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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 22:13, 2 October 2022
, 22:13, 2 October 2022→a) Garnishment Before or After Judgment
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==== a) Garnishment Before or After Judgment ==== | ==== a) Garnishment 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 | A pre-judgment garnishing order is paid into court pending the outcome of the proceedings, and may be used in circumstances where the debtor's 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. Damages for a breach of contract must be quantified as a term of that contract (see ''[https://www.canlii.org/en/bc/bcsc/doc/2010/2010bcsc409/2010bcsc409.html?autocompleteStr=Ocean%20Floors%20Ltd%20v%20Crocan%20Construction%20Ltd%20(2010)%2C%202010%20BCSC%20409&autocompletePos=1 Ocean Floors Ltd v Crocan Construction Ltd'' (2010), 2010 BCSC 409]). A definition of liquidated sum is found in ''[https://www.canlii.org/en/bc/bcsc/doc/2005/2005bcsc920/2005bcsc920.html?autocompleteStr=Steele%20v%20Riverside%20Forest%20Products%20Ltd%20(2005)%2C%202005%20BCSC%20920&autocompletePos=1 Steele v Riverside Forest Products Ltd'' (2005), 2005 BCSC 920]. The accompanying affidavit to a pre-judgment garnishing order 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. The creditor will generally swear an affidavit in support of a pre-judgment garnishing order by themself. | ||
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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Typically, it is the debtor who applies for a release of a garnishment order to substitute for an order for payment by instalments. However, 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. The creditor can also seek to have exemptions lowered in the case of garnishment of wages under s 4, resulting in the debt being repaid faster. The creditor should be advised that hardship may be used as a defence. | Typically, it is the debtor who applies for a release of a garnishment order to substitute for an order for payment by instalments. However, 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. The creditor can also seek to have exemptions lowered in the case of garnishment of wages under s 4, resulting in the debt being repaid faster. The creditor should be advised that hardship may be used as a defence. | ||
A garnishee who wishes to dispute indebtedness to the defendant or judgment debtor, should file a dispute notice as soon as possible with the court. If they do not dispute it, a second order, called an order absolute may be issued (see [[Relevant Forms for Creditors%27 Remedies (10:App A) | Appendix A: List of Relevant Documents]]: '''Affidavit in Support of Garnishing Order After Judgment'''). This order operates as a judgment and execution may be taken against the garnishee. '''Inactivity could render a garnishee liable even if they never owed the money to the defendant/judgment debtor.''' | A garnishee who wishes to dispute indebtedness to the defendant or judgment debtor, should file a dispute notice as soon as possible with the court. If they do not dispute it, a second order, called an order absolute may be issued (see [[Relevant Forms for Creditors%27 Remedies (10:App A) | Appendix A: List of Relevant Documents]]: '''Affidavit in Support of Garnishing Order After Judgment'''). This order operates as a judgment and execution may be taken against the garnishee. '''Inactivity could render a garnishee liable even if they never owed the money to the defendant/judgment debtor.''' | ||
==== b) Which Debts Can be Garnished? ==== | ==== b) Which Debts Can be Garnished? ==== | ||