



COURT OF APPEAL FOR ONTARIO

CITATION: 1842752 Ontario Inc. v. Fortress
    Wismer 3-2011 Ltd., 2020 ONCA 250

DATE: 20200409

DOCKET: C67216

Simmons, Harvison Young and
    Zarnett JJ.A.

BETWEEN

1842752
    Ontario Inc.

Applicant (Appellant)

and

Fortress
    Wismer 3-2011 Ltd., Pace Developments Inc.,

1839392
    Ontario Limited, Pace Developments (The Mark) Ltd.

and
Firm Capital Mortgage Fund Inc.

Respondents (
Respondent
)

and

MarshallZehr
    Group Inc.

Intervenor

Kevin Sherkin, for the appellant 1842752
    Ontario Inc.

Cary Schneider, for the respondent Firm
    Capital Mortgage Fund Inc.

Harvey Chaiton, for the intervenor
    MarshallZehr Group Inc.

Heard: February 21, 2020

On
    appeal from the order of Justice David L. Corbett of the Superior Court of Justice,
    dated June 12, 2019, filed as 2019 ONSC 3673.

REASONS FOR DECISION

Introduction

[1]

The appellant, 1842752 Ontario Inc., has a
    judgment and writ of seizure and sale against Fortress Wismer 3-2011 Ltd.
    (Fortress Wismer). Fortress Wismer owns an undivided 35 percent beneficial
    interest in lands registered under the
Land Titles Act
, R.S.O. 1990, c.
    L.5. The registered owner of the lands holds the land for Fortress Wismer and
    two other corporations under an unregistered trust agreement. Under s. 62(1) of
    the
Land Titles Act
[1]
,
    notice of an express, implied or constructive trust shall not be entered on
    the register or received for registration.

[2]

The appellant applied for declarations that the
    writ of seizure and sale is binding on and enforceable against the registered
    owner of the lands and gives the appellant priority over a previously
    registered charge to the extent of advances under it made following actual
    notice of the writ.

[3]

The application judge dismissed the appellants
    application. For the reasons that follow, we dismiss the appellants appeal.

Background

[4]

Pace Developments (The Mark) Ltd. ("Pace
    Mark") is the registered owner of lands being developed as an 18-storey
    residential condominium (the lands). The lands are registered under the
Land
    Titles Act
.

[5]

Pace Mark holds the lands under an unregistered
    trust agreement
[2]
specifying that Fortress Wismer, Pace Developments Inc. (Pace) and 1839392
    Ontario Limited (1839392) are the beneficial owners of the lands as tenants
    in common. Under the trust agreement, Fortress Wismer is entitled to a 35
    percent beneficial interest in the lands.

[6]

In 2016, Pace Mark gave a construction financing
    charge to Firm Capital Mortgage Fund Inc. (Firm Capital) and a further charge
    to MarshallZehr Group Inc. (MarshallZehr).

[7]

The appellant, 1842752 Ontario Inc., is a
    judgment creditor of Fortress Wismer, having obtained a judgment against Fortress
    Wismer for payment of $100,000 plus interest and costs in November 2017.

[8]

On January 30, 2018, the appellant filed a writ
    of seizure and sale with the sheriff in the jurisdiction where the lands are
    located, directing the sheriff to sell the real and personal property of
    Fortress Wismer within the jurisdiction. The appellant also gave Firm Capital actual
    notice of its writ of seizure and sale and asserted that any subsequent
    advances under Firm Capitals charge would be subordinate to its writ. Firm
    Capital disagreed.

The appellants application

[9]

Subsequently, the appellant applied for
    declarations that: i) its writ of seizure and sale against Fortress Wismer applies
    against or binds Pace Mark, the registered owner of the lands as bare trustee
    for Fortress Wismer, Pace and 1839392; ii) its writ of seizure and sale may be
    executed against Pace Mark; and iii) any advances to Pace Mark from Firm
    Capital made after January 30, 2018
[3]
rank subordinate to its interest.

[10]

The application judge granted intervenor status
    to MarshallZehr on the application. For ease of reference, Firm Capital and
    MarshallZehr will be referred to as respondents on this appeal.

The application judges decision

[11]

The application judge concluded that the
    appellant is not entitled to enforce its writ of seizure and sale against Pace
    Mark, nor to priority over the arms length construction financing provided by
    Firm Capital and MarshallZehr.

[12]

The application judge acknowledged that s. 9(1)
    of the
Execution Act
, R.S.O. 1990, c. E.24, authorizes the sheriff to
    whom a writ of execution
[4]
is delivered to seize and sell the lands of the execution debtor including any
    lands whereof any other person is seized or possessed in trust. However, he
    noted that the
Execution Act
is a procedural statute that does not
    confer substantive rights but rather provides mechanisms for the collection of
    judgment debts:
Yaiguaje v. Chevron Corporation
, 2018 ONCA 472, 141 O.R.
    (3d) 1, at para. 54.

[13]

Further, the application judge observed that, in
    this case, Pace Mark holds the lands not just for Fortress Wismer but also for
    two other companies, Pace and 1839392. The beneficial owners rights are
    governed by the trust agreement. The application judge concluded that the
    appellant, as a judgment creditor, could have no higher interest in the lands
    than Fortress Wismer. Further, he found that as Fortress Wismer has no right,
    as a beneficial owner, to force a sale of the lands or interrupt ongoing
    construction financing, neither could the appellant have any such right.

[14]

Finally, the application judge concluded that
    the appellants statement that it did not intend to force a sale against Pace
    Mark did not assist its position; if it obtained a declaration entitling it to
    enforce its writ against the registered owner, it would be entitled to force a
    sale of the lands.

[15]

Notably, the application judge observed the
    appellant may well be entitled to enforcement through other remedies, such as
    garnishment or appointment of a receiver.

The Appellants Position on Appeal

[16]

The appellant submits that the application judge
    erred by conflating the issue of the sheriff's ability under the
Execution
    Act
to seize and sell the whole of the lands (which the appellant concedes
    cannot be done) with the issue of whether its writ of seizure and sale is
    binding on the lands and gives the appellant priority over mortgage advances
    made under a previously registered mortgage following actual notice of its writ
    of seizure and sale.

[17]

The appellant argues that on a plain reading of
    ss. 9, 10 and 13 of the
Execution Act
and s. 93(4) of the
Land Titles
    Act
, it is entitled to the relief it seeks.

[18]

Section 9 of the
Execution Act
gives the
    sheriff authority to seize and sell lands of an execution debtor that are held
    in trust. Section 10 confirms that a writ of execution binds the lands against
    which it is issued. Section 13 stipulates land  belonging to any person
    indebted is liable to and chargeable with all  debts owing by any such
    person and subject to seizure and sale to satisfy those debts. To make the
    lands liable to and chargeable with Fortress Wismers debt, the appellant
    argues that, patently, its writ of seizure and sale is binding on and
    enforceable against Pace Mark.

[19]

Further, says the appellant, various authorities
    have confirmed that, even where lands are registered under the
Land Titles
    Act
, which prohibits registration of notice of an express, implied or
    constructive trust, the court will consider a prior unregistered trust
    agreement to determine that a writ of execution is not binding on particular
    land because the execution is in the name of a registered owner who holds the
    land in trust: see
Michaud v. Coreslab

Structures (Ont.) Inc
.,
    2012 ONSC 355, citing
Young v. LeMon
(1985), 3 C.P.C. (2d) 163 (Ont.
    Dist. Ct) and
Gibb v. Jiwan
, [1996] O.J. No. 1370 (Ct. J. (Gen. Div.);
    and
Jellet v. Wilkie
, (1896) 26 S.C.R. 282, cited in
Gibb
. As a
    corollary to that reasoning, the appellants writ of seizure and sale against
    Fortress Wismer should be binding on and enforceable against Pace Mark.

[20]

Concerning Firm Capitals charge, the appellant submits
    that under s. 93(4) of the
Land Titles Act
, subsequent advances under a
    prior charge following registration of a transfer, charge or other instrument
    maintain priority over such transfer, charge or other instrument
unless
the original chargee had actual notice of such transfer, charge or other
    instrument. Here, the appellant gave Firm Capital actual notice of its writ of
    seizure and sale against Fortress Wismer, such that Firm Capital lost the
    priority to which it was otherwise entitled under s. 93(4).

[21]

The appellant also relies on the following
    statements in a headnote from
Sherlick v. Harley
(1932), 41 O.W.N. 85
[5]
and a paragraph in the
    Canadian Encyclopedic Digest as supporting its claim for priority over
    subsequent advances by Firm Capital:

Sherlick v. Harley
 headnote  unknown court

Plaintiffs mortgage was registered before an
    execution against the lands of the mortgagor was placed in the sheriffs hands.
    Plaintiff made an advance thereafter. Held: On a reference in an action on the
    mortgage, the mortgagee was prior to the execution in respect of all advances
    made without actual notice.

CED 4th (online),
Mortgages
(Ont.),
    Miscellaneous: Tacking (XIII.6) at
§
821:

Apart from registration, the doctrine of
    purchaser for value without notice does not apply to equitable interests in
    land. However, a person holding the legal estate by way of mortgage and making
    a further advance on the security of the same land without notice of an
    intervening interest can tack his or her second advance to the legal estate and
    refuse to be redeemed until the whole loan is repaid. In this way, he or she
    obtains priority for the second advance over the intervening interest.

[22]

Finally, the appellant submits that because it
    confirmed on its application that it would not be instructing the sheriff to
    sell the Pace Mark lands, the application judge erred in failing to grant the
    more limited remedy it requested. With the requested declarations in hand, all
    the appellant will do is await the sale of the lands  at which time the
    purchaser will require clear title from Pace Mark and Pace Mark will be
    required to address the appellants writ of seizure and sale.

The Respondents Position on Appeal

[23]

The respondents assert that while the
Execution Act
gives the appellant the right to have the sheriff seize and
    sell Fortress Wismers interests in the lands, it does no more than that. In
    particular, it gives the appellant no higher rights than Fortress Wismer, a
    partial beneficial owner and creates no priority over Firm Capitals mortgage
    advances.

[24]

Moreover, the respondents contend that under the
Land Titles Act
, the registered owner is considered the absolute owner of
    land as the
Land Titles Act
does not recognize a trust relationship. As
    set out above, s. 62(1) of the
Land Titles Act
provides that [a] notice
    of an express, implied or constructive trust shall not be entered on the
    register or received for registration. Further, s. 62(2) provides that
    describing the owner of land as a trustee shall be deemed not to be a notice
    of a trust.
[6]

[25]

Further, the respondents rely on s. 72(1) of the
Land Titles Act
, which provides that [n]o person, other than the
    parties thereto, shall be deemed to have any notice of the contents of any
    instruments, other than those mentioned in the existing register of title  or
     entered in the records of the office kept for the entry of instruments.

[26]

In addition, the respondents point to various
    decisions that have held a writ of seizure and sale does not create an interest
    in land and gives the sheriff no right to apply for partition: see e.g.
Ferrier
    v. Civiero
, 1999 CarswellOnt 4197 (Sup. Ct. J.), affd 2000 CarswellOnt
    5277 (Sup. Ct. (Div. Ct.)), affd (2001) 147 O.A.C. 196 (C.A.).

[27]

Finally, the respondents say that, on its face,
    s. 93(4) of the
Land Titles Act
does not apply to an execution creditor.

[28]

Overall, the respondents assert that the
    appellant has failed to identify any authority, whether statutory or otherwise,
    to support its entitlement to the declarations it seeks.

Discussion

[29]

We agree with the respondents overall position
    that neither the statutory authorities nor the case law supports the appellants
    entitlement to the relief it seeks.

[30]

As a starting point, the sections of the
Execution Act
upon which the appellant relies do not support its position
    that its writ of seizure and sale should be declared binding on Pace Mark and that
    it may be executed against Pace Mark.

[31]

As the application judge observed, s. 9(1) of
    the
Execution Act
gives the sheriff the authority to seize and sell
    lands of an execution debtor subject to a writ of seizure and sale, including lands
    held in trust for the execution debtor:

9 (1)
The
    sheriff
to whom a writ of execution against lands is delivered for
    execution
may seize and sell
thereunder
the lands of the execution
    debtor, including any lands whereof any other person is seized or possessed in
    trust for the execution debtor
and including any interest of the execution
    debtor in lands held in joint tenancy. [Emphasis added.]

[32]

Subsections 10(4)-(7) stipulate the date from
    which a writ of execution binds land. In the case of lands registered under the
    land titles system, s. 10 is supplemented by s. 136 of the
Land Titles Act
.
    Subject to certain exceptions and the sheriff complying with statutory
    obligations concerning entry of the writ into an electronic data base, essentially,
    these sections provide that a writ of execution binds the lands against which
    it is issued from the date it is received by the sheriff.

[33]

Section 13 provides that land and real estate
    belonging to a person are liable to and chargeable with the persons debts and
    subject to the remedies provided under the
Execution Act
. However, s. 13
    does
no more
than confirm that lands are subject to the remedies of
    seizure and sale provided for under the
Execution Act
:

13
Subject to the
Courts of Justice Act
and the rules of court,
land and other hereditaments and real estate belonging to any person
    indebted

are liable to and chargeable with all just debts
, duties
    and demands of whatsoever nature or kind
owing by any such person
to Her
    Majesty or to any of her subjects and are assets for the satisfaction thereof
and
    are subject to the like remedies,
proceedings and process
for seizing,
    selling or disposing of them towards the satisfaction of such debts
, duties
    and demands, and
in like manner as personal estate is seized, sold or
    disposed of
. [Emphasis added.]

[34]

Beyond stipulating that a writ of seizure and
    sale binds the lands of the party named in the writ and authorizing the sheriff
    to sell those lands even if they are held in the name of a trustee, the
Execution
    Act
provides no further remedy to a judgment creditor in relation to a writ
    of seizure and sale.

[35]

As has been observed on many occasions,
    including by the application judge, the
Execution Act
is a procedural
    statute that facilitates the collection of debts through the mechanisms
    contained in it. It does not purport to grant substantive rights to judgment
    creditors:
Yaiguaje
, at para. 54. In particular, the sections of the
Execution
    Act
upon which the appellant relies do not authorize effectively adding the
    legal owner of a property in which a judgment debtor has an unregistered
    beneficial interest to a writ of seizure and sale against the judgment debtor.

[36]

Assuming there was an available market, and
    subject to the terms of any co-tenancy agreement, the sheriff could conceivably
    sell Wismers 35 percent beneficial interest in the lands. However, that fact
    does not make the appellants writ of seizure and sale binding on or
    enforceable against Pace Mark.

[37]

Nor does
Michaud
assist the appellant.
    The underlying principle animating that decision is that, unless displaced by a
    statutory provision to the contrary, an execution creditor may seize and sell
    no more than the debtors interest in land. Put another way, the execution
    creditor stands in no better position than the debtor. Accordingly, lands to be
    sold at the request of an execution creditor are sold subject to the charges,
    liens and equities to which they were subject in the hands of the debtor. In
Michaud
,
    it was thus held that a prior unregistered trust declaration or agreement made
    by the registered owner had priority over an execution creditor. An execution
    creditor of a registered owner subject to an unregistered trust agreement cannot
    sell the beneficial interest in lands because the registered owner does not own
    it: see
Michaud
, at paras. 57 to 63.
[7]

[38]

However,
Michaud
does not support the
    appellants request for a declaration that its writ of seizure and sale against
    Fortress Wismer is binding on and enforceable against Pace Mark. As the
    appellant stands in no better position than Fortress Wismer, the appellants
    entitlement is limited to having the sheriff seize and sell whatever Fortress
    Wismers interest in the lands may be and, as will be explained below, to share
    in the proceeds of sale of that interest in accordance with the priorities set
    out in the
Creditors Relief Act
, 2010
, S.O. 2010, c. 16, Sched. 
    4.

[39]

Further, the appellants argument that it
    acquired priority over subsequent advances by Firm Capital under s. 93(4) of
    the
Land Titles Act
by giving Firm Capital actual notice of its writ of seizure
    and sale is misconceived. Section 93(4) is reproduced below. Section 93(4)
    gives a registered charge priority over everyperson claiming by, through or
    under the charger. It does not create any priorities over a prior registered
    charge for an execution creditor. Rather, s. 93(4) speaks to the priority of advances
    made under a previously registered charge following registration of a further transfer,
    charge or other instrument executed by the chargor, or the chargors successors.
    The appellant as the holder of a writ of seizure and sale does not fall within
    the section. A writ of seizure and sale is not created through a transfer,
    charge or other instrument executed by the chargor or the chargors heirs,
    executors, administrators or estate trustees as required under the section.

[40]

Section 93(4) of the
Land Titles Act
reads
    as follows:

93
    (4)
A registered charge is, as against the chargor
, the
    heirs, executors, administrators, estate trustees and assigns of the chargor
    and every other person claiming by, through or under the chargor,
a security
    upon the land thereby charged to the extent of the money or moneys worth
    actually advanced or supplied under the charge
, not exceeding the amount
    for which the charge is expressed to be a security,
although the money or
    moneys worth, or some part thereof, was advanced or supplied after the
    registration of a transfer, charge or other instrument affecting the land charged,
    executed by the chargor
, or the heirs, executors, administrators or estate
    trustees of the chargor
and registered subsequently to the first-mentioned
    charge
,
unless, before advancing or supplying the money or moneys
    worth, the registered owner of the first-mentioned charge had actual notice of
    the execution and registration of such transfer, charge or other instrument
,
and the registration of such transfer
, charge or other instrument after
    the registration of the first-mentioned charge
does not constitute actual
    notice
. [Emphasis added.]

[41]

Further, as the respondents point out, under s.
    72(1) of the
Land Titles Act
, absent registration or entry in
    appropriate records, only the parties to an instrument are deemed to have
    notice of it. Absent such registration or entry, the notice the appellant
    purported to give to Firm Capital was of no effect.

[42]

Similarly, the headnote from
Sherlick v.
    Harley
and the extract from the Canadian Encyclopedic Digest on which the
    appellant relies are of no assistance. Apart from the complete lack of context
    and specificity, both speak to mortgages as opposed to charges  the latter are
    the relevant instruments under the
Land Titles Act:
s. 93. Notably,
    unlike the mortgage referred to in the Canadian Encyclopedic Digest reference,
    a charge does not operate as a transfer of the legal estate in the land to the
    chargee:
Land Registration Reform Act
, R.S.O. 1999, c.  L.4, s. 6. These
    authorities therefore do not appear to relate to the land titles system.
[8]

[43]

In any event, as we have explained, an execution
    creditors remedy against land under a writ of seizure and sale is the right to
    have the sheriff seize and sell the lands of the execution debtor:
Execution
    Act
,

s. 9. The sheriff steps into the shoes of the execution debtor
    and can have no higher rights than the execution debtor:
Michaud
, at
    paras. 57-63. Further, s. 37 of the
Execution Act
provides that
    following a sale of property, the sheriff shall distribute the proceeds of sale
    in accordance with the
Creditors Relief Act, 2010
. Among other things,
    that act establishes the priorities among persons entitled to share in the
    proceeds of sale following a sheriffs sale of land.

[44]

Section 14 of the
Creditors Relief Act, 2010
gives an execution creditor priority over a charge registered subsequent to an
    execution. The
Creditors Relief Act
,
2010
does not, however,
    give an execution creditor priority over subsequent advances made under a
    charge registered prior to the execution being filed. It is the only section of
    the
Creditors Relief Act, 2010
that speaks to priorities between an
    execution creditor and a chargee or mortgagee.

[45]

Although not at issue on this appeal, s. 14 of
    the
Creditors Relief Act, 2010
may not give an execution creditor of an
    unregistered beneficial owner of property registered under the
Land Titles
    Act
priority over a subsequent charge given by the registered owner. That
    is because s. 14 addresses only priorities between an execution creditor and a
    subsequent charge executed by the execution debtor, not a subsequent charge
    executed by another party. It is not, however, necessary to express any final
    views on that issue.

[46]

The appellant pointed to no other authority
    establishing it is entitled to the declarations it seeks.

[47]

Although we are satisfied that the appellant is
    not entitled to the declarations it seeks, these reasons should not be taken as
    expressing any opinion on how, if at all, a beneficial interest might be
    protected under the
Land Titles Act
or how, if at all, an execution
    creditor seeking to have a sheriff sell a beneficial interest under the
Land
    Titles Act
might protect its remedies under that Act.

[48]

The appeal is dismissed. Costs of the appeal are
    to the respondent and intervenor on a partial indemnity scale fixed in the
    amount of $6,700 to Firm Capital and $9,600 to MarshallZehr inclusive of
    disbursements and HST.

Janet
    Simmons J.A.

A.
    Harvison Young J.A.

B.
    Zarnett J.A.


Appendix A

Creditors
    Relief Act, 2010
, S.O. 2010, c. 16, Sched. 4, s. 14

14
.
(1)
This
    section applies if,

(a)  one
    or more executions are filed with the sheriff; and

(b)  after
    at least one execution is filed with the sheriff, the debtor executes a
    mortgage or other charge that is otherwise valid on all or part of his or her
    property.


(2)
The
    following rules apply:

1.  The
    sheriff may sell the encumbered property under an execution filed before the
    mortgage or charge was given, as if the mortgage or charge had not been given.

2.  The
    sheriff shall prepare a scheme of distribution of the proceeds of sale of the
    encumbered property that proposes the distribution of the amount of the
    proceeds, before taking into consideration the amount owing under the mortgage
    or charge,

i.  firstly
    among any creditors who have priority under section 2, and

ii.  secondly
    among those creditors whose executions were filed with the sheriff before the
    mortgage or charge was given.

3.  To
    the extent the proceeds of sale exceed the total amount plus costs that would
    be distributed as described in paragraph 2, the scheme of distribution must
    provide for the distribution to the encumbrancer of the amount owing under the
    mortgage or charge, or all of the remaining amount if it does not exceed the
    amount owing.

4.  If
    proceeds would still remain after the payments proposed under paragraphs 2 and
    3, the sheriff shall prepare a separate scheme of distribution of the balance
    among the creditors who filed executions with the sheriff after the mortgage or
    charge was given.


(3)
Section
    11, other than subsection 11 (1), and sections 12 and 13 apply if a person who
    would be affected by a scheme of distribution under this section wishes to
    object to the proposed distribution.




Execution Act
, R.S.O. 1990, c. E.24, ss. 1, 9(1); 10; 13; 37

1
In this Act,



writ of execution includes,

(a) a writ of seizure and sale,

(b) a writ of seizure and sale of land,

(c) a writ of seizure and sale of personal property,

(d) a writ of sequestration,

(e) a subsequent writ that may issue for giving effect to a writ
    listed in any of clauses (a) to (d),

(f) an order for seizure and sale of personal property, real
    property or both real property and personal property,

(g) any other process of execution issued out of the Superior Court
    of Justice or the Ontario Court of Justice having jurisdiction to grant and
    issue warrants or processes of execution.

9
(1) The sheriff to whom a writ of
    execution against lands is delivered for execution may seize and sell
    thereunder the lands of the execution debtor, including any lands whereof any
    other person is seized or possessed in trust for the execution debtor and
    including any interest of the execution debtor in lands held in joint tenancy.

10
(1)  A
    writ of execution against real property and personal property or against only
    personal property and any renewal of it binds the personal property against
    which it is issued from the time it is filed with the sheriff and entered into
    the electronic database maintained by the sheriff as the index of writs of
    execution.

(2)  Despite
    subsection (1), a writ of seizure and sale of personal property issued out of
    the Small Claims Court,

(a)  is
    not entered into the electronic database maintained as the index of writs of
    execution; and

(b)  is
    binding on personal property of the execution debtor only from the time the
    personal property is seized.

(3)  Despite
    subsection (1), no writ of execution against personal property, other than
    bills of sale and instruments in the nature of chattel mortgages, prejudices
    the title to the personal property if the personal property is acquired by a
    person in good faith and for valuable consideration unless the person had
    notice at the time of acquiring title to the personal property that a writ of
    execution under which the personal property of the execution debtor might be
    seized or attached has been filed with the sheriff and remains unexecuted.

(4)  A
    sheriff to whom a writ of execution, a renewal of a writ of execution or a
    certificate of lien under the
Bail Act
is directed
    shall, upon receiving from or on behalf of the judgment creditor the required
    fee in accordance with the
Administration of Justice Act
and instructions to do so, shall promptly take the following actions:

1.  Enter
    the writ, renewal or certificate of lien, as the case may be, in the electronic
    database maintained by the sheriff as the index of writs of execution.

2.  Indicate
    in the electronic database that the writ, renewal or certificate of lien, as
    the case may be, affects real property governed by the
Land
    Titles Act
.

(5)  As part
    of maintaining the electronic database that is the index of writs of execution,
    the sheriff shall do the following:

1.  Assign
    consecutive numbers in the electronic database to each writ and certificate of
    lien in the order in which the writs and certificates of lien are entered in
    the database.

2.  Note
    in the electronic database the effective date of each writ, renewal of a writ
    and certificate of lien.

3.  Give
    access to the electronic database to the land registrar of each land titles
    division wholly or partially within the sheriffs jurisdiction.

(6)  Subject
    to section 11 and the
Land Titles Act
, a writ of
    execution, a renewal of it or a certificate of lien under the
Bail Act
binds the lands against which it is issued from
    the effective date of the writ, renewal or certificate noted in the electronic
    database maintained by the sheriff as the index of writs of execution.

(7)  The date
    of receiving a writ, a renewal of it or a certificate of lien referred to in
    clause 136 (1) (d) of the
Land Titles Act
is deemed
    to be the effective date referred to in subsection (6).

13
Subject to the
Courts of Justice
    Act
and the rules of court, land and other hereditaments and real
    estate belonging to any person indebted are liable to and chargeable with all
    just debts, duties and demands of whatsoever nature or kind owing by any such
    person to Her Majesty or to any of her subjects and are assets for the
    satisfaction thereof and are subject to the like remedies, proceedings and
    process for seizing, selling or disposing of them towards the satisfaction of
    such debts, duties and demands, and in like manner as personal estate is
    seized, sold or disposed of.

37
The money and proceeds from property
    received by a sheriff under an execution or as a result of executing a writ of execution
    shall be applied and distributed by the sheriff in accordance with the
Creditors
    Relief Act, 2010
.

Land
    Registration Reform Act
, R.S.O. 1990, c. L.4, s. 6

6
(1) A charge
    does not operate as a transfer of the legal estate in the land to the chargee.

(2) A charge
    ceases to operate when the money and interest secured by the charge are paid,
    or the obligations whose performance is secured by the charge are performed, in
    the manner provided by the charge.

(3) Despite
    subsection (1), a chargor and chargee are entitled to all the legal and
    equitable rights and remedies that would be available to them if the chargor
    had transferred the land to the chargee by way of mortgage, subject to a
    proviso for redemption.

Land Titles
    Act
,
    R.S.O. 1990, c. L.5, ss. 61; 62(1), (2); 71; 72; 93(4); 136

61
(1) No
    person shall be registered as owner of an undivided share in freehold or
    leasehold land or of a charge apart from the other share or shares.

(2) Where
    the extent of a co-owners interest is not shown on the register, the co-owner
    may,

(a)
    transfer or charge a specified share in the land or transfer a share in the
    charge, as the case may be, upon providing the Director of Titles with proof of
    the co-owners percentage of ownership in the manner specified by the Director
    of Titles; or

(b)
    transfer or charge all of the co-owners unspecified share.

62
(1)  A
    notice of an express, implied or constructive trust shall not be entered on the
    register or received for registration.

(2)  Describing
    the owner of freehold or leasehold land or of a charge as a trustee, whether
    the beneficiary or object of the trust is or is not mentioned, shall be deemed
    not to be a notice of a trust within the meaning of this section, nor shall
    such description impose upon any person dealing with the owner the duty of
    making any inquiry as to the power of the owner in respect of the land or
    charge or the money secured by the charge, or otherwise, but, subject to the
    registration of any caution or inhibition, the owner may deal with the land or
    charge as if such description had not been inserted.

71
(1)  Any
    person entitled to or interested in any unregistered estates, rights, interests
    or equities in registered land may protect the same from being impaired by any act
    of the registered owner by entering on the register such notices, cautions,
    inhibitions or other restrictions as are authorized by this Act or by the
    Director of Titles.

(1.1) An
    agreement of purchase and sale or an assignment of that agreement shall not be
    registered, but a person claiming an interest in registered land under that
    agreement may register a caution under this section on the terms specified by
    the Director of Titles.

(2) Where a
    notice, caution, inhibition or restriction is registered, every registered
    owner of the land and every person deriving title through the registered owner,
    excepting owners of encumbrances registered prior to the registration of such
    notice, caution, inhibition or restriction, shall be deemed to be affected with
    notice of any unregistered estate, right, interest or equity referred to
    therein.

72
(1)  No
    person, other than the parties thereto, shall be deemed to have any notice of
    the contents of any instruments, other than those mentioned in the existing
    register of title of the parcel of land or that have been duly entered in the
    records of the office kept for the entry of instruments received or are in
    course of entry.

72
(1) No
    person, other than the parties thereto, shall be deemed to have any notice of the
    contents of any instruments, other than those mentioned in the existing
    register of title of the parcel of land or that have been duly entered in the
    records of the office kept for the entry of instruments received or are in
    course of entry.

(2) For the
    purposes of subsection (1), the highways register provided for in the
    regulations shall be deemed to be a record kept for the entry of instruments.

(3) Subject
    to the regulations, the Trans-Canada Pipe Line register provided for in the
    regulations shall be deemed, for the purposes of this Act, to be a register of
    the title of land or interests therein, including easements, owned by
    TransCanada PipeLines Limited.

93
(1) A
    registered owner may in the prescribed manner charge the land with the payment
    at an appointed time of any principal sum of money either with or without
    interest or as security for any other purpose and with or without a power of
    sale.

(2) A
    charge that secures the payment of money shall state the amount of the
    principal sum that it secures.

(3) The
    charge, when registered, confers upon the chargee a charge upon the interest of
    the chargor as appearing in the register subject to the encumbrances and
    qualifications to which the chargors interest is subject, but free from any
    unregistered interest in the land.

(4)  A registered charge is, as against the chargor, the
    heirs, executors, administrators, estate trustees and assigns of the chargor
    and every other person claiming by, through or under the chargor, a security
    upon the land thereby charged to the extent of the money or moneys worth
    actually advanced or supplied under the charge, not exceeding the amount for
    which the charge is expressed to be a security, although the money or moneys
    worth, or some part thereof, was advanced or supplied after the registration of
    a transfer, charge or other instrument affecting the land charged, executed by
    the chargor, or the heirs, executors, administrators or estate trustees of the
    chargor and registered subsequently to the first-mentioned charge, unless,
    before advancing or supplying the money or moneys worth, the registered owner
    of the first-mentioned charge had actual notice of the execution and
    registration of such transfer, charge or other instrument, and the registration
    of such transfer, charge or other instrument after the registration of the
    first-mentioned charge does not constitute actual notice.

(5) An
    instrument in the nature of a deed of trust and mortgage that provides for the
    issuance of bonds or debentures may be registered as a charge upon the lands of
    the grantor, and the entry in the register shall state the aggregate principal
    sum and the rate of interest of such bonds or debentures.

(6)
Repealed
:
     1998, c. 18, Sched. E, s. 135 (4).

(7)
Repealed
: 
    1998, c. 18, Sched. E, s. 135 (4).

(8) A
    charge registered under subsection (5) may be discharged by a cessation in the
    prescribed form.

(9) A
    charge in the form of a debenture or similar instrument shall not be registered
    unless the name of the person entitled to receive the money payable thereunder
    and to give a discharge thereof is set out in the instrument.

136
(1)  A
    sheriff to whom a writ of execution, a renewal of a writ of execution or a
    certificate of lien under the
Bail Act
is directed
    shall, upon receiving from or on behalf of the judgment creditor the required
    fee and instructions to do the actions described in clauses (a) and (b),
    forthwith,

(a)  enter
    the writ, renewal or certificate of lien, as the case may be, in the electronic
    database that the sheriff maintains for writs of execution;

(b)  indicate
    in the electronic database that the writ, renewal or certificate of lien, as
    the case may be, affects land governed by this Act;

(c)  assign
    a number in the electronic database consecutively to each writ, renewal and
    certificate of lien in the order of receiving it;

(d)  note
    in the electronic database the date of receiving each writ, renewal and
    certificate of lien; and

(e)  give
    the land registrar of each land titles division wholly or partially within the
    sheriffs territorial jurisdiction access to the electronic database.

(2)  No
    registered land is bound by any writ of execution, renewal or certificate of
    lien mentioned in subsection (1) until the sheriff has complied with that
    subsection.

(3)  No sale
    or transfer under a writ of execution or certificate of lien mentioned in
    subsection (1) is valid as against a person purchasing for valuable
    consideration before the sheriff has complied with that subsection, although
    the purchaser may have had notice of the writ or certificate of lien, as the
    case may be.

(6)  A writ
    of execution or certificate of lien mentioned in subsection (1) has no effect
    under this Act if it is issued against the registered owner under a different
    name from that under which the owner is registered.

(7)  A writ
    of execution, renewal or certificate of lien mentioned in subsection (1) does
    not bind land being transferred or charged as against the transferee or chargee
    if the land registrar,

(a)  decides
    that the name of the execution debtor appearing in the writ, renewal or
    certificate of lien, as the case may be, and the name of the registered owner
    as it appears in the records of the land registry office of the land registrar
    do not represent the same person; and

(b)  does
    one of the following:

1.  Issues
    a certificate to the effect that the land registrar has made the decision
    described in clause (a).

2.  In
    the case of a transfer, registers the transfer free of the writ, renewal or
    certificate of lien, as the case may be.

(8)  No
    additional fee is payable to the sheriff or to the land registrar in respect of
    a certificate under section 12 of the
Execution Act
.





[1]

All legislative provisions referred to in this decision are
    reproduced in full in Appendix A.



[2]

Although s. 62(1) of the
Land Titles Act
prohibits
    registration of notice of an express, implied or constructive trust, s. 68(2) states:

68(2) Subject
    to the maintenance of the estate and right of the registered owner

a person having a sufficient estate or interest in the land may create
    estates, rights, interests and equities in the same manner as the person might
    do if the land were not registered.

See also ss. 71 and 72 concerning the protection of and effect of
    unregistered instruments.



[3]
In its appeal factum, the appellant confirmed that Firm Capital
    received actual notice of the appellants writ of seizure and sale on February
    13, 2018. Accordingly, on appeal the appellant seeks a declaration that any
    advances to Pace Mark from Firm Capital made after February 13, 2018 rank
    subordinate to its interest.



[4]
The appellant obtained a writ of seizure and sale to enforce its
    judgment under rule 60.07 of the
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194. Under s. 1 of the
Execution Act
, writ of execution is
    defined as including a writ of seizure and sale.



[5]

Sherlick v. Harley
is apparently unreported save for this
    headnote. The headnote refers to the court that made the decision as unknown.



[6]

Although not applicable in this case, it may be noteworthy
    that s. 62(2) reads, in part, as follows:

62(2) Describing the
    owner of freehold land  as a trustee, whether the beneficiary or object of the
    trust is or is not mentioned, shall be deemed not to be a notice of a trust
    within the meaning of this section, nor shall such description impose upon any
    person dealing with the owner the duty of making any inquiry as to the power of
    the owner in respect of the land  but,
subject to the registration of any
    caution or inhibition
, the owner may deal with the land  as if such
    description had not been inserted. [Emphasis added.]



[7]
Note however that a
bona fide
purchaser for value at a
    sheriffs sale who registers prior to registration of a prior unregistered
    beneficial interest may acquire priority over the beneficial interest:
Jellet
    v. Wilkie
, cited in
Michaud
,

at para. 63.



[8]
Section 6(2) of the
Land Titles Act
reads: The system of
    registration under this Act shall be known as the land titles system.


