



COURT OF APPEAL FOR ONTARIO

CITATION: Sturino v. Crown Capital Corporation, 2018 ONCA 207

DATE: 20180302

DOCKET: C64228

Feldman, Benotto and Brown JJ.A.

BETWEEN

Frank Sturino

Applicant (Respondent)

and

Crown Capital Corporation,
Canada
    Investment Corporation
and Fenfam Holdings Inc.

Respondents (
Appellant
)

Rick Quance, for the appellant Canada Investment
    Corporation

Wojtek Jaskiewicz, for the Court Appointed Receiver MNP
    Ltd.

Mauro Marchoni, for the respondent Frank Sturino

Heard and released orally: February 26, 2018

On appeal from the order of Justice Michael R. Gibson of
    the Superior Court of Justice, dated February 6, 2017.

REASONS FOR DECISION

[1]

Canada Investment Corporation (CIC) appeals
    the order of the motion judge approving the recommendation of the receiver, MNP
    Ltd. (the Receiver), that no further distributions be made to CIC in respect
    of its first mortgage. CIC submits the motion judge erred by failing to find it
    was entitled to a distribution for the interest due on its mortgage.

[2]

We do not agree.

[3]

As described in the Receivers Third Report
    (paras. 43 and 49) and Supplement to the Third Report (paras. 13 and 14), the
    Receiver asked CIC for: (i) a breakdown of how the interest was arrived at; and
    (ii) clarification as to why CIC did not enforce its mortgage from Crown Capital
    Corporation (CCC) earlier than February 2014, if interest had not been paid
    since April 2012. Although Mr. Wilson of CIC provided an affidavit in response
    to the Receivers Third Report, CIC did not provide a breakdown of its interest
    calculation  relying on its discharge statements  nor did it provide the
    requested clarification.

[4]

As a result of its investigation, the Receiver
    had concerns that CIC and CCC were related companies. The mortgagor, CCC, did
    not allow the Receiver access to its financial records that would have allowed the
    Receiver to verify the amount due under the mortgage.

[5]

The burden was on CIC to prove its claim.

[6]

Given the failure of CIC to provide the
    information reasonably requested by the Receiver so that it could verify CICs
    mortgage interest claim, the Receivers recommendation that no distribution be
    made to CIC for mortgage interest was reasonable. We see no reversible error in
    the motion judges decision to accept that recommendation, given the state of
    the evidence concerning CICs mortgage.

[7]

The appeal is dismissed. The court did not accept the
    receivers position that it was not asking for costs because its costs would be
    paid out of the estate. Counsel for the creditor who has an interest in the
    funds remaining in the estate submitted that costs should be awarded. CIC shall
    pay costs to the Receiver fixed at $7,500.00, inclusive of disbursements and
    HST.

K.
    Feldman J.A.
M.L. Benotto J.A.
David Brown J.A.


