively
authorized and empowered to do so, to the exclusion of all other Persons (as defined below),
including the Debtor,, and without interference from any other Person.
DUTY TO PROVIDE ACCESS AND CO-OPERATION TO THE RECEIVER
4. THIS COURT ORDERS that (i) the Debtor, (ii) all of its current and former directors,
officers, employees, agents, accountants, Legal counsel and shareholders, and all other persons
acting on its instructions or behalf, and (iu) all other individuals, firms, corporations,
governmental bodies or agencies, or other entities having notice of this Order (all of the
foregoing, collectively, being "Persons" and each being a "Person") shall forthwith advise the
Receiver of the existence of any Property in such Person's possession or control, shall grant
immediate and continued access to the Property to the Receiver, and shall deliver all such
Property to the Receiver upon the Receiver's request.
5. THIS COURT ORDERS that all Persons shall forthwith advise the Receiver of the
existence of any books, documents, securities, contracts, orders, corporate and accoun#ing
records, and any other papers, records and information of any kind related to the business or
1771742v3
affairs of the Debtor, and any computer programs, computer tapes, computer disks, or other data
storage media containing any such information (the foregoing, collectively, the "Records") in
that Person's possession or control, and shall provide to the Receiver or permit the Receiver to
make, retain and take away copies thereof and grant to the Receiver unfettered access to and use
of accounting, computer, software and physical facilities relating thereto, provided however that
nothing in #his paragraph 5 or in paragraph 6 of this Order shall require the delivery of Records,
or the granting of access to Records, which may not be disclosed or provided to the Receiver due
to the privilege attaching to solicitor-client commuiv.cation or due to statutory provisions
prohibiting such disclosure.
6. THIS COURT ORDERS that if any Records are stored or otherwise contained on a
computer or other electronic system of information storage, whether by independent service
provider or otherwise, all Persons in possession or control of such Records shall forthwith give
unfettered access to the Receiver for the purpose of allowing the Receiver to recover and fully
copy all of the information contained therein whether by way of printing the information onto
paper or making copies of computer disks or such other manner of retrieving and copying the
information as the Receiver in its discretion deems expedient, and shall not alter, erase or destroy
any Records without the prior written consent of the Receiver. Further, for the purposes of this
paragraph, all Persons shall provide the Receiver with all such assistance in gaining immediate
access to the information in the Records as the Receiver may in its discretion require including
providing the Receiver with instructions on the use of any computer or other system and
providing the Receiver with any and all access codes, account names and account numbers that
may be required to gain access to the information.
7. THIS COURT ORDERS that the Receiver shall provide each of the relevant landlords
with notice of the Receiver's intention to remove any fixi~zres from any leased premises at least
seven (7) days prior to the date of the intended removal. The relevant landlord shall be entitled
to have a representative present in the leased premises to observe such removal and, if the
landlord disputes the Receiver's entitlement to remove any such fixture under the provisions of
the lease, such fixture shall remain on the premises and shall be dealt with as agreed between any
applicable secured creditors, such landloxd and the Receiver, or by further Order of this Court
17'71742v3
-~_.
upon application by the Receiver on at least two (2) days' notice to such landlord and any such
secured creditors.
NO PROCEEDINGS AGAINST THE RECEIVER
8. THIS COURT ORDERS that n~ proceeding or enforcement process in any court or
tribunal (each, a "Proceeding"), shall be commenced or continued against the Receiver except
with the written consent of the Receiver or with leave of this Court.
NO PROCEEDINGS AGAINST THE DEBTOR OR THE PROPERTY
9. THIS COURT ORDERS that no Proceeding against or in respect of the Debtor or the
Property shall be commenced or continued except with the written consent of the Receiver or
with leave of this Court and any and all Proceedings currently under way against or in respect of
the Debtor or the Property are hereby stayed and suspended pending further Order of this Court.
NO EXERCISE OF RIGHTS OR REMEDIES
1Q. THIS COURT ORDERS that all rights and remedies against the Debtor, the Receiver, or
affecting the Property, are hereby stayed and suspended except with the written consent of the
Receiver or leave of this Court, provided however that this stay and suspension does not apply in
respect of any "eligible financial contract" as defined in the BIA, and furthex provided that
nothing in this paragraph shall (i) empower the Receiver or the Debtor to carry on any business
which the Debtor is not lawfully entitled to carry on, (ii) exempt the Receiver or the Debtor from
compliance with statutory or regulatory provisions relating to health, safety or the environment,
(iii) prevent the filing_ of any registration to preserve or perfect a security interest, or (iv) prevent .
the xegistration of a claim for lien.
NO INTERFERENCE WITH THE RECEIVER
11. THIS COURT ORDERS that no Person shall discontinue, fail to honour, alter, interfere
with; repudiate, terminate or cease to perform any right, renewal right, contract, agreement,
licence or permit in favour of or held by the Debtor, without written consent of the Receiver or
leave of this Court.
1771742v3
CONTINUATION OF SERVICES
12. THIS COURT ORDERS that all Persons hamming oral or written agreements with the
Debtor or statutory or regulatory mandates for the supply of goads and/or services, including
without limitation, all computer software, communication and other data services, centralized
'ua~king services, payroll services, insurance, transportation services, utility or other services to
the Debtor are hereby restrained until further Order of this Court from discontinuing, altering,
interfering with or terminating the supply of such goods or services as may be required by the
Receiver, and that the Receiver shall be entitled to the continued use of the Debtor's current
telephone numbers, facsimile numbers, Internet addresses and domain names, provided in each
case that the normal prices or charges for all such goods or services received after the date of this
Order are paid by the Receiver in accordance with normal payment practices of the Debtor or
such other practices as may be agreed upon by the supplier or service provider and the Receiver,
or as maybe ordered by this Court.
RECEIVER TO HOLD FUNDS
13. THIS COURT ORDERS that all funds, monies, cheques, instzuments, and other forms of
payments received or collected by the Receiver from and after the making of this Order from any
source whatsoever, including without limitation the sale of all or any of the Property and the
collection of any accounts receivable in whole or in part, whether in existence on the date of this
Order or hereafter coming into existence, shall be deposited into one or more new accounts to be
opened by the Receiver (the "Post Receivership Accounts") and the monies standing to the credit
of such Post Receivership Accounts from time to time, net of any disbursements provided for
herein, shall be held by the Receiver to be paid in accordance with the terms of this Order or any
further Order of this Court.
EMPLOYEES
14. THIS COURT ORDERS that all employees of the Debtor shall remain the employees of
the Debtor until such time as the Receiver, on the Debtor's behalf, may terminate the
employment of such employees. The Receiver shall not be liable for any employee-related
liabilities, including any successor employer liabilities as provided for in section 14.06(1.2) of
the BIA, other than such amounts as the Receiver may specifically agree in writing to pay, or in
1771742v3
respect of its obligations under sections 81.4(5) or 81.6(3) of the BIA or under the Wage Earner
Protection Program Act.
PIPEDA
15. THIS COURT ORDERS that, pursuant to clause 7(3}(c) of the Canada Personal
Information Protection and Electronic Documents Act, the Receiver shall disclose personal
information of identifiable individuals to prospective purchasers or bidders for the Property and
to their advisors, but only to the extent desirable or required to negotiate and, attempt to complete
one or more sales of the Properly (each, a "Sale"). Each prospective purchaser or biddex to
whom such personal information is disclosed shall maintain and protect the privacy of such
information and limit the use of such information to its evaluation of the Sale, and if it does not
complete a Sale, shall return all such information to the Receiver, or in the alternative destroy all
such information. The purchaser of any Property shall be entitled to continue to use the personal
information provided to it, and related to the Property purchased, in a manner which is in all
material respects identical to the prior use of such information by the Debtor, and shall return all
other personal information to the Receiver, or ensure that all other personal information is
destroyed.
LIMITATION ON ENVIRONMENTAL LIABILITIES
16. THIS COURT ORDERS that nothing herein contained shall require the Receiver to
occupy or to take control, care, charge, possession or management (separately and/or
collectively, "Possession") of any of the Property that might be environmentally contaminated,
might be a pollutant or a contaminant, or might cause or contribute to a spill, discharge, release
or deposit of a substance contrary to any federal, provincial or other law respecting the
protection, conservation, enhancement, remediation or rehabilitation of the environment or
relating to the disposal of waste or other contamination including, without limitation, the
Canadian Environmental Protection Act, the Ontario Environmental Protection Act, the Ontario
Water Resources Act, or the Ontario Occupational Health and Safety Act and regulations
thereunder (the "Environmental Legislation"), provided however that nothing herein shall
exempt the Receiver from any duty to report or iriake disclosure imposed by applicable
Environmental Legislation. The Receiver shall not, as a result of this Order or anything done in
I'171742v3
-10-
pursuance of the Receiver's duties and powers under this Order, be deemed to be in Possession of
any of the Property within the meaning of any Environmental Legislation, unless it is actually in
possession.
LIMITATION ON THE RECEIVER'S LIABILITY
17. THIS COURT ORDERS that the Receiver shall incur no liability or obligation as a result
of its appointment or the carrying out the provisions of this Order, same and except fox any gross
negligence or wilful misconduct on its part, or in respect of its obligations under sections 81.4(5)
or 81.b(3) of the BIA or under the Wage Earner Protection Program Act. Nothing in this Order
shall derogate fxom the protections afforded the Receiver by section 14.06 of the BIA or by any
other applicable legislation.
RECEIVER'S ACCOUNTS
18. THIS COI7RT ORDERS that the Receiver and counsel to the Receiver shall be paid their
reasonable fees and disbursements, in each case at their standard rates and charges, and that the
Receiver and counsel to the Receiver shall be entitled to and are hereby granted a charge (the
"Receiver's Charge") on the Property, as security for such fees and disbursements, both before
and after the making of this Order in respect of these proceedings, and that the Receiver's Charge
shall form a first charge, on the Property in priority to all security interests, trusts, liens, charges
and encumbrances, statutory or otherwise, in favour of any Person, but subject to sections
14.06(7), 81.4(4), and 81.6(2) of the BIA.
19. THIS COURT ORDERS that the Receiver and its legal counsel shall pass its accounts
from time to time, and for this purpose the accounts of the Receiver and its legal counsel are
hereby referred to a judge of the Commercial List of the Ontario Superior Court of Justice.
2Q. THIS COURT ORDERS that prior to the passing of its accounts, the Receiver shall be at
liberty from time to time to apply reasonable amounts, out of the monies in its hands, against its
fees and disbursements, including legal fees and disbursements, incurred at the normal rates and
charges of the Receiver or its counsel, and such amounts shall constitute advances against its
remuneration and disbursements when and as approved by this Court.
FUNDING OF THE RECEIVERSHIP
1~~1~4ays
-11-
21. THIS COURT ORDERS that the Receiver be at liberty and it is hereby empowered to
borrow by way of a revolving credit or otherwise, such monies from time to time as it may
consider necessary or desirable, provided that the outstanding principal amount does not exceed
$200,000.00 (or such greater amount as this Court may by further Order authorize) at any time,
at such rate or rates of interest as it deems advisable for such period or periods of time as it may
arrange, for the purpose of funding the exercise of the powers and duties conferred upon the
Receiver by this Order, including interim expenditures. The whole of the Property shall be and
is hereby charged by way of a fixed and specific charge (the "Receiver's Borrowings Charge") as
security far the payment of the monies borrowed, together with interest and charges thereon, in
priority to all security interests, trusts, liens, charges and encumbrances, statutory or otherwise,
in favour of any Person, but subordinate in priority to the Receiver's Charge and the chaxges as
set out in sections 14.06{7), 81.4(4), and 81.6(2) of the BIA.
22. THIS COURT ORDERS that neither the Receiver's Borrowings Charge nor any other
security granted by the Receiver in connection with its borrowings under this Order sha11 be
enforced without leave of this Court.
23. THIS COURT ORDERS that the Receiver is at liberty and authorized to issue certificates
substantially in the form annexed as Schedule "A" hereto (the "Receiver's Certificates") for any
amount borrowed by it pursuant to this Order.
24. THIS COURT ORDERS that the monies from time to time borrowed by the Receiver
pursuant to this Order or any further order of this Court and any and all Receiver's Certificates
evidencing the same or any part thereof shall rank on a pari passu basis, unless otherwise agreed
to by the holders of any prior issued Receiver's Certificates.
SERVICE AND NOTICE
25. THIS COURT ORDERS that the E-Service Protocol of the Commercial List (the
"Protocol") is approved and adopted by reference herein and, in this proceeding, the service of
documents made in accordance with the Protocol (which can be found on the Commercial List
website at http://www.ontariocourts.ca/scj/practice/practice-directions/toronto/e-service-
protocol/} shall be valid and effective service. Subject to Rule 17.05 this Order shall constitute
i
f 1771742v3
-12-
an order for substituted service pursuant to Rule 16.04 of the Rules of Civil Procedure. Subject to
Rule 3.01(d) of the Rules of Civil Procedure and paragraph 21 of the Protocol, service of
documents in accordance with the Protocol wi11 be effective on transmission. This Court further
orders that a Case Website shall be established in accordance with the Protocol with the
following URL ̀<@>'
26. THIS COURT ORDERS that if the service or distribution of documents in accordance
with the Protocol is not practicable, the Receiver is at liberty to serve or distribute this Order, any
other materials and orders in these proceedings, any notices or other correspondence, by
forwarding true copies thereof by prepaid ordinaxy mail, courier, personal delivery or facsimile
transmission to the Debtor's creditors or other interested parties at their respective addresses as
last shown on the records of the Debtor and that any such service or distribution by courier,
personal delivery or facsimile transmission shall be deemed to be received on the next business
day following the date of forwarding thereof, or if sent by ordinary mail, on the third business
day after mailing.
GENES ar.
27. THIS COURT ORDERS that the Receiver may from time to time apply to this Court for
advice and directions in the discharge of its powers and duties hereunder.
28. THIS COURT ORDERS that nothing in this Order shall prevent the Receiver from acting
as a trustee in bai~lcruptcy of the Debtor.
29. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,
regulatory or administrative body having jurisdiction in Canada ar in the United States to give
effect to this Order and to assist the Receiver and its agents in carrying out the terms of this
Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully
requested to make such orders and to provide such assistance to the Receiver, as an officer of this
Court, as may be necessary or desirable to give effect to.this Order or to assist the Receiver and
its agents in carrying out the terms of this Order.
30. THIS COURT ORDERS that the Receiver be at liberty and is hereby authorized and
empowered to apply to any court, tribunal, regulatory or administrative body, wherever located,
1771742v3
-13-
for the recognition of this Order and for assistance in carrying out the terms of this Order, and
that the Receiver is authorized and empowered to act as a representative in respect of the within
proceedings for the purpose of having these proceedings recognized in a jurisdiction outside
Canada.
31. THIS COURT ORDERS that the Applicant shall have its costs of this Application, up to
and including entry and service of this Order, provided for by the terms of the Applicant's
security or, if not so provided by the Applicant's security, then on a substantial indemnity basis
to be paid by the Receiver from the Debtor's estate with such priority and at such tune as this
Court may determine.
32. THIS COURT ORDERS that any interested party may apply to this Court to vary or
amend this Order on not less than seven (7) days' notice to the Receiver and to any other party
likely to be affected by the order sought or upon such other notice, if any, as this Court may
order.
~3,}~'~~~t~ AT ,' INSCRIT ATORQ~
ova 1 aoo~c r~o~~~.~ ~ ~?ANS LE REGISTRE N~:
APR 0 7 ti~~~
1771742v3
SCHEDULE"A"
RECEIVER CERTIFICATE
CERTIFICATE NO.
AMOUNT $
1. THIS IS TO CERTIFY that The Fuller Landau Group Inc., the receiver (the "Receiver")
of the assets, undertakings and properties of 2177427 Ontario Limited (the "Debtor") acquired
for, or used in relation to a business carried on by the Debtor, including all proceeds thereof
(collectively, the "Property") appointed by Order of the Ontario Superior Court of Justice
(Camrnercial List) .(the "Court") dated the 7~' day of April, 2017 (the "Order") made in an action
having Court file number -CL- ,has received as such Receiver from the holder of
this certificate (the '"Lender") the principal sum of $ ,being part of the total principal sum
of $ which the Receiver is authorized to borrow under and pursuant to the Order.
2. The principal sum evidenced by this certificate is payable on demand by the Lender with
interest thereon calculated and compounded [daily] [monthly not in advance on the . day of
each month] after the date hereof at a notional rate per anntun equal to the rate of per cent
above the prime commercial lending rate of Bank of from time to time.
3. Such principal sum with interest thereon is, by the terms of the Order, together with the
principal sums and interest thereon of all other certificates issued by the Receiver pursuant to the
Order or to any further order of the Court, a charge upon the whole of the Property, in priority to
the security interests of any other person, but subject to the priority of the charges set out in the
Order and in the Bankruptcy and Insolvency Act, and the right of the Receiver to indemnify itself
out of such Property in respect of its remuneration and expenses.
4. All sums payable in respect of principal and interest under this certificate are payable at
the main office of the Lender at Toronto, Ontario.
5. Until alI liability in respect of this certificate has been terminated, no certificates creating
charges ranking or purporting to rank in priority to -this certificate shall be issued by the Receiver
to any person other than the holder of this certificate without the prior written consent of the
holder of this certificate.
Receivership Order-(Mazch, 2017).docx
-2-
6. The charge securing this certificate shall operate so as to permit the Receiver to deal with
the Property as authorized by the Order and as authorized by any further or other order of the
Court.
7. The Receiver does not undertake, and it is not under any personal liability, to pay any
sum in respect of which it may issue certificates under the terms of the Order.
DATED the day of MONTH, 20YR.
THE FULLER LAI~TDAU GROUP INC., solelyin its capacity as Receiver of the Property, andnot in its personal capacity
PART OF BLOCK 6, ALL OF BLOCKS 8 AND 9 AND PART OF COMMERCIALDRIVE (AS CLOSED BY BY-LAW N0. 90-92, II~ISTRUMENT NO. LT89196) PLAN5dI`~-165, BEWG PART 4 ON PLAN 4R-21938, O'1"I'AZ~i~A. ~... ~
PART OF LO'I` 37 CONCESSION 1 (OLD SURVEY) CUMpERLAND, BEING PART 3ON -PLAN 4R 21938, OTTAWA. S/T AN EASEMENT III GROSS O~~R PART 1PLAN 4R231~8 AS IN OC915909.
~.ZE: Har~m~arEdg~ TVlartgage ~nvesfix~rxen~ C~r~orativ~ (t~~"Lezxc€er"} mo~t$age froYn 2i774~7 C~N'~A1ZI~,1 LT~vr~'r~~ (thy;t~3arr~wer") ~n the security of P~leT ~4~oS-~2f~A (I.T~ - PtMock 6, all Blacirs 8 & g and I't a~ Commercial Drive, Pi~~11'Y-3.65 bCl37tg ~t [}.~ FI~ri c~..R 21[~~$j flttaw~; andI'~~I Zr}.~~8-az73 CLT) - Pt ~t 37, C~nc. x {Oid Su~veY~Cwmbe~iand being Pt 3, k'I q.R 2.}38, OttawaDown as zg~ Ce~ztr~urrx Parkway, Url~an~, O1~TQua Fzle I~Taa ~3-~.Yx9-B
We enclose herewith a copy of our certified cheque and deposit receiptskowing ive have depositeti the sum of $2~4s569.7$ ~~~ Y4~ ~s~account. These funds are delivered to yaa in escro~~ o~i the strictunderstanding that tt~.ey will be used for no other purpose than ~o paythem into Court to the credit of the action commenced by WildwoodCapital Inc., Court ale Na: CV-~4-5a44~4- (Toronto) once you havesatisfiedyourselfthatyou lave sufficientundertakings from#i~e Plainfi~f~ssolicitor ~a consent to the zrnumediate removal o£t~e Certificate of PendingLitigation registered as Na.00~.58x19~ and on the understanding thatyouwill talze iix~medz`ate s~e~s to hav~the CPI. registration x~moved from title.
If these eondi~ions cannotbe sat~s~ed please make arrangements to returnthe finds to our tz~ust account.
Yours ve uIyBAi1L ~~T A.ITIS ~T~.~ii~ LLBPer: ~~ ~
Ministry of the Attorney General Ministere du Procureur general ~~*—
Accounfant of fhe Superior Court of Compfable de !a Cour superieure de justice ~ ~'"Justice
5g5, rue Bay, Bureau 808 ~ ~~ ■ ■595 Bay Street, Suite 808 Toronto, ON M5G 2N3 1 ~.~ fir/Toronto, ON M5G 2N3 Tel.: (496} 314-8692Te}: (416) 3148892 Telec.: (416} 314-6700Fa~c (416) 314-6700
December 07, 2015
Baldwin Law Professional CorporationAtfn: Jordan A. Sewell54 Victoria AvenueP.O. Sox 1537Belleville, ONK8N 5J2
RE: WILDWOOD CA.PTTAL INC. VS 2177427 ONTARIO LIMITED
OUR FILE NO: 539076
YOUR REP. NO: N/A
Please $nd enclosed our Direction with respect to the payment into court.
This is to certtfytnat ~ `'BALDWIIV`tAbY PROFESSIONAL CORPORATION ``
U Hai U3i~to th.; credit of tf~is m ~~tAr in the Superior C~ ̀rl of Ju~t~~~~
5234.559.78 ~,ursu~in to Orucr. ~~
~~~, ~ t r̀~./r z ~
~..~,~.
k
- - l
., -. -~ :i.... ,. - .. 5 _
..... ...
Ken Peari
From: Dane, Vern W. <[email protected]>Sent: April 25, 2417 2:36 PMTo: '[email protected]'Subject: RE: Receivership of 2177427 Ontario LimitedAttachments: AppIicatio n Reco rd 9 70407.pdf
David,
As per your request, piease find attached a copy of the Application Record of HarbourEdge.
Vern
fogler.$~~_a~ ~~~~~'~~ ~ry
Vern W. DanePartnerFogler, Rubinoff LlPLawyers77 King Street WestSuite 3000, P.O. Box 95TD Centre North TowerToronto, ON MSK 1G8Direct: 416.941.8842Main: 416.864.9700Tol! Free: 1.86&.861.9700Fax: 416.941.8852Email: [email protected]~oglers.com
LL1
J ~.1 ~ ';
Proud to be named one of Ontario's Top 10 Regional Firms by Canadian Lawyer magazine 2015-2016
We acfi for The Fuller landau Group Inc., in its capacity ascourt-appointed receiver {the "Receiver"} over all of the
assets, undertakings and properties (the "Property") of 2277427 Ontario Limited ("217"). The Receiver was appointed
on April 7, 2017 pursuant to the attached Order ofJustice Myers (the "Receivership Order"). Paragraph 3 (a) ofthe
Receivership Order provides that the Receiver is authorized to "take possession of and exercise control over the
Property and any and afl proceeds, receipts and disbursements arising out of or from the Property." Paragraph 4 of the
Receivership Order provides, inter alia, that al! "individuals, firms, corporations, governmental bodies or agencies, or
other entities having notice ofthis Qrder...shall deliver ali such Property to the Receiver upon the Receiver's
request." Paragraphs 8 to 12 of the Receivership Order generally provide the stay of proceedings in relation to the
Receiver, 217 and the Property.
The attached litigation, Wildwaod Capital INC, v. 227 and Sandhu, and in particular, the payment into Court of the sumof $234,559.78 (the "Security Funds") to the credit of the action and for the discharge of the CPL pursuant to the Orderof Master Hawkins dated November 6, 2015, has come to the Receiver's attention.
The leading case in this area is Tercon Contractors Ltd. v. Cassiar Mining Corporation (B.C. Court of Appeal} (1994} and itstands for the proposition that if a debtor before its receivership has paid moneys into court during a.lawsuit, then thereceiver is entitled to such moneys, as property of the debtor unless the creditor has made a valid acceptance beforethe appointment of a receiver. According to the leading bankruptcy text of Sarra, Hou(den and Morawetz (underheading L s. 23, "Money Paid into Court Prior to the Appointment o€a Receiver"}, "if, prior to the appointment of areceiver, money has been paid into court by the debtor company in an action against it, and if, after the appointment ofthe receiver, the plaintiff in the action purports to accept it in satisfaction of its claim, the plaintiff is precluded by thereceivership from accepting the money. On its appointment, the money accrues to the receiver. The appointment of
the receiver is a sufficient ground to permit a defendant to withdraw a payment into court."
217 paid the Security Deposit into Court before its receivership pursuant to the Order of Master Hawkins datedNovember 6, 2015.
The Receiver is therefore entit3ed to the Security funds for the benefit of the Estate of 237 pursuant to the ReceivershipOrder, case law and commentary and intends to ask or request the Court to release the funds by written letter. We
intend to make the request early next week. In the meantime, we would appreciate your consent ornon-opposition, onbehalf of your clients, to us making the written request to the Court for the release of the Security Funds. We would
appreciate to hear from you by this Friday,"April 28, 2017. If you oppose the Receiver writing to the Court for the
release of the Security Funds or the Court refuses to release the Security Funds, after receiving the Receiver's written
request, without another court order, the Receiver will consider whether it is necessary to bring a motion for advice and
direction on this issue. The Receiver will rely on this email if it brings such a motion.
If you have any questions, please do not hesitate to contact me.
Regards,
~0~~~~_ Vern W. DanePartnerFogler, Rubinoff LLPLawyers77 King Street WestSuite 3000, P.O. Box 95TD Centre North TowerToronto, ON M5K 1G8Direct: 416.941.8842Main: 416.864.9700Totl Free: 1.866.861.9700Fax: 418.941.8852Email: [email protected]
~„"".ut~;ui 2i
T~~'~:, , .~.4N7A~i8 ~.~"'e~`t~l. i`R.4E4
Proud to be named one of Ontario's Top 10 Regions! Firms by Canadian Lawyer magazine 2015-2016
This communication may be solicitorlclient privileged and contains confidential information intended only for the persons to whom if is addressed. Any otherdistribution, copying or disclosure is sfrictly prohibited. If you"have received this message in error, please notify us immediately and delete this message from yourmail box and trash without reading or copying it.
Ken Pearl _
Subject: FW: Receivership of 2177427 Ontario Limited re. Wildwood issue
From: David Downs [mailto:ddC~~zle~aLcomlSent: Thursday, April 27, 2017 4:23 PMTo: Dane, Vern W. <vdareCa~fogEers.com>Cc: 'Greg Parker' <~parf<erC~baldwiniaw.ca>Subject: RE: Receivership of 2177427 Ontario Limited
Mr. Dane,
This email is in response to your email of April 25, 2017 below.
have reviewed the Tercon Contractors decision. It concerns a different circumstance, where a defendantpaid into court a sum of money, as proposed settlement open for acceptance under a former British Columbiarule of practice that was replaced by a rule providing for written offers to settle. The former rule and thereplacement rule would appeared to be essentially the same as those in Ontario.
In the present matter, the executed application for mortgage loan provides for a brokerage fee that is earned
by Wiidwood Capital Inc. ("Wildwood") upon acceptance of a commitment, which did occur. It goes ontoprovide for registration of a mortgage or certificate of pending litigation to secure the fee, with agreement
and acknowledgment by the borrower that arranging the mortgage loan gives Wildwood an interest in the
property until such time as the fee is paid. The money paid into court was to substitute for and to obtain a
discharge of the certificate of pending litigation securing an interest in the properly that was subsequent onEy
the first mortgage registered by Harbouredge Mortgage Investment Corporation. (f you are aware of any
decision holding in such or simiEar circumstances that the position of Wildwaod would be Lessened, please
advise. Otherwise, it would appear that the only consequence of the receivership is that the Receiver will
take the place of the debtor in the Wildwood action.
To: 'David Downs' <dd(a~~zlegal.cam> 'Greg Parker' <gparkert~k~aldwinlaw.ca>
Subject: FW: Receivership of 2277427 Ontario Lim9ted
Mr. Downs and Mr. Parker,
Thank you for yaur emails with respect to this issue. l'm currently out of tine office and have not had the opportunity to
discuss the matter with my client. However, upon getting instructions, l expect that my instructions will be to seekadvice and direction from the court regarding the sta#us of the money paid into court in the Wildwaod and 217
Eitigation regarding the brokerage fee.
i briefly glanced at the Mortgage Application. Paragraph 8 refers to the entitlement of judgment in favour of 1Ni{dwood
upon breach of the Agreement and that the brokerage fee earned as liquidated damages and not as a
penalty. Paragraph 10 refers to a breach as a breach of contract or the Agreement. in this context, it wauld seem that
what we have in this case ar litigation or the nature of Wildwood's claim is a breach of contract claim against the
Defendant, 217. That is, this is simply a contingent, unsecured claim. If Wiidwaod wishes to continue its litigation or
contingent claim against 227, currently stayed by the Receivership Order, it will need to seek leave of the court to have
the stay lifted.
In the alternative, even if paragraph 12 arguably elevates Wildwo~d's claim to a secured one, and I'm not sure aboutthat, by either the registration afi a mortgage or GPL against title to the Property, a secured claim does not necessarilyhave priority over other claims, especially if the other claims are prior mortgagees, Crown claims or o#her super-priorityclaims. Mr. E?owns, you in fact acknowledged in an earlier emailthat the CPL was subsequent in priority toHarbaurEdge's morfigage. Even if Wildwoad had registered a mortgage against title to the Property, that mortgagewould have been subsequent to HarbourEdge's mortgage and perhaps other mortgages. 1 understand that Wiidwoodflied or registered a CPL on title of the Property and agreed to the CPl. being lifted on condition that approximately$235,Oa0 be paid into court by 217: Who has priority over the fund's should be deterrriined in the receivership. As youknow, the Receiver is an officer of the court and its main function is to liquidate the estate at maximum value for thebenefit of all stakeholders, including Wildwood, and then make a distribution of the property or proceeds to the
stakeholders based an their legal rights or the priority rules. The release of the funds currently held in court in theWi(dwood litigation to the Receiver would be without prejudice to Wildwood to make a clairrt against those funds at thedistribution stage ar before, in the receivership proceedings.
Regards, Vern
• • "` Vern W. DanePartnerFogler, Rubinoff LLPlawyers77 King Street WesfSuite 3000, P.d. Box 95TD Gentre North TowetToronto, ON M5K 1G8Ditsct: 436.941.8842Main: 418.864.9700Toil Free: 1.866.861,97 0Fax: 416.941.6852Email: vdare~afagfers.comfoaiers.carn
~~~~~ Rnanclmt Qiatemonta persnns( end corporate 9rtd any Otriet~ itOttt that the (ender
corasldens necessary in order to fund thn irans;action. All foes must he paid sn
aCcorckince with the request of tha profeasiona[ o~mp~nies that are appointed by the
or by the Broker.
5. Ths Ierider moat appoint an appraised and all other' professional ge~vlca (n conjunction
... wkth the. Rtortgage trensaciion, It the horrawer has had cn appralsai dons before, tha.. _ . _ ~:.. _ .. ... .. lender does net have to accept that appraisal report.
B. lMle the appifcant acknowledge to pay all legal, disbursfimert~S, GSI', and ~!I k~Cldenials
In wrier to dear the tk~e and asst of discharges of p[e~ent encumbrances on Ute
prapercy, aver and above the tQtai uses mentioned above.
7, VWe ~pp(tcant agrees- lhoE If the U11a to the property Is, in the optntan of the
tdortgagae's Sdkifor, found unsatssfacWry and the appilcant refuses to prDvide goad tttfe
subject to any prior rrwdgages aforasatd, o~ if UWe the appilcant Es unable ar unwRling
..,.....,__............___._.... la cornpieie the transaction or refi.5es to provide andlar execute all documents which
~ ~ ~ ~ : =:., "_ : __. :..:.:.:... .... .. ~~ . the fv7~arteagae's Solioitdr may regufra io compEate the Uansactian, then the undersigned
....._....:...m,....:, ~.:__:...,. ._..`:~ ~:rtil! totthwittt ptsy to you the above mentioned tae as liquidated damages and not as a
per~aby.
B. IMra the app(k~tt IS unwiiling or unable for any reason whats~ave~ thmugh mylour rnm
nagligence or~shere holders, ex~cuiive, dlrecrors to provide any of the items requested
from iha <.v~m~rtitm~nS ecW ~ftat era tnenUoned !n Items 2. 3, 4,5,8,7 & 8 and }E I1We the
.. .. .. ....._..... appt3cant causes t#te commitmeat.to lapse or the (ender to cancel the cammitmer»..:'Y~:~ = .__~_._._ ~. aN~I _̀T-. ̂,... :rnen, the ~rokecege fee Es Bus and payable. We hateby direct eery court of the land of
_-.~^:n~~- r:^•~i:=T. ~ ~. ~;:;• •:.: •:~:-:.... Canada. So give Judgmen! to YJlidvrood CapEta( tnc. far praduciag this cammEtment 76is
~~ --~. •. T~ . , .~ ̂ ~ _ V .~.•.-. • .... brokerage fse w~f ae earned as tfquidated damages and net as a penalty.
.. .. .. ..9. [f the appftrant at' atty priRCipa[ of the apptt~ant (n Uie event of a cotporatlon and [n the
eltant oP an kailvlcfuat tk19 petsori5 lmtnedlata tamlly or close fBmlly atlempts to arrange
the loan from sane source without v~rlUen consent of Wildwagd C~pitel tnc, within a
twelra (f2} month perlvd a' it the eppl2cant ettters Irfto any mv~igage nr lean
artangement w~t~ any person ar cx~rpotat(fln intraduca~i to the appltcam by Wtt~waod
~apltal inc. with(n iwe3ve months of the data hereof, then Witdwk4d CsplWl inc. shall
-.._ `"."...~..__" ... .become en~tled to recehra full Brokerage ~e which the appt[cant herat~y acknowledges
: ~;^` ; ~,~:~~~s%~rr~~'~'~~-a~te~ ~~ .~ ~.. ;,,:: • =•to ba. considered as. Uquldated damages and not as a penally of any nature ar kind. ~ ... . .:h)!~71~`}~I.'lM~.~N''~i~17t.4W~i}%vif~Y~:i~;ryr"~~i~~.: ~ .. .~ ..
r~These Minutes of Settlement, effective as of the~day of June, 2017
JN THE MATTER OF Witdwood Capifat Inc. v. 2177427 Ontario Limifed and &hupinderSandhu also known as Bobby Sandhu
BETWEEN:WILbWOOD CAPITAL INC.(hereinaffier referred to as "Witdwood")
rte
2177427 ONTARIO LIMITED.{hereinafter referred to as "2177427")
- and —
BHUPINDER SANDHUj
also known as BOSBY SANDHU(hereinafter referred fio as "Sandhu")
- and-
THE FULLER LANDAU GROUP INC.,in its capacity as receiver for 23.77427ONTARIO LIMITED and not in its personal
capacity
WFlEREAS Wildwood is the plaintiff and 2177427 and Sandhu are the defendants in the
action in the Ontario Superior Court of 1us#ice at 7oranto that is Court File No. CV-14-504414
(the "ACtiOf1");
AND WHEREAS Wildwood obtained in the Action and registered a Certifica#e of Pending
Litigation, as instrument no. OC1581193, against 2277427's real properties identified as PIN
145Q8-0261 (LT}and PIN 14508-0273 (~T} (the "CPL");
AND WHEREAS, pursuant to the Order of Master Hawkins dated November 6, 2015,2177427 paid to the Accountant of the Superior Court of Justice under account no. 539076 thesum of $234,559.78 as security funds to the credit ofthe Action and the CPL was discharged fromthe above-noted (ands on February 25, 2416 by instrument no. OC1766809;
AND WHEREAS pursuant to the Oi-der of the Honourable Justice Myers dated Aprif 7,2017 (the "Receivership Order") for Court File No. CV-17-11726-OOCL, The Fuller Landau GroupInc. (hereinafter referred to as "Fuller Landau") was appointed as the court-appointed receiver{the "Receiver"} for 2177427 (the "Receivership"};
AND WHEREAS pursuant to the Receivership, Fuller Landau, in its capacity as the receiverof 2177427, has the rights and powers, without limitation, to settle, extend or compromise anyindebtedness of 2177427, to settle ongoing litigation regarding 2177427 and to receive and
collect all monies and accounts owing to 2177427;
AND WHEREAS as of June 8, 2017 the funds in court to the credit of the Action amounted
to the sum of $239,237.12.
AND WHEREAS, subject to court approval in the Receivership, the parties to these
Minutes of Settlement have agreed 'to settle and resolve the Action inclwding all issues relating
to the Action;
AND WHEREAS the parties to these Minutes of Settlement are represented by legal
counsel;
THE PARTIES HfRE70 hereby evidence their agreement to settle and resolve the Action
an the following terms:
1. Fuller Landau, in its capacity as the receiver of 2177427, shall direct the Accountant of the
Ontario Superior Court of Justice to pay to it the then current entire balance of the funds in
court to the credit of the Action. Upon receipt of the same, Ful[er Landau shall forthwith
pay 50% to Wifdwood or as it may direct and sha11 retain the remaining 50% in its capacity
as Receiver.
2. In furtherance of paragraph 1 hereof, Fuller Landau, in its capacity as the receiver of
2177427, shall proceed by motion fia the Ontario Superior Court of Justice (Commercial
Courts on July 7, 2017 requesting various relief including fihe approval of these Minutes of
Settlement and, if approval is granted, an order lifting of the stay with respect to the Action
imposed by the Receivership Order for the sole purpose of settling the Action andeffectuating these Minutes ofi Settlement, an order that all funds held by the Accountan# ofthe Superior Court of Justice to the credit of the Action be paid out immediately to FullerLandau and an order dismissing the Action otherwise without casts.
3. On July 7, 2017, Fuller Landau shall seek various relief in the Receivership including the reliefset out in the draft Order attached hereto as Schedule "A" and the Receiver sha!( requestthat fihe draft Order be granted and issued by the Ontario Superior Cour# of Justice(Commercial List} on consent or non-opposition of the parties herein.
4. On Juiy 7, 203.7, if the draft Order referred to in paragraph 3 hereof is granted, Fuller Landaushall request that the draft Order for the Action, which is attached herewith as Schedule ̀B`,be granted and issued by the Ontario Superior Court of Justice on consent of the partiesherein.
The parties shall execute a fiul(and final mutual release, which is attached herewith asSchedule "C° (the "Release").
6. Notwithstanding fihese Minutes of Settlement or the Release, it is understood andagreed that the terms set out herein are deemed to be no ac(mission whatsoever ofliability on the part of any of the parties.
7. The parties to these Minutes of Settlement shall bear their own legal costs associatedwith the Action and for negotiating, documenting and implementing the settlement. Forgreater certainty with respect to the Receiver, it is enti#fed to its costs from the estate orproperty of the Receivership pursuant to the Receivership Order.
8. These Minutes maybe amended by the parties on consent and in writing.
9. The parties agree that these Minutes of Settlement may be executed in separatecovnfierparts, each of which so executed shall constitute an original and alI of whicl~together sha11 constitute one and the same agreement. An executed counterpartdelivered by electronic means is hereby deemed to be as effective as an originaldelivered executed counte~~pa~~t, and a photocopy of an original shall be deemed to beas effective as an original.
10. Each party acknowledges that:{a) they have read and understood these Minutes of Settlement;
(b) they have had the opportunity to can5ult legal counsel abouf the meaning andeffect afithese Minutes of Settlement and that they have in fact done so; and
(c} they are signing these Minutes of Settlemen# voluntarily.
SIGNED, SEALED AID QELIVERED
in the presence ofTHE FULLER LANDAU GROUP TNC.,in its capacity as receiver for 2177427ON7ARt0 LIMYTED and not in its personalcapacity
Per: Ken Pearl, A.S.O.
J have the autl2ortty fo bind the Receiver.
Witness
Name:
}}
Bhupinder Sandhu, in his personal capacity}
WII.DWOOD CAFiTAL INC.~ ,.,
i~~ ~ f
~ rt, ))) __ ,i /~~ ~~ ._.-~~~ /./,/
/'~/C..l 7 'ff
4"
Per: %l'~~ r~ lJ .,~~5'~~,~Jj~/s~'~%-~f„2
)1 have the aeitharity to bind the Corporation.
2177427 ONTARIO LIMITED
}
}
}
Per: Bhu.pinder Sandhu
!have the authority to bind the Corporation.
{c) ~ they are sigt~i~~g these Minutes of Settlement voluntarily.
SIGNED, S~ LSD ANi~ ~ELIV~REI~in fhe pres~r~c~ of )
~ ) TFiE FULLEK LANQA~ (sR~3UP INS.,I} in ids rapacity a~ rec~iuer for 2177427t71~lTARIO I.CMI7Ep and nat i~ its ~Qrsorra!capa~ifiy
) Per: Kett Pearl, q.S.O.
~ have the actthortty t'o bind the Receiver.
} ,,~
. ? f -~~W,yfine~s ) ~huptnder Sa~nri.hu, in his ~er~~naf capacityName: ~C~S~ ~.~~ tjC~t~i'Y~t ~
}V1lY.L,DWDOD CAPITAL INC.
Per:
!have the authority to bu~rd the Corporation,
} 2x77427 t}l~iTARTU (~iV1ITED
}}
~- ~ ̀~ i _
Psr: BM~pind ~ ~andhu
7f have t1~e qu~harity to bind fhe Carpol'ation.
SCHEDULE A
Draft Court Order -Court File No. CV-17-11726-OOCL
DRAFT ORDER OF PARTIAL RELIES
Court File No. CV-17-11726-OOCL
ONTAf2I0SUPERIt?R COtlR7 OF JUSTICE(COMMERCIAL LIST)
B ETWEEN:
HARBOUREDGE MORTGAGE INVE53MENT CORPORATION.
Plaintiff
- and-
2177427 ONTARIO LIMITED
Defendant
O RDER
7HIS MOTION, made by The Fu11er Landau Graup inc., in its capacity as
the court-appointed receiver (the "Receiver"} of the assets, undertakings and
properties of the 2.177427 Ontario limited {"217") for, among other things, an
order approving Minutes of Settlement dated • (the "Minutes of Settlement")
whereby #unds paid into court to the credit of the action in fihe Ontario Superior
Court of Justice at Toronto between Wildwoad Capital Inc. ("Wildwood") as
P{aintiff and 217 and Bhupinder Sandhu as Defiendants that is Court Fife No. CV-
14-504414 (the "Action") be paid out of court to the Receiver., with 50%thereof
~~
then paid to Wildwood and the remaining 50% retained by the Receiver, and an
order lifting of the stay with respect to the Action imposed by the Order of the
Honourable Justice Myers dated Aprif 7, 2017 in this receivership proceeding
appointing the Receiver (the "Receivership Order"), was heard this day at Toronto.
ON READING the. motion record filed in support of this motion and on
hearing the submissions of counsel appearing,
1. Tl~IS COURT ORDERS that the Minutes of Settlement are hereby accepted
and approved by the Superior Court of Justice.
2. THIS LOURT QRDERS that the stay of proceedings with respect to the
Action is hereby lifted, for the limited purpose of a motion in the Action for
orders in accordance with the M+nutes of Settlement for payment out of
tour# of the funds currently field by the Accountant. of the Superior Court
of Justice to the credit of the Action, division of those funds between
Wildwood and the Receiver and dismissal otherwise of the action without
COStS.
3. THIS COURT URGERS that, in accordance with the Minutes of Settlement
and upon receipt by the Receiver of funds paid out of court in the Action,
the. Receiver pay forthwith to. Wildwood or as it may direct 5d% of the
funds and retain the remaining 50% of the funds in its capacity as receiver
far 217.
4. TMIS COURT ORDERS that, as to casts, the Receiver it is entitled to its
costs with respect to the Minutes of Settlement, the settlement thereby
3
evidenced, this motion and the motion in the Action contemplated by this
order and any other costs pursuant to the Receivership Order, all from the
estate or property of the Receivership pursuant to the Receivership Order.
SCHEDULE B
Draft Court Order -Court File No. CV-14-504414
Court Fife No. CV-14-504414
ON1'RRiO
SUPERIOR COURT OF .IUSTICE
THE HONOURABLE ) FRIDAY, 7HE 7th DAYOF JULY, 203.7.
B ETWEEN:
V1?ILDWOOD CAPITAL INC.
Plaintiff
and -
2177427 OfVTARIO LIMITED
and BNUPINDER SANDHU also known as BOBBY SANDHU
Defendants
• ~
THIS MOTION; made by the parties for a payment out of court and
dismissal otherwise of this action, was heard this day, at Toronto.
~N READII~lG the consent and undertaking to not appeal of the parties
and of The Fuiler Landau Group Inc. in its capacity as cou~~t-appointed Receiver of
the defendant 2177427 Ontario Limited, the stay of proceedings with respect to
this action pursuant to the receivership order in the Ontario Superior Court of
J ustice (Commercial List) receivership proceeding at Toronto that is court file no.
CV-17-11726-OOCL having been lifted by order made in that proceeding this day,
and on hearing the submissions of counsel appearing,
1. THIS COURT ORDERS that all funds held by the Accountant of the
Superior Court of Justice under account no. 539076 to the credit of this
action be pa(d out of court irnmediafiely to The Fuffer Landau Group Inc.,
in its capacity as receiver of 2177427 Ontario Limited.
2. THIS COURT ORDERS that compliance by The Fuller Landau Group Inc.
with rule 72.03(2)(c)(ii) of the Rues of Civit Procedure, requiring for
payment out of court an affidavit stating that the time prescribeel for an
appeal has expired and no appeal is pending, is hereby dispensed with on
the basis of the undertaking given to not appeal.
3. THIS COURT' ORDERS that The Fuller Landau Group Inc., upon receipt of
funds paid out of court pursuant to paragraph 1 ofi this order, pay 5Q% of
the funds forthwith to Wifdwood Capital Inc. or as it may direct and retain
the remaining 5Q% in its capacity as receiver for 2177427 Ontario Limited.
4. THIS COURT ORDERS that this action is otherwise dismissed without
costs.
SCHEDULE C
Fuli and Final Release -Court File No. CV-1.4-504414
FULL AND FINAL MUTUAL RELEASE
FOR VALUABLE CONSIDERAi`TON as set forth in the Minutes of Settlement between
the parties dated-~~~~~~''~`'` (the "Minutes of Settlement"}, the receipt and sufficiency
of which is hereby acknowledged, in respect of all claims, interest, damages, losses and
costs inclusive, WILDWOOD CAPITAL INC., 2177427 ONTARIO LIMFTED and BHUPINDER
SANDHU also (mown as BOBBY SANDHU as parties together and THE FULLER LANDAU
GROUP INC., on their awn behalf and on behalf of their respective successors, insurers
employees, servants, subcontractors and agents, hereby release and forever discharge
each other and their respective successors and assigns and their employees, servants
and agents from any and ail actions, causes of actions, claims and demands, interest,
damages, or loss, howsoever arising, which heretofore any of them may have been
entit{ed to ar may have sustained or may hereafter be entitled to or may hereafter
sustain relating in any way to the action commenced in the Ontario Superior Court of
Justice at Toronto as Court File No. CV-14-504414, incfucfing without limitation the
funds paid into court to the credit of the said action, or to any of the occurrences and
transactions giving rise to the said action.
IT IS EXPRESSLY UNDERS'T04D AND AGREED that this Release, apart from any claim
for performance of the Minutes of Settlement, is intended to cover and does cover not
only all now known claims, interests, losses and damages but any future claims,
interests, losses and damages not known or anticipated but which may later develop or
be discovered, including a!I effects and consequences thereof.
AND the parties hereto hereby declare that they fully understand the terms of this
release and the settlement to which it relates; that the consideration referred to herein is
the sole consideration of this Release and that the parties hereto voluntarily accept the
-2-
said consideration for the purpose of making full and final compromise, adjustment and
settlement of all claims, interests, losses and damages.
AND FOR THE SAID CONSIDERATION each party hereto agrees not to make any claim
or tale any proceedings against any other person, corporation, government body or
department or other fegaf entity who might claim contribution or indemnity under the
provisions of the Negligence Act and the amendments thereto or otherwise #rom any
person, persons or corporations discharged by this Release.
iT IS UNDERSTOOD ANl~ AGREED that the giving of the said consideration is deemed
to be no admission whatsoever of liability on the part of any party hereto and their
successors and assigns and their employees, servants and agents.
FtlRTHER, IT IS UNDERSTOOD AND ACxREED that each party hereto:
a) has read and understood this Release
b) has had the opportunity to consult legal counsel about the meaning and effect of
,this Release and that they have in fact done sa; and
c) is signing this Release voluntarily,
AND F(}R GREATER CERTAINTY, the parties hereto acknowEedge that pursuant to the
Order of the Honourable Justice Myers dated April 7, 2017 (the "Receivership Order")
for Court file No. CV-17-11726-OOCL, The Fuller Landau Group Inc. was appointed as fihe
court-appointed receiver (the "Receiver"} for 2177427 Ontario Limited (the
'Receivership").
AND WHEREAS, the parties hereto acknowledge that pursuant to the Receivership, the
Receiver has the rights and powers, without limitation, to settle, extend or compromise
any indebtedness of 2177427 Ontario Limited, to settle ongoing litigation regarding
-3-
2177427 Ontario Limited and to receive and collect ail monies and accounts owing to
2177427 Ontario Limited.
AND UVHEREAS, fhe parties heeeta acknowledge and accept the Receiver entering into
the Minutes of Settlement and release the Receiver from any 13ability for entering into
the Minutes of Settlement and fulfilling the terms and conditions of the Minutes of
Settlement.
THE PARTIES HERETO AGREE that this Release may be executed in separate
counterparts, each of which so executed shall constitute an original and a(i of which
together shall. constitute one and the same document. An executed counterpart
delivered by electronic means is hereby deemed to be as effective as an original
delivered executed counterpart, and a photocopy of an original shall be deemed to be
as effective as an original..
tc~IN WITNESS WHEREOF, the parties heretr~ have set their hands this ~~ day of June,
za~.~.
SIGNED, SEALED AND DELIVERED
in the presence of
Witness to Bhupinder Sandhu
Name:
}THE CULLER LANDAU GRULIP INC.,in its capacity as receiver foez~~~~.a7} ONTARYO LIMITED and not in its
personal capacity
/~~ r~ -~_~
} Per: Ifen Pearl, A.S.D.~ z~.~ ~~~~,~~~~ r} ]have the authority to bind the
Receiver
Bhupinder Sandhu, in his persona[~} capacify
-3-
X177427 j ntario Limited acid to receive and eollec~ a!I monies anef accounts o.wi»g to
2127427 ~ntario Limited.
AND W EREAS, the p~rt~es hereto acknowledge and accept the 'Receiver entering rota
the Minu es of Seftierrient .anti release ~Y}~e Rece(ver from any .(iabilit~r for enferit~g into
the.. Mi.nu es of Settlement and fulfilling the terms ar~~ conditions of the Minutes of
Se-t#leme t.
THE PAf~TIES H~R~TO AC~R~~ that this ~efease .rnay be execute! in separate
caunt~rp rts~ each of which so exQcuted shall constitute an Qriginal and alI of which
together sl~a[I constitute one and tiie same document. An executed counterpart
tJeliver-ed by electronic means is hereby deemed to be as effective as an or'tginaf
delivered executed counterpart, and a phato44py of an original shall be deemed to be
as effecti e as an original.
IN VttYT'N~SS WH~REQ~, the parties hereto have set their hands this day of June,
2017. E
SIGI~Eq ~EA~ED AI~1l~ C?ELN~R~D
ih. the ire enc~ of
Hama:
6hupinder Sar~dhu
~'t 5 r~ e.e ~- ,~r.~~l"~y
Tt~~ FUI~~.EE2 l~,NDAU GROUP ANC.,J in its capacity as receiver for~3.77~27}. 4NTA~2Y0 L11UttTED and nat in its
per~ona3 capacity
} Per; Ken Pearl, A.Q.O.
! have the cruthoi-ity to bind theReceiver ~
J̀Bh.upind~r San u, in hid personal
capacity
-4-
WILDIN4-OD~CAPIT~A:L iNC.
Per: f~`/~~~D .~',Si~s',';i l~/,~'~~i•
!have the awtlaority to bind the
Corporation.
21774.27 ONTARIO L3lVfITED
}Per:
I have the acrtharity to bind the
Corporation.
-4-
~ WTEp~U00b CAPITAL If~lC.
Per.
t have the authority to bind theCorporat~t~r~.
21774~~' O (.~MZTED}~`~~}Per:
)1 have the authority to bind The} Carps~ration.
Court File No. CV-17-11726-OOCL
~i ~ ~
SUPERIOR COURT OF JUSTICE(COMMERCIAL LIST)
THE HONOURABLE ) FRIDAY, THE 7th DAY
JUSTICE ~ OF JULY, 2017
B ETWEEN:
HARBOUREDGE MORTGAGE INVESTMENT CORPORATION
Plaintiff
- and -
~►~~L~►~il~:~~C~l~~u~~7
Defendant
C~l~ ~l ~7
THIS MOTION, made by The Fuller Landau Group Inc., in its capacity as
the court-appointed receiver (the "Receiver") of the assets, undertakings and
properties of the 2177427 Ontario Limited ("217") for, among other things, an
order approving the Minutes of Settlement dated June 23, 2017 (the "Minutes of
Settlement") whereby funds paid into court to the credit of the action in the
Ontario Superior Court of Justice at Toronto between Wildwood Capital Inc.
("Wildwood") as Plaintiff and 217 and Bhupinder Sandhu as Defendants that is
Court File No. CV-14-504414 (the "Action") be paid out of court to the Receiver,
with 50% thereof then paid to Wildwood and the remaining 50% retained by the
Receiver, and an order lifting of the stay with respect to the Action imposed by
the Order of the Honourable Justice Myers dated April 7, 2017 in this receivership
proceeding appointing the Receiver (the "Receivership Order"), was heard this
day at 330 University Avenue, Toronto, Ontario.
ON READING the Third Report of the Receiver dated June 27, 2017 (the
"Third Report") and on hearing the submissions of counsel for the Receiver and
anyone else appearing from the Service List on this motion, duly served as
appears from the affidavit of service of Silvana Pocino, sworn June 28, 2017, filed,
1. THIS COURT ORDERS that the time for service of the Notice of Motion
and the Motion Record is hereby abridged and validated so that this
Motion is properly returnable today and hereby dispenses with further
service thereof.
2. THIS COURT ORDERS that the Minutes of Settlement are hereby accepted
and approved by the Superior Court of Justice.
3. THIS COURT ORDERS that the stay of proceedings with respect to the
Action is hereby lifted, for the limited purpose of a motion in the Action
for orders in accordance with the Minutes of Settlement for payment out
3
of court of the funds currently held by the Accountant of the Superior
Court of Justice to the credit of the Action, division of those funds between
Wildwood and the Receiver and dismissal otherwise of the Action without
costs.
4. THIS COURT ORDERS that, in accordance with the Minutes of Settlement
and upon receipt by the Receiver of funds paid out of court in the Action,
the Receiver pay forthwith to Wildwood or as it may direct 50% of the
funds and retain the remaining 50% of the funds in its capacity as receiver
for 217.
5. THIS COURT ORDERS that, as to costs, the Receiver it is entitled to its
costs with respect to the Minutes of Settlement, the settlement thereby
evidenced, this motion and the motion in the Action contemplated by this
Order and any other costs pursuant to the Receivership Order, all from the
estate or property of 217 pursuant to the Receivership Order, subject to
court approval in a subsequent motion by the Receiver.
HARBOUREDGE MORTGAGE INVESTMENT CORPORATION
Appiicanfi
-and- 2177427 ONTARIO LIMITED
RespondentCourt File No. CV-17-11726-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
PROCEEDINGS COMMENCED AT TORONTO
~.~
FOGLER, RUBINOFF LLPLawyers77 King Street West, TD CentreSuite 3000, North TowerToronto, ON M5K 1 G8
Vern W. Dane (32591 E)Tel: 416.941-8842Fax: 416.941-8852
Lawyers for the Receiver
Court File No. CV-14-504414
ONTARIOSUPERIOR COURT OF JUSTICE
B ETWEEN:
WILDWOOD CAPITAL INC.
Plaintiff
- and-
2177427 ONTARIO LIMITEDand BHUPINDER SANDHU also known as BOBBY SANDHU
Defendants
CONSENT
The parties hereto, none of which is a party under disability,
through their solicitors, hereby consent to an Order in the form attached and
undertake to not appeal the Order.
DATED. . ~~ ~ +~ 1Vern DaneFogler Rubinoff LLPSolicitors for the Fuller Landau Group Inc., inits capacity as court-appointed receiver for2177427 Ontario Limited
DATED: ~i~e Z~~ZU ~ ~ ._-~-~ '~/ —~—JGregory R. M. ~ rkerBaldwin Law Professional CorporationSolicitors for Bhupinder Sandhu and 2177427Ontario Limited
DATED: e~ - - ..:-.i - 7 ~~/ ~. ~,.-..~ ~. `.-.;
David DownsGarfin Zeidenberg LLP
Solicitor far the Plaintiff
Court File Na. CV-14-504414
OI+~TARIO
SUPERIOR COURT OF JUSTICE
THE HONOURABLE ) FRIDAY, THE 7~h DAY
OF JULY; 2017.
B ETWEEN:
WiLDWOOD CAPITAL INC.
Plaintiff
- and-
2177427 ONTARIO LIMITED
anc[ BNUPINDER SANDHU also known as BOBBY SANDHU
Defendants
• ~
THIS MOTION, made by the parties for a payment out of court and
dismissal otherwise of this action, was heard this day, at Toronto..
ON READING the consent and undertaking to not appeal of the parties
and of The Fuller Landau Group Inc. in its capacity as court-appointed Receiver of
the defendant 2177427 Or,~ario Limi~~~, tl~e slay of proceedings with respect to
this action pursuant to the receivership order in the Ontario Superior Court of
Justice (Commercial List} receivership proceeding at Toronto that is court file no.
CV-17-11726-OOCL having been lifted by order made in that proceeding this day,
and on hearing the submissions of counsel appearing,
1. THIS COURT ORDERS that all funds held by the Accountant of the
Superior Court of Justice under account no. 539076 to the credit of this
action be paid out of court immediately to The Fuller Landau Group Inc.,
in its capacity as receiver of 2177427 Ontario Limited.
2. THIS COURT ORDERS that compliance by The Fuller Landau Group Inc.
with rule 72.03(2)(c)(ii) of the Rules of Civil Procedure, requiring for
payment out of court an affidavit stating that the time prescribed for an
appeal has expired and no appeal is pending, is hereby dispensed with on
the basis of the undertaking given to nat appeal.
3. THIS COURT ORDERS that The Fuller Landau Group Inc., upon receipt of
funds paid out of court pursuant to paragraph 1 of this order, pay 50% of
the funds forthwith to Wildwood Capital Inc. or as it may direct and retain
the remaining 50% in its capacity as receiver for 2177427 Ontario Limited.
4. THIS COURT ORDERS that this action is otherwise dismissed without
costs.
wand- 2177427 ONTARIO LIMITED and BNUPIND~R SANDHUalso known as Bobby Sandhu
