December 4, 2018

Filing Type:

Trustee: Rosen Goldberg

Trustee Counsel: GSNH

Applicant: Owemanco

Applicant Counsel: Andrew Pigott Professional Corporation

Industry:

Province:

68 Belgrave Avenue, a property in Toronto, Ontario on which a single-family dwelling is being built, was placed in receivership on December 4 on application by Owemanco, a mortgage broker based in Toronto. Ontario Wealth Management Corporation ("OWMC"), a related entity to Owemanco had agreed to fund a $1.1MM construction loan to the property's owner, Mr. De Silva. The initial advance of funds occurred in August 2017, while the balance of the loan was to be advanced in stages to complete the construction project. However, after Owemanco's inspections in late 2017 revealed that little progress was being made on the construction of the house, it advised Mr. De Silva that no further advances would be made. After Mr. De Silva defaulted on the Owemanco mortgage in September 2018, Owemanco took possession of the property a month later, retaining a property manager and setting up hydro and gas accounts for the property. Currently, Mr. De Silva does not appear to have the equity or other financial means to advance construction of the house beyond its current state, which is about 80% complete. Because he is no longer in possession of the property, there is no construction occurring nor is the house listed for sale. The unfinished state of the house significantly reduces the pool of buyers available, further reducing the likelihood that Mr. De Silva will be able to sell the property in a timely manner. In addition to the Owemanco mortgage, there is a second mortgage and two certificates of pending litigation registered on title to the property. Owemanco is only prepared to proceed through a court-appointed receiver, as a receivership would permit clear title as well as simplify and unify in one proceeding the competing claims of subsequent encumbrancers relating to the property. Further, a receiver, as an officer of the court, is better positioned than the debtor, or Owemanco under a power of sale, to consider and make recommendations as to the disposition of any surplus proceeds. Rosen Goldberg was appointed receiver and will consider either expediting the sale of the property as is, or completing the construction of the property and selling it afterwards. Counsel is Andrew Pigott Professional Corporation for the applicant and GSNH for the receiver.