New B.C. legislation aimed at streamlining process of collecting money through courts, tribunals

  • May 15, 2023

By Ian Burns for The Lawyer's Daily

The B.C. government has introduced new legislation it says will make it easier for people to get the money owed to them following a successful civil court or tribunal decision.

The purpose of the Money Judgment Enforcement Act, which is currently before the B.C. legislature, is to streamline the process to collect money through the courts, or tribunals such as the Residential Tenancy Branch (RTB) or Civil Resolution Tribunal (CRT). Currently, people who are awarded a money judgment must make a court application for each method used to collect funds if the person ordered to pay does not voluntarily comply with the judgment.

Methods to collect funds include garnishing wages, garnishing funds in bank accounts, seizing and then selling personal goods and putting liens on personal property. Currently, requesting the garnishment of wages requires a new court application every two weeks, which can be time-consuming and expensive for the person pursuing collection. Under the new Act, employers will receive a single notice to garnish a percentage of wages that will remain valid indefinitely.

Attorney General Niki Sharma said the legislation will reduce the need for people to involve the courts in the collection process.

“When the courts or tribunals rule in your favour, you should be able to get what is owed to you,” she said. “But we know many people, including renters and landlords, are then faced with the difficult, time-consuming and often expensive task of collecting on the debt. This new legislation will lessen the burden on people who are awarded money and help ensure the timely delivery of money owed.”

The legislation is based on recommendations from the Uniform Law Conference of Canada and the British Columbia Law Institute, and will update and replace much of the current Court Order Enforcement Act. It enables money judgments to be enforced with a single enforcement instruction after a person registers in a searchable public registry, eliminating the need to apply to the court multiple times to pursue collection.  

Tribunal orders will automatically be entered in the registry and enforced, instead of having to first be registered with the court, and the registry will serve as a “one-stop shop” for information about previous money judgments, including the current amount owing and commercial liens.

Canadian Bar Association, B.C. Branch (CBABC) president Aleem Bharmal said the association has advocated for this sort of legislation for over a decade. He also noted that money enforcement is “definitely” an access to justice issue.

“Our members see how difficult it is for the clients to collect the money they are owed — it is frustrating and time-consuming, so overall we are pleased to see the recommendations reflected in the legislation,” he said. “We think the legislation will get people the money they are owed at the end of a tribunal or a court case more readily, because one of the foundations of a fair and just legal system is to be able to collect on money the court awards to a successful party. And right now, the collection of payments for successful litigants is difficult and frustrating.”

In addition, certain types of property not contemplated in the old rules will be able to be seized, such as crops and co-owned property. The legislation will also ensure collection is carried out equitably. Additional protections have been introduced to ensure that people owing money and their dependants can maintain a basic standard of living. This includes expanding the list of items exempt from seizure and moving certain details of the exemptions to regulations, to ensure exemption amounts can more easily be adjusted over time to reflect inflation.

But praise for the proposed legislation was not universal.

Joven Narwal of Vancouver’s Narwal Litigation LLP said allowing monetary judgments to be enforced more efficiently by minimizing the need for creditors to resort to the courts for assistance in enforcement of judgments is a laudable goal from the creditor’s perspective, but he noted there is another important constituency composed of vulnerable debtors who face mental and physical health and other socio-economic challenges “whose interests are no less important.”

“The debate about effective debt collection is ancient. An early iteration of enforcement involved debtor’s prisons which created a tiered system of enforcement in which the poor and downtrodden received long, harsh and unjust jail sentences and other punishments for their inability to pay off debts,” he said. “While this approach was abolished long ago, the reality is that vulnerable debtors find themselves in metaphorical prisons in which they are unable to escape their debts and may be required to surrender their ability to sustain and improve their quality of life.”

Narwal said the previous system may have been complex but “embedded within it at least a foundational ideal that the court would retain a form of albeit imperfect oversight to help protect vulnerable debtors.”

“In my view, the quality of the proposed legislation will rest on whether it appropriately balances the interests of expediency with the fundamental importance of protecting vulnerable debtors from unreasonable and unjust enforcement,” he said.

Alberta and Saskatchewan have already enacted similar legislation, and if passed, the Money Judgment Enforcement Act is expected to be brought into force through regulation in 2025.