You have won your court case. Congratulations! However, it doesn’t mean that you’ll get your money automatically. Obtaining a court order it is not a guarantee of payment, actually, far from it. Sometimes, it’s just the beginning of a long process with unknown results.

Debtor and Creditor

If you’re the plaintiff in a Small Claims Court case and you win, you become a creditor. The person you sued becomes the debtor.

Obtaining a judgment gives you legal tools to help you collect the money you are owed under the court order. But it’s your responsibility to enforce (attempt to collect) the court order and it’s up to you to commence the different enforcement procedures available.

The orders of boards and tribunals have to be filed and enforced in the Small Claims Court

In Ontario, the orders of some boards and tribunals can be filed and enforced in the Small Claims Court (orders under the Residential Tenancies Act, Employment Standards Act, and the Provincial Offences Act). Once the order is filed, for enforcement purposes, the order is treated as an order of the court.

However, in order to file the order in the Small Claims Court, you will have to find out your debtor residential address to be able to serve them.

What you can do to collect the money

In order for you to collect, the debtor must have one of the following:

• bank account or an employment income that can be garnished
• assets that can be seized and sold

Garnishment

If you have not received payment from your debtor, you can demand money owed to the debtor by someone else. This is called garnishment. Most often, people garnish wages or bank accounts.

If you are garnishing the debtor’s bank accounts, you must know the name of the bank and his or her account number. If you are garnishing wages, you must know the correct legal name and address of the employer. If the name of the employer is not correct, the employer may have a case for ignoring the order.

The rules on garnishment are strict and have to be followed carefully. Section 7 of the Wages Act restricts the amount of wages that can be garnished. In addition, there are some exemptions from garnishment. For example, employment insurance, social assistance and pension payments cannot be garnished, even if the funds have been deposited into an account at a financial institution.

Writ of seizure and sale

As a creditor, you can ask the enforcement office to take specific personal possessions belonging to the debtor and sell them at public auction so that the money can be used to pay the judgment debt. The costs of this procedure can be relatively high. You have to realize the risks of paying these costs with no chance of recovery if the debtor does not have any goods worth seizing and selling. It is a good idea to confirm beforehand whether this procedure will be worthwhile.

Legislation

Rule 60 of the Rules of Civil Procedure deals with the enforcement of orders in civil matters before the Superior Court of Justice.

Garnishment

• Courts of Justice Act, Ontario Regulation 258/98, Rules of the Small Claims Court
• Wages Act, R.S.O. 1990, CHAPTER W.1

Writ of Seizure and Sale

• Courts of Justice Act, Ontario Regulation 258/98, Rules of the Small Claims Court

Collection Agencies

• Collection and Debt Settlement Services Act, R.S.O. 1990, Chapter C.14

Unpaid rent

• If your tenant is still living in your rental unit: If your tenant is still living in your rental unit, you will have to proceed to the Landlord and Tenant Board (LTB) to obtain an order of eviction and an order for the arrears of rent. As of September 1, 2021, section 88.2 of the Residential Tenancies Act (RTA) allows landlords to file an application for failure to pay for utility costs with the LTB up to one year after the tenant moves out of the rental unit. The tenant must have moved out of the rental unit on or after September 1, 2021.
• If your tenant is no longer living in your rental unit: When the tenant vacates the unit, the RTA no longer applies. Rule 60 of the Rules of Civil Procedure deals with the enforcement of orders in civil matters before the Superior Court of Justice. However, in order to file this application, you will have to find out their new residential address to be able to serve them.

How to get financial information about your debtor

If you aren’t sure about the debtor’s financial situation, you can ask for an examination hearing. At the examination hearing, the debtor will give you and the court information about their financial situation, assets, and ability to pay. The judge may make an order for payment at the hearing.

If the debtor doesn’t attend the examination hearing, or attends the hearing, but refuses to co-operate, a person can be found in contempt of court and can be sent to jail or fined.

The steps you can take to collect your money

Let’s summarize.

If you have won your case in Ontario Small Claims Court and the defendant has not voluntarily paid the judgment amount, you will need to take steps to enforce the judgment and collect your money. Here are some common methods of enforcing a judgment in Ontario:

1. Request for payment: The first step to start with is often a simple written request for payment. You can send a letter to the debtor asking for prompt payment and suggesting some ways for it. Keep a record of the payments you receive. If the letter asking for payment is unsuccessful and/or you are unable to reach a mutually satisfactory agreement with the debtor, you will have to take other steps to enforce your judgment. Generally, the faster the creditor acts, the better the results will be.
2. Examination Hearing: You can request an examination hearing, where the debtor is required to provide details of their income, assets, and liabilities. This information can help you determine their ability to pay and identify potential sources for collection.
3. Garnishment: If the debtor has a regular income, you can apply to the court for a garnishment order. This allows you to collect the judgment amount directly from their wages or salary through their employer. The court will provide the necessary forms and instructions for this process.
4. Writ of Seizure and Sale: If the debtor has valuable assets, such as real estate, vehicles, or other valuable property, you can apply for a writ of seizure and sale. This allows the court-appointed sheriff to seize and sell the assets to satisfy the judgment debt.
5. Examination in Aid of Execution: If you believe the defendant has hidden or undisclosed assets, you can request an examination in aid of execution. This allows you to question the defendant under oath about their assets and financial situation. If they fail to comply with the examination, they may be held in contempt of court.
6. Filing a Notice of Writ: You can file a notice of writ against the defendant’s personal property, such as bank accounts or other assets. This freezes the assets, and you can then apply to the court for an order to have the funds released to satisfy the judgment.
7. Registration on the Personal Property Security Register: If the defendant has personal property used for business purposes, you can register your judgment on the Personal Property Security Register. This gives you a priority claim over the defendant’s personal property, allowing you to potentially seize and sell it to satisfy the judgment.
8. Negotiated Settlement: In some cases, you may be able to negotiate a payment arrangement or settlement with the defendant. This can be done directly between the parties or with the help of a mediator or collection agency.

It’s important to note that the enforcement process can be complex, and the success of collection depends on the debtor’s financial situation and available assets. It’s advisable to consult with a legal professional or seek guidance from the Ontario Ministry of the Attorney General for specific advice on enforcing your judgment and collecting your money.

Bottom line: If you win the case, the court will ask the person or business you are suing to pay you. If that person doesn’t pay you, you can start a legal process to collect the money or property owed to you. If you lose, you might owe money to cover the costs of the case.

By Carlos Perdomo

Licensed Paralegal