Obtaining Judgment in a Debt Claim

• Author: McKay White
• Pages: 65-97

4

Obtaining Judgment

inaDebt Claim

Learning Outcomes

After reading this chapter, you will be able to:

• explain the prerequisites for an unsecured creditor

to enforce a debt;

• assist in obtaining default judgment;

• assist in obtaining summary judgment;

• use the Civil Enforcement Act to enforce foreign

judgments within Alberta;

• fill out, file, and register a Writ of Enforcement;

• get information about a debtor’s finances for

enforcement of a judgment.

Relevant Legislation and Case Law

Alberta Rules of Court, Alta Reg 124/2010

Civil Enforcement Act, RSA 2000, c C-15

Civil Enforcement Regulation, Alta Reg 276/1995

International Conventions Implementation Act, RSA

2000, c I-6

Michel v Lafrentz, 1998 ABCA 231

Personal Property Security Act, RSA 2000, c P-7

Personal Property Security Registration, Alta Reg 95/2001

Provincial Court Act, RSA 2000, c P-31

Provincial Court Civil Procedure Regulation, Alta Reg

176/2018

Reciprocal Enforcement of Judgments Act, RSA 2000,

cR-6

Stark v Stark (1977), 12 AR 353

Stefanyk v Sobeys Capital Incorporated, 2018 ABCA 125

65

Introduction 66

Preconditions for Enforcement 66

Methods of Obtaining Judgment 67

Obtaining Default Judgment in a Debt

Claim 68

Obtaining Default Judgment in the Court of

Queen’sBench 69

Obtaining Default Judgment in the Provincial

Court 78

Obtaining Summary Judgment in a Debt

Claim 80

Enforcing Foreign Judgments 83

The Reciprocal Enforcement of Judgments

Act 84

The International Conventions Implementation

Act 84

Obtaining an Alberta Judgment on a

ForeignJudgment 85

Writs of Enforcement 85

What Is a Writ of Enforcement? 86

Filling Out a Writ of Enforcement 87

Getting Information 93

Four Searches 93

Getting Information from the Debtor 94

Chapter Summary 96

Key Terms 97

Review Questions 97

© [2022] Emond Montgomery Publications. All Rights Reserved.

Introduction

In this chapter, we address practice for representing unsecured creditors and other

creditors that need a judgment to compel a debtor to pay its debt. These are creditors

that have no statutory preference granting special relief, or the collateral securing the

debt is insufficient to satisfy it. As a result, they cannot legally compel the debtor to

pay the entire debt until obtaining a judgment from the court.

This chapter walks us through the steps to help these creditors arrive at the point

where they can take advantage of the plethora of legal debt enforcement mechan-

isms. We’ll start with an overview of what a creditor needs for enforcement and how

to get to the enforcement mechanisms. We will explore the different routes to

obtaining a judgment, with emphasis on default judgment and summary judgment.

We’ll also learn what is required to be able to enforce a foreign judgment in Alberta.

Ultimately, the Writ of Enforcement is what grants the creditor access to the

enforcement mechanisms. We will learn what a Writ of Enforcement is, how it works,

and how to complete one. This chapter ends with a discussion of how to get the

information about the debtor’s assets and finances that will maximize the effectiveness

of the Writ of Enforcement and your collection efforts.

Preconditions for Enforcement

A creditor wants to be paid. Regardless of what type of creditor it is (i.e., unsecured,

secured, or preferred), the creditor cannot compel a debtor to pay without legal

authority to do so. Secured creditors have limited authority to compel payment by

virtue of the security agreement with the debtor. We will learn how secured creditors

can use this authority in Chapters 7 and 8. Some preferred creditors, such as landlords,

also have limited statutory authority to compel payment without need for litigation.

This is discussed in Chapter 10.

Outside of those limited situations, a creditor, including all unsecured creditors,

must have a judgment confirming its legal right to collect the debt before being able

to compel payment. If the debtor’s obligation to pay is based in contract, all of the

creditor’s rights against the debtor come from that contract. The debtor’s failure to pay

is a breach of that contract. If the contract does not grant the creditor a security

interest in the debtor’s assets, the creditor’s only remedy is to sue for breach of con-

tract. Just as a victim of negligence cannot compel compensation from the defendant,

neither can a creditor compel compensation from the debtor until judgment is given.

It works similarly when the debtor’s obligation to pay is based in law, or statute. The

debtor’s failure to pay is a breach of statute. Unless the statute grants alternative

remedies (in which case the creditor is a preferred creditor), the creditor’s only remedy

is to sue for violating the statute. Again, the creditor cannot compel payment without

a judgment.

The Civil Enforcement Act1 (CEA) provides mechanisms for all judgment cre ditors to

compel a judgment debtor to pay as ordered in the judgment. Regardless of whether

the judgment creditor sued for negligence, defamation, misrepresentation, or debt, all

judgment creditors are unsecured creditors with the right to use the CEA to collect

from their judgment debtors.

1 RSA 2000, c C-15.

66 DEBTOR–CREDITOR AND COLLECTIONS LAW IN ALBERTA

© [2022] Emond Montgomery Publications. All Rights Reserved.

The judgment from the court is the starting point for enforcement. Under section

25.1(1) of the CEA, upon obtaining a judgment you may require the court clerk of the

judicial centre where the judgment was received to issue a Writ of Enforcement. Sec-

tion 2(c) states, “on registration of a writ in the Personal Property Registry, that writ

may be enforced, and any civil enforcement proceedings in respect of that writ may be

carried out, anywhere in Alberta.”

Your goal when representing a creditor without contractual or statutory remedies

is to obtain a judgment and Writ of Enforcement on the creditor’s behalf. You can then

avail yourself of all the collection enforcement mechanisms in the CEA. As we will see

in the next two chapters, the two primary enforcement mechanisms are:

1. seizure—CEA, Parts 5, 6, and 7; and

2. garnishment—CEA, Par t 8.

Seizure permits the creditor to seize the debtor’s assets, sell them, and apply the

proceeds to the debt. We will cover this process in detail in Chapter 5. Garnishment

enables the creditor to require third parties who owe money to the debtor, such as an

employer, to pay the money to the creditor instead. Chapter 6 explains how to use

garnishment.

Before these processes can be employed, however, you need to obtain a judgment

on behalf of your client and register a writ based on that judgment. The following

sections will explain how to get there.

Methods of Obtaining Judgment

Having judgment as your goal does not necessarily mean a trial. There are faster and

cheaper methods of obtaining a judgment. Understanding the type of debtor you face

on the other side will help you determine the method you are likely to seek.

If you have a cooperative debtor who admits to owing the money and wants to

avoid the costs of further legal action, the debtor may agree to a consent judgment.

A consent judgment is essentially a settlement agreement endorsed by the court. With

that endorsement, it has the same standing and effect as any other type of judgment.

You can use the judgment to obtain a Writ of Enforcement from the court clerk.

Without the court’s endorsement, the settlement agreement is simply another

contract. It does not entitle your client to a Writ of Enforcement, which means there is

no opportunity to use the CEA’s mechanisms for compelling payment. If the debtor

does not honour the settlement agreement, you will have to renew litigation. If you

have reasonable concern that the debtor will not honour the settlement, you should

require a consent judgment.2

If you are suing in the Court of Queen’s Bench and the debtor files a Statement of

Defence that has no legal merit (i.e., you can easily prove it is invalid), you will likely

apply for summary judgment under Rule 7.2 of the Alberta Rules of Court3 (Rules of

Court). This is an application to a judge or a master made primarily on affidavit evi-

dence. If you succeed in proving the defence has no merit, the Court will grant judg-

ment in your client’s favour.

2 As an alt ernative, you could require the debtor to pr ovide collateral for the debt. This w ill make your client a

secured creditor, able to reali ze on the collateral without a judgment .

3 Alta Re g 124/2010.

CHAPTER 4 OBTAINING J UDGMENT INADEBT CLAIM 67

© [2022] Emond Montgomery Publications. All Rights Reserved.