Arkle Motor Freight: RBC's receivership closes on a Brampton condominium unit

Arkle Motor Freight Inc. described itself, on a website page Royal Bank of Canada printed in October 2024 and filed with its receivership application, as a carrier established in 2017 that hauled dry van and temperature-controlled freight "throughout the Unites States and Canada" from an address on Kennedy Road in Caledon, and offered warehousing, packaging and storage besides, per the Application Record, Dec. 6, 2024, pp. 77–80 (Exh. B). Its sister company, 15383960 Canada Inc., held one asset: Unit 22, Level 1 of Peel Standard Condominium Corporation No. 1135, at 20 Newkirk Court in Brampton. The transfer to 153 was registered on December 1, 2023 at $2,350,000, and the same day RBC registered a first charge on the unit, with a general assignment of rents behind it, per the parcel register in the Application Record, Dec. 6, 2024, p. 85 (Exh. C).

On September 18, 2026, Justice Fowler Byrne of the Ontario Superior Court of Justice, sitting in Brampton, vested that unit in 17222190 Canada Inc. and, in a second order the same day, approved the distribution of what the estate held and the discharge of the receiver, msi Spergel inc. The receivership had run a little over seventeen months, and it began by consent.

Eleven months with the bank

RBC's facilities were papered on November 10 and 11, 2023: a loan agreement with Arkle, a loan agreement with 153, a credit card agreement, general security agreements from each company, the mortgage and the assignment of rents, per the bank's affidavit, sworn by a senior manager in its Special Loans department on November 29, 2024 (Affidavit of David Kennedy, Nov. 29, 2024, paras. 1, 6–7). The companies cross-guaranteed each other, Arkle for up to $1,997,500 of 153's debt and 153 for up to $1,433,378 of Arkle's, and their sole director guaranteed $700,000 and $500,000 respectively. One of Arkle's facilities was issued under Export Development Canada's Trade Expansion Lending Program and carried an EDC guarantee, per the Affidavit of David Kennedy, Nov. 29, 2024, paras. 8–11.

By June 13, 2024 the bank was writing to Arkle about reporting covenants for the year ended December 31, 2023 (review-engagement statements for Arkle, compilation statements for 153, aged receivables and payables, an equipment financing list), none of which had arrived, and acknowledging "your plan to remedy such default, on or before June 21, 2024," per the non-tolerance letter at Application Record, Dec. 6, 2024, pp. 315–316 (Exh. K). The companies' accountant had written to the bank four days after the letter asking for more time. The relationship manager's emails through the summer are in the record. On July 29 he wrote that "the line of credit is not revolving" and that "there is no cash flow coming into the RBC accounts"; on September 10, that he did not think there were "enough receivables/customers/business to support a $1.25MM line of credit"; on October 3, that the September 30 blended payment of $14,072.20 on the real estate term loan had not come out, per the Application Record, Dec. 6, 2024, pp. 318–320 (Exh. L).

The file moved to Special Loans in October. The principal answered once, on October 16, per his email at Application Record, Dec. 6, 2024, p. 323 (Exh. L), and did not answer the request for a call that followed, according to the Affidavit of David Kennedy, Nov. 29, 2024, para. 20. Aird & Berlis LLP made formal demand on October 25, 2024 for $3,265,650.84: $1,259,322.48 on Arkle's revolving line, $1,092.12 on the credit card, $1,996,061.33 on 153's term facility, and $9,174.91 in legal fees, with s. 244 notices enclosed, per the demand letter at Application Record, Dec. 6, 2024, pp. 326–327 (Exh. M). By then 153 also owed the City of Brampton $19,272.45 in property tax, per the Affidavit of David Kennedy, Nov. 29, 2024, para. 18.

A monitor first, then a consent

The application, returnable January 16, 2025, relied on the contractual right to a receiver in both general security agreements. "RBC is justified in having lost confidence in the Debtors and their management," its factum argued, citing Elleway Acquisitions and iSpan Systems for the proposition that a receiver the security already provides for is not an extraordinary remedy, per the Factum of the Applicant, Jan. 3, 2025, paras. 4, 24–25, 29. Arkle's PPSA search showed 17 registration families, all but RBC's limited to equipment and vehicles or registered later; RBC was the only registered secured creditor of 153, per the Factum of the Applicant, Jan. 3, 2025, para. 9.

The companies had retained counsel only shortly before the first hearing and wanted to file materials. Justice Bloom adjourned the application peremptory to them to January 30, choosing a fixed date "because of its urgency in light of the risk to the security of the Applicant," per the Endorsement of Justice Bloom, Jan. 16, 2025, paras. 1–2. The terms of that adjournment were an order under s. 101 of the Courts of Justice Act appointing Spergel not as receiver but as monitor, with power to report on the companies' ability to make monthly payments to RBC and on any sale or refinancing effort to repay it. It required 153 to bring its property taxes current and the companies to pay RBC $50,000, both by 5:00 p.m. the next day, and gave the monitor a first-ranking charge for its fees, per the Order of Justice Bloom (appointing Monitor), Jan. 16, 2025, paras. 2–5, 14.

On January 30 the parties agreed to adjourn again, to February 13, peremptory to the respondents, per the Endorsement of Justice Fowler Byrne, Jan. 30, 2025, paras. 1–2. When the application next produced an order, on April 4, 2025, the respondents had new counsel and the bank had an agreement. "As the respondents have not complied with their interim obligations under a forbearance agreement, the applicant sought a consent order to grant a receivership pursuant to the earlier resolution agreement of the parties," Justice Doi wrote, per the Endorsement of Justice Doi, Apr. 4, 2025, para. 1. The terms of the forbearance and resolution agreements are not set out in either instrument.

Under the appointment order Spergel could sell property without court approval in transactions up to $50,000 each and $200,000 in aggregate, and could borrow up to $150,000 under a charge ranking behind only its own fee charge and the statutory priorities, per the Order of Justice Doi (appointing Receiver), Apr. 4, 2025, paras. 3(k), 22.

What was vested, and what came off title

The sale that needed the court was the Newkirk Court unit. The receiver signed an agreement of purchase and sale with 17222190 Canada Inc. dated February 17, 2026 and put it before the court as an appendix to its First Report of July 7, 2026, per the Approval and Vesting Order, Sept. 18, 2026, p. 1. The price is in confidential appendices to that report, which the discharge order seals until the earlier of the transaction's completion or further order, per the Discharge and Ancillary Order, Sept. 18, 2026, para. 4.

The purchased assets are the unit, its buildings and fixtures, and whatever rights 153 held in "benefits, advantages, licenses, guarantees, warranties, indemnities, income, rents and options" relating to it, to the extent assignable. On delivery of the receiver's certificate they vest free and clear, and five registrations come off title: RBC's charge and notice of assignment of rents of December 1, 2023; a condominium lien in favour of Peel Standard Condominium Corporation 1135, registered January 30, 2025; and a construction lien and certificate of action registered by an individual lien claimant on April 2 and May 5, 2025. Easements to utilities, Peel Region and the City of Brampton, and the condominium's own declaration and by-laws, stay on as permitted encumbrances, per the Approval and Vesting Order, Sept. 18, 2026, paras. 4–6, Schs. B–D. The net proceeds stand in for the unit and the discharged claims attach to them with their former priority; the order also exempts the sale from the Bulk Sales Act and protects the vesting against any later bankruptcy of the debtors.

No one appeared on the motion but the receiver's counsel, though the service list had been served, per the Discharge and Ancillary Order, Sept. 18, 2026, p. 3.

The distribution and the discharge

The second order approves the First Report and the receiver's activities in it, with the standard limit that only the receiver, in its personal capacity, may rely on that approval. It approves the receiver's interim statement of receipts and disbursements to April 30, 2026, the receiver's fees and disbursements of $67,527.70, those of Gowling WLG (Canada) LLP as its counsel of $16,790.19, and those of its former counsel, Fogler, Rubinoff LLP, of $6,189.63, together $90,507.52, per the Discharge and Ancillary Order, Sept. 18, 2026, paras. 3, 5–8.

The distribution comes in four steps from paragraph 59 of the First Report: $30,000 to RBC to repay the receiver's borrowings, with interest under the borrowing certificate; the City of Brampton's property tax arrears; the condominium corporation's fee arrears; and "the balance of any and all funds in the Debtors' estate to Royal Bank of Canada on account of the Debtors' secured indebtedness." A fee accrual of $150,000 covers the receiver's and Gowling's remaining work without a further passing of accounts, and any part of it left unspent also goes to RBC, per the Discharge and Ancillary Order, Sept. 18, 2026, paras. 9–11. The amount the bank will receive, and so what remains of the October 2024 demand, is not stated in either order.

Spergel is discharged when it files a certificate that all matters in the receivership have been completed to its satisfaction. From that filing it is released from liability for its acts as receiver, including matters "raised, or which could have been raised" in the proceeding, save gross negligence or wilful misconduct; it remains receiver for incidental duties and keeps the benefit of every earlier order's protections, per the Discharge and Ancillary Order, Sept. 18, 2026, paras. 12–13.