In a receivership arising from concurrent CCAA proceedings, the moving party sought to vary a prior receivership order to change the allocation of sale proceeds from certain properties.
The dispute concerned whether surplus proceeds should be applied first to a cross‑collateralized mortgage held by a secured lender or to higher‑interest receiver borrowings incurred for other properties.
The court held that the original order did not finally determine the allocation of proceeds and that new facts concerning the timing and financing of property sales had arisen.
Applying Rule 59.06 of the Rules of Civil Procedure and the commercial reasonableness requirement under the Bankruptcy and Insolvency Act, the court concluded that applying lower‑interest debt before higher‑interest borrowing costs was not commercially reasonable.
The receivership order was amended to prioritize repayment of the receiver’s other borrowings before the lender’s blanket mortgage.
