Bill 27, the Money Judgment Enforcement Act: An Overview of Proposed Key Changes to the Enforcement of Money Judgments in B.C.

Update: On October 26, 2023 the Money Judgment Enforcement Act received Royal Assent. The Act will come into force by regulation of the Lieutenant Governor in Council.

Introduction

On May 1, 2023, the BC government tabled Bill 27,  the Money Judgment Enforcement Act (“MJEA”). Long in the making, the MJEA is designed to modernize and simplify the enforcement of money judgments in BC. This legislation targets many of the most common problems with the enforcement process, including: the difficulty of seizing certain types of assets, the need for repeat garnishing orders, and the necessity of going to court for most enforcement matters. While it brings major changes, MJEA will be largely operationalized by existing entities, including court bailiffs who are defined in the new act as “enforcement officers.”

Universal Exigibility

The most fundamental change that the MJEA will introduce is the presumption of universal exigibility. This means that by default, every type of property in which a debtor has an interest may be subject to an enforcement charge, unless the MJEA provides otherwise. This universal rule applies to all manner of personal or real property and marks a significant change from previous legislation, which enumerated specific categories of property that were available for the satisfaction of judgments.

The Money Judgement Enforcement Registry

The biggest structural change that the MJEA will introduce is the creation of the Money Judgement Enforcement Registry (the “Registry”). The Registry will create a universal system for registering judgements that is both public and searchable. Upon receiving a money judgment, a creditor will be able to register it within two years by submitting a judgment statement to the registrar. Once in the Registry, a money judgment can be searched to obtain information such as the amount owing. Judgments that have been registered can also be enforced through instructions to an enforcement officer, eliminating applications to garnish wages or bank accounts and for orders for seizure and sale.

Simplification of the Garnishment Process

As with any enforcement action under the MJEA,  to garnish wages or bank accounts the creditor need only provide instructions to do so to an enforcement officer. Once instructed, the enforcement officer may seize an account by giving notice of seizure to the account debtor. When it comes to garnishing wages, this process works indefinitely; rather than filing repeated applications to Court, once notice of seizure is given, wages will continue to be garnished from the account debtor until the notice of seizure is withdrawn.

Improved Procedures for Seizing Problem Assets

Another area of reform introduced by the MJEA is improved procedures for seizing assets that were difficult or impossible to seize under the previous regime. The MJEA creates new procedures for seizing crops, fixtures, intellectual property, interests under lease, and even trade secrets in certain situations. It also modernizes the procedures for seizing securities and futures contracts.

Mechanisms for the Seizure of Co-owned Real Property

The MJEA creates new procedures for the seizure of co-owned property. Under the MJEA, enforcement officers may seize co-owned property in its entirety and dispose of it. Seizure of co-owned property is based on a new presumption that debtors have equal co-ownership of co-owned property. There are two protections for non-debtor co-owners under the MJEA; they may get an order from the court that the debtor’s interests are less that the presumed equal interest, or they may purchase the debtor owner’s co-ownership interest. The MJEA also introduces mechanism to convert joint tenancies into tenancies in common, for the purpose of disposing of seized property.

Distributable Funds

The MJEA also creates a standard process for the distribution of funds from the seizure of assets. Once an enforcement officer receives money toward a debt, a distributable fund will be created and the funds will be distributed to the creditors in accordance with the MJEA. All monies must go through this distributable fund.

Conclusion

The MJEA will mark a major overhaul to the system of court order enforcement in BC, and is expected to be brought into force through regulation in 2025. For more information or for advice regarding specific concerns about the MJEA or court order enforcement generally, contact Daniel Barber, dbarber@singleton.com.

Brian Palaschuk, summer student, assisted with the preparation of this article.

For more information, please contact: