Cheema Carriers: the contempt motion that became a compliance order

Bank of Montreal first asked for a receiver over Cheema Carriers Corp. and 1000083465 Ontario Inc. in April 2025. It did not get one for ten months, and it got there by a route the debtors themselves proposed.

On June 16, 2026 — a year to the day after the hearing that adjourned the application — Justice Cavanagh dealt with what the receiver says it found once it was finally appointed.

The year the bank waited

The application was opposed. Justice Dietrich set a schedule in May 2025 and heard the matter on June 16, 2025, by which time the debtors had entered into an agreement of purchase and sale for their commercial real property in the Greater Toronto Area, per Endorsement of Justice Dietrich, June 16, 2025, paras. 1–2.

The parties adjourned on consent terms with a hard number in them. The transaction was to close and at least $10 million was to reach the bank by August 1, 2025 — or closing could be extended to September 30 on a further $100,000 deposit, pushing payment to October 1. If either happened, the bank would withdraw its application. If the agreement was terminated or neither condition was met, the debtors consented in advance to the appointment of a receiver, reserving only the right to object to the identity of the trustee, per Endorsement, June 16, 2025, paras. 3–4.

The matter went over to October 3, 2025, then December 3, 2025, each time with an aide memoire filed. Goldhar & Associates Ltd. was appointed receiver and manager on February 18, 2026, per Appointment Order, February 18, 2026.

A consent-to-appointment adjournment is a common and usually sensible bargain. It gives a borrower a defined window to refinance or sell on its own terms, and gives a lender a receivership without a contested hearing if the window closes. What it also does is put eight months between the application and the appointment.

What the receiver said it found

The receiver's motion was for an order holding Faraz Cheema, the principal of the debtors, in contempt of court for failing to comply with the obligations imposed by the Appointment Order — specifically, by obstructing the receiver and failing to cooperate with it.

The consequence, as the receiver put it: it remains without fundamental documents and information regarding the debtors' business and property, without access to their electronic systems, and without a complete picture of the assets of the debtors, per Endorsement of Justice Cavanagh, June 16, 2026, para. 2.

Mr. Cheema denied failing to comply and asked that the contempt motion be dismissed. But he also said something that decided the motion: he was prepared to comply with a compliance order giving specific directions, per Endorsement, June 16, 2026, para. 3.

The materials show a genuinely fought motion — a factum from the receiver on June 3, a brief of transcripts on June 4, a factum from Mr. Cheema personally on June 10, a reply factum on June 12, and a schedule with his responses filed the day before the hearing.

How the judge resolved it

This is the part worth reading closely, because it is a practical answer to a problem that comes up constantly and is usually described only as a choice between two bad options.

Before the hearing, the receiver had uploaded a draft contempt order that included provisions specifying how Mr. Cheema could purge his contempt — what he had to deliver, and by when.

At the hearing, at the judge's request, counsel for the receiver and counsel for Mr. Cheema left to review those provisions together. They came back having agreed to a form of order with compliance provisions substantially in the form of those in the draft contempt order — with no finding of contempt, per Endorsement, June 16, 2026, para. 4.

The receiver got the operative half of what it asked for. Mr. Cheema avoided the finding. And the court did not have to decide whether conduct that both sides characterised differently crossed the line into contempt.

Two details keep this from being a pure compromise. First, the judge did not simply take the agreed order as filed: counsel were to upload it, and he would review it and sign it only if satisfied — a contempt-adjacent order is still the court's order, not the parties', per Endorsement, June 16, 2026, para. 5.