Monde Development: a receiver for the condo a fire hose flooded

Monde Development Group Inc. sold the condominium at 1607 King Street East in Courtice, in the Municipality of Clarington, as Mondria 1. The sample purchase agreement in its lender's application record was signed in July 2021 and gave the buyer a first tentative occupancy date of September 1, 2023, per the Affidavit of Amber Waheed, June 1, 2026, para. 21 and Ex. "N". By July 2026, 76 of the six-storey building's 89 units were sold, and all parties agreed that they wanted to try to keep those agreements alive if possible. Occupancy had been projected for December 2025. In early December, with completion apparently near, "A vandal entered the building at night and opened a fire hose on an upper floor. Damage was extensive," according to the Endorsement of Myers J., July 7, 2026, paras. 9, 12, 29.

Monde made a claim on its insurer, Chubb, for over $15 million, and seven months later Chubb had yet to pay it, per the Endorsement of Myers J., July 7, 2026, paras. 10–11. On July 7, 2026, over Monde's opposition, Justice FL Myers of the Ontario Superior Court of Justice (Commercial List) appointed BDO Canada Limited receiver and manager of Monde's property and construction lien trustee, under s. 243(1) of the BIA, s. 101 of the Courts of Justice Act and s. 68 of the Construction Act, on the application of the first mortgagee, Meridian Credit Union Limited, in court file CL-26-00000241-0000, per the Appointment Order, July 7, 2026, para. 2. Monde had asked for time to cross-examine on who delayed the building the previous fall. "The autopsy over who caused it and whether anyone is liable to anyone else as a result of historic wrongs can wait," the judge wrote. "First the land has to be tended to, secured, insured, kept clean and safe, and proposals for realization need to be developed and considered," per the Endorsement of Myers J., July 7, 2026, paras. 18, 21, 30.

A bridge loan, then a flood

Monde was incorporated in March 2019 as 5013264 Ontario Inc. and took its present name in February 2020. Majid Hamid is its sole director, president and secretary, and he guaranteed its debt to Meridian without limit; a second personal guarantee is capped at $3,000,000, per the Affidavit of Amber Waheed, June 1, 2026, paras. 5–6, 17 and Ex. "A".

Meridian lent under a February 2022 credit agreement, amended and restated on November 12, 2024. As restated, it provided a $31,000,000 construction demand loan, letters of credit, a credit card and a $3,600,000 bridge loan at Meridian's prime rate plus 8%, with a floor of 13.95%. The agreement gives the bridge loan's purpose as "To partially fund the cost overrun on the Project as indicated in the Project Monitoring Claim Report No. 27 prepared by BTY Group dated September 27, 2024," and charged a $400,000 amendment fee; the facilities were repayable on demand and by April 30, 2025 at the latest, per the Affidavit of Amber Waheed, June 1, 2026, paras. 12–13 and Ex. "D", pp. 2–4. Behind Meridian sit a second-ranking loan that MarshallZehr Group Inc. administers for Ducimus Capital Inc., which the affidavit says ultimately financed it, and The Sovereign General Insurance Company, Monde's Tarion surety and excess deposit insurer. Both postponed their interests in the land to Meridian, though Sovereign keeps a first charge on purchaser deposits, per the Affidavit of Amber Waheed, June 1, 2026, paras. 7, 9 and the Notice of Application, May 21, 2026, para. 12.

The endorsement sets out the creditors' account of what followed. In late 2024 the debtor ran out of money; by April 2025, cost overruns of over $8 million had been recognized on a total budget of about $29 million; unpaid trades filed liens, and work slowed to a halt between February and April 2025 because Monde could not pay them. The creditors were also concerned about Monde's disclosures: in January 2025 it reported the project 99% finished, a figure that fell to 90% in April. And "the debtor was paying trades from a different bank account than the one into which its loan advances were deposited," which made payments difficult to track; Monde produced wires it said were payments to trades, but the parties' consultants could not get the trades to confirm receipt. Justice Myers added a caution of his own: "This is not to say that there was wrongdoing committed by the debtor. Rather, it is the explanation by the creditors of why they lost faith in management to proceed with the project by mid-2025," per the Endorsement of Myers J., July 7, 2026, paras. 3–6. Meridian's affidavit dates the last interest payment on its loan to the period ending January 17, 2025, per the Affidavit of Amber Waheed, June 1, 2026, para. 29(a).

Ducimus then agreed to fund completion, on terms that included Monde retaining a contractor Ducimus selected, which the endorsement calls CPC. Monde signed a CCDC contract with CPC and construction resumed, per the Endorsement of Myers J., July 7, 2026, paras. 7–8. On December 1, 2025, according to Meridian's affidavit, water began discharging from the fire hose cabinet on the fourth floor, damaging interior finishes in most units and common areas from the fourth floor down to the ground floor. Monde engaged Restoration Aid Inc. for mitigation on or about December 2, and by December 12 an engineer retained through Chubb's adjuster found the building "adequately dried and remediated" and said reinstatement of finishes could proceed, per the Affidavit of Amber Waheed, June 1, 2026, paras. 22–25 and Exs. "P", "Q".

Meridian and MarshallZehr, first and second loss payees under the policy, engaged XALT Claims Management, whose preliminary estimate, as the affidavit relays it, is approximately six to eight months and over $14 million for a complete restoration. As of June 1, Chubb had made no determination on coverage and paid nothing, per the Affidavit of Amber Waheed, June 1, 2026, paras. 24, 26–27. Restoration Aid registered a lien for $956,216.49 on February 10, 2026, and on April 1 sued for $957,033.10, Chubb among the defendants; its claim pleads that Chubb agreed to pay it directly, subject to Monde's deductible, per the Statement of Claim, Apr. 1, 2026, Ex. "O" to the Waheed Affidavit, paras. 1, 12, 21.

Buyers, lawyers and a demand

On April 20, 2026, Monde's lawyers at Robins Appleby LLP wrote to Meridian's counsel at Gowling WLG that notices of unavoidable delay had gone to all purchasers in early December to suspend the critical dates, including the outside occupancy dates; that some purchasers had since questioned the delay and were "in some cases attempting to terminate their purchase agreements"; and that the firm had told all of them the delay qualified under section 5 of the addendum to their agreements, per the Affidavit of Amber Waheed, June 1, 2026, para. 32 and Ex. "S".

Ten days later Mr. Hamid emailed Amber Waheed, the Meridian recovery manager who affirmed its evidence, and others that Monde had "formally terminated the engagement of Robins Appleby LLP with respect to the ongoing legal matters relating to the project, effective immediately," and was moving the file to new counsel. Ms. Waheed's conclusion: no party was prepared to fund the restoration ahead of unit closings, the debtor "no longer has counsel to close the UPA transactions," and there was "no apparent path for the Debtor to repay the Indebtedness," per the Affidavit of Amber Waheed, June 1, 2026, paras. 33–34 and Ex. "T".