Creditors' Relief Act, 2010, S.O. 2010, c. 16 , Sched. 4

• Jurisdiction: Ontario

Creditors’ Relief Act, 2010

S.O. 2010, CHAPTER 16
Schedule 4

Consolidation Period: From June 8, 2023 to the e-Laws currency date.

Last amendment: 2023, c. 9, Sched. 12.

Definitions

1 (1) In this Act,

“county” means a county or district described in section 151 of the Courts of Justice Act; (“comté”)

“judge” means, in respect of a county in which a sheriff carries out duties under this Act, a judge of the Superior Court of Justice who sits in that county. (“juge”) 2010, c. 16, Sched. 4, s. 1 (1).

Application of Execution Act definitions

(2) Terms defined in the Execution Act have the same meaning in this Act. 2010, c. 16, Sched. 4, s. 1 (2).

No priority among execution or garnishment creditors

2 (1) Except as otherwise provided in this Act, there is no priority among creditors by execution or garnishment issued by the Superior Court of Justice, the Family Court of the Superior Court of Justice and the Ontario Court of Justice. 2010, c. 16, Sched. 4, s. 2 (1).

Exception, Small Claims Court

(2) Subsection (1) does not affect the priority of,

(a) a creditor by garnishment issued under the Small Claims Court Rules made under the Courts of Justice Act; or

(b) a creditor by writ of seizure and sale of personal property issued under the Small Claims Court Rules made under the Courts of Justice Act. 2010, c. 16, Sched. 4, s. 2 (2).

Exception, support or maintenance orders

(3) A support or maintenance order has the following priority over other judgment debts, other than debts owing to the Crown in right of Canada, regardless of when an enforcement process is issued or served:

1. If the maintenance or support order requires periodic payments, the order has priority to the extent of all arrears owing under the order at the time of seizure or attachment.

2. If the support or maintenance order requires the payment of a lump sum, the order has priority to the extent of any portion of the lump sum that has not been paid. 2010, c. 16, Sched. 4, s. 2 (3).

Support orders rank equally

(4) Support and maintenance orders rank equally with one another. 2010, c. 16, Sched. 4, s. 2 (4).

Priority if execution creditors include the Crown

(5) If there are no support or maintenance orders against a debtor and the Crown is an execution creditor, the priority among the execution creditors and creditors by garnishment is in the following order:

1. The Crown in Right of Canada, with respect to writs of execution filed on its behalf, with all such writs ranking equally with one another.

2. The Crown in right of Ontario with respect to writs of execution filed on its behalf, with all such writs ranking equally with one another.

3. All other creditors by execution or garnishment. 2010, c. 16, Sched. 4, s. 2 (5).

If federal Crown waives priority

(6) If the Crown in right of Canada, as represented by the Minister of Justice, provides a written waiver of the priority of the Crown in right of Canada with respect to a judgment debt for which the Crown in right of Canada would otherwise have priority, the sheriff may reassign to a support or maintenance order priority over the judgment debt, regardless of when an enforcement process is issued or served with respect to that judgment debt. 2010, c. 16, Sched. 4, s. 2 (6).

Identification re support or maintenance order

(7) A process for the enforcement of a support or maintenance order must be identified on its face as being for support or maintenance. 2010, c. 16, Sched. 4, s. 2 (7).

Garnishment, attachment of debt to be for benefit of all creditors

3 (1) A creditor who attaches a debt by garnishment the proceeds of which are paid to the sheriff is deemed to do so for the benefit of all execution creditors of the debtor as well as his or her own benefit. 2010, c. 16, Sched. 4, s. 3 (1).

To which sheriff payment is made

(2) Payment of the debt is to be made to the sheriff for the county in which the debtor resides or, if the debtor resides outside the Province, to the sheriff for the county in which the proceeding that gave rise to the judgment was commenced. 2010, c. 16, Sched. 4, s. 3 (2).

Exception re garnishment in specified courts

(3) This section does not apply to a debt attached by garnishment in the Small Claims Court, the Ontario Court of Justice or the Family Court of the Superior Court of Justice unless, before the amount recovered by garnishment is actually paid to the creditor, an execution against the property of the debtor is filed with the sheriff for the county. 2010, c. 16, Sched. 4, s. 3 (3).

Money paid into specified courts

(4) When money recovered by garnishment is paid to the clerk of the Family Court of the Superior Court of Justice, the Ontario Court of Justice or the Small Claims Court, the sheriff may, on the request of an execution creditor, demand and receive the money from the clerk of the court for the purpose of distributing it to judgment creditors in accordance with this Act. 2010, c. 16, Sched. 4, s. 3 (4).

Right of attaching creditor to share with other creditors

(5) If a sheriff receives money under subsection (1) or pursuant to a demand under subsection (4), the garnishment creditor is entitled to share in the distribution of the money in respect of his or her claim against the debtor. 2010, c. 16, Sched. 4, s. 3 (5).

Limit on share of funds

(6) The garnishment creditor’s share of the money referred to in subsection (5) shall not exceed the amount recovered by the garnishment proceedings referred to in subsection (1) or from the clerk of the court under subsection (4), unless the garnishment creditor has filed a writ of execution with the sheriff before the money is distributed. 2010, c. 16, Sched. 4, s. 3 (6).

Rights of creditors re money received under execution, garnishment, etc.

Sheriff to record receipt of money

4 (1) On receipt of money under an execution, by garnishment or in respect of a debt that has been attached or sold under section 15 of the Absconding Debtors Act, the sheriff shall promptly record the amount received with respect to the debtor and the date of receipt. 2010, c. 16, Sched. 4, s. 4 (1).

Right of creditors to share

(2) Subject to subsections (4) and (5) and any claims having priority under section 2, the money received shall be shared proportionately among,

(a) all execution creditors whose executions were filed with the sheriff at the time the sheriff received the money or who filed an execution with the sheriff within a one-month period after the date the sheriff received the money; and

(b) the garnishment creditor, if any of the money was received by reason of garnishment proceedings, but the garnishment creditor may share only to the extent of the amount received by reason of the garnishment proceedings unless the garnishment creditor is also an execution creditor referred to in clause (a). 2010, c. 16, Sched. 4, s. 4 (2).

If sheriff receives additional money under same execution

(3) The following rules apply if the sheriff receives additional money from the debtor’s property or receives additional money in respect of a debt of the debtor that has been attached or sold under the same execution from which money was originally received and recorded under subsection (1):

1. If the money is received within the one-month period described in subsection (2), the sheriff shall promptly record the amount and the date the money is received and shall link that information to the record of the money originally received.

2. The additional money referred to in paragraph 1 shall be distributed under subsection (2) with the money originally received.

3. If the additional amount is received after the end of the one-month period described in subsection (2), the receipt of the additional money is considered to be unrelated to the original receipt of money and is dealt with under subsections (1) and (2) as if it were a new and unrelated receipt of money. 2010, c. 16, Sched. 4, s. 4 (3).

When two-month period applies

(4) If money referred to in subsection (1) is the proceeds of the property of an absconding debtor against whom an order of attachment was issued under the Absconding Debtors Act, every reference to “one-month period” in clause (2) (a) and subsection (3) is to be read as a reference to “two-month period”. 2010, c. 16, Sched. 4, s. 4 (4).

Limit on amount to be distributed

(5) The amount to be distributed to creditors described in clauses (2) (a) and (b) is subject to the following:

1. The retention of any amount under section 11 by reason of an objection to the proposed scheme of distribution under that section.

2. The payment of the costs of the creditor under whose execution an amount for distribution was received.

3. The payment to a creditor of the costs of garnishment proceedings...