Executive Summary: Key Legal and Evidentiary Issues

• Priority and entitlement to foreclosure sale proceeds paid into court where multiple judgment creditors, including the mortgagee and other creditors, assert competing claims to the same fund.
• Interpretation and limits of the Sheriff’s seizure powers under The Enforcement of Money Judgments Act when the money is held “to the credit of the cause” and not yet determined to be payable to the judgment debtor personally.
• Application of Rule 10-47 of The King’s Bench Rules governing judicial sale of mortgaged land, including when and how sale proceeds, mortgage debt, and costs may be assessed and paid out.
• Ongoing role of the court’s supervisory jurisdiction over funds paid into court, particularly the requirement for applications on notice to all interested parties before any disbursement of surplus proceeds.
• Treatment and priority of registered judgment creditors on title (such as the additional defendants) versus creditors whose judgments arise later or relate to other lands and who attempt to reach the same proceeds.
• Unresolved quantification of the mortgagee’s final costs and of any surplus or deficiency, with the result that no definitive monetary award or amount in favour of any party has yet been determined.

Background and parties

Affinity Credit Union 2013 was the mortgagee under a mortgage granted by Charles Murray Wilson over several parcels of land. The mortgage was dated July 10, 2020. Wilson defaulted on his obligations under the mortgage, prompting Affinity to commence foreclosure proceedings against the land. Several other parties held registered interests in the form of judgments recorded against title, and they were joined as additional defendants: Daniel Staples as Personal Representative of the Estate of Nellie Adams, and Thomas Jay Johnson, Heather Sharon Johnson, and Teresa May Johnson.

Earlier in the litigation, on July 19, 2023, the court determined that s. 9(1)(d) of The Saskatchewan Farm Security Act did not apply, clearing the way for Affinity’s foreclosure to proceed on the mortgaged farmland. Affinity then issued a Statement of Claim against Wilson and the additional defendants as persons with interests registered against the mortgaged lands.

Foreclosure process and judicial sale

On January 30, 2024, the court granted an Order Nisi for Sale by Real Estate Listing. This order set the framework for a judicial sale of the mortgaged land. Wilson did not redeem the land within the period allowed. In due course, an offer to purchase was received which complied with the terms of the Order Nisi.

When Affinity applied for an order confirming the sale, Wilson sought an adjournment on the basis that he wished to pursue a claim related to the Estate of Nellie Adams. He did not, however, file affidavit evidence in support of this request, and the court viewed this as a separate issue from the confirmation of the sale. Because the terms of the Order Nisi had been met and the sale had been properly conducted, the application to confirm the sale was granted. An Order Confirming Sale issued on November 27, 2024.

The Order Confirming Sale directed that the proceeds of sale were to be applied in a specific order: first to sale expenses (including an allowance for the selling officer), then to taxes and arrears to the date of confirmation, then to the amounts due to Affinity under the subject mortgage (with interest as specified in the mortgage), then to amounts due under another mortgage registered against certain parcels, and finally any balance (surplus) to be paid into court to the credit of the cause. In accordance with that direction, on January 23, 2025, a total of $2,298,803.58 was paid into court to the credit of the foreclosure action. Affinity had not yet applied for a final assessment of its costs at the time of the fiat.

Funds paid into court and the sheriff’s notice of seizure

The next complication arose when, on May 28, 2025, the Sheriff issued a Notice of Seizure of Account in the amount of $341,838.45. The Notice of Seizure was served on the Court of King’s Bench, Judicial Centre of Estevan, treating the court (through the Local Registrar) as the “account debtor.” It purported to seize “all accounts or monetary obligations owed by the account debtor to Charles Murray Wilson,” covering several judgments against Wilson and instructing that any monies owing to him be paid over to the Sheriff up to the total estimated amount of $341,838.45.

The judgments listed in support of the Notice of Seizure included: (1) a judgment in favour of Cynthia Miller and Kirk Miller against Wilson; and (2) several judgments obtained by or involving Daniel Peter Staples in his capacity as Executor of the Estate of Nellie Adams and related parties against Wilson. Notably, some of these judgments related to other litigation and different parcels of land, not the land subject to Affinity’s foreclosure.

The central issue for the court in this fiat was whether the Sheriff could simply seize the funds that had been paid into court “to the credit of this cause” as though they were a straightforward debt or account owing directly and presently to Wilson.

Statutory framework and continued role of judicial oversight

The Enforcement of Money Judgments Act empowers the Sheriff to seize money in court that is due to the judgment debtor at the date of seizure or to which the judgment debtor becomes entitled within 30 days after seizure, by serving a notice of seizure on the local registrar. The scheme contemplates that, unless otherwise ordered, the local registrar must pay over the seized amount when it is or becomes payable to the judgment debtor.

However, the judge emphasized a crucial distinction: the money in this case, although physically held by the court, was not yet “due” to Wilson as a judgment debtor. He could not simply attend at the courthouse and demand payment. Instead, the funds were being held to the credit of the foreclosure cause, and entitlement to them had not yet been determined. No party had a present right to demand payment without a court order.

Although older legislation (The Executions Act and The Creditors’ Relief Act) had been repealed, the court drew on earlier appellate authority and reaffirmed the principle that when funds are paid into court by order of the court, they are held there to prevent unsupervised dispersal and to protect competing claims. This rationale applies equally under the current regime: payment out remains subject to judicial oversight, particularly where there are multiple interested parties and unresolved entitlements.

Rule 10-47 of The King’s Bench Rules reinforces that any monies resulting from a judicial sale of land must be paid into court to the credit of the cause and thereafter applied as the court may direct. Prior case law, such as Toronto-Dominion Bank v Schell, confirms that sale proceeds are to be paid into court and that issues like property taxes, commissions, and mortgage balances are addressed through staged applications, including at the time of confirming sale and later when costs and accounting questions are resolved. In Scotia Mortgage Corporation v Keep, the court further stressed that sale proceeds cannot be disbursed before the assessment of costs and that all costs (legal fees, commissions, selling officer fees, taxes, and property management costs) must be determined by the court. Only after that assessment can any deficiency judgment or surplus be properly calculated.

In this case, Affinity had not yet brought its application for a final assessment of costs, and so the true net proceeds and any surplus or deficiency were unknown. The surplus, if any, remained to be identified and allocated, and the interests of other registered judgment creditors on title had to be taken into account.

Competing creditors and connection to other litigation

The situation was further complicated by the fact that some of the judgments listed in the Sheriff’s Notice of Seizure did not arise out of the foreclosure action and were not registered against the specific lands whose sale produced the $2,298,803.58 now held in court. For example, Kirk and Cynthia Miller had commenced a separate foreclosure-related action (the Miller Action) concerning different land and had obtained a consent judgment against Wilson in March 2025 for $280,457.03 plus costs. The parties in the Miller Action discussed satisfying that judgment from “other proceeds that have been paid into court,” evidently referring to the funds in the present foreclosure matter, even though their mortgage and judgment related to different property and they were not parties to the original foreclosure proceeding.

By contrast, some of the additional defendants in the foreclosure action—Thomas Jay Johnson, Heather Sharon Johnson and Teresa May Johnson—held judgments that were actually registered on the titles of the foreclosed lands, yet they were not named in the Notice of Seizure and had not been given notice that the Sheriff sought to intercept the funds. Only Daniel Staples, as Estate representative, had submitted his judgments to the Sheriff for enforcement, despite the fact that other registered interest holders might have equal or superior claims to the surplus.

The judge found that the Notice of Seizure was based on a flawed premise: that the entire fund held by the court belonged outright to Wilson. In reality, Affinity’s outstanding costs, the claims of registered judgment creditors on title, and the distinct status of judgments unconnected to the foreclosed land all had to be weighed before entitlement could be determined. The court stressed that the speed with which any creditor sends a judgment to the Sheriff does not dictate priority to funds paid into court, especially where those funds are held to the credit of a specific cause and subject to further adjudication.

Structured process for distribution of judicial sale proceeds

The fiat set out a clear sequence for how proceeds of a judicial sale are to be addressed. First, on the judicial sale application, the plaintiff may seek directions concerning payment of property taxes and real estate commissions out of the sale proceeds. Second, at the application to confirm sale, the plaintiff may seek payment of the mortgage debt itself, subject to the court’s review. Third, the plaintiff must then bring an application for assessment of its costs, on notice to all interested parties, and it is at that stage that all costs associated with the foreclosure—legal fees, commissions, selling officer’s fees, taxes, and property management—are to be approved. Fourth, once costs are assessed, the court can calculate any remaining surplus or deficiency. Finally, any remaining funds are to remain paid into court to the credit of the cause and can only be disbursed following an application, on notice, for payment out of court, at which time the court will determine each party’s entitlement based on the evidence.

Applying these principles, the judge held that the Sheriff may serve a notice of seizure on the court, but no payment to the Sheriff may occur until the court has determined what portion of the proceeds, if any, is payable to Wilson as judgment debtor. Only after the court has calculated any surplus actually belonging to Wilson can that portion be remitted to the Sheriff, and only in respect of judgments not otherwise satisfied through the court-ordered distribution process.

Directions given and outcome of the decision

The court concluded that the funds were not being held to the credit of Wilson as execution debtor but to the credit of the foreclosure cause, and they remained subject to further adjudication. The Local Registrar therefore could not simply comply with the Sheriff’s Notice of Seizure and pay out any part of the $2,298,803.58 without a judge’s order. The court reaffirmed its obligation to supervise the disposition of money paid into court, to protect the interests of all parties with potential claims to the proceeds.

To move matters forward, the judge directed that the next step must be taken by Affinity. Affinity is required to bring its application for final assessment of costs, serving Wilson and all additional defendants, and to provide them with a copy of the fiat. In this particular situation, the court also ordered that the Office of the Sheriff and counsel for Kirk and Cynthia Miller be served with any subsequent applications in the foreclosure action. Thereafter, any party wishing to obtain a payment from the proceeds may bring an application for payment out of court of any remaining surplus, either at the same time as the costs assessment or later. On the return of those applications, interested parties must file evidence to support their entitlement to any part of the fund, and the court will then determine the proper distribution.

In terms of outcome, the fiat does not finally declare a single “successful party” in the sense of awarding specific sums of money. Affinity Credit Union remains the foreclosing mortgagee and has already successfully obtained an Order Nisi and an Order Confirming Sale, resulting in $2,298,803.58 being paid into court, but its final entitlement (including its recoverable costs) has not yet been quantified. No party—whether Affinity, Wilson, the additional defendants, or other judgment creditors such as the Millers—has been granted a definitive monetary award out of the sale proceeds in this decision. The court explicitly confirms that sale proceeds cannot be disbursed before assessment of costs and that any surplus can only be paid out after further applications on notice. Accordingly, although Affinity’s position that the funds must remain under court control is upheld, the total amount ordered or awarded in its favour, or in favour of any other party, cannot yet be determined from this decision.