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In this post, we’ll provide a concise overview of how one can go about enforcing a Landlord and Tenant Board (LTB) order in Small Claims Court (SCC), and actually getting paid.
There are three primary ways an LTB payment order may be enforced in SCC:
garnishment;
a writ of seizure and sale of personal property (a “writ”); or
a periodic payment schedule order.
We explore each of these in greater detail below, but first we will outline the steps to be taken between getting an LTB order and seeking enforcement in SCC.
Negotiation
Negotiation should always be the first step parties take in these scenarios. Because SCC enforcement can be a difficult, expensive, and sometimes reputationally damaging process. If the parties can simply come to an agreement on how and when payment will be made, and stick to that, it will likely benefit everyone.
For the party seeking enforcement, they should advise the debtor that if they can agree on payment terms, then reputationally adverse remedies - such as reporting debt to credit bureaus through services like FrontLobby, or posting LTB orders to repositories like OpenRoom.ca - may be avoided. We note that reputational damage carries its own attendant costs, with the length and extent of ongoing damage being uncertain, so keep this in mind if you’re on the debtor side of the ledger.
If negotiation fails or is impractical, or if the acrimony between the parties is too extreme, then we move to the next step.
Filing with the SCC
Parties can file documents through the Small Claims Court E-Filing Service portal or the Ontario Justice Services portal. Note that new SCC claims must be filed with the E-Filing Service, though other filings (including, we believe, all those referenced in this post) can be made via the Justices Services portal. And, if the debtor is in a different jurisdiction, it will be necessary to request a Certificate of Judgement to file in the SCC of the debtor’s jurisdiction.
Pursuing Garnishment
Garnishment is the easiest and simplest means of enforcing an LTB order for payment. To pursue garnishment of either the debtor’s wages or bank account, the party seeking enforcement must first complete and file with the SCC an Affidavit for Enforcement Request and a Notice of Garnishment, and pay a filing fee.
After the Court issues the notice - you’ll get it emailed back with an electronic stamp, basically - the creditor must serve it on the garnishee (the employer or bank) along with a blank Garnishee’s Statement. Within 5 days, you must then serve the Affidavit of Enforcement Request and Notice of Garnishment on the debtor. In both cases, personal (physical) service is required. This is often accomplished using a process server.
The creditor must then complete and file two Affidavits of Service substantiating service on the garnishee and the debtor. If any other party is entitled to the money being garnished (such as a joint owner of the debtor’s shared bank account), the creditor must also serve that person with a Notice to Co-Owner of Debt.
We’ll note that for debtors whose wages are subject to garnishment, this remedy can be incredibly harmful to one’s career and perception by an employer.
Pursuing a Writ of Seizure and Sale of Personal Property
An alternative to garnishment is a writ. This allows an enforcement officer to take certain personal possessions of the debtor and sell them at a public auction. The proceeds will be used to pay the debtor’s creditors. Importantly, pursuant to the Execution Act, many possessions are exempt if they are under a certain value or if they are necessary items.
To pursue a writ, a creditor must first complete and file an Affidavit for Enforcement Request and a Writ of Seizure and Sale of Personal Property, and pay a filing fee. If the property to be seized is a motor vehicle, snowmobile, or boat, the creditor must also conduct searches for pre-existing and prioritized liens registered against title, and provide the court with proof that there is enough equity in the vehicle(s) to justify seizure and sale.
Once issued by the court clerk, the creditor must file the writ with the Enforcement Office (aka the local ‘sheriff’s office’) along with a completed Direction to Enforce Writ of Seizure and Sale of Personal Property, which provides details about the specific property that is to be seized, such as its location and description. Once seized, the property will be stored until a public auction is held and the auction proceeds will be paid into the court before being paid out to the creditors.
Writs are also available for the seizure and sale of a debtor’s land; both land that the debtor currently owns and land that the debtor will own in the future. The process for pursuing this type of writ is similar, albeit with different paperwork and longer wait times. Because the seizure and sale of land is a complicated and costly process, it will only be available for debts large enough to justify it.
A creditor must pay an advance deposit for the anticipated costs of enforcing the writ. These costs include the enforcement officer’s travel, storage of the property, insurance, advertising, etc. If the deposit is used up before the property is successfully seized, the creditor will have to pay an additional deposit, possibly replenishing it numerous times.
As such, pursuing a writ can be a very long, costly process for a creditor and it is imperative that the creditor makes sure there are assets of adequate value to make the process worth it. this can be determined through an examination hearing, described below. Note that the enforcement office may refuse to enforce a writ if the anticipated costs of enforcing it are greater than the cost of the debt owed.
Examination
Let’s say you want to enforce an order through garnishment or a writ, but you don’t know where the debtor works (or if they work, or if they’re self-employed), their banking information, what assets they have, etc. To get this and all other necessary information for enforcement, you will likely require an examination hearing.
An examination hearing allows a party seeking enforcement (or their legal representative) to ask the debtor (or someone else) under oath all the foregoing questions and more.
To request an examination hearing, one must complete and file a Notice of Examination Form and an Affidavit for Enforcement Request, pay a filing fee, and serve the Notice of Examination and a blank Financial Information Form on the debtor (or other person that they want to examine) at least 30 days prior to the hearing. The creditor must then complete and file with the court an Affidavit of Service at least 3 days prior to the hearing, which the court will schedule with the parties.
If a party refuses to attend, refuses to answer questions, refuses to complete and provide the answers sought in the Financial Information Form, or demonstrably lies to the court in an examination hearing, they can be held in contempt of court. Consequences for being held in contempt of court range from fines to jail time. If a party seeks to hold another party in contempt, they can ask the presiding judge at an examination hearing to schedule a contempt hearing, where they’ll advise the court why a contempt order is justified and what it should include.
Sometimes, at an examination hearing, the SCC may order a periodic payment schedule, requiring that the debtor make specific payments towards the debt according to a schedule set by the court. If the debtor fulfills this payment schedule, the creditor will not be able to pursue garnishment or a writ. If the debtor, however, fails to make a payment according to a periodic payment schedule, the creditor can serve the debtor with a Notice of Default of Payment and an Affidavit of Default of Payment. This process will terminate the periodic payment schedule after 15 days, allowing the creditor to proceed with an alternate enforcement method.
As a practical matter, the more involvement the court has the slower things will proceed. As such, we might recommend trying to avoid a court-imposed periodic payment schedule, if possible. Because enforcing a schedule which has been violated simply entails further legal proceedings.
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