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Litigation can be a long, drawn-out affair. Unfortunately, for many successful litigants, the process does not end when a judgment is issued. Often, a judgment will include a monetary award of some form, and collecting on that debt can be both challenging and time-consuming.
Let us take a classic example: the plaintiff in our scenario is a small business that is trying to collect on unpaid invoices issued to the defendant. After proceeding through the Alberta Court of Justice and succeeding at trial, the plaintiff is granted a judgment against the defendant for the unpaid invoices. The plaintiff takes the steps to properly register its judgment and writ of enforcement and is now ready to collect. Unfortunately, the defendant is avoiding payment of the judgment.
This scenario, where the losing party in litigation is unable or unwilling to pay the amount ordered by the Court, is common. Judgment enforcement heavily relies on understanding the debtor’s assets. There are tools available under the Civil Enforcement Regulation (the “Regulation”) that empower an enforcement creditor (the party owed money) to require the enforcement debtor (the party owing money) to provide a description of the enforcement debtor’s assets and income. This blog post focuses on one of these tools: a Financial Statement of Debtor.
Financial Statement of Debtor
Under section 35.10 of the Regulation, an enforcement creditor may, on written notice to an enforcement debtor, require said debtor to provide a financial report. This report must be verified by statutory declaration, meaning the enforcement debtor must swear or affirm that the contents are true before a commissioner for oaths or a notary public. The report must also be returned to the enforcement creditor within 15 days of service of the notice.
There are two forms in the Regulation available for the enforcement creditor to use:
- Form 13: a Financial Statement of Debtor (Individual Debtor)
- Form 14: a Financial Statement of Debtor (Corporate Debtor)
These forms, which are in Schedule 4 of the Regulation and available on the Alberta Court of King’s Bench website, require the enforcement debtor to provide information about assets and income.
Form 13 asks, among other things, about:
- Bank accounts;
- Vehicles and other serial-numbered goods;
- Real estate;
- Employment and sources of income;
- Dependants; and
- Inheritances.
Form 14 asks, among other things, about:
- Real estate;
- Motor vehicles;
- Bank accounts;
- Receivables and ongoing contracts;
- Shares and securities; and
- Insurance.
When an enforcement debtor properly completes the applicable form, the enforcement creditor should have the information necessary to begin enforcing against the enforcement debtor’s assets.
What Happens if Form 13 or Form 14 Is Not Returned
A common issue in the process occurs when an enforcement debtor does not comply with the obligation to provide the completed report. When this occurs, the enforcement creditor can usually bring a Court application to compel the enforcement debtor to comply.
It is not uncommon for enforcement debtors to continue to refuse to provide the completed report, even when ordered by the Court. This may lead to further Court applications and, in some circumstances, a contempt application, which can result in serious consequences, including fines, costs, or other Court-ordered remedies against the enforcement debtor.
Conclusion
Judgment enforcement can be a challenging process, but it is easier to collect if an enforcement creditor knows where to look for assets of value. The Regulation provides tools to help enforcement creditors collect, and if you require assistance with enforcing a judgment, our litigation team can help.
This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.
