Alexander Steele

The appellants, lien claimants in a condominium development bankruptcy, appealed a motion judge's decision regarding the quantum of their priority under section 78(2) of the Construction Act.

They argued for a 20% priority due to two building mortgages, while the receiver contended it was a single 10% holdback deficiency.

The Court of Appeal granted leave to appeal, finding the statutory interpretation issue important.

On the merits, the Court of Appeal upheld the motion judge's interpretation, affirming that the priority is limited to the single 10% holdback deficiency, regardless of the number of building mortgages.

The appeal was dismissed.

Three lien claimants brought a motion in a receivership proceeding to determine the proper interpretation of s. 78(2) of the Construction Act regarding priority over building mortgages.

The claimants argued they were entitled to priority for the holdback deficiency against each building mortgage individually, effectively multiplying their priority amount.

The court dismissed the motion, holding that the lien claimants' priority is limited to the extent of the single deficiency in the owner's holdback over all building mortgages combined, as multiplying the priority would be contrary to the statutory scheme and unfairly prejudice subsequent encumbrancers.

The Applicants, part of the Lydian Group which owns a development-stage gold mine in Armenia, sought an order sanctioning their Plan of Arrangement under the CCAA.

The Plan, supported by the Monitor and the requisite majority of secured creditors, provides for the privatization of the Lydian Group and the release of existing indebtedness to Senior Lenders.

The court found the Plan to be fair and reasonable, noting that while equity claimants would receive no compensation, this reflected the economic reality of the insolvency.

The court also approved third-party releases, an increase to the DIP charge, an extension of the stay period, a sealing order for commercially sensitive information, and the Monitor's activities and fees.