Garnishing Funds and Freezing Assets

Garnishment

If you have obtained a judgment against a debtor, you can attempt to collect the money owed to you by garnishing the debtor’s bank account or garnishing money owed to the debtor by an employer or other third party.

To do so, you must complete and file a requisition for garnishment and affidavit. The Court will then issue a notice of garnishment, which must be served on the debtor and the bank, employer, or other paying party (the garnishee). You must also provide the garnishee with a blank garnishee’s statement.

For proceedings before the Civil division of the Superior Court of Justice, the garnishee must pay any debt owed to the debtor (such as funds in a bank account or wages) to the sheriff unless the garnishee disputes liability or raises exemptions through a garnishee’s statement. The judgment debtor can also bring a motion for a garnishment hearing to object to the garnishment.

Within one month, the sheriff is then required to distribute the funds to the garnishor, and any other judgment credits who have registered writs with the sheriff, under the Creditors’ Relief Act, 2010, SO 2010, c 16, Sch 4.

In Small Claims Court proceedings, the garnishee pays the garnished funs to the Court clerk unless the garnishee disputes the garnishment. The judgment debtor can also bring a motion for a garnishment hearing to object to the garnishment. Otherwise, the Court clerk will distribute the garnished funds to the garnishor and any other judgment creditor who has obtained a notice of garnishment.

If garnishing a bank account, the bank must be served at the branch where the debtor banks.  If it is a joint account, you can only garnish 50% of the funds in the joint account. Some funds cannot be garnished, such as employment insurance or social assistance money.

If garnishing the debtor’s wages, the employer can only garnish 20% for commercial debts.

Garnishment notices can be renewed before they expire.

For other options to collect on a judgment, see Collecting a Judgment.

Freezing Assets Before Judgement

If you are concerned that a defendant will dissipate assets before you can obtain and collect on a judgment, you can consider bringing a motion to freeze the defendant’s assets, known as a Mareva injunction.

The threshold to obtain a Mareva injunction is high. The moving party must show:

• a strong prima facie case, meaning that the case has a substantial likelihood of success;
• evidence that the defendant has assets in the jurisdiction;
• a serious risk of removal or dissipation of assets with the intent to avoid judgment. This risk can be inferred from fraud, but fraudulent conduct is not necessarily necessary;
• irreparable harm to the plaintiff if the injunction is not granted, meaning that the moving party cannot be compensated through damages and costs;
• the balance of convenience favours the injunction;
• an undertaking to pay damages, often supported by security.