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Real Property - Receivership. Lash v. Lash Point Association Corp.
In Lash v. Lash Point Association Corp. (Ont CA, 2022) the Court of Appeal stated the test for a Receiver approving a sale agreement, here in a non-insolvency context:[37] The second ground of appeal advanced by the appellants is that the motion judge erred in approving a sale that contravened the principles established in Royal Bank of Canada v. Soundair Corp. (1991), 1991 CanLII 2727 (ON CA), 4 O.R. (3d) 1 (C.A.).
[38] The motion judge himself said, “The principles governing the approval of sale agreements in a receivership context restated by the Court of Appeal in Royal Bank of Canada v. Soundair Corp. have three decades of consistent precedent to recommend them and, were that not sufficient, the weight of good common sense as well.” (Citation omitted.)
[39] Under the principles described in Soundair, a court is to consider:1. whether a sufficient effort has been made to obtain the best price and whether the receiver has acted improvidently;
2. the interests of all of the parties;
3. the efficacy and integrity of the process by which the offers were obtained; and
4. whether the working out of the process was unfair. ....
[45] Counsel for the appellants submitted that since Soundair was decided, there did not appear to be any reported case in Canada where a court had approved a sale of property in the face of an express finding that the transaction did not satisfy any of the Soundair principles. Counsel for the respondents was unable to suggest otherwise. Although this case does not involve a traditional receivership, it does engage many of the same principles including the involuntary transfer of property, and McKinlay J.A.’s comments in her concurring reasons for decision in Soundair are apt:It is most important that the integrity of procedures followed by court-appointed receivers be protected in the interests of both commercial reality and the future confidence of business persons in their dealings with receivers. Consequently, in all cases, the court should carefully scrutinize the procedure followed by the receiver to determine whether it satisfies the tests set out by Anderson J. in Crown Trust Co. v. Rosenberg (1986), 1986 CanLII 2760 (ON SC), 60 O.R. (2d) 87, 39 D.L.R. (4th) 526 (H.C.J.).[6]
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