CANADA Law and Practice Contributed by: John Pirie, Matthew Latella, David Gadsden and Christina Doria, Baker McKenzie
seeking a contempt order. Contempt orders do not apply to orders for the payment of money. The Rules set out the procedures by which a judgment or order for the payment of money can be enforced. The Execution Act sets out the role of the sheriff and a public official, and the rights of debtors and creditors. The Creditors’ Relief Act provides the basis for the distribution of seized assets and establishes priorities among execution and garnishment creditors, support and maintenance orders, and debts of the Crown. Enforcement Methods Primarily, there are four methods of enforcing a domestic judgment for the payment or recovery of money in Canada (and, specifically, in Ontario): • a writ of seizure and sale under the Rules; • garnishment under the Rules; • a writ of sequestration under the Rules; and • the appointment of a receiver under the Rules, the Bankruptcy and Insolvency Act RSC 1985, c B-3, and the Courts of Justice Act RSO 1990, c C-43 (the “Courts of Justice Act”). Sheriff assistance Pursuant to the Courts of Justice Act, a creditor will require the assistance of the sheriff to enforce a domestic judgment for the payment of money. The creditor will need to file a writ of seizure and sale with the sheriff and move to enforce the writ after filing. As a practice note, depending on the nature of the defendant (eg, financial institutions being reliably will - ing to satisfy judgments voluntarily), moving to enforce a writ of seizure and sale should be done promptly after obtaining judgment – unless assets have been frozen prior to judgment. The creditor must provide the sheriff with a direction to enforce, which includes detailed information as to the amount of the order, the amount and date of any payment, the rate of post- judgment interest, and the costs of enforcement. Upon receipt of the direction to enforce a writ of sei - zure and sale, the debtor’s property can be seized. The Execution Act empowers the sheriff to use rea - sonable force to enter the debtor’s land and premises if the sheriff has reasonable and probable grounds to believe that there is exigible property on the land
or premises. One exception to this power is that the sheriff may not enter a dwelling place with force unless a court order is obtained. There are exceptions with regard to the types of per - sonal property that are exigible. By way of example, household furniture, utensils, equipment, food and fuel contained in the debtor’s permanent home – up to a prescribed value – are not exigible, and neither are pension entitlements. The sheriff can enforce a writ against personal or real property. The writ will be valid for six years from the date of the judgment, but can be renewed. A writ will give the debtor priority over other unsecured credi - tors, but that priority is lost if the debtor becomes bankrupt. Other creditors who have perfected security interests in the debtor’s property will also have priority. Before the sheriff sells personal or real property that was seized pursuant to a writ, notice of the time and place of the sale must be provided to the creditor. Garnishment Garnishment is another common procedure in Can - ada to enforce a domestic judgment. Garnishment permits a creditor to seize money that is owed to the debtor by a third party (eg, wages, salaries, dividends and receivables). A creditor with a judgment for the payment of money can request that the local regis - trar issue a notice of garnishment. The creditor must provide particulars of the judgment and of the debts owed to the debtor by a third party. Writ of sequestration A writ of sequestration is another enforcement meth - od – although it is considered “extraordinary” and is rarely used. Pursuant to a writ of sequestration, the sheriff is directed to take possession of and hold a debtor’s property, and to collect and hold any income from the property until the debtor complies with the order. Where there is a writ of sequestration, the prop - erty is not sold. Receivers Finally, a receiver can be appointed by a court where it is “just or convenient to do so” (Section 101 of the Courts of Justice Act). The court may authorise a
53 CHAMBERS.COM
Powered by FlippingBook