Appeal in a mortgage priority dispute arising from the sale of a vacant lot where the purchaser granted a first construction mortgage and a second purchase money mortgage on closing.
The application judge had held that the unpaid vendor's lien took priority over the first mortgage because the first mortgagee had notice of the unpaid purchase price.
The Court of Appeal held that the equities rebutted enforcement of the vendor's lien as between the first and second mortgagees where both mortgages were placed on title on closing in a common transaction intended to finance construction and establish priority by registration.
The court further held that a vendor's lien is not an 'existing claim on the land' released by s. 5 of the Land Registration Reform Act, but limited the first mortgage's priority to the amount of the first advance.
