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Good afternoon.

There was only one substantive civil decision released by the Court of Appeal this week – 1842752 Ontario Inc. v Fortress Wismer 3-2001 Ltd. It will be of interest to our colleagues who practice real estate and do lending work. The Court confirmed that a sheriff cannot execute against land when the execution debtor is a beneficial owner, but not the legal owner of the land. In addition, the court determined that a mortgage lender that makes an advance under a charge that was registered before a writ of execution maintains priority over the execution creditor even if the advance was made after the registration of, and with knowledge of, the writ of execution. Apparently, subsequent execution creditors are not treated on the same footing as subsequent mortgagees. The latter do obtain priority over advances made by prior mortgagees with notice of a subsequently registered charge under subsection 93(4) of the Land Titles Act, but that subsection does not apply to execution creditors.

Please join me and Lea Nebel at our “Top Appeals of 2019” CLE program scheduled to take place at the OBA on Wednesday, April 15, 2020, commencing at 5:45 pm. In light of COVID-19, the program will be only available via webcast. Three decisions will be featured. The first is Darmar Farms v Sygenta, which deals with the potential new tort of “premature commercialization” and pure economic loss in product liability context. Our panelists for that decision are Mike Peerless, who represents the plaintiff, and Scott Maidment, who has a depth of experience litigating product liability cases. The second is The Guarantee Company of North America v Royal Bank of Canada regarding the priority of construction trust claims in bankruptcy. Counsel who acted on that case, Miranda Spence and Scott Rollwagen, will be joining us. The third decision is Wright v Urbanek, which deals with the scope of the doctrines of abuse of process and collateral attack. John O’Sullivan, who acts for the appellant in seeking leave to the Supreme Court, will be speaking about this decision.

Wishing everyone celebrating a Happy Easter long weekend and Happy Pesach.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

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

Keywords: Real Property, Mortgages, Priority, Civil Procedure, Judgments, Enforcement, Writ of Seizure and Sale, Creditors’ Relief Act, 2010, S.O. 2010, s. 14, Execution Act, R.S.O. 1990, c. E.24 s. 9(1), 10, 13, Land Titles Act, R.S.O. 1990, c. L.5 s. 62(1) & (2), 72(1), 93(4), Yaiguaje v. Chevron Corporation, 2018 ONCA 472, Michaud v. Coreslab Structures (Ont.) Inc., 2012 ONSC 355, Sherlick v. Harley (1932), 41 O.W.N. 85, Ferrier v. Civiero, 1999 CarswellOnt 4197Real Property, Mortgages, Priority, Civil Procedure, Judgments, Enforcement, Writ of Seizure and Sale, Creditors’ Relief Act, 2010, S.O. 2010, s. 14, Execution Act, R.S.O. 1990, c. E.24 s. 9(1), 10, 13, Land Titles Act, R.S.O. 1990, c. L.5 s. 62(1) & (2), 72(1), 93(4), Yaiguaje v. Chevron Corporation, 2018 ONCA 472, Michaud v. Coreslab Structures (Ont.) Inc., 2012 ONSC 355, Sherlick v. Harley (1932), 41 O.W.N. 85, Ferrier v. Civiero, 1999 CarswellOnt 4197

Short Civil Decisions

Thistle v. Schumilas, 2020 ONCA 248

Keywords: Civil Procedure, Costs, Summary Judgment, Delay

Criminal Decisions

R. v. A., 2020 ONCA 246

Keywords: Criminal Law, Publication Ban, Possession of Child Pornography, Making Child Pornography, Sexual Assault, Voyeurism, Obstruction, Unlawful Detention, Right to Counsel, Unreasonable Search and Seizure, Right to Privacy, Bail, Canadian Charter of Rights and Freedoms, ss. 8, 24(2), R. v. Morelli, 2010 SCC 8, R. v. Grant, 2009 SCC 32, R. v. Paterson, 2017 SCC 15, R. v. Silveira, [1995] 2 S.C.R. 297, R. v. Vu, 2013 SCC 60, R. v. Poirier, 2016 ONCA 582, R. v. Rover, 2018 ONCA 745, R. v. McGuffie, 2016 ONCA 365

R. v. B., 2020 ONCA 245

Keywords: Criminal Law, Drug Trafficking, Possession of Controlled Substances, Firearm Offences, Evidence, Exclusion, Unreasonable Search and Seizure, Unlawful Arrest, Canadian Charter of Rights and Freedoms, ss. 8, 9, 24(2), R. v. Grant, 2009 SCC 32, R. v. White, 2015 ONCA 508, R. v. Mian, 2014 SCC 54, R. v. Côté, 2011 SCC 46, R. v. Mann, 2004 SCC 52, R. v. Chehil, 2013 SCC 49, R. v. Simpson, (1993) 79 C.C.C. (3d) 482 (Ont. C.A.), R. v. Rover, 2018 ONCA 745, R. v. Bacon, 2010 BCCA 135, R. v. Kitaitchik, (2002), 166 C.C.C. (3d) 14 (Ont. C.A.), R. v. Storrey, [1990] 1 S.C.R. 241, R. v. Villaroman, 2016 SCC 33, R. v. DaCosta, 2017 ONCA 588, R. v. Pannu, 2015 ONCA 677, 127 O.R. (3d) 545, leave to appeal ref’d [2015] S.C.C.A. No. 478

R. v. K., 2020 ONCA 251

Keywords: Criminal Law, Fraud, Money Laundering, Fraud in Association with Criminal Organization, Delay, Bail Pending Appeal, COVID-19, Criminal Code, ss. 679(3)(a), 679(3)(b), 679(3)(c), Canadian Charter of Rights and Freedoms, s. 11(b),  R. v. K., 2020 ONCA 22, R. v. Oland, 2017 SCC 17, R. v. Drabinsky, 2011 ONCA 647, R. v. Jordan, 2016 SCC 27, R. v. Morgan (31 March 2020), Toronto, M51470 (C67536) (Ont. C.A.)

R. v. S.D., 2020 ONCA 249

Keywords: Criminal Law, Sentencing, Parole Eligibility, Corrections and Conditional Release Act, S.C. 1992, c. 20, s. 127(3)

Ontario Review Board Decisions

N. (Re), 2020 ONCA 247

Keywords: Ontario Review Board, Not Criminally Responsible, Invitation to Sexual Touching, Detention Orders, Procedural Fairness, Criminal Code, ss. 672.54, 672.78(1)(a), Re Benjamin, 2016 ONCA 118,Re Osawe, 2015 ONCA 280, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Re Ahmadzai, 2020 ONCA 169, Re Abeje, 2019 ONCA 734


CIVIL DECISIONS

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

[Simmons, Harvison Young and Zarnett JJ.A.]

Counsel:

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.

Keywords: Real Property, Mortgages, Priority, Civil Procedure, Judgments, Enforcement, Writ of Seizure and Sale, Creditors’ Relief Act, 2010, S.O. 2010, s. 14, Execution Act, R.S.O. 1990, c. E.24 s. 9(1), 10, 13, Land Titles Act, R.S.O. 1990, c. L.5 s. 62(1) & (2), 72(1), 93(4), Yaiguaje v. Chevron Corporation, 2018 ONCA 472, Michaud v. Coreslab Structures (Ont.) Inc., 2012 ONSC 355, Sherlick v. Harley (1932), 41 O.W.N. 85, Ferrier v. Civiero, 1999 CarswellOnt 4197

FACTS:

The appellant, 1842752 Ontario Inc., has a judgment and writ of seizure and sale against Fortress Wismer 3-2011 Ltd. (“Fortress Wismer”), which holds a 35% beneficial interest in lands registered under the Land Titles Act. Pace Developments (The Mark) Ltd. (“Pace Mark”) is the registered owner of the land and holds it for Fortress Wismer and two other corporations under an unregistered trust agreement. In 2016, Pace Mark gave a construction financing charge to Firm Capital Mortgage Funds Inc. (“Firm Capital”) and a further charge to MarshallZehr Group Inc. (“MarshallZehr”). The appellant obtained the judgment in 2017.

The appellant brought an application for a declaration 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 Developments Inc. (“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, rank subordinate to its interest. 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 arm’s length construction financing provided by Firm Capital and MarshallZehr. The appellant appealed that decision.

The application judge acknowledged that s. 9(1) of the Execution Act, authorizes the sheriff to whom a writ of execution 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.

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. 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.

The appellant submitted 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.

Further, 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.

Concerning Firm Capital’s charge, the appellant argued 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, Firm Capital had actual notice of the appellant’s writ, such that Firm Capital lost priority.

Finally, the appellant submitted 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.

issue:

(1) Did the application judge err in holding that the appellant’s writ of seizure and sale should not be declared binding on, nor be executed against, Pack Mark?

holding:

Appeal dismissed.

reasoning:

(1) No. 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. The Land Titles Act provides that a writ of execution binds the lands against which it is issued from the date it is received by the sheriff.

Section 13 provides that land and real estate belonging to a person are liable to and chargeable with the person’s 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. 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. It is a procedural statute that facilitates the collection of debts through the mechanisms contained in it. It does not grant substantive rights to judgment creditors. 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.

Further, 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. As the appellant stands in no better position than Fortress Wismer, the appellant’s entitlement is limited to having the sheriff seize and sell whatever Fortress Wismer’s 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.

Further, the appellant’s 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) gives a registered charge priority over “every…person 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 chargor’s successors. The appellant as the holder of a writ of seizure and sale does not fall within the section because a writ of seizure and sale is not created through a transfer, charge or other instrument executed by the chargor or the chargor’s heirs, executors, administrators or estate trustees as required under the section.

Section 14 of the Creditors’ Relief Act, 2010 gives an execution creditor priority over a charge registered subsequent to an execution. It does not, however, give an execution creditor priority over subsequent advances made under a charge registered prior to the execution being filed.


SHORT CIVIL DECISIONS

Thistle v. Schumilas, 2020 ONCA 248

[Watt, Hourigan and Trotter JJ.A.]

Counsel:

Marie Sydney, for the appellant

Sean Zeitz, for the respondent

Keywords: Civil Procedure, Costs, Summary Judgment, Delay


CRIMINAL DECISIONS

R. v. A., 2020 ONCA 246

[Hoy A.C.J.O., Paciocco and Nordheimer JJ.A.]

Counsel:

Gerald Chan and Stephen Aylward, for the appellant

Michael Perlin, for the respondent

Keywords: Criminal Law, Publication Ban, Possession of Child Pornography, Making Child Pornography, Sexual Assault, Voyeurism, Obstruction, Unlawful Detention, Right to Counsel, Unreasonable Search and Seizure, Right to Privacy, Bail, Canadian Charter of Rights and Freedoms, ss. 8, 24(2), R. v. Morelli, 2010 SCC 8, R. v. Grant, 2009 SCC 32, R. v. Paterson, 2017 SCC 15, R. v. Silveira, [1995] 2 S.C.R. 297, R. v. Vu, 2013 SCC 60, R. v. Poirier, 2016 ONCA 582, R. v. Rover, 2018 ONCA 745, R. v. McGuffie, 2016 ONCA 365

R. v. B., 2020 ONCA 245

[Watt, Fairburn and Zarnett JJ.A.]

Counsel:

James Foy, for the appellant

Sarah Shaikh, for the respondent

Keywords: Criminal Law, Drug Trafficking, Possession of Controlled Substances, Firearm Offences, Evidence, Exclusion, Unreasonable Search and Seizure, Unlawful Arrest, Canadian Charter of Rights and Freedoms, ss. 8, 9, 24(2), R. v. Grant, 2009 SCC 32, R. v. White, 2015 ONCA 508, R. v. Mian, 2014 SCC 54, R. v. Côté, 2011 SCC 46, R. v. Mann, 2004 SCC 52, R. v. Chehil, 2013 SCC 49, R. v. Simpson, (1993) 79 C.C.C. (3d) 482 (Ont. C.A.), R. v. Rover, 2018 ONCA 745, R. v. Bacon, 2010 BCCA 135, R. v. Kitaitchik, (2002), 166 C.C.C. (3d) 14 (Ont. C.A.), R. v. Storrey, [1990] 1 S.C.R. 241, R. v. Villaroman, 2016 SCC 33, : R. v. DaCosta, 2017 ONCA 588, R. v. Pannu, 2015 ONCA 677, 127 O.R. (3d) 545, leave to appeal ref’d [2015] S.C.C.A. No. 478

R. v. K., 2020 ONCA 251

[Harvison Young J.A. (Motion Judge)]

Counsel:

Cate Martell, for the applicant

Craig Harper, for the respondent

Keywords: Criminal Law, Fraud, Money Laundering, Fraud in Association with Criminal Organization, Delay, Bail Pending Appeal, COVID-19, Criminal Code, ss. 679(3)(a), 679(3)(b), 679(3)(c), Canadian Charter of Rights and Freedoms, s. 11(b),  R. v. K., 2020 ONCA 22, R. v. Oland, 2017 SCC 17, R. v. Drabinsky, 2011 ONCA 647, R. v. Jordan, 2016 SCC 27, R. v. Morgan (31 March 2020), Toronto, M51470 (C67536) (Ont. C.A.)

R. v. S.D., 2020 ONCA 249

[MacPherson, Pepall and Jamal JJ.A.]

Counsel:

R.S.D., acting in person
Ian R. Smith, duty counsel
Jennifer Conroy, for the respondent

Keywords: Criminal Law, Sentencing, Parole Eligibility, Corrections and Conditional Release Act, S.C. 1992, c. 20, s. 127(3)


ONTARIO REVIEW BOARD DECISIONS

N. (Re), 2020 ONCA 247

[Watt, Fairburn and Zarnett JJ.A.]

Counsel:

Paul Calarco, for the appellant

Michael S. Dunn, for the respondent, the Attorney General of Ontario

Kendra Naidoo, for the respondent, the Person in Charge of the Centre for Addiction and Mental Health

Keywords: Ontario Review Board, Not Criminally Responsible, Invitation to Sexual Touching, Detention Orders, Procedural Fairness, Criminal Code, ss. 672.54, 672.78(1)(a), Re Benjamin, 2016 ONCA 118, Re Osawe, 2015 ONCA 280, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Re Ahmadzai, 2020 ONCA 169, Re Abeje, 2019 ONCA 734


The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

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Photo of John Polyzogopoulos John Polyzogopoulos

John has been the editor of Blaneys Appeals since the inception of the blog in the Summer of 2014. He is a partner at the firm with almost two decades of experience handling a wide variety of litigation matters. John assists clients with…

John has been the editor of Blaneys Appeals since the inception of the blog in the Summer of 2014. He is a partner at the firm with almost two decades of experience handling a wide variety of litigation matters. John assists clients with matters ranging from appeals, to injunctions, to corporate, breach of contract, construction, environmental contamination, product liability, debtor-creditor, insolvency and other business litigation. He also handles professional discipline and professional negligence matters, as well as complex estates and matrimonial litigation. In addition, John represents amateur sports organizations in contentious matters, and advises them in matters of internal governance. John can be reached at 416-593-2953 or jpolyzogopoulos@blaney.com.