AG Dundas: a broker fee does not make an appeal as of right

On 2.087 acres of Dundas Street East in Mississauga, land its owners meant to redevelop, stand two one-storey commercial buildings. At 1000 Dundas, a building of about 5,200 square feet and its parking lot hold roughly 44 tenants operating as used-car dealers. At 1024 Dundas, a four-unit building of about 44,000 square feet, counting the basement, has solar panels leased on its roof and one occupant: Ahmed Asset Management Inc., a company related to the debtors' principal, which the receiver says has never paid rent there. The project planned for the site was two towers of 16 and 20 storeys over a four-storey podium, with 462 residential units and 8,073 square feet of ground-floor retail, and the City of Mississauga had not approved it, according to the Third Report of the Receiver, Aug. 14, 2026, paras. 20–22.

Since April the owners have maintained that the court-supervised sale of those buildings was stayed by operation of law, because they had filed a notice of appeal. On September 1, Pomerance J.A. of the Court of Appeal for Ontario released a chambers endorsement holding that it never was. Neither the April 1 order approving the receiver's sale process nor the July 10 order authorizing it to terminate the related-party lease was appealable as of right under s. 193(c) of the Bankruptcy and Insolvency Act, leave under s. 193(e) was refused, and there is "no automatic stay of either the Sale Process Approval Order or the Lease Termination Order under s. 195 of the BIA," per the Endorsement of Pomerance J.A., Sept. 1, 2026, pp. 1, 4.

A loan that matured before the approvals came

Morrison Financial Mortgage Corporation lent against the two properties under a commitment of March 10, 2023: $10,250,000 to refinance existing debt, and a facility for development soft costs up to a total of $15,000,000. The security was a pair of cross-collateralized first mortgages registered on April 25, 2023, a general security agreement and assignments of rents, backed by guarantees from the principal, Mohammed Irfan Ahmed, and the general partner. The loan matured on May 1, 2025 and was not repaid. Morrison served its demand and notices of intention to enforce security on June 5, 2025, putting the debt that day at $14,898,299.84, and issued its application for a receiver on July 8, according to the Notice of Application, July 8, 2025, paras. 2(e)–(j), 4, 6, 8.

The application was put over for a forbearance agreement dated September 30, 2025, which carried the debtors' consent to the appointment of Albert Gelman Inc. as receiver and manager, per the Supplementary Affidavit of Chawin Vajanopath, Dec. 9, 2025, paras. 2–3. The debtors did not refinance by the agreement's December 5 deadline, the receiver later reported in its First Report of the Receiver, Mar. 9, 2026, paras. 31–32. When the application returned before Justice Myers on December 17, debtors' counsel asked that the receiver "not launch into a sales process too quickly." The judge left that to the parties and signed the order, calling the property "a good case for a neutral, court-appointed officer to bring stability to the property," per the Endorsement of Justice Myers, Dec. 17, 2025, paras. 2–4.

By May 26, 2026, Morrison was owed over $16 million, and the receiver puts the interest accruing on that debt at approximately $120,000 a month. After the appointment, Ahmed Developments Inc., a company the receiver understands to be controlled by the principal, registered a construction lien against the properties on May 25, 2026 for approximately $7.9 million; no determination has been made as to its validity, according to the Third Report of the Receiver, Aug. 14, 2026, paras. 24, 28, 42(c).

Plain vanilla, with a fee for a short circuit

The receiver's First Report laid out the process. It took proposals from four brokers and chose CBRE Limited, with Morrison's consent; the properties would be listed unpriced, separately and as a two-property assembly, on an as-is basis, with any sale subject to court approval. One listing term was particular to this receivership: a fee to CBRE if the properties went by credit bid or refinancing, of $50,000 plus taxes within the first 30 days of the listing period and $100,000 plus taxes after that. The receiver said those fees "are materially less than the commission that would otherwise be payable if CBRE identified a conventional sale," per the First Report of the Receiver, Mar. 9, 2026, paras. 75–79, 83.

The debtors answered with a cross-motion to adjourn approval for at least fourteen days, so they could review the sealed broker proposals and retain an appraiser. The receiver replied on March 30 that it would share the sealed appendix under a confidentiality agreement, with estimated values redacted if the debtors or anyone related to them meant to bid. Debtors' counsel had also reported a prospective institutional tenant for a 25-year net lease of three units at 1024 Dundas at about $76,000 a month; the receiver said it had seen no verifiable evidence of that tenancy, and that its broker considered a long-term lease detrimental to the sale, per the Supplementary First Report of the Receiver, Mar. 30, 2026, paras. 5, 8(a), 11, 14.

The debtors' former counsel had been removed from the record on March 17, per the Endorsement of Justice Dunphy, Mar. 17, 2026, para. 3. On April 1 the lawyer they were retaining appeared as agent only, having been called to trial in Milton, to ask for a second adjournment. Justice Dunphy refused it and approved a process he described as "as close to 'plain vanilla' as the circumstances of this case permit." Selling now, as is, was "quintessentially a matter of the business judgment of the Receiver"; the debtors' redemption rights were unimpaired; and while the debtors attacked the broker fee, the respondent "provides no evidence whatsoever as to why it is unreasonable or off-market," per the Endorsement of Justice Dunphy, Apr. 1, 2026, paras. 7–9, 14–17. "Delay for delay's sake – and that is clearly the agenda being pursued – amounts to writing a cheque on someone else's bank account," he wrote, per the Endorsement of Justice Dunphy, Apr. 1, 2026, para. 21.

Two notices of appeal and a lease

The debtors delivered a notice of appeal dated April 6 and a longer one dated April 9, asking the Court of Appeal to rehear the motion or send it to a different judge, per the Notice of Appeal, Apr. 6, 2026, p. 1. The April 9 version complains of a receiver's factum served 23 hours before the hearing and of a sale process approved "with disbursement of $100,000 to CBRE." The broker terms, it says, were sealed from equity holders "who hold almost $20 million of acknowledged equity" while Morrison was consulted on every material decision, and jurisdiction lies under s. 193(c) without leave, according to the Notice of Appeal, Apr. 9, 2026, grounds 1, 2(c), 4; jurisdiction, paras. 2–3. A motion for a stay and, in the alternative, leave, served April 17, was never scheduled, per the Third Report of the Receiver, Aug. 14, 2026, paras. 7, 34.

The receiver meanwhile turned to Unit 1 of 1024 Dundas. The principal had told it that Ahmed Asset Management paid no rent under a longstanding set-off arrangement, occupancy in exchange for property management services, which the written lease of January 1, 2025 did not record. On April 8 the receiver demanded approximately $96,000 in rent accrued since its appointment; it was not paid. Justice Dietrich declined on June 9 to put the receiver's lease motion off until the appeal was decided, adjourning it only because the tenant's counsel had not been served, per the Endorsement of Justice Dietrich, June 9, 2026, paras. 3–4. On July 10 she refused to adjourn again, and for the purposes of that motion accepted the receiver's submission, on the authority of AFC Mortgage Administration Inc. v. Sunrise Acquisitions (Elmvale) Inc., 2024 ONCA 764, that a sale process order needs leave, so that "the commencement of an appeal does not result in a stay of the Sale Process Approval Order," per the Endorsement of Justice Dietrich, July 10, 2026, para. 11. Weighing the equities, she found a non-arm's-length lease, no rent paid, a claimed set-off inconsistent with the written terms, a broker who saw the lease as an impediment to selling, and default remedies in the lease itself. She authorized termination and gave the tenant 30 days to vacate, per the Endorsement of Justice Dietrich, July 10, 2026, paras. 18, 25–26, 31.