Peace Point: six months at Sotheby's, then the lender's credit bid

The building at the southeast corner of Berkeley Street and Adelaide Street East began, around 1872, as part of a row of houses put up for workers in what was then an industrial part of downtown Toronto, and Heritage Toronto listed it as a property of interest in 1973. An addition went on at the back in the early 1990s, and a renovation around 2018 left two units: a commercial space fronting Berkeley, and behind it a two-bedroom residence of three and a half storeys with a built-in garage. In 2024 Metrolinx expropriated some of the subsurface land, to allow for the Ontario Line subway to be built underneath, per the First Report of the Receiver, July 3, 2026, paras. 12–14.

Peace Point Properties Limited, whose sole officer and director is Leslie Tomlin, took title under a transfer registered on February 13, 2014 for $1,606,000, per the Approval and Vesting Order, July 13, 2026, Sched. "D" and the Affidavit of Yvonne Lai, Mar. 12, 2025, para. 5. On July 13, 2026, Justice J. Dietrich of the Ontario Superior Court of Justice (Commercial List) approved the building's sale by its court-appointed receiver, Bricks Damiani Inc., to Vista Mortgage Capital Corporation, which held the second mortgage when the receivership began and now holds the first as well. Vista's bid was a partial credit bid, in the judge's words, and the price is sealed, per the Endorsement of Justice J. Dietrich, July 13, 2026, paras. 2, 9–10, 14.

A loan, a second mortgage and a medical spa

Equitable Bank lent Peace Point $2,100,000 under a commitment letter of January 28, 2020: a 60-month term maturing March 5, 2025, the money to refinance existing debt, with the balance going to recoup renovation costs and start-up costs for the business in the front unit, a medical spa. The loan was secured by a first mortgage registered February 10, 2020, a general security agreement and an assignment of rents, and Tomlin guaranteed it, per the Affidavit of Yvonne Lai, Mar. 12, 2025, paras. 10–14, 18.

The front unit was leased from December 1, 2018 to Youth Medispa Inc., another company of which Tomlin is the sole director. In November 2024 an occupancy check commissioned by the bank found a medical spa called Skin6 operating there, per the Affidavit of Yvonne Lai, Mar. 12, 2025, paras. 39–45. Tomlin later told the receiver that Youth Medispa had contracted with Skin6 Inc. around 2024 to run the spa on its behalf; the receiver was given no documents about the arrangement, and the spa had apparently closed in early 2025, per the First Report of the Receiver, July 3, 2026, paras. 15–18.

Vista's loan came in November 2023: $950,000, advanced on November 6 and secured by a second mortgage in the principal amount of $1,425,000, registered November 27, per the Notice of Motion, July 3, 2026, para. 11. The bank's affiant swore that Peace Point granted that mortgage on November 2 "without the knowledge or consent of EQ Bank," an event of default under the bank's standard charge terms. None of the monthly payments due after May 21, 2024 was made. The bank demanded payment on August 7, 2024, gave notice of its intention to enforce its security on September 19, sued Peace Point and Tomlin in November, and took default judgment, including an order for possession, on January 2, 2025. As of March 6, 2025 it was owed $2,117,816.56, excluding legal and other professional fees, per the Affidavit of Yvonne Lai, Mar. 12, 2025, paras. 20–22, 26–37.

Meanwhile, The Behar Group had listed the building for sale since May 2024, and its feature sheet, exhibited to the bank's affidavit, asked $5,999,990 for approximately 6,000 square feet, per the Affidavit of Yvonne Lai, Mar. 12, 2025, para. 56 and Ex. 29, p. 252. An agreement of purchase and sale dated February 16, 2025 was conditional, among other things, on the buyer obtaining financing before June 16; Peace Point's counsel told the court the condition was not waived and the agreement had terminated, per the Endorsement of Justice J. Dietrich, June 19, 2025, para. 21.

Consent, after a deadline passed

The bank's application was first set down on an urgent basis in April 2025, because the evidence was that the building's insurance was being terminated for non-payment. On May 5 the court was told that proof of insurance had been provided and that the parties had agreed the bank would be paid out by June 17, 2025 or Peace Point would consent to a receiver. The bank was not paid out. Peace Point's counsel said a further financing offer had been made to the bank, but that certain terms, including a subordination by Vista, were required and not forthcoming, and Peace Point consented; Vista supported the application and no one opposed. "The Bank has, understandably, lost all confidence in the Debtor's ability to manage the Real Property," Justice Dietrich wrote, appointing Bricks Damiani as receiver on June 19, 2025, per the Endorsement of Justice J. Dietrich, June 19, 2025, paras. 2–5, 32, 35.

Under an assignment of loans and security made as of July 30, 2025, Equitable Bank's security package and Tomlin's guarantee passed to Vista "in return for a full payout of the Debtor's indebtedness to EQB," in the receiver's words, and the transfer of the first mortgage was registered September 4, per the First Report of the Receiver, July 3, 2026, paras. 3, 23. On October 6, 2025, Justice Cavanagh ordered the proceeding continued with Vista as applicant, per the Order to Continue, Oct. 6, 2025, para. 1. Blaney McMurtry LLP, which had acted for the bank, now acted for Vista. The receiver's report calls Vista the "fulcrum creditor" and says Blaney also acted for the receiver on matters where it had no conflict, to minimize professional fees and costs; Aird & Berlis LLP was the receiver's independent counsel, per the First Report of the Receiver, July 3, 2026, paras. 3, 10.

A loft let below market

When the receiver arrived, the spa was closed and the residence was let. Tomlin, who the receiver understands had lived there since the 2018 renovations, told it that Peace Point had leased the unit to three individuals, one signing on March 7, 2025 and two on March 27, for a year from April 1 at $5,725 a month. On March 27, at the bank's request and without opposition, Justice Black had ordered that, pending a scheduling appointment the following week, Peace Point "not enter into any new lease or encumber the property at issue," per the Endorsement of Justice Black, Mar. 27, 2025 (Motion Record, App. H), para. 6. The receiver's report says the leasing contravened that endorsement. The receiver left the lease in place all the same, although the rent was below market: given the term, the amount of below-market rent over it and the professional costs of a challenge, terminating it was not cost effective, per the First Report of the Receiver, July 3, 2026, paras. 19–20.

The tenants moved out on or about April 30, 2026; the receiver's rent receipts to June 30 came to $47,340. Benaco Sales Ltd. appraised the chattels in the front unit at a liquidation value of $11,530 to $13,000, and those left in the residence at $3,950 to $4,930, per the First Report of the Receiver, July 3, 2026, paras. 25, 34 and App. AA. Youth Medispa and Skin6 Inc. each allege that they own certain of the chattels and equipment in the front unit, and both are subject to PPSA registrations over equipment by their creditors; Tomlin alleges that he owns the chattels in the residence, per the Notice of Motion, July 3, 2026, paras. 6–7.

Six months at Sotheby's

The receiver took proposals from three brokers and, after discussing them with Vista, chose Sotheby's International Realty Canada, partly on the perception that a mixed-use building would draw an owner-operator, who would live in the residence and either run a business from the front or lease it out. The listing agreement of September 9, 2025 gave Sotheby's six months, exclusive, per the First Report of the Receiver, July 3, 2026, paras. 39–40.

Sotheby's recommended an asking price over no list price, believing one would attract more interest, and the receiver, in consultation with Vista, approved $3,950,000. The campaign launched September 15, on the Multiple Listing Service in both its commercial and residential sections, with signage, brochures, online advertising and direct outreach to lawyers, accountants and architecture firms. No offers had arrived by the October 9 deadline. Sotheby's told the receiver that the market for residential and commercial property in the GTA had deteriorated through the summer and fall of 2025, and that buyers hesitated over a residence occupied by tenants paying below-market rent, which "negatively impacted any investor interest." On October 15 the asking price came down to $3,775,000, with offers to go to the receiver as they arrived rather than against a new deadline, per the First Report of the Receiver, July 3, 2026, paras. 41–44.

The listing expired on March 9, 2026, and the receiver did not renew it. No acceptable offer had been submitted, and Vista told the receiver it had decided to buy the building by credit bid, per the Endorsement of Justice J. Dietrich, July 13, 2026, paras. 8–9 and the First Report of the Receiver, July 3, 2026, para. 46. A summary of the offers, a discussion of interest from other parties and an assessment of value from another broker are in Confidential Appendix "1," per the First Report of the Receiver, July 3, 2026, paras. 45–47.

Part of the debt, for the building and a claim against Metrolinx

The agreement of purchase and sale is dated June 30, 2026. Vista takes the real property, the front unit's chattels and equipment, any assumed contracts and Peace Point's claim for compensation from Metrolinx, on an "as is, where is" basis; the receiver conveys only such interest as the debtor has. Fogler, Rubinoff LLP had been engaged as the debtor's counsel on that compensation claim, and it was still being negotiated with Metrolinx's counsel when the receiver reported, per the First Report of the Receiver, July 3, 2026, paras. 36–38, 50(iii)–(iv).

The price is a credit bid amount plus any assumed liabilities. The credit bid amount combines the receiver's certificates, $86,000 the receiver borrowed from Vista to fund its work, and the "Credit Bid APA Amount," which the report defines as "the portion of Vista's secured debt less the amount of the Receiver's Certificate Obligations," per the Endorsement of Justice J. Dietrich, July 13, 2026, para. 11 and the First Report of the Receiver, July 3, 2026, paras. 50(ii), 57. At closing Vista advances the receiver's $150,000 wind-down estimate, for outstanding and future professional fees and property-related disbursements, against a receiver's certificate; any excess goes back to Vista. The determination of the purchase price is Confidential Appendix "3." Closing falls ten business days after the approval and vesting order issues, or earlier if the receiver and Vista agree, per the First Report of the Receiver, July 3, 2026, paras. 50(ii), 50(vi), 70(a), 70(e).

Aird & Berlis gave the receiver an opinion that, subject to standard assumptions and qualifications, both mortgages are valid and enforceable in Vista's favour. The receiver called the price fair and reasonable given the sale process and its being "within the range of the summary of offers and real estate broker's assessment of value" in the sealed appendix. It said further marketing was unlikely to produce a superior transaction in a softening market that Sotheby's did not expect to improve in the near term, while carrying and marketing the building would bring additional costs "that would further add to the amount owed to Vista," per the First Report of the Receiver, July 3, 2026, paras. 52, 58.

July 13

The motion was unopposed, and Justice Dietrich applied the Soundair principles and approved the sale: "The Real Property was broadly marketed and listed widely by Sotheby's between September 15, 2025 and March 9, 2026," per the Endorsement of Justice J. Dietrich, July 13, 2026, paras. 4, 12–13. She sealed the summary of offers, the unredacted agreement and the price calculation until closing or a further order, finding that disclosure "would pose a risk to the public interest in enabling stakeholders of a company in receivership to maximize the realization of assets," and directed the receiver to apply for an unsealing order at the appropriate time, if necessary, per the Endorsement of Justice J. Dietrich, July 13, 2026, para. 14 and the Approval and Vesting Order, July 13, 2026, para. 9.

She approved the First Report, with the typical language that only the receiver may rely on the approval, and the fees: the receiver's $99,075.65 to April 30, 2026, for 202.5 hours at an average of $423.37 an hour; Blaney McMurtry's $57,389.35; and Aird & Berlis's $2,639.36, each including disbursements and HST, per the Fee Approval and Discharge Order, July 13, 2026, paras. 2–6, the First Report of the Receiver, July 3, 2026, paras. 62–64 and the Affidavit of Hartley Bricks, June 10, 2026 (First Report, App. X), para. 3.

The receiver had also asked to be discharged once it filed a certificate, and for a reserve of $59,303 to finish, per the First Report of the Receiver, July 3, 2026, paras. 66, 72. "I am not prepared at this time to grant the requested discharge of the Receiver," Justice Dietrich wrote. "There are still substantive matters to address, including closing of the transaction." She adjourned the discharge until those are done, when a final fee approval can also be sought; the fees approved on July 13 do not include the estimated fees to complete the administration, per the Endorsement of Justice J. Dietrich, July 13, 2026, para. 18. The order she signed that day keeps the title "Fee Approval and Discharge Order"; its paragraphs approve the fees, the statement of receipts and disbursements and the report, and none discharges the receiver, per the Fee Approval and Discharge Order, July 13, 2026, paras. 1–7.

What the receiver has left, by its own list, is to close; arrange final utility readings and end the insurance; pay the estate's liabilities from the wind-down funds; file its final report and statement of accounts under s. 246(3) of the Bankruptcy and Insolvency Act; and, if necessary, bring a motion for directions on priority to the chattels in both units. Any funds remaining with the receiver after its fees and its counsel's are paid will be distributed to Vista, along with an accounting, per the First Report of the Receiver, July 3, 2026, paras. 66, 70.