The National Bank of Canada appealed an order dismissing its motion to set aside an ex parte order that paid surplus tax sale proceeds to the Family Responsibility Office (FRO).
The Bank, as a first and second mortgagee, had priority at law over the FRO, an execution creditor.
The Divisional Court allowed the appeal, finding that the motion judge erred in interpreting s. 380 of the Municipal Act, 2001.
The Court held that the Bank's failure to apply for the funds did not extinguish its legal priority, and the FRO was not entitled to the proceeds.
The FRO was ordered to repay the funds to the Bank.
