Mortise Nova: National Bank's CCAA to finish a stalled Surrey building

On April 15, 2026, Arden Vos, a senior director and team lead in National Bank of Canada's Special Loans Group, went to assess the building his bank had been financing on 166th Street in Surrey. By his account there was no active work being done, the site did not appear to be secure, and the amenity building was exposed to the elements, per the Affidavit #1 of Arden Vos, May 21, 2026, paras. 1, 45. The building is phase 2 of the Mortise Nova strata project: six storeys, 93 residential units, a commercial space and future development lands at 8140/8148/8158 166th Street, per the First Report of the Monitor and Receiver, June 3, 2026, para. 5.1. It was first marketed in 2019 and financed for construction in 2021, and 62 of its 93 units are under presale contracts, per the Pre-filing Report of the Proposed Monitor and Proposed Receiver, May 22, 2026, para. 5.4.

The bank asked for a CCAA proceeding and a receivership at once. On May 25, Madam Justice Fitzpatrick of the Supreme Court of British Columbia (Vancouver Registry, No. S-263823) granted a single "Initial CCAA and Receivership Order" on its petition. The two companies that hold legal title, 0993006 B.C. Ltd. and 1014669 B.C. Ltd., were declared companies to which the CCAA applies, with Alvarez & Marsal Canada Inc. as monitor with enhanced powers. A&M was also appointed receiver and manager, under s. 243(1) of the BIA and s. 39 of the Law and Equity Act, of the interests of the other two, 670805 B.C. Ltd. and 0859116 B.C. Ltd., in the land and the personal property related to it, per the Initial CCAA and Receivership Order, May 25, 2026, paras. 3, 11, 13, 18. The receiver's statutory statement gives its plan as preserving the property, completing construction of the planned 93-unit project and conducting a sale, per the Notice and Statement of the Receiver, May 28, 2026, para. 6.

A construction loan past its maturity

The bank's loan agreement of May 5, 2021 was last amended on December 3, 2025. Its main facility, an uncommitted interim construction loan of $47,795,419, was to repay the bank's existing financing and finance construction, and the credit facilities were due in full on the earlier of demand and January 15, 2026. The first mortgage now secures $50,295,419. 1067159 B.C. Ltd. and the companies' two directors, Baljit Singh Johal and Tirath Gosal-Sadhra, gave limited guarantees up to that amount and cost-overrun, lien-free completion and debt service guarantees, per the Affidavit #1 of Arden Vos, May 21, 2026, paras. 9, 12–15, 17, 19(a). As of April 29, 2026 the borrowers owed the bank $48,482,696.24, per the same affidavit at para. 36.

Two other secured creditors stand behind the bank by agreement. Westmount West Services Inc., which provided deposit insurance for the project, registered a $5,000,000 mortgage in 2022. Bancorp Balanced Mortgage Fund II Ltd., Bancorp Growth Mortgage Fund II Ltd., Bancorp Financial Services Inc. and Mandate Management Corporation, which Vos understands provided construction financing from around September 2024, registered one for $9,250,000 in November 2024. Both postponed their security to the bank's. In August 2025 Bancorp served 1014669 and 0993006, among other guarantors, with a demand for approximately $8.9 million and a notice of intention to enforce its security, and the 90-day standstill in its priority agreement with the bank had expired by the time the bank applied, per the Affidavit #1 of Arden Vos, May 21, 2026, paras. 21, 23–24, 31–32.

The receiver's statement for 670805 and 0859116, drawn from the books and records as at May 25, lists secured claims of $60,375,521.75 (the bank at $48,482,696.24, Bancorp at $8,980,060.51 and Westmount at $2,912,765.00) and unsecured claims of $1,699,020.85, among them Sosan Construction Ltd. at $465,217.98 and Vancouver Ready Mix Inc. at $235,789.60. It carries the property and land at $30,046,000, "the approximate 2026 tax assessed value of the Real Property," with the caution that realizable values may be materially different, per the Notice and Statement of the Receiver, May 28, 2026, paras. 2, 5 and App. "A".

The bank's demands of April 30, 2026 set out defaults including the missed maturity, interest unpaid from January 2026, a holdback account not established and maintained, budget and scope changes made without the bank's approval, "including changes in mechanical design," and liens left on title. The loan required Qualifying Presold Units totalling $31,500,000; according to the demands, the borrowers let all of those contracts lapse, which required new agreements in 2025, and the current amount totals "only approximately $26 million," per the Affidavit #1 of Arden Vos, May 21, 2026, paras. 34–35. Five claims of builders lien and a certificate of pending litigation were registered against the land between February and April 2026, and liens totalling approximately $800,000 were on title when the bank applied, per the same affidavit at paras. 21 and 46.

One of the affidavit's complaints concerns appliances. By May 8 the borrowers had agreed to let A&M, then the bank's advisor, monitor their financial position. A&M's Anthony Tillman told Vos he had seen appliances in only one unit, and Vos saw none on his own visit. The project's quantity surveyor told him it had been given an invoice for appliances, and a statutory declaration from the borrowers suggesting the invoice was paid, and had used them in its report on amounts spent, on which the bank relied to advance funds. When Vos asked the borrowers' representatives, he "was informed that notwithstanding the documents they provided to the quantity surveyor, the invoice for appliances was never paid, such appliances were never delivered, and that the funds were used elsewhere in the Project, contrary to the Loan Documents." The bank, he swore, "is materially concerned that the Project is not as advanced as anticipated," had "lost confidence in the Borrowers," and would extend further funding only if a monitor with enhanced powers managed the project's finances, construction and sales and a receiver was appointed, per the Affidavit #1 of Arden Vos, May 21, 2026, paras. 39–43, 48.

Two proceedings, one building

The split follows the title. 1014669 and 0993006 hold legal title as bare trustees and nominees for the beneficial owners, 0993006, 670805 and 0859116. The two title holders are also the developer on the presale contracts, and those two went into the CCAA. The other two beneficial owners, 670805 and 0859116, are not parties to the presale agreements, "nor are they the 'developer' under the disclosure statements filed under REDMA," and the bank's personal property searches suggested they may have other interests and other secured creditors. Since its own security over them is limited to the project, the bank asked for a receiver of that interest only, so that it could recover "without causing undue harm to the Receivership Debtors' other stakeholders," per the Affidavit #1 of Arden Vos, May 21, 2026, paras. 8, 50, 59.

Some of the presales have already been rewritten once. As the original agreements approached their outside date in November 2025, the developer filed a new disclosure statement and offered purchasers a choice between rewriting and ratifying their contracts and taking back their deposits, and a number of contracts were cancelled. Most of the 62 remaining agreements terminate automatically, with the deposit returned, if the unit is not completed within 12 months after the estimated completion date. On the bank's review, the un-extended outside date for the "vast majority" falls in October 2026, and all but five of the agreements let the vendor extend it by up to four months, per the Affidavit #1 of Arden Vos, May 21, 2026, paras. 27–29.