STRATEGIC ADVOCACY IN ENFORCEMENT AND RECOVERY PROCEEDINGS – TORONTO ENFORCEMENT LAWYERS
Lawyers Enforcing Judgments in Ontario
Enforcement of Orders and Awards in Ontario
Toronto Enforcement and Recovery of Judgment Debt Lawyers
Enforcing Settlement Agreements
Enforcing Your Judgment
Our lawyers can act in large judgment debt and arbitration award collection matters to enforce judgment creditor’s remedies or to defend the judgment debtor’s rights.
Referrals to Enforce Judgment
Plaintiff’s trial lawyers may not have significant experience in enforcing large judgments when there appears to be no insurance policy responding to the judgment debt. Gilbertson Davis LLP has lawyers who have been retained in such circumstances to seek to locate assets (in Ontario and elsewhere) and take specific legal proceedings to enforce a judgment debt.
We offer a free initial consultation to lawyers acting for judgment creditors, during which we can discuss which retainer agreement best suits your client: a referral or co-counsel retainer.
Gilbertson Davis LLP has lawyers who are experienced in the legal procedures available to determine whether or not a judgment debtor has assets, the location of assets, whether they have been fraudulently conveyed or hidden, or dealt with by the debtor contrary to the statutory provisions of the Assignments and Preferences Act, R.S.O. 1990, c. A.33 and/or Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, and providing an assessment of viability of recovery of the judgment debt.
A post-judgment Norwich order is sometimes sought to obtain disclosure of documents and information from a third party about the judgment debtor and the judgment debtor’s assets.
Gilbertson Davis LLP has lawyers who have experience in assisting clients in locating, selecting and instructing foreign lawyers to determine if the judgment debt has assets located in other jurisdictions.
Enforcement of Judgment Procedures in Ontario
The legal proceedings available to enforce a judgment in Ontario which we may be specifically retained to bring on behalf of a judgment creditor include those described below. There are some legal restrictions and limitations on the use of these enforcement procedures and we can advise on the rights, remedies, exclusions, limitations and restrictions applicable in the circumstances.
Examination in Aid of Execution
Examination in Aid of Execution (formerly called Judgment Debtor Examination) includes not just the judgment debtor but with order of the court in suitable circumstances, third parties.
A creditor under a judgment or order for the payment of money may enforce it by “garnishment” of debts payable to the debtor by other persons. This may include contractual debt by others to the judgment debtor, bank accounts and other debts owing to the judgment debtor.
Seizure and Sale
Where an order may be enforced by seizure and sale, a writ of seizure and sale may issue and be registered on title of property owned by the judgment debtor. In appropriate circumstances, the Sheriff may be instructed to enforce the writ of seizure and sale. There are some legal restrictions and limitations on the use of this enforcement procedure.
Where a writ of sequestration issues, then on behalf of the judgment creditor, the Sheriff may take possession and hold the property of the person against whom the order is made and collect and hold income from the property.
Writ of Possession
In appropriate circumstances the judgment creditor may seek leave (i.e. permission) for an order of the court for possession of property.
Freezing Assets after Judgment or Arbitration Award
The required action may include urgent equitable remedies to freeze assets and obtain disclosure of documents and information concerning the debtor’s assets. This includes a post-judgment Mareva injunctions (post-judgment freezing orders) to freeze the assets of the judgment debtor in the possession of a third party
Setting Aside a Fraudulent Conveyance
Gilbertson Davis LLP has lawyers who have experience in bringing legal proceedings for an order to set aside fraudulent conveyance, assignment or preference.
Debts Not Released by Order of Discharge in Bankruptcy
Certain kinds of debt survive and are not released by an order of discharge of a bankrupt, pursuant to section 178 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3
These include, but are not limited to, any award of damages by a court in civil proceedings in respect of bodily harm intentionally inflicted, or sexual assault, or wrongful death resulting therefrom; any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others; and any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim. See section 178 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3, below, for the full text of section 178 and the description of debts not released by an order of discharge of a bankrupt.
We can advise you whether or not debts owed to you fall within these statutory exceptions to the discharge of a bankrupt and be retained to represent you in the presentation and enforcement of such debts.
Debts not released by order of discharge
178 (1) An order of discharge does not release the bankrupt from
(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;
(a.1) any award of damages by a court in civil proceedings in respect of
(i) bodily harm intentionally inflicted, or sexual assault, or
(ii) wrongful death resulting therefrom;
(b) any debt or liability for alimony or alimentary pension;
(c) any debt or liability arising under a judicial decision establishing affiliation or respecting support or maintenance, or under an agreement for maintenance and support of a spouse, former spouse, former common-law partner or child living apart from the bankrupt;
(d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others;
(e) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim;
(f) liability for the dividend that a creditor would have been entitled to receive on any provable claim not disclosed to the trustee, unless the creditor had notice or knowledge of the bankruptcy and failed to take reasonable action to prove his claim;
(g) any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred
(i) before the date on which the bankrupt ceased to be a full- or part-time student, as the case may be, under the applicable Act or enactment, or
(ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student;
(g.1) any debt or obligation in respect of a loan made under the Apprentice Loans Act where the date of bankruptcy of the bankrupt occurred
(i) before the date on which the bankrupt ceased, under that Act, to be an eligible apprentice within the meaning of that Act, or
(ii) within seven years after the date on which the bankrupt ceased to be an eligible apprentice; or
(h) any debt for interest owed in relation to an amount referred to in any of paragraphs (a) to (g.1).
Court may order non-application of subsection (1)
(1.1) At any time after five years after the day on which a bankrupt who has a debt referred to in paragraph (1)(g) or (g.1) ceases to be a full- or part-time student or an eligible apprentice, as the case may be, under the applicable Act or enactment, the court may, on application, order that subsection (1) does not apply to the debt if the court is satisfied that
(a) the bankrupt has acted in good faith in connection with the bankrupt’s liabilities under the debt; and
(b) the bankrupt has and will continue to experience financial difficulty to such an extent that the bankrupt will be unable to pay the debt.
(2) Subject to subsection (1), an order of discharge releases the bankrupt from all claims provable in bankruptcy.
R.S., 1985, c. B-3, s. 178; R.S., 1985, c. 3 (2nd Supp.), s. 28; 1992, c. 27, s. 64; 1997, c. 12, s. 105; 1998, c. 21, s. 103; 2000, c. 12, s. 18; 2001, c. 4, s. 32; 2004, c. 25, s. 83; 2005, c. 47, s. 107; 2007, c. 36, s. 54; 2014, c. 20, s. 484.
Civil Contempt Orders
Debtors prisons no longer exist. But a debtor must comply with the enforcement procedures set out by law, including under the Ontario Rules of Civil Procedure. Of course, debtors do not always comply with the enforcement procedures.
A civil contempt order is one means of compelling a debtor to comply with the enforcement procedures. It may be granted for failure to comply with a court order, or for concealment or disposition of property to defeat or defraud, or both.
Rule 60.11 of the Rules of Civil Procedure provides that a contempt order to enforce an order requiring a person to do an act (other than the payment of money) or to abstain from doing an act, may be obtained on motion to a judge in the proceeding in which the order to be enforced was made.
A number of steps are usually required to obtain a contempt order. The first is that the debtor must be subject to an order requiring a person to do an act or abstain from doing an act (i.e. not simply an order requiring the debtor to pay money).
For example, the Rules of Civil Procedure require a debtor to attend at examinations in aid of execution and bring to the examination ” all documents and things in his or her possession, control or power that are not privileged and that the notice of examination or summons to witness requires the person to bring.” A debtor may fail to comply with these obligations, including by failing to attend at an examination in aid of execution, failing to bring the documents listed in the notice of examination or failing to answer proper questions. If the debtor fails to comply with these obligations, the creditor may seek an order compelling the debtor to comply.
Once an order has been made compelling the debtor to, for example, attend at the examination in aid of execution, Rule 60.11 is potentially engaged; the debtor has been ordered “to do an act other than the payment of money”.
If the debtor fails to comply with the order, then the creditor may then bring a motion seeking a contempt order.
The Court may impose a variety of sentences on a debtor found to be in contempt of court, including fines, house arrest or, most severely, imprisonment. Among other goals, the contempt order is intended to coerce the debtor into complying with the enforcement procedures.
Contempt for concealment or disposition of property to defeat or defraud
Rule 60.18(5) is another basis for a contempt order. That rule states “Where it appears from [an examination in aid of execution] that a debtor has concealed or made away with property to defeat or defraud creditors, a judge may make a contempt order against the debtor.”
For example, if a debtor fails to disclose assets at an examination in aid of execution, and subsequently transfers the property to avoid paying the judgment, Rule 60.18(5) will be engaged. If the creditor discovers the transfer of assets, the creditor can seek a contempt order under Rule 60.18(5). Again, the Court may impose a variety of sentences on a debtor found to be in contempt of court under Rule 60.18(5), including fines, house arrest or imprisonment. The contempt order serves to both punish the debtor for attempting to defeat or defraud creditors, and to coerce the debtor into complying with future enforcement procedures.
The lawyers at Gilbertson Davis LLP have experience with enforcement of judgements and with seeking (and obtaining) civil contempt orders.
Absconding Debtors Act, R.S.O. 1990, c. A.2
Under this Act the property of absconding debtor may be seized and taken by an order of attachment for the satisfaction of the person’s debts.
Assignments and Preferences Act, R.S.O. 1990, c. A.33
Provisions of this Act include statutory authority:
- to void, as against the creditors of the person a consent judgment given by a person to those creditors, being at the time in insolvent circumstances or unable to pay his, her or its debts in full or knowing himself, herself or itself to be on the eve of insolvency, voluntarily or by collusion with a creditor with intent thereby to defeat, hinder, delay or prejudice creditors wholly or in part, or to give one or more creditors a preference over other creditors or over any one or more of them;
- to void, as against the creditor or creditors injured, delayed or prejudiced every gift, conveyance, assignment or transfer, delivery over or payment of goods, chattels or effects, or of bills, bonds, notes or securities, or of shares, dividends, premiums or bonus in any bank, company or corporation, or of any other property, real or personal, made by a person when insolvent or unable to pay the person’s debts in full or when the person knows that he, she or it is on the eve of insolvency: •with intent to defeat, hinder, delay or prejudice creditors, or any one or more of them; or
- with the intent to give a creditor an unjust preference over other creditors or over any one or more of them; and
- to follow the proceeds of property fraudulently transferred in the above circumstances
Fraudulent Conveyances Act, R.S.O. 1990, c. F.29
Provisions of this Act include statutory authority to void, as against such persons and their assigns, every conveyance of real property or personal property and every bond, suit, judgment and execution heretofore or hereafter made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures.
In Ontario, if the International Commercial Arbitration Act, R.S.O. 1990, c. I.9 applies, then it provides that the UNCITRAL Model Law (and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards as is contained in the UNCITRAL Model Law) is the law of Ontario. Article 35 of the UNCITRAL Model Law requires the recognition and enforcement of the award, subject to the exceptions described in Article 36. We may also, if necessary, consider the applicability of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Why Gilbertson Davis LLP?
We endeavor always to work efficiently and in a results-oriented manner in seeking the collection of judgment debts and seeking the enforcement of orders of the court.
If you have any concerns or issues regarding debt collection or the enforcement of judgments or arbitration awards, please contact our office to arrange for an initial consultation.