ENFORCEMENT OF JUDGEMENTS

Transcription

1 ENFORCEMENT OF JUDGEMENTS Prepared and presented by: BRIAN J. ROURKE PEDERSON ROURKE PINCH 300, 333 3rd Avenue North Saskatoon, Saskatchewan S7K 2H9 (306) Albert Street Regina, Saskatchewan S4P 2T1 (306) )

2 ) ENFORCEMENT OF JUDGMENTS I. LEGAL EFFECT OF JUDGMENT OR ORDER II. EXTENDING JUDGMENT OR ORDER III. WRITS OF EXECUTION 7 IV. GARNISHMENT 19 V. EXAMINATION IN AID OF EXECUTION 25 VI. RESTITUTION OF JUDGMENTS IN CRIMINAL PROCEEDINGS 28 VII. COURT AND OTHER PROCEEDINGS 32 VIII. BANKRUPTCY 36 COLLECTION OF DEBTS-Questions to be Asked 41 \ /

3 ENFORCEMENT OF JUDGEMENTS I. LEGAL EFFECT OF JUDGMENT OR ORDER The words "judgment" and "order" are often used to mean one and the same thing. There is, however, a distinction which should be kept in mind. A judgment is a final determination of the issues between the parties to the litigation before the Court and an order is every other decision. Whether judgment is for debt or damages, or whether judgment is obtained by way of summary judgment, consent, default or by decision of the Court is irrelevant to its enforceability. The only thing that is important with respect to the issue of enforceability is that the decision rendered by the Court constitutes a final determination of the dispute between the parties. In Canada, a creditor's ability to collect from a recalcitrant debtor is usually only available once he has sued that debtor and received judgment. II. EXTENDING JUDGMENT OR ORDER Saskatchewan has legislation which recognizes judgments from other jurisdictions for the purpose of orderly enforcement of those judgments within Saskatchewan.

4 Page 2 The Reciprocal Enforcement of Judgments Act, R.S.S. 1978, c. R-3, provides a summary way for registration within Saskatchewan of judgments obtained in other jurisdictions. The Act allows a judgment creditor to apply to a Saskatchewan Court of Queen's Bench to have registered within Saskatchewan any judgment or order given in civil proceedings where a sum of money is made payable by a Court in any other province or territory of Canada to which the Act extends. Where the Lieutenant Governor in council is satisfied that reciprocal provision has been made or will be made by any other province or territory in Canada for the enforcement of judgments obtained in Saskatchewan he may direct that the Act shall apply to those provinces or territories. If the Act applies, the application for registration must be made within six years of the date of the original judgment. Registration of judgment may be made by filing with the registrar or clerk of the registering Court an exemplification or certified copy of the judgment, together with the order for the registration. Upon filing of the judgment it will be registered as a judgment of the registering Court and shall, from date of registration, be of the same force and effect as if it had been originally obtained in the registering Court and may be proceeded on accordingly.

5 Page 3 Reasonable notice of an application to register the judgment must be given to the judgment debtor in all cases in which he was not personally served in the original proceedings and did not appear or defend or otherwise submit to the jurisdiction of the Court. Otherwise, the application may be made ex parte. The Act provides that where judgment is registered pursuant to an order made ex parte, notice of the-registration must be served on the judgment debtor within one month of the registration. No sale under the judgment is valid if it is made prior to the expiration of a month from the date of service of the notice of the registration on the judgment debtor - section 6. section 4 provides that the judgment shall not be registered if anyone of a number of conditions are present. The most common ground for refusing registration was that the judgment debtor, neither carrying on business nor ordinarily resident in the jurisdiction of the original Court, did not voluntarily appear or otherwise submit to its jurisdiction. An agreement in a contract that the Courts of a specified province has jurisdiction over all disputes constitutes a )

6 Page 4 submission to that Court's jurisdiction, for the purposes of section 4: First City Capital Ltd. v. Winchester Computer Corp., [1987] 6 W.W.R. 212, 61 Sask. R. 153 (C.A.). When the judgment is registered pursuant to an order made ex parte, the judgment debtor has one month after he has been notified of the registration to apply to set it aside. The Judgments Extension Act, R.S.S. 1978, c. J-3, is similar to The Reciprocal Enforcement of JUdgments Act in that it provides for a summary procedure for the registration within Saskatchewan of judgments for sums of money obtained in a superior court of Her Majesty's Dominion outside of Canada. This Act extends only to those parts of Her Majesty's Dominion as declared by the Lieutenant Governor in Council. This declaration is made only when the Lieutenant Governor in Council is satisfied that reciprocal provisions have been made or will be made by the Legislature of that part of Her Majesty's Dominion for the enforcement of Saskatchewan Court of Queen's Bench judgments. Those areas of Her Majesty's Dominion to which this Act extends may be found in the Regulations to the Act. It should be noted that the Act sets out a number of circumstances wherein registration may be barred even though the Act extends to the area of Her Majesty's Dominion from

7 ) Page 5 which the judgment was obtained. Pursuant to the Act an application to register judgment must be made within 12 months of the date of judgment unless the time for registration is otherwise extended by the Saskatchewan Court hearing the matter. Once judgment is registered it has the same force and effect from date of registration as if it had been originally obtained in the registering Court and may be proceeded upon accordingly. The same grounds for refusing to register the judgment exist in this act as are found in section 4 of The Reciprocal Enforcement of JUdgments Act. The Foreign JUdgments Act, R.S.S. 1978, c. F-18, also has the effect of extending judgments. The Act allows for an action to be commenced in Saskatchewan on a judgment whereby a sum of money is made payable is obtained in any foreign country. In this instance "foreign country' is deemed to include any other province or territory too. The Act fills the void in circumstances where the foreign jurisdiction does not have the necessary reciprocal enforcement provisions to fall within the previously mentioned Acts. )

8 Page 6 Under The Foreign Judgments Act the judgment of the foreign Court serves as the basis for the Plaintiff's action within Saskatchewan. Resort may be had to this legislation, even though The Recirocal Enforcement of Judgments Act or The Judgments Extension Act are available. Such an action on a judgment may be brought only if (a) the defendant was ordinarily resident in the jurisdiction at the time of the commencement of the action, (b) the defendant was carrying on business in that jurisdiction, or (c) the defendant submitted or agreed to submit to the jurisdiction - section 3. The foreign judgment is conclusive. However, section 6 sets forth a number of defences in this jurisdiction, including the failure of the defendant to appear, even if he was ordinarily resident or carried on business in the jurisdiction. The Act does not prevent the bringing of an action upon the original cause of action in respect of which a foreign judgment. Quere, whether in some instances this would result in an abuse of process?

9 Page 7 III WRITS OF EXECUTION When a jugment has been entered for the payment of money, Queen's Bench Rule 352 permits the issuance of a writ of execution, unless there is a stay of execution. Queen's Bench forms numbered 38, 39 and 40 may be used. Rule 359 permits more than one writ of execution to be issued directed to any of the Sheriffs. However, this is not necessary, as the Sheriff with whom a writ has been filed will transmit a copy of the same to any other Sheriff on request. section 2.2 of The Executions Act, R.S.S. 1978, c. E-12, provides that if a writ of execution is delivered to a Sheriff or is registered pursuant to The Personal Property Security Act, it takes priority over any unregistered security interest or any security interest registered after the writ of execution is registered. However, it does not have priority over, first, a bona fide purchaser who has no notice of the writ and where the purchaser takes immediate and continued possession of the goods,

10 Page 8 secondly, the interests of a secured party who has taken possession of the goods before the writ was registered and thirdly, the interests of a secured party who has taken a purchase money security interest that is perfected before or within 15 days after the debtor obtains possession. It is advisable to register the writ with the Personal Property Registry as financial institutions lending money and purchasers of property often search the registry. This will often lead to payment. since 1981, the Sheriff has had the power, given by section 5 (2) to seize choses in action, that is, debts due to execution debtor. This can be an effective method of seizing a recurring payment, such as mortgage payments or agreement for sale payments due to an execution debtor, as the cost of monthly garnishees may be out of proportion to the recovery. On the other hand, these funds may have to be shared with other creditors pursuant to The Creditors Relief Act. Section 17 permits the seizure of transferrable shares in a corporation by seizing the certificates and, within five days, serving a copy of the writ of execution on the company. Thereafter, any transfer of the shares of the company by the

11 Page 9 judgment debtor is invalid. When the shares have been sold, the Sheriff is to notify the company within 10 days and the purchaser thereafter has the same rights and is under the same obligations as if he had purchased the same from the debtor. Where the debtor owns shares in a private company, the Sheriff shall first offer them for sale to the- other shareholders of the corporation. However, in the event no reasonable offer is received, he may proceed to sell them in the same manner as any other personal property. The fact that the debtor could not transfer the shares without the approval of the directors of the corporation does not restrict the Sheriff's powers as outlined above: Bank of Montreal v. Melbay Development (1984), 32 Sask. R. 143 (Q.B.). writs of execution may be issued for goods only or goods and lands. Normally, it is transmitted to the Sheriff who is located closest to the debtor. However, in some rural areas, another Sheriff may be responsible. However, if the writ includes lands, the creditor must

12 Page 10 determine in which land registration the debtor's land is situated and instruct the Sheriff to register in the appropriate land titles office. From the time of filing in the land titles office, the writ binds the debtor's equity in any land - section 180 (3) of The Land Titles Act, R.S~S. 1978, c. L-5. A writ of execution does not have priority over a previously granted, but unregistered, equitable mortgage held by a third party: Royal Trust v. Dekker, [1976] 6 W.W.R. 577 (Sask.Q.B.). Bank of Montreal v. Stradler (1984), 34 Sask. R. 34 (Q.B.). While not entirely free from doubt, it would appear that a writ of execution will attach whatever interest an unpaid vendor of land has at the time of filing and therefore, the purchaser makes payments to the vendor at this peril: Adanac oil Co. v. Stocks (1916), 9 W.W.R. 1521, 11 Alta. L.R. 214, 28 D.L.R. 215 (S.C.). The filing of a writ of execution does not sever a joint tenancy section 180 (4) of The Land Titles Act. However, bankruptcy will sever the joint tenancy and therefore, if the debtor has a joint interest in land which is not exempt from

13 Page 11 seizure, consideration should be given to petitioning the debtor into bankruptcy: Re Chisick (1967), 62 W.W.R. 586, 11 C.B.R. (N.S.) 161, 66 D.L.R. (2d) 543 (Man. C.A.). The Sheriff cannot sell land under a writ of execution until after one year from the date the first writ of execution was delivered to the Sheriff (section 22(3) of The Executions Act) and until the Sheriff has provided a return of nulla bona that there are no goods in his jurisdiction liable to seizure. Furthermore, section 23 (1) of The Executions Act requires the creditor to apply to the Court for leave to conduct the sale. sections 3 and 4 of The Land Contracts (Actions) Act applies to this application. If the land is farm land, leave under The Saskatchewan Farm Security Act, R.S.S. 1978, c. 21, must be obtained. After the sale of land, one of the execution creditors must apply to the Court to confim the sale - Queen's Bench Rule 374. A writ of execution is valid for ten years. Therefore, if a

14 Page 12 judgment is renewed, care must be taken to issue a new writ of execution: The Land Titles Act, s. 180 (5). The Execution Act, s. 26 (5). Of course, the Sheriff can only seize those assets which are not exempt form seizure. The Exemptions Act R.S.S. 1978, c. E-14, and part V of The Saskatchewan Farm Security Act set out a list of chattels and lands which are exempt from seizure. The exemptions of a non-farmer include such items as one motor vehicle where it is necessary for the proper and efficient conduct of the debtor's business, trade, calling or profession, the tools and necessary implements and office furniture and equipment, to the extent of $4,500.00, used by the execution debtor in the practice of his business, trade, calling or profession, the homestead of up to 160 acres and the home occupied by the debtor, up to a value of $32, The onus to establish the exemption is on the debtor: R. v. smith (1983), 48 C.B.R. (N.S.) 272, 29 Sask. R. 30 (Q.B.). For a motor vehicle to be exempt, it is not enough that it is required to go to and from work or is used to perform many

15 ) Page 13 duties of the employer. It must be required as a condition of employment: Canadian Acceptance Corporation v. Laviolette (1981), 11 Sask. R. 121 (Q.B.). De Davey (1984), 32 Sask. R. 284 (Q.B.). While the issue is rarely raised, there is some question whether employment falls within the phrase "business, trade, calling or profession." In Canadian Acceptance Corporation v. Laviolette, supra, the Court held that a general labourer employed by the Department of Northern Saskatchewan at a fire control warehouse did not fall within this definition and therefore, could not claim the vehicle exemption. Even if the debtors equity in the home exceeds $32,000.00, the property cannot be sold as long as it is occupied by the debtor: Re Neuls (1985), 56 C.B.R. (N.S.) 132, 17 D.L.R. (4th) 554, 37 Sask. R. 60 (C.A.). Incidentally, this decision also confirmed that normal registered retirement savings plans are not exempt and raise strong doubts that such plans held with insurance companies afford the degree of protection from seizure as is widely advertized, at least where the plan provides for the payment of

16 Page 14 an annuity at some future time. The proceeds from the forced sale of exempt property are also exempt. This extends to a sale made as a result of the threat of foreclosure: Re Schmidtz (1983), 28 Sask.R. 205, 49 C.B.R. (N.S.) 155 (Q.B.) Part V of The Farm Land security Act lists the exemptions provided farmers. They include all livestock, farm machinery and equipment, including one automibile or one farm truck, that are reasonably necessary for the proper and efficient operation of the farmer's agricultural operation for the next 12 months, the house and buildings occupied by the farmer, to the extent of $32,000.00, crop to the extent necessary to cover the of harvesting, living allowance up to the next harvest and costs the costs of farming up to the next harvest, seed grain to the extent of two bushels per acre and the homestead. Two issues frequently arise with respect to these exemptions. First, can the farmer claim more than motor vehicle by arguing that it falls within the definition of "farm machinery and equipment."

17 Page 15 The following cases ruled in favour of the farmer: Agricultural Credit Corporation v. Smith (1989), 182 (Q.B.). 77 Sask.R. Aqricultural Credit Corporation v. Willett Farms Ltd., [1990] Sask.D (Q.B.). The following ruled in favour of the creditor: Strasbourg Credit Union v. Kelln (1984), 73 Sask.R. 135 (Q.B.). Aqricultural Credit Corporation v. Lapshinoff, [1990J Sask.D (Q.B.). Where there is more than one vehicle, the debtor may select which one is exempt, assuming he is restricted to one: Teachers Credit Union Ltd. v. McLeod, [1990J Sask.D The other issue which arises is the meaning of the phrase "for the next 12 months." It would appear that this is a floating period and if the debtor continues to farm and the equipment continues to be necessary for his farming operations, it continues to be exempt: Royal Bank v. Christianson (1988), 68 Sask.R. 36 (Q.B.). Saskatchewan Valley Credit Union v. Kozak, [1990J Sask.D (C.A.). Once the Sheriff is in receipt of proceeds from the sale by him

18 Page 16 of the debtor's property, he holds the same for two months, pursuant to section 6 of The Creditor's Relief Act, R.S.S. 1978, c. C-46. Upon the expiration of two months, it is distributed rateably among the debtor's creditors who have filed executions or a certificate under The Creditor's Relief Act. This Act does not restrict the Crown's Royal prerogative to priority: Re Ile a la Crosse Native Industries, [1983] 6 W.W.R. 565, 28 Sask.R. 182 (Q.B.). It is important to note that section 7(2) of that act permits a creditor to apply ex parte to a Judge for an order delaying distribution in order to provide a reasonable time to obtain a judgment or certificate. Section 12 provides that where there is an issue to be determined by interpleader, which is instituted by the Sheriff, only those creditors who agree to participate and contribute rateably to the cost of contesting the claim are entitled to any benefits flowing from the interpleader: Criming v. Stroud (1961), 35 W.W.R. 4 (Sask. C.A.).

19 Page 17 Employees of the debtor can apply to the Sheriff under section 15(1) to be paid, out of the monies held by him, unpaid wages. They have a priority to the extent to three month's wages and share rateably with the other creditors for any balance. section 16 provides that where a writ is based on a judgment for the sale price of goods and the Sheriff sold those same goods, the proceeds of the sale shall be applied to that particular writ and not distributed rateably. Where a Sheriff has seized goods or where an execution against lands have remained unsatisfied for nine months after filing, other creditors or claimants may make a claim pursuant to section 17 of the Act. The creditor or claimant must serve on the debtor either personally or by registered mail with A.R. card an affidavit and notice of claim in forms prescribed by the Act. These notices, with proof of service and a certificate from the Sheriff showing that the creditor is entitled to take these proceedings, are filed with the Local Registrar of the Court of Queen's Bench - section 18. If the execution debtor does not contest the claim within 10

20 Page 18 days, if served in Saskatchewan, 20 days if served elsewhere in Canada or 25 days if served in the united States, the Local Registrar shall issue a certificate in the prescribed formsection 19. This certificate may then be filed with the Sheriff, thereby entitling the creditor to share in any sale proceeds realized by the Sheriff - section 20 (1). If the debtor or other creditor of the debtor contests the claim, they must file an affidavit stating there is a good defence on the merits. This affidavit is to served on the creditor (claimant) within 5 days of filing. That creditor then has 8 days to apply to the Judge for an order allowing his claim or he is deemed to have abandoned the same - section 22. The Judge may determine the dispute summarily or direct an action or trial of an issue - section 24 (1). Where a debtor voluntarily pays money to the Sheriff, the Sheriff may distribute the same forthwith among those creditors who have filed writs or certificates with him - section 30 (3). Where there are funds in Court to the credit of a debtor, the

21 Page 19 Sheriff may seize the same to satisfy writs or certificates in his hands - section 31. This procedure to obtain a certificate may be considered as an expeditious method of obtaining judgment where the claim is unliquidated (so that summary judgment is not available), but it is felt there is no valid defence, and it is suspected a "bogus" defence will be filed. The requirement to file an affidavit may deter such action. IV GARNISHMENT A person who has obtained a judgment for the payment of money and a plantiff in an action for a debt or liquidated demand may issue a garnishee summons directing a third party who allegedly owes money to a debtor to pay those monies into Court section 3 (1) of The Attachment of Debts Act, R.S.S. 1978, c. A-32. The affidavit in support of the garnishee must show the nature and amount of the claim or the amount remaining due and unsatisfied under the judgment and swear positively to the indebtedness of the defendant to the plaintiff. It must also state, to the best of the dependent's information and belief, )

22 Page 20 that the named proposed garnishee is indebted to the defendant, or, if the monies are to be attached are wages or salary, that, to the best of the deponent's information and belief, the dependant was or is employed by the proposed garnishee and where and in what capacity the defendant is so employed - section 3(2). If someone other than the plaintiff swears the affidavit, his relationship with the plaintiff should be stated. It is preferable to state that he is the agent of the plaintiff and has knowledge: century 21 Cameo Real Estate v. Halverson (1982), R. 375 (Q.B.). 17 Sask. Prejudgment garnishees cannot attach wages or salary - section 9(1). Some Registrars refuse to issue a prejudgment garnishee unless it is established that the debt allegedly due by the garnishee does not relate to wages or salary. Therefore, it is advisable to include a statement to this effect in the affidavit. Care must also be taken to use the correct form of garnishee summons. The forms are prescribed. There is a form for prejudgment garnishees and two for post judgment garnishees - one to attach to debts, and one to attach wages or salary.

23 Page 21 Failure to use the proper form will probably be fatal. There are a multitude of cases dealing with defects in such affidavits and it would be outside the scope of this paper to attempt to cover them all. Suffice it to say that great caution must be exercised, particularly with prejudgment garnishees, to clearly establish all of the essential elements to prove that the claim is one for debt or liquidated demand and stating the exact nature of the claim. Where the claim for a sum of money is made in the alternative to a claim for specific performance or for quantum meruit, it is not clear that the claim is for debt or liquidated demand and therefore, a prejudgment garnishee will be set aside: McKinnon v. Kat (1985), 43 Sask. R. 78 (Q.B.). Air Exchange (U.K.) Ltd. v. North Can. Air Ltd. (1985), 42 Sask. R. 81 (Q.B.). However, see, contra, First Ave. Research Corp. v. Donar Chemicals Ltd. (1987), 11 B.C.L.R. (2d) 136 (S.C.). However, if seeking both damages and a liquidated sum, provided the affidavit and garnishee is restricted to the claim for the )

24 Page 22 liquidated sum, a prejudgment garnishee will be upheld: Kent Chemicals Distributors Inc. v. Kent Chemicals (1984) Ltd. (1987), 61 Sask. R. 300 (Q.B.). It has been held that neither an action for foreclosure and judgment in the alternative nor an action on a guarantee are ones for debt or liquidated demand: Bank of Nova scotia v. Ken-Don Farms (1984), 37 Sask. R. 111 and 308 (Q.B.). Queare why a claim is not one for debt or liquidated demand simply because one is also seeking to enforce the security in respect to that claim or because the guarantee may have some preconditions to enforcement attached to it, as held in this case? However, the affidavit must disclose the plaintiff's true interest, such as in a case where a promissory note is taken collateral to a mortgage, or the garnishee will be set aside: Royal Bank v. Hiebert, [1987] 4 W.W.R. 252, 58 Sask. R. 150 (Q.B.). The garnishee must be served on the garnishee and, within 20 days of such service, on the defendant or his solicitor. The

25 ) Page 23 service provisions of the Queen's Bench Rules apply: Estevan Credit Union Ltd. v. Page (1986), 54 Sask. R. 290 (Q.B.). Upon service, the garnishee binds any debts due or accruing due to the defendant and all wages and salary that become due or payable within the next 5 days. Where more than one garnishor serves a garnishee, the funds should be shared rateably. P.W. Woolworth Co. v. Zimmer (1978), 94 D.L.R. (3d) 766 (Q.B.). Employees of the Government of Saskatchewan and Crown corporations and recipients of benefits under The Saskatchewan Medical Care Insurance Commission Act are subject to garnishee provisions - section 6. However, 30 day notice of intention to garnishee must be served on the proposed garnishee - section 6 (4). The defendant, garnishee or any person Claiming to the interested in the monies may apply to set aside the garnishee summons - section 10. If the garnishee disputes his liability or claims that the debt is not attachable, he may within 20 days or such further time \ j

26 Page 24 as a Judge may allow, file a statement setting out his reasons for that position - section 11. The plaintiff or other person interested may than apply to fix a time and place for determining the dispute or question of liability. The plaintiff has two months to make this application, failing - which, the garnishee may apply to set aside the summons - section 12. It would appear that this time limit applies even if the plaintiff does not yet have judgment against the defendant. Once judgment has been obtained and upon the expiry of ten days following service on both the defendant and the garnishee, the plaintiff may apply for payment out, unless the defendant has consented to payment out - section 14. If it is suggested that a third party may have an interest in the funds, the Court may order the third party to appear and state the nature and particulars of the claim - section 15. The Court will then determine the validity of the claim section 17.

27 Page 25 If the garnishee fails to pay the money in Court and does not dispute liability, the Court may, after judgment is entered against the defendant, enter judgment against the garnishee for the amount due from the garnishee, to the extent of the plaintiff's claim - section 18. It is usual to apply by motion, on notice to the garnishee. An attempt should be made to establish the amount owing by the garnishee to the defendant. When wages and salary are attached, the employee is entitled to an exemption of $ plus $ for each dependant section 22 (2). The exemption is prorated based on the frequency of the pay period - section 22 (7). The employer may retain the amount of the exemption - section 22 (4). If he does not, the defendant may apply to the Court Registrar for the same - section 22 (9). However, if the defendant does not receive the exemption or apply for payment out, the plaintiff has to await the expiry of two months from the date of payment in before applying for payment out. V EXAMINATION IN AID OF EXECUTION

28 Page 26 Any unpaid judgment creditor may without order examine the judgment debtor for discovery converning the reason for non-payment, his means and assets and any disposition of property either before or after judgment - Queen's Bench Rule 383 (1). The creditor must issue an appointment and serve it, together with the necessary conduct money, on the debtor - rule 383 (2). On application made ex parte to the Court, any employee or former employee and any officer or employee of a corporate debtor may be directed to attend for examination - rule 383 ( 3) Furthermore, on notice to the debtor, the creditor may apply to examine any person or firm or member thereof, or any person or firm or member thereof, or any officer or employee of any corporation to which any property which ought to have been applied towards payment of the judgment has be transferred or assigned - rule 383 (4). The latter rule applies only to transactions made after the

29 Page 27 date of judgment: Jim Long Cos~ v. General Broadcasting Ltd., [1987] 2 W.W.R. 353, 51 Sask. R. 292 (C.A.). The party being examined is bound to seek information from his agents and servants and examine documents in his control or possession and then impart that information on his examination: Badger v. Torosoff, [1919] 1 W.W.R. 919 (Sask. Q.B.). If he fails to do so, he may be summoned before the Court to answer the questions, or, in the alternative, be committed for contempt: Badger v. Torosoff, supra. It appears that the proper procedure is to secure an order that the party is in contempt and then suspend the operation of the order until he is given another opportunity to attend and answer the questions, failing which, he should be required to appear to show cause why an order for his committal should not be made: Elfenbaum v. Elfenbaum (1985), 37 Sask. R. 288 (C.A.). Where the judgment is not for the payment of money and there has been difficulty in enforcement, an application may be made under rule 384 for an order for the examination of any party

30 Page 28 and directions on how the judgment may be executed or enforc~d. Rule 385 requires any person liable to be examined to attend upon payment of proper conduct money. He may also be compelled to produce his books and documents, although a subpoena may be required to enforce this: Great West Life Assurance Co. v. Wright, [1928] 2 W.W.R. 94 (Sask. C.A.). The information obtained on the examination may then be used to attempt to enforce the judgment. In Saskatchewan, there is no restriction on the number of examinations which may be held. However, multiple examinations without good reason would be held to be an abuse of process. Found at the end of this paper is a sample of questions that might be asked on an examination in aid of exectution. VI RESTITUTION JUDGMENTS IN CRIMINAL PROCEEDINGS When an accused is convicted or discharged pursuant to section 736 of The Criminal Code, the Court imposing sentence has authority pursuant to section 725 of The Code to order compensation to another person.

31 Page 29 Currently, the compensation is restricted to the loss or damage to property as a result of the commission of an offence. The application is to be made by the person aggrieved, at the time sentence is imposed. However, the agent of the Crown may apply as agent for that person: R. v. wilcox (1988), 43 C.C.C. (3d) 432 (N.W.T.S.C.). After sentencing, it is too late to apply: R. v. Gorunuk (1961), 40 W.W.R. 640, [1963] 1 C.C.C. 320 (B.C.C.A.). Such an order is discretionary. The Court will consider the application as part of the sentencing process. There need not be agreement on the amount of the loss. The Court may embark on an informal inquiry as to the value, provided it does not turn into the equivalent of a civil trial: ~ v. Ghislieri, [1981] 2 W.W.R. 303, 56 C.C.C. (2d) 4 (Alta. C. A. ). While proof of loss must be beyond a reasonable doubt, because it is part of the sentencing process, the hearsay rule does not apply, and therefore, estimates may simply be filed with the Court: R. v. Wilcox, supra.

32 Page 30 The means of the offender is to be considered. There must be a realistic prospect of payment: ~ v. Wilcox, supra. In exceptional circumstances, the offender's means are not controlling, such as in a case where a lawyer misappropriates a large sum of money and there is some question as to where it now is: R. v. Scherer (1984), 16 C.C.C. (3d) 30, 42 C.R. (3d) 376 (Ont. C.A.), leave to appeal to S.C.C. refused. If the accused is in possession of money at the time of arrest, those funds may be applied towards the compensation pursuant to section 725 (3) of The Code. Where the amount ordered is not paid forthwith, the applicant may file the order with the superior Court of the province where the trial was held and it is thereafter enforceable in the ordinary fashion as a judgment of that Court. No further order is required. An affidavit verifying the balance owing should, however, also be filed: Re Canada Ltd. and Moniuk (1981), 61 C.C.C. (2d) 285, 23 C.R. (3d) 87 (N.W.T.S.C.). A replacement section to 745 has been passed, but not yet

33 Page 31 proclaimed. The new section provides that the application is made by the Attorney General or on the Court's own motion. The term "compensation" is replaced with "restitution." Restitution may be made for the replacement value of damaged or lost property, less any residual value of property returned. In the case of bodily injury suffered as a result of an offence, restitution may total all pecuniary losses suffered as a consequence. Therefore, -it does not extend to non-pecuniary damages for pain and suffering. In each instance, the loss must be readily ascertainable. A new section 727 will require the Court to consider the financial position and earning power of the offender, any benefit derived by the offender as a result of the commission of the offence, and the loss suffered by the person to whom restitution may be ordered to be made. Therefore, when acting for someone who suffered a loss as a consequence of a criminal offence, you need to consider this inexpensive and expediant method of obtaining judgment against the offender. )

34 Page 32 VII COURT AND OTHER PROCEEDINGS When a judgment creditor is faced with a situation where the ordinary legal remedies for enforcement are inadequate or there is some special difficulty to the obtaining of execution of the judgment, Rule 397 an application may be made pursuant to Queen's Bench for the appointment of an equitable receiver. Equitable execution, as the procedure is commonly called, is available only in those cases where the debtor has possession of an asset which could be reached by legal execution except for some impediment or difficulty of a legal nature. In Fox v. Peterson Livestock Ltd., [1982] 2 W.W.R. 204, 17 Alta. L.R. (2d) 311, 131 D.L.R. (3d) 716, 35 A.R. 471 (C.A.), the Court discharged a receiver of monies to be paid at some undetermined future time in an undetermined amount to a member of an Indian Band by the Federal Government because there was no debt due or accruing due. Debts which are not due or accruing due cannot be reached by execution in any form and therefore, cannot be made the subject of equitable execution. Similarly, equitable execution is not available to attach rent.

35 Page 33 Rent due October 1 for the month of October is not due or accruing due prior to October 1 and therefore, there is no debt capable of legal attachment and, as a consequence, an equitable receiver cannot be appointed: Fox v. Peterson Livestock Ltd., supra. Access Mortgage Group Ltd. v. Stuart,[1984] 2 W.W.R. 669, 49 B. C. L. R. 260, 6 D. L. R ~ ( 4th) 260 (C. A. ). An equitable receiver may be appointed where a significant number of repeat execution procedures would be required or where the nature of the property to be seized will result in excessive costs or diminished returns: Garry Finance Corp. Ltd. v. Heizman, [1939] 1 W.W.R. 541 (Man. C.A.) An equitable receiver may also be appointed where the judgment debtor has an equitable interest in lands, but legal title is held by someone else and therefore, the Sheriff is unable to attach the same: Longstaff v. Sguirrell, [1924] 1 W.W.R (Sask. C.A.) While, for reasons of public policy, the salary of employees of the Crown are not attachable, it has been suggested, insofar as the Federal Crown is concerned, that where the debt owing by the Crown is of such a character as to be exigible if owing by )

36 Page 34 a private individual, there is jurisdiction in provincial superior courts to make an order for an equitable receiver: Hobbs v. Attorney General of Canada (1914), 7 W.W.R. 256 (Alta C.A.) An order may be made with respect to monies earned to the date of the order, but not future earnings, under a service contract with the Federal Government, such as a mail service contract: Boucher v. Viala, [1947] 2 W.W.R. 277 (Sask. D.C.) An application to appoint an equitable receiver will normally be made by notice of motion. However, under special circumstances, an interim order may be granted ex parte. The applicant should furnish the following: 1. Date and particulars of judgment; 2. Result of examination of judgment debtor; 3. Evidence by the examination and by affidavit that the defendant has no property which can be taken by ordinary execution; 4. Particulars of the fund as to which a receiver is proposed; 5. Name and address of the proposed receiver; 6. Particulars of other sources of revenue to show that the debtor would not be deprived of all means:

37 Page 35 Talbourdet v. Junker, [1927] 1 W.W.R. 495 (Alta. C.A.) Boucher v. viala, supra. A review of the cases indicate that a Sheriff is usually appointed the receiver. This appointment can be made without the requirement that security be given. The appointment of someone else would likely require the posting of security: Queen's Bench Rule 398. Resort may also be had to Queen's Bench Rule 402, which provides that "where a judgment creditor... alleges that the de.btor is entitled to, or has an interest in any property which under the former practice could not be sold under legal process, but could be rendered available in an action for equitable execution by sale for satisfaction of the debt, such execution creditor... may apply to the Court by notice of motion... duly served upon the judgment debtor for an order for the sale of the property... " This will could be used where the legal estate was not in the debtor but in a trustee or other person. There are other forms of proceedings which may be utilized to bring sufficient pressure on a debtor so as to cause him to \ /

38 Page 36 deal with his financial obligations. For example, if the judgment is for damages arising out of an automobile accident, you may invoke section 58 of The Vehicle Administration Act, R.S.S., c.v - 2.1, to have the debtor's drivers licence suspended until arrangement for payment is made. If the debtor is licensed by a professional association, such as the Law Society or a licensing body such as The Saskatchewan Horse Racing Commission, a complaint to that authority may bring results. Sometimes, the method of enforcement needs to be considered when drafting the claim and stating the relief sought. For example, in an action for conversion where it is felt that a money judgment would be of little value, ask only for an order that the property be returned, pursuant to Rule 370 (1). Then, if he fails to deliver the property, he can be found in contempt pursuant to Rule 372. VIII BANKRUPTCY When a judgment debtor makes an assignment into bankruptcy or

39 Page 37 is petitioned into bankruptcy section 69 (1) of The Bankruptcy Act, R.S.C. 1985, c. B-3, provides that the creditor shall have no remedy against the debtor or his property until after the discharge of the trustee unless the Court gives leave. section 178 (1) of The Bankruptcy Act specifies the categories of debts which are not effected by an order of discharge. Presumably, therefore, if a judgment had been obtained in an action falling within one of those categories, upon the discharge of the trustee, the creditor could continue to seek to enforce the judgment. It is a question of fact in each case whether the judgment relates to one of the specified categories. If required to rule on this issue, the Court can have regard to the claim and the evidence on which the judgment is based: Morgan v. Demers (1986), 60 C.B.R. (N.S.) 241, 71 A.R. 244 (C.A.). Therefore, one should seriously consider, in drafting a claim where section 178 (1) may apply in any subsequent bankruptcy proceedings, whether to make the necessary allegations to bring the case within that secton. Failure to do so could result in

40 Page 38 the debt not surviving the bankruptcy: Borg-Warner Acceptance Canada Ltd. v. Northern Cycle and Machine Ltd. (1988), 71 C.B.R. (N.S.) 197, 71 Sask. R. 90 (Q.B.). Generally speaking, leave to continue proceedings is granted only for the purpose of establishing liability. Such claims as payment of maintenance or alimony are not effected by the stay of proceedings, as they are not claims provable in bankruptcy. SUbject to the foregoing, a judgment creditor is in no better position than any other unsecured creditor. Section 70 (1) provides that every receiving order and every assignment in bankruptcy takes precedence over all judicial and other attachments, garnishments, judgments, executions, and other process against the property of a bankrupt, except those that have been completely executed by payment to the creditor or his agent. Therefore, execution creditors are reduced to a state of equality with other unsecured creditors. As a consequence of the section, any funds held by a Sheriff or paid into Court pursuant to a garnishee or other process, at the time of bankruptcy must be paid into Court: Re Christian (1957), 36 C.B.R. 131 (Ont. S.C.)

41 Page 39 Fairford Industries Ltd. v. Rivard (180), 34 C.B.R. (N.S.) 57 (Sask. Q.B.). However, if a garnishee had failed to pay money into Court within the required 20 days and if, had he done so, the creditor would have had sufficient time to obtain payment out of Court before the bankruptcy of the judgment debtor, judgment may be entered against the garnishee: Prince Albert Credit Union Ltd. v. Mountjoy (1983), 48 C.B.R. (N.S.) 24, 25 Sask. R. 63 (Q.B.). The first creditor who issues garnishment or files a writ of execution has limited priority over other creditors, pursuant to section 70 (2). The first such creditor is entitled to file a proof of claim as a preferred creditor for the solicitor's bill of costs, including Sheriff's fees and land titles fees. section 136 (1) (g), which section deals with the priority of the payment of the proceeds realized from the bankrupt's property, provides for priority of payment for the bill of costs but only to the extent of the realization from the property exigible thereunder. In other words, the priority is available only if monies were attached by garnishment or goods seized by execution. )

42 Page 40 Finally, it should be noted that bankruptcy does not result in an automatic discharge of writs of execution. The writ remains until discharged by the creditor or ordered by the Court. There are no prescribed rules or provisions for such application, but the Court has inherent jurisdiction to do with such matters. BRIAN J. ROURKE NOVEMBER, 1990

43 ) Page 41 COLLECTION OF DEBTS QUESTIONS TO BE ASKED ON EXAMINATION OF JUDGMENT DEBTOR 1. What is the debtor's age? 2. Is he single, married, divorced, or living apart from his wife? 3. How many dependents has he? 4. What is his occupation? 5. What is his employer's name and address? 6. What position does he hold? 7. How long has he been in his present position? 8. Does he work full-time? 9. Has he any part-time employment? 10. If out of work, what are his prospects of employment? 11. What is his weekly salary? 12. What day is he paid? 13. Has he any other source of income (pensions, family allowances, etc.?) 14. If he rents,how much rent does he pay, and who is his landlord, and is the landlord any relation to him? 15. Does he own any real estate? 16. When did he last own real estate? 17. Where is the property located? 18. Does his wife own any real estate?

44 Page Does he drive a car, license number, where is it kept, and is it used in his business? 20. When did he last have an automobile? 21. Does his wife have an automobile? 22. If the debtor has an automobile, is there any money owing on it? If so, to whom, and what type of security have they got? 23. Is there any possibility of his inheriting money or getting money together to pay this account? 24. Has he a bank account? 25. If so, where? 26. When did he last have a bank account? 27. Is there any money owing to him? If so, by whom, name and address? 28. Does the debtor have any stocks or bonds? 29. How much money does he owe? 30. What is the cause of his financial difficulties? 31. Insurance? 32. R.R.S.P.'s? 33. Annuities? 34. Jewellry?