Overview of Judgment Enforcement in Ontario
Obtaining a judgment is only the first step. A judgment creditor must take active enforcement steps to collect the amount owed. In Ontario, civil judgment enforcement is governed primarily by Rule 60 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The principal enforcement mechanisms are: the writ of seizure and sale; garnishment; and examination in aid of execution.
The limitation period for enforcing a judgment in Ontario is 10 years from the date of the order: Limitations Act, 2002, s.16(1)(b). A judgment may be renewed by commencing a new action on the judgment debt before the limitation period expires.
Writ of Seizure and Sale: Rule 60.07
A writ of seizure and sale is the primary tool for enforcing a monetary judgment in Ontario. The creditor files the writ with the Sheriff of the county or district where the debtor resides or has assets. The writ authorizes the Sheriff to seize and sell the debtor's personal property and, subject to registration requirements, to bind and sell the debtor's real property.
Issuing the Writ
After judgment, the creditor prepares a writ of seizure and sale in the Form 60A prescribed by the Rules and files it with the local Sheriff's office and, where real property enforcement is sought, with the land registry office for the county where the property is situated.
Duration and Renewal
A writ of seizure and sale remains in force for six years from the date of issue. It may be renewed for successive six-year periods before expiry. A writ that has expired cannot be revived; the creditor must issue a new writ (Rule 60.07(4)-(5)).
Seizing and Selling Personal Property
The Sheriff may seize and sell the debtor's personal property under the writ. The proceeds are applied first to the costs of the seizure and sale, then to the judgment debt and post-judgment interest. The Sheriff distributes surplus proceeds to the debtor.
Certain personal property is exempt from seizure under the Execution Act, R.S.O. 1990, c. E.24, including: necessary and ordinary wearing apparel and bedding for the debtor and family (s.2(a)); household furniture, utensils, equipment, food, and fuel not exceeding $11,300 total (s.2(b)); tools, instruments, and chattels ordinarily used in the debtor's business, profession, or occupation not exceeding $11,300 (s.2(c)); and one motor vehicle not exceeding $11,300 in value (s.2(d)).
Enforcement Against Real Property
A writ filed in the land registry office for the county where the debtor has real property binds the debtor's freehold and leasehold interests in that county. Filing the writ does not automatically sell the property — the creditor must direct the Sheriff to proceed with a Sheriff's sale after the writ has been on file for at least 30 days (Rule 60.07(14)).
A writ filed in the land registry will appear on a title search, which may prevent the debtor from selling or mortgaging the property without satisfying the judgment. This makes the writ an effective tool even where the creditor does not immediately pursue a Sheriff's sale.
Priority Among Creditors
Where multiple creditors have filed writs against the same debtor, priority in the distribution of proceeds from a Sheriff's sale of personal property is generally determined by the order in which writs were filed with the Sheriff. However, secured creditors with PPSA security interests that have priority over the judgment creditor may claim ahead of unsecured judgment creditors.
Garnishment: Rule 60.08
Garnishment allows a judgment creditor to intercept money owed to the debtor by a third party (the "garnishee") — typically an employer, bank, or account debtor. The garnishee is required to pay the debt owed to the debtor directly to the Sheriff until the judgment is satisfied or the garnishment is set aside.
Notice of Garnishment
To initiate garnishment, the creditor files an affidavit confirming the judgment amount and the existence of a debt owed to the debtor by the garnishee, and obtains a notice of garnishment from the court office. The notice of garnishment is then served on: the garnishee (typically by mail); the debtor; and the Sheriff (Rule 60.08(3)).
Within 10 days of being served, the garnishee must pay to the Sheriff the amount it owes to the debtor (or will owe within 10 days), up to the amount of the judgment (Rule 60.08(8)). If the garnishee disputes owing money to the debtor, it may file a notice of dispute.
Wage Garnishment and the Wages Act Exemption
When wages are garnished, the Wages Act, R.S.O. 1990, c. W.1, s.7(2) provides that 80% of net wages are exempt from seizure. "Net wages" means wages after deductions required by statute (income tax, CPP, EI). The garnishee employer is only required to pay 20% of the debtor's net wages to the Sheriff.
The court may vary the 80% exemption on motion where the debtor can show financial hardship, or where the creditor can show exceptional circumstances. The Wages Act exemption does not apply to the full extent where the debt arises from a family law support order — Family Responsibility Office (FRO) garnishment for support operates under the Family Responsibility and Support Arrears Enforcement Act, 1996 and may capture a larger share of wages.
Bank Account Garnishment
A judgment creditor may garnish the debtor's bank account by serving a notice of garnishment on the debtor's bank. The bank is a garnishee for the amount on deposit at the time of service. Funds deposited after service of the notice are not captured by that garnishment — the creditor must issue additional notices to capture future deposits.
Certain government payments deposited into bank accounts may be protected from garnishment under federal law — for example, Employment Insurance benefits and Canada Pension Plan payments are protected under their respective statutes.
Examination in Aid of Execution: Rule 60.18
Where a creditor does not know what assets the debtor has, an examination in aid of execution (formerly "debtor's examination") allows the creditor to examine the debtor under oath about their financial affairs.
Who Can Be Examined
The creditor may examine: the debtor personally; where the debtor is a corporation, any officer or director; and any other person who may have information about the debtor's property (Rule 60.18(1)-(2)). The examination is conducted before a court officer and is under oath.
Scope of Examination
The examination may cover any matter relevant to enforcement of the judgment, including: the debtor's current and recent income and employment; bank accounts and financial institution relationships; real property owned; personal property of value; debts owed to the debtor; transfers of property in the preceding years; and reasons for non-payment.
Consequences of Non-Attendance
If the debtor fails to attend the examination or refuses to answer questions, the creditor may bring a contempt motion. A contempt order may result in fines or, in serious cases, imprisonment until compliance.
Registering a Judgment in the Land Registry
Filing a writ of seizure and sale in the appropriate land registry office registers the judgment as a charge on the debtor's real property in that county. Any purchaser or mortgagee taking title after registration of the writ takes subject to the creditor's interest.
A judgment registered in the land registry will appear on title when the debtor attempts to sell or refinance, forcing the debtor to satisfy the judgment to convey clear title. This is often the most effective enforcement tool where the debtor owns real property.
Costs of Enforcement
The costs of enforcement — Sheriff's fees, registration fees, and legal costs — are generally recoverable from the debtor in addition to the judgment amount, subject to the court's costs assessment. Creditors should maintain detailed records of all enforcement costs incurred.
Practice Points for Ontario Civil Litigation Lawyers
- File the writ of seizure and sale in the land registry office at the same time as filing with the Sheriff — this binds real property and creates pressure on the debtor at low cost.
- Serve a notice of garnishment on all banks where the debtor may have accounts; the creditor can identify banks through the examination in aid of execution.
- Use the examination in aid of execution to map the debtor's assets before choosing which enforcement mechanisms to deploy; an unproductive Sheriff's sale is a waste of time and money.
- Monitor the writ expiry date and renew before the six-year period expires to avoid losing priority.
- Where the debtor is insolvent and has multiple creditors, consider whether a bankruptcy petition may be more effective than individual enforcement (which may be stayed if the debtor goes bankrupt).
- For support enforcement, direct the client to the Family Responsibility Office (FRO), which has broader garnishment powers under the Family Responsibility and Support Arrears Enforcement Act.