25 James Street: an interim receiver for six unfinished townhomes

At about 4:30 on the afternoon of August 18, 2026, a principal of Cara Partners Inc. and a professional engineer walked through a block of new townhouses on James Street in Georgetown, in the Town of Halton Hills. Inside the units they could enter, the shafts built for the homes' internal elevators were open at several floor levels, the shaft doors unlocked, with no guarding or blocking at the openings; the rails and cabs were in, the elevators were not in service, and the bottom of each shaft was unfinished basement. At the rear of one unit, which they understood to be lived in full-time, a second-floor balcony over the garage had no railing, its door was not blocked off, and a barbecue stood on it. Cara Partners graded both conditions, along with exposed wiring and unverified smoke and carbon monoxide alarms, as "Critical — Life Safety," per its Site Observation Report, Aug. 19, 2026, Ex. "U" to the Hillmount affidavit, ss. 1.2, 3, 4.1.

The report was commissioned by the mortgage lender, and it became the centre of the lender's case for a receiver. Hillmount Capital Mortgage Holdings Inc. applied under s. 243(1) of the BIA and s. 101 of the Courts of Justice Act against the project's owner, 2715573 Ontario Inc., its builder, 2661793 Ontario Inc., and two of the individual guarantors, in the Ontario Superior Court of Justice at Milton, Court File No. CV-26-00001551-0000. On September 9, Justice J. E. Mills did not decide the application. The court appointed Goldhar & Associates Ltd. as interim receiver until it comes back on September 22, being "satisfied from the affidavit... that there are serious safety concerns that must be addressed in respect of the real property at issue in this proceeding," per the Endorsement of Mills J., Sept. 9, 2026, paras. 2–4.

A one-year loan, renewed seven times

Hillmount's account is sworn by the president and founder of the Hillmount companies. 2715573 Ontario was incorporated on September 9, 2019 and bought the James Street land on November 25, 2019; its registered office is in Oakville, and a single person is its sole director, president and secretary, as he is of the builder, which was incorporated in October 2018. According to the affidavit, the owner carries on no business other than this development, which it describes as "six townhomes constructed on a parcel of land, the construction of which is not complete," financed for construction by Transform Industries Inc., per the Hillmount Affidavit, Sept. 1, 2026, paras. 5–6, 21–23.

Hillmount Capital Inc., which administers the loan, signed a commitment letter with the owner on October 21, 2019 for $950,000 at 8.75% a year, maturing December 1, 2020. It was renewed on December 2, 2020, December 1, 2021, December 5, 2022, February 10, 2023, March 14, 2024, February 18, 2025 and February 23, 2026, the renewals moving the rate to the greater of 9.25% or Royal Bank of Canada prime plus 3.50%, and the principal was still $950,000 on December 1, 2025. The loan was assigned to the applicant on February 20, 2020, and matured on June 1, 2026, per the Hillmount Affidavit, Sept. 1, 2026, paras. 4, 24–25, 29.

Behind it sit a first-ranking $950,000 charge on the James Street land registered November 25, 2019; a $950,000 second-ranking charge on a house in Oakville, granted by the two individual guarantors who own it and ranking behind a $1,400,000 Bank of Nova Scotia charge; general security agreements from both companies; and a joint and several guarantee from the builder and three individuals. As of August 26, 2026, $1,077,118.91 was owing, with per diem interest of $261.10, per the Hillmount Affidavit, Sept. 1, 2026, paras. 14, 26–28, 32.

Transform holds a second-ranking charge on the land and a second-ranking general security interest over both companies. On April 16, 2026 its counsel served a notice of sale under mortgage and a s. 244 notice claiming $4,507,509.83 and warning that it would sell if not paid by June 1; Hillmount understands that sum remains unpaid. The purchasers of one home hold a $170,000 charge, registered, Hillmount understands, to protect their deposit. Together, the charges behind Hillmount's exceed $4.3 million in registered principal, per the Hillmount Affidavit, Sept. 1, 2026, paras. 30–31, 51–52, 72.

How the project stalled, in the lender's telling

The account of how the project stopped is Hillmount's, and it has not been tested; on September 9 the companies' sole director asked for time to get legal advice. The affidavit dates the trouble to the second half of 2025. On November 6, 2025 the Town of Halton Hills issued a tax certificate on the land for arrears of $9,621.65, stating that it was in the tax-sale process, and Hillmount Capital Inc. paid $11,103.27 to clear it. No monthly payment has been made since the one due December 1, 2025. The insurance lapsed; Hillmount paid $17,674.20 in premiums, and the land now carries a course-of-construction policy running from August 18 to November 18, 2026, naming Hillmount first mortgagee and loss payee, per the Hillmount Affidavit, Sept. 1, 2026, paras. 35–39, 46–47.

A first demand, with a s. 244 notice, went out on February 2, 2026. The affidavit says the owner asked for time and gave assurances that the loan would be repaid by May 2026, so Hillmount extended to June 1, and the owner signed the seventh renewal on February 23. What remained to be done, Hillmount understood at first, was mostly paying municipal levies and fees so the land could be severed and a common-elements condominium registered. Until that happens, the affidavit says, none of the sales can close, although three of the finished units are occupied by their purchasers, per the Hillmount Affidavit, Sept. 1, 2026, paras. 7, 40–43.

By the end of March, the affidavit says, Hillmount could not get a clear answer on whether the approvals were as far along as described, and turned to public sources and Tarion records to learn whether the homes were finished and the builder still licensed. It found that the Town had granted an occupancy permit on June 19, 2025 while leaving the building permit open, with deck framing and finishing, exterior cladding and grading ("rough grade only"), anti-siphon devices on the hose bibs and the elevator all outstanding. The owner's planning counsel, according to the affidavit, had only prepared applications, had not been paid, and said his workload would not let him finish the severance and registration, per the Hillmount Affidavit, Sept. 1, 2026, paras. 44–45, 48–49.

Transform stopped advancing construction money in or around April. A second demand from Loopstra Nixon LLP followed on May 27, with two s. 244 notices, one on the land and one on the Oakville house, and the ten-day period ran out on June 8. Counsel then worked on a consensual plan: Hillmount would advance more money for the severance and condominium registration, Loopstra Nixon would do the applications for the owner, and Hillmount, the owner and Transform would sign a forbearance agreement. Concerns about Tarion licensing, the builder's obligations and purchaser claims ended it. Transform raised purchaser disputes and possible litigation. The owner disputed them, the affidavit records, saying there was no pending or threatened litigation, that four purchasers wanted to close and that two had asked for their deposits back and agreed to repayment arrangements, per the Hillmount Affidavit, Sept. 1, 2026, paras. 51, 53–59.

On June 23, Hillmount's counsel told the owner's counsel it would apply for a receiver, citing the Tarion registration's expiry on July 2, 2026, the owner's failure to provide information, reported purchaser litigation and Transform's withdrawal from the forbearance, per the Hillmount Affidavit, Sept. 1, 2026, para. 60. The notice of application was issued on July 14 and amended on August 28, per the Amended Notice of Application, Aug. 28, 2026, p. 2.

What the inspectors reported

Hillmount Capital Inc. retained Cara Partners, an advisory firm for distressed real estate, on July 29, 2026, to work out what it would take to close the remaining sales, per the Hillmount Affidavit, Sept. 1, 2026, para. 62. The report frames itself narrowly: it calls itself a "non-intrusive visual walk-through" and states that it is not an engineering assessment, a code-compliance audit or an appraisal. Its observers saw three units in full and a fourth in part, tested nothing, and were given Town occupancy documents for two units only, per the Site Observation Report, Aug. 19, 2026, Ex. "U", ss. 1.1–1.2, 6.

The elevator finding turns on the Town's own paperwork. The June 2025 occupancy records for two units carry the same open item, "Elevator not fully installed. Guards in place to prevent access at floor levels," and Cara Partners reads that as the safeguard on which occupancy was granted. About fourteen months later it saw no guards in the units it entered, including the occupied unit that record concerns. It concluded that the property had "regressed below the minimum state documented at the time occupancy was granted," per the Site Observation Report, Aug. 19, 2026, Ex. "U", ss. 4.1.1, 5. Its major items were water in the basements, cracks in foundation elements for a structural engineer to review, reported sewage backups, a waterproofing membrane that appears to end at or below finished grade, and an outstanding final gas inspection, and it listed cosmetic, cabinetry and landscaping work besides. It added that each critical item "admits of prompt, low-cost interim mitigation" that could be done within days, per the Site Observation Report, Aug. 19, 2026, Ex. "U", ss. 3, 4.2, 5.

The affidavit adds that a Cara Partners representative tried to arrange a site visit with the owner, and the owner did not attend, per the Hillmount Affidavit, Sept. 1, 2026, paras. 63–65. Hillmount's position, in its factum, is that it has "lost all confidence" in management to repay the debt and fix the conditions, and that the loan documents give it a contractual right to a receiver on default, per the Factum of the Applicant, Sept. 8, 2026, paras. 62–63.

September 9

The hearing was by video. The sole director appeared for both companies himself and asked for an adjournment to get legal advice for them. Justice Mills noted that the application had come forward as urgent and that the materials were served on September 4, just before the Labour Day weekend, and treated more time for him as reasonable, then appointed an interim receiver for the interval and adjourned the receivership application to September 22, 2026 at 10:00 a.m., in person, per the Endorsement of Mills J., Sept. 9, 2026, paras. 1–4. Counsel for the two individual guarantors, and counsel for Transform, who also acted for two individuals, were on the counsel slip.

The interim order is written in the form of a full receivership order. Goldhar takes the James Street land and all the assets of both companies, with power to complete condominium applications, sign documents on construction and occupancy permits, and apply for permits in the companies' names. Four other parcels in Halton Hills are carved out: an order of Justice Lemon dated June 9, 2026, in a separate proceeding, directed two of the individual guarantors to sell them, and they may do so, provided the net proceeds after registered security are held in trust until September 22. The stay and the receiver's litigation powers both leave that June 9 order alone, per the Interim Receivership Order, Sept. 9, 2026, paras. 2–3, 7–10 and Scheds. "A"–"B".

The relief is also smaller than the application. Hillmount's notice and affidavit sought a receiver over the Oakville house as well; the factum framed the property as the two companies' assets, including the James Street land, and the order's schedule of real property lists only the James Street parcel, per the Factum of the Applicant, Sept. 8, 2026, para. 2 and the Interim Receivership Order, Sept. 9, 2026, Sched. "A". The factum proposed a Receiver's Charge of up to $150,000 and a borrowing charge of up to $400,000. The order grants the Receiver's Charge first-ranking priority over all security, subject only to the statutory priorities in the BIA, and caps borrowing at $150,000, or more if Hillmount accepts it and the court authorizes it, per the Interim Receivership Order, Sept. 9, 2026, paras. 18, 21.

Goldhar's file carries Richard Goldhar, Clark Lonergan and Evan MacKinnon, who appeared for the proposed receiver on September 9; Fogler, Rubinoff LLP is listed as the interim receiver's counsel, per the Service List, Sept. 9, 2026, p. 1. Any interested party may move to vary the order on September 22, the day the application returns to Milton, per the Interim Receivership Order, Sept. 9, 2026, para. 32.