A Reminder: Requirement For A Receiver To Pay Occupation Rent

The recent decision of the Ontario Court of Appeal in Crate Marine Sales¹ serves as a reminder regarding the trigger for the obligation of a court appointed receiver to pay occupation rent. A receiver that is in possession of the premises of an insolvent corporation in order to continue to operate the insolvent's business in the ordinary course, and not merely with a view to securing or protecting property, will be liable to pay rent for the occupation of those premises.

In Crate Marine Sales, the "Crate Marine" group of companies ("Crate Marine") operated marinas in Ontario, including the "Lagoon City Marina" on Lake Simcoe (the "Marina"). Crate Marine became insolvent and a receiver (the "Receiver") was appointed by court order. The Receiver took possession of the properties of Crate Marine; which included the Marina. Insurance and utility costs associated with the operation of those properties were also funded by the Receiver. In addition, the Receiver continued