Judgment: Not always the end of the road to recovery
December 12, 2014
Many litigants are under the impression that once a judgment is obtained, payment of the debt owed will follow shortly thereafter. However, that is not necessarily the case. As such, we will examine what it means to obtain default judgment and what steps may need to be taken in order to recover the debt owed to the Plaintiff/Creditor.
Once your claim is served on a Defendant, the Defendant has a prescribed time under the Rules of Civil Procedure in which to serve and file their Statement of Defence. If a Defendant fails to serve and file a Defence pursuant to the Rules, a Plaintiff may note the Defendant in default. The consequences of noting a Defendant in default, is that the Defendant is deemed to have admitted the truth of the allegations made in the Statement of Claim. Thereafter, the Defendant is prohibited from delivering a Statement of Defence or taking any other step in the proceeding without leave of the Court, which step would usually be a motion to set aside the noting in default.
After noting a Defendant in default, the Plaintiff can move to have the Registrar sign a Default Judgment against the Defendant in respect of certain claims; for example, claims in respect of a monetary debt including interest. However, while the Defendant is required to pay the amount owed pursuant to the Default Judgment/Order, it is not always so easy to actually obtain payment from the Defendant.
Accordingly, if payment is not forthcoming from the Defendant, it may be necessary to arrange an Examination in Aid of Execution, also known as a Judgment Debtor Examination. Pursuant to the Rules, a creditor is entitled to examine a judgment debtor in relation to: the reason for his/her nonpayment or nonperformance under the Order; the debtor’s income and property; any disposal of assets either before or after the Order; and, the debtor’s means by which to satisfy the Order. The purpose of a Judgment Debtor Examination is to obtain enough information about the assets of a creditor in order to take other enforcement steps to recover the debt owed to him/her including, but not limited to, filing a Writ against the debtor to prevent the disposal of property without first satisfying the Order, or to seize property of the debtor and/or garnish the debtor’s bank accounts or wages.
While a Default Judgment means that as a creditor you are entitled to payment of a debt, it does not mean the debtor is prepared to cooperate in providing payment of your judgment, and as such, the above steps are often required to enforce the Judgment/Order.