288 Dundas Street: RBC gets its receiver over five Brampton companies

The building at 288-292 Dundas Street in London, Ontario holds a restaurant and a cannabis retailer. Its owner, 14227280 Canada Inc., borrowed from Royal Bank of Canada in September 2022 and granted the bank a mortgage registered on title on November 1, 2022 in the principal amount of $1,112,553. By January 30, 2026 the term facility had matured unpaid, property taxes had fallen into arrears, and RBC put the balance at $991,077.28, per the bank's Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 3, 4(d), 5(c), 18(d), 22. The London property is the largest single asset in a receivership that also reaches four other companies with registered offices in Brampton, and it was the centre of the argument the companies' principal made, without a lawyer, for keeping the receiver out.

The court appointed the receiver on the day of the hearing and postponed nothing. On August 25, 2026, Justice M. T. Doi of the Ontario Superior Court of Justice, sitting at 7755 Hurontario Street in Brampton, appointed Grant Thornton Limited receiver, without security, over all the property of 12823772 Canada Inc., 12823896 Canada Inc., 14227280 Canada Inc., 2794693 Ontario Inc. and Nile Renovation and Construction Ltd., under s. 243(1) of the BIA and s. 101 of the Courts of Justice Act, in court file CV-26-00004208-0000, per the Receivership Order, Aug. 25, 2026, recitals and para. 2. A sixth respondent, 13466566 Canada Inc., was left out on the bank's own agreement. The order does not give reasons.

Six borrowers, one lender

RBC's case, as its factum summarizes the affidavit of one of its officers sworn May 14, 2026, is a set of loans made between 2022 and 2024 to six companies that share directors. The principal and a second director are the sole registered directors of the four numbered Canada corporations; the second director also sits on the board of 2794693 Ontario Inc., and a third person is Nile's sole director. RBC holds general security agreements from all six, chattel mortgages from three, the London mortgage and a general assignment of rents, together with six guarantees from the principals. It says it is the first-registered general secured creditor against each company, per the Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 2, 4–8.

Several of the facilities were Canada Small Business Financing loans. The defaults, as RBC lists them, began with missed payments by 2794693 Ontario Inc. on two term loans, and by the end of January 2026 every company had at least one: matured term loans at 772, 566 and 280, two missed payments on 772's small-business loan, unauthorized overdrafts at three companies, and the London tax arrears. Demands went out on February 5, February 12, February 17 and March 18, each with a notice of intention to enforce security under s. 244 of the BIA, and none was honoured, per the Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 9–23.

The bank's table of what the four numbered Canada companies owed as of January 30 and March 3, 2026 runs to fourteen lines, from a Visa balance of $11.48 to the London loan. Its largest items after that loan are an accelerated small-business term loan to 772 of $382,082.83 and one to 896 of $237,587.11. The total in the fresh factum is $2,101,859.01. The first version of the factum, dated July 28, had totalled $1,110,781.73; the bank's amended factum explains that the summation line "inadvertently excluded the last line item of $991,077.28," which still appeared in the table and in the demands, per the Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 22–22A and the Factum of RBC, July 28, 2026, para. 22. Separately, the demand letters put 2794693 Ontario Inc.'s debt at approximately $700,000 and Nile's at over $300,000 as of January 30 (Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 12, 16).

Two companies already bankrupt

Two of the six were no longer in their directors' hands by the time the application was heard. According to an RBC officer's supplementary affidavit sworn July 27, 2026, the bank learned from the licensed insolvency trustee in July that Nile and 2794693 Ontario Inc. had assigned themselves into bankruptcy in February 2026, with Kunjar Sharma & Associates Inc. as trustee, per the Supplementary Application Record, July 28, 2026, Tab 1, para. 4. The trustee's notices, exhibited to that affidavit, date Nile's assignment to February 18 and 2794693 Ontario Inc.'s to February 19, and describe the latter as operating as Denny's Canada Diner in Barrie. The companies' own statements of affairs list total assets of $1.00 for Nile against liabilities of $447,539.00, and $3.00 for the diner company against $1,759,887.00, per the Supplementary Application Record, July 28, 2026, Tab 1, Ex. "A", pp. 12–13, 21–22. The trustee told RBC's counsel by email on July 17 that it was "not in possession of any assets that may be subject to bank security" (Supplementary Application Record, July 28, 2026, Tab 1, Ex. "A", p. 8).

RBC relied on s. 69.3(2) of the BIA, which leaves a secured creditor free to realize on its security despite a bankruptcy, and neither bankrupt company nor its trustee opposed the appointment, per the Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 1B, 34.

The fourth numbered company went the other way. In late June 2026 RBC received $310,843.02 toward what 13466566 Canada Inc. owed, through counsel retained for that payout. The bank says the company acknowledged owing priority amounts to the Canada Revenue Agency but did not provide evidence that they had been paid, and agreed to adjourn the receivership over 566 alone so that it could finish paying out, per the Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 1A, 24. Paragraph 34 of the order adjourns that part of the application "to a date to be scheduled" (Receivership Order, Aug. 25, 2026, para. 34).

The principal's case for waiting

The application was first returnable on August 7 before Justice Kumaranayake. The principal attended and told the court that he intended to represent four of the companies, that he had received the application materials only recently, and that he meant to file a response. RBC's counsel "did not strongly oppose a short adjournment." The judge told him that the Rules of Civil Procedure require a corporation to be represented by a lawyer unless the court grants leave under Rule 15.01, encouraged him "to review the applicable rules and to also obtain legal advice," and set a timetable that adjourned the application to August 25, per the Endorsement of Justice Kumaranayake, Aug. 7, 2026, paras. 1–4, 9.

Before that hearing, RBC's supplementary affidavit had exhibited July correspondence with two law firms described as "purported to be engaged in limited capacities" for some of the respondents, neither of which had replied since July 6 (Supplementary Application Record, July 28, 2026, Tab 1, para. 6). No lawyer went on the record for the companies before August 25.

The principal's responding factum, which he signed on August 20 on behalf of 772, 896 and 280, asks for three things. The first is leave under Rule 15.01(2) to represent the companies, relying on his position as a registered director and officer, his involvement in the transactions at issue and "the asserted inability of the corporations to fund an external legal retainer at this stage," with the Court of Appeal's decisions in GlycoBioSciences and Stayside Corporation cited for the balance between the exceptional nature of leave and access to justice, per the Responding Factum of the Respondents, Aug. 20, 2026, paras. 3, 9–12.

The second is an adjournment to let two transactions finish. The factum says 280 holds an appraisal of the Dundas Street property by Guggi Appraisals Inc., dated July 22, 2026, at $1.2 million, against RBC's claim of $991,077.28, which it calls "an asserted equity cushion of more than $200,000," and that 280 is finalizing a refinancing. It says 896 signed a binding asset purchase agreement dated August 3, 2026 to sell its business assets for $365,000, with a target closing date of October 28, 2026, and that this "private realization path" avoids the professional costs of a court receivership. Citing Freure Village, M & K Construction and John Taylor's Truck Sales, it argues that a receivership is discretionary, that a creditor adequately protected by its collateral does not need one, and that the companies were asking for "a defined adjournment rather than an indefinite delay," to a date after October 28. It also points to RBC's own agreement to adjourn over 566 and asks for "a comparable, defined opportunity," per the Responding Factum of the Respondents, Aug. 20, 2026, paras. 5–7, 15–21.

The third, in the alternative, is to postpone the effectiveness of any receivership order for a short fixed period so that "a firm and concrete refinancing or payout" could close, the remedy granted in Freure Village itself. The companies offered to provide updated evidence on the sale, the refinancing and any payments to RBC at the adjourned date (Responding Factum of the Respondents, Aug. 20, 2026, paras. 19, 21–22).

RBC's answer

RBC's position was that the companies were unrepresented, that the court had not granted leave on August 7, and that the responding materials, even if considered, "reinforce RBC's position that it has lost faith in the Opposing Debtors' management." It said those materials contain no evidence about 772 at all. On 280, the bank argued that if the appraisal is accurate, "competent management ought to have been able to repay 280's term loan at its maturity." On 896, it described the purchase agreement as providing for no deposit until the buyer's conditions are satisfied, subject to financing, due diligence, franchisor and landlord approval, requiring 896 to keep paying the business's costs until closing, and allowing closing to be delayed twice past October 28. RBC also submitted that the price would not repay what 896 owes the bank. These are the bank's characterizations of the principal's evidence, made in argument and untested, per the Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 26B–26F.

On the law, the bank relied on its security's express right to appoint a receiver on default, citing Elleway Acquisitions and iSpan Systems for the proposition that the remedy is then not regarded as extraordinary, and on Carnival National Leasing for the rule that reasonable time to repay a demand loan is measured "in days, not weeks" (Fresh as Amended Factum of RBC, Aug. 20, 2026, paras. 29–37).

What the order says, and does not

The order's recitals list the principal's responding affidavit sworn August 14 and his factum among the materials read, and record that the court heard submissions from RBC's counsel and from the principal on behalf of 772, 896, 280 and 566. It does not say whether leave under Rule 15.01(2) was granted, and it contains no finding on the appraisal, the sale or the refinancing, per the Receivership Order, Aug. 25, 2026, recitals. Nothing in it postpones its effect: paragraph 35 makes it effective the day it was made.

The rest follows the Commercial List model. Grant Thornton may sell property without court approval up to $50,000 a transaction and $200,000 in total, holds a Receiver's Charge ranking first, subject only to ss. 14.06(7), 81.4(4) and 81.6(2) of the BIA, and may borrow up to $150,000 under a Receiver's Borrowings Charge ranking behind it. The receiver is expressly authorized to deal with any trustee in bankruptcy of the companies, and nothing in the order stops it from acting as their trustee itself. RBC gets its costs of the application against the companies, on the terms of its security or otherwise on a substantial indemnity basis, per the Receivership Order, Aug. 25, 2026, paras. 3(k), 3(p), 19, 22, 29, 32, 35. Any interested party, the principal's companies included, may move to vary the order on seven days' notice (Receivership Order, Aug. 25, 2026, para. 33).