DATE: 20010629 DOCKET: C35049
COURT OF APPEAL FOR ONTARIO
RE:
DeGASPERIS MUZZO CORPORATION (Plaintiff/ Appellant) –and– 951685 ONTARIO INC., PRICEWATERHOUSE COOPERS INC., in its capacity as court-appointed receiver of 951865 ONTARIO INC., MONTREAL TRUST COMPANY OF CANADA, in its capacity as trustee for THE HOLDERS OF CERTAIN MORTGAGE BONDS, STADIUM CORPORATION OF ONTARIO LIMITED and SPORTSCO INTERNATIONAL CORPORATION (Defendants/Respondents)
BEFORE:
OSBORNE A.C.J.O., FINLAYSON and SHARPE JJ.A.
COUNSEL:
Angus T. McKinnon and Andrew Skodyn, for the appellant
Dana B. Fuller, Alan B. Merskey and Gavin H. Finlayson, for the respondent Montreal Trust Company of Canada
Allan D. Coleman, for the respondent Stadium Corporation of Ontario Limited
HEARD:
June 27, 2001
RELEASED ORALLY:
June 27, 2001
On appeal from the judgment of Justice John D. Ground dated August 30, 2000.
E N D O R S E M E N T
[1] In this appeal, DeGasperis Muzzo Corporation (“DMC”) appeals from the judgment of the Honourable Mr. Justice Ground dated August 30, 2000. In his judgment, Ground J. declared that the mortgage security interests in the SkyDome created in favour of the respondents, the Montreal Trust Company of Canada, in its capacity as Trustee for the Holders of Certain Mortgage Bonds (“Montreal Trust”) and Stadium Corporation of Ontario Limited (“Stadco”) rank in priority to the leasehold interest of DMC in SkyBox #321.
[2] Stadco and Montreal Trust also cross-appeal from the judgment of Ground J. and request that the judgment be varied to declare that:
(a) the leasehold interest of DMC in SkyBox #321 was not created or effective prior in time to the mortgage security interests of either Stadco or Montreal Trust; and
(b) DMC was not entitled to relief from forfeiture in relation to its defaults in the performance of its obligations under its lease of SkyBox #321 dated March 16, 1994 (the “SkyBox Suite Lease”).
[3] These proceedings arise from the application of SkyDome Corporation, previously known as Stadium Acquisition Inc. (“SAI”) and subsequently renamed 951865 Ontario Inc. (“951865”), under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the “CCAA”) and the consequent court-approved sale of the SkyDome in March 1999.
[4] Pursuant to an order dated June 24, 1999, the Honourable Mr. Justice Blair directed that PricewaterhouseCoopers, the court-appointed receiver of SkyDome Corporation, hold in reserve a portion of the proceeds from the sale of the SkyDome pending judicial determination of the claim of DMC. By way of an endorsement made as of December 3, 1999, Blair J. directed a trial of the issue of the priorities as between the interests in the SkyDome of Montreal Trust, Stadco and DMC.
[5] In his judgment in the trial of the issue, Ground J. determined that the interests of Stadco and Montreal Trust rank in priority to the interest of DMC. We do not think that Ground J. erred in making that determination. In particular, having regard to the agreements and the documents that make up the arrangements under consideration, Ground J. was correct in finding that:
(a) pursuant to subs. 78(5) of the Land Titles Act, R.S.O. 1990, c. L.5, as amended, registered interests rank according to the order in which the instruments are entered in the register and that the instruments securing the interests of Stadco and Montreal Trust were entered in the register prior to that of DMC;
(b) in any event, DMC agreed in the SkyBox Suite Lease to subordinate its leasehold interest to the interests of Stadco and Montreal Trust; and
(c) the non-disturbance agreements dated March 15, 1994 provided to DMC by each of Stadco and Montreal Trust (the “Non-Disturbance Agreements”) did not affect the determination of the priorities as between the interests of the parties.
[6] We do not think it necessary or appropriate to deal with any other issues on the appeal.
[7] Accordingly, the appeal is dismissed with costs. The cross-appeal is dismissed without costs.
Signed: “C.A. Osborne A.C.J.O.”
“G.D. Finlayson J.A.”
“Robert J. Sharpe J.A.”