Hamilton court pushes ahead on time-sensitive receivership despite jurisdiction concerns

The Bank of Nova Scotia v. Old Green Inc. et al., 2025 ONSC 6191
Is it appropriate to determine a receivership application on the merits pending a transfer motion?

Summary: The Ontario Superior Court has appointed a receiver over Old Green Inc. and related respondents after rejecting their attempt to derail the application on venue grounds, ruling that although the case likely belonged in Milton rather than Hamilton, the time sensitivity of a receivership justified deciding the matter on the merits. The Court found the borrowers had been in default for months, offered no credible refinancing plan, and were allowing the lender’s security to erode through unpaid taxes and inaction. The Court emphasized that transfer motions must be brought before the Regional Senior Justice and cannot be raised orally in response to a receivership application, but concluded that delaying the matter further would only prejudice stakeholders and undermine an orderly realization process.

The Bank of Nova Scotia commenced an application in Hamilton to appoint a receiver over the respondents. The real properties in question were in Burlington. The respondent corporations’ head offices were in Burlington. Their principals were residents of Burlington. The loan agreement was proposed, negotiated and executed in Burlington.

The notice of application was dated June 22, 2025. The respondents raised the issue of whether the application should be heard in the Central West Region. The respondents asked the Court to “direct the Applicants to take the necessary steps to have this Application transferred to the appropriate Court Region.”

In Ontario, a motion to transfer a proceeding should be brought at the court location to which the moving party seeks to have the proceeding transferred. The moving party must file a notice of motion with a supporting affidavit, as required under rule 13.1.02(2) of the Rules of Civil Procedure. The Regional Senior Judge, or his or her designate, will hear all motions to transfer. Motions are to be brought in writing and only heard orally if required and then by teleconference. The onus rests with the moving party to satisfy the Court that a transfer is desirable in the interest of justice, having regard to the factors listed in r. 13.1.02. It is not sufficient to bring a transfer motion orally, on consent, or to file a consent for an order to transfer a case to another county under r. 13.1.02.

There is no statute or rule requiring the proceeding to be brought in a particular county. Therefore, unless r. 13.1.01(3) applies, r. 13.1.01(2) on its face allows this application to be commenced at any court office in any county named in the application. Both parties relied on factors in r. 13.1.02(2)(b) in support of their positions. The respondents argued the factors supported a transfer to Central West and the applicant argued the factors supported the matter remaining in Hamilton. The test is whether a transfer is desirable in the interest of justice, having regard to:

1. where a substantial part of the events or omissions that gave rise to the claim occurred;

2. where a substantial part of the damages were sustained;

3. where the subject-matter of the proceeding is or was located;

4. the convenience of the parties, the witnesses, and the court; and

5. any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits.

The factors set out in Rule 13.1.02(2)(b) are to be applied holistically. The balancing of the Rule 13.1.02(2)(b) factors is not a purely numerical or mathematical counting exercise. At first instance a plaintiff is entitled to commence a proceeding at any court location. If the plaintiff’s choice of venue is reasonable and the defendant challenges that venue, then a comparison of the two venues is required. The defendant must establish that its proposed choice of venue is significantly better than the one chosen by the plaintiff. The language of r. 13.1.02(2) is permissive, not mandatory. The Court may but is not required to transfer a proceeding.

BNS asserted that there is inherent time sensitivity in receivership matters, and the delay for a short motion in Milton was too long. Further, BNS claimed that the process for obtaining a long motion in Milton was more complicated than in Hamilton, such that it preferred Hamilton because Hamilton is easier and earlier dates are available.

The Court found that the connection to Hamilton was tenuous at best and it may well be appropriate to transfer the application to Milton. However, as set out in the practice direction, that was not the Hamilton Court’s decision to make. While it was open to the Hamilton Court to direct that the application be stayed while a motion is brought before the Regional Senior Justice in Central South to determine whether the application should be transferred in accordance with the practice direction, the result would be further delay in a matter in which there appeared to be little to no defence to the relief sought by the applicant.

In the unique circumstances of this case, the Court elected to determine the matter on its merits as that was the just, most expeditious and least expensive manner of determining the application. However, the Court noted that this is not to be taken as an endorsement of the parties’ choices, or an acknowledgment that Hamilton will hear matters which have no rational connection to Hamilton.

In determining whether it is just and convenient to appoint a receiver, the Court must have regard to all the circumstances, but in particular the nature of the property and the rights and interests of all parties in relation to the property. The Court found that it was just and convenient to appoint a receiver as sought by the applicant. The borrower and corporate guarantor had been in default for many months. The charge/mortgage and the general security agreement granted by the respondents to the applicant allowed for the appointment of a receiver over the property of the respondents upon default. Property taxes were owing. The applicant had lost confidence in the respondents’ management. The respondents had months to refinance or sell the properties, but did not offer any cogent evidence of refinancing. The respondents’ strategy appeared to be to delay matters further. Further erosion of the security was to be prevented, and appointing a receiver would ensure fairness to all stakeholders and an orderly process of monetizing the assets and maximizing realization.

Judge: M. Bordin J.

Professionals involved:

• Ian Klaiman and Jakob Bogacki of Spetter Zeitz Klaiman for BNS

• R. Allan for the respondents