Mayfield Investments Ltd. (Mayfield) was financially distressed, insolvent, and in default of its obligations to ATB Financial (ATB). Despite several forbearance agreements, Mayfield continued to default. ATB demanded repayment and filed Notices to Enforce Security. The Parties agreed to a Consent Receivership Order, which was temporarily stayed to allow Mayfield time to cure its defaults. As Mayfield failed to cure its defaults, ATB filed a Lender’s Certificate, and a Receiver was appointed.

Mayfiled applied under the Companies Creditors Arrangement Act, RSC 1985, c C-36 (CCAA), and sought to stay the effects of the Consent Receivership Order and the Lender’s Certificate pending determination of the CCAA Application. ATB opposed.

Mayfield argued the Court had authority to stay a Receiver’s actions even after a receivership commenced, citing BCIMC Construction Fund Corporation et al v The Clover on Yonge Inc, 2020 ONSC 3659, but Marion J. found the case distinguishable and inapplicable. However, Marion J. highlighted that Rule 1.4(2)(h) allows the Court to make orders with respect to practice or procedure to further the purpose of the Rules in any action or proceeding.

The Parties agreed that the applicable test for a Stay was the tripartite test from RJR MacDonald v Canada (Attorney General), [1994] 1 SCR 311. However, Marion J. noted that the Court may still exercise discretion to grant a Stay even if the test is not fully satisfied, if the interests of justice so warrant. Justice Marion found that Mayfield failed to demonstrate irreparable harm, and the balance of convenience did not favour a Stay. ATB refrained from enforcement for months and reversing the Receiver’s process would be impractical. Additionally, Marion J. observed that even if the Court had residual discretion to grant a Stay, the interests of justice did not warrant it in the circumstances.

As a result, Justice Marion dismissed Mayfield’s Application to Stay the effects of the Consent Receivership Order and the Lender’s Certificate.