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Difference between revisions of "Creditors' Remedies against Debtors (10:III)"
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Creditors' Remedies against Debtors (10:III) (view source)
Revision as of 04:57, 11 June 2016
, 04:57, 11 June 2016→a) Garnishment Before or After Judgment
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Garnishment is a judicial proceeding in which a creditor asks the court to order a third party who is indebted to the debtor to turn over to the creditor any of the debtor’s property. The creditor is the garnishor. The third party is the garnishee. The ''COEA'' provides that a garnishing order may be obtained before or after judgment. | Garnishment is a judicial proceeding in which a creditor asks the court to order a third party who is indebted to the debtor to turn over to the creditor any of the debtor’s property. The creditor is the garnishor. The third party is the garnishee. The ''COEA'' provides that a garnishing order may be obtained before or after judgment. | ||
A pre-judgment garnishing order is paid into court pending the outcome of the proceedings, and may be used in circumstances where the debtors ability to pay may be compromised before judgment. A pre-judgment garnishing order is not available against wages. The creditor’s action against the debtor must be for a liquidated (i.e. explicitly specified) or ascertained sum. E.g. damages for a breach of contract must be quantified as a term of that contract (see ''Gibbons v Specialty Cars'' (27 January 1989), F.5885590 (BC County Ct.)). A definition of liquidated sum is found in ''Hydro Fuels v Wilder'', [1968] 1 OR 169 at 276 (HCJ). The accompanying affidavit must disclose the nature of the cause of action and the specified amount claimed. Note that recourse to a pre-judgment garnishing order is extraordinary and therefore the provisions of the ''COEA'' must be strictly complied with or it may be overturned. Never swear an affidavit in support of a pre-judgment garnishing order for a client because you may not have all the relevant facts. Have the client swear the affidavit him or herself. | A pre-judgment garnishing order is paid into court pending the outcome of the proceedings, and may be used in circumstances where the debtors ability to pay may be compromised before judgment. A pre-judgment garnishing order is not available against wages. The creditor’s action against the debtor must be for a liquidated (i.e. explicitly specified) or ascertained sum. E.g. damages for a breach of contract must be quantified as a term of that contract (see ''Gibbons v Specialty Cars'' (27 January 1989), F.5885590 (BC County Ct.)). A definition of liquidated sum is found in ''Hydro Fuels v Wilder'', [1968] 1 OR 169 at 276 (HCJ). The accompanying affidavit must disclose the nature of the cause of action and the specified amount claimed. Note that recourse to a pre-judgment garnishing order is extraordinary and therefore the provisions of the ''COEA'' must be strictly complied with or it may be overturned. '''Never swear an affidavit in support of a pre-judgment garnishing order for a client because you may not have all the relevant facts.''' Have the client swear the affidavit him or herself. | ||
A creditor who begins an action for a liquidated sum may seek to garnish a debt owed to the debtor to have the money paid into court to “ensure” payment if the creditor is successful in court. However, remember other judgment creditors may also be trying to ensure payment. | A creditor who begins an action for a liquidated sum may seek to garnish a debt owed to the debtor to have the money paid into court to “ensure” payment if the creditor is successful in court. However, remember other judgment creditors may also be trying to ensure payment. | ||
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If the order has not yet been made and the debt is valid, it may be in the debtor’s best interest to pay the creditor if possible, since the debtor is liable for payment of the costs of the garnishing proceedings. | If the order has not yet been made and the debt is valid, it may be in the debtor’s best interest to pay the creditor if possible, since the debtor is liable for payment of the costs of the garnishing proceedings. | ||
If the order has already been made, the creditor should examine the possibility of having the garnishment released and an order for payment by instalments substituted under s 5, or in the case of garnishment of wages, having the exemption increased under s 4. The creditor should be advised that hardship may be used as a defence. | If the order has already been made, the creditor should examine the possibility of having the garnishment released and an order for payment by instalments substituted under s 5, or in the case of garnishment of wages, having the exemption increased under s 4. '''The creditor should be advised that hardship may be used as a defence.''' | ||
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