Bill 27 Money Judgment Enforcement Act (“MJE Act”)
Bill 27 contains a new wholesale change to the way judgments are registered and enforced in BC. It will be proclaimed in 2025. Essentially it: (i) treats a judgment like a PPR registration (ii) permits a bailiff to seize and sell land (iii) replaces garnishment with seizure, and (iv) permits the appointment of a Receiver to enforce a judgment if it cannot be enforced otherwise.
Under the MJE Act, judgments must be registered in a Judgement Registry under the PPSA regime, to be enforceable under that Act [s 14] and/or the Land Title Act.
Registration of a judgment results in an enforcement charge against (i) all personal property of the judgment debtor, or (ii) the property that is specified in the registration. It is recommended to register by serial number.
Court bailiffs have a new expansive role and are called “Enforcement Officers – “EO” herein.
Priority [s 36]
An enforcement charge has the same priority as a perfected security interest would have under the Personal Property Security Act effective at the time that the enforcement charge was created. In that sense a judgment is now like a security agreement. That means if a lender lends and registers a security agreement after a registered judgement then the judgement will rank first. Registrants are deemed to have knowledge of a judgement if a search would reveal it.
But PMSI and Inventory charges that are registered after the judgment, will have priority over a prior registered judgment [s 36 (4)]. The same principle applies to mortgages of land which will have priority over prior registered judgments if the money was used to buy the land and they are registered concurrently.
Effect on Bankruptcy
Section 39 of the MJE Act preserves the current status where all judgments rank as unsecured creditors in Bankruptcy. There will then be added advantages for secured Creditors to apply for a bankruptcy order where there are prior ranking registered judgments.
LTO Registration
A creditor can also choose to register in the Land Title office. But a money judgment must now be registered in the Judgment Registry first [s 28]. The court may order registration over land interests, which are owned by the debtor but held in another name in the LTO. Under section 68(3) an EO may seize land by giving notice.
Under section 44, the EO can delegate the power to give notice to the creditor with the effect that, with the agreement of the EO, a Creditor (presumably through their lawyer or agent) can seize land by giving notice.
Registration is effected by filing a “judgement statement” which is filed under regulations yet to be published. A money judgment must be registered within two years of the date of the order or a later acknowledgement of debt.
Debtors will need to file notice of the transfer of title and Creditors will need to file notice of transfer of their judgment.
Renewal Section 82-3 of the Court Order Enforcement Act are the current source of the registration and expiry regime whereby a land registration for judgment expires after two years. We see no provision in the MJE Act for expiry after two years for a land registration. Currently section 82-3 of the Court Order Enforcement Act remains in force. The legislator’s Consultation Paper leads one to believe that either or both of (i) the two year (land) expiry or, (ii) the ten year (judgment) expiry, could be eliminated.
New Role of Bailiffs
Bailiffs have an elevated status under the MJE Act. They are now the specific “civil enforcement officers” who can enforce a judgement. A Creditor may give enforcement instructions to an EO in a form which we expect to be clarified on receipt of published regulations. An EO has new, broad powers [s 43]. There are powers of forced entry and use of permissible reasonable force on (i) commercial property; and, (ii) private property with a court order [s 42(5)].
Garnishment
An EO can seize accounts including seizure of income [s 99] thereby avoiding (i) the traditional need to file garnishment orders in court; and (ii) the conditions which have been an impediment to garnishment in the past. Book debts will be included.
Information
Debtors may be required to provide disclosure of their assets and liabilities [s 53]. Lawyers and bailiffs are now eligible representatives to obtain Information [s 54] in “identification documents” yet to be prescribed [s 51]. Cross examination of the debtor remains in the law; [s 54] with specified applications to court [s 56-9]; and, applicable disincentives for costs [p 60-2].
Procedures Part 8 and 9 of the MJE Act are a catalogue of instructions to the EO on enforcement restrictions, powers and procedures. Chattels are disposed of in the same was as in the PPSA [s 138]. Land leases may be subject to seizure so we may see land lease terms change. Section 90 permits seizure even where the lease provides that it terminates on seizure.
Discharges
On payment of the judgment, discharges are to be filed by a Creditor within 30 days of the payment. If the Creditor does not discharge, then the debtor may notify the EO who may apply to effect the discharge.
For more information on the MJE Act and how it may impact you, please contact Dennis Fitzpatrick at [email protected]
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Dennis Fitzpatrick Associate Counsel |Financial Services Vancouver |
This article is intended to be an overview of the law and is for informational purposes only. Readers are cautioned that this article does not constitute legal or professional advice and should not be relied on as such. Rather, readers should obtain specific legal advice in relation to the issues they are facing.