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Priority Between Purchaser and Writ

Kandlproperties Inc. v George Street Law 2023 Ont SCJ

Execution debtor signed agreement for sale with arms’ length purchaser after judgment, but before the writ was issued and filed. The agreement was closed after the writ was filed.  The execution creditor commenced an action against all parties and then moved to enjoin the purchaser from dealing with the property. The judge relied on the priorities set out in Dhatt v. Beer and refused the injunction. The judge held that the purchaser, whose agreement pre-dated the writ filing had an equitable interest in the land in priority to the creditor. However, the execution may still be successful in the action against the purchaser if, after the sale proceeds were used to pay the encumbrances on the land, the sale proceeds could have been used to pay part or all of the execution debt, but, instead, were paid to the execution debtor.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.