Canada: Pre-Judgment Remedies: Preserving Your Ability To Collect

Last Updated: December 21 2018
Article by Graham E. Quick

In a previous article entitled "Enforcing Judgments: Not just a matter of being paid," we discussed judgment enforcement in Saskatchewan. In that article, it was noted that obtaining a judgment does not guarantee you will collect what is owed to you; however, just as the law provides for post-judgment processes to assist in collection, it also provides for pre-judgment remedies that can preserve your ability to later collect on a judgment or recover property. The following briefly discusses three pre-judgment remedies:

Preservation Orders

A preservation order is exactly what it sounds like, an order preserving property until an action is determined. Preservation orders are provided for in The Enforcement of Money Judgments Act (the "EMJA") as well as in The Queen's Bench Rules (the "Rules of Court").

Preservation orders take many forms including prohibiting the disposition of certain property, requiring that certain property be deposited with the Court or the Sheriff, and placing conditions on the use of property, among others. The EMJA establishes a test that must be met to obtain a preservation order and requires a plaintiff to show that:

  1. if successful, the plaintiff will obtain a judgment or order affecting specific property;
  2. if the order is not granted, the plaintiff's ability to enforce a judgment will be partially or totally ineffective due to disposition, dissipation, destruction, damage or concealment (subject to some exceptions) of the property in question; and
  3. the action will be pursued without delay by the plaintiff.

This test is not an easy one to meet so plaintiffs need to have good evidence to obtain a preservation order. A plaintiff who seeks a preservation order must also provide sufficient security for one unless providing security would cause the plaintiff undue hardship.1

Replevin

Replevin is a process that allows a person to recover property wrongfully or unlawfully taken by another person. Replevin is a creation of the courts and is now governed by the Rules of Court.

Before recovering property by replevin, a replevin order must be obtained. To obtain a replevin order, a court action must be commenced seeking recovery of property and then an application must be made for the replevin order. The applicant for a replevin order must do several things but the following are three essential requirements to obtain a replevin order:

  1. provide a description of the property to be replevied, its approximate value, and the location where the property is believed to be;
  2. give a sworn statement that he or she is the rightful owner of the property and is entitled to possession of it; and
  3. provide security (eg. cash) to the Sheriff equivalent to the value of the property.

Assuming the applicant has complied with the Rules of Court, a replevin order will be issued. The replevin order is then provided to the Sheriff who recovers the property. Unless the defendant provides security equivalent to the value of the property in response to the replevin order, the plaintiff will retain possession of the property until the action is concluded and, if successful, permanently thereafter. The plaintiff's security will also be returned by the Sheriff if successful in the action.

Injunctions

Injunction is a broad term as used here; for example, a preservation order is a form of injunction. In its simplest form, an injunction is an order compelling a person to do something or refrain from doing something. Injunctions can be interim or permanent. Injunctions are also creations of the court and are now provided for in the Rules of Court.

In the context of this discussion, we are concerned primarily with interlocutory injunctions, which are injunctions put in place pending the outcome of a legal action. In order to obtain an interlocutory injunction, a person is required to meet the following test:2

  1. demonstrate a strong prima facie case that he or she will succeed at trial;
  2. demonstrate irreparable harm will follow if an injunction is not granted; and
  3. show that the balance of convenience favours granting the injunction.

Irreparable harm refers to harm that cannot be compensated monetarily. The balance of convenience refers to which of the parties to the action will suffer the greatest harm from the Court either granting or refusing the injunction.

Similar to preservation orders, an injunction is quite difficult to obtain and requires strong evidence from the person seeking one. In addition to satisfying the above test, the person seeking the injunction is also expected to provide an undertaking to pay damages. This effectively means the person is agreeing to pay monetary damages to the person against whom the injunction was granted for any losses occasioned by the injunction.

This discussion is only a primer on pre-judgment remedies and is by no means an exhaustive list of pre-judgment remedies. As always, you should consult a lawyer for advice on whether pursuing a pre-judgment remedy makes sense and which remedy is most appropriate to seek in your circumstances.

1 See Custom Foundations Ltd. v Welcome Homes Ltd., 2017 SKQB 148.

2 RJR-MacDonald Inc. v Canada (Attorney General), [1994] 1 SCR 311, 111 DLR (4th) 385.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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