Highline Metrotown: KingSett's CCAA around a $7.55 million GST trust

By the time a receiver arrived in December 2024, the developer's sales agent, Rennie, had sold 213 of the 332 strata lots in the Highline tower, a 48-storey mixed-use building at 6511 Sussex Avenue in Burnaby, and the hotel component inside it had gone to a third party. The developer, 6511 Sussex Heights Development Ltd., still owned 119 units, none of them under contract, per the First Report of the Receiver, Jan. 13, 2025, s. 2.0, para. 2; s. 3.0, para. 1. The company had missed its September 1, 2024 interest payment on a $176,500,000 first-mortgage loan from KingSett Mortgage Corporation, per the Affidavit No. 1 of Daniel Pollack, Nov. 5, 2024, paras. 5, 25. Then, on January 8, 2025, a letter from the Canada Revenue Agency reached the receiver: 6511 Sussex owed $8,152,926 in GST, of which $7,551,095 was claimed as a deemed trust under the Excise Tax Act and $601,831 was penalties and interest, per the First Report of the Receiver, Jan. 13, 2025, s. 2.1.3, para. 1.

That letter set the course of the next eighteen months. KingSett first asked the court to put the company into bankruptcy, and that application was adjourned. Fourteen months later it petitioned under the CCAA against a company already in receivership, with the stated purpose of reversing the priority of the Crown's claim so that it could credit bid for the shares. On July 27, 2026, Justice Masuhara of the Supreme Court of British Columbia approved that credit bid by reverse vesting order and, the same day, signed the order taking 6511 Sussex out of the receivership once the deal closes, per the Reverse Vesting Order, July 27, 2026, para. 3 and the Discharge Order, July 27, 2026, paras. 3, 5.

The bankruptcy application, and the Crown's answer

KingSett's notice of application of January 13, 2025 asked for an order directing the receiver to assign 6511 Sussex into bankruptcy, with KSV as trustee. "It is appropriate and indeed common for a creditor to seek to invoke the distribution mechanism provided for under the BIA to alter priorities in its favour," the application said, and: "KingSett had no involvement in Sussex's decision not to remit GST and did not benefit from that decision," per the Notice of Application (bankruptcy), Jan. 13, 2025, Part 1, para. 1; Part 3, paras. 3, 9. The receiver told the court it understood "the principal purpose of the Bankruptcy Application is to reverse the priority of the CRA Deemed Trust Claim," per the First Report of the Receiver, Jan. 13, 2025, s. 2.1.3, para. 4.

The Attorney General of Canada opposed it. The deemed trust, its response said, was $7,551,095.38, "the amount collected by 6511 Sussex but not yet remitted," and it pointed to KingSett's own receivership affidavit, which alleged that the developer had received $7,531,225 in GST on unit sales and used it "for internal obligations, which it would not disclose." KingSett held a prescribed security interest under the Excise Tax Act, the Crown said, but approximately $5.9 million of the deemed trust ranked ahead of it, and KingSett had not shown it would suffer a shortfall. The application sought a bankruptcy "solely in order to reverse priorities entirely in KingSett's favour," and a bankruptcy order would "nullify the entirety of the Crown's GST deemed trust," per the Application Response of the AGC, Jan. 24, 2025, Part 4, paras. 2–3; Part 5, paras. 9–11, 14, 19 and the Affidavit No. 1 of Daniel Pollack, Nov. 5, 2024, para. 49.

The application was adjourned, and in connection with the adjournment the CRA agreed to permit distributions to KingSett in the receivership notwithstanding its deemed trust claim, per the Joint Sixth Report and Pre-Filing Report, Mar. 31, 2026, s. 2.1.3, para. 2. On October 17, 2025 the court approved an amended unit sale process with Anthem Properties Group Ltd. and Anthem Realty Ltd. as sales agent, per the Joint Seventh Report and Second Report, July 23, 2026, s. 1.0, para. 7. Anthem's minimum price for each unit sits in a confidential supplement to the receiver's Fourth Report, sealed until the last unit sold in that process closes, per the Fourth Report of the Receiver, Sept. 30, 2025, s. 5.1, para. 1; s. 6.0, paras. 1–3 and the Sealing Order, Oct. 17, 2025, para. 1. By July 22, 2026, 33 units had closed and five more were under contract, with closings set between July 27 and October 5, 2026; the strata corporation's liens had been settled by a distribution of $875,000 in full and final satisfaction, per the Joint Seventh Report and Second Report, July 23, 2026, s. 2.0, para. 2; s. 2.1.2, para. 3.

A CCAA inside a receivership

KingSett filed its CCAA petition on March 18, 2026, supported by a three-page affidavit. It meant to credit bid its debt and subscribe for shares in 6511 Sussex, the affidavit said, and the initial order and the CCAA's protections "will reverse the priority of the GST Liability." Its conclusion: "Without CCAA protection, the sale of the Highline Property would be subject to the GST Liability and would not be a commercially viable option for KingSett," per the Affidavit #1 of Daniel Pollack, Mar. 18, 2026, paras. 6–7, 10.

The receiver, proposing itself as monitor, put it the same way. KingSett was "seeking the proposed Initial Order and the protections granted under the CCAA to reverse the priority of the CRA Deemed Trust Claim and thereby facilitate the submission of its Stalking Horse Bid." The CCAA case would run beside the receivership and would not touch the Minoru Boulevard site in Richmond, and the CRA had advised that it did not intend to take a position on the petition or appear at the hearing, per the Joint Sixth Report and Pre-Filing Report, Mar. 31, 2026, s. 3.0, paras. 3–4. Management had no hand in the cash-flow forecast, "given this is a creditor-driven CCAA application," per the Joint Sixth Report and Pre-Filing Report, Mar. 31, 2026, s. 4.0, note 4.

Justice Masuhara granted the initial order on April 9, 2026. It declares that "the Respondent is a company to which the CCAA applies," appoints KSV as monitor with enhanced powers to negotiate a stalking horse agreement for the company, and grants a $250,000 administration charge ranking equally with the receiver's charge and ahead of the receiver's borrowings charge; it does not mention the CRA's deemed trust claim, per the Initial Order, Apr. 9, 2026, paras. 2, 17, 19, 31. The amended order of April 17 extended the stay to July 24 and spared the company a new disclosure statement under the Real Estate Development Marketing Act, which the monitor said would have given buyers whose purchases had not closed a right to rescind, per the First Report of the Monitor, Apr. 13, 2026, s. 5.0, para. 3(a). By July the monitor recorded the result in one sentence: "As a result of the commencement of the CCAA Proceedings, the priority of the CRA Deemed Trust Claim has been reversed," per the Joint Seventh Report and Second Report, July 23, 2026, s. 1.0, para. 12; s. 2.1.3, para. 2.