Jumping The Line: A Solicitor's Charging Order Takes Priority Over A Registered Ontario PPSA Security Interest

Registering a financing statement under the Ontario PPSA¹ to perfect a security interest is a key means of protecting a secured creditor’s priority over collateral.  It is important for secured creditors to be cognizant however that there are situations where other claims that are not subject to traditional registration requirements may still trump a secured creditor’s registered security interest. This was confirmed in the recent Ontario decision in Dalcor² dealing with the priority of a solicitor’s charging order. A motion had been brought by a secured party seeking to assert the priority of its Ontario PPSA registration over any solicitors’ charging order that might be obtained by the debtor’s former solicitors, but that motion was ultimately unsuccessful.