Diamond Luxury: 316 William Street is ordered out of the receivership, unsold

The building at 316 William Street in London, Ontario "is the only real remaining asset of Diamond Realty and is derelict," Justice Nicholson wrote on October 30, 2026. "It has been vandalized, and, for example, used as a 'toilet'." The cost-benefit analysis in the receiver's First Report satisfied the judge that there is "no prospect of rehabilitating the property for the benefit of the creditors," per the Endorsement of Justice Nicholson, Oct. 30, 2026, para. 5. On the receiver's unopposed motion to be discharged and, "in particular, to be released from any obligations with respect to the debtors' property at 316 William Street," the judge approved the plan of the receiver, Albert Gelman Inc., to remove the building from the receivership estate, and signed the order provided, per the Endorsement, Oct. 30, 2026, paras. 1–2, 11, 17.

The judge found "no realizable equity in the subject property for TD Bank, the City of London or any unsecured creditors, or for the debtor, Diamond Realty," and that "continued administration of the subject property would diminish rather than enhance the receivership estate." TD Bank and the City, "properly served with the motion, do not oppose it," the endorsement records, per the Endorsement, Oct. 30, 2026, para. 10. It puts the debt owing to TD "in excess of $585,000 from Diamond Realty and $778,000 from Diamond Luxury," and records that TD does not wish to exercise any of its rights or remedies under its mortgage "to repossess the property," per the Endorsement, Oct. 30, 2026, paras. 7, 9.

Albert Gelman was appointed on TD's application under s. 243(1) of the Bankruptcy and Insolvency Act (BIA) by two orders: Justice Kalajdzic's of July 24, 2026, over the builder, Diamond Luxury Developments Corp., and Justice Cook's of August 7, over the brokerage that owns the building, Diamond International Realty Inc., per the Endorsement, Oct. 30, 2026, para. 3 and the receiver's First Report of the Receiver, Oct. 15, 2026, paras. 1–2, 6–7. The bank's application was reported here on July 26, and the receiver's motion on October 20.

The receiver's duty, and s. 243

Agreeing with counsel, the judge held that the appointment orders "empower, but [do] not obligate the Receiver to take possession of the subject property." The receiver's duty, the endorsement continues, "is to sell the subject property and realize the proceeds from the sale for the benefit of the creditors," citing Ostrander v. Niagara Helicopters Ltd. et al., 1973 CanLII 467, and "Where the management of the subject property actually erodes the possibility of any benefit to the creditors, it is not in their best interests to require the Receiver to continue to act," per the Endorsement, Oct. 30, 2026, para. 13.

Section 243 of the BIA, as the endorsement puts it, "includes the provision that the court may require the receiver to 'take any other action that the court considers advisable'," which the judge called "broadly worded." Given that the purpose of a receivership is, in the endorsement's words, to "enhance and facilitate the preservation and realization of the assets for the benefit of creditors," the judge concluded that discharging the receiver from any further responsibility for the property "is consistent with the purpose and wording of s. 243 of the BIA," citing Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc., 2019 ONCA 508, at para. 73, per the Endorsement, Oct. 30, 2026, para. 14.

The endorsement also approves the First Report and the receiver's activities described in it, says the receiver "has taken responsible steps to manage the property since its appointment," records the judge's satisfaction that it is "acting in good faith," and accepts that the companies' principal, also a respondent, "is not engaged in the receivership process," per the Endorsement, Oct. 30, 2026, paras. 3, 6, 10, 12, 15.

Title stays with Diamond Realty

The Release and Discharge Order removes the property from the receivership effective on the day the receiver delivers written notice of the order to The Corporation of the City of London, which the order calls the "Release Date", per the Release and Discharge Order, Oct. 30, 2026, para. 7. Nothing in it "transfers, conveys, surrenders or vests the Real Property or any interest therein in any person." Title and possession remain with Diamond Realty, and the rights, interests and remedies of TD Bank, the City and any other person in respect of the building "shall be unaffected by this Order," per the Release and Discharge Order, Oct. 30, 2026, para. 8.

From the Release Date the receiver has no obligation or liability of any kind in respect of the building. It is not deemed to be an owner, occupier or person having care, charge, possession, management or control of it "for any purpose," and need not pay its realty taxes, utilities, by-law charges, inspection fees, penalties or other amounts, per the Release and Discharge Order, Oct. 30, 2026, para. 9. It is authorized, among other things, to deliver the keys and any access information to the City and to cancel the insurance it placed, and the stays in the August 7 order are lifted from that date "to the extent necessary to permit the City to exercise its statutory rights and remedies in respect of the Real Property," per the Release and Discharge Order, Oct. 30, 2026, paras. 10, 12.