Executive Summary: Key Legal and Evidentiary Issues

• Priority of a writ registered on a certificate of title versus a writ registered only at the Personal Property Registry (PPR) is the central dispute regarding surplus foreclosure proceeds.

• L7 Architecture Inc holds a writ of enforcement registered in the PPR but not on the land title, raising the question of its entitlement to share in surplus proceeds.

• Applicants CGN 254 Incorporated and Clement Njoroge brought their application ex parte without notice to L7, claiming L7 had no interest in the proceeds.

• Under the Civil Enforcement Act (CEA), Part 11 governs the distribution of surplus proceeds, and "related writs" include any writ discoverable through a PPR search of the debtor's name.

• The CEA strictly prohibits ex parte applications unless expressly authorized, and no such authorization existed here.

• Applications Judge B.W. Summers dismissed the application, ordering surplus proceeds to remain in trust pending a proper distribution application under the CEA and the Rules.

Background and facts of the dispute

This case arose from a foreclosure proceeding in Royal Bank of Canada v Twagirayezu (action number 2503 05085), in which certain lands were sold pursuant to a court-ordered sale. Following the sale, surplus proceeds were generated and paid into court to the credit of the foreclosure action. The plaintiffs, CGN 254 Incorporated and Clement Njoroge, were enforcement creditors who had obtained judgment against Divine Legacy Inc, Sylus Twagirayezu, and Resty Twagirayezu. They registered their writ of enforcement both in the Personal Property Registry and on the certificate of title to the lands in question. A third-party creditor, L7 Architecture Inc, also held a writ of enforcement registered in the PPR, but had not registered its writ on the land title.

The applicants' ex parte motion and position

The applicants brought an ex parte application seeking an order that the surplus proceeds be paid directly to them. Counsel for the applicants stated that he had been advised by counsel for Royal Bank of Canada that the bank takes no position with respect to the application. The applicants argued that since L7's writ was not registered on the certificate of title for the lands, L7 had no entitlement to any share of the surplus proceeds and therefore was not entitled to notice of the application. In support of their position, the applicants relied on section 33 of the Civil Enforcement Act, RSA 2000, c C-15, which provides that a writ does not bind an enforcement debtor's interest in land under the Land Titles Act unless it is registered against the applicable certificate of title. They also cited sections 122(2) and 148 of the Land Titles Act and the case of Resmor Trust Company v Wood, 2006 ABQB 841, arguing that a writ holder seeking payment from surplus proceeds following a foreclosure sale may proceed under the LTA rather than the CEA.

The court's analysis under the Civil Enforcement Act

Applications Judge B.W. Summers was not persuaded by the applicants' legal position. The Court noted that the cited LTA provisions did not support the applicants' argument and that Resmor Trust Company v Wood addressed only the priority between two writ holders who were both registered on the certificate of title for the property sold in the foreclosure proceeding. The Court did not have to address whether a writ registered in the PPR only is entitled to share in those proceeds. The Court held that distribution of the surplus proceeds must be done in accordance with Part 11 of the CEA. Under section 96, all money realized through writ proceedings or otherwise received by an agency as a result of the existence of an enforcement debt must be dealt with under Part 11. Section 97 designates such money as a "distributable fund" (subject to exemptions), and section 99(1) provides that eligible claims against a distributable fund include the amounts outstanding on all "related writs" that are in force against the enforcement debtor. The definition of "related writ" under section 1(1)(mm) of the CEA encompasses any writ that would be disclosed if a distribution seizure search was conducted of the Personal Property Registry using the name of the debtor as shown on the instructing creditor's writ.

Precedent supporting PPR-registered writs

The Court relied on the decision in Canadian Western Trust Company v Eaton, 2008 ABQB 481, a case the applicants did not refer the Court to. This case was on point as it dealt with the issue of whether a writ that was only registered in the PPR is entitled to share in surplus proceeds realized under a judicial sale of land. In that case, Master Laycock stated that writs of enforcement may be registered at the Personal Property Registry but not registered on the title to the property, and even if they are not registered on the title, they would be "related writs" as defined in the CEA and would be entitled to share in the distribution of proceeds. Master Laycock further noted that a search of the land title alone will not reveal all the interested parties who may have a claim to the proceeds of sale. The Court confirmed that L7's writ registered in the PPR is a related writ, and that the CEA and case law interpreting "related writs" are clear: there is no priority among related writs and creditors seeking distribution are expected to conduct searches at the PPR to reveal other potential interested parties.

Impropriety of the ex parte application

The Court also took issue with the procedural manner in which the application was brought. Section 5(1.1) of the CEA strictly prohibits ex parte applications unless expressly authorized. Nothing in the CEA, Civil Enforcement Regulation, Alta Reg 276/1995, or Alberta Rules of Court, Alta Reg 124/2010 permitted the applicants to bring this application ex parte. The Court observed that this section of the CEA is in essence a codification of the common law principle that applications should be made with notice to other parties to a proceeding, and that ex parte proceedings are exceptional, limited to situations such as where the delay in providing notice would harm the applicant or where there is fear the other party would act improperly if notice were given, citing Ruby v Canada (Solicitor General), 2002 SCC 75 at para 25.

Ruling and outcome

The application was dismissed. The Court ordered that the surplus proceeds will remain in trust until an application for distribution is made in accordance with the CEA and the Rules. No specific monetary amount was awarded to any party, as the distribution of the surplus proceeds has yet to be determined through the proper statutory process. The matter was heard on March 2, 2026, and the decision was dated April 1, 2026, by Applications Judge B.W. Summers at the City of Edmonton, Alberta.