Difference between revisions of "Enforcement of a Small Claims Judgment (20:XVII)"

A judgment is valid for 10 years (''Limitation Act'', RSBC 1996, c 266, s 3(3)(f)). During that time, a judgment creditor may use whatever means permitted by law to enforce the order (''Court Order Enforcement Act'', RSBC 1996, c 78). First, the successful party must fill out a payment order form (Form 10) and file it in the registry. Interest and expenses need to be included, and a plain piece of paper showing those calculations should be attached. Although it is called a “payment order”, the form is used even if no payment of money is ordered. There is space at the bottom of the form for a description of a non-monetary order. The registry will compare it with the court record for accuracy and it will then be signed and ready for pick-up or mailed within a day or two.  

An order for seizure and sale allows for personal property belonging to the debtor to be seized by a bailiff and sold at public auction. Examples of personal property that can be seized include vehicles, furniture, and electronics. A personal judgment debtor (i.e., not a  corporation) is entitled to retain certain personal property up to a certain value set by regulation (''Court Order Enforcement Act'', RSBC 1996, c 78: s 71(1); ''Court Order Enforcement Exemption Regulation'', BC Reg 28/98, s 2).

The net proceeds (after deduction of the bailiff’s fees and expenses) are given to the judgment creditor. One a judgment creditor has filed Form 11, the registrar can grant an order for seizure and sale if there is no payment schedule or if the debtor has not complied with a payment schedule (''SCR'', Rules 11(11)(a) and 11(14)(b)).  

Once an order for garnished wages is served on the garnishee, the order is only valid for wages due and owing within '''seven''' days (''Court Order Enforcement Act'', RSBC 1996, c 78, s 1) – it is therefore critical to have some knowledge relating to the debtor’s pay schedule.  If the garnishee owes money to the debtor, they must pay the amount owed to court. All money paid into court is held until further order of the court.  

If a person who was properly summoned or ordered by the court to attend a payment hearing does not attend, the creditor may ask that the judge or justice of the peace issue a warrant (Form 9) to arrest that person (''SCR'', Rule 12(15)).

If damages are a result of a motor vehicle accident involving property damage exceeding $400, bodily injury, or death (''Motor Vehicle Act'', s 91(1)), the creditor may apply to the Superintendent of Motor Vehicles within 30 days of the judgment to have the debtor’s driver’s licence suspended. The Superintendent may suspend the licence upon receiving the judgment.  

If the debtor owns land in British Columbia, the creditor can register the judgment against the land (''Land Title Act'', RSBC 1996, c 250, ss 197 and 210). If you do not know whether the debtor owns land, you can do a name search at the land title office, for a fee. If the property is sold or transferred after registration of certificate of judgement, some or all of the judgment may be paid. Registering a certificate of judgment prevents the Debtor from selling or mortgaging the land unless the debt owed to the Creditor is paid off. Even if the Debtor owns land jointly with another person, it may be useful to register a certificate of judgment against the land. A certificate of judgment is subject to a prior registered mortgage and the rights of a bona fide purchaser who, before registration of the certificate of judgement, has acquired an interest in land in good faith and for valuable consideration under an instrument not registered at the time of the registration of the judgment (''Court Order Enforcement Act'', RSBC 1996, c 78, s 86).

Once the judgment is registered, the creditor may apply for an order to sell the property, but only through the Supreme Court of BC. It is outside the jurisdiction of the Provincial Court to order a lien to be placed or removed against property. The process of having a Debtor’s land sold to pay off a debt owed to a creditor is very complicated, costly and time-consuming. For example, if the land is used by the Debtor as principal residence in the Capital Regional District or the Greater Vancouver Regional District, and the Debtor’s equity in the land is less than $12,000 the land is exempt from being taken and sold. If the land is located elsewhere in BC and is used by the Debtor as a principal residence and the Debtor’s equity is less than $9,000 the land is exempt from being taken and sold (''Court Order Enforcement Act'', RSBC 1996, c 78, s 71.1). Because of this complicated process, legal advice should be obtained to determine whether it would be financially worthwhile to apply for an order to sell.

If a person files a consumer proposal or becomes bankrupt, the law automatically puts in place a “stay of proceedings”. With a few exceptions, a stay prevents any legal action from being commenced or continued against the bankrupt party. The person’s trustee will send legal notice of the stay to any person or business currently engaged in legal action against the person declaring bankruptcy. The stay is also sent to the Court that is handling the person’s legal action and if a creditor has already obtained a judgment against the person, a copy is sent to debtor’s employer as well to stop the garnishee.  

The Stay of Proceedings is only effective against debts that are dischargeable (i.e., can be eliminated) by bankruptcy law. Things like child support, spousal support, restitution orders, repayment of debts based on fraud or misrepresentation and some others are not stopped by a stay. A complete list of the debts can be found under the Bankruptcy and Insolvency Act, RSC 1985, c B-3, s 178.

There are ways for creditors to circumvent a Stay of Proceedings. However, clients with a judgment awarded in Small Claims Court are advised to speak with a trustee and discuss the mechanism of submitting a proof of claim. This form must be filled out to share in the dividends and vote at the first meeting of creditors (if one is held). The form contains the name of the creditor and the bankrupt and the nature and amount of the claim, as well as other information. A list of instructions is usually included. You must attach a Statement of Account providing the details of the claim along with supporting documents or other evidence that establishes the validity of your claim.

Part 7 of the ''Business Practices and Consumer Protection Act'' (BPCPA) deals with debt collection practices and applies to all transactions, including consumer to consumer, business to consumer, and consumer to business. A collector is defined as “any person, whether in British Columbia or not, who is collecting or attempting to collect a debt”. Collectors should be aware of the proscriptions in this BPCPA because there are penalties and fines associated with violating the provisions. For example, Part 10 s 171 of the Act gives rise to a statutory cause of action in Provincial Court to recover damages caused by contraventions of the Act and also gives the Provincial Court jurisdiction for defamation and malicious prosecution.