2135 Lawrence: a second receiver, and four leases dated in the gap

In July 2026 a mattress store was still occupying part of 2135 Lawrence Avenue East, in northeastern Toronto, despite a court-appointed receiver's letter of January 9 directing it to cease operations and leave. The reason, as Justice W.D. Black later quoted it, was that the building had been found "unsafe for continued occupancy and operations due to, among other things, roof failure and electrical hazards caused by water leaking from the roof." The store was the remaining tenant of two single-storey commercial buildings, of 24,392 and 26,412 square feet, on about 2.28 acres at 2135 and 2139 Lawrence, where environmental assessments had found historical underground storage tanks and contaminated soil and groundwater, and a remediation proposal of April 2025 estimated that the clean-up "could be in excess of $30 million," per the Pre-filing Report of the Proposed Receiver, July 15, 2026, ss. 2.1(3)–(4), 2.2(5)–(6) and the Endorsement of Justice Black, 2026 ONSC 5043, Sept. 3, 2026, para. 13.

2531961 Ontario Inc. owns 2135. Melania Agustin, its sole officer and director, holds title to 2139 in trust for it. On September 3, 2026, in the Ontario Superior Court of Justice (Commercial List), court file CL-26-00000313-0000, Justice Black appointed AlixPartners Restructuring, Inc. receiver of all of the company's property under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act, on the application of The Lawrence Phoenix Inc. The order, he wrote, "will be the second receivership order within these proceedings," per the Pre-filing Report, July 15, 2026, ss. 1.0(1), 2.1(2) and n. 1, the Receivership Order, Sept. 3, 2026, para. 2 and the Endorsement, Sept. 3, 2026, para. 2.

A bank that decided not to sell

The first receivership was RBC's. The bank began it on August 24, 2023 against the company, against Ms. Agustin and her husband, Stephen Smith, as guarantors, and against TNT International Leasing Inc. and 24HR. Kitchens Inc.; The Fuller Landau Group Inc. was appointed receiver on February 29, 2024, per the Pre-filing Report, July 15, 2026, s. 2.2(1)–(4). The applicant alleged, "fairly having regard to the record in these proceedings," Justice Black wrote, that the RBC receivership "was characterized by delays and obstruction" on the respondents' part. The court had been called upon to help the receiver evict tenants and get into the buildings, and the respondents "periodically purported that they wished to refinance and redeem" but "have yet to turn up with funds," per the Endorsement, Sept. 3, 2026, paras. 3–4. Justice Black's own order of September 23, 2024, in RBC's file CV-23-704556-00CL, ended any leases at 2139 with Mr. Smith, Ms. Agustin, TNT or a "crypto-mining business," per the First Report of the Receiver, Sept. 23, 2026, App. "F", order, paras. 9–10.

Fuller's building condition assessment found structural deficiencies, extensive wear, and leaks and other signs of failure in both roofs, and the property was not formally marketed. After the April 2025 remediation proposal, RBC reconsidered its plans. Its evidence on the discharge motion, as Justice Black recorded it, was that it "did not believe that it was economically feasible to complete a proper environmental remediation of the Real Property and therefore did not wish to be associated with any sales process for environmentally contaminated property." He discharged Fuller himself, by order dated May 11, 2026, per the Pre-filing Report, July 15, 2026, ss. 2.2(5), 3.1(1) and the Endorsement, Sept. 3, 2026, paras. 5–7.

On June 5, 2026 RBC assigned its loan and security to The Lawrence Phoenix Inc., which the pre-filing report says was owed approximately $13.72 million as of July 8: $11.67 million under a 2022 credit agreement secured by a first charge on the land in the principal amount of $15.2 million, $0.75 million under a credit agreement with TNT secured by a $1,000,000 guarantee, and $1.3 million of professional and legal fees. RBC kept about $2 million of the debt and a $3.55 million personal guarantee from Ms. Agustin and Mr. Smith. On the uncontested evidence the company has paid nothing since RBC's demands of July and August 2023, and it did not respond to the applicant's demands and s. 244 notices of June 19, per the Pre-filing Report, July 15, 2026, ss. 1.0(2), 2.3(1) and the Endorsement, Sept. 3, 2026, paras. 8–11.

At a July 16 case conference Justice F.L. Myers gave the respondents time to retain counsel and respond. His endorsement observed that two days after the discharge, "apparently, the bank agreed to a letter of intent to sell its position to the Applicant," which "took on the debt knowing that the Respondents had not paid anything in three years and that the property was too contaminated for the bank to touch." The file, he wrote, raised "unusual facts involving a request for a second receiver for environmentally challenged land," per the First Report, Sept. 23, 2026, App. "P", Sched. "A" (Endorsement of Myers J., July 16, 2026), paras. 10, 14.

Just or convenient, a second time

The application was heard on August 31. The respondents' factum had two main grounds: that further receivership proceedings had not generally been recognized as just or convenient, and that this one was in any event out of time. They also alleged that RBC and the applicant were "colluding in order to ensure that there is a deficiency." Justice Black found the collusion claim "not supported by any direct or specific evidence," and it made "no sense" to him: as applicant's counsel pointed out, a creditor realizing on its security would seem to have no incentive to drive down the value of its collateral. "Without evidence or any obvious rationale, I reject this argument summarily." On a suggestion that the assignment was improvident, he agreed with Justice Myers that the debt "has been assigned at full face value. The debtors obtain no benefit by whatever haircut the bank took," per the Endorsement, Sept. 3, 2026, paras. 21–24.

The first ground traced to West Face Capital Inc. v. Chieftain Metals Inc., 2020 ONSC 5161, where Chief Justice Morawetz, as he then was, discharged a receiver without prejudice to the secured creditor's right to seek a new appointment, but only until August 11, 2022. Justice Black drew the contrary conclusion: "I distill from West Face that it is open to the court, in appropriate circumstances, to order a re-appointment of a receiver," and "I see no principled reason why, if an applicant justifies the request, the court ought to reflexively reject it." Citing Environmental Waterproofing Inc. v. Huron Tract Holdings Inc., 2023 ONSC 405, he held that the discharge order need not have preserved the possibility. The application, "at its core, a mortgage enforcement proceeding," fell, he held, under the ten-year limitation periods of the Real Property Limitations Act, per the Endorsement, Sept. 3, 2026, paras. 25–45, 53–58.

The respondents' materials, he found, made "really no attempt" to address the debt or the safety and security concerns. Ms. Agustin said other assessments, by consultants she did not identify, in her understanding show "no environmental contamination deeper than approximately sixteen feet which is immaterial for development considerations"; the judge found the respondents' evidence "general, largely in the nature of hearsay." Nor, he held, did the applicant need a remediation plan: the property's condition would, he expected, be "transparently disclosed" in the sale process, and the court "will not be inclined to approve a transaction that perpetuates environmental contamination or risk." The respondents, he noted, could bid in that process. "The circumstances are essentially crying out for a court officer to take control," he wrote, per the Endorsement, Sept. 3, 2026, paras. 17–20, 48, 50, 52.