It is provided in Ontario by rules 468 to 471 as follows:

468. Upon a reference under a judgment for foreclosure or sale or redemption of mortgaged property, the master shall enquire and state whether any person, and who, other than the plaintiff, has any lien, charge, or encumbrance upon the land and premises embraced in the mortgage security of the plaintiff, subsequent thereto.

469. The plaintiff shall bring into the master's office certificates of the registrar and sheriff of the county wherein the property lies, setting forth all the encumbrances which affect the property and such other evidence as may be necessary.

470. The master shall direct all such persons as appear to have any lien, charge or encumbrance upon the property in question, subsequent to the mortgage in question, to be made parties to the action, and to be served with a notice (form no. 43).

471. Any party served with such notice may apply at any time within ten days from the date of the service, to discharge, add to, vary, or set aside the judgment, or the order making him a party.

Form 43, referred to in rule 470, is as follows:

Notice to Encumbrancers.

Whereas an action has been instituted by the above named plaintiff for the foreclosure (or sale) of (or enforcement of a lien on) certain lands, (insert description of lands) and I have been directed by the judgment made in this cause, and dated the day of , to enquire whether any person other than the plaintiff has any charge or lien, or encumbrance upon the said estate. And whereas it has been made to appear before me that you .have each some lien, charge or encumbrance upon the said estate, and I have therefore caused you to be made part to this action, and have appointed the day of , at o'clock in the noon, for you to appear before me, at my chambers at , either in person or by your solicitor, to prove your claims.

Now you are hereby required to take notice: 1st. That if you wish to apply to discharge my order making you a party, or to add to, vary, or set aside the judgment, you must do so within ten days after the service hereof; and if you fail to do so, you will be bound by the judgment, and the further proceedings in this cause as if you were originally made a party to the action. 2nd. That if you fail to attend at the time and place appointed, you will be treated as disclaiming all interest in the land in question, and it will be dealt with as if you had no claim thereon, and your claim will be in fact foreclosed.

Dated this day of A.D. 19

W. L., Master,

The enquiry is confined to subsequent encumbrancers, etc. As already pointed out, prior encumbrancers usually are not made parties at all and are not affected by the proceedings, but if some relief is sought against them, they must be made parties by writ (z).

The notice to subsequent encumbrancers added in the master's office must be served in the same manner as a writ of summons may be served. Within three days after service it must be endorsed by the person who served it with a memorandum of the day of the month and the day of the week of service, and the day on which this endorsement was made must be stated in the affidavit of service (a).

A person added as a party under rule 470 who contends that he should not have been made a party should apply under rule 471 within ten days after service. If a party so added does not move against the order and thus submits to it, he cannot in the master's office attack the plaintiff's mortgage as being fraudulent or ultra vires (b). It is, however, probable that he would be able to get relief by way of appeal from the master's report (bb), even though he has failed to move under rule 471, and it is clear that a party added in the master's office can get such relief if he is not an encumbrancer, for instance, if he is a tenant of the mortgagor who should be made a party by writ, if at all (c).

(z) See Sec. 234, supra.

(a) See rules 17, 3 (j).

(b) McDougall v. Lindsay Paper Mill Co., 1884, 10 O.P.R. 247; McDermott v. Bielschowsky, 1912, 22 M.R. 319, 3 D.L.R. 319.

(bb) See Sec. 240, infra.

(c) McLaughlin v. Stewart, 1901, 1 O.L.R. 295; Cowan v. Allan, 1896, 26 Can. S.C.R. 292.

There is no right and no necessity on the part of subsequent encumbrancers added in the master's office to move to vary the judgment for the purpose of questioning or reducing the amount owing on the mortgage as between the mortgagee and the mortgagor, it being open to the added parties to raise the question of value in the master's office (d).

Subsequent mortgagees, execution creditors (e) and mechanics lien holders (f) should be added in the master's office under rule 470. The registrar's and sheriff's certificates brought into the master's office under rule 469 will show what subsequent encumbrances or liens have been registered, or what executions have been placed in the sheriff's hands. It is sufficient that the certificate should be brought down to the day next following the issue of the writ of summons, but if the master has notice of a subsequent encumbrance or lien, though unregistered, the encumbrancer or lien holder should be made a party (g). If an encumbrancer or lien holder has died, his personal representative should be made a party (h).

A creditor of a mortgagee who has obtained an order attaching the mortgage debt but who has not obtained an order to pay over is not an encumbrancer within the meaning of the rule (i). A simple contract creditor who has not recovered judgment and issued execution has no right of redemption and is not a proper party (j).

(d) Rutherford v. Rutherford, 1896, 17 O.P.R. 228.

(e)Under rule 202 service upon an execution creditor may be effected by service upon the solicitor who issued the execution.

(f) Jackson v. Hammond, 1879, 8 O.P.R. 157; Hynes v. Smith, 1879, 27 Gr. 150; Reinhardt v. Shutt, 1888, 15 O.R. 325 As to the question of priority between a mortgage and a mechanics lien, see chapter 8, The Registry Act, Sec. 79.