The envelope says Notice of Examination, and a person who lost a lawsuit some months ago now has to go to court and talk about their money. On the other side of the same notice is a creditor who may have spent a long time getting a judgment, and who still has no idea where the debtor banks or works.
A judgment debtor examination exists to bridge that gap. It is a private hearing, under oath, focused on one question: why has the order not been paid, and how can it be? It is one of the most practical and least costly enforcement tools in Ontario, and it is often misunderstood from both sides of the table.
This post is general information and not legal advice. If you are a debtor with several creditors, or facing a contempt hearing, get advice about your own circumstances, because the choices can have long-term consequences.
Where This Fits in Enforcement
A judgment does not collect itself. Garnishments, writs and seizures all need information: an employer’s name, a bank branch, a property address. Creditors who have this already may not need an examination. Those who do not can use it to find out, before spending money on enforcement steps that may go nowhere.
The procedure depends on which court made the order. Small Claims Court uses rule 20.10 of its own rules, with the examination held before a judge or other judicial official. The Superior Court uses rule 60.18 of the Rules of Civil Procedure, known as an examination in aid of execution, usually held before an official examiner and recorded, with no judge in the room.
In Peel, a Small Claims examination would generally be held at the court for the territorial division where the person being examined lives or does business, which for a Brampton resident means the Brampton location. If the order was made elsewhere, the creditor may need a certificate of judgment in order to bring the process here.
How a Creditor Sets It Up in Small Claims Court
An examination is available once there is default under an order for the payment or recovery of money. The steps are straightforward:
- Complete an affidavit for enforcement request (Form 20P), setting out the date of the order, the amount awarded, the postjudgment interest rate, payments received and the amount owing.
- Ask the clerk to issue a notice of examination (Form 20H), and pay the required fee. If the order came from another territorial division, also file a certificate of judgment (Form 20A).
- Serve the notice at least 30 days before the hearing date. If the debtor is an individual, serve a blank financial information form (Form 20I) with it.
- File your proof of service in time. Ontario’s guide says the affidavit of service must be filed at least three days before the examination.
The service rules are specific, and a defective service can undo the whole exercise, especially if it later leads to a contempt order. Read the notice’s instructions and follow them closely.
What Can Be Asked
The list of topics is almost identical in both courts:
- the reason for non-payment;
- the debtor’s income and property;
- debts owed to and by the debtor;
- property the debtor has disposed of, before or after the order;
- the debtor’s present, past and future means to satisfy the order;
- whether the debtor intends to obey the order, or has a reason for not doing so;
- anything else relevant to enforcement.
That is broad. Questions about the merits of the original case are generally off topic, since that has been decided. In contrast, it is fair to ask where the debtor’s paycheque goes, who pays the mortgage, or what became of a truck.
Good questions turn a hearing into usable information. For an individual, a creditor might ask for the name and address of the employer, pay frequency, overtime, side income and any expected bonus. It is also worth asking about bank and credit union accounts including joint ones, investment accounts, RRSPs and TFSAs, any real property in Canada or abroad, vehicles and any loans against them. Debts owed to the debtor, inheritances, insurance claims, lawsuits or tax refunds could also be relevant. For a business, ask about customers who owe it money, its bank, its equipment and who has signing authority.
It is also fair to ask about transfers. If a debtor has signed a home over to a spouse or sold a car to a brother, the answers could support a fraudulent conveyance claim. Ask for dates, amounts and who was involved.
Bring a copy of the judgment, your calculation of what is owed, your notes from the original case, your own list of questions, and space to write down the answers. If you are not sure how an answer helps you, write it down anyway and look at it afterwards.
When the Debtor Is a Company
Many creditors assume a judgment against a corporation means no one has to answer. That is not the case. In both courts, an officer or director of a corporate debtor can be examined on its behalf. In the case of a partnership or sole proprietorship, a partner or the sole proprietor can be examined. In the Superior Court, the court can also order the examination of someone else who may have knowledge, where a difficulty arises in enforcing the order.
Naming the right person and getting service right is important. An up-to-date corporate profile report can identify the directors and officers. But being examined on a company’s behalf does not make that person liable for its debt, unless a separate legal basis exists.
What a Debtor Must Do
If you have been served, the worst approach is to ignore it. Your duties under the Small Claims rules are to:
- inform yourself about the topics above, so you can answer them;
- if you are an individual debtor, complete Form 20I, serve it on the creditor and provide a copy to the judge at the hearing, but not file it with the court;
- bring documents that support what you have put in the form.
Typical documents include recent pay stubs, a notice of assessment, bank statements, your lease or mortgage statement, and proof of loans, car payments and child support. The more clearly you can show your income and expenses, the more reasonable any payment proposal is likely to look.
Tell the truth. You are under oath. Answers that are false or incomplete can do more damage than a poor financial picture, which is not a crime. Being unable to pay does not make you a wrongdoer, and the hearing is not a punishment. If you need an interpreter, contact the court office well in advance.
Before the hearing, it is also worth thinking about what you could actually pay, even if it is small. Many of these hearings end with a practical arrangement. If your debts are overwhelming, speaking to a licensed insolvency trustee or a lawyer about the whole picture may make more sense than a payment order you cannot keep up with.
What the Court Can Order
In Small Claims Court, the examination is held in the absence of the public unless the court orders otherwise, conducted under oath and recorded. After the examination, or if the debtor’s consent is filed, the court may make an order as to payment, such as a fixed sum each month.
An order as to payment has a real effect on the creditor. While it is in force, a creditor named in it cannot take or continue any step to enforce the judgment against the debtor, with one exception: issuing a writ of seizure and sale of land and filing it with the sheriff. So a garnishment may have to stop. Creditors should think about this before agreeing to a low monthly figure. Debtors can see the benefit: a realistic order can bring breathing room, so long as the payments are kept up. If a debtor falls behind, the rules provide steps that can bring the order to an end, which lets enforcement resume.
If Someone Does Not Attend or Will Not Answer
In Small Claims Court, the court may order a person to attend a contempt hearing if they were served with a notice of examination and failed to attend, or if they attend but refuse to answer questions or to produce records or documents.
Ontario’s published guidance makes the stakes plain: at a contempt hearing, a person who is found in contempt can be jailed for up to five days. That outcome is not automatic, and the hearing gives the person a chance to explain. Someone who has a good reason, such as a real illness or never having received the notice, can file a notice of motion and supporting affidavit (Form 15A) asking to set aside the contempt hearing order, before the date of that hearing. The court may deny the motion and require attendance.
In the Superior Court, failing to attend or refusing to answer proper questions can lead to orders requiring the person to reattend at their own expense, and a judge can make a contempt order for non-compliance. The rule also provides that a judge may make a contempt order if an examination shows that a debtor has concealed or made away with property to defeat or defraud creditors.
If you have been served and cannot make the date, do not stay away. Contact the creditor and the court office well before the hearing and ask about rescheduling. Keep a written record of what you did and what you were told.
How Often and How Much
A creditor cannot examine a debtor over and over. In the Superior Court, only one examination may be held in a twelve-month period for a debtor in the same proceeding, unless the court orders otherwise, so choose your timing and prepare well. If you are thinking about a further examination in Small Claims Court, ask the court office first.
Fees and costs are generally modest, and reasonable enforcement costs may be added to what is owed. The Superior Court rules allow a creditor to recover the costs of an examination in aid of execution on a partial indemnity scale, unless the court orders otherwise.
After the Hearing
For a creditor, the job now is to act on what you learned before it goes stale. If you got an employer’s name, consider a garnishment right away. If you learned of land, file a writ. If you heard about a transfer, get advice about its time limit. For a debtor, the job is to follow any payment order to the letter and keep proof of each payment.
If you are working out how to get paid on a judgment, or you have just been served with a notice, the firm’s page on small claim matters covers much of this ground, and the contact page is the way to set up a review of your order and the steps so far with Sawan Law House LLP. Have your judgment and any served documents on hand, and note the hearing date before anything else.