Can an execution creditor sell the property of his debtor subject to all such charges and equities as the same was subject to in the debtor's hands?

Newfoundland and Labrador, Canada


The following excerpt is from Apache Construction & Development Limited v HP Holdings Limited, 1988 CanLII 4422 (NL CA):

That rule was succinctly stated by Strong, C.J., in Jellett v. Wilkie (1896), 1896 CanLII 49 (SCC), 26 S.C.R. 282, at pp. 288 - 289 as follows: "No proposition of law can be more amply supported by authority than that ... an execution creditor can only sell the property of his debtor subject to all such charges, liens and equities as the same was subject to in the hands of his debtor."

In Eyre v. McDowell (1861), 11 E.R. 71, Lord Cranford, in holding that a registered judgment debt did not take priority over an unregistered equitable mortgage, stated at p. 88: "... though he may seize the whole, yet it is the whole of that only of which the debtor was the beneficial owner, of that, which, if there had' been no judgment, the debtor might have appropriated for payment of the debt."

Legislation providing for the registration of an execution made against property of a judgment debtor and its effect on unregistered deeds and other documents embracing the same property have been strictly construed by the courts so as to give effect to the common law rule. As stated by Lord Cranford in Eyre v. McDowell, supra: "... it is hardly possible to suppose that the legislature could have intended so to alter the relative position of debtor and creditor as to enable the latter to satisfy himself out of property over which the former had no disposing power. If for any reason such a change had been contemplated, we should surely have had some recital indicating an intention to make such an unusual deviation from principle."

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