Terra Nova Golf Resort: 20 numbered companies later, a final distribution sought

On October 30, 2026, Grant Thornton Limited, receiver of the two companies behind the Terra Nova Golf Resort at Port Blandford asked the Supreme Court of Newfoundland and Labrador to approve a final distribution, discharge it and terminate a receivership that began on March 20, 2019. The proposed distribution is set out in Appendix O to the Third Report, dated October 27: $85,165.57 to the Canada Revenue Agency on a source-deduction deemed trust, $273,066.40 to the Town of Port Blandford for property taxes and municipal charges, and $465,007.79 to the Business Development Bank of Canada, which was owed approximately $3,228,664 when the receivership began. "There will be no funds available to disburse to other creditors," the motion says, per the Notice of Motion, Oct. 30, 2026, paras. 1–2, 9, 15 and the Third Report of the Receiver, Oct. 27, 2026, para. 27 and App. O.

The resort came out of an earlier receivership. Sports Villas Resort, Inc. acquired it on February 1, 1993 from Coopers & Lybrand Limited, as receiver and manager of the former owner, St. Christopher's Resort Inc.: an 82-room hotel completed in 1989, with a restaurant and meeting rooms. Its subsidiary, Twin Rivers Golf Inc., took the former owner's lease of the Twin Rivers Golf Course from the same receiver on March 31, 1993. That 18-hole course lies inside Terra Nova National Park, on land leased from Parks Canada under a lease that expires on October 31, 2031. Sports Villas added a nine-hole course, Eagle Creek, in 1999 and 2000, and held 38 unsold lots in an adjacent development, Terra Nova Estates, per the Third Report of the Receiver, Oct. 27, 2026, paras. 4, 6–7, 11–12, 126.

A hotel that was a condominium

On June 26, 2011 Sports Villas transferred the hotel building and the parcel under it to Terra Nova Resort Condominium Corporation, keeping most of the units, managing the property and running a rental pool through which owners let their units to hotel guests and shared the profits. "The hotel was actually a condominium corporation," the Third Report says, and one that "had no cash, reserve fund, or contingency fund, and relied primarily on funding from Sports Villas to sustain operations," per the Third Report of the Receiver, Oct. 27, 2026, paras. 9, 22.

BDC had lent to the companies for renovations, upgrades and operations, against security that included a general security agreement, first mortgages on land in Port Blandford, a first mortgage on the Crown lease of approximately 260 acres used for Twin Rivers, and guarantees from the companies' parent holding company and from their director and shareholder. BDC served its notice of intention to enforce on October 29, 2018, and BDO Canada Limited became private receiver on November 12, per the Third Report of the Receiver, Oct. 27, 2026, paras. 27–29. On BDC's application, Justice Marshall appointed BDO receiver under s. 243(1) of the BIA by an order issued March 20, 2019, per the Receivership Order, Mar. 20, 2019, pp. 1, 14. Both companies made assignments in bankruptcy in August 2019, and the parent holding company is also bankrupt, with PwC Inc. as trustee, per the Third Report of the Receiver, Oct. 27, 2026, paras. 8, 114, 116–117. On June 18, 2020, Justice Robert P. Stack appointed Grant Thornton "in the place and stead of BDO Canada Limited," per the Order, June 18, 2020, para. 2.

Eighty per cent of the owners

BDO had marketed the resort through an Invitation for Offers, seeking, as the decision records, "a bidder who would operate the Terra Nova Golf Resort," and settled on 83848 Newfoundland & Labrador Limited. The sale the receiver brought to court took in the whole condominium, including nine units that belonged to other owners, among them Project Management and Design Limited, NWS Holdings Inc., ALJO Holdings Inc. and a numbered company, 68861 Newfoundland and Labrador Inc., whose five units were mortgaged to Clarke Inc. Master Trust. Three of those owners and the mortgagee intervened to oppose, per Sports Villas Resort, Inc. (Re), 2020 NLSC 109, Aug. 7, 2020, paras. 3–5, 16–17, 21, 23, 48.

The decision turned on s. 61(1) of the Condominium Act, 2009, which, as the reasons quote it, allows a sale of the property to be authorized "by the consent of (a) 80% of the owners of the common elements" and of those with registered claims against it. Sports Villas held 82.74% of the common elements. The dissenting owners argued that it was "only one of the six owners of those units" and so represented "just 17% of the owners of the common elements." Justice Stack concluded: "I find that although the receiver's interest represents ownership of more than 80% of the common elements, it does not represent 80% of the owners of those common elements," per 2020 NLSC 109, paras. 24, 49, 52, 56.

The receiver's answer, as the decision sets it out, was that the wording made no difference, because Sports Villas "could have avoided any confusion by holding each of its units in a separate corporation." The judge rejected it: "Although Sports Villas could have arranged its ownership in such a way, it did not. The flaw in this argument, therefore, is that it does not reflect the facts before me." The receiver "could have included its right, title and interest in the Sports Villas units in the tender package, but nothing more," per 2020 NLSC 109, paras. 57, 66.

The mortgagee's refusal was a second ground. The receiver asked to be authorized under s. 21(5) of the Act to consent in its place, inviting the court, in the judge's words, to "infer bad faith." The judge was not satisfied that s. 21(5) reaches an encumbrancer, and held that even if it did, a refusal to consent "to a transaction that will see it realize no return on its security interest is not sufficient, on its own, to establish unreasonableness." The sale approval was dismissed on August 7, 2020, with costs to the intervenors other than the purchaser against the receiver, per 2020 NLSC 109, paras. 71, 73–76, 78–79.

Twenty units, twenty companies

Grant Thornton's later account, in a memorandum of fact and law dated November 4, 2024, is that the 2020 decision "set out a road map" for the condominium's ownership structure and any dissenting owners. Using the power in paragraph 3(m) of the receivership order to sell or transfer property without court approval up to $250,000 a transaction and $500,000 in all, the memorandum says, the receiver "incorporated a series of individual holding corporations to hold title to individual units under its control": 16 residential units went to 16 numbered companies by deeds dated August 19, 2021, and four commercial units to four more by deeds dated February 10 and July 5, 2022. The memorandum submits that this took the count "from 17 percent to 93 percent," above the Act's 80 per cent threshold, per the Receiver's Memorandum of Fact and Law, Nov. 4, 2024, paras. 33, 43–45, 49. The Third Report lists the step, "Incorporated and transferred 20 condominiums to companies controlled by the Receiver," beside another, "Bankrupted 68861 Newfoundland and Labrador Inc."; 68861 was adjudged bankrupt by an order dated August 31, 2021, per the Third Report of the Receiver, Oct. 27, 2026, paras. 115, 129(k).

The receiver also took over the mortgage. On April 22, 2021, Clarke Inc. Master Trust assigned to the receiver its mortgage on 68861's units and the related security, an assignment amended and restated in November 2023, and Clarke "is no longer a creditor in the receivership," per the Third Report of the Receiver, Oct. 27, 2026, paras. 98–103. The memorandum puts the cost of the assignment and its amendment at $100,000, the sum the final statement lists to Clarke among its settlements of debts. "As the only encumbrancer," the memorandum says, the receiver then used that security "to consent to the sale as required by section 61(1)(b)," per the Receiver's Memorandum of Fact and Law, Nov. 4, 2024, paras. 56, 58 and the Third Report of the Receiver, Oct. 27, 2026, App. O.