CANADA Trends and Developments Contributed by: Kathryn Manning, John Mather and Max Libman, DMG Advocates LLP
DMG Advocates LLP 1230-155 University Avenue Toronto, ON M5H 3B7 Canada Tel: +1 416 238 7475 Email: admin@dmgadvocates.com Web: www.dmgadvocates.com
Recent Developments in the Enforcement of Judgments in Ontario In 2025 and 2026, Ontario’s courts have provided helpful insights to judgment creditors seeking to pre - serve a judgment debtor’s funds while also reminding judgment creditors of the importance of attention to detail when it comes to seeking orders for payment from a garnishee. Rule 45.02: an oft-overlooked tool for preserving funds before judgments In Labyrinth Partners Ltd . et al v Iberbanco Ltd . et al (2026 ONSC 705), the Ontario Superior Court of Justice offered a helpful reminder that an effective judgment enforcement process can sometimes begin before judgment, and that the Ontario Rules of Civil Procedure provide more tools in this regard than one might think. This decision occurred in the context of a claim for fraud. The applicant, Labyrinth Partners, sought to open a bank account with the respondent, Seker Bank. Labyrinth Partners used the respondent Iber - banco, a registered Canadian money service busi - ness, to transfer funds to Seker Bank. Ultimately, however, it turned out that Iberbanco transferred the funds to an account with Seker Bank that was in Iber - banco’s name rather than that of Labyrinth Partners. While misusing these funds, Iberbanco also charged bank fees back to Labyrinth. Labyrinth Partners brought an application seeking the return of the funds that it provided to Iberbanco and restitution for all of the bank fees charged to Labyrinth Partners.
The Ontario Superior Court of Justice ordered Iber - banco to immediately repay Labyrinth Partners all of the bank fees that it had charged to Labyrinth Part - ners, and USD35,951.97 worth of funds that Iber - banco had admitted belonged to Labyrinth Partners. After accounting for these orders, there remained USD371,850.83 in Iberbanco’s bank account to which both Labyrinth Partners and Iberbanco laid claim. Rather than determining entitlement to the funds on the limited basis of the documentary records submit - ted by the parties as part of the application, the Ontar - io Superior Court of Justice made an order under Rule 45.02 of the Ontario Rules of Civil Procedure that the funds be paid into court pending a full trial on the mat - ter. The Court noted that the facts at hand satisfied all three prongs of the test for issuing a Rule 45.02 order: • there was a claim to specific, identifiable funds; • there was a serious issue to be tried regarding entitlement to the funds; and • the balance of convenience favoured paying the In cases where there is a concern that a defendant/ respondent may not be able to satisfy a money judg - ment at the conclusion of a claim, or may take steps to place funds outside of the reach of the court before a judgment can be enforced, litigants should always consider the tools available to them pre-judgment to ensure that funds can be preserved before the need to enforce a judgment arises. Labyrinth Partners Ltd . et al v Iberbanco Ltd . et al reminds us that there are other tools available aside from more commonly used mechanisms such as Mareva injunctions, which can funds into court. Lessons learned
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