Canada: Collecting On Your Judgment: A Look At The Money Judgment Enforcement Act

After a protracted, inconvenient, and expensive litigation process, you finally obtained your judgment against an adverse party. Now what?

The simple answer to that question should be "collect". Unfortunately, for many judgment creditors in British Columbia, collecting on a judgment can be just as lengthy, inconvenient, and costly a process as the litigation through which the underlying judgment was obtained in the first place.

While there are many reasons that judgments can be difficult to collect upon, blame is frequently directed at British Columbia's legislative regime and, more specifically, the Court Order Enforcement Act¹ (the "COEA"). The COEA has been criticized for being outdated and unnecessarily burdensome for judgment creditors to navigate.²

Enter Bill 27 – Money Judgment Enforcement Act³ (the "Act"): new legislation that received Royal Assent on October 26, 2023, and that is intended to update and replace much of the existing COEA. The Act's modifications to British Columbia's judgment enforcement regime include the following:

Creation of a Money Judgment Registry

The Act will establish a Money Judgment Registry (the "Registry"), where creditors can register their judgment for enforcement. The Registry will operate as a subset of the Personal Property Registry and will be searchable and accessible to the public.

Registration of a judgment with the Registry will create an enforcement charge in favour of the judgment creditor against all personal property of the judgment debtor, whether the property was acquired before or after the registration of the money judgment.⁴ It is also possible to register a money judgment such that it applies solely to certain specified personal property held by the judgment debtor or exclude certain specified personal property. Significantly, once a judgment is registered, a judgment creditor benefits from asserting priority over the judgment debtor's property pending full satisfaction of their debt. An enforcement charge has the same priority as a perfected security interest would have under the Personal Property Security Act[5] if the security interest were perfected at the time that the enforcement charge was created.⁶

Judgment creditors may also choose to apply to register the money judgment in a land title office against registered land. The Act allows for converting joint tenancies into tenancies in common for the purpose of seizure.⁷ At the same time, there are protections put in place for co-owners of property who are not debtors, such as purchasing the debtor's ownership interest or applying to have it deemed less than equal to the interest of the non-debtor co-owner.

While similar mechanisms exist in other provinces across Canada, the Registry will be new to British Columbia. The Registry will serve as another tool in a judgment creditor's toolbox and is clearly intended to increase the chances of recovery.

Civil Enforcement Officers

The Act grants civil enforcement officers (also known as bailiffs) the authority to enter properties and seize personal belongings.⁸ Specifically, upon receiving instructions from the judgment creditor, an officer is entitled to seize property by taking possession of the property or giving a notice of seizure.⁹

While seizure and sale of personal property exist under the COEA, the Act contemplates a more streamlined process. More specifically, the Act allows a judgment creditor to issue a single instruction specifying all civil options the creditor wants the civil enforcement officer to pursue and reduces the necessity for the judgment creditor to appear in court frequently. This not only expedites the judgment enforcement process, but also reduces the cost of that process.

Types of Properties Able to be Seized

The Act also expands the types of personal property creditors can seize. In particular, the Act permits seizure of negotiable instruments, fixtures, growing crops, securities, licences, trade secrets, and intellectual property.¹⁰ It also provides improved procedures for seizing securities and futures contracts.

Like with the Registry, the expansion of the classes of exigible assets serves to give judgment creditors more options for collecting on a judgment.

Garnishment of Wages

The Act allows creditors to garnish wages and employment benefits payable in the future by delivering a single notice to the debtor's employer that will remain valid until the debt is paid. This eliminates the need to apply to court for a garnishing order each pay period, which can be administratively and logistically intensive for both creditors and employers.

A Look Ahead

Overall, the Act is a welcome development in British Columbia's legal landscape. The credibility of any legal system is inherently tied to the credibility of judgments rendered within that system, and the Act should increase the accessibility, efficiency, and cost-effectiveness of ensuring that rendered judgments are enforced in our province. The Act should also increase the uniformity of collections law across our country, as British Columbia will begin to incorporate systems of enforcement already existing across Canada in other provinces.

The Act is intended to come into force by regulation in 2025. We will continue to monitor and keep you apprised of legislative developments in this area.

Footnotes

1. R.S.B.C. 1996, c. 78.

2. British Columbia Law Institute, "BCLI welcomes introduction of Money Judgment Enforcement Act" (4 May 2023), online:

3. S.B.C. 2023, c. 29 (the "Act").

4. The Act, s. 13(1).

5. R.S.B.C. 1996, c. 359.

6. The Act, s. 36.

7. The Act, s. 28.

8. The Act, s. 42.

9. British Columbia, Ministry of Attorney General Justice Services Branch Policy and Legislation Division, Consultation Paper on the Uniform Civil Enforcement Money Judgments Act: Potential Departures and Additions, (British Columbia: Ministry of Attorney General Justice Services Branch Policy and Legislation Division, 2020) https://www.lawsociety.bc.ca/Website/media/Shared/docs/practice/Consultation-MoneyJudgments.pdf

10. The Act, s. 68(2).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.