Enforcement of Order for Payment

One of the key considerations for anyone thinking of starting litigation, is the likelihood of collecting on a judgment. The Rules of Civil Procedure, which govern civil litigation in Ontario, provide for a variety of ways to enforce an order or judgment for payment or recovery of money. Let's look at a couple of the more common methods: writ of seizure and sale, and garnishment.

Once you have a judgment or order for payment or recovery of money, you may be able to obtain a writ of seizure and sale. This is a direction to the sheriff in the jurisdiction in which the judgment debtor has exigible assets. "Exigible" means assets that can be seized. The idea is to seize all or a portion of the judgment debtor's unencumbered exigible property and sell it in order to satisfy the judgment. The Execution Act, Ontario, along with other legislation governs the types of property that can and cannot be seized and the execution procedures for each type of property. Insurance proceeds and pension benefits are protected from execution, for example.

A writ of seizure and sale must be renewed every 6 months. That said, a judgment creditor is entitled as of right to enforce the writ anytime within 20 years of its date, even if it has expired. The solicitor acting for the judgment creditor may bring a motion to have it renewed.

A writ binds the debtor's lands against which it is issued. A writ on title to real property must be cleared off before the property can be transferred. Lawyers acting for purchasers of real property should check for writs registered with the Land Registry Office, well in advance of the closing date.

One can also obtain execution against personal property.

The next common method of collection is garnishment. Garnishment permits an execution creditor (the garnishor) to seize or attach a debt owed by a third party (the garnishee) to the debtor. Put differently, the creditor may seize the payment owing to the debtor before it is paid to the debtor. The obvious example of this is garnishing employment wages. Before the wages are paid to the employee, the amount to be garnished is paid to the garnishor.

The Wages Act, Ontario, states that 80% of an employee's wages are exempt from garnishment. This amount can be increased or decreased however, by a court. Where there is an order for payment of support or maintenance under family law or divorce legislation, the exemption is decreased to 50%. The debtor may apply to the court to vary the amount and the terms of payment.

Other forms of debt that can be garnished include crown money owing to a debtor for goods or services, the debtor's interest in a partnership, life insurance proceeds that are payable to the insured's estate and certain RRSP funds to the extent of the debtor's beneficial interest.

There are many other methods of debt collection. For more information, please contact me at my office to discuss your case.