Seizure of Real Property

1842752 Ontario Inc. v. Fortress Wismer 3-2011 Ltd., 2020 ONCA 250 (CanLII)

[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 appellant’s application. For the reasons that follow, we dismiss the appellant’s appeal.

[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 Wismer’s 35 percent beneficial interest in the lands. However, that fact does not make the appellant’s writ of seizure and sale binding on or enforceable against Pace Mark.

[43] In any event, as we have explained, an execution creditor’s 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 sheriff’s sale of land.