Enforcing CAT orders through Ontario’s Small Claims Court
Monday, December 2, 2024
The Condominium Authority Tribunal (CAT) handles disputes related to condo governance, but once a decision is made, enforcement can be challenging.
Many believe that once litigation has concluded by way of a decision in the CAT, the creditor (the successful party from the action) will automatically receive payment from the debtor (the party who has been ordered to pay the successful party), at the conclusion of the proceedings. However, securing a decision or order is often just the beginning.
For condo corporations, many CAT orders can be enforced through a lien. Condo corporations should remember that strict timelines apply to be able to effectively register a lien. For CAT orders that cannot be enforced by a lien, the condo corporation will need to pursue enforcement through either the Small Claims Court, which has jurisdiction to deal with the enforcement of decisions or orders under $35,000.00 (CAD), or through the Superior Court of Ontario, which has jurisdiction to deal with enforcement for larger monetary amounts and enforcement relating to behaviour.
How soon can you enforce a decision or order?
A creditor can usually commence enforcement immediately, but it is often best practice to wait thirty (30) days in case the decision is appealed by the debtor.
Consider a formal demand letter first
When it comes to enforcement, it may not be necessary to immediately pursue remedies from within the court system. In many circumstances starting with a formal demand letter is recommended.
This letter can be prepared by you, the creditor, or your legal representative in order to formally request payment from the debtor. In this letter you can provide an option for a payment plan that may benefit both you, the creditor (money-in-hand), and the debtor (resolving the outstanding debt in a sustainable way).
What to know before starting the enforcement process
As a creditor, enforcing your CAT decision or order requires the debtor to have either cash, seizable assets, or a third-party debt (e.g. bank account or wages) that can be garnished. You will need to know the specifics of any or all of the above for the purposes of enforcement, along with contact information for the service of enforcement documents on the debtor, pursuant to the rules of the Small Claims Court.
If the debtor is currently unable to make immediate payment(s), you might consider postponing enforcement, especially if there is a chance the debtor’s financial situation could improve, such as by gaining employment. Be cautious about delaying too long though, as it could complicate the recovery process, particularly if you lose contact with the debtor.
Filing the decision or order within the Ontario Small Claims Court
Decisions or orders from the CAT can be filed and enforced in the Ontario Small Claims Court (if under $35,000 CAD), pursuant to s. 19 of the Statutory Powers Procedures Act, R.S.O., 1990.
To begin enforcement, you must file a certified copy of the decision or order with the Small Claims Court. You should file the decision or order in the geographic jurisdiction where the debtor resides or carries on business, if this is where you plan to enforce by way of garnishment or writ of seizure of sale.
Enforcement methods via the Small Claims Court:
There are two primary methods for enforcing in the Small Claims Court: garnishment and writ of seizure and sale.
1. Garnishment
Garnishment involves collecting money owed to the debtor by a third party (known as a garnishee). The two common types are:
Wage Garnishment: Requires advising the debtor’s employer to deduct payments directly from their wages.
Bank Garnishment: Involves directing the bank to send funds from the debtor’s account to the sheriff or enforcement office at the Court.
Note that wage garnishments have limits and some funds, such as employment insurance (EI), Ontario Works (social assistance), Canada Pension Plan and/or Old Age Security (OAS), are exempt.
2. Writ of Seizure and Sale
A writ of seizure and sale allows for the seizure and sale of the debtor’s property to satisfy the judgment or order. There are two types available in the Ontario Small Claims Court.
Personal property: This writ enables the seizure and sale of personal property. Once filed, the writ is valid for six years and may be renewed through additional filing requirements, pursuant to the rules of the Small Claims Court.
Land: This writ can encumber the debtor’s land, complicating any potential sale or mortgage renewal. Similar to the above, this writ is valid for six years after filing and may be renewed through additional filing requirements, pursuant to the rules of the Small Claims Court.
What if I lack the details required to be successful in a garnishment or a writ of seizure and sale?
You can request an examination hearing (sometimes referred to as a judgment-debtor examination) from the Small Claims Court if you, the creditor, wish to obtain the necessary information from the debtor as to proceed with enforcement via garnishment and/or writ of seizure and sale. At the hearing, the debtor should come prepared to answer questions about their employment, any property the debtor owns (motor vehicles, recreational vehicles, etc.) and specifics about their personal banking information. These hearings are usually scheduled for at least two hours and are not open to the public. At an examination hearing, the deputy judge has the ability to make specific orders, such as an order for a payment plan.
Effective enforcement of CAT decisions through the Small Claims Court can be complex but with the right approach—whether through garnishment, a writ or a payment plan—it is possible to collect what you are owed, if the monetary amount is under $35,000.00. If the enforcement is for behaviour or an amount over $35,000.00, you will need to proceed through the Superior Court of Ontario. If you are interested in pursuing enforcement, seek legal advice from an experienced legal representative, such as a lawyer or licensed paralegal, to navigate these steps efficiently.
Megan A. Alexander is a licensed paralegal who works within the Commercial Litigation and Multi-Residential Housing Groups at Cohen Highley LLP in London, Kitchener, Strathroy, Windsor, Sarnia, and Stratford. Ms. Alexander’s main areas of practice is within the Ontario Small Claims Court (including enforcement) and the Condominium Authority Tribunal (CAT).
This was originally published in Condo Business magazine and the REMI Network