Before embarking on litigation, an important early consideration is the likelihood that a plaintiff or applicant will be able to enforce an order or judgment if he or she is ultimately successful. In considering this question, a plaintiff or applicant will want to consider what they know about the defendant’s or respondent’s assets and income: does the defendant or respondent own property or have shares in a company, is he or she employed, does he or she have a mortgage?
Such considerations are critical, because being successful in court does not automatically translate into payment or recovery of money from a defendant or respondent. For example, a court may order a defendant to pay a plaintiff a certain sum of money, and the defendant may not do so. If a defendant fails to pay an award of damages or costs, or disobeys a court order or judgment, what can be done? The Rules of Civil Procedure provide various methods by which a party may enforce court orders and judgments. These methods are outlined in this bulletin.
Getting An Order or Judgment As we have discussed in prior litigation bulletins (available online at http://www.fasken.com/litigation_reference_manual/), the litigation process in Ontario involves several steps: pleadings are exchanged by the parties; documentary discovery occurs; examinations for discovery are conducted; motions may be heard; mediation is conducted (in most instances); and a trial is held. It is usually as a result of two of these steps, motions and trials, that a court makes an order against (or gives a direction to) one or more of the parties.
Motions and trials may each result in a court ordering one or more parties to pay money, deliver property (real or personal), or do or abstain from doing some act. Judgments (which are a type of court order) are usually made at the conclusion of a civil proceeding (often after a trial). Other court orders are usually made as a result of a motion that is brought during the course of a civil proceeding. Both orders and judgments can contain provisions requiring a party to litigation to pay money to another party. Orders and judgments can also contain non-monetary provisions requiring a party to deliver up property or do or abstain from doing something.
Methods of Enforcement
When a party does not comply with an order or judgment, the opposing party in the litigation may seek to enforce the order or judgment. The Rules of Civil Procedure allow for the following methods of enforcement of orders and judgments:
- Writ of seizure and sale;
- Writ of delivery;
- Writ of sequestration;
- Writ of possession; and
- Contempt order.
A creditor who is entitled to the payment of money by reason of a court order may enforce the order by garnishment of debts payable to the debtor by other persons. For example, a creditor may obtain payment of money due to him or her by reason of a court order by garnishing the wages due to the debtor by their employer. Debts that may be garnished include money due under contracts, guaranteed investment certificates, bank accounts, payment due under a lease or mortgage, payment of royalties, payment under a promissory note and accounts receivable.
It is no longer necessary, as it once was, to bring a court application to garnish a debt. Now a creditor is only required to make a requisition for garnishment with the court registrar. This involves filing a requisition and an affidavit that establishes the amount awarded to the creditor by the court and the creditor’s entitlement to it. The court registrar then issues a notice of garnishment and sends copies of it to the county sheriff and the creditor. The creditor must serve the notice of garnishment on both the debtor and the garnishee. The garnishee is the employer, insurer, bank, etc. that owes wages, interest or some other monies to the debtor. Once a garnishee is served with a notice of garnishment, the garnishee must pay to the sheriff any wages, interest or other monies that the garnishee owes to the debtor, up to the amount shown in the notice of garnishment, less a small amount for the cost of making each payment. Such payments must be made within 10 days. Once the sheriff receives a payment from a garnishee, the sheriff distributes the garnished amounts to the creditors.
If a garnishee does not pay amounts owed to the debtor to the sheriff as required, the creditor may be able to obtain a court order against the garnishee for payment of the amount that the court finds is payable by the garnishee to the debtor. It is therefore very important that garnishees comply with notices of garnishment in order to avoid personal liability for the debts owing by the debtor to the creditor.
A notice of garnishment is valid for 6 years, and can be renewed thereafter. Generally speaking, creditors are entitled to pursue court-ordered payments from a debtor through the garnishment process until the amount owing under the court order is paid in full. Garnishment does not only apply to amounts that are immediately due and owing to the debtors, but also to most future amounts payable to the debtor.
Writs are directions from the court and to the sheriff to take action against a debtor’s property.
An order for the payment or recovery of money may be enforced by a writ of seizure and sale in certain circumstances. A writ of seizure and sale directs the sheriff to seize and sell a debtor’s real or personal property to satisfy the amount payable to the creditor pursuant to the court order. There are detailed rules about how such writs may be issued and how a sheriff may sell real or personal property to satisfy court orders. There is also a prohibition against enforcing a writ of seizure and sale where property is held by a court-appointed receiver. Like notices of garnishment, writs of seizure and sale are valid for 6 years, and may be renewed.
An order for the recovery of real or personal property other than money can be enforced by a writ of delivery. A writ of delivery is obtained by filing a requisition with the court registrar. The writ of delivery directs the sheriff to effect the delivery of personal property that is the subject of a court order.
Where property is not delivered up under a writ of delivery, the court order may be enforced by a writ of sequestration, which directs the sheriff to take possession of and hold property, and collect and hold income from property. Leave of the court (the court’s permission) is required to obtain a writ of sequestration and this is obtained by bringing a motion. The court is empowered to grant a writ of sequestration only where the court is satisfied that other enforcement measures are or are likely to be ineffective.
An order for the possession of land may be enforced by a writ of possession in certain circumstances. A writ of possession directs the sheriff to recover or deliver possession of land, and like writs of sequestration, may only be issued with leave of the court. A court may only grant leave to issue a writ of possession where it is satisfied that everyone in actual possession of any part of the land in question has received sufficient notice of the court proceeding in which the order being enforced was obtained.
A contempt order is a court order finding a person in contempt of court for failing to obey an earlier court order to do an act (other than the payment of money) or abstain from doing an act. Contempt orders cannot be obtained where someone fails to pay money owing under a court order. A contempt order is obtained on motion to a judge in the proceeding in which the order to be enforced was made. Notice of a motion for contempt must be served personally and an affidavit must be filed in support of a contempt motion. Once notice of the motion has been served, the judge may issue a warrant for the arrest of a person against whom a contempt order is sought where the judge is of the opinion that the person’s attendance at the hearing of the motion is necessary in the interest of justice and it appears that the person is not likely to attend voluntarily.
Where a finding of contempt is made, a judge may order that the person be imprisoned, pay a fine, do or refrain from doing something, pay costs, or comply with any other order that the judge considers necessary. A judge may also grant leave to issue a writ of sequestration against the person’s property. Where a corporation is in contempt, the judge may also make any of these orders against an officer or director of the corporation and may grant a writ of sequestration against the officer or director’s property. The party enforcing the order by bringing a motion for contempt is entitled to their costs of the motion.
In order for a judge to make a finding of contempt, a three-part test must be met: (1) the order that was breached must state clearly and unequivocally what should and should not be done; (2) the party who disobeyed the order must have done so deliberately and wilfully; and (3) the evidence must show contempt beyond a reasonable doubt.
Examination in Aid of Execution
Another procedure that may be used as a tool to assist with the enforcement of court orders and judgments is an examination in aid of execution (formerly known as, and still often referred to by lawyers as a “judgment debtor’s examination”). This type of examination allows a creditor attempting to enforce an order or judgment to examine a debtor in relation to his or her reasons for the non-performance or non-payment of the order, his or her income or property, debts owed and owing, property disposed of before or after the order was issued, the debtor’s present, past and future means to satisfy the order, and any other matter pertinent to the enforcement of the order. Only one such examination may be held in a twelve month period in respect of a debtor in the same proceeding, unless the court orders otherwise.
A creditor initiates the process of conducting an examination in aid of execution by serving a notice of examination on the debtor. It is important for the creditor to specify in the notice of examination which key documents the debtor is required to bring to the examination to avoid relying on the debtor to provide important documents after the examination has concluded. For example, documents relating to RSPs, real properties, shares, bank statements, tax returns and pay stubs may be requested. At the examination, the creditor may ask questions to learn, for example, whether any assets can be seized pursuant to a writ, whether any income can be garnished, and whether there have been any fraudulent conveyances or other ways in which a debtor has concealed or made away with property to defeat or defraud creditors. If there have been such attempts, a judge may make a contempt order against the debtor.
A successful party in civil litigation is entitled to expect that a losing party will comply with any court order resulting from the litigation, whether the order is for payment of money or for some non-monetary relief. The Rules of Civil Procedure set out numerous methods by which court orders may be enforced if this does not occur. Although these steps are not always required, litigants should be mindful that such measures may be an anticipated step in litigation. It is therefore important to consider, before taking legal action, not only the likelihood of succeeding on the legal and factual merits, but also the likelihood of successfully enforcing any court order that may be eventually obtained.