260 High Park: Meridian asks for the church wall lawsuit as EY seeks discharge

On September 29, 2015, TRAC Developments Inc. paid $5,700,000 to the trustees of the High Park Korean Congregation of the United Church of Canada for the church lands at 260 High Park Avenue in Toronto, per the title abstract in the Third Report of the Project Receiver, Aug. 21, 2026, App. "C", p. 119. A City of Toronto by-law registered on title in November 2017 designates the property, High Park Alhambra United Church, as being of cultural heritage value or interest, per the Third Report, App. "C", p. 131. The project on the lands at 248 and 260 High Park Avenue was to be a 70-unit condominium, the converted church beside a newly built mid-rise, and the original plan, the developers later pleaded, required a protected heritage façade wall from the church to be preserved and integrated into the new building, per the Statement of Claim, Mar. 7, 2023, para. 7 (Third Report, App. "G").

In the autumn of 2020 the wall moved. The statement of claim issued in the developers' names pleads that a section of the wall was demolished under temporary supports on or around September 27, 2020, that the structural engineer called for removal of a wall extension on or around October 29 to ease installation of the excavation shoring, and that a precision survey on or around November 3 recorded up to 20mm of lateral westward movement. A large crack became visible near the top of the wall on or around November 6. It was March 2021 before the wall was stable enough to rebuild, per the Statement of Claim, Mar. 7, 2023, paras. 8–15 (Third Report, App. "G"). The developers claimed $12,182,537.17 against their course of construction and wrap-up insurance and settled in February 2024 for $5,450,000, less a $50,000 deductible, according to the Third Report, Aug. 21, 2026, paras. 34–36.

The condominium was never finished, and the lawsuit over the wall has outlasted it. On August 26 Ernst & Young Inc. served a motion, returnable September 15, asking the Commercial List to hand Meridian Credit Union Limited whatever that suit recovers beyond the insurer's share, pay Meridian the cash left in the estate, and discharge the receiver, per the Notice of Motion, Aug. 26, 2026, Tab 1, pp. 5–8.

A sale at $35,430,000

On Meridian's application, Justice Cavanagh appointed EY project receiver, manager and construction lien trustee of 260 High Park Limited Partnership, TRAC Developments Inc. and 2486357 Ontario Inc. on May 27, 2024, per the Third Report, para. 1, App. "A". Construction had not advanced since late 2023, when, the receiver understood, trade contractors abandoned the site "due to liquidity challenges and other delays," with windows uninstalled, the demolition of certain church walls unfinished and holes left in the church roof. The developers had pre-sold 64 of the 70 units, per the First Report of the Receiver, Sept. 25, 2024, paras. 9–10, 27. Meridian was owed $42,252,410.97 on April 9, 2024, per the Assignment Agreement, July 22, 2026, recital D (Third Report, App. "I"), under a first mortgage in the principal amount of $50,000,000. Behind it sat Fiera's $14,300,000 mortgage and Westmount Guarantee Services Inc.'s $20,000,000 mortgage, postponed to both, which secured the purchaser deposit insurance "required in order to facilitate the release of deposits from escrow for use in the Project," per the Notice of Motion, Tab 1, grounds paras. 5–9.

CBRE Limited's marketing produced 45 non-disclosure agreements and seven compliant offers by the December 3, 2024 deadline; Meridian declined to finance any bidder, which left the all-cash offer of 1001136742 Ontario Inc. as the successful bid, per the Second Report of the Receiver, June 13, 2025, paras. 29–30, 34–39. On April 23, 2025, the buyer told the receiver it had "identified unexpected cost issues" and would not close at the original price, and negotiations settled on a reduction of $3,570,000, per the Second Report, paras. 41–44. The approval and vesting order sealed the unredacted agreement until 30 days after closing, per the Approval and Vesting Order, July 11, 2025, para. 12. The Third Report now attaches it in full: $39,000,000 in section 4.1 of the agreement of February 4, 2025, and a fourth amendment dated as of April 30, 2025 changing that figure to $35,430,000, per the Third Report, App. "C", pp. 85, 143. Justice Cavanagh approved the sale on July 11, 2025, and it closed on July 22 to the buyer, since renamed HP Residences Inc., per the Third Report, paras. 4, 17.

Where the money went

The receiver's statement of receipts and disbursements to August 18, 2026 records the $35,430,000.00 in sale proceeds and $3,745,986.77 of insurance money, the balance of the wall settlement, paid to the receiver after its appointment. On July 23, 2025, Meridian received $33,500,000.00, "approximately 95%" of the gross proceeds, per the Third Report, paras. 17–18, 36. That was the ceiling set by the Distribution and Ancillary Relief Order, July 11, 2025, para. 4. Thirteen lien claimants shared $1,512,876.56. Over the receivership the estate paid $768,000.90 in construction costs, $285,124.00 for security and alarm services, $249,266.54 for insurance and $145,082.15 in property taxes, and CBRE's commission came to $265,725.00. With the receiver's fees of $670,548.50 and its counsel's $430,377.50 also paid, $1,343,013.41 remains, per the Third Report, App. "L".

Meridian's August 14, 2026 statement of balance puts what it is still owed at $11,870,806.80: construction loan principal of $5,740,453.15, interest of $6,090,249.10, fees of $15,030.00 and $25,074.56 of swingline interest, accruing at $935.77 a day at Meridian's prime rate of 4.45% plus 1.50%, per the Third Report, App. "H", p. 217. Blaney McMurtry LLP has given the receiver an opinion that, subject to standard assumptions and qualifications, Meridian's security is valid. The receiver has not sought one on the Fiera and Westmount mortgages, "as there will not be distribution to these secured creditors if the Surplus Distribution and the Assignment Agreement are approved," per the Third Report, paras. 59–60.

The purchasers and the trades

The buyer took none of the pre-sale agreements. The receiver sent termination and disclaimer notices to 56 purchasers on August 1, 2025, and held six agreements listed in Schedule "E" to the vesting order open for 45 days so their purchasers could negotiate with the buyer; on or about September 9 the buyer said it would assume none, and those six were terminated on or about September 17, per the Third Report, paras. 24–27. The receiver's September 23, 2025 letter to purchasers put the total at 63 terminated agreements, per the Third Report, App. "F", p. 165. Approximately $11,200,000 of their deposits had been released from escrow and spent on construction, according to the Second Report, para. 19.

Aviva Insurance Company of Canada and Westmount, its administrative agent, brought an unopposed motion for a deposit return protocol, which Justice Steele approved on September 9, 2025. Tarion Warranty Corporation covers the first $20,000 of any individual deposit. The protocol's release was widened to "any other monies" paid for the units, to reach deposits made for improvements; when counsel for one purchaser asked what redress remained for those, "It was clarified that such claims would be unsecured claims as against the companies," per the Endorsement of Steele J., Sept. 9, 2025, paras. 1, 3, 5, 7–8. The receiver has signed a release and termination agreement for each purchase agreement, says it is aware of no outstanding obligations under the protocol, and will send any questions after its discharge to the deposit insurers' advisor, per the Third Report, paras. 29–32.