Among the people who signed for units in Lumina Eclipse, a 34-storey tower of 329 strata lots at 2381 Beta Avenue in Burnaby, were a barber, a massage therapist and the owner of a small office ergonomics start-up, each of whom deposed that they had bought a home to live in. Their deposits ran from about $35,000 to $205,000, on contracts signed between 2021 and 2023, when pre-sale demand in Greater Vancouver, in the court's words, "was materially stronger." In April 2026 the Monitor sent them notices of completion. Thirty-nine purchasers came to court instead, per the Reasons for Judgment, Aug. 25, 2026, paras. 6–12.
On August 25, 2026, Justice D.M. Masuhara, who has supervised the CCAA proceeding since its first day, declared their agreements unenforceable. Under s. 23 of the Real Estate Development Marketing Act, he held, the agreements "became unenforceable against them by the Developer at the time of its breaches which was before the start of these proceedings," and the stay orders could not change that. The reasons, reported at 2026 BCSC 1598, leave the purchasers' deposits, about $3.6 million against purchase prices of about $30.5 million, for another hearing, per the Reasons for Judgment, Aug. 25, 2026, paras. 9, 24, 112–113, 141.
A tower finished on its lender's money
KingSett Mortgage Corporation, the senior secured lender, then owed in excess of $189 million, brought the proceeding in January 2025, in the Monitor's account because of KingSett's "concerns regarding the Initial Debtors' financial mismanagement and operational failures." The tower was about 95% built and roughly 232 of its units were presold, but work had stopped: on October 31, 2024, KingSett learned that WBI Home Warranty Ltd. would no longer provide the mandatory warranty coverage, and on November 14 the City of Burnaby suspended the building permit. The initial order of January 8, 2025 appointed KSV Restructuring Inc. as monitor with enhanced powers and approved an $18 million interim facility from KingSett. It also relieved the developer of any obligation to file a new disclosure statement under s. 16(2) of REDMA and stayed purchasers' rights to rescind. AlixPartners Restructuring, Inc. took KSV's place on June 1, 2026, with the same professionals on the file, per the Eighth Report of the Monitor, July 23, 2026, s. 1.0, paras. 2–4 and n. 1; s. 2.1, para. 3.
The Monitor had the warranty and the permit reinstated on April 11, 2025 and reached substantial completion around March 17, 2026. Burnaby issued the occupancy permit on April 10, two days after the court granted an approval and vesting order and a distribution order, and closings began on April 27, per the Seventh Report of the Monitor, May 4, 2026, ss. 1.0, 3.1, 3.4, 4.0. By August 17, 164 presale units had closed and KingSett's debt was down to approximately $139.2 million, with a shortfall still expected on its second mortgage loan, per the Ninth Report of the Monitor, Aug. 18, 2026, s. 2.1, paras. 4–5.
What the amendments left out
The disclosure statement the developer filed with the BC Financial Services Authority on September 8, 2021 estimated completion between December 1, 2024 and March 1, 2025. The second amendment, in May 2024, moved that window earlier, to July 1 through October 1, 2024. The fourth, filed on December 3, 2024, 19 days after the permit suspension, disclosed receivership applications against two other developments with two directors in common, adding that "The Developer does not expect those applications to impact the sale of the Strata Lots in the Development," along with four builders' liens and a new window of January 15 to April 15, 2025. Each amendment declared that it disclosed all material facts without misrepresentation, per the Reasons for Judgment, Aug. 25, 2026, paras. 16–17, 37–40.
What went unsaid, according to the applicants, was a $12 million Canada Revenue Agency judgment of June 30, 2023; about $9.7 million the developer received from the City of Burnaby around September 2024 and allegedly misappropriated, a word the court noted came from KingSett's own affidavit; the warranty and permit suspensions and the halt in construction; the lapsed completion date; and the change of control to the Monitor. The next amendment, filed by the Monitor on November 25, 2025, disclosed the CCAA order, the tax liability and a completion window running to April 14, 2026, per the Reasons for Judgment, Aug. 25, 2026, paras. 41, 44. The Monitor calls the misuse-of-funds allegation "never substantiated," per the Seventh Report of the Monitor, May 4, 2026, s. 6.0, para. 4(c).
In the interval the Monitor had written to purchasers, on January 11, 2025: "Your Purchase Agreement remains valid and enforceable, and we aim to close it as quickly as possible." The purchasers' lawyers first wrote invoking s. 23 in December 2025, per the Reasons for Judgment, Aug. 25, 2026, paras. 27, 48.
The case against the purchasers
The Monitor, KingSett and Westmount West Services Inc., the deposit insurer and second-position secured creditor, opposed. In the court's summary, they said the applicants had "lain in the weeds" until KingSett's money and the Monitor's work had made the project a success, were relying on a "loophole," would receive the units they had bargained for, and would force units back onto a deteriorating market while interest of more than $59,000 a day accrued, per the Reasons for Judgment, Aug. 25, 2026, para. 46. The Monitor's evidence was that the contested units, remarketed, would bring in materially less than their contract prices, per the Seventh Report of the Monitor, May 4, 2026, s. 6.1, para. 5. On May 15 the Monitor served a notice of constitutional question: depending on how the court read the stay, it would argue that s. 23 was inoperative under federal paramountcy to the extent it conflicted with ss. 11 and 11.02 of the CCAA, per the Notice of Constitutional Question, May 15, 2026, p. 2. The Attorney General of British Columbia appeared on that question, and the applications were heard from June 15 to 18.
A statutory shield
Westmount argued that s. 23 reaches only a misrepresentation that existed when the contract was signed, and the court rejected that reading. Section 23(1) applies to a developer who has breached "any provision of Part 2," which includes the duty in s. 16 to amend immediately on learning that a disclosure statement contains a misrepresentation. The exception in s. 23(2)(b) is tied to the moment of contracting; s. 23(2)(a) is not, and its words "was or would have been" reasonably relevant, Justice Masuhara reasoned, capture a later fact that would have mattered had it been disclosed by amendment. Read Westmount's way, the continuing duty "would lack a corresponding enforcement mechanism once the purchaser signs the agreement," per the Reasons for Judgment, Aug. 25, 2026, paras. 66–74.
Materiality is objective, and the court found it on all three routes in Bosa Properties (Esprit 2) Inc. v. Kim, 2012 BCSC 1013: the Superintendent's disclosure requirements, the conduct of KingSett, the BCFSA and the Monitor, and common sense. "A development being constructed under a valid building permit and protected by warranty coverage is objectively different from a development whose warranty coverage has been suspended, whose building permit has been suspended, and whose construction has ceased." Completion did not change the answer: "Materiality is assessed at the time the disclosure was required, not with hindsight after completion." The developer took no part in the hearing, the court found it "highly unlikely" that the developer had been unaware of the events as they happened, and neither exception in s. 23(2) applied, per the Reasons for Judgment, Aug. 25, 2026, paras. 35, 45, 88–94, 106–109.
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