Mewburn Towns: what is left of 27 buyers' deposits

The trust ledger Aliquot Law kept in Oakville for the townhouses at 2700 Mewburn Road in Niagara Falls opens in November 2020 with $5,000 bank drafts and cheques and runs into 2022, when most of the buyers added a cheque marked "upgrades." At its foot the buyers of 27 units at Mewburn Towns had paid $1,980,487, and the firm had released $1,702,950 of it toward construction in eleven releases between October 5, 2021 and September 9, 2022, per the ledger appended to the Supplement to the First Report of the Receiver, Aug. 31, 2026, paras. 13–15, App. "I".

No townhome has been completed or occupied. Construction stalled, in the receiver's account, "due to 945Can's lack of available funding"; no meaningful work has been done on the site since around the fall of 2025, and the blocks stand between 50% and 90% complete, per the First Report of the Receiver, Aug. 17, 2026, paras. 2, 15–16. On August 17, BDO Canada Limited, receiver of the owner, 11517945 Canada Inc., asked the Ontario Superior Court of Justice to approve a sale of the site to Royal Living Development Group Inc. at a price filed under seal, and to declare the 27 buyers' purchase agreements terminated. In a supplement dated August 31 it proposed that, before the buyers claim from Tarion Warranty Corporation's deposit protection program, they share what is left of their deposits, which its draft accounting puts at approximately 9.88% of what each paid, per the Supplement to the First Report of the Receiver, Aug. 31, 2026, paras. 21–23.

The lender's account

11517945 Canada Inc., a federal corporation with its registered office in Mississauga, bought the Mewburn Road parcel on March 20, 2020 for $1,900,000, per the parcel register attached to the Affidavit of Amber Waheed, Jan. 19, 2026, Ex. "B", p. 38. It retained Alpha Capital Management Inc. as consultant and construction manager, and Alpha also acted as vendor of the units: the purchase agreements are between Alpha and the buyers, and the debtor is not a party to them, per the First Report of the Receiver, Aug. 17, 2026, paras. 3, 14, 19.

Meridian Credit Union Limited financed the build under a credit agreement of December 1, 2021: a demand construction loan of up to $9,900,000 and standby letters of credit of up to $1,081,495, issued to governmental authorities and Tarion among others. It holds a $14,500,000 first collateral mortgage registered September 29, 2021 and guarantees from Alpha and from the debtor's sole director, Magid Hassan Idris. The first loan advance came on December 9, 2022, and the loan was not repaid at maturity, December 9, 2024, according to Meridian's affidavit in the Affidavit of Amber Waheed, Jan. 19, 2026, paras. 9–12, 22.

In Meridian's chronology, a concerns letter of August 23, 2024 had already asked whether purchasers would agree to extend, the "Outside Occupancy Date" of October 30, 2023 having long expired. A standstill agreement of January 2, 2025 recorded that the project budget was expected to increase "as a result of cost escalations and substantial delays." In July 2025 Meridian declined to renew, and on October 31 Alpha's management told it that the private lender the debtor had been courting was no longer interested in taking out the Meridian debt, per the Affidavit of Amber Waheed, Jan. 19, 2026, paras. 21–22, 25–28.

A local developer Meridian had put in touch with Alpha visited the site on November 11, 2025. As the affidavit relays his observations, he found potential water damage from the site going without proper heating or cooling for at least two seasons, evidence of mould damage in Block C, which the debtor claimed to be "ready to close," and fire separation between units in each block that "was done incorrectly." On November 19, Mr. Idris told Meridian he had injected approximately $4.9 million into the project and would put in nothing more "until there was a satisfactory plan in place to get the project to completion," per the Affidavit of Amber Waheed, Jan. 19, 2026, paras. 29, 31.

A feasibility study that Glynn Group Incorporated prepared for Alpha on September 23, 2025, attached to the same affidavit, had found that "the project has been progressing very slowly, and at times over the last year, the site has become dormant for several months at a time." It took its sales figures from the developer's November 2024 sales report and noted that it had not been given executed closing extension letters "to confirm the sales are still valid," per the Glynn Group Feasibility Study Report, Sept. 23, 2025, Ex. "W", pp. 134, 136.

Meridian demanded $8,781,087.62 on December 19, 2025, made up of $7,761,823.16 on the loan and $1,019,264.46 on the letters of credit, and on December 30 learned from Alpha that the builder's risk insurance was lapsing that day and would not be renewed, per the Affidavit of Amber Waheed, Jan. 19, 2026, paras. 36–39. Its application issued January 21, 2026. On February 12, Justice J. Ramsay appointed BDO receiver and manager under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act, with authority to borrow up to $500,000 against a Receiver's Borrowings Charge on the property, per the Receivership Order, Feb. 12, 2026, para. 22.

Ten offers and a sealed price

The receiver insured a vacant, part-built site, put mobile security patrols and cameras on it, filed an insurance claim for water damage to certain units, and commissioned a cost-to-complete report from Glynn Group. It describes the project in three pairs of blocks: two "A" blocks of four townhomes each, about 70% complete and facing the street; two "B" blocks of six, about 50%; and two "C" blocks of four, about 90%. "The Receiver has not continued progressing the development," per the First Report of the Receiver, Aug. 17, 2026, paras. 12, 16–17, 24.

After taking listing proposals from CBRE Limited, Institutional Property Advisors and Avison Young, the receiver listed with Avison Young on May 12, 2026. The campaign, which included MLS and two Globe & Mail advertisements, drew 55 expressions of interest and 31 signed confidentiality agreements. Nine offers arrived by the June 23 offer date. The top two offerors were asked for final and best offers by June 26, and a tenth party sent a late offer. Meridian backed Royal Living's resubmission on the condition that Royal Living replace two letters of credit, for Niagara Peninsula Energy Inc. and the City of Niagara Falls, then totalling $300,434.57; the receiver countered with that term on July 2 and signed on July 3, per the First Report of the Receiver, Aug. 17, 2026, paras. 25–34.

The agreement sells the property "as is, where is," subject only to court approval, against a non-refundable deposit already paid, with closing on the later of August 14, 2026 or ten days after the vesting order. The price is redacted in the public copy. The unredacted agreement, the cost-to-complete report and the summaries of listing proposals, initial offers and resubmissions went to the court as confidential appendices, which the receiver asked be sealed until the transaction completes because their release "is likely to jeopardize the value that could be generated from the Real Property," per the Notice of Motion, Aug. 17, 2026, paras. 21, 35–36. "No information has come to the Receiver's attention which indicates that a better result could have been achieved by continuing to market the Mewburn Property," per the First Report of the Receiver, Aug. 17, 2026, paras. 34, 37.

Meridian's discharge statement of August 10 puts its claim at $9,191,463.39 to August 9, 2026: $8,171,020.13 on the construction loan, $185,817.57 of protective disbursements and $1,020,443.26 on the letters of credit, with interest and extension fees running at a combined $1,841.40 a day. The receiver's own borrowing from Meridian under Receiver's Certificate #1 stood at approximately $125,405.92. Loopstra Nixon's security review found Meridian's mortgage valid and enforceable, and Meridian supports the sale, the receiver reports, "notwithstanding it will suffer a shortfall," per the First Report of the Receiver, Aug. 17, 2026, paras. 35, 65–67, App. "V". The draft order would pay court-approved professional fees first, hold back a reserve for claims ranking ahead of Meridian, pay Meridian the balance, pay the priority claims once they are determined, and send what remains of the reserve to Meridian, per the Draft Administrative Order, Aug. 17, 2026, Tab 1B, para. 5. The fees BDO asks the court to approve are $86,656.54 including tax, for 169.35 hours to July 31, and Loopstra Nixon's are $36,280.53 for 50.55 hours to August 13, per the First Report of the Receiver, Aug. 17, 2026, paras. 74–75.

Three liens, two registered after the appointment

Besides property tax and water arrears of $57,825.78 and $6,235.60, to be paid through the transaction, the claims said to rank ahead of Meridian are three construction liens, each of which Alpha and 945Can dispute in amount, according to what the debtor's counsel told the receiver. Canadian Way Electric Inc., which says it substantially completed its electrical work around August 12, 2025, registered a $125,940.66 lien on September 23, 2025 and issued its statement of claim on December 22. Aesthetic Pro Drywall Ltd. registered $64,469.32, the receiver reports, "Despite the Appointment Order and stay of proceedings," for materials and labour it says it supplied from August 9, 2024 to January 9, 2026, and in June asked the receiver to consent to lifting the stay so it could perfect the lien; the receiver did not consent, per the First Report of the Receiver, Aug. 17, 2026, paras. 42–54. The parcel register dates Aesthetic's lien March 10, 2026 and Rhema Ever Incorporated's May 15, 2026, per the Loopstra Nixon Security Review, Aug. 10, 2026, App. "B", p. 128.

Rhema's lien is for $166,492.00, for services and materials it says it supplied from August 19, 2024 to March 23, 2026. The receiver wrote to Rhema's counsel on May 27 and spoke with that counsel on July 22, each time questioning a claim to have supplied work up to March 23 when the receiver had taken possession on its appointment on February 12, and asking for evidence of any work after the appointment order, and as of the report had heard nothing back. The receiver proposes to hold $356,901.98, the three liens together, from the sale proceeds while it and Loopstra Nixon review them, per the First Report of the Receiver, Aug. 17, 2026, paras. 55–64.

Twenty-seven agreements

On February 26 the receiver wrote to the buyers that it was investigating the status of their deposits and pointed them to Tarion Warranty Corporation, which provides deposit protection where a sale is not completed, including where a builder has gone bankrupt, per the Receiver's Update No. 1 to Unit Buyers, Feb. 26, 2026, pp. 1–2. Only two of the buyers responded, per the First Report of the Receiver, Aug. 17, 2026, paras. 21–23.

Royal Living did not ask to take the purchase agreements, and so, the receiver's notice of motion says, the project will not be completed for the buyers under them. "Any claim the purchasers may have will be against the Debtor and, potentially, under new home buyers' protection programs." Deeming the agreements terminated would, among other things, "crystallize the purchaser's claims and rights"; in the alternative the receiver asks for a declaration that it has no interest in them, per the Notice of Motion, Aug. 17, 2026, paras. 26–28.

The August 31 supplement

The motion was returnable by videoconference on August 27, per the Notice of Motion, Aug. 17, 2026, Tab 1, p. 11. On August 26, Royal Living's counsel, McHugh Ionico Boer LLP, wrote to the receiver's counsel designating RLD Group (Niagara Falls) Inc. as the entity in which title is to vest, and confirmed that both companies are wholly owned by the same individual. Section 8.11(b) of the agreement lets the purchaser designate a wholly owned entity by written direction delivered "not later than five (5) business days prior to the issuance of the Approval & Vesting Order," and the receiver now asks that the vesting order issue in RLD Group's name, per the Supplement to the First Report of the Receiver, Aug. 31, 2026, paras. 7–11.

The supplement then accounts for the deposits. Before the appointment, on October 2, 2024, the buyer of unit 16 received a full refund plus interest, $90,820.64, made up of $83,084 advanced from 945Can and $7,736.64 of interest from the deposit funds. Aliquot advised the receiver that it issued the refund "based on instructions of the amount to release from 945Can," and "confirmed to the Receiver that it did not hold the Deposit Funds in an interest-bearing account, despite paying interest as part of the Unit 16 Refund." Aliquot remitted $269,800.36 to the receiver, which the receiver reconciles as the $1,980,487 in deposits plus the 945Can advance, less the $1,702,950 used in the project and the unit 16 refund, per the Supplement to the First Report of the Receiver, Aug. 31, 2026, paras. 15–20.

Tarion, the receiver reports, "requires that the Unit Buyers access all available recoveries before seeking payment from Tarion's deposit protection program – in particular, as against the Residual Deposits." The receiver proposes to pay the residual deposits pro rata to the buyers on Aliquot's ledger, each against a release in a form consistent with industry practice, a signed payment direction, and a release of BDO and the receiver from liability for carrying out the distribution, save for wilful misconduct or gross negligence; a buyer's release would not bar a claim against anyone else. Its draft accounting, based on the information provided to it, suggests each buyer would receive approximately 9.88% of its deposit. Tarion supports the protocol, and the buyers would then claim from Tarion for the remainder of their deposits once their agreements are terminated and the distribution is paid, per the Supplement to the First Report of the Receiver, Aug. 31, 2026, paras. 21–25.

The orders the supplement asks for are approval of the supplement and the receiver's activities, and the vesting of title in RLD Group. The relief and distribution for the buyers "will be sought at a separate hearing before the Court in the near future," with no date set in the report, per the Supplement to the First Report of the Receiver, Aug. 31, 2026, paras. 2(b), 26. No order or endorsement from the August 27 return date is in the record read for this piece.