Law Times

Page 4 SePTeMBeR 21, 2015 • LaW TIMeS www.lawtimesnews.com Court lays out alternative for enforcing money judgments BY YAMRI TADDESE Law Times L awyers trying to enforce a money judgement against real property now have an alternative to the beleaguered sheriff 's sale process. In Canaccede International Acquisitions Ltd. v. Abdullah, a Superior Court judge approved a judicially supervised process for the sale of property after ac- knowledging some difficulties with the traditional procedure mandated by the Execution Act. According to lawyer Todd Christensen, who succeeded in getting an alternative, judi- cially supervised sale process approved, the "last nail in the coffin" for the sheriff 's sale pro- cess came after a ruling in Citi Cards Canada Inc. v. Pleasance. In that case, the court found pri- vacy laws precluded banks from handing over mortgage state- ments to creditors who want to enforce a judgment via the sher- iff 's sale process. "Given that a mortgagee is prevented by PIPEDA [the Per- sonal Information Protection and Electronic Documents Act] from providing such mortgage discharge statements required by sheriffs, the practical im- plication is that an execution creditor who wishes to initiate a sheriff 's sale of any encumbered property will likely be required to undertake potentially pro- tracted and expensive exami- nations in aid of execution and other process, with uncertain outcomes, just to get into the position of being able to initiate the sale process," wrote Justice David Broad in Canaccede on Sept. 9. "PIPEDA, in prevent- ing a mortgagee from providing a mortgage statement to an execu- tion creditor proposing to initiate a sheriff 's sale, does represent an impedi- ment to employment of the sheriff 's sale process," Broad noted. In the alternative pro- cess approved by the court, a reference hearing would involve all interested par- ties in a subject property, including the mortgagee bank. The bank, as a party to the matter, may have to disclose the mortgage payout statements to the creditor, says Christensen. Christensen, who rep- resented the applicant, Canac- cede, along with his colleague Zameer Hakamali, points out restrictions under PIPEDA aren't the only barrier while dealing with the sheriff 's sale process. "You need to pay a $7,000 deposit upfront, and the sheriff uses that to hire its own solicitor to conduct the sheriff 's auction and then it uses the money to advertise the auction," he says. But even if an offer came up that would be sufficient to pay out all of the writs of seizure and sale, the sheriff can reject the bid, he adds. "And then you're done. The whole process is over; there's no appeal. You have to start all over. Your money's gone because the sheriff invariably spends it all." The applicants argued the court had jurisdiction to allow an alternative to the sheriff 's sale process. With no submission from the respondents to counter their argument, the court made a finding that creating an alter- native isn't a job to leave to the legislature. "I have considered the ques- tion of whether the court should refrain from endorsing an al- ternative approach to the en- forcement of judgments against land in favour of leaving it to the legislature to address any difficulties in the judgment en- forcement process by legislative reform," wrote Broad. "In my view, where the court has an inherent jurisdiction to make an appropriate order which will do justice between the parties, the court is at liberty to do so and should do so where the circumstances warrant it, in the absence of binding authority or an overriding policy reason constrain- ing it from following such a course," he added. Lawyer Inga Andries- sen of Andriessen & As- sociates PC says the deci- sion is "a good step in the right direction for credi- tors' rights." "Ontario is a fantastic place to be a judgment debtor if you have the stomach to walk away from your debts," she says. "The Rules of Civil Procedure that govern enforce- ment are so weighed in favour of the debtor that if you're a small creditor . . . if you don't have hundreds of thousands of dol- lars owed to you, then the cost to enforce a judicial order is pro- hibitive." The alternative process will mean "huge cost savings," says Andriessen, noting it eliminates the need to get the payout state- ment from the bank by going through an examination in aid of execution. With PIPEDA restrictions in place, Andriessen says ob- taining information from debt- ors had become particularly frustrating, especially if they were hiding from creditors. If the debtor is avoiding a process server, the creditor has to go to court to bring a motion for an order to serve via an al- ternative method, such as mail. If the debtor doesn't respond to the mail correspondence and doesn't show up at the ex- amination in aid of execution, the creditor must take the cer- tificate of non-attendance and bring another motion to compel attendance at the examination. "Now you serve that order by mail because you're smart enough to ask the judge to serve it by mail. You serve it, and they don't show up again," says An- driessen. The creditor then has to get a contempt of court order, "but in order to get a contempt of court order, you have to per- sonally serve the judgment debtor who is evading you," says Andriessen, noting every step of the process is costly. Broad also noted the alter- native of a judicially supervised sale of the subject properties "preserves the right of the re- spondents and the encum- brances to show cause on a case- specific basis why a judicial sale should not proceed." That's why the process isn't just an enforcement mecha- nism, according to Christensen. "It's a fair process because it gives anyone with an interest in the property to show cause [as to] why it would be unjust or in- equitable for the court to order the property sold," he says. LT NEWS Available risk-free for 30 days Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 The new 2015 edition of this annual journal includes insightful articles, each covering a current issue in construction law. Table of Contents 1. The Law of Privilege and In-house Counsel – Dan Levert 2. Contractor's Performance Review Under Quebec's Public Procurement Regime – Yvan Houle 3. Responsibility for Site Conditions in the Context of Owners' Disclosure of Information: Contractors' Risks and Rights – J. Marc MacEwing 4. Comstock Canada Ltd. (Re), A Model of Efficiency – John Margie 5. The Obligation to Cooperate in the Context of Construction Contracts in Quebec – John Murphy 6. Total Cost Claims: Canada's Five-part Test – Steve Richards 7. 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Price(s) subject to change without notice and subject to applicable taxes. 00229UY-A50720 'Ontario is a fantastic place to be a judgment debtor if you have the stomach to walk away from your debts,' says Inga Andriessen. Check out lawtimesnews.com for insight from our regular online columnists Monica Goyal discusses the latest gadgets and trends in legal technology in Bits & Bytes From trade deals to foreign investment, Patrick Gervais keeps you up to date on business issues in Trade Matters Darcy Merkur brings a plaintiff-side perspective on insurance matters in Personal Injury Law

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