On October 26, 2023 the Money Judgment Enforcement Act (the "Act") received Royal Assent and is set to overhaul the current money judgment enforcement scheme in British Columbia. When brought into force, the Act will repeal much of the largely outdated, inefficient and cumbersome Court Order Enforcement Act, RSBC 1996, c. 78 ("COEA"), which has governed money judgment enforcement procedures in the province for nearly three decades.
Court Order Enforcement Act
Under the current legislative scheme, creditors seeking to enforce monetary judgments are unduly burdened by the COEA's requirements and administrative hurdles, often having to bring several court applications in order to collect upon a judgment. The COEA is also silent on many processes regarding the enforcement of court orders, which further complicates collection efforts. Once in force, the new Act will repair some of the gaps in the COEA, modernize the legislative scheme, and remove many of the barriers created by the COEA that currently make judgment enforcement expensive and ineffective.
Money Judgment Enforcement Act
The purpose of the Act is to implement a simplified process for creditors to collect the money owed to them and to protect debtors from unreasonable collection practices. These streamlined procedures are intended to be less expensive and time consuming for the parties involved. The following are just some of the sweeping changes being implemented by the Act.
1. Universal Exigibility of Property
Under the COEA, only certain types of property are subject to enforcement. However, under the new Act, every type of property in which a debtor has an interest is subject to an enforcement charge and enforcement proceeding, with limited exceptions. This provides for a wider breadth of assets upon which judgment creditors can enforce, including but not limited to, fixtures, crops, leasehold interests, contracts of sale, security agreements, securities, licences, intellectual property, and even trade secrets.
2. Implementation of the Money Judgment Registry
The Act also creates a money judgment registry (the "Registry"). When the Act comes into force, creditors will be required to register their money judgments in the Registry within two years (with certain exceptions), which creates an enforcement charge in favour of the creditor. The public will also be able to access the Registry to search whether an individual has a money judgment against them. Care should be given to register serial numbered goods in the Registry in order to maintain priority.
3. Registration of Money Judgments Against Land
As with the current scheme, a money judgment will continue to be registrable against real property. However, the new Act provides an added mechanism for converting joint tenancies into tenancies in common in order to effect enforcement against a debtor. Under the Act, a creditor may also register an enforcement charge in the Land Title Office on fixtures or growing crops attached to registered land.
4. Less Court Intervention
The Act provides civil enforcement officers with certain abilities and powers regarding the enforcement of money judgments without the need for additional court orders. Once in force, creditors will be able to give civil enforcement officers a single instruction to undertake several enforcement mechanisms, significantly reducing the time and expense to creditors. For example, under the Act, a creditor may garnish wages and employment benefits on a continual basis, rather than the current requirement to obtain a new court order for each and every garnishment attempt.
5. Increased Ability to Obtain Financial Disclosure from Debtors
The Act also provides ways for creditors to obtain financial disclosure from debtors, including requiring debtors to provide, upon request, identification and an asset disclosure statement, and requiring debtors to attend an examination under oath to answer questions regarding their assets.
6. Improved Procedures for Seizing and Disposing of Property
The Act includes rules regarding the disposition of property through a civil enforcement officer, including what property may be disposed of and in what circumstances. For example, in certain circumstances, a civil enforcement officer has the power to use reasonable force to enter lands or premises and remove a debtor's personal property without the necessity of a court order.
Conclusion
The Act is anticipated to come into force in 2025. Once in force, it will provide for a more comprehensive, efficient and cost-effective money judgment enforcement process in BC. In doing so, the Act will save valuable judicial resources, simplify the collections process and expand the pool of assets available to creditors, while ensuring that debtors are not taken advantage of through unreasonable seizure practices.
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