Executive Summary: Key Legal and Evidentiary Issues

• Business Development Bank of Canada sought appointment of a court-appointed receiver over Kooshie Cushions of Canada Limited under section 243 of the Bankruptcy and Insolvency Act and section 43(9) of Nova Scotia's Judicature Act.
   
• Kooshie Cushions conceded the debt and the default but resisted Deloitte Restructuring Inc.'s appointment, proposing a forbearance arrangement instead.
   
• Justice Keith applied the "just or convenient" test, drawing on factors summarized in Bank of Nova Scotia v. Freure Village of Clair Creek and Kingsett Mortgage Corp. v. Mapleview Developments Ltd.
   
• Evidentiary gaps in Kooshie Cushions' forbearance proposal, including the absence of cash-flow projections and anchor-tenant details, weakened its position.
   
• Objections to Deloitte specifically, based on its earlier role as a proposed private receiver, were dismissed as unsupported by evidence of bias or conflict.
   
• Ultimately, the court found it just and convenient to appoint Deloitte as receiver over Kooshie Cushions' assets and undertakings.
   

Facts of the case

On June 15, 2026, Business Development Bank of Canada ("BDC") filed a Notice of Application seeking to have Deloitte Restructuring Inc. ("Deloitte") appointed as Court-appointed Receiver and Manager over the assets, property, and undertaking of Kooshie Cushions of Canada Limited ("Kooshie Cushions"). BDC's security included a Mortgage and Assignment of Rents registered on title to 339 Willow Street, Truro, Nova Scotia (PID 20239059) on January 10, 2025; a personal guarantee from Kooshie Cushions' principal, Mark Shelley; a corporate guarantee from Sun Kissed Energy Incorporated; and a general security agreement from Sun Kissed Energy Incorporated registered under Nova Scotia's Personal Property Security Act. As of April 7, 2026, BDC claimed it was owed $2,565,282.75 plus interest and professional fees under a $3.5 million loan facility approved on or about October 16, 2024. Kooshie Cushions did not dispute the debt or the default. It initially raised concerns about inconsistent interest rates in the demand package and a demand letter addressed personally to Mr. Shelley rather than the corporation, but softened this position at the hearing, acknowledging these as minor procedural imperfections. BDC attempted to install Deloitte as a private receiver on or about April 24, 2026, but Kooshie Cushions declined to consent, resulting in an impasse that led BDC to seek a court-appointed receiver instead.

Policy and legislative provisions at issue

The application engaged section 243(1) of the Bankruptcy and Insolvency Act and section 43(9) of Nova Scotia's Judicature Act, both of which authorize a court to appoint a receiver where it is "just or convenient" to do so. Section 244 of the BIA governed the notice requirements for BDC's April 7, 2026 Notice of Intention to Enforce Security. Contractually, section 10(p) of the Mortgage contained an acceleration clause triggering the full debt upon default, while section 12(d) conferred on BDC a contractual right to appoint a receiver in the event of default. The general security agreement was registered under Nova Scotia's Personal Property Security Act.

Reasoning and analysis

Justice Keith distinguished a privately appointed receiver, who acts as the creditor's agent under the security agreement, from a court-appointed receiver, who is a neutral officer of the court owing duties to all interested parties. Applying the "just or convenient" test, he considered factors drawn from Bank of Nova Scotia v. Freure Village of Clair Creek, 1996 CanLII 8258 (ON CTGD), and Kingsett Mortgage Corp. v. Mapleview Developments Ltd., 2024 ONSC 1983, including risk to the secured creditor, potential prejudice to the debtor, the need to preserve assets, cost implications, and the likelihood that receivership would maximize recovery. He found BDC had demonstrated a valid, secured debt, an uncontested default since early April 2026, and denial of meaningful access to the secured assets after the private receivership attempt failed. By contrast, Kooshie Cushions' forbearance proposal lacked evidentiary support: it offered no cash-flow projections, no threshold for "extraordinary" expenditures, and no details about the anchor tenant it said was essential to its survival. The affidavit of Mark Shelley was described as "distressingly weak" on this point. Justice Keith also rejected the argument that Deloitte's earlier engagement as a proposed private receiver disqualified it, citing Fotti v. 777 Management Inc., [1981] 5 W.W.R. 48 (Man. Q.B.), for the principle that a court-appointed receiver acts as trustee for all interested parties rather than as the creditor's agent, and finding no evidence of bias, conflict, or misconduct on Deloitte's part.

Ruling and overall outcome

Justice Keith granted BDC's application, appointing Deloitte as Court-appointed Receiver and Manager over the assets and undertakings of Kooshie Cushions. BDC was the successful party. The decision did not order or grant any monetary award, damages, or costs; the $2,565,282.75 figure (plus interest and professional fees) reflects the indebtedness BDC alleged as of April 7, 2026, not a sum awarded by the court. No costs order is recorded in the decision.