Unsecured Creditors
Post-Judgment Remedies
Specific Enforcement Procedures
Taxonomy of Remedies
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Against the person of the debtor
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Remedies against personal & real property
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Passive enforcement: filing notice of judgment/memorial of execution –
already discussed
Order for Seizure and Sale – M&E Act
Remedies against debts owing to debtor
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Imprisonment for failure to pay debt
Imprisonment in aid of examination
Attachment of debts or garnishment – Garnishee Act
Equitable execution – fills in the cracks
Retroactive Remedies
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Assignments And Preferences Act
Against the Person of the Debtor
Post-Judgment Arrest &
Imprisonment
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Failure to pay judgment as ordered by court is
contempt of court
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But in all jurisdictions Rules of Court provide that
imprisonment is not available for contempt for
failure to pay a judgment debt
Some jurisdictions retain specific statutory
authority to imprison debtor for non-payment
Nfld, NB, NS, BC, Yukon
 Rarely used
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Post-Judgment Arrest &
Imprisonment
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NB Arrest & Examinations s.36
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No person shall be arrested or imprisoned after judgment in
any civil suit, or for making default in the payment of a sum
of money. . .
Abolition of common law imprisonment for failure to pay
. . .except as provided and allowed by this or any other Act at
the time in force.
Statutory imprisonment retained
Term of up to one year (s.38) if the debtor has the
means to pay and refuses to do so (s.40(a)).
Arrest in Aid of Examination
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Can get an order for examination to discover
assets which may satisfy the judgment.
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Persons other than the debtor may be examined
Enforceable by contempt proceedings, which
can include imprisonment
Arrest and Examinations Act, ss. 30-34
Against Real and Personal
Property of the Debtor
Order for Seizure & Sale
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Distinguish
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Exigible property is not subject to seizure under a writ
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“Exigible property”
“Exempt property”
e.g. chose in action (subject to garnishment)
RRSP?
Stock in a company? Liquor licence?
Exempt property is exigible, but is statutorily exempt
from execution
Seizure
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Sheriff conducts seizure and sale
Not JC
 Instructing creditor must pay sheriff’s costs before
seizure: Sheriff’s Act s.13
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Liable to third parties for seizing their goods
Problem when ownership is in dispute
 Sheriff can ask for indemnification from instructing
creditor
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Is liable to D for excessive seizure
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more than is reasonably needed to satisfy debt
Seizure
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Sheriff cannot force entry to effect seizure
“the house of every one is to him as his castle and
fortress, as well for his defence against injury and
violence, as for his repose.” 1604 decision
 Sheriff liable in damages for illegal entry
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Ultimately, a sheriff is a peace officer (Criminal
Code s.2 definitions) with the right to
possession of the property in question, and it is
a criminal offence to hinder a peace officer
Seizure
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In practice, as a matter of convenience the sheriff does
not want to take physical possession of the property
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Most of the issues surrounding seizure concern the type of
symbolic possession which is necessary to give sufficient
notice to third parties that a seizure has been effected.
Once goods have been seized, sheriff has a “special
kind of property” and can bring an action for recovery
of the goods against a third person who carries them
away.
Sale
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Sale is very rare since it will often result in an
undervalue
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D is inclined to buy out if at all possible
The Act does not even provide minimal
specification of how sale is to be conducted in
case of personalty.
Sale
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Case-law requirements
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Sheriff selling assets must conduct the sale so as to ensure that a
fair price is received.
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The sheriff will be liable to the debtor who might have received any
surplus
Or to the creditor whose judgment should have been but was not
satisfied.
Where the sale does not result in a reasonable bid, the sheriff
may not simply sell to the highest bidder.
The sheriff may either adjourn to a named day or prepare a
return that the goods remain in his or her hands for want of a
buyer.
Sale
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Compare secured creditor’s duty which is only
to take reasonable steps to secure a fair price
Reason for the difference is that the sheriff has the
option of a return venditioni exponas – application to
court that the goods be sold for the best price
obtainable.
 Note that in practice there may be little difference
btw SP duty and that of a sheriff as an unreasonably
low price is good evidence that reasonable steps
were not taken
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Title of Purchaser
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Purchaser is protected if judgment is later reversed:
M&E s.9
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In which case creditor is liable to debtor
Other than that, purchaser from sheriff gets very
tenuous title
Recall priorities Jellett v Wilkie
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“...the sale shall convey whatever interest the party had in the
goods and chattels at the time of the seizure.”
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M&E s.23 (similarly in the case of land, s.15)
The sheriff offers no warranties as to title
Title of Purchaser
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Sale may be challenged if
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The goods were not exigible or were owned by a third person
at the time of seizure (Jellett)
Court issuing the writ had no jurisdiction to do so
Writ was not regular on its face or had expired
Proceedings leading to issue of the writ were seriously flawed
(how flawed?)
There was fraud or wilful misconduct on the sheriff’s part
The sale was collusive
Result – price at a sheriff’s sale is usually very low
Remedies Against Debts Owing
to Debtor: Garnishment
Garnishment
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D is owed money by third party “account debtor”
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JC applies ex parte for “attaching order”
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Order may be challenged by D or AD within 20 days of
service
Attaching order is served on account debtor
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Account debtor called “garnishee” in the Garnishee Act
Not on D
Once attaching order is served, debt is “attached”
(bound)
Garnishment
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Once debt is bound, payment into court by AD
discharges debt
AD may pay JD only on order of court
 Cf PPSA right to collect on intangibles, where AD
pays SP after notice is given
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Payment by AD to D is void & does not
discharge debt
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AD will be liable to pay the same amount to JD
Garnishment
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AD can raise against JD any defenses which
would have been available against D
There is a special process if AD disputes debt
owing to D
Garnishable Debts
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“Debts due or accruing due”
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Usual formulation
“Debt”
Must be specific sum – damages claim cannot be
garnished
 Ie when debtor is herself a JC vis-a-vis a third party,
the judgment debt owing to the debtor cannot be
garnished until judgment.
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Garnishable Debts
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Problem: What debts can be garnished before
they are actually due?
“Accruing due”
Debts which are “accruing” are debts which will
become payable with certainty only with the passage of
time: e.g. a loan
 Such debts are said to be “present debts payable in
the future”
 Distinguish amount owing those which are
contingent on some uncertain future action
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Garnishable Debts
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Examples of controversial types of debts
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Unliquidated damages – cannot be attached until judgment is
entered
Fire insurance – fire insurance policy cannot be garnished
until insurer admits liability and agrees to pay rather than
replace asset
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But, some policies may be garnishable immediately, depending on
particular clause e.g. auto insurance policy creating a debt owing to
insured once judgment recovered
Life insurance garnishable on death of deceased, even where
succession duty releases have not yet been filed
Garnishable Debts
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Examples of controversial types of debts
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Legacies – where the j.d. is entitled to a specific bequest, and
the executors have agreed to pay, it can be attached
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But where bequest is a distributed share, not garnishable until
quantified
Rent which is not yet due – was at one time garnishable as
debt accruing due, but is now generally not garnishable
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Successive orders are necessary to garnish rent as it becomes due.
Mortgages (e.g. where debtor is mortgagee), in contrast, can be
garnished prospectively
RRSP – generally not garnishable
Garnishable Debts
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Why are debts not yet accruing due not
garnishable?
Wage Garnishment
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Wages are often not yet accrued
Several orders must be issued in order to catch
sequential pay periods.
 Some jurisdictions have specific continuting
garnishment orders for wages
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Wages typically cannot be garnished entirely
N.B. has abolished wage garnishment
All provinces (incl. NB) have ongoing
garnishment orders for family orders e.g.
maintenance and alimony
Equitable Execution
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There are various forms of equitable execution
The most important is appointment of a receiver
One important reason for appointment of a
receiver is to reach assets which cannot be
reached because of gaps in other processes
E.g. RRSP cannot be seized, nor can it be garnished
 It is now clear in NB that a receiver can be
appointed to collapse and RRSP
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Part 5.IV: Exemptions
Exemptions
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Exempt goods – M&E s.33(1):
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(a) the furniture, household furnishings and appliances
reasonably necessary for the debtor and his family;
(b) the necessary and ordinary wearing apparel of the debtor
and his family;
(c) all necessary food and fuel for the debtor and his family
for three months;
(d) two horses and sets of harness, two cows, ten sheep, two
hogs and twenty fowl, and food therefor for six months;
Exemptions
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(e) any tools, implements and necessities used by the
debtor in the practice of his trade, profession or
occupation having a cumulative market value of not
more than six thousand five hundred dollars, and one
motor vehicle having a market value of not more than
three thousand dollars, if required by the debtor in the
course of or to retain employment or in the course of
and necessary to his trade, profession or occupation,
but the exemptions provided in this paragraph do not
apply to a corporate debtor;
Exemptions
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Exempt goods – M&E s.33(1):
(f) seed grain and potatoes required for seeding and
planting purposes to the following quantities: forty
bushels of oats, ten bushels of barley, ten bushels of
buckwheat, ten bushels of wheat and thirty-five
barrels of potatoes;
 (g) dogs, cats, and other domestic animals belonging
to the debtor;
 (h) medical or health aids reasonably necessary to
enable the debtor or any member of his family to
work or to sustain health.
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Exemptions
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Note: Traditionally and still in most
jurisdictions, there are no exemptions in the case
of secured transactions
Atlantic PPSAs have exemptions (NB s.58)
Exemptions do not apply to pmsi
 (a) furniture, household furnishings and appliances
used by the debtor or a dependent to a realizable
value of five thousand dollars or to any greater
amount that may be prescribed;
 Cf M&E – no limit on the value of the furniture
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Exemptions
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NB PPSA
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(b) one motor vehicle having a realizable value of not more
than six thousand five hundred dollars at the time the claim
for exemption is made, or not more than any greater amount
that may be prescribed, if the motor vehicle is required by the
debtor in the course of or to retain employment or in the
course of and necessary to the debtor's trade, profession or
occupation or for transportation to a place of employment
where public transportation facilities are not reasonably
available;
Cf M&E – $3000 limit on value of vehicle
Exemptions
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NB PPSA
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(c) medical or health aids necessary to enable the
debtor or a dependent to work or to sustain health;
and
CF M&E
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(h) medical or health aids reasonably necessary to
enable the debtor or any member of his family to
work or to sustain health.
Exemptions
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NB PPSA
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(d) consumer goods in the possession and use of the
debtor or a dependent if, on application, the Court
determines that
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(i) the loss of the consumer goods would cause serious
hardship to the debtor or dependent, or
Exemptions
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NB PPSA
(ii) the costs of seizing and selling the goods
would be disproportionate to the value that
would be realized.