Hansard Blues

Committee of the Whole –

Section A

Draft Report of Debates

The Honourable Raj Chouhan, Speaker

4th Session, 42nd Parliament

Thursday, October

5, 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; F. Donnelly in the chair.

The committee met at 1:09 p.m.

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

Act, to order.

On clause 1 (continued) .

M. de Jong: Just a few more preliminary questions. Was Bill 27 drafted on the basis of an RFL,

a request for legislation?

[1:10 p.m.]

Hon. N. Sharma: The answer is yes. I'm told there were many RFLs that got us to this stage over time.

But yes.

M. de Jong: The practice in the past has been for the minister responsible to sign off on an RFL.

We already know enough about the history of this piece of legislation for me to suppose

that the RFL that has given birth to this piece of legislation may not have been signed

off by this minister and this Attorney General. Perhaps she could confirm that.

Hon. N. Sharma: That's correct. This one would have been signed off by the current Premier, former

AG.

M. de Jong: Is the minister able to advise the committee as to when that RFL would have been signed

off on?

Hon. N. Sharma: We found an exact date. It was signed February 26, 2018.

M. de Jong: The practice with most legislation in the past — and I think from previous conversations

with this Attorney and others, this has continued — is that prior to a piece of legislation

being tabled in the House, it would be examined and reviewed by the legislative review

committee, the LRC. Was this bill reviewed by LRC, and if so, when?

[1:15 p.m.]

Hon. N. Sharma: April 25, 2023.

M. de Jong: Am I to understand, then, that the period between February 26, 2018, when the RFL

would have been approved, and April of 2023 — that, I guess roughly five-year period

— was consumed with the drafting of the bill? Is that…?

Hon. N. Sharma: Yeah, I can confirm that was true.

M. de Jong:

Section 1 is, which is usually the case, dedicated to a whole series of

definitions.

There are some that I'd like to review with the Attorney insofar as they, not surprisingly,

are significant to the body of law, that proposed law, that follows.

The first one. I just want to make sure I am understanding properly some of the terms.

An "account debtor" is defined. I won't read the definition. On my copy of the bill,

it's page 8. I'm not sure if the page numbers correspond with what the minister has

in front of her.

Would a bank or credit union qualify as an account debtor? That is, they are presumably

holding money to which a judgment debtor is otherwise entitled?

Hon. N. Sharma: Yes, they are captured. The example given by the member of a bank or a credit union

would be captured under that definition.

M. de Jong: Okay, so that seems to flow logically. I'll come to sub (

b) of that definition in

a moment.

[1:20 p.m.]

Let's just take a second and consider some other examples of an account debtor. Is

it anyone, any agency, who is obligated to a judgment debtor, and what are examples

of that?

Hon. N. Sharma: The definition is drafted in a broad way to include persons who have some sort of

financial obligation and who owe money to a party. That broad definition, in the way

it's drafted, is meant to include a range of things. I can give the member some examples:

an employer, rent that's owed to a landlord, a contractual obligation that has been

unsatisfied with the consideration. Things like that could be included. It's meant

to be very broad, I guess you could say.

M. de Jong: This is significant because it represents a sum of money owing to a judgment debtor

that is exigible to a judgment creditor to satisfy the debt that is owed to them.

That is the concept, as I understand it.

Hon. N. Sharma: That's correct.

M. de Jong: Sub (

b) speaks to a "future account," a person who will become obligated to the judgment

debtor. There are, I'm sure, numerous examples. One that came to mind…. Of course,

these are

definitions that show up and are applied later in the act. I will try to

undertake not to repeat my question when the term shows up later.

If the broad concept is as we've just discussed, my question is this…. I was trying

to think of everyday examples. Let's say you have a renter who is renting a home,

an apartment or a house, and they have provided a security deposit, damage deposit

to the landlord. That tenant now becomes the subject of a claim.

That tenant now, vis-à-vis a third party, becomes a judgment debtor. For the landlord

holding that security deposit, is that sum of money a future account within the meaning

of the definition sub (

b) of "account debtor"?

Hon. N. Sharma: I just want to thank the member for illustrating that example. I think it is a very

practical, everyday example of how this might be used.

Yes, he's correct in the fact that example could be determined as a future account,

money owing, and captured under this.

[1:25 p.m.]

M. de Jong: Not to belabour it but to follow it through, I think in creating this new tool, presumably,

the government is anxious that people avail themselves of it.

To use that example, we have a renter who is paying the rent but has provided a security

deposit. In today's rental market, that could be significant amount. It could be measured

in thousands of dollars, as opposed to hundreds of dollars, given the cost of rent

in certain parts of the province.

In a completely separate transaction, that person may become the subject of a lawsuit

for the non-payment of something, and a third party may secure a judgment against

that person. It proceeds through the registration process, as contemplated in this

act.

That renter, upon departure from their rental accommodations, may be expecting to

get several thousand dollars back, subject to the residential tenancy provisions,

but as a judgment debtor, may discover that that money is no longer available to them

and that it has been used to satisfy the debt and the judgment that has been secured

against them.

I'm trying not to think of fanciful things, but is that an accurate description of

how this could work?

Hon. N. Sharma: I'll start by saying that of course, the residential tenancy laws in our province

are very broad. As a tenant or a landlord, you can avail yourselves of all the potential

remedies or processes under there, if there are wrongdoing claims or anything associated

with that. We start from that position. That being said, the member is right. In the

scenario that he described, that is a possible outcome of this legislation.

M. de Jong: That's helpful. That example came to mind, but as I was thinking about that example,

I thought of all of the other cases now where people are asked to provide a deposit

in advance of acquiring a service.

It struck me that in all of those cases, those deposits could well be captured by

these provisions. We were talking about an accommodation example, and we're going

to talk later about just how efficient the registry is going to be.

[1:30 p.m.]

It strikes me that someone, moving quickly, could file the necessary documentation

with a hotel, for example, which has received a deposit to hold a room for someone.

Technically, it would be captured, I think, by the provisions.

That broad statement I've made…. Any kind of deposit that is being held by a third

party on behalf of someone who becomes a judgment debtor, now…. I don't want to say

this is new, but under these provisions, that sum becomes exigible to the judgment

creditor.

Hon. N. Sharma: I'll start by saying the goal of this piece of legislation is to make it easier and

the tools to be broader, as we'll talk about in lots of detail, I'm sure, for people

to collect on money that's owed to them.

The term deposit…. I just want to make it clear that it's not all deposits that would

fit in the definition of reasonably expected to be returned to the person. So, for

example, the hotel example that the member gave, if the person stays at the hotel,

then that deposit is not reasonably expected to be returned to them in the same way

that the deposit would be for long-term residential tenancy.

Also, I think it's important to say that one of the designs of this legislation, because,

as the member is raising, there are a lot of intricacies and details about how this

will apply in real-life scenarios.... As this develops, and as we see it showing up,

we'll have the ability to exempt certain things under 165 and the regulation powers.

So if there are ways that we need to go in and do that, that's a potential way to

remedy any things that were unintended.

M. de Jong: All understood. The reason I'm just taking a moment to focus on this is because I

think this is deliberate, that in creating that additional means, or improved means,

for a judgment creditor to realize on a monetary judgment, the Attorney has turned

her mind to situations where, although a judgment debtor doesn't have, or claims not

to have, some funds now, there are funds to which they are entitled in the future

that a judgment creditor may be aware of, or, through the discovery process, become

aware of.

I'll use this example. It wouldn't be the first time that someone gets into a dispute

with a car dealership, for example, and obtains a judgment. Not only do car dealerships

obtain judgments against clients, but clients get judgments against car dealerships.

It strikes me that in a general way, this provision could be used to attach to future

lease payments to which that car dealership might be entitled down the road.

[1:35 p.m.]

And now I am getting way ahead. That would require, through the discovery process,

for the judgment creditor to garner some understanding of who the leases are with.

But it strikes me that, in general terms, this could be used in that kind of situation.

Hon. N. Sharma: That's correct.

M. de Jong: The next question won't surprise the minister, and it will recur a few times during

the course of the exchange we have on this bill.

The next definition, under amount recoverable, sets out, obviously, the unsatisfied

amount of the money judgment. That seems sensible and logical. Taxable court costs

to the judgment creditor — lawyers know and argue about taxable court costs all the

time.

The one that I wanted, at this point, to ask the Attorney about is the fees associated

with the civil enforcement officer and costs incurred by the officer in relation to

the enforcement of the judgment –– so sub (

c) under that definition.

Now, the Attorney is experienced enough to know that the simple question here is:

what are those fees? And I'm experienced enough to know that she's going to begin

by telling me that they will be set in regulation, and there will be a tariff associated

with that. I'm going to ask anyway, because I do want to try to determine through

this exchange what the rough order of magnitude is going to be with respect to these

fees. We'll pursue that for a few minutes, but I'll ask the general question, and

then we'll take it from there.

[1:40 p.m.]

Hon. N. Sharma: I'm sure we will dig into this question a little bit more, but we're thinking about

it now in terms of how we can determine….

I'll start by saying that, yes, the member is right. There will be a tariff and regulation

that set out the fees, but it'll be based on work that's already underway. I'm sure

the member knows the court bailiff system and the contracting out that we do right

now for enforcement. That gives us an idea of the fees that are currently set out

and the relative cost of changing that under this regime to the court enforcement

officers. But the system will remain the same.

M. de Jong: Okay. Thanks to the Attorney.

Here's what I think I want to explore a little bit. The bill — and it represents,

obviously, a significant body of legislative work in drafting — is presented, and

in her second reading remarks, the minister said this when it was tabled last spring

and in the accompanying press releases and the documents that always accompany the

tabling of legislation.

The emphasis was on — and these are my words, not the minister's or what was in the

release — kind of a one-stop shop, a single point of registration, civil enforcement

officers are going to assist people in ways that heretofore have not been available

to them. This is going to be a more efficient, a less complicated — therefore, presumably

less expensive — means of people realizing on their money judgments. I'm concerned

that the reality may prove to be a little different in all of those areas, but we'll

explore that as we go through the bill.

What can the minister say today about how this fee

schedule is going to be structured?

If I have secured a small claims judgment in the amount of $2,000 against an individual

for damage they may have caused or for improper workmanship or whatever the judgment

is and I am now seeking to register that and have it enforced, what am I going to

be confronted by in terms of fees under this regime?

Much is being made of the fact that there will now be these civil enforcement officers

who are going to embark upon work that heretofore individuals have been responsible

for. Sounds good. But if on my $2,000 judgment, I'm told, "You need to post a $1,000

deposit for us to begin our work," then I'm not as impressed, and it's certainly not

as helpful from the point of view of a judgment creditor.

[1:45 p.m.]

The Attorney will understand. I'm going to try and zero in a little bit on what this

begins to look like at a practical level. Is there an escalating scale? Is there an

incremental assessment of cost? It strikes me that a civil enforcement officer may

not know what some of the options are until the discovery exercise has taken place.

But if the judgment creditor is told right up front, "Well, you're going to have to

give us $1,000 on your $2,000 judgment," then we may not be much further ahead.

Hon. N. Sharma: I'd like to thank the member for the question. It's an important one, because the

goal of this process is to make sure that no matter the level of debt owed, there's

an ability to use a process to get what's owed to you.

First of all, the fees would be transparent at the offset. So if you're somebody who

has…. I'll give the example the member had about a small claims matter of, let's say,

$2,000. You can start by availing yourself of the questionnaire process.

If you're somebody that, first of all, has already been through the small claims process,

which is very low barrier and low cost, and you have a payment hearing and a

schedule

and have done all those things to try to collect and you still haven't been able to

collect, you go to the court enforcement officer and you say: "I'm having this issue."

[1:50 p.m.]

The first step is the questionnaire process, which I'm sure we will go over. It is

low-cost, low barrier.

The questionnaire process will elicit what assets this person, the debtor, might have.

In that scenario — let's say it's a small claims matter — the person can speak with

the court enforcement officer and say: "Okay. Well, why don't we go after this asset?

That's going to cost you this much, and it's still proportionate to the claim that

you have." There's an ability to tailor the response based on the level of claim and

the person's ability to pursue.

I think that kind of answers the question that was asked about escalation or proportionality.

It's really a conversation, between that person and the court enforcement officer,

that will inform the steps that are taken after the low-cost step of the questionnaire.

M. de Jong: It answers it to a point. I appreciate that from the Attorney.

I'm going to push back a little bit on the last part of her answer. I'll do it using

an example not dissimilar from the one I used earlier. I can't think of a better way

to have the conversation than to…. To have it in the abstract doesn't really work.

I think the examples, as long as they are reasonable examples, are, hopefully, helpful.

I'm a single parent. I've been providing daycare services to a family in my community.

They've run up a bill of $4,000 or $5,000. I'm finally at my wit's end, and I've had

to pursue legal remedies to collect that. I now have a judgment.

I happen to know that the family has two or three vehicles. We know that they have

a vehicle that would be outside of any exemptions. After registering my money judgment

with a civil enforcement officer, I say: "Look, I know they've got a vehicle that

is exigible. I'd like you to seize it and sell it and get me my money."

What's that going to cost? Is it going to, under this regime, require that single

parent to put up another $3,000 or $4,000?

By the way, I understand, from the point of view of the debtor, that there is a risk

there as well, because those costs get passed along, in this section, under the definition

of "amount recoverable."

The barrier would be to that single parent who is told by the civil enforcement officer:

"Look, I'm sorry. But in order to initiate a seizure of that asset, I require up front

X number of thousands of dollars." That single parent says: "I can't afford that.

I don't have the money."

I have a rough idea of what the tariff is today for retaining those services. They

are significant. Are we going to see those replicated? If we are….

Notwithstanding what the minister has said about an incremental approach to getting

information, there comes a moment when, in many of these cases, the judgment creditor,

if she or he is going to realize on the judgment, has to seize an asset. They can't

do that themselves. The tariff, the cost, the security required today oftentimes places

that out of reach.

In the example I've given, how much money does that judgment creditor that I've described,

that single parent, have to put up to realize on the seizure of an asset to satisfy

their judgment?

[1:55 p.m.]

Hon. N. Sharma: I thank the member again for the important question.

Of course, when we move towards setting out the fee structure and the

schedule for

good example of how we don't want fee structures to be a barrier for somebody to access

justice in terms of the money that's owed to them. So that will certainly be something

that we think about in terms of setting the fees.

I will also draw the member's attention, which we may get to, to

section 45(d)(ii).

There is an ability under there to contemplate a written proposal of a fee payment

with the enforcement officer. So if that person is in a particular situation with

respect to their ability to make a deposit, then they can talk to the enforcement

officer, and they can come up with a payment structure that works for the person.

It builds in that flexibility, based on the case, a case-by-case basis.

[2:00 p.m.]

Also, importantly, which I think was mentioned already by the member, the cost will

come out of the debt that is recovered at the end of the day, so another level of

protection.

M. de Jong: Thank you, and we will get to that. I noted that option when we got to 45. I suppose

what I would be urging upon the Attorney in creating those regulations…. And I'll

come back to the general regulations in a moment. I think, and this is just my view,

in order for civil enforcement officers to take advantage of that flexibility, it

will require direction from the Attorney General.

Here's what I mean. I think the tendency will be to be very cautious and proceed in

the way that we proceed. Now what I think the Attorney is suggesting that she would

be comfortable with, in my example, is that if the judgment for that single-parent

creditor is $5,000 and she has identified a vehicle that the civil enforcement officer

is satisfied is worth in excess of $10,000, it should in those circumstances be possible

for the civil enforcement officer to conclude the agreement and proceed to forfeiture,

to seizure, confident that the costs associated with that can be recovered.

My humble submission to the Attorney is I don't think, without clear direction somewhere,

that civil enforcement officers are going to do that. There is the general provision

in the legislation that allows for it. But my concern is that that won't be sufficient

for enforcement officers to confidently craft the kinds of arrangements that the minister,

I think, would be comfortable seeing and that I would be comfortable seeing.

That's a comment. Maybe I'll let the Attorney respond, and then I have another question

about the regs, generally.

Hon. N. Sharma: I thank the member for that caution, and I agree that that is something that we'll

have to watch.

But one of the opportunities to do that or set out standards is through the contracts

that we would…. I think every three to five years, they come up — those contracts

with what will be the enforcement officers, which are now the bailiffs, where you

can set expectations about how they enforce and the kinds of considerations they should

take into account. It's among other things that we will have to do, so I take that

point.

M. de Jong: We'll come to it, I think, in…. I don't know if it's

part 6. We get to the civil enforcement

officers and how that's structured and who they are and the relationship with the

Crown.

Here's my general question. We come up against this time and time again with respect

to not just legislation, amending existing legislation — we've seen some examples

of that — but new pieces of legislation and new initiatives.

The Attorney fairly pointed out that a lot of work has already taken place around

the question of fee structure. And I say this not in some sort of mischievous way.

I don't think we're going to get through the whole bill today, so we're likely to

be back at it for a bit when we come back after next week.

[2:05 p.m.]

Is that work far enough advanced to — and I expect it is — at least release a draft

of what that fee

schedule might look like? Of course, I'd like to see amounts, but

even the structure of it would be helpful to see, at this point, to address that question

of incremental fees through the exercise.

Oppositions sort of seize on the vacuum of information to speculate and generally

speculate in ways that reflect negatively on governments. But if the work is far enough

advanced to at least present, at some point next week, some indication of what this

looks like, then we're not having the conversation in a vacuum, and attempts I might

make to raise the bogeyman of excessive fees disappear.

Hon. N. Sharma: To the member's point, the normal course of things…. As legislation works through

this House, we don't instruct our teams to work on regulations until after the legislation

is received royal assent or has at least passed. So no, there's nothing to show at

this stage when it comes to the fee structures.

I will say again that I think the principles that the member raised, but also what

are guiding the work and the work of this piece of legislation. So the points that

he raised with respect to making sure that a lens is being applied to that will be

part of the goal in developing the regulations.

M. de Jong: Just one more gentle kick at this, and then I have the Attorney's answer.

Here's my other recollection, though, of how these things flow through the development

of legislation. There's this beast called Treasury Board to which the Attorney General

is, as all her colleagues are, answerable to. They ask these questions like: "How

much is this going to cost?" and "How much of that will be realized from the collection

of fees?"

I am certain that somewhere in one of those big binders over there is an estimate

that has been prepared for the Treasury Board to either disclose the fact that this

is going to require an influx of additional dollars, or that the ministry believes

the fees collected will be equivalent to and/or cover the cost associated with these

changes.

I'm not trying to be argumentative, but I'm not fully accepting of the proposition

that there's been no attention turned to the dollars, because I rather suspect that

the minister has been required to assure Treasury Board or inform Treasury Board of

what the implications of this are and how much revenue will be recovered via fees.

[2:10 p.m.]

Hon. N. Sharma: I have no further information to provide the member in terms of the specific costs.

I think he's trying to analyze how much cost will be borne by the creditor when they

enter the process, which is not the level of discussion that we've had with Treasury

Board at this time. But we will. Obviously, that, going forward, will be something

that we'll have to discuss and work on when we get to the regulations. But I have

no new information other than what was said here.

M. de Jong: I'll just try this, then. Has the Attorney General's ministry prepared a

summary for

Treasury Board estimating what the fee recovery amount will be under this regime?

Hon. N. Sharma: No.

M. de Jong: Okay. I'm surprised about that, because that may lead to some unpleasant surprises

down the road and interesting conversations between Treasury Board and the ministry.

But if that's the answer, then that's the answer that the Attorney has offered.

I'm going to…. Further down the same page, there's a definition. Oh, I should say,

in other contexts, we may come back to some conversations around specific fees, but

I'll leave the general conversation for the moment.

Further down the page, there's a defined term "deposit account." Again, I'm not going

to read the definition, but sub (

a) refers to money accounts just above that. It seems

to be a definition that captures or is intended to capture the general kinds of bank

accounts that people and companies and agencies would have at their financial institution.

Am I correct in that assumption?

Hon. N. Sharma: Yes.

M. de Jong: In sub (a), is that a definition? Is that intended to capture what we might otherwise

refer to as things like term deposits?

Hon. N. Sharma: Yes.

M. de Jong: That's interesting. Again, and I'll state this, these

definitions are important because

they speak to what is exigible for the judgment creditor as we trace the application

of these terms through the legislation. That's why they have relevance.

So subject to all of the other provisions of the act, the general provision here is

that as a judgment creditor, I might be able to attach to these deposit accounts as

a way of satisfying my money judgment. But flowing from what we just determined….

[2:15 p.m.]

If the Attorney sues me and gets a judgment against me, she can register, and she

can attach to my savings account, my chequing account and all. But if I have a sizable

term deposit in the same lending institution, the definition doesn't capture that.

Maybe that's because there are other ways for her to attach to that asset. But I'm

not sure I understand why the distinction in this case, in the definition, at least.

Hon. N. Sharma: The member was correct in saying that there is another part of the piece of legislation

that would cover what he's referring to. That would be under

part 9, division 4, Security

Entitlements and Future Contracts.

M. de Jong: And those are the same provisions, presumably, that would cover things like an RRSP?

Hon. N. Sharma: RRSPs are exempt under this legislation.

M. de Jong: This is where the challenge in dealing with the

definitions is. I want to be a bit

structured so we don't re-cover ground, but that's worth at least one follow-up question.

RRSPs are exempt in their entirety, or subject to an exemption that we will come to

later?

Hon. N. Sharma: The question is dealt with in

part 13,

section 164, subsections (2) and (3). Generally

speaking, yes, RRSPs are exempt, but under subsection (3), there are exceptions to

that that are listed out in the legislation.

M. de Jong: Still with the deposit account defined term.... Sub (

b) sets out a description of

a second type of account that is not captured by the term deposit account: "an account

under which a person is obligated to pay a judgment debtor a specified sum of money,

with or without interest, at a specified date in the future."

On the surface, that sounds a lot like a term deposit, but there's clearly an intention

for there to be a distinction, or to capture something else.

So two questions, if I can, for the purpose of time: What's an example of that kind

of an account? And again, what's the rationale for not including it in the definition

of deposit account?

[2:20 p.m. - 2:25 p.m.]

Hon. N. Sharma: I think it helps to explain this definition by understanding the purpose for its use

in the legislation, so I'll start with that.

The goal behind having a definition for deposit account was to separate it in terms

of the ability to have a single seizure of whatever is owed from that account, and

the reasons are…. Really, one is practicality, so we would assume deposit account

to have a mix of funds that are flowing into it, whether it's some may be exempt from

seizure and some might not be. If a bank or institution is kind of blindly seizing,

then it would potentially create confusion over what was exempt and what wasn't, so

there's a practical reason for singling out deposit accounts in this section.

Then the subsection (

b) is meant to ensure that future accounts are also part of that

exclusion.

M. de Jong: Again, taking the bill in its entirety, it was helpful to hear what the Attorney had

to say, but can I ask this, then?

There's an obligation in the way that the Attorney has described this. Is there an

obligation that falls to the institution at which the deposit account is located now

to determine source of funds for an account? I thought I heard the Attorney talk about

how a savings account can be comprised of funds from a variety of sources, some of

which might be exempt.

I'm not disputing that. I thought the objective here was to instil in the hands of

the judgment creditor the right, once registered, if the decision has been made by

the judgment debtor to deposit that money into an account, to give the creditor access

to the funds in that account, it sounds like the institution and/or the creditor and

the enforcement officer now have to engage in some kind of a determination of where

the source of those deposit funds come from. That's going to get awfully complicated.

[2:30 p.m.]

Hon. N. Sharma: I'll start with the clarity that nothing in this legislation puts an obligation on

the bank or the financial institution to adjudicate whether it's exempt or non-exempt

in terms of what's in that deposit account. Really, the goal of this definition and

how it's used is to minimize the type of problems that the member raised in terms

of exempt and non-exempt.

The way it's structured is it will require the enforcement officer to give a notice

of seizure in a deposit account if they have a good-faith belief that there are non-exempt

funds in that account. It's not a standing seizure. It only happens once. So every

time, they would have to do a new one to step into the account.

You can see that in that process, it'll minimize the confusion they may have if a

deposit account is mixing with exempt and non-exempt funds at all times. It also gives

the person that's subject to that seizure the ability to provide evidence, to come

forward — because it has to be renewed every time, right? — to say: "Actually, I'm

using that account for exempt purposes." It's actually meant to minimize the conflict

there.

M. de Jong: Again, we'll undoubtedly come to this further along. But for reasons the Attorney

has just alluded to, this notion that what is being created here is a single registration,

one registration, one one-act play that ultimately leads to collection, for reasons

the Attorney has already begun to allude to, isn't quite true. There are, in some

cases, multiple registrations that are still necessary.

I'll let the Attorney respond to that, but cognizant of the time, I'll ask my question

and ask her as well. The only part of what she said, or maybe didn't say, that I'm

still confused about is what sub (

b) is designed…. What kind of account, why it is

deemed necessary to exclude that from the general definition of "deposit account"

and what it's intended to capture and why.

Hon. N. Sharma: Rather than a specific example under that subsection (b), what I can say is that the

drafting consideration there was to make it very clear that future accounts are exempt.

That is just a term of clarity that the legislative drafters wanted to ensure was

in there, in the event that that comes up in the future, although I can't give a specific

example of the type of account.

M. de Jong: The Attorney indicated those accounts are exempt. Did she mean those accounts aren't

captured by the definition of "deposit account" or they are exempt from seizure or

attachment?

[2:35 p.m.]

Hon. N. Sharma: Thanks for that clarity. Under the definition of "deposit account" is what I was referring

to, not the general exemption.

M. de Jong: Just before we move on to the next page and a few of the

definitions there, I neglected

to offer the Attorney an opportunity to put something on the record that I think is

important and something she alluded to, but we sort of passed over.

I'm going now back to the definition of "amount recoverable." I think it is important

that the Attorney be able to put on the record that, if she agrees with what I'm about

to say, the legislation is very much intended to operate so that in circumstances

where a judgment creditor becomes obliged to pursue enforcement remedies to collect

on their judgment, the costs associated with doing that could escalate significantly

and will ultimately be imposed on the judgment debtor.

So a judgment debtor who chooses to ignore a $2,000 debt — and I am making up numbers

now — could find themselves, in the right set of circumstances, paying not $2,000

but $3,000 or $3,500.

I think it's worth having the Attorney make clear that that won't happen by accident.

That is what this legislation is intended to do. It is intended to pass along the

costs of enforcement to people who do not pay on the debt that they have been adjudicated

to owe.

Hon. N. Sharma: I thank the member for the question.

It's not a change in policy in this legislation, but it is correct that the pressure

on the debtor is to pay quicker and pay their debt owed because costs will escalate

if they don't, right? The cost of recovery is their burden to bear.

If they are able to come up with a payment agreement earlier on, avoid the costs of

enforcement orders, then obviously, it's better for them in terms of settling their

debts. So it is one of the principles of the collection system, and it currently is

under the policy like that. It's a continuation of policy.

M. de Jong: Only because the Attorney mentioned it, and it's maybe worth closing the loop on this.…

On my example of the $2,000 debt, the option for the debtor exists to enter into a

repayment agreement that doesn't necessarily involve payment of the full amount, at

first instance, but payment over time.

The Attorney can confirm that and also confirm who is obligated to sign off on that

agreement. Is it purely an adjudicator, a civil enforcement officer, the judgment

creditor or all three?

[2:40 p.m.]

Hon. N. Sharma: The system that we're putting in place through this bill is all voluntary. The goal

is to give better tools in order to get to a resolution as fast as possible and to

get the payment that's owed.

There are many scenarios that will flow through the system. A creditor may choose

not to register. They may choose not to go forward and register, because they've received

payment. They may, and they hopefully should, register, because it protects them in

the ways that the act sets out.

Or at different points, after having come up with an agreement — a sign-off between

the debtor and the creditor that they've come to a payment agreement — then they can

change their position with respect to any of their enforcement positions or the things

that they're pursuing, based on that agreement.

It's going to be, I guess, fluid, depending on the scenario and their ability. But

there's no direct sign-off per se, as the member raised, in terms of the enforcement

officer, besides being an agreement between the debtor and creditor.

M. de Jong: To be clear, as we move through these provisions, what I'm hearing from the Attorney

is that a judgment creditor, once they've registered, can't be put in a position where

a payment

schedule is imposed upon them by the civil enforcement officer.

They would have to agree to it, although I still think, from my reading, that the

act contemplates a payment

schedule ordered by the courts. That is still contemplated,

but except for a payment

schedule ordered by the courts, a judgment creditor would

have to agree to a payment

schedule that didn't involve payment of the full amount.

[2:45 p.m.]

Hon. N. Sharma: There is no power for the enforcement officer to impose a payment

schedule on the

creditor. The way it would be structured is that the creditor registers and says to

the enforcement officer: "Look, I need help collecting this." They have the ability

then to instruct the enforcement officer on the collection.

That's one way of them driving it, but in the instance where they have instructed

the enforcement officer to do certain things, like take assets, there may be in there

the enforcement officer establishing a payment structure, a recovery structure, of

that asset, depending on what it is, which the creditor maybe wouldn't have a direct

control over.

So it's not as direct as the member suggested, in terms of the enforcement, but there

could be contemplated something where there is a payment structure that the civil

enforcement officer has set out with the parties.

On top of that, throughout all of this, there may be a scenario ongoing — hopefully,

likely — that the starting of the structures of this process will force parties to

come to an agreement, because it's less pain for the debtor, if they're able, to comply

and come up with an agreement directly with the creditor, outside of this process,

than it is to escalate.

That is kind of an ongoing thing: that a payment structure agreement might happen

between the parties.

M. de Jong: To the Attorney's point, there is nothing in this legislation that I have seen that

precludes or diminishes the capacity of the Civil Resolution Tribunal, the small claims

court or any court, for that matter — at the conclusion of a process of a trial where

the determination has been made that X owes Y a certain amount of money — to facilitate

or make an order that that amount will be paid as follows over a certain period of

time.

Payment schedules, as ordered by tribunals in the context of small claims and civil

dispute resolution, have historically been quite common — where the debtor, the now

judgment debtor, throws their hands up and says, "Okay. I've lost, but I don't have

the $3,000," and the trier of fact says, "All right, but you're going to have $800

a month," or whatever it is. Those processes can continue.

In that context, the judgment creditor would only have access to this mechanism, as

I understand it, were the debtor to be in default of that payment schedule.

Hon. N. Sharma: That's correct. The member clearly articulated the existing legal processes that anybody

can avail themselves of through the various dispute resolution processes that we have.

That may mean that there's a court-ordered payment structure, and yes, if it's in

breach, then you can rely on the sections in this piece of legislation to get recovery

of that.

[2:50 p.m.]

M. de Jong: It is a unique feature of legislative drafting that sometimes terms that we think

have a common and straightforward meaning need to be defined in a certain way.

I'm looking now at the definition of "due" and its reference to a monetary obligation

meaning any of the following. The two that captured my attention, mostly because I

didn't understand them, were sub (a): "that the obligation is owed unconditionally

even if it may not be payable." On the surface, you've got an obligation that's owed

unconditionally but not payable. I'm trying to think what that is intended to capture.

Hon. N. Sharma: The reason that this

section of the definition was put in place — maybe we'll start

there — is to contemplate times where a notice of seizure has happened, but the amount

has not been received yet. So it's not payable.

[2:55 p.m.]

It's something that…. Say you've contracted out your services, and at some point,

when you're done, you're going to get paid for those services you did. What this definition

does and how it's used in the act is to make clear that once that money is received

by you as the debtor, it can be seized by the creditor. So if it's an amount that's

owed unconditionally, even if it may not be payable — payable, meaning at that point

in time, it's not in your hand. It's a future payment that you're receiving, if that

makes sense.

M. de Jong: I understood all of that, but I just want to cross-check this.

The relevance of what the minister has just said, and the significance in the context

of this legislation, if I'm correct, is that those funds in the hands of the third

party are exigible before it goes to the debtor. If the funds fall within this definition,

they are exigible.

Hon. N. Sharma: Yes, that is the reason that the term in there is "payable" and not "paid," in the

definition. It potentially could go straight from the third party to the creditor.

M. de Jong: Then in a similar vein, sub (c)…. Well, it's the same question. I was unable to determine

on my own the circumstances that this might apply to within the context of the defined

term "due."

Hon. N. Sharma: This definition was drafted out of, I think, an appropriate level of caution to make

sure that we're covering off all the scenarios that might fall in the event of a third-party

payment owed to the debtor that should be given to the creditor for satisfaction of

what is owed to them.

[3:00 p.m.]

Under this subsection, I can do it by example. Let's say you are a debtor and you

set up a contract, or you contract out your services. When your services are done,

normally you would be paid for those services. It's meant to avoid the drafting of

contracts to stall payment or to avoid payment directly after the conditions are served,

to avoid having to pay back the creditor what's owed.

What it does is it triggers the ability of the creditor to go after the third party

once the conditions are established or met to be paid. So I've done my contracted

work. I've painted your house, for example. Under a contract that I had with you for

me to paint your house, the condition is I paint your house, and you pay me, right?

So once the condition of painting the house is done, then it gives more breadth of

the creditor, then, to go after that payment directly from the third party and avoids

any unnecessary avoidance that might happen by the debtor to avoid payment or that

money going to the creditor or delaying or anything like that.

M. de Jong: That's helpful.

Let's go to, I guess, the next definition, which is significant for all kinds of reasons,

and that is "employment remuneration." I'm going to ask this question to start the

conversation. Am I correct in suggesting to the committee that subject to the exemptions

that are laid out later in the legislation, certain amounts of employment remuneration

are intended to be exigible to a judgment creditor?

Hon. N. Sharma: Yes.

M. de Jong: That being the case, the definition of what is captured by "employment remuneration"

becomes important.

The language here I thought was interesting. "'Employment remuneration', in relation

to a judgment debtor, means the total of…." The first thing here is "an amount of

money due to the judgment debtor under a contract of employment."

There are a couple of things that come to mind. When I read that on the surface, I

immediately thought of someone who has contracted for services. But then I realized….

And if you are part of a collective agreement, you have a contract, a contract for

service. But a lot of people in this province and in this country who get hired on

wouldn't have a contract per se. They would be paid for their services, and they'd

have an understanding. The boss has told them they're going to be hired for X amount

of dollars, but they don't have a contract per se.

Anyway, I think that the Attorney gets my point. Is sub (

a) intended to cover everyone

that qualifies as an employee, for example, under the terms of the Income Tax Act?

Is there a differentiation? And if that is so, then what is the significance of that,

if any of that, language: "an amount of money due to the judgment debtor under a contract

of employment"?

[3:05 p.m.]

Hon. N. Sharma: The capture, the definition of contract, I guess, would be a contact in the sense

of any form of legal contact, oral or written. So it's true that there may not be

a written contract, but certainly by the behaviour of the parties, there is an oral

contract. It's meant to be broad in terms of the sense of that word.

M. de Jong: I rarely would venture into arguing with the skilled people that do the legislative

drafting. And the Attorney's answer is helpful. My immediate reaction is that the

language is problematic. I would have thought that if that's the intention — and I

accept that it is –– to capture within the definition that everyone who works for

someone is an employee, then stipulating that the contract may be an implied contract

as opposed to a formal instrument that can be pointed to….

I can think of so many examples where, especially today, the relationship between

employee and employer is so short-term that you might have difficulty as a judgment

creditor making an argument that there is a contract of employment, except that there

is money owing because someone works. So it's helpful to know what the Attorney's

and the government's intention is.

I wonder if the Attorney shares any of the concerns I do about the decision to use

that phrase and that language and whether the argument might be made down the road

that in certain cases, that definition doesn't cover certain types of employees.

[3:10 p.m.]

Hon. N. Sharma: In the nature of the way we draft our legislative drafting decisions…. The term "contract,"

as it's used in this statute, is used in other pieces of legislation, like the Employment

Standards Act, to meet the same definition of the broadest sense of the contract.

So although I appreciate the member raising the concern, I think the legislative drafters

had considered the use of that term and how it was used and relied on how it's used

in other pieces of legislation to do that.

Also, just as an aside, which is linked to this…. Actually, it's more in the debtor's

interest, from their perspective, to be found to be under an employment contract.

In that sense, they may be eligible for exemptions.

Whereas if it is the employer

that's an account debtor, without that, then they can't avail themselves of the same

exemptions.

M. de Jong: Thanks to the Attorney. She has zeroed in on what I think is the relevance.

If I'm a judgment creditor confronted by a judgment debtor who is trying to avail

themselves of the exemptions that flow from being an employee, and wage remuneration,

I might want to seize upon language to say: "That person isn't an employee within

the meaning of the act."

I accept, as I say, that the language chosen was deliberate. I think I heard the Attorney

and her able staff discuss and reference the Employment Standards Act. The use of

that term in the Employment Standards Act is undoubtedly relevant. In this context,

however, I will merely say — and the Attorney can respond or not — that reference

to a debtor under terms of employment or in an employee relationship might alleviate

any confusion.

We'll see. We'll see at what point, if any, it becomes an issue. If the minister has

any thoughts on that, I'm happy to hear them.

I'll go straight to my next question, though. It relates to sub (

b) of that definition

and the reference to the fair market value of goods and services that the judgment

debtor is entitled to receive under the contract of employment referred to in paragraph

(a). I, again, was trying to think of an example that would have required the differentiation

that the drafters thought necessary in distinguishing sub (

b) from sub (a).

Hon. N. Sharma: Subsection (

b) is meant to bring clarity to other forms of compensation that may not

be money.

[3:15 p.m.]

For example, if there is a judgment debtor that owes money, they can't tell their

employer: "Well, give me a gym membership. Let me use the car or use other things.

Pay me in other ways, besides money, so I won't have it seized because of this amount

I owe." It helps to capture that broader sense of compensation for work.

M. de Jong: Well, that's a good transition from there. I'm going to flip the page over to page

The next term. I had a brief interest in "future account." Again, I was thinking of

examples from the point of view of what might be exigible by a judgment creditor and

how these things change over time.

The example I wanted to quickly pursue with the Attorney is whether…. Under this definition

or some other definition or provision of the bill before us, might a judgment creditor

attach to reward miles, which today, as opposed to a decade or two ago, can be of

significant value, whether they relate to travel or purchase?

Some people have accumulated sizeable reservoirs of wealth in the context of reward

miles, which have a future value if redeemed, or when redeemed, but sit there. Is

something like that captured by the definition of "future account" or captured anywhere

else in the act?

[3:20 p.m.]

Hon. N. Sharma: Thank you for that very provocative question. We have an answer for you.

It would not be under the current definition that the member suggested, a future account,

but the Air Miles example would not be under account debtor because it's not a monetary

obligation, but it would be under property.

So it would be determined under this legislation as property under

section 67. It

gives the enforcement officer broad power to seize the property of the debtor, and

then under

section 43 (1) (a), it gives the enforcement officer the power to do what

it deems appropriate with that property once it's classified as property.

Those are the two powers that I think come into play with the example that the member

provided with respect to Air Miles.

M. de Jong: Thanks. That's helpful.

So the conclusion one is able to draw from the Attorney's response is that under this

legislative regime, the civil enforcement officer, in consultation with the judgment

creditor, would have as an option the attachment to an account of.... What do we call

them? We used the trade name, Air Miles, but that's not fair. Loyalty programs, I

guess, is what they're called.

I heard the Attorney talk about the fact that sometimes they have cash value. They

certainly have redemptive value. So this legislative package contemplates the possibility

of those loyalty accounts being attached by a judgment creditor via the civil enforcement

officer. I think the Attorney will confirm that.

I guess the other thing that bears saying is that is true under this regime. It is

probably also true today. The alteration is the introduction of the civil enforcement

officer. Unless the Attorney is going to suggest that substantively this now creates

that option.... The option probably exists today to attach to that asset, if I can

use that term, or that property. What we're trying to do is make it easier and provide

a new instrument for doing so. But that is a question, not a statement.

[3:25 p.m.]

Hon. N. Sharma: This legislation does change what is the status quo at this point. So it starts with,

in the current process…. Let's say in the writ, there was something about Air Miles,

right? But that would be the person knowing that that was something the person had.

Then, in our view, the court bailiff wouldn't have the same tools that they would

have under this legislation, and an enforcement officer, to not only capture the property

under 43(1), but also take specific actions against that Air Miles company or wherever

they're held to do things to recover.

So it not only makes it easier, as the member suggested, and the intent is to have

more possibility. It also gives more powers to the enforcement officer to take steps

to, I guess, go after a broad range of property.

M. de Jong: Again, that's helpful. What I heard the Attorney General say is that today, perhaps,

these loyalty program accounts that many of us have and that have redeemable value

are either not exigible or it is very difficult to attach and seize them. It's an

example I've offered up only because I think it has daily relevance in many of our

lives.

She also seems to be saying to the committee that she believes the provisions of the

legislation in their totality will assist in making that particular type of asset

far more exigible to a judgment creditor. If I have that right, I'm interested to

hear the Attorney say that.

Hon. N. Sharma: Yeah, I think you captured what I was saying.

M. de Jong: The next definition I just wanted to spend a moment on is the term "goods," which

appears, actually, ironically, right below "future account." There are two aspects.

Again, I'm not going to read the definition, but in the context of the definition,

the term "investment property" appears.

If we think about that in the context of everyday discussion, it evokes a certain

understanding. I don't think that's necessarily what is meant: a piece of property

that someone holds that is not a primary residence. But maybe it is.

I wonder if the Attorney could clarify what she and the drafters mean by the term

investment property within the definition of goods.

By the way, it does not include…. It's the exemption again. So "goods" means tangible

personal property, fixtures, crops, but it does not include investment property. What

aren't we including there?

[3:30 p.m.]

Hon. N. Sharma: Okay. I'll start by giving clarity that investment property, as in this definition,

does not mean real estate. The definition is pulled from the Personal Property Security

Act in terms of goods. In that act, investment property is defined, and I can read

it: "…a security, whether certified or uncertified, security entitlement, securities

account, futures contracts or futures account."

M. de Jong: My recollection is that this legislation imports the definition of the Personal Property

Security Act, except in circumstances where specific

definitions are set out. I may

have said that incorrectly. My understanding is that this legislation adopts the

definitions

contained within the Personal Property Security Act, except in circumstances where

that is expressly said not to be the case. Is that correct?

Hon. N. Sharma: That is correct in

section 2.

M. de Jong: The other term from the definition of "goods" that I…. It is, again, the term…. It

is listed there as not being included in the definition of goods.

The phrase goes as follows: "trees other than crops until the trees are severed."

I should ask: is that a definition that flows from the Personal Property Security

Act as well? Clearly, in the presence of the forestry minister, we would acknowledge

that trees, whether they are harvested or not, have great value, but they are not

included here in the definition of goods. Is that consistent with the existing provisions

of the Personal Property Security Act?

[3:35 p.m.]

Hon. N. Sharma: The entire definition of goods is directly from the PPSA, so that includes the particular

portion of the definition that the member is talking about. The reason behind that

is at the stage that a tree is alive and growing, it's considered part of the land

that it grows on until it's severed, which is the reason for that definition.

M. de Jong: In two days, I'm going to qualify for 30 percent off at Denny's. That's the good news.

Interjections.

M. de Jong: Just one, and I got it last year.

But that has increased the frequency with which I have to visit certain rooms in this

building, so I wonder if we….

The Chair: Calling a ten-minute recess.

The committee recessed from 3:36 p.m. to 3:48 p.m.

[J. Sims in the chair.]

The Chair: Okay, folks, we're back to Bill 27, Money Judgment Enforcement Act, and — a big surprise

for all of you — we are on clause 1, and back to the member for Abbotsford West.

M. de Jong: Still with the

definitions. The short definition of the term "interest" — which shows

up, not surprisingly, frequently through the provisions of the act — specifically

applies to interest in relation to property and includes a contingent or equitable

interest in property.

Here's my question. Again, I'll ask it in the context of an example. I won't profess

to remember thoroughly or be an expert in the laws of equity and how they may apply

today to interests in land, but the presence of the word here confirms that it is

at least relevant.

[3:50 p.m.]

Let's take a case where a married couple or common-law couple has parted company,

has separated, and the matrimonial home, which was the principal residence for both

individuals, was registered in the name of the husband. The separated wife has, we

know, either an equitable interest or in some instances a statutory interest in that

property. But it's no longer her principal residence.

For unrelated reasons, she finds herself on the debtor's end of a judgment. Is her

equitable interest in what was formerly her principal residence but is no longer her

principal residence now exigible to a judgment creditor who is seeking to enforce

a money judgment against her?

Hon. N. Sharma: In the scenario discussed by the member, the equitable interest in that property,

yes, would be exigible under this piece of legislation. Because it's not the person's,

in the hypothetical scenario, primary residence, then they wouldn't be able to avail

themselves of any of the protections offered, potentially, for primary residence.

M. de Jong: That is helpful in terms of the answer. Again, I'm trying to use examples that I think

are not fanciful but may reveal themselves to be practical and real.

In a situation where a relationship breaks down, it is still not uncommon that one

of the spouses doesn't appear on title. In a relationship when separation occurs,

it is also not unusual that financial circumstances tighten and bills get left unpaid.

Some of them are joint debts; frequently they're joint debts. But judgment is taken

against both parties who, in many cases, have signed on and are jointly and severally

liable for the debt.

[3:55 p.m.]

We're now in a situation where the protection that might otherwise exist for that

spouse with the unregistered interest in what was the matrimonial home disappears

insofar as a judgment creditor is concerned.

Is that the intention? Is the Attorney comfortable with that fact?

Hon. N. Sharma: The resolution to this matter would start with the Family Law Act, and all the provisions

of that would apply, first and foremost, in terms of division of property, settling

of debts and payment to any potential debtors through that separation process.

The likelihood of that resolving the matter is high. But in the instance that there

are lingering debtors to any individual properties, if the family or the parties are

no longer living in the home, then, yes, it is subject to a creditor's claim against

that property.

The purpose of that is really to do two things. So if somebody…. We wouldn't want

somebody to unnecessarily have to leave a place that they were living in, right? So

if they're living in the primary…. It protects that kind of housing that that person

has. But, in the instance, where they're no longer, then it should be treated the

same way as any other property that could be collected on.

[R. Leonard in the chair.]

The Chair: Member.

M. de Jong: Thanks, hon. Chair, and welcome to the chair.

Again, that's helpful. By the way, I can think of a myriad of other circumstances

where someone might have an equitable interest where notions of matrimonial law don't

apply.

[4:00 p.m.]

My guess is that's what this provision is designed to address: those circumstances

in business and elsewhere where people have an unregistered equitable interest. The

objective is to ensure that for a judgment debtor who does have an equitable interest

in property that that interest is exigible and attachable by a creditor.

I presume that is the objective here.

Hon. N. Sharma: Yes.

M. de Jong: Let's go down to the definition of "judgment debtor," obviously a person, a significant

player in the whole equation of enforcing money judgments: "a person other than the

government" — I presume that is a reference to the government of British Columbia

I realize there is a whole body of legislation around Crown proceedings. In the instances

where something like this comes before the House and comes before a committee, it

is, I think, always worthwhile and appropriate to ask whoever happens to be the Attorney

General at the time why it is that a certain set of rules should apply to everyone

in the province, everyone in the country, except for the government.

It means that if the Attorney gets a judgment against me, I am, as judgment debtor,

subject to all of these provisions. If she gets a judgment against my colleague from

Terrace or Kitimat, he is subjected to all of these provisions. But if she gets a

judgment against the government of British Columbia, none of those provisions apply.

Why is that?

Hon. N. Sharma: Thanks for the question. The government is situated quite differently than private

owners of property under this, quite rightly so, as raised by the member.

First and foremost, there's a whole series, as he mentioned, of other laws and rules

that apply to government when it comes to debt. The Crown Proceeding Act,

section

13, requires the Minister of Finance to pay any amount that is owed by government

to individuals. For government, obviously, it's public assets that governments have.

They are presumed, in that sense, to be solvent and always able to pay debts, which

is a different circumstance, sometimes, with individuals.

There's a whole regime of legislation related to the sale of public assets and how

that plays out. So there are different powers there.

[4:05 p.m.]

M. de Jong: I can sue the government of British Columbia. I can sue the Crown in the right of

— if I am correct and the court orders such — a judgment against them. But neither

within the meaning of this legislation.

Is a municipality capable of being a judgment debtor? I can sue a municipality, and

I believe there are references elsewhere in the legislation to municipalities. When

I say "municipalities" under the Community Charter, I'll include the cities of Vancouver

and Victoria, which have their own governing legislation.

Hon. N. Sharma: Yes, a judgment debtor could include a municipality. The member is correct about that.

M. de Jong: Can a regional government be a judgment debtor?

Hon. N. Sharma: Okay. The definition of "person" is the key one in this one. If the body, whether

incorporated or in statute is deemed a person, legally speaking, then they will be

The question of whether or not a regional district is a person is something that we

will get back to the member on.

M. de Jong: In the same vein, is a First Nations government capable of being a judgment debtor

within the meaning of this act?

Hon. N. Sharma: The answer to that question would be very complicated, depending on the nation and

whether or not they have an incorporative body that they're doing business under and

that would be considered a person. I think it would just depend on the legal analysis

related to that particular debtor and their situation and whether they fit the definition

of "person."

M. de Jong: I'll just explore that for a moment because, happily, First Nations across British

Columbia have become more and more engaged in the economic life. There's a long way

to go, collectively, but I think, the progress that has been made has been good.

[4:10 p.m.]

So what is it…? I don't think it's, again, a fanciful line of questioning. With more

and more contractual arrangements arising between First Nations and contracting parties,

service suppliers, it strikes me that where there is a dispute, those parties who

wish to pursue an action would like to know what remedies are available to them.

I won't ask the Attorney to summarize 30 years of jurisprudence. But presumably there

are some principles and common features that will determine whether or not, if I am

contracting with a First Nation — it will generally be a corporation of some sort

set up on behalf and controlled by the First Nation — that First Nation is, for the

purposes of collecting on a money judgment, capable of being considered, or would

be considered, a judgment debtor in circumstances where the court rules that is so.

Hon. N. Sharma: In the scenario that the member provided, where it is an incorporated body that's

doing business, that would be captured under the definition of "judgment debtor."

If it's a government, then the area of law becomes very complicated. It wouldn't be

a matter of…. It would depend, in that scenario.

M. de Jong: Last kick at that. In terms of a contract with a First Nations government that is

not incorporated, and the contracting party is not a corporation and a judgment has

been obtained against the First Nation government, what, broadly speaking, would determine

whether or not the provisions of this act apply insofar as they become a judgment

debtor? What would the considerations be?

Hon. N. Sharma: The answer to this question is embedded in the history of colonization and legislation

with Indigenous people over time. It starts with the Indian Act, which is very paternalistic

in the sense of the powers that are given to governments and their ability to do things.

Then all the way up to modern treaties, which you could imagine are different with

each modern treaty, that would give different powers and contemplate the questions

asked differently. And also the many First Nations that have economic development

wings and powers with their corporations and the work that they're doing.

[4:15 p.m.]

I will just say that it is a complicated and factually-driven question that I wouldn't

be able to answer in the absence of a specific example, given the layers of laws and

history and treaties that are involved in that, and the nature of the debt.

M. de Jong: I guess the obvious question then, just to wrap up this section.... And I'm not in

any way underestimating the legal complications associated with answering the questions

I've raised. Is this part of the legislation then that would have been reviewed with

either the Leadership Council or First Nations representatives, which I understand

is now part and parcel of the development of legislation?

Maybe the Attorney can just put on the record the nature of the discussions that took

place, particularly with reference to the creditor's remedies and how they might apply

in the circumstances that we've discussed.

Hon. N. Sharma: This was before the interim approach, but as per our process, we notified FNLC, the

Métis, the Alliance and treaty nations about the development of this piece of legislation

and the work that we're doing. We didn't receive any feedback.

M. de Jong: Last question on this. At what point in the exercise does that notice go out? Is it

post-RFL, pre-LRC — post–request for legislation, pre–legislative review committee

— or does it come at the end, after the legislative review committee has examined

it?

[4:20 p.m.]

Hon. N. Sharma: After the RFL, the FNLC, treaty nations and Métis were notified of the development.

And then when we were at draft legislation stage, there was an offer given to, as

I mentioned before, all of them, to see if they wanted to look at the draft or give

feedback under an NDA. Nobody took us up on that offer.

M. de Jong: Let's go down to the term "money judgment," still on page 11. Sub (

a) of that definition,

I think, is pretty straightforward in terms of where a money judgment can derive from

in terms of the courts here in British Columbia and the Supreme Court and Federal

Court in Canada.

Sub (

b) talks about an instrument under an enactment as if it were an order or a judgment

of a court. Are we talking here about tribunals, civil resolution tribunals? What

gets captured by that definition in terms of alternate dispute resolution and other

bodies that may have the authority to make an order for the payment of money — WorkSafe,

for example?

Hon. N. Sharma: It's meant to include tribunals or certificates issued under administrative decision–makers.

M. de Jong: Would it include the residential tenancy branch?

Hon. N. Sharma: Yes.

M. de Jong: WorkSafe — that's a question. Civil dispute resolution tribunal — that's a second

question.

Hon. N. Sharma: Yes to both of them.

M. de Jong: Is there any significance or magic in the use of the term, and as is always the case

with the very precise and capable drafters…? Sub (

a) refers to orders of the court.

Sub (

b) refers to an instrument. Most of these tribunals would, I think, believe that

they are issuing an order. Is the term "instrument" meant to capture something broader

than the orders that these tribunals make?

Hon. N. Sharma: It's meant to capture things like certificates issued by administrative decision–makers,

so that's broader than….

M. de Jong: I'm looking further down in that same…. Sub (

c) and sub (d), again, include exceptions

that are not captured by the definition in sub (

a) and sub (b): "a prescribed class

or type of order or judgment referred to in paragraph (a)…."

I take it what we're trying to do there is say: "All of these court orders from all

of these courts represent money judgments, but the government wishes to reserve the

opportunity by regulation to say that certain court orders aren't captured, certain

orders of the courts listed in sub (

a) will not be captured." Have I got that right?

[4:25 p.m. - 4:30 p.m.]

Hon. N. Sharma: Yes, that does give power to create exemptions through regulation, as the member suggested,

although, at this stage, we don't contemplate any particular examples of what that

power might be used for immediately. We were just thinking about ways that the Uniform

Law Conference example and our example might give rise to that need under there.

One example might be for the family law enforcement provisions that are exempt. There

may be times where there are accrued arrears where you would want to make it so they

are subject to the enforcement provisions there. These are hypothetical, because they're

not contemplated at this stage, but it gives the power to do such things if needed.

M. de Jong: I'll pursue it just a little bit because the regulatory power in both sub (

c) and

sub (

d) relates to a prescribed class or type of order. So it very purposely…. I understand

the example the Attorney gave, but that would be a specific case. There might be circumstances

in that specific case that a court would decide to issue —we come to it a little bit

later — an order suspending a stay on the enforcement. But this is a whole class of

types of judgments.

I remember, confronted by…. When I, a long time ago, sat in that chair or other chairs,

I would say to my officials: "If we're putting it in there, we must have something

in mind. We must be thinking about something that might require…." What we're talking

about is exempting this act from money judgments given by the Supreme Court of Canada,

the Supreme Court of B.C., the Court of Appeal, provincial court and a whole broad

class. I was trying to….

The example the Attorney gave is helpful, but it's an individual case. If we take

that example, it would be to exempt all maintenance arrears orders, and I don't think

the Attorney is contemplating that. At least, I hope she's not, and I don't think

she is.

Ironically, it's…. In sub (d), I would understand. It's a more difficult question

to answer because of the broad array of tribunals and administrative panels. But sub

(

c) speaks to orders of the courts. I am curious to know if someone believed that

there might be a need to exempt an entire class of decisions from those courts from

the application of this act.

I'm going to press a little bit to try to discover what was in someone's mind in deciding

to include sub (c).

[4:35 p.m.]

Hon. N. Sharma: So the purpose of having these contained in here is really flexibility as the legislation

comes into place and different regimes change.

For example, there might be contemplated in the future a separate legislative regime

for collecting particular debts or assets in a certain way, in which case, you would

want the power to exempt certain things from this regime.

The reason for the example that I brought before about the family maintenance or those

kind of orders is that there is a separate regime for that, right?

That is set in place to help families collect on debts owed to them through the family

justice process. In some situations, you may want to contemplate having accrued arrears

be enforceable through this process. So the regulatory power gives the flexibility

in the future to contemplate different ways that may be needed to collect.

M. de Jong: All right. Well, it's not the first time this conversation or observation has been

made.

In the scenario the Attorney has described, it follows that there would need to be….

If we're going to create an entirely different collection system for a specific class

of money judgments, that will require legislative intervention.

At that point, it is hardly complicated to include the line in the bill that creates

that new regime, notwithstanding the provisions of the Money Judgment Enforcement

Act for the following purposes.

It's something that I suppose one can be critical of frequently, and that is…. Sure,

the flexibility is fine, but the whole point of this, we are told, is to create a

single means by which people can seek to collect their money judgments.

If someone is contemplating creating a different or alternative means, then that will

require the Legislature to consider that. It will, in many ways, defeat the purpose

of what we're doing here.

Rather than just use a regulatory process, I'm going to suggest it would be incumbent

upon the government of the day to come before the House and say, "We require your

approval," to defeat what was the intended purpose of this, which is to create a single

means by which we collect money judgments.

In any event, I have put that on the record, and I don't expect that I will persuade

anyone today to go down a different path.

I think those are the questions I had with respect to the

definitions in

section 1.

Clause 1 approved.

On clause 2.

M. de Jong: This is merely a question about, again, drafting techniques and how they may or may

not have changed. This is something that we discussed briefly a few moments ago about

adopting the

definitions of the Personal Property Securities Act.

[4:40 p.m.]

In so doing, the exceptions to that are set out in sub (

a) and (b). So (

a) is pretty

clear. The

definitions apply unless "the word or expression is defined in this Act"

— or defined differently, I suppose — or then, (b) "the context requires otherwise."

That, to a layperson, says the PPSA definition applies unless it doesn't.

I'm not blaming the Attorney. I mean, she has to answer the questions about the drafting.

That's an interesting turn of phrase that we're now utilizing, it seems. The definition

applies unless the context requires otherwise. I'm not sure I know what that means,

but I'm interested to learn.

[4:45 p.m.]

Hon. N. Sharma: As we discussed earlier on…. We were talking about the contents and the process of

this act. It's a very complicated piece of work. It touches on multiple things, multiple

types of property, multiple scenarios that might come up.

The provisions that I'm told the member refers to in subsection (b)…. It's a general

principle of statutory

interpretation that you give that ability, in the legislation,

for a court to remedy a situation where there's an absurd outcome, which is potential,

when you import the

definitions from one act that's very complicated into another

act.

It is a general principle of that statutory drafting to do that kind of thing. That's

the reason that it's in there.

M. de Jong: I think I'm going to adopt that principle and use it with my wife in explaining my

behaviour: "Context requires otherwise."

I think we're good to go to

section 4, Madam Chair.

Clauses 2 and 3 approved.

On clause 4.

M. de Jong: I should know this. Earlier on, we defined "court." In clause 4, "court" is lowercase.

If it were uppercase, it would refer to the Supreme Court only, I think. In this case,

does it apply…?

I'll ask the question. In this case, in clause 4, which courts are we referring to?

Hon. N. Sharma: Court, in this context, is a defined term that's found in the definition. It says:

"unless the context requires otherwise, means the Supreme Court."

M. de Jong: Does this general principle…? If I read it in that way, it would say that the Supreme

Court of British Columbia, which grants a money judgment, may make the following orders.

Is that the intention, to restrict sub (

a) and (

b) to the Supreme Court of British

Columbia?

[4:50 p.m.]

Hon. N. Sharma: As the definition says, of court…. It has to be read in context. And because a court

that grants a money judgment is in the context of that piece of legislation, it, by

those words, applies to any court that has been granting a money judgment. They can

make orders with relation to subsections (

a) and (b).

M. de Jong: I accept that's what the intention is. That's what I assumed the intention was. But,

like the Attorney, I immediately went to the defined term and said: "Oh, it is a defined

term." If the Attorney, with the assistance of her able staff and officials, and somewhere

on the other end of the line is the legislative drafter who assures us that the courts

will interpret it that way, then I guess we'll take that and accept it. It is, I would

suggest, a little bit confusing when you read it.

It strikes me, just to editorialize, that had it read "any court," it would be clearer

that this particular provision relates to any court and not just the defined term.

If someone listening believes that has merit, then perhaps the Attorney will come

back next day and offer up an amendment.

Let's park the discussion about which court, and assume that what we have here is

something that applies to any court order that's issued. Sub (

b) also empowers those

courts to stay one or more enforcement proceedings indefinitely or for a specified

period of time.

Now, this gets a little bit complicated. What I'm going to ask is: if you're a judgment

creditor confronted by that, that portion of an order, is it appealable? I think the

superior courts have an inherent jurisdiction to do these things irrespective of whether

the statute allows for it.

I don't think the Provincial Court necessarily does, but if we're right and this applies

to all courts, this grants them that right. But if I'm a judgment creditor, I may

not like that very much. And the Provincial Court also has some pretty strict rules

about on what basis you can appeal an order of that court.

So insofar as that power is being bestowed on all the courts that may grant a money

judgment, is the decision or an order to stay enforcement proceedings appealable by

the judgment creditor in all of those cases?

[4:55 p.m.]

Hon. N. Sharma: The creditor in that instance would have the right of judicial review of that decision.

M. de Jong: In what circumstance? We're now talking about…. We've got various courts. We've agreed

that we think we're dealing with various courts here. So in the case of…. Well, not

an issue for the Supreme Court of Canada and not, I suppose, for the federal courts.

For the Supreme Court of British Columbia, is there a right of appeal to a stay order?

Is it a right of appeal? And in the case of the Provincial Court, what the Attorney

has said is that it's not a right of appeal. Well, it wouldn't be judicial review

in the case of the Provincial Court. It would have to be an appeal right.

Hon. N. Sharma: Okay, so in the instance of a provincial court, under subsection (b), a stay of one

or more enforcement proceedings would be judicial review, as I mentioned. In the instance

of a Supreme Court of B.C. decision, it would be an appeal.

[5:00 p.m.]

M. de Jong: In the case of an appeal to the Court of Appeal for a stay order from the Supreme

Court of British Columbia, and in the case of a Provincial Court order staying…. I

want to make sure in the….

Let's just deal with the Provincial Court for a moment. I'm a judgment creditor because

I have secured a judgment in the Provincial Court and, presumably, small claims court.

It's Provincial Court, and I have initiated collection proceedings. The judgment debtor

has gone back to the Provincial Court and asked for a stay order.

Does the Provincial Court have the authority to order a stay? It seems that by virtue

section 4, it would have that authority now. The Attorney is saying my only remedy

as a judgment creditor in that case would be to seek judicial review of that.

What, then, would be the test in terms of seeking judicial review of that Provincial

Court order? What's the threshold I have to meet? It's different than an appeal, right?

Hon. N. Sharma: Okay. Important to start with the fact that this doesn't change…. This act doesn't

contemplate any changes in the regular procedures when it comes to your rights of

appeal or judicial review under a Provincial Court and a superior court. It just relies

upon them.

Right now under the Small Claims Act, it's a judicial review of a provincial order

that would be like what are contemplated under subsection 4(b). The test for that

is from the Supreme Court of Canada decision in 2011. Justification, transparency

and intelligibility is the standard.

M. de Jong: In the Attorney's mind, what would justify an indefinite stay of enforcement proceedings

for a money judgment?

I think we can all contemplate circumstances in which a court would say, for a variety

of reasons, to a judgment creditor, and taking into account circumstances confronting

a judgment debtor: "You have secured your judgment for $10,000. You have that judgment.

I am persuaded, however, that in these circumstances, I'm going to suspend the enforcement

of that order for a period of time, given the following…."

[5:05 p.m.]

But the

section also empowers a court to suspend, to stay enforcement indefinitely.

I thought the whole purpose of this was to say to a judgment creditor: "You don't

have to keep going back to court." Well, this requires them to go back to court because

now you've got a hollow judgment.

You've got a judgment that is meaningless because the court has said: "Fine. You've

won. You've spent all your time and money. You got your judgment. You're owed $10,000,

but I'm suspending your ability to enforce that, and if you ever want to reacquire

that, you have to come back to court."

Hon. N. Sharma: Just like anything in our justice system, we have to have trust in the courts and

the decision-maker in terms of determining the facts of the case and addressing and

issuing the correct orders with respect to those facts.

There may be scenarios under that where actually issuing an indefinite order on a

money judgment prevents the use of judicial resources, or prolonged the use of it.

If the court has determined that the money judgment order is in the context of a bigger

dispute or a bigger issue in terms of, let's say, delivering on services or compelling

a party to do something else and that party is doing it, then maybe you don't need

to enforce the money judgment order, and it's an indefinite order.

I mean, this is all speculation in terms of where it may be used, but I just think

that there may be times where the court sees fit to issue such an order indefinitely

in the context of the facts that are before them.

M. de Jong: I don't doubt that courts like to have the broadest possible discretion, and judges

certainly do. And if we provide them with that discretion, then we should expect that

they'll use it. I'm not sure we should be providing that breadth of discretion, in

this case.

If someone has gone to the trouble.... I mean, I am going to remind the committee

where this is applicable. Someone has gone to the trouble, has been obliged to go

to a court, has litigated a matter and had a trier of fact, an adjudicator, say: "Ma'am,

you're right. This person owes you X amount of money."

I certainly accept the proposition that there may be times and circumstances where

the court would subsequently say: "But here are some other factors pertaining to the

debtor that I am going to take into account…."

[5:10 p.m.]

Look, this is always going to accrue to the advantage of the debtor. It is rarely

in the judgment creditor's advantage to have their enforcement opportunities suspended

or stayed. The court says: "I see some circumstances pertaining to the debtor, and

I am going to temporarily stay your ability to enforce that." I get that. That's fine.

But to say to the judgment creditor who has already proven the case, has already demonstrated

that they are owed the money…. To empower the court to say, "Now, that's all well

and good, but I'm suspending your ability to collect that for as long as I want,"

well, I don't see how that is fair to someone who has proven their case.

It may be that the court wants to…. The Attorney says, well, there may be other circumstances

at play. All of those circumstances about the debt owing would have been taken into

account in the finding of fact that the debt is owing and the judgment is issued.

To now empower a court…. By the way, I am suspicious about how this might be used,

because sometimes judgment creditors aren't always the nicest people. They might be

right legally. They're not always the nicest people.

So we create an instrument where a court can say: "You know what? You're right. Legally,

you're right. You're owed X amount of money, and I'll make an order to that effect.

By the way, I'm suspending your right to enforce it indefinitely."

I'm not sure that's fair, and I'm not sure it's necessary, because the "limited" —

you take out that word, and the court still has the right to stay enforcement procedures,

but it has to set a time limit and bring the parties back into court.

Anyway, that's my submission. The Attorney may want to respond, and I think it's probably

my last question of the day.

[5:15 p.m.]

Hon. N. Sharma: I'm going to suggest that we wrap up now, and I'll answer the question next time.

M. de Jong: You expect me to remember what my question was?

Hon. N. Sharma: We will remember.

Just given the time, Chair, I move that the committee rise, report progress and ask

leave to sit again.

Motion approved.

The committee rose at 5:16 p.m.

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