Hansard Blues

Committee of the Whole –

Section A

Draft Report of Debates

The Honourable Raj Chouhan, Speaker

4th Session, 42nd Parliament

Tuesday, October

17, 2023

Afternoon Sitting

Draft Transcript — Terms of Use

PROCEEDINGS IN THE

DOUGLAS FIR ROOM

Committee of the Whole House

BILL 27 — MONEY JUDGMENT

ENFORCEMENT ACT

(continued)

The House in Committee of the Whole (Section

A) on Bill 27; R. Leonard in the chair.

The committee met at 2:03 p.m.

On clause 54.

The Chair: Good afternoon, Members. I call Committee of the Whole on Bill 27, the Money Judgment

Enforcement Act.

We are on clause 54.

M. de Jong: So we've talked…. In following through the legislation, the judgment creditor gets

their judgment from the court or tribunal. They register; they explore the enforcement

options. But frequently a key part of this is discovering, determining what, if any,

exigible assets the judgment debtor has.

That brings us to

part 7, aptly entitled "Obtaining Information."

[2:05 p.m.]

I've asked us to spend a moment on clause 54 because it occurs to me that that becomes

a fundamental part of obtaining that information: the ability to provide notice to

an individual and, as the

section points out, not just always the judgment debtor

— although that would presumably be a key part — but others as well.

Can the Attorney explain what the intention here is in terms of the practical process?

Are we talking about a discovery exercise that involves bringing the person…?

For the sake of this discussion for the moment, let's talk about the judgment debtor,

since that's probably the obvious person to pose questions to and obtain information

from.

Where will this happen? Is there to be the equivalent of a court reporter or a recording

of the proceedings? Who pays? I know in a moment we get to witness fees, but insofar

as there are costs associated with that discovery exercise, who is going to bear them?

Hon. N. Sharma: This builds from an existing process but changes it in a few ways.

The first question — I think there was a three-parter to the question. The first one

is where, and it's tied to the second question. It could happen anywhere, any office.

Also, the CEO is, under

section 59, empowered to administer oaths, so could act as

the court reporter in that regard, therefore lowering the costs and the processes

associated with this part.

The third question was who pays.

[2:10 p.m.]

We talked extensively before the break about the process that occurs in terms of the

prescribed fee to administer an arrangement that's made related to other potential

fees, and that would be captured under this section.

M. de Jong: Thanks to the Attorney. The prerequisite for this to happen, as I understand it, is

firstly a request for a written disclosure statement and then in circumstances where

the judgment creditor wishes to explore further the option to call in either the judgment

debtor or someone else as provided for in this part of the legislation….

Is there a threshold that the judgment creditor must meet? I guess it's a two-part

question. Is there a threshold the judgment creditor must meet to bring in and question

the judgment debtor, and is there a threshold to call in and question a third party

for similar purposes?

Hon. N. Sharma: Okay. So the order in which the member described it as a written disclosure being

the prerequisite to this was correct. If you see in subsection 54(3)(b), that's the

threshold described for the question.

Basically, in the opinion of the eligible representative, and that's defined as either

this chief enforcement officer or the lawyer for the creditor, the information and

the statement is insufficient. That's the threshold that would lead to that.

M. de Jong: Is it sufficient in those circumstances for the judgment debtor to hold the reasonable

belief that the written disclosure material the judgment creditor has received does

not represent a complete disclosure, so that it is one thing to question the accuracy

of what is in the written disclosure, but it is frequently the case in these circumstances

that there's often a suspicion that the material doesn't fully disclose all of the

potentially exigible assets.

Hon. N. Sharma: Yes.

M. de Jong: Let's go to 57.

Clauses 54 to 56 inclusive approved.

On clause 57.

M. de Jong: All of these sections, of course, work hand in hand, and I just want to confirm….

[2:15 p.m.]

In 57, we are speaking of an application that a judgment creditor can make to a court.

Of course, that, by definition, becomes a little more complicated.

When we cross-reference 57 with 54, it strikes me that essentially the rule is — and

I'm making a statement, but it is meant to be a question — that insofar as the judgment

creditor is concerned, the judgment creditor has a right, on their own initiative,

to question and examine, discover, the judgment debtor or people associated with a

corporate judgment debtor or a partnership.

The point of departure where they must seek authorization from the court are third

parties who are not either the judgment debtor or directly associated with a corporate

judgment debtor or a partnership. Is that…? I've said that clumsily, probably, but

is that largely the distinction that would require an application being made to the

court?

Hon. N. Sharma: The design of the legislation is really focused on a tiered process, starting with

the least intrusive and escalating. If more, I guess, tools to enforce are needed,

the first one would be the least intrusive. We talked about the questionnaire. The

next one would be examination, which are the questions we discussed. And then there's

another power in there we may get to about the CEO being able to directly go to third

parties that are prescribed in the act.

This

section 57 that we're on right now is an ability to take even the debtor before

a court. That would allow, in the situation where the debtor is…. Nothing has worked,

and you're at this escalated tier of the legislation — for the court to have powers

like contempt to compel in a more direct way. It also allows, like the member suggested,

for there to be third parties that are beyond the ones that are prescribed in this

legislation to be part of the process.

Clauses 57 to 59 inclusive approved.

On clause 60.

[2:20 p.m.]

M. de Jong: This is more a question of practicality referencing the expenses of a person being

examined. I'm just recalling it from my preparatory work. I think the essential rule

here is that if a judgment debtor is to be examined, they're entitled to an amount,

it says here, equal to a witness fee, the equivalent of a witness fee in the Supreme

Court.

Sub (4) then refers to a judgment debtor making an application to the court for tendering

that amount prior to. I'll leave aside the argument. We're dealing with someone who

is a debtor who is presumably being called before the court because they have otherwise

been uncooperative, because that's the tiered system that the Attorney has just pointed

out. We, I suppose, are prepared to accept the proposition that this uncooperative

debtor is of limited means.

I'm not sure what the witness fee is for. I can't remember what the witness fee is.

How practical is that to say to someone, "Well, you can make an application to the

Supreme Court for a witness fee" that I'm guessing is less than $100? Unless I'm misreading

this.

We've got a judgment debtor who's entitled to a witness fee that eventually gets paid.

But if they want to have it paid, it's presumably because they don't have any money.

And if they're going to get it, well, in order to do that, they have to go to the

Supreme Court to apply for it. That just seems a bit impractical.

Hon. N. Sharma: Thanks for that question. I just want to start with the purpose of this particular

provision. It starts with what we believe, through this legislation, is landing on

the side of fairness in this regard.

Remember that we've gotten to the situation where the debtor has to be compelled.

There already were less expensive options for that debtor to have complied with the

demands for information that were put upon them, right? So in this scenario, it's

the view of the…. The policy behind this is that the creditor shouldn't be the one

that's out of pocket to pay for the debtor to have to be compelled to testify in this

scenario.

In that regard, it was thought that we still should have an ability, in the case of

hardship, for that debtor to have an option to make a claim to the court for expenses.

Sometimes these claims could be very complicated and involve a series of judgments

or things like that, so it just gives that person, the debtor, the ability, in the

case of hardship, to seek a court application to not have to pay those fees.

M. de Jong: I was with the Attorney General right up to the final part of her explanation. And

my point is this. Just as a practical matter, wouldn't it make more sense…? I agree,

by the way, with the proposition. At this point, the debtor has chosen not to avail

himself or herself of less intrusive means or has ignored other requirements of this

process.

But if I'm the judgment debtor and I am being compelled to come back to the court,

and presumably, if my situation truly is that I find myself in destitute circumstances,

I'm not going to the Supreme Court. Wouldn't it have made more sense to invest in

the officer who's presumably got conduct of this thing flowing from the registry,

the civil enforcement officer?

I mean, we are talking about a witness fee here, which I think is less than $100.

No one is going to the court for 100 bucks. And if I'm wrong about that, by the way,

please tell me. We're talking about a witness fee. It's less than 100 bucks. No one

is going to the court. Wouldn't it have made more sense to vest that authority in

the civil enforcement officer to make a decision?

[2:30 p.m.]

Hon. N. Sharma: I think what this

section does is it enables some kind of relief in the event of hardship.

Now,the member noted correctly that witness fees…. If it's just one witness fee and

it's not a huge monetary burden and it's not hardship for that debtor, then that's

a different scenario. If it's multiple that this person, this debtor, is facing, multiple

fees, then they may actually reach the threshold of wanting to make an application

to the court to have a determination of hardship.

So it's going to be…. It gives that ability to the person, and every scenario will

be different as this shows up.

Clauses 60 to 63 inclusive approved.

On clause 64.

M. de Jong: The term used in the heading here is "Limitation on examination." It's not a limitation

period. It's a limit on the number of times a person can be examined, and the 12-month

period is noted there.

Here's my question, and the Attorney can explain the rationale behind the decision

to include that 12-month limitation. There are lots of — well, I shouldn't say lots.

There are areas in this legislative construct that impose an obligation on a judgment

creditor to adjust certain information before the enforcement officer when circumstances

change, or they become aware of circumstances.

It also wouldn't be unusual for a judgment creditor, for example, to acquire evidence

and therefore a suspicion that a judgment debtor's circumstances have changed. Sometimes

it could be fairly compelling evidence, like their name suddenly shows up at the land

title office in an ownership capacity or some other instrument.

I get that there's a balancing act here, and it's not about vesting in the judgment

creditor the ability to bring a debtor in five times a week. But 12 months strikes

me. A lot can change in 12 months. I wondered why the Attorney and the drafters didn't

include, perhaps, another threshold relating to the acquisition of additional information

that would trigger the right to bring a person in that wouldn't necessitate again

the very costly exercise of appearing before a superior court justice to seek permission.

[2:35 p.m.]

I think the Attorney probably understands my question. It seems like a long period

of time and a lot can change in the world of a judgment debtor, and the ability for

the creditor to confirm those changed circumstances and act accordingly will be inhibited

by the need to go to the court if they discover this information three months after

the last examination.

Hon. N. Sharma: In answer to the scenario presented by the member, I think we'll start by saying that

we have to think of the process in its entirety and the powers of all the different

actors that exist with or without the examination process.

In the example provided, if there is knowledge after an examination of other property,

then the chief enforcement officer has direct powers to investigate and do things

appropriately, if that evidence is there, without a further examination of the debtor.

There's also an ability to do a new questionnaire to that. If there is further information

you need from the debtor, on that new discovery information, you could do that.

[2:40 p.m.]

The purpose of this

section was really directed towards instances where there are

multiple creditors against one debtor. In that scenario, it would not be efficient

and not make sense if every creditor had to go through the same questionnaire and

examination process with the same debtor. So that information could be used in other

proceedings, and therefore, that debtor wouldn't be put under an examination over

and over again in the 12-month period.

M. de Jong: Thanks. That's helpful. In situations like that, where there are multiple judgment

creditors — not an unusual or fanciful idea — when there is a discovery or an examination,

or whatever term we use in the act, does every judgment creditor have standing to

participate in an examination? They may have different interests with respect to different

assets.

Hon. N. Sharma: Thanks for the question. Nothing prohibits multiple parties from examining together.

You can imagine a lot of scenarios where there may be lawyers representing multiple

creditors. They would give separate instructions to their enforcement officer. But

it would be in their interest to come to agreement or collaborate on that examination.

I'm sure that probably would happen in complex scenarios.

M. de Jong: I think it's the last question on this. I can't remember from reading the section.

For that to happen, is there a statutory obligation to notify…? For a judgment creditor

who is embarking upon an examination of the debtor, is there a statutorily created

obligation to notify other judgment creditors so that they are aware?

I think the Attorney gets my point. If it's a one-shot deal every 12 months and there

are multiple creditors, presumably they would want to know, and then they can make

the choice about whether or not to participate.

[2:45 p.m.]

Hon. N. Sharma: Thank you for that scenario. The power to make regulation for notice is under 214(1)(e),

and that would come in regulation. That's some of the scenarios that we would consider

in terms of notice that's required.

Clause 64 approved.

On clause 65.

M. de Jong: I'll try to wrap this all up into one question, because we had this conversation,

in part, earlier in the proceedings.

I believe

section 65 creates a remedial authority for the court to do certain things

when a person fails to comply with an order deriving from this section. The two things

are to make that person who has failed to comply responsible for the expenses of another

and/or impose a fine not to exceed $5,000.

Is the court's ability to impose a custodial order for contempt a third option, based

on the inherent jurisdiction of at least a superior court? I get the indication that

the Attorney is going to say yes.

Is there any merit in these pieces of legislation, to the Attorney's mind, to saying

that? I realize they are extraordinary orders. They don't happen often. I also realize

that most people aren't poring over the statutes of British Columbia. But having the

option spelled out….

Maybe the Attorney is just going to say: "We don't generally spell out the inherent

jurisdiction of the court." But it strikes me that it would serve at least as a reminder,

perhaps, to lawyers advising more sophisticated judgment debtors that that is something

they need to be alive to and concerned about if they persist in ignoring the orders

of the court.

Hon. N. Sharma: Thanks for the question. On the general construction of statute, the reason to not

put it in specifically under this would be to ensure no confusion in that. It's part

of the inherent jurisdiction of the court, and we expect that every court order would

have that consequence if there's a failure to comply. There's a multitude of statutes

that would have court orders that could lead to possible contempt provisions.

The reason not to do it is to not confuse the legislative

interpretation of this document,

that it's any different, and then maybe put some kind of positive

interpretation or

positive pressure to put that in every time that it's applicable.

Clauses 65 and 66 approved.

On clause 67.

M. de Jong: Just a couple of questions here. The general proposition…. I understand there are

extensive provisions in the legislation dealing with specific assets. I will say,

I don't think we're going to get into detailed questioning of all of those sections,

so I will ask the general question, recognizing that the Attorney may need to qualify

her answer based on some of the other provisions.

The general proposition here is that in the seizure of property in which a judgment

debtor has an interest, the fact that they hold that property jointly with someone,

in the case of land, as a tenant in common or joint tenancy, does not preclude the

property from being seized. There is then a series of steps that follow, but the beginning

proposition is the property may be seized and the joint tenancy or the tenancy in

common or the partnership does not preclude that from happening at the outset. Is

that a fair statement?

[2:50 p.m.]

Hon. N. Sharma: Yes.

M. de Jong: Now I have a really specific question, and I'm not being flippant. I get this in my

constituency office and sometimes down at my credit union, and I hope I can get an

indication from the Attorney.

Bank accounts. With the assistance of her team –– the joint accounts which list two

names with the conjunction "and" and sometimes "or." Is that distinction rendered

irrelevant, or does it maintain some relevance in terms of the proceeds of that account

being exigible if one of the persons on that account is a judgment debtor?

I have said that clumsily. Lending institutions, financial institutions will ask two

people, frequently partners, whether they wish to be listed as "A and B" or "A or

B." It has consequences for who needs to sign on those old things we used to call

cheques. It may have consequences in terms of the exigibility of the proceeds in that

account. Or has that distinction been rendered irrelevant based on the construct here?

Hon. N. Sharma: The member is correct in the sense that this statute and the powers in here do change

with the scenario that he provided. For example, in sections further down, there's

a presumption that anything that's a joint account is 50-50, and then there's an ability

and a process for the party that's joint to rebut that through a process. For example,

showing pay stubs that I've actually…. This is 75 percent mine and 25…. There's an

ability to do that.

M. de Jong: In subsection 67(3)…. I wanted to pose this question as well. Again, I understand

the balancing act here and the desire not to unjustly or unfairly penalize a partner

who is in partnership with a judgment debtor but otherwise unconnected to the debt

that they have incurred and the money judgment that has been rendered against that

partner.

[2:55 p.m.]

The subsection that attracted my attention is 67(3)(b), where an enforcement officer

is precluded from seizing property that is partnership property if the property is

"necessary to generate revenue from the partnership's business."

If we have a business that is…. Well, let's take a pretty straightforward example.

The business is holding revenue properties, and there are two or three or four partners

whose business is holding revenue properties. If I am one of those partners, I am

going to make the case, I think, that none of those assets should be seized because

they are all property that generate revenue for the partnership. Am I misreading that,

or is that the intended consequence of this section?

[S. Chant in the chair.]

Hon. N. Sharma: In answer to that question, I will note that all three of the subsections in subsection

(3) — so (a), (

b) and (c) — are necessary, given the "and."

In the member's scenario, if that revenue-generating property fits those three, (a),

(

b) and (

c) in the category, then I guess that partnership…. The person could make

the case that it's not feasible, or it may not fit, from the civil enforcement officer's

perspective.

It's important to note that the accounts that receive that revenue…. It may not be

the revenue-generating property itself, but it may be instead the accounts that receive

that revenue that would be the place that they would go.

M. de Jong: In sub (c), the "value that is less than the prescribed value, if any" — what is being

prescribed there? I know that when we get to the sections on exemptions, there are

prescribed values, but what does that prescribed value relate to?

[3:00 p.m.]

Hon. N. Sharma: The prescribed value is meant to help to target the value of the property that is

under this

section to be focused on things that were contemplated in the construction

of this.

The real goal of this

section is to make sure that things like machinery or things

that are being used to generate revenue in the partnership are not part of the exigible

assets.

If you would, for example, set the prescribed value at an amount of $1 million, that

might — I'm just giving examples; I'm not saying we're going to do that; this is purely

hypothetical — eliminate the kind of revenue-generating properties that the member

was talking about earlier.

If you set it at $100,000, it would be focused on that type of equipment that we would

be really trying to make sure we focused on that would be revenue-generating for that

partnership.

M. de Jong: Last query on this point. Doesn't that become…? If I'm understanding this correctly,

then the prescribed value that we're talking about that would, if it happens, ultimately

appear in a regulation, would say that pursuant to subsection 67(3) of this act, property

that is partnership property below a certain value cannot be seized.

I'm trying to think about what that looks like. Does it start to get itemized in terms

of real estate property, tractors, vehicles?

This starts to get awfully complicated when we think of the myriad of property that

is captured by the definition of partnership property.

Hon. N. Sharma: First of all, I think we have to keep in mind that when we're dealing with this subsection,

we're already in a very complicated area of seizure and enforcement for the chief

civil enforcement officer.

You're already going to be dealing with complexity. The goal of this legislation is

to organize that complexity in a way that is fair and makes sense of the type of assets

you want get at.

The flexibility that's built into subsection (c), to set it as regulation, will be

helpful for us to respond in the case of misuse of these provisions.

[3:05 p.m.]

The goal is to make sure that we are not seizing whatever might be the basis of that

business that's in that partnership that's revenue generating. The revenue itself,

as I mentioned before, that's sitting in an account of the debtor is a different story.

But we will have to figure out and learn from the civil enforcement officer what that

line is. Regulation allows us to be able to adjust and adapt to that over time.

Clauses 67 to 135 inclusive approved.

On clause 136.

M. de Jong: It appears we have moved to a new set of binders. All right.

The proposition here that I'm interested in is the notion that I'm a judgment creditor.

I've got my judgment from the courts. I've registered it. I have provided my instructions

on enforcement. I have conducted my discoveries. I have had the civil enforcement

officer seize some goods, and now we're trying to realize on the value of those goods.

The decision is made to state explicitly that the civil enforcement officer can, if

they so choose, sell some of those seized goods to the judgment creditor themselves.

I assume the way that works is that the judgment creditor purchases them for a certain

amount, and that money goes into, I think, the distribution account that is created

and ultimately receives that money back.

Two questions. If I've summarized that correctly, why was it deemed necessary or prudent

to specifically include the authority that allows the civil enforcement officer to

sell to the creditor? Secondly, are there concerns about the possibility that, in

these circumstances, the goods would be sold for less than market value to accommodate

the wishes of the judgment creditor?

The Chair: Just to be clear, we are on 136.

M. de Jong: Correct.

[3:10 p.m.]

Hon. N. Sharma: The real goal of that provision identified by the member is to just remove any perception

of bias or impropriety by the civil enforcement officer if they sell the property

to the judgment creditor or, say, it's auctioned off and the judgment creditor ends

up being the one that receives that property. It doesn't displace

section 206, which

requires a person to exercise a right or power or perform a duty under this

section

to act in a commercially reasonable manner.

Clause 136 approved.

On clause 137.

M. de Jong: Subclause 137(3) is the area I have two questions on. Let me ask it and see if I've

got a plausible example here. A civil enforcement officer who has seized a judgment

debtor's interest in a timber sale licence — is that an accurate description? I'm

thinking that perhaps it is, but I'll let the Attorney indicate that.

Hon. N. Sharma: Yes, that's an example.

M. de Jong: Of course, there are a myriad of different examples. I've just picked that one.

I found it curious. I found the absence of any reference in this case to being subject

to consultation and accommodation with First Nations interesting, insofar as we've

all now become, I think, accustomed, when dealing with interests in Crown land, to

see a specific confirmation of the obligations around consultation and accommodation.

But there may be a reason that the Attorney felt it unnecessary to articulate that

specifically and explicitly.

Hon. N. Sharma: Thanks for the question. That is included under subsection (a), where it says: "…any

applicable requirements or restrictions as set out in an enactment are complied with."

That includes the Declaration Act and our updates to the

Interpretation Act.

M. de Jong: I thought that that might be the answer. What does the civil enforcement officer do

practically, in my example, in judgment creditor examination and seizure of a judgment

debtor's timber sale licence — which, presumably, has some value, in the mind of the

of the civil enforcement officer? What do they do?

[3:15 p.m.]

Hon. N. Sharma: One thing to point out is that here we are at the stage of disposal. Likely, obligations

that the member talks about would be triggered at the time of seizure of that interest

by the civil enforcement officer. Then how it's constructed is that after subsection

(a), there is an "and (

b) the government gives written consent to the disposition."

The civil enforcement officer in that circumstance would have to wait for the government

to fulfil its obligations with respect to any First Nations with that and then, presumably,

give written consent if that disposition was appropriate.

M. de Jong: That suggests to me that the realization of and the satisfaction of a money judgment,

based on the proceeds of a sale of a seized interest in Crown land, is likely to be

a lengthy process. Is that a fair observation, given what we all know is involved

in the consultative and accommodation process?

I'm not trying to trick anyone here. Presumably, if you seize my car, you can sell

it next week, but for the reasons we've just alluded to, if you seize my interest

in Crown land, it sounds like it realizing on that becomes a far more complicated

exercise.

Hon. N. Sharma: One of the improvements in this legislation is that the previous regime only had four

various prescribed interests in Crown land that could be part of this process, and

we've expanded it to all.

[3:20 p.m.]

The member is correct in the sense that anything that has an interest in Crown land

has other legal and constitutional obligations associated with it, so that process

would be different than other assets, potentially. I can't tell you how long or how

short it would take, but it would have different steps associated with it.

M. de Jong: Last question on this. Let me argue the reverse, having raised the issue in the first

place. That is, as I read other provisions of the act, that the seizure of the asset

does not alter the ownership in the asset, as I understand it.

In my example, it was a timber sale licence. Ownership in that timber sale licence

is company A. The seizure of that asset does not then vest the interest in the Crown,

which would automatically trigger some obligations, but the transfer of title in that

interest is from the judgment debtor, company A, to whomever it is sold to.

Now, my understanding is that in that circumstance, even today, the private sector

will buy and sell timber sale licences. That does not trigger an obligation on the

part of the Crown to consult, because title has never revested in the Crown.

I have raised the issue, but it strikes me that there is an argument that says that

in dealing with that type of interest in Crown title, an obligation on the part of

the Crown to consult and accommodate would not be triggered.

Hon. N. Sharma: I'll start by saying that this area is very complicated and case by case.

As the member raised one perspective, we've also thought, during this discussion,

of other scenarios where benefits or some kind of group might be attached to that

licence or the operation of that. The seizing of it might implicate a First Nation.

They might contact the Crown, and that might start the discussion. It's a whole range

of complexity when it comes to the area, but it starts by the commitment of government

to have a government-to-government relationship with First Nations across the province

in the implementation of UNDRIP.

That means that likely, if there was a Crown interest implicated, there would be some

sort of notification to that First Nation to start with the discussion about their

interests or thoughts on that.

Clauses 137 to 141 inclusive approved.

On clause 142.

[3:25 p.m.]

M. de Jong: I think a straightforward question here speaks to the transfer of title following

a seizure and sale of land to realize proceeds to satisfy a judgment debtor's obligations.

Is property transfer tax payable on the transfer?

Hon. N. Sharma: It's applicable unless it's specifically exempted under the Property Transfer Tax

Act. So it would depend on the circumstances. Under that act, there is a whole

section

on exemptions and the types of property that might be exempt.

M. de Jong: Right, and I believe one of those exemptions relates to a court-ordered sale. I'm

wondering if this becomes the equivalent of a court-ordered sale.

Hon. N. Sharma: Chair, I'm going to suggest, hopefully, if it's okay for the member, that we're consulting

our tax specialist in relation to this question. If we can go on to the next questions,

I'll make sure I get an answer when I have one.

The Chair: Are you in agreement that we stand down 142 for the moment?

M. de Jong: We don't need to stand it down. I'm content to proceed, and the Attorney will provide

the information. I'm content with that.

Clauses 142 to 161 inclusive approved.

On clause 162.

[3:30 p.m.]

M. de Jong: We are now in an important section, especially from the perspective of a judgment

debtor, but also from the perspective of a judgment creditor, and that is: what assets

in the hands of a judgment debtor are not exigible?

In the time available to us, I think I'm going to ask the minister…. I'm going to

focus on individual exemptions as opposed to corporate exemptions. It's probably a

little easier to have the conversation, but these things tend to be more applicable

when we're dealing with an individual judgment debtor and the implications of collections

on them.

So 162 speaks to exemption claims in relation to income. This is, I will acknowledge,

generally an unfair question to ask because there's a reason for the complexity laid

out in the

section in the bill. But I think it is an important enough provision to

ask the Attorney to summarize, by way of example, what the general rules around income

exemptions are meant to be with respect to collection activities being taken, or enforcement

activities being taken, against an individual judgment debtor.

[3:35 p.m.]

Hon. N. Sharma: The purpose of this exemption, just to say it on the record, is to ensure that the

debtor is able to take care of their needs and their expenses and that that amount

is not part of what's seized. The way this is constructed is, first, to set a minimum.

You would base that minimum on around or less than what we would qualify for, for

government assistance so that we know that that amount is not an amount that could

become part of any proceeding.

Anything above that is prescribed, usually a percentage. I'm told in past examples

it might be 70 percent; anything above that can't be taken. That's an acknowledgment

that there are daily or monthly expenses in that person's life, whether it's rental

payments, child expenses, all those things that you would want to protect.

There's an ability in this, through regulation, to think about proportionality, based

on the level of income. That's something that we could consider in regulation.

Then the next thing to say is, of course — I think we talked about this earlier —

anything to do with the Family Law Act is separate. Anything owed there is under a

different regime, and that's set out in this act.

M. de Jong: All right. As I thought there would be, lots goes into the calculation. Is there a

minimum amount? I am the judgment debtor, and I have an income stream, and the enforcement

proceedings are being taken against me by the judgment creditor through the civil

enforcement officer. I have an income of $3,000 a month. Is there an absolute minimum

that is exempt with respect to earned income?

Hon. N. Sharma: Yes, there is an absolute minimum. That's tied closely with what a person would qualify

for, for government assistance. It's also at play with the next level, which is a

percentage exemption. Anything above that minimal amount, there would be a percentage

applied.

With the example I mentioned before, say it's 70 percent. So 70 percent of the income

above that minimum is also protected. That is to take into account things…. Seventy

percent is not an actual number that was set up in regulation. I'm just giving it

by example. That would be protected, as well, from proceedings.

[3:40 p.m.]

M. de Jong: The number, though, will be set in regulation.

In the example that the Attorney has offered up, I think if we were dealing with a

single, employable male, the first part of the equation sort of makes sense — basic

life necessities and tying that to the rate at which social assistance is paid out

to an individual.

Then with respect to the percentage thereafter, I think the expectation would be that

there would be an emphasis on satisfying the judgment. I'm sure that people would

agree that may lead to a change in lifestyle for the debtor.

I hope the Attorney will confirm that the purpose of this is not to create exemptions

that protect every aspect of a judgment debtor's existing lifestyle. The whole point

is that there be added emphasis given to satisfying the judgment that has thus far

been disregarded, and that presumably will have some impact on their existing lifestyle.

Hon. N. Sharma: Through the discussion we've had over the days we've been at it, we've really talked

about the myriad ways that the civil enforcement officer has to impact upon the debtor's

life and their assets for failure to pay this debt. So I think, just generally, it

is true that the life of the debtor will necessarily be impacted by some of the powers

in this legislation, specifically with income.

The goal of the protection is to make sure that the life and necessities and ability

to meet the needs of the debtor are not compromised by the collection of debt. There

may be families involved in these situations, so I think there are important considerations

there. That's the consideration of these percentages.

Clauses 162 and 163 approved.

On clause 164.

M. de Jong: So 164 speaks to registered plans. Somewhere in here, it's my recollection, they are

defined. In subsection 164(2), reference is made to the fact that "Subject to subsection

(3), all property in a registered plan is exempt from any enforcement process."

This is, again, a philosophical question about what should be exigible and what shouldn't.

Let's take an RRSP. I get it. It's something that someone has created to provide for

their retirement. But I think one can make a compelling argument that in prioritizing

between preserving that judgment debtor's retirement plans and satisfying their existing

obligation as a judgment debtor, perhaps the latter should if not take priority, at

least take some priority.

[3:45 p.m.]

I wonder if the Attorney can indicate what, to her mind, is the rationale for exempting

the main body of an RRSP in totality.

Hon. N. Sharma: This is not a change in the current law; it's a continuation of that. The reason behind

this is fairness.

Those that are fortunate enough to work in places that have defined benefits plans

and defined retirement insurance plans…. Those are not subject to these provisions.

Out of fairness, anybody that has contributed privately to this kind of a plan is

also exempted.

I will note that if the payments made out of the retirement plans are being made to

the person, that could be seized like any other income.

M. de Jong: I'm also aware of the twelve month — the exigibility under sub (3). But that notion

of fairness only extends so far, because, as I understand it, if the judgment creditor

is the government, in sub-sub 164(3)(d), the government can go after the whole works,

unless I'm mistaken.

I accept that this may not be altering an existing regime, but it does seem somewhat

odd that we would say to every other creditor: "Oh, look. We're not going to let you

access the capital portion of an RRSP for the following reasons related to our perception

of what is fair or unfair." But if the government is the judgment creditor, they have

the right to access the whole amount.

If I'm wrong about that, I stand to be corrected. But that seems to be something of

an inconsistency.

Hon. N. Sharma: Just by fact, government debt is very different than private debt. First of all, government

contributes through tax exemptions to things like RRSPs and different contributions.

Also when government is collecting debt, it's collecting it on behalf of the public,

the public of all of British Columbia.

[3:50 p.m.]

There's also the other side of the fairness argument that I talked about earlier,

where a government is able to collect on debts under defined plans and then so, by

fairness, also RRSPs.

M. de Jong: Yeah, I'm not buying that one. I think there's a…. I get the longstanding distinction,

but the fact that a regular creditor is told, "No, it's unfair to attach to that RRSP,"

and government has the power to do so strikes me as being perhaps a longstanding inconsistency,

but an inconsistency, an unfair one, notwithstanding.

But we must press on.

Clause 164 approved.

On clause 165.

M. de Jong: Just to confirm, these are all going to be prescribed values. I presume they will

be prescribed values, so it won't be the civil enforcement officer making this up

on the fly. These will be set amounts that judgment creditors will know and judgment

debtors will know as being applicable in these circumstances. Is that correct?

Hon. N. Sharma: Yes.

Clauses 165 to 176 inclusive approved.

On clause 177.

M. de Jong: I do this with great trepidation, knowing the reputation for the extremely capable

people at legislative counsel, but I'm going to ask if there is a typographical error,

as opposed to a substantive error, in

section 177(4)(b), which reads: "if the money

has been paid to officer, pay to the judgment debtor…."

Is there a missing word in there? If the money has been paid to the officer, an officer?

[3:55 p.m.]

Hon. N. Sharma: I just want to commend the member for correctly finding, in this very large piece

of legislation, a typographical error, which is, I think, a feat. We got a round of

applause in the committee here. My team is currently looking at the process to fix

that.

The Chair: We'll stand down that section. So 177 will stand down for now. Thank you.

Clauses 178 to 212 inclusive approved.

On clause 213.

M. de Jong: All I wanted to say with respect to this — and the spirit of former MLA Leonard Krog

is hovering around us when I say this — is that the regulatory powers for this bill

are contained in sections 213 and 214 and stretch some five, by my calculation, pages.

It is a complicated bill. But to honour a former colleague who never tired of pointing

out the growing trend towards the creation of regulatory powers — I suspect some of

that has to do with changing styles of statutory

interpretation. But it is a very

lengthy list of regulatory powers.

Much of what will determine the success or failure of this regime remains to be created

and, presumably, will be created between now and when the act takes effect — we think,

operationally, I'm told, in the year 2025.

Hon. N. Sharma: I appreciate the comment from the member.

I think it's always a balance of what's put in legislation and regulation. Over the

course of discussing this very, as the member noted, complicated piece of legislation,

I believe we've struck the right balance.

When there are regulatory powers, like fee-setting or prescribed exemptions, it helps

to strike that balance where government needs to be flexible through regulation,

whereas

it sets out a very clear regime through legislation so that the public can have confidence

in understanding the intent and purpose of all those regulations.

Clauses 213 to 215 inclusive approved.

Title approved.

Hon. N. Sharma: I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 3:59 p.m.

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