Executive Summary: Key Legal and Evidentiary Issues

• The Court refused National Bank of Canada’s application to compel Compeer Financial to elect whether it would sue NBC over dishonoured cheques and to disclose bases and quantum of any such claim, and also rejected NBC’s requested claims-bar consequence.

• Consent litigation plans and scheduling orders between Sunterra and Compeer were strictly applied, leading to findings that Sunterra had effectively waived any right to bring “compel” applications for further answers or undertakings, and that Compeer’s late affidavits had to be struck.

• Under separate scheduling orders, National Bank of Canada’s president, Compeer’s chief executive officer and chief risk officer, and KPMG personnel were all ordered to attend for questioning, based on the wording and structure of those agreed procedural orders.

• Sunterra obtained an extension of the CCAA stay for the Sunterra entities to May 1, 2026, while Compeer’s request for “super-monitor” style relief and to “take the reins” of the process was rejected, in light of recent restructuring steps and the monitor’s support for a stay extension with existing management.

• Signature Pointe Developments Inc.’s application under s 73 of the Law of Property Act to compel ATB Financial to assign its mortgage over WMS’s leasehold interest to SPDI was dismissed because SPDI was neither the mortgagor nor a person “entitled or obligated” to pay the mortgage within the meaning of that section.

• The Court declined to extend the CCAA stay to West Market Square Inc., found that appointment of a receiver and manager over WMS at ATB’s instance was just and convenient, and later recorded that ATB had resolved its claim against WMS, withdrawn its receivership application, and that an SPDI-related entity had acquired ATB’s position (excluding the receivership application).

Background and overall context

The Sunterra group and key parties

The decisions all arise in the context of CCAA proceedings concerning Sunterra Food Corporation and related Canadian entities, including Sunterra Enterprises Inc. The proceedings involve several significant creditors: National Bank of Canada, Compeer Financial, PCA, Farm Credit Canada, and ATB Financial.

The Court (Justice Michael J. Lema of the Court of King’s Bench of Alberta) issued multiple endorsements addressing:

• whether and how inter-creditor disputes could be managed within the CCAA proceedings

• the scope and effect of consent litigation plans and procedural orders

• the reach of the CCAA stay to related entities such as West Market Square Inc.

• the availability of extraordinary remedies such as “super-monitor” style orders and receiverships

• the operation of s 73 of the Law of Property Act in relation to ATB’s mortgage on WMS’s leasehold interest.

NBC’s application to compel Compeer regarding potential claims (2025 ABKB 599)

In the 2025 ABKB 599 endorsement, National Bank of Canada applied for an order requiring Compeer Financial, PCA to:

• advise whether it intended to pursue claims against NBC arising from NBC’s dishonouring of certain cheques payable by Canadian Sunterra entities

• outline the bases of any such claims and provide a range of quantum

• do so by a specified “Compeer Claims Bar Date,” failing which Compeer’s claims against NBC in respect of the dishonoured cheques would be barred.

NBC argued that it needed this information to prove and value a contribution-and-indemnity claim against the Canadian Sunterra entities in the CCAA proceedings, relying on s 11 of the CCAA and authorities where CCAA courts had dealt with disputes involving creditors.

The Court noted that CCAA proceedings are not properly used to determine disputes solely between parties other than the debtor company, subject to an exception where the resolution of such disputes is “inextricably connected to the restructuring process.” It held that NBC had not shown that the order sought met this threshold and highlighted that the CCAA has its own mechanism for proving and valuing contingent and contribution claims.

The Court also found that, in substance, Compeer could not yet fully define its potential claim and that any compelled “election” and range would be subject to later change. The proposed order would not materially increase certainty or materially assist the CCAA claims process, and a claims-bar consequence was not warranted in any event. NBC’s application was dismissed.

Orders for questioning senior bank and Compeer executives and KPMG (2025 ABKB 606)

In 2025 ABKB 606, the Court considered three “produce-witnesses-to-be-examined” applications heard on October 15, 2025:

1. Sunterra’s application to examine National Bank of Canada’s president, Laurent Ferreira.

2. Sunterra’s application to examine Compeer’s chief executive officer (Jase Wagner) and chief risk officer (Bill Moore).

3. NBC’s application to examine KPMG personnel.

Sunterra and NBC had negotiated a detailed scheduling order for the December 2025 claims hearing. Justice Lema found the order created a category of additional NBC witnesses whose obligation to attend examination depended only on being a current or former NBC officer, director, or employee and on being selected by Sunterra. He concluded that the wording and structure of the order, including tight timelines and the absence of any objection mechanism regarding witness selection, meant that NBC had “effectively abandoned its right to challenge the Sunterra witness selections.”

On that basis, the Court ordered that NBC’s president attend for remote examination at a time convenient to him, with no fixed time limit other than what flowed from the scheduling order.

For Compeer, the parallel scheduling order invoked Rule 6.8, but without any reference to Rule 5.17. The Court held that, in context, the reference to Rule 6.8 imported its procedural mechanics without requiring any separate assessment of whether the proposed witnesses had likely relevant and material evidence. Compeer had agreed to a protocol under which Sunterra could select two current Compeer employees for examination, and that selection triggered the duty to attend. The Court therefore granted Sunterra’s application to examine Compeer’s CEO and CRO by remote questioning, subject to the overall time limits in the order.

NBC’s separate application to examine KPMG personnel was also granted, with the Court emphasizing KPMG’s role as auditor to the Sunterra entities and accepting NBC’s submissions that such examinations could illuminate relevant matters.

Effect of consent litigation plans and refusal of Sunterra’s “compel” application (2025 ABKB 708)

The 2025 ABKB 708 endorsement concerned a later set of procedural disputes between Sunterra and Compeer. Two consent litigation plans (procedural orders) had been agreed in July 2025 and then amended and restated by consent on November 13, 2025, setting out all lead-up steps to the December 4–5, 2025 applications regarding Compeer’s claim.

Under these orders:

• Sunterra had cross-examined two Compeer affiants (Nicholas Rue and Steve Grosland), with some questions objected to and some undertakings refused or declined.

• Sunterra had also, by separate order (2025 ABKB 606), examined Compeer’s CEO (Jase Wagner) and CRO (Bill Moore) under Rule 6.8, again with objections and undertakings at issue.

• The amended order set deadlines for completion of all examinations and for providing undertaking responses. It did not include any express right to bring a “compel” application regarding objected-to questions or undertakings, unlike the separate NBC–Sunterra order which contained such a clause.

On December 1, 2025, Sunterra applied for an order compelling responses to objected-to questions and undertakings and for leave to conduct follow-up examinations. It also sought to strike three affidavits that Compeer had filed late, contrary to the timelines in the order.

Justice Lema held that, in agreeing to the amended procedural order on November 13, 2025, Sunterra did so with knowledge of the existing objections and refused undertakings from the Rue and Grosland examinations and with the undertaking response deadline already set. The order was intended to be a complete roadmap for the remaining steps. In those circumstances, Sunterra had “effectively waived its rights to apply for a ‘compel’ order” against Compeer.

The Court reached the same conclusion regarding the Rule 6.8 examinations of Messrs. Moore and Wagner. It also accepted Compeer’s position, based on Alberta case law including Great North Equipment Inc v Penney, that Rule 6.8 witnesses are not subject to undertakings in the way party witnesses are.

Consistent with its strict reading of the consent procedural order, the Court further held that Compeer’s additional affidavits were filed too late and were not contemplated by the order. Those affidavits were struck from the materials for the December 4–5 hearing.

Extension of the CCAA stay and refusal of “super-monitor” relief (2026 ABKB 161)

In 2026 ABKB 161, Sunterra applied to extend the CCAA stay of proceedings (which was expiring on March 4, 2026) to May 1, 2026. Compeer opposed and sought, in effect, an order allowing it to “take the reins” through a super-monitor-type structure.

The Court noted that much of the parties’ time and effort up to that point had been devoted to the claims-proving process, and that the Court had recently issued claims-process judgments. It also recorded that the CCAA monitor had been urging advancement of the sales and investment solicitation process (SISP) since July 2025.

Justice Lema observed that:

• There had recently been a “burst of energy and attention” to SISP and restructuring issues, including the addition of Goodmans LLP and the actual or prospective retention of a restructuring expert.

• Compeer had not shown that it had taken earlier steps, to the extent available to it, to advance the SISP or to seek earlier orders directing Sunterra to do so.

• No other secured or unsecured creditors had aligned with Compeer’s “take the reins” approach.

The monitor supported extending the stay, despite its prior frustrations with the pace of SISP-related work, and considered it preferable for existing management, guided by expanded counsel and the restructuring expert, to pursue restructuring efforts over the next 57 days.

The Court referred to commentary and case law on “super-monitor” powers, including Re Hudson’s Bay Company and Mantle Materials Group Ltd, and emphasized that such relief is “extraordinary” and fact-specific. It found that the facts in this case did not warrant such exceptional relief and that there was no disqualifying bad faith or due-diligence failure in light of the previous focus on claims-proving and the current signs of progress on restructuring.

Accordingly, the stay was extended to May 1, 2026, and Compeer’s request for super-monitor-type powers was rejected. A further endorsement was to follow on other issues argued at the February 24, 2026 hearing.

SPDI’s application under s 73 of the Law of Property Act (2026 ABKB 175)

The 2026 ABKB 175 endorsement dealt with an application by Signature Pointe Developments Inc. (SPDI) under s 73 of Alberta’s Law of Property Act (LPA). SPDI owns the fee simple interest in a commercial property in Calgary. It granted a long-term ground lease to West Market Square Inc. (WMS), which then borrowed from ATB Financial and granted ATB a mortgage on its leasehold interest.

At SEI’s request, WMS borrowed additional monies from ATB for SEI’s purposes. SPDI took a pledge of SEI’s shares in WMS as security for SEI’s promise to repay those funds to ATB. SPDI, WMS, and ATB entered into a tri-party agreement defining their relationships concerning the share pledge and the ground-lease mortgage.

When SEI defaulted, ATB demanded repayment from WMS and applied to appoint a receiver of WMS. SPDI, in turn, tendered what it described as full payment of WMS’s indebtedness to ATB and applied for a declaration that s 73 LPA applied to its tender, such that ATB would be bound to transfer its mortgage and security to SPDI at SPDI’s request.

The Court reproduced s 73 and noted that SPDI’s application rested on s 73(2), because WMS, not SPDI, was the mortgagor under s 73(1). Justice Lema accepted a definition of “entitled” as having the right to do or receive something and examined whether SPDI had such a right or any obligation to pay off WMS’s mortgage to ATB.

Key findings included:

• The ATB–WMS commitment letter was between ATB and WMS; SPDI was not a party. It mentioned SPDI only as a party to a contemplated tri-party agreement for consent to the leasehold mortgage.

• The commitment letter defined “Guarantor” as any party that has provided a guarantee in favour of ATB. No evidence showed that SPDI had provided a guarantee.

• ATB’s mortgage was registered against WMS’s ground-lease interest, not against SPDI’s fee simple title.

• SPDI’s fee simple title was not subject to ATB’s enforcement remedies in the event of WMS’s default.

The Court held that SPDI’s status as fee simple owner, its participation in the tri-party agreement, and references to the “Project Lands” did not make SPDI a mortgagor or guarantor, did not impose any obligation on SPDI to pay ATB, and did not confer any entitlement within the meaning of s 73(2) LPA to pay off the mortgage and require an assignment. The tri-party agreement, properly read, gave ATB enforcement rights over the ground lease and deferred some of SPDI’s enforcement rights against WMS but did not suggest that SPDI had any right to clear the ATB debt.

The application was dismissed. The Court added that, if SPDI had had status under either s 73(1) or (2), its tender and request for assignment of ATB’s security would have fallen outside the CCAA stay as a substitution of one secured creditor for another.

Application to extend the CCAA stay to WMS and ATB’s receivership application (2026 ABKB 206)

In 2026 ABKB 206, the Court considered two related issues:

1. Whether the CCAA stay should be extended to cover West Market Square Inc. (WMS), a company 50% owned by Sunterra Enterprises Inc. (SEI) and 50% by SPDI.

2. Whether a receiver (or interim receiver) should be appointed over WMS at ATB Financial’s request.

Sunterra sought to extend the stay to WMS and “its business and property,” arguing that:

• SEI holds 50% of WMS’s voting shares and SPDI holds the other 50%.

• The Court had previously confirmed that the existing CCAA stay protected SEI from actions by SPDI that would affect SEI’s interest in WMS.

• Without a clear stay for WMS, ATB or other creditors might take enforcement steps, including a receivership, that could negatively affect the value of WMS and SEI’s interest in it and divert key Sunterra personnel and resources.

• The stay extension would cause no material prejudice to SPDI or WMS’s lenders and could promote stability and facilitate discussions.

• Courts have, in other cases, extended CCAA stays to entities in which the debtor does not own 100% of the equity.

Evidence about WMS included that it owns the commercial property at 1851 Sirocco Drive SW, Calgary, as sub-landlord of a shopping facility, and that SEI and SPDI are its two equal shareholders. The Court also had the benefit of evidence from SPDI’s principal, Peter Livaditis, confirming that he and Glen Price were WMS’s directors.

Justice Lema reviewed case law on extending CCAA stays to affiliates or other related entities, including decisions where stays were granted because the outside entities’ businesses were highly integrated with, indispensable to, or inextricably intertwined with the debtor’s operations, or because they were co-borrowers, guarantors, licence holders, employers, or otherwise structurally critical.

He concluded that the evidence before him did not demonstrate that WMS’s operations were functionally integrated, inextricably intertwined, or highly integrated with those of the Sunterra applicants to the degree shown in those cases. While Sunterra occupied retail premises in the WMS property, there was no detailed showing of the kind of integration, or of the significance of WMS’s equity (if any) to the overall Sunterra restructuring, that had supported stay extensions elsewhere.

ATB, for its part, applied to appoint a receiver and manager over WMS. It relied on factors including:

• WMS’s defaults under ATB’s security.

• ATB’s concern about the value and preservation of its collateral, particularly the ground-lease interest.

• Evidence that WMS’s shareholders’ equity might be minimal or non-existent, given a valuation range for the ground lease and ATB’s approximately $8.4 million secured claim (plus interest and costs).

SPDI’s evidence confirmed that WMS had failed to pay February 2026 rent under the ground lease and that ATB had made that rent payment to SPDI. SPDI also pointed to an appraisal showing different values for the ground lease depending on whether renewal options totaling fifteen additional years were assumed to be exercised. The Court noted that the lease required WMS to have duly performed all lease covenants as a condition to renewal and that WMS’s rent default raised questions about whether the renewal options remained available.

The Court accepted that ATB’s position was at risk and that WMS had not been responsive to ATB’s efforts to obtain information and engagement. It found that appointing a receiver and manager was just and convenient to ensure proper management of WMS’s assets, collection and application of net rents, and protection of both ATB’s secured position and any residual shareholder equity.

On the stay-extension question, Justice Lema held that, in light of his conclusion that a receivership was warranted, extending the CCAA stay to WMS would prejudice ATB by blocking that receivership. He therefore refused to extend the stay to WMS.

At the same time, the Court recognized the possibility that SPDI might pay ATB’s claim in full or that the parties might otherwise resolve ATB’s claim. It stayed the operation of the receivership order until noon on March 27, 2026 to allow time for such a resolution.

In an epilogue, Justice Lema recorded that, after completing the decision but before releasing it, he received letters advising that ATB’s claim against WMS had been resolved and that ATB was withdrawing its receivership application, and that an SPDI-related entity had acquired ATB’s position, excluding the receivership application. SPDI also advised that, with the ATB receivership threat resolved, a stay extension for WMS was no longer warranted. Sunterra’s counsel asked that the decision nonetheless be released, and the Court did so, adding the epilogue.