



COURT OF APPEAL FOR ONTARIO

CITATION: Peoples Trust Company v. Rose of Sharon (Ontario)
    Retirement Community, 2014 ONCA 534

DATE: 20140707

DOCKET: C58426

Feldman, MacPherson and Cronk JJ.A.

BETWEEN

Peoples Trust Company

Applicant (Respondent)

and

Rose of Sharon (Ontario)
    Retirement Community

Respondent
    (Respondents)

APPLICATION
    UNDER section 243 of the
Bankruptcy and Insolvency Act
,

R.S.C. 1985, c
    B-3, as amended and under Section 101 of the
Courts of

Justice Act
,
    R.S.O. 1990, c. C-43

Justin Baichoo, for the appellant Unimac Group Ltd.

Clifton P. Prophet and Haddon Murray, for the respondent
    Peoples Trust Company

Lou Brzezinski, for the respondent Deloitte & Touche
    in its capacity as court-appointed Receiver of Rose of Sharon (Ontario)
    Retirement Community

Heard: July 4, 2014

On appeal from the order of Justice David M. Brown of the
    Superior Court of Justice, dated February 6, 2014.

ENDORSEMENT

[1]

The appellant, Unimac Group Ltd., appeals from the Order of D.M. Brown
    J. of the Superior Court of Justice dated February 6, 2014, declaring that the
    respondent Peoples Trust Company is entitled to priority over any other
    interest claimed in certain Life Lease units in the Rose of Sharon (Ontario)
    Retirement Community in Toronto, except for any valid and prior construction
    lien claims.

[2]

The appellants principal argument is that the motion judge erred by
    determining the Priority Motion, brought by the respondent, separate and apart
    from the Lien Reference, where the appellant will be a significant participant.

[3]

We do not accept this submission, which ignores two crucial factors.

[4]

First, the bifurcation of the priority of security and construction lien
    issues flows from a previous court order dated December 27, 2012:

7. THIS COURT ORDERS that the issues of liability, timeliness
    and quantum in the Construction Lien Action shall be determined in a Reference
    before a Master.

8. THIS COURT ORDERS that the issue of the priorities of the
    construction lien vis-à-vis any other encumbrance shall be determined by a
    Judge of the Commercial List in these receivership proceedings.

No party appealed this order.

[5]

In a subsequent component of the priority of security proceedings, the
    appellant made submissions about its lien and the construction lien component
    of the proceedings.  In her endorsement, Mesbur J. said:

The construction lien in relation to UNIMAC and its assignee is
    being dealt with in a construction lien action, #CV-11-9399-OOCL.  Once the
    quantum of the lien is determined, the issue of priority will be decided in
    this overall receivership application on a date to be fixed.

The appellant did not appeal Mesbur J.s decision.

[6]

Second, the motion judges Order specifically preserves the construction
    lien issues and recognizes that, at a later time in both proceedings, the two
    streams will merge.  The Order granted the respondents motion on the priority
    issue save and except for any construction lien claims found to be valid and
    prior by a judge presiding over the Superior Court of Justice (Commercial
    List).

[7]

The appellant also submits that the motion judge erred by not giving
    effect to its security and equity interests at the priority hearing.

[8]

We disagree and say simply that we agree with the motion judges
    succinct rejection of these claims at paragraphs 3 and 4 of his endorsement.

[9]

Finally, in oral argument the appellant expressed the concern that it
    might not receive any money in the receivership proceedings because the receiver
    would distribute funds to Peoples Trust Company in accordance with its
    priority.

[10]

This
    concern is misplaced.  The receiver is collecting assets in accordance with the
    relevant court orders.  There can be no distribution until all claims,
    including the appellants, are dealt with by the court.

[11]

The
    appeal is dismissed.  The respondent is entitled to its costs of the appeal
    fixed at $7400, inclusive of disbursements and HST.

K. Feldman J.A.

J.C. MacPherson J.A.

E.A. Cronk J.A.


