Executive summary: key legal and evidentiary issues

• PricewaterhouseCoopers Inc., as court-appointed Receiver, sought approval to sell the Bates Properties and to assign the Corporate Debtors into bankruptcy over the objections of respondent Matthew Malkin.
• Environmental risks at 5205 Bates Road, including a draft Pollution Prevention Order from the British Columbia Ministry of Environment and Parks, created urgency to sell and transfer remediation responsibility to a financially capable purchaser.
• Malkin's repeated refinancing promises since April 2025 remained unsubstantiated, highly conditional, and collectively insufficient to cover the approximately $17.5 million debt plus receivership costs owed to Bank of Nova Scotia.
• The Receiver's sales process satisfied the Soundair Principles, attracting expressions of interest from 31 parties, 17 site visits, and nine total offers across two competitive rounds before the Amended Offer was accepted.
• Authorization to assign the Corporate Debtors into bankruptcy was sought to gain enhanced investigatory powers available to a trustee under the BIA and to reorder the CRA deemed trust priority on unpaid GST amounts.
• Approximately $1.8 million in pre-receivership transactions warranting further review were identified, including alleged unauthorized advances to Malkin Group Holdings Ltd., Mr. Malkin's company.

The parties and background

The Bank of Nova Scotia ("BNS") petitioned the Supreme Court of British Columbia against Fraser Valley Renewables Ltd. ("FVR"), Fraser Valley Agri Waste Solutions Ltd. ("FV AWS"), Huntingdon Agricultural Ltd., Matthew Blair Grier Malkin, and 1315390 B.C. Ltd. (collectively, the "Debtors"). The Corporate Debtors were owned and controlled by Mr. Malkin and were involved in organic waste conversion and complementary waste processing activities in Abbotsford, British Columbia. BNS held security against all of the Corporate Debtors' assets and two properties on Bates Road owned by Mr. Malkin — 5205 Bates Road, the site of FV AWS and FVR's commercial operations, and 5133 Bates Road, a larger property comprising two tenanted residences from which rent is derived. As of September 2025, the amount outstanding to BNS was approximately $17 million, and by December 1, 2025, this figure had grown to approximately $17.5 million without enforcement costs. BNS had made demand in April 2025, citing defaults in the loan facilities dating back to 2024.

Appointment of the Receiver and early proceedings

After Mr. Malkin failed to produce any refinancing despite months of assurances, BNS filed a petition in July 2025. On August 21, 2025, the Honourable Madam Justice Fitzpatrick appointed PricewaterhouseCoopers Inc. as Receiver of the Corporate Debtors' assets and the Bates Properties. The Receivership Order authorized the Receiver to immediately market most of the secured property but delayed marketing of Mr. Malkin's personal residence (the 131 Lands) until after January 1, 2026. A 30-day stay was also imposed in respect of the British Columbia Ministry of Environment and Parks (the "Ministry") to allow the Receiver to evaluate the economic feasibility of complying with a Pollution Prevention Order ("PPO") that the Ministry had issued on December 3, 2024 against FV AWS and Huntingdon in respect of the Huntingdon Lands. The stay was later extended to October 6, 2025.

Environmental complications and abandonment of the Huntingdon Lands

The PPO stated that effluent was being discharged from waste piles on the Huntingdon Lands and required compliance with certain remedial measures. As of August 20, 2025, FV AWS and Huntingdon had failed to complete some of those remedial measures from as early as May 2025. On October 2, 2025, the Receiver decided to abandon and release its interest in the Huntingdon Lands in accordance with s. 14.06(4)(a)(ii) of the Bankruptcy and Insolvency Act, due to what it considered were significant risks and costs associated with complying with the PPO. If the Ministry undertakes any remedial action in respect of the Huntingdon Lands, the Province will at least presumptively have priority over BNS's security on those lands pursuant to s. 14.06(7) of the BIA. Subsequently, an Amended and Restated Receivership Order granted on November 19, 2025 removed the Huntingdon Lands from the receivership proceedings.

The Bates Properties sales process

The Receiver solicited proposals from various real estate brokers, ultimately choosing Colliers Macaulay Nicolls Inc. ("Colliers") for the listing. Cognizant of the holding costs and ongoing environmental management issues, the Receiver determined that an expedited sales process was the best course of action. The listing began in early November 2025, with 5133 Bates listed for $4.3 million and 5205 Bates listed for $2 million. Broadcasts on the MLS took place to over 1,800 parties, in addition to publications in regional print magazines, listing on various websites, and signage on the properties. Colliers addressed expressions of interest from 31 parties, conducted 17 site visits, and fielded numerous enquiries. Four offers were received for 5205 Bates and one offer was received for both Bates Properties; no offers were received for 5133 Bates only. On December 8, 2025, the Receiver accepted an offer from a purchaser for both Bates Properties on an "as is, where is" basis. After subjects were removed on December 12, 2025, the Receiver ensured that the market was well aware of the upcoming court hearing to address the sale approval. At the sale approval hearing on December 18, 2025, four other interested parties who had not previously submitted offers appeared in Court and presented offers, and the original purchaser also tendered a revised offer. The Court sealed confidential supplements containing the purchase price under the Sherman Estate v. Donovan, 2021 SCC 25 test to protect the integrity of the sales process.

Environmental urgency at 5205 Bates

A significant factor influencing the expedited sales process was a draft Pollution Prevention Order issued by the Ministry on November 28, 2025 in respect of 5205 Bates (the "Draft PPO"), directed at the Receiver, FV AWS, and Mr. Malkin. The Ministry referred to an inspection by Ministry officials on November 18, 2025. The Draft PPO was similar to the PPO in terms of requiring immediate action to stop discharge of effluent and also requiring action on other remedial fronts, including covering waste piles and hiring a "Qualified Professional" to monitor and report, all by certain short deadlines. Mr. Malkin had estimated the cost of clean-up to the Receiver at $400,000 to $800,000. At the far end of that estimate, the amount well exceeded the maximum limit of the borrowings available to the Receiver under the Receivership Order ($400,000). The Receiver had also determined that the estimated cost to remove the waste piles would not yield a corresponding increase in value to 5205 Bates. The successful purchaser had engaged with the Ministry in advance of making the offer or during due diligence to understand what would be involved upon a sale. The purchaser provided a letter from Farm Credit Canada dated December 18, 2025 confirming its financing of the acquisition and also a $200,000 facility to support clean-up activities, and further advised the Receiver that it had access to "additional family equity" to help fund the clean-up.

Mr. Malkin's refinancing proposals

Mr. Malkin opposed the sale, asserting that he had achieved financing for the Bates Properties, a refinancing of the 131 Lands, and a sale of the Huntingdon Lands that collectively would repay BNS in full. The Court examined each proposal in turn. The Bates Properties refinancing consisted of a brief term sheet dated December 16, 2025 from Jagdip Purewal, MetroVan Development Inc., which was not accompanied by any support as to its validity. Significantly, the security required was a "first ranking mortgage" over the Bates Properties, yet there were two other mortgages behind BNS's mortgage and no indication how those were to be addressed. The 131 Lands refinancing from BTB Mortgage Investment Corporation was a term sheet dated December 15, 2025 for $4.25 million with a $250,000 holdback, set to close January 31, 2026. This offer was highly conditional, including due diligence relating to "property valuation," when the July 2024 assessed value was about $3.4 million. Mr. Malkin had not accepted this offer although he stated he intended to do so before its expiry on December 20, 2025. The Huntingdon Lands sale to Riverside Recycling Ltd. for $6.25 million with a $200,000 non-refundable deposit was set to close March 15, 2026, but by December 19, 2025, there was no evidence that the deposit had been paid. The sale was also heavily conditional, requiring among other things a clearance letter with respect to the PPO by February 15, 2026. The Court observed that Mr. Malkin's own consultant, Terrawest Environment Inc., had indicated an anticipated date for requesting formal closure of the PPO no later than April 1, 2026 — a date that did not meet the February 15, 2026 deadline. Furthermore, the combined net recovery from all three transactions would be $16.5 million, well below BNS's debt of $17.5 million plus receivership costs. As with all three proposed transactions, Mr. Malkin was unable to force BNS to accept any of them save as they allowed for full repayment of its debt. The Court concluded that the refinancing efforts were very conditional and uncertain and that Mr. Malkin did not provide any firm support that would give credence to their viability.

The bankruptcy assignment

The Receiver also sought authorization to assign the Corporate Debtors into bankruptcy under s. 243(1)(c) of the BIA. This authority was requested to gain enhanced investigatory powers available to a trustee in bankruptcy, which were necessary to thoroughly review certain pre-receivership transactions and dealings with related-party entities, and to reorder the priority of CRA's deemed trust claim for unpaid GST, which upon bankruptcy would be converted to an unsecured claim ranking subordinate to BNS's and other creditors' valid security interests. The Receiver had identified 20 transactions warranting further review, with a value of approximately $1.8 million, along with broader concerns including unrecorded equipment sales, missing assets, and unreconciled receivables not recorded in the general ledger. The Corporate Debtors opposed the bankruptcy, acknowledging the Court had the authority to authorize the Receiver as requested, but submitting it was not appropriate to do so in this case or at least at this time. The Court noted that it could not be seriously contended that the Corporate Debtors were solvent, and Mr. Malkin's counsel had conceded during submissions that the Corporate Debtors had failed to meet their liabilities generally as they became due. The Corporate Debtors also failed to provide any "clear and independent" evidence that they were solvent, as required under Braich v. Clarke, 2023 BCCA 305.

The ruling and outcome

On December 19, 2025, Justice Fitzpatrick ruled in favour of BNS and the Receiver on both contested matters. The Court approved the sale of both Bates Properties to the purchaser under the Amended Offer, finding the Receiver had run a fair and reasonable sales process in light of the challenges before it, one that satisfied the Soundair Principles. Nine offers in total were received and considered by the Receiver and the Court, and the Receiver's business judgment that the Amended Offer was the best opportunity for recovery was accepted, citing Kruger v. Wild Goose Vintners Inc., 2021 BCSC 1406. The Court also authorized the Receiver to assign any of the Corporate Debtors into bankruptcy and to act as trustee in bankruptcy. While the exact purchase price was sealed in confidential supplements, the Court noted that the purchase price under the Amended Offer would yield a price substantially less than the outstanding debt owing to BNS, and BNS was likely to suffer a significant shortfall in the recovery of its debt. In the meantime, stakeholders risked the ongoing cost of $80,000 per month in interest on the BNS debt and further receivership costs. The Court accepted BNS's counsel's submissions that it would suffer material prejudice if the Amended Offer were not approved, let alone the other creditors.