CITATION: Gefen v. Gefen et al., 2026 ONSC 2696

COURT FILE NO.: CV-14-0005107-00ES

DATE: 20260506

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: HENIA GEFEN, in her personal capacity and as estate trustee of the Estate of Elias Gefen, Plaintiff

AND:

ARIE GAERTNER, MILLER CANFIELD, PADDOCK and STONE LLP, THE JEWISH HOME FOR THE AGED, BAYCREST HOSPITAL, BAYCREST CENTRE FOR GERIATRIC CARE, YEHUDA GEFEN AND HARRY GEFEN, Defendants

AND BETWEEN:

HARRY GEFEN, Plaintiff by Counterclaim

AND:

HENIA GEFEN, in her personal capacity and as estate trustee of the Estate of Elias Gefen, HARVEY GEFEN, ASHLEY GEFEN, DUNDAS-THICKSON PROPERTIES LTD., 1393522 ONTARIO LIMITED and 1585708 ONTARIO LIMITED, Defendants by Counterclaim

AND BETWEEN:

HARRY GEFEN, Third Party Plaintiff

AND:

HARVEY GEFEN, Third Party Defendant

BEFORE: C. Gilmore, J.

COUNSEL: Gregory Azeff, Counsel for the Estate Trustee During Litigation Richard Swan and Joseph Blinick, Counsel for Harvey Gefen Melvyn Solmon, Counsel for Ashley Gefen David Milosevic, Counsel for Mayer Investments Canada LLC

HEARD: April 17, 2026

ENDORSEMENT ON MOTION

Introduction

1The Estate Trustee During Litigation (“the ETDL”) brings a motion for approval of the sale of property located at 20-26 Kennedy Road in Brampton (“the Brampton property”) pursuant to an Agreement of Purchase and Sale dated May 27, 2025, for $10.1 million. The sale is sought in the context of estate litigation which has been ongoing since 2013 with respect to the Estate of Elias Gefen and subsequently in relation to the Estate of his wife Henia Gefen.

2I have been case managing this matter since 2020 and do not intend to recite a detailed history of the litigation. The parties are well aware of the background facts. However, for context, Harvey, Harry and Yehuda Gefen are the sons of the now deceased Elias and Henia Gefen. Yehuda Gefen died in 2016. His Estate, Harvey, Harry and Ashley are all costs creditors of the Elias Estate. Ashley Gefen is Harvey’s daughter. For the purposes of these reasons, I shall refer to Harvey and Ashley as the “Gefen parties” and Harry Gefen as “Harry.”

3There is a dispute about the ownership of the Estate’s share of the Brampton property. Harvey and Ashley each assert a 12.5% interest in the Brampton property and that Henia’s Estate owns the other 25%. Harry Gefen asserts that the entire 50% share of the Brampton property is owned by the Elias Estate. Harry commenced an Application in 2025 to challenge Henia’s Primary and Secondary Wills. That Application remains ongoing.

4The ETDL was appointed in 2015 by Justice Newbold. The ETDL seeks approval to sell the Brampton property on the grounds that the Estate is illiquid, has ceased paying its creditors and its substantial creditor claims cannot be paid without a sale of property. Further, according to the ETDL, the Brampton property is derelict, unfit for occupation, has significant environmental issues and operates at a loss of $41,000 per month.

5The Brampton property is co-owned by Mayer Investments Limited (“Mayer”) which is controlled by Irving Garten (“Mr. Garten” or “Mayer/Garten”). Pursuant to my order dated July 6, 2021 (“the Authority Order”) the Brampton property is to be sold jointly by the ETDL and Mr. Garten. My further order dated July 6, 2021, set out the terms of the sale process (“the Terms Order”).

6There has been a long delay in the sale process. Mr. Garten submits it is because of what he describes as the “unnecessary and self-defeating” opposition to his attempt to rezone the Brampton property to increase its value. A motion was heard on this issue on May 30, 2023, when Mr. Garten and Mayer brought a motion to release funds from financing provided by Hillmount Capital Inc. to use for costs related to the remediation and rezoning of the Brampton property. Harvey, Ashley and Henia (who was still living at that time) vigorously opposed the motion. The ETDL opposed the motion only if it resulted in a delay in the sale of the Brampton Property. The motion was dismissed and thereafter Mr. Garten financed the rezoning application with his own funds. Mr. Garten seeks to be reimbursed for those funds from the sale proceeds. This is a contentious issue which will be dealt with more expansively below.

7On that same motion the Gefen parties sought to remove the ETDL and replace the ETDL with themselves and Henia Gefen such that they could jointly participate in the sales process with Mr. Garten. That motion was denied. Both Justice Dietrich and I concluded (in separate reasons) that the Gefen parties should be excluded from the sales process and the ETDL remain because of a history of animosity and mistrust between the Gefen parties and Mr. Garten. I found that Mr. Garten could work cooperatively with the ETDL but that the Gefen parties could not. The Gefen parties were denied leave to appeal that decision.

8The ETDL and Mr. Garten jointly selected Colliers as the broker. A listing agreement was prepared and the Brampton property was marketed by Colliers. After several years of marketing the Brampton property and protracted negotiations, the ETDL accepted the Sale Agreement dated May 27, 2025. Due to negotiations and sign-backs the Sale Agreement was not finalized until the fall of 2025. The Sale Agreement continues to be extended on a week-to-week basis awaiting the results of this motion.

9The ETDL requests approval of the Sale and a Vesting Order. The Gefen parties oppose approval of the sale. Initially Mr. Garten also opposed approval of the sale. However, the evening before this motion was heard he instructed his counsel to agree to the sale. His explanation for the change was that after 14 years of litigation he was exhausted, the commercial real estate market is not improving and he simply wants out.

10The Gefen parties expressed surprise at Mr. Garten’s sudden about face and question the timing of it. Their position is that the ETDL has blatantly breached my 2021 and 2023 orders by failing to consult with Mr. Garten and failing to protect Harvey and Ashley’s interests.

11Mr. Shael Eisen is the former Litigation Guardian and Guardian of Property for Henia Gefen, who died on July 31, 2025. Mr. Eisen and his counsel have deferred payment of their fees and request that they be paid out of the sale proceeds after the ETDL is paid. The total amount claimed is $785,356. Mr. Eisen takes no position on whether the Brampton Property should be sold on the terms proposed by the ETDL.

12Harry Gefen has submitted a letter to the court with respect to this motion. He is a costs creditor of the Estate. He does not oppose the motion but requests that if the sale is approved, Ashley and Harvey’s 25% share be held in trust until the dispute in Court File number CV-25-00754683 is determined.

13The Estate of Yehuda Gefen is also a costs creditor of the Estate. The Estate does not oppose the motion but submits that if any new sales process is ordered, Harvey and Ashley should not be permitted to veto or oversee it.

The Position of the ETDL

14The ETDL submits that the sale should be approved for the following reasons:

• The Brampton property was listed by Colliers International, a broker that the ETDL and Mr. Garten jointly selected. The Brampton property was marketed in accordance with Colliers’ marketing plan.
• The aggregate unsecured creditor claims against the Estate exceeded $3M as of January 2026. The Estate has no means to pay its creditors without a sale of the Brampton property.
• The property operates at a loss of $500,000 per year. Financing must be obtained annually to pay for the operating expenses of the property. Hillmount Capital has provided the financing to date which is secured by a $4 million mortgage. Hillmount has not indicated definitively whether it will continue to finance the Brampton property.
• The property is derelict and unfit for occupation.
• The ETDL’s mandate will continue until the Estate properties are sold and the creditors are paid. The ETDL seeks approval of the sale in order pay the creditors at which point it may be discharged.

15The ETDL does not disagree that other offers were received for higher prices but submits they were heavily conditional on financing and zoning and were not acceptable.

The Position of Harvey and Ashley Gefen

16The Gefen parties submit that the ETDL failed to follow this Court’s specific orders for sale. Further the ETDL has admitted to failing to include Mr. Garten in receipt, negotiation and acceptance of the proposed offer. The ETDL had no right or authority to sell Mayer’s 50% interest without his approval.

17The ETDL dismisses its lack of consultation with Mr. Garten as an “irregularity” which should not prevent approval of the sale. The orders made by this court in 2021 specifically require three things; 1) that the Brampton property be sold jointly by the EDTL and Mr. Garten, 2) that the listing Broker to take instructions only from Mr. Garten and the ETDL jointly, and 3) that all offers be provided to both parties for approval.

18Further, the Gefen parties submit that the Sale and Terms Orders made by this court in 2021 were specifically intended to protect their interests with a process by which they could take comfort that Mr. Garten would want the best price for his share and the ETDL had fiduciary obligations to ensure a transparent process and reasonable return for the beneficiaries.

19Harvey and Ashley submit that the sale price is improvident. At least two other offers were received at prices 40-60% higher than the one for which approval is sought.

20A further complaint from Harvey and Ashley was that sale negotiations were conducted by Allan Rutman, who is Ronald Rutman’s brother. Allan Rutman is not the court-appointed ETDL and they say he had no authority to conduct negotiations or enter into the Sale Agreement.

21Harvey and Ashley are “shocked” at Mr. Garten’s change of position in this matter, which came about at 4:00 p.m. on the day before the motion. Prior to that point in time, Mr. Garten had opposed the sale process. His sworn evidence was that the sales process was “irretrievably corrupted” and the purchase price was improvident. Initially, Garten had not filed a supplementary affidavit or offered any plausible explanation for this fundamental change of position. Harvey and Ashley go further to submit that no one acting economically rationally would change a position to one which they had earlier vociferously opposed as corrupt and improvident. Since, they say, there is simply no rational explanation, counsel for Harvey and Ashley suggest there is some economic benefit to the sale for Mr. Garten, such as a secret deal.

22Harvey and Ashley highlight portions of Mr. Garten’s factum in which he states:

“The ETDL is a court officer. Its decision to ignore court orders and usurp for itself the authority to sell the Brampton Property is shocking. The entire sales process has been corrupted by the ETDL’s action and inaction.”

23Harvey and Ashley set out other alleged deficiencies which go beyond breaches of my orders as follows:

(i) there were MLS listing irregularities and market signaling issues, including that the MLS listing displayed an anomalous “$1” sale price; (ii) there was abbreviated MLS exposure, including that the Brampton Property was listed on MLS for a very limited period (March 19, 2024 to expiry on December 25, 2024); (iii) there was a reduced cooperating broker commission, materially below the industry standard (0.75%, being less than one third the industry standard of 2.5%), reducing the incentive for outside brokers to bring qualified purchasers; (iv) there was a failure to provide sufficient development diligence materials, including site plan and zoning/OPA/SPA information and status updates that sophisticated purchasers would reasonably require to formulate offers; and (v) there was a lack of meaningful online and outreach marketing, including an apparent lack of online/social media marketing or targeted broker outreach commensurate with a major commercial disposition.

24Harvey and Ashley also noted that Mr. Garten obtained his own appraisal from Janterra Real Estate Advisors in March 2026 which valued the property at $14 million. Garten also received an offer of $13 million in December 2025 which was rejected by the ETDL. A further expression of interest from Jasleen Kaur for $13-14 million in March 2026 was not pursued. Yet, they submit, Mr. Garten now accepts the lower price despite the fact that none of the Soundair principles have been met.

25Finally, Harvey and Ashley remind the court that Mr. Garten spent over $650,000 of his own money on a rezoning application for the Brampton Property because he was certain this would increase the value of the property. It makes no sense that Mr. Garten would walk away from such an investment with no real attempt to recoup it.

26Ashley and Harvey submit that the only remedy is the appointment of an Independent Trustee and a transparent follow-on sales process. They suggest the appointment of Mr. David Mills as an arm’s length court appointed officer who can implement a transparent process for the sale of the Brampton property in accordance with the Soundair principles.

The Additional Evidence

27After hearing this motion on April 17, 2026, the court requested further submissions from counsel. The content of my endorsement from April 17, 2026, is set out below:

1. I have now had an opportunity to review counsel’s submissions and facta. Before rendering my decision, I request that Mr. Milosevic provide the following material by April 24, 2026: An affidavit from Mr. Garten confirming that he approves the Sale Agreement. The affidavit should include a waiver from Mr. Garten confirming that he waives any alleged irregularities in the sale process.
2. A 3-page further submission with respect to how any alleged irregularities in the sale process may be distinguished from the findings in Lash v. Lash Point Association Corp., 2022 ONCA 361.
3. Mr. Azeff, Mr. Swan and Mr. Solmon may provide a three-page response to the above by May 1, 2026. I will render my decision within the following week.

28Those additional submissions have now been received. Mr. Garten has provided an affidavit sworn April 22, 2026, in which he confirms the following:

• He is concerned that he was not involved in the sales process but has now had time to assess the reality of achieving a higher price. The purchase price in the current APS is the best price available at this time. The other offers he received for the Brampton property failed to materialize. He is content that the marketing process for the Brampton property was adequate.
• He is not in a rush to sell but is concerned about the rate at which carrying costs are eroding the equity in the property (at a rate of $500,000 per year) and is uneasy about how long a new sales process might take. Overall, he feels it is best to sell now and avoid further risks and delays.
• Given all of the above, he is prepared to waive his dispute about any irregularities in the sales process and supports the approval of the APS.
• Mr. Garten granted the right to participate in the sales process by court order dated July 6, 2021. Mr. Garten therefore retained standing to challenge the sales approval process. He has decided not to challenge the process.
• As for his investment in the property for rezoning and remediation, he intends to seek reimbursement for those expenses from the sale proceeds.

29Mr. Garten’s counsel also noted that his client has been “dragged along” in this process for 13 years and understandably wants it to end. He is concerned that if Hillmount will not refinance at the end of 2026, a forced sale may have to occur under “fire sale” type conditions.

30It is true that Mr. Garten invested money in rezoning and remediation of the Brampton property with the prospect of an increased return. Unfortunately, based on the valuation obtained by the ETDL in March 2026, the premium for rezoned properties in Brampton has simply disappeared. Mr. Garten on behalf of Mayer has the same interest as the other parties in obtaining as much value as possible for the property but for the reasons set out above, he is prepared to accept the $10.1 million offer.

31The ETDL filed a supplementary report dated April 29, 2026, as per my April 17, 2026, endorsement. Much of the ETDL’s report was a response to correspondence sent by Harvey’s counsel on April 24, 2026, in which he alleges that the ETDL was not transparent with respect to its dealings with Mr. Garten between April 14-17, 2026. Harvey’s counsel demanded that all communication between Mr. Garten and the ETDL be disclosed and that the ETDL further advise whether there were any other undisclosed agreements, arrangements or understandings between Mr. Garten and the ETDL. Finally, counsel for Harvey required disclosure as to whether Mr. Garten or Mayer or the ETDL or anyone affiliated with them has any interest in or affiliation with the proposed purchaser.

32The ETDL vehemently denies that Mr. Garten’s change of heart was the result of any conspiracy or secret dealings. The ETDL’s counsel produced a chronology of all communication between him and Mr. Garten’s counsel between April 14-17, 2026. Most of that communication focused on the preparation of a draft order and none of it related to any secret dealings. While the ETDL’s initial position was that it would not be seeking costs as the motion was in the ordinary course of its mandate, the ETDL now reserves the right to seek costs in having to respond to Harvey’s attacks.

33The ETDL’s position mirrors Mr. Garten’s affidavit in that after over a decade as an unwilling participant in the Gefen litigation and now the commencement of new litigation regarding Henia’s Estate, and considering the ongoing operating losses of the Brampton property, that Mr. Garten simply wants out.

34With respect to the issue of Allan Rutman acting as ETDL as opposed to Ronald Rutman, both are qualified accounting professionals who work for Zeifmans LLP. It was always contemplated that Zeifmans would be providing professional services. Whether it is Ronald Rutman or his brother Allan Rutman doing the actual work does not rise to a breach of the Appointment Order made in 2015.

35On April 27, 2026, the ETDL uploaded a draft order for consideration by the court (“the April 27^th draft order”). That order confirms court approval of the sale and vesting order, a holdback for taxes, payment of secured creditors and a holdback from the net sale proceeds of the amounts claimed by Mr. Garten for the expenses claimed for zoning and remediation.

The Gefen Parties

36I start by noting that Harvey Gefen’s submissions (an affidavit and a written submission) vastly exceeded the three-page submission I requested. No submission was received from Ashley Gefen, but I infer that her position is aligned with that of her father as it has been throughout this proceeding.

37Harvey’s additional evidence and submissions may be summarized as follows:

• Harvey reiterates his insistence that Mr. Garten and the ETDL’s counsel negotiated a secret deal just before the April 17, 2026 motion. Proof of such a deal is the April 27^th draft order which was not provided to the court at the motion and contains a term that Mr. Garten’s expenses for the rezoning and remediation would be held back from the net proceeds. The Gefen parties have never agreed to this and the issue of whether any portion of those costs should be reimbursed from the Gefen’s share of proceeds is an outstanding and contentious issue. The Gefen parties insist that the ETDL’s counsel offered to withhold the zoning and remediation costs from the sale proceeds so long as Garten agreed to the sale, but kept this negotiation hidden from the other interested parties.
• Given that Mr. Garten described the sale process as “irretrievably corrupted” in his initial affidavit, it is impossible to believe he would have changed his mind in the manner he did without receiving an economic benefit in return.
• Nothing in Mr. Garten’s supplementary affidavit disclosed the arrangement between Mr. Garten and the ETDL’s counsel to withhold the zoning and remediation costs from the net sale proceeds but the Gefen parties submit this must have been known to Mr. Garten and the ETDL’s counsel at that time and they simply chose not to disclose it. Further, the April 27^th draft order was never circulated to the parties but uploaded to Case Center on the morning of April 27, 2026.
• The proposed sale price of $10.1 million was not revealed to the Gefen parties until the sale approval motion. At that price and after deducting real estate commission estimated at $310,750, payout of the Hillmount mortgage estimated at $4 million, the disputed Mayer/Garten claim for re-development costs of $730,000, capital gains tax of $300,00 and the ETDL’s fees of $1.35 million, this would leave approximately $3.5 million to be split between Mayer/Garten, the Henia Estate and the Gefens, or $1.754 to Garten/Mayer, $877,312 to the Henia Estate and $877,312 to the Gefen parties equally. The amount of the remaining costs claims against the Henia Estate far exceeds what is available to the Estate.
• Harvey submits he has engaged in discussions with purchasers who are willing to purchase the property for between $16-19 million on an expedited basis.
• Harvey has obtained a copy of the planning applications submitted on behalf of Mayer/Garten in the summer of 2024. They propose two mixed-use towers of 42 and 32 stories respectively. This reflects a materially intensified development which significantly enhances the value of the Brampton property. Harvey alleges that these materials did not form part of the ETDL’s process and were not used to market the property nor was Collier’s marketing brochure updated to reflect this development potential.

Analysis and Orders

38In determining whether to approve a Sale and Vesting Order, this court must advert to the principles set out by the Court of Appeal for Ontario in Royal Bank of Canada v. Soundair Corp. (1991), 4 O.R. (3d), 83 D.L.R. (4th) 76 1 (C.A.). In that case there were competing offers made to the receiver to buy a division of Soundair Corp. The receiver’s decision to accept one of the offers over another was appealed by the party with the unaccepted offer.

39In that case the court warned that a court should be cautious about determining whether a receiver’s conduct was improvident. Offers that are “marginally” better or based on circumstances which came to light after acceptance may not lead to an inference that the receiver’s strategy was improvident.

40Further, the court should not interfere lightly with the commercial judgment of the receiver. nor should the views of creditors be determinative. Creditors should not be permitted to take over the sales process simply because they do not agree with the receiver’s decision. While the ETDL is not a receiver per se in this case, it has similar duties to owners and creditors as well as its fiduciary duties to the Estate.

41The principles of Soundair are accepted to be as follows:

(a) whether sufficient effort has been made to obtain the best price and that the receiver has not acted improvidently; (b) whether the interests of all parties have been considered; (c) the efficacy and integrity of the process by which offers have been obtained; and (d) whether the working out of the process was unfair.

Has Sufficient Effort Been Made to Obtain the Best Price

42I find that this part of the test has been made out despite the objections of Harvey and Ashley. Colliers is a well-recognized brokerage and had an incentive, based on the commission structure, to obtain the best price.

43The Brampton property was exposed to the market for an extended period of time (almost five years) and the offer received is a cash offer without conditions. I accept the ETDL’s submission that the property is “derelict” and difficult to sell in its current condition. A quick review of the photos of the property in the Janterra appraisal demonstrates the neglected state of the property and buildings.

44The ETDL acknowledged that there had been two previous offers which were higher than the current offer. However, they were heavily conditional on zoning and financing and the ETDL had serious concerns that those offers would not be approved by this court. I find that the ETDL was correct in wanting an offer that could be approved and closed. Consistent with the findings in Soundair, the ETDL’s (qua “receiver” in Soundair), commercial judgment should not be interfered with lightly and I find that the proposed sale is not improvident.

45I do not view the listing and brokerage issues raised by Harvey and Ashley to be sufficient to dismiss the motion and open a new sales process. Colliers is a well-respected brokerage and there was no evidence that any of the issues raised impacted the price obtained.

46The March 2026 appraisal obtained by the ETDL appraised the Brampton property at $14 million. However, that appraisal describes the property as a “development site” which contemplates demolishment of the existing building to allow for redevelopment. The appraisal also references the Official Plan and Zoning By-law Amendment Applications made by Mayer/Garten on February 9, 2026. In a letter from Mr. Garten’s Planning Consultants, MHBC, dated March 12, 2026, they estimate a review process by the City of Brampton of 12 months. MHBC reminds Mr. Garten that City Council retains final authority to refuse or approve such applications but that the requested zoning permissions are “reasonably achievable.”

47While the Gefen parties complain that the potential for redevelopment was not included in Colliers’ marketing package and therefore may have affected potential pricing, it can be seen from the appraisal package that the appraisal assumes the property will be redeveloped and the zoning permissions granted. The letter from MHBC clarifies that there is no such guarantee and that even after a year of review, such approvals could be denied. The decision by city council (either for or against development) could then be appealed to the Ontario Land Tribunal. A possible delay of up to two years to obtain such approvals would likely mean another $1 million in equity will be lost while expenses continue to drain the value of the property, all in a commercial real estate market which is stagnant or declining.

48The Gefen parties complain that they obtained offers which were not considered by the ETDL. I have reviewed those offers. The offer for $14 million was conditional on financing and zoning for development. As articulated above, there is no rezoning approval and at best, such approval will not be received until February 2027.

49The offer for $16 million is contained in an email to Harvey dated January 13, 2026. The prospective buyer suggested a meeting but there is no evidence that such a meeting took place or that a formal offer was made.

50Before changing his position on the sale approval motion, Mr. Garten complained that he had received an offer for $13 million which the ETDL had ignored. This offer was conditional on financing and zoning which were not acceptable to the ETDL for the reasons set out above.

51In summary, I do not find that the sale price is improvident or that appropriate efforts to market and sell the property were not made. The bleeding must stop. The proposed cash offer may not pay out all of the unsecured creditors, but it will pay out the judgment and secured creditors and some of the remaining claims. Delay will only diminish the amounts available for all interested parties.

Were All of the Parties’ Interests Considered?

52While the ETDL did not consult with Mr. Garten, Mr. Garten has waived any irregularity caused by such lack of consultation. The waiver was Mr. Garten’s to make, and he did so with the advice of counsel. The ETDL was not required to consult with Harvey or Ashley whose interest is significantly less than Mr. Garten’s.

53I note the warning in Soundair that creditors’ views should not be determinative in the sales process. In this case the Gefen parties are creditors. They are also potential beneficiaries whose interest is being challenged. Their standing in this matter cannot be compared to that of Mr. Garten and they should not be permitted to take over the process.

54While the Soundair principles are instructive for this court, there is no requirement that all of the principles be strictly adhered to. Some flexibility is required for the circumstances of each case. In Cameron Stephens Mortgage Capital Ltd. v. Conacher Kingston Holdings Inc., 2025 ONCA 732, 179 O.R. (3d) 541 at para 34, the court held:

34Starting from this point of deference, I do not agree that the motion judge erred in his application of Soundair. The Soundair principles are flexible and case specific. No one factor is determinative. Rather, they are principles that a court must consider when deciding whether a receiver who has sold a property acted properly.

55In this case, the softened market conditions and Mr. Garten’s acquiescence of the reality of the situation cannot be ignored with respect to his decision to waive the joint consultation provision of the Sale and Terms Orders.

56The parties are all aware that despite their complaints about the price, the Estate is insolvent and requires money to pay its creditors. Interest on the costs owing continues to mount as do legal fees. The operating costs of $41,000 per month have already cost the Estate and Mr. Garten $164,000 in 2026.

57The interests other than those of the owners must also be considered in this case. They include the costs claims of Henia’s former Attorney for Property and Litigation Guardian and his counsel, Harry, and the Estate of Yehuda Gefen. The Gefen parties have costs claims as well. Apart from the Gefen parties, the other unsecured creditors do not oppose the motion. This is an important consideration given that those parties are alive to the prospect that they may not receive the full amount of their costs claims.

58I find that the ETDL recognized that a balance was required in these circumstances. All parties want the best price. Conversely, the market conditions, operating costs, creditor claims and state of disrepair of the property dictate an end to the sales process as soon as possible. Mr. Garten’s change of position only supports this. He is the party with the most at stake in this process given his investment of over $650,000 into the property and his ownership share. Yet, even he has relented and has confronted the reality of the situation.

59Finally, this court must place confidence in the conduct and considered business decisions made by the ETDL. The court is not in a position to second-guess the ETDL’s recommendations except in a situation such as Lash (as will be discussed below) where none of the Soundair principles were met.

Was the Marketing Process Fair and Run with Integrity?

60Colliers is a well-known professional brokerage business that had a clear interest in ensuring the property was properly marketed. The data room (an online repository of records related to the proposed transaction) information produced shows that there was considerable interest in the property.

61The Gefen parties complain that Colliers did not include the zoning and by-law amendment application information in their marketing package inferring that either Colliers knew about it and ignored it, or that they were not given the information. This does not change the court’s view about the integrity of the process.

62The ETDL’s submission was that the premium for rezoned properties has disappeared in Brampton. The March 2026 appraisal for $14 million assumes the property will be redeveloped. If there is no market for redevelopment and no ability to determine if such approvals will ever be granted, marketing the property based on the possibility of such approvals would be futile.

63Harvey submits that his input and proposed offers were not considered by the ETDL. The ETDL was not required to consult Harvey and in any event, as outlined above, the offers he proposed were not acceptable.

64In summary, I find that the marketing process was run with fairness and integrity and that this Soundair principle has been met.

Was the Working out of Process Unfair?

65The Gefen parties have made serious allegations about an alleged “secret deal” between the ETDL and Mr. Gefen. I reject any such allegations.

66The ETDL’s counsel has produced his communications with Mr. Garten which do not support such allegations. The communication between the ETDL’s counsel and Mr. Garten’s counsel related mostly to negotiating a draft order for presentation to the court.

67While it is true that the draft order was not presented until after the motion was argued and contained terms which were not discussed at the motion, I do not find that is sufficient to decline the relief sought.

68The main area of contention was that the draft order contained a provision requiring that Mr. Garten’s expenses in relation to the remediation and redevelopment be held back from the net sales proceeds. This would mean that 50% of those costs would be held back from the Henia Estate/Gefen parties’ share. Of course, they strenuously object to this as they have never agreed to pay for such expenses.

69I note that this is a draft order offered for consideration by the court. The order was not presented as being on consent of the parties. As Case Management judge, I well recognize that the issue of Mr. Garten’s expenses in relation to the Brampton property remains outstanding. However, it is an entirely separate issue related to the distribution of the sale proceeds as opposed to the sale approval motion and in this court’s view has nothing to do with the Soundair principles.

70As for whether the working out of the process was fair, that is not a substantive consideration here. The sale process was set out in my Sale and Terms orders in July 2021. The Gefen parties sought leave to appeal those orders and were unsuccessful. The court ordered process was followed other than the consultation with Mr. Garten which was waived and which I have found did not affect the overall fairness of the process.

The Considerations in Lash

71The Gefen parties rely on the decision In Lash v. Lash Point Association Corp., 2022 ONCA 361, 2022 A.C.W.S. 5317, in which the Court of Appeal for Ontario set aside the approval of a sales and vesting order where there was a failure to comply with the Soundair principles.

72In that case, certain family members transferred their interest in a 28-acre cottage property to a non-profit corporation. On wind-up, the founding members would receive a percentage interest equal to their contribution to the non-profit corporation.

73Inevitably, some family members wanted to stay on and enjoy the property (and avoid triggering capital gains) while others wanted to leave and realize the value of their share. The by-law required a two-thirds majority for any such change which neither side could muster. The parties sought a court-supervised process. The application judge ordered a staged buy-out of the interests of those who wanted to depart by those who wanted to remain. Grant Thornton was appointed as the Receiver.

74Various disputes arose related to the sales process. An offer was received and the parties disagreed as to whether the offer should be approved by the court. The motion’s judge approved an offer whereby the entire family cottage compound would be sold despite earlier orders that would have sold only parts of the property. Those parties who wanted to remain appealed the motion judge’s order.

75The Court of Appeal found that the motion’s judge erred in finding non-compliance with all of the Soundair principles yet approving the sale. The Court of Appeal noted that the property had never been listed for sale on the open market, there was no evidence of sufficient efforts to obtain the best price, there was no integrity to the process by which the offer had been obtained and the working out of the agreement was unfair. A new sales process was ordered.

76The case at bar may be easily distinguished from Lash. In Lash, none of the Soundair principles were met, as noted by both the motion judge and the Court of Appeal. In this case even if one could argue that Mr. Garten’s last-minute change of heart was an “irregularity” he has clearly waived such irregularity, and provided evidence as to why.

77Further, it is not necessary to decline a sale approval motion if some but not all of the Soundair principles were followed. In Chahal v. Chabrra et al., 2014 ONSC 6770 the Receiver did not involve the defendant’s lawyer in the sales process and used a real estate agent with whom there may have been a conflict of interest. In that case the court found that such irregularities related only to the “appearances” of the sale rather than the actual sale: Chahal, at para. 24. In the case at bar, the lack of consultation with Mr. Gartner was a requirement that was waived by Mr. Gartner who had the standing to make such a waiver. Mr. Gartner now takes no issue with the sales process.

78Given all of the above, I find that this case can be distinguished from Lash in that all of the principles in Soundair have been met. If I am wrong, and the lack of consultation with Mr. Gartner defeats the first principle in Soundair, I find that this irregularity is insufficient on its own to deny the sale approval in these exigent circumstances.

Orders and Costs

79Given all of the above, the motion relief is granted. Mr. Azeff to provide a draft approved order for my review and signature.

80Upon the sale of the Brampton property, all sale proceeds are to be held in trust after the payment of real estate commission, capital gains tax, legal fees on the sale, the ETDL’s fees, Mr. Garten’s share and the Hillmount mortgage.

81Mr. Azeff is to return to court for a one-and-a-half hour Case Conference with a proposed distribution to the Estate, the Gefen parties, and the remaining unsecured creditors from the net sale proceeds. Mr. Garten is to provide his invoices and submission on reimbursement of the remediation and rezoning costs prior to the Case Conference. If the distribution of the remaining sale proceeds cannot be worked out at the Case Conference, a motion date will be set.

82Mr. Azeff advised that he would not seek costs if the motion was approved. I am uncertain if that position has changed given the requirement to respond to the allegations made by the Gefen parties. Mr. Azeff to advise and if costs are sought, a timetable for written submissions can be determined.

Cory A. Gilmore