Creditors who had provided legal services and financing to an insolvent debtor sought declarations of a solicitor’s lien and a salvage lien against funds arising from the sale of a matrimonial home.
The debtor had filed a Notice of Intention and proposal under the Bankruptcy and Insolvency Act, triggering a stay of proceedings.
The court held the stay should not be lifted for the alleged salvage lien because the creditor had failed to properly perfect any assignment of execution debts or security interests.
Although the stay was lifted to consider potential solicitor’s liens, the court declined to grant charging orders, finding that equitable considerations weighed against relief where the lawyers failed to secure available mortgage protection and delayed seeking the lien while other creditors obtained competing claims.
The motion for liens and charging orders was denied.
