Chapter 6 - Specific Areas

6.4 - Enforcement

Introduction

In our First Report, we said that recommendations relating to enforcement activities would be deferred to our Final Report, and invited further comment on these issues -- in particular the following: [1]

  • the appropriateness of existing enforcement mechanisms -- in particular, the use of warrants of committal in Small Claims Court;
  • the level of service provided by the courts and the degree to which the public is well served;
  • the requirements of service and options to personal service in particular; and
  • the extent to which enforcement and process serving services should be provided by the courts.

Appropriateness of Existing Enforcement Mechanisms - Warrants of Committal

The Small Claims Court is the only civil court where such a drastic remedy as a warrant of committal can be readily obtained. The current procedures dealing with warrants of committal lead to the perception that the warrant is issued for the non-payment of the judgment debt, as opposed to contempt of court for not appearing at a judgment debtor examination for non-payment.

Some changes have been proposed to the Small Claims Court Rules [2] by the Small Claims Court Subcommittee of the Rules Committee to address this perception. First, the Subcommittee has recommended that the warrant should not be issued until after the second hearing at which the debtor fails to appear, or where the debtor has been uncooperative at the judgment debtor examination, to ensure that it is used in the minimum number of circumstances. Currently, it can be issued after the first hearing -- the judgment debtor examination -- although it is not usually enforced until after a second hearing -- the committal hearing. It is further proposed that the second hearing be renamed the contempt hearing", as opposed to the "committal hearing", to clarify that the person is being found in contempt of court for failure to attend the examination.

Second, pursuant to the proposed rules change, the court would only be empowered to make a commital order at the contempt hearing. At present, the court can make such an order after the debtor fails to attend the judgment debtor examination and the clerk can then issue a warrant. This has led to the perception that the warrant is for the non-payment of the judgment debt rather than the contempt arising out of a failure to attend the hearing, as we have noted.

Third, under the proposed rule changes, the notice of contempt hearing must be served personally. At present, service by mail is permitted, despite the fact that the next step in the process is the enforcement of the warrant.

While these changes will help address the perception, it is not likely that they will eliminate it. As long as imprisonment is a possible sanction for contempt, and the contempt has some connection to a money judgment, it is likely that this perception will continue. Further, these changes do not address the larger issue of whether imprisonment for contempt is appropriate in this context.

We do not believe it is. In our view, such a sanction is tantamount to imprisonment for debt. The Task Force recommends that less draconian options, such as a civil fine, be considered for enforcing such contempt orders.

RECOMMENDATION

We recommend that imprisonment as a sanction for contempt of court in the Small Claims Court, where the contempt relates to the non-payment of a judgment debt, be reconsidered with a view to imposing a less intrusive sanction.

The Requirements of Service and Options to Personal Service

On April 1, 1996, the Ministry of the Attorney General terminated personal service of court documents by Ministry personnel. At the same time, the Small Claims Court Rules were amended to eliminate the requirement of personal service of claims by the bailiff and to permit service by ordinary mail.

Notwithstanding these changes, there continues to be varying, and sometimes conflicting, rules with respect to the service of court documents. The underlying rationale for the particular service rule is not always apparent -- for example, why service in certain cases must be by registered mail as opposed to ordinary mail. Further, the rules do not address more modern methods of service, such as by courier and E-Mail. In some cases, these alternate methods of service would be as effective in giving notice to an opposing party and would result in lower costs to litigants and the justice system. Accordingly, we make the following recommendation.

RECOMMENDATION

We recommend that the Ministry of the Attorney General undertake a comprehensive review of all service rules with the objective of ensuring consistency in service requirements and optimizing the use of modern, effective and low-cost methods of service.

The Enforcement of Judgment Debts

a.   Process

The civil justice system provides the process by which individuals can enforce their judgments and obtain payment of monies they are owed. Confidence in the civil justice system will only exist if this process can produce the results that judgment creditors are entitled to -- payment of their debt in a simple and efficient way. At present, that confidence is threatened. The process is difficult and frustrating and the outcomes, often because of the process, are not satisfactory.

The problems with the enforcement system are fundamental in nature. A review of the legislative framework and the actual procedures followed in the courts discloses the following:

  • a lack of consistency among the various courts with regard to the enforcement processes available; and
  • legislation which is often ambiguous, unnecessarily complex (due in part to the number of applicable statutes) and archaic.

The lack of consistency manifests itself at the level of the user of the system in several ways. In the first place, the process a judgment creditor must use to enforce a money judgment differs depending upon the particular court which issues the judgment. [3] Secondly, the cost of enforcement varies between different branches of the Ontario Court of Justice (General Division). Finally, the level of service provided to judgment creditors in the different levels of courts differs to a noticeable degree.

The following example illustrates this disparity. Two judgment creditors seek to enforce their judgments through a garnishment order: one has a Small Claims Court judgment, the other a judgment from the General Division. The person with the Small Claims Court judgment will be given the appropriate forms from the court office; court staff will provide the required information necessary to fill out the forms; booklets are available free of charge to explain the process and the options available; and court staff can assist by outlining the enforcement remedies available. The creditor is generally able to complete the process without the aid of a lawyer. The person with the General Division judgment, however, is not provided with any of the several required forms to fill out; no assistance is given with respect to identifying the forms or providing the information required to complete the forms; and no information is given regarding what other remedies are available. The person usually seeks the assistance of a lawyer. When it comes time to issue, file and serve the process, the person with the Small Claims Court judgment pays a fee of $35 to issue and file the Notice of Garnishment and $3.60 to serve it by mail. In the General Division, the person pays $89 to issue and file the notice and it is their responsibility to serve the debtor with the notice.

It is not readily apparent to us why, in principle, these inconsistencies should exist. It can be argued that the difference in processes is justified based on the different history, purpose and clientele of the courts. The Small Claims Court, for instance, is intended to provide a forum where the public can resolve (and enforce) disputes themselves, without legal assistance, for cases under $6,000 in a low cost, simple, user-friendly environment. This has led to a customer focus in developing the processes for the Small Claims Court. The General Division, on the other hand, is the court of general jurisdiction: it is the forum for the resolution of all disputes. Perhaps the processes should be different; this is not to say, however, that the process in the General Division should not be as user friendly as possible. This issue is important, and needs to be addressed.

b.   Legislation

In the early 1980's, the Ontario Law Reform Commission in its Report on the Enforcement of Judgment Debts and Related Matters described the existing debtor-creditor law as "fragmented, ambiguous, incomplete and archaic". [4] The Commission stated as follows: [5]

Developing in a generally ad hoc and unsystematic fashion, the law often has left debtors, creditors, their advisors and enforcement personnel in some confusion concerning the administration of the enforcement system as a whole and concerning the existence and effectiveness of statutory rights.

Perhaps the best description of the present state of the law is that made by the Alberta Law Reform Institute in its 1991 Report: [6]

One of the chief criticisms of the present system is that it is a hodgepodge of statutory and judicial rules and procedures. As the law has developed in this area, the logical ordering of the provisions has not been given a high priority. The system is far from user-friendly. One of our objectives has been to recommend an enforcement system that is coherent, logical and internally consistent.
The system should be established by one piece of legislation that is logically arranged and describes enforcement processes in a manner that can be understood by people who are affected by it and not just by their lawyers.

This pronouncement is equally applicable to the present state of the law in Ontario. In our view, Ontario's enforcement system should also be based on one piece of legislation governing all enforcement processes that is "logically arranged and describes enforcement processes in a manner that can be understood by people who are affected by it". [7]

c.   Other Reform Proposals

The complexity of this area of the law, and the extent of reform believed necessary, is illustrated by the breadth of the Ontario Law Reform Commission (O.L.R.C.) Report which contains some 450 recommendations. Several other jurisdictions, including Alberta (where reforms were implemented in January 1996), New Brunswick and Newfoundland have recommended reforms based, in part, on the findings and recommendations of the O.L.R.C. Report.

In all three provincial jurisdictions, the recommended reforms include statutory and regulatory reform, as well as operational. These jurisdictions have been guided in their reform proposals by the following principles:

  • that the system of enforcement operate under creditor initiation and control;
  • that it be designed to require minimal involvement by the court, which will maintain a supervisory role; and
  • that enforcement be primarily an administrative procedure conducted through an enforcement office on instructions from the creditor.

These principles should be considered in any reform of the enforcement system undertaken in the province of Ontario.

With respect to statutory and regulatory reform, these jurisdictions have recommended the implementation of a single "Judgment Enforcement Act", which would constitute a complete code of all pre- and post- judgment enforcement procedures, and replace the many pieces of legislation now applicable. Alberta's new Civil Enforcement Act [8] was proclaimed in force in January 1996. Both New Brunswick and Newfoundland are actively considering comprehensive judgment enforcement legislation. As noted earlier, the O.L.R.C. Report also proposed a "coordinated enforcement system, integrating virtually all enforcement measures under a single new statutory regime." [9]

Each of the three provincial jurisdictions also support reforms to the structure and organization of their enforcement systems in order to improve service delivery. For instance, both New Brunswick and Newfoundland have proposed a new restructured Enforcement Office which would be responsible for the co-ordination and general operation of a new enforcement system. Both of the proposed regimes would rely on a new computerized province-wide Enforcement Registry. Once a Notice of Judgment has been registered in the Enforcement Registry, all of the debtor's personal property would be bound; a judgment creditor would no longer have to file a writ in each judicial district where the debtor has personal property. The O.L.R.C. Report also recommends the creation of an integrated enforcement office which would be supervised by the sheriff, and responsible for virtually all enforcement measures in respect of all judgments from all court levels in Ontario." [10] (Emphasis added.)

Under the new Alberta Civil Enforcement Act, the Sheriff's Office no longer acts as a registry for writs. Instead, the Personal Property Registry, which is also the registry for creditors with secured interests, is used as a central province-wide enforcement registry for all enforcement mechanisms. Registration of a writ by an unsecured judgment creditor in the Registry is effective on a province-wide basis. In order to bind the debtor's land, the writ must also be registered at Land Titles.

Alberta, however, has gone further in its organizational and structural reforms. With the proclamation of the Civil Enforcement Act, a form of enforcement agencies' model for the seizure activity done by the Sheriff's Office has been implemented. Prior to its enactment, seizures were carried out by bailiffs acting under contract with the Sheriff's Office. As well, the Sheriff's Office no longer serves government documents and service of documents is still unregulated. [11]

Under the Civil Enforcement Act, creditors can no longer obtain a court order to conduct a private seizure. Instead, only government-approved civil enforcement agencies that have satisfied insurance, bonding and training requirements are allowed to conduct seizures, pursuant to a contract entered into with the Sheriff's Office. As well, the bailiffs employed by these Agencies must satisfy training and other requirements. The Sheriff's Office is responsible for reviewing the conduct of civil enforcement agencies to ensure that the integrity of the justice system is not compromised.

It is worth noting that, in addition to conducting seizures, civil enforcement agencies in Alberta also have the authority to repossess property under a lease. While we have some concerns that eviction orders may be more properly enforced by officers of the court, perhaps consideration should be given to whether Alberta's system, where an enforcement agencies model is balanced with a level of regulatory control, might be appropriate.

There are several rationale for this "outsourcing" of seizure activity. It is suggested that the Alberta model will improve efficiencies within the system and serve the public better by allowing value-added services and eliminating duplication. Further, it is expected to reduce costs to government as it is assumed that the revenue sharing arrangements with the civil enforcement agencies will generate sufficient revenues to cover the direct costs of regulating the activity. Finally, it provides business opportunities for the private sector.

d.   Privatization of Enforcement Services

In our First Report we suggested that government should not be providing services that may be readily available elsewhere. [12] In keeping with this reasoning, the Review believes that other options for the delivery of enforcement services may be appropriate. The above rationale for the Alberta model supports this view.

It is important, however, that any new model of delivering enforcement services must include a locus of responsibility and clear lines of accountability. This is necessary so that the users know who the authority is behind the enforcement process. As seizure activity can lead to circumstances which threaten the public peace, the system must protect against potential abuse. Accordingly, it is our view that, if responsibility for enforcement services are privatized, there must be sufficient regulatory control to ensure that the integrity of the justice system is not compromised.

The Alberta model appears to balance the benefits of reducing costs to government with an adequate level of regulation to meet these concerns. While the seizure (and eviction) activities are outsourced to enforcement agencies under a government contract, the government maintains a supervisory role by screening the agencies to ensure they meet the necessary insurance, bonding and training requirements and by an ongoing review of their activities.

e.   Recommendations

The inconsistencies, inefficiencies and ambiguities in the present system impact on all those who come into contact with it. Effective enforcement procedures are important not only to users of the civil justice system but also to society as a whole. If not addressed, the problems which plague the current system of enforcement will eventually impact on the public's confidence in the civil justice system. It is essential that this be prevented. It is for this reason that we believe it is time to revisit the issue of enforcement and to take action on the recommendations made in the O.L.R.C. Report.

RECOMMENDATION

We recommend that the Ministry of the Attorney General review the Ontario Law Reform Commission's Report on the Enforcement of Judgment Debts and Related Matters with a view to recommending the implementation of those reforms considered appropriate within 6 to 9 months. In its review, the Ministry should have regard to reform initiatives in Alberta, New Brunswick and Newfoundland and should give consideration to:

  • proposing new legislation to establish a reorganized, comprehensive and coordinated enforcement system for the enforcement of judgment debts, integrating virtually all enforcement measures under a single statutory regime;
  • establishing a new central enforcement office under the supervision and control of a court official;
  • proposing uniform statutory and regulatory provisions and operational practices to govern the enforcement of money judgments from every court level; and
  • designing a system which identifies the body which is responsible and accountable and includes sufficient safeguards and regulatory controls to protect against abuses.

The Ministry should be guided in its review by the following set of principles articulated by the Alberta Law Reform Institute: [13]

  1. Universal Eligibility: All the debtor's property should be subject to enforcement except property that is deliberately exempted;
  2. Just Exemptions: Deliberately exempted property should be sufficient to permit debtors to maintain themselves and their dependents with the necessaries of life;
  3. Creditor Initiative: The enforcement process should be creditor-driven, rather than being dependent on the initiative of a government official;
  4. One Statute: The enforcement process should be governed by one statute that describes the system of enforcement and its various processes in a consistent, coherent and logically ordered way;
  5. Judicial Supervision: Judicial supervision should be kept to a minimum, but parties should have easy access to the court when they require it; and
  6. Imprisonment for Debt: Imprisonment should not be, or seen to be, a remedy for the enforcement of money judgments.

The Ministry should consult with those with expertise in this area, including consumer groups, collection agencies, the Bench, the Bar, Courts Administration, and the private sector.


Footnotes:

[1] First Report of the Civil Justice Review (Toronto: Ontario Civil Justice Review, March 1995), at p.254 [hereinafter "First Report"].
[2] Small Claims Court Rules, R.R.O. 1990, Reg. 201.
[3] There are four courts which can issue a money judgment: the Ontario Court of Justice (General Division); the Small Claims Court, which is a branch of the General Division; the Ontario Court of Justice (Provincial Division) when it has jurisdiction in a claim for support; and the Unified Family Court, which is also a branch of the General Division.
[4] Ontario Law Reform Commission, Report on the Enforcement of Judgment Debts and Related Matters, Parts I to V (Ministry of the Attorney General, 1981 and 1983) Part I, at p.3 [hereinafter "O.L.R.C. Report"].
[5] Id., Part I, at p.77.
[6] Alberta Law Reform Institute, Enforcement of Money Judgments, Vols. 1 and 2 (Report No. 61, March 1991) Vol. 1, at p.26 [hereinafter "Alberta Report"].
[7] Id.
[8] Civil Enforcement Act, S.A. 1994, c.C-10.5.
[9] O.L.R.C. Report, supra, note 4, Part I, at p.77.
[10] Id., Part I, pp. 3, 77 and 171.
[11] Service of documents for the private sector had already been discontinued.
[12] First Report, supra, note 1, at p.254.
[13] Alberta Report, supra, note 6, at p.403.

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