H. Garnishment of Deposits

• Author: M.H. Ogilvie
• Profession: LSM, B.A., LL.B., M.A., D.Phil., D.D., F.R.S.C. Of the Bars of Ontario and Nova Scotia Chancellor's Professor and Professor of Law, Carleton University
• Pages: 244-244

Page 244

The Bank Act provides that court orders in relation to an interest in any deposit account binds only property in the possession of a bank belonging to a person at the branch where the order is served and affects only money owing to that person on deposit at that branch.¹⁰⁶

Since a garnishment is a court order, this requirement means that a garnishment order must be directed to a specific branch of a bank at which the debtor is believed to have funds on deposit, and that each branch must be separately garnisheed. The bank is required to comply with a garnishment order; otherwise it would be in contempt of court, but where an order is served at the same time as the presentment of cheques, a bank is entitled to reasonable time to consider the situation.¹⁰⁷

A bank has a duty to satisfy itself as to the identity of the garnishee, who may keep an account under a trade name, although sued in their own name.¹⁰⁸

Where the account garnisheed is a trust account, the bank should seek directions from the court as to payment.¹⁰⁹

[106] Bank Act, above note 1, s. 462(1).

[107] Todd v. Union Bank of Canada (1887), 4 Man. R. 204 (C.A.). A bank cannot act on a pre-judgment garnishee order: Royal Bank of Canada v. G.L.B. Holdings Ltd. (1998), 171 Sask. R. 139 (Q.B.).

[108] Smith v. Gautschi, [1917] 2 W.W.R. 225 (B.C.C.A.).

[109] Garon Realty & Insurance Ltd. v. James, [1978] 6 W.W.R. 694 (B.C.S.C.).