Post-Judgment Execution: Execution Against Real Property

Being successful at trial and obtaining judgment against an opposing party does not necessarily facilitate an easy transaction wherein the loser pays the winner for that judgment. Rather, successful litigants are often left in a position where they have succeeded at trial but are unsure whether, or how, they can collect on a monetary judgment. The Supreme Court Civil Rules (the “Rules”) and certain acts provide various mechanisms for aiding successful litigants with execution on judgment. These post-judgment mechanisms include debtor examinations, garnishment, execution against real property, execution against personal property, and equitable execution. This blog post will provide an overview of how unsecured creditors can execute against real property.

Although not the topic of this blog, secured creditors who hold mortgages registered against real property owned by a judgment debtor are able to execute against that property using foreclosure proceedings. The foreclosure process is primarily set out in Rule 21-7.

Unsecured creditors are unable to commence foreclosure proceedings. Instead, if an unsecured creditor aims to execute against real property, they must do so using the enforcement mechanisms set out in the Court Order Enforcement Act (“COEA”). Through the COEA, a judgment creditor may register a judgment against title to the judgment debtor’s real property and obtain the proceeds from the subsequent sale of the real property.

Once a litigant successfully obtains a judgment in the Supreme Court of British Columbia, the next step is to register the judgment against the debtor’s title to real property. It is important to note that the process for registering a Small Claims judgment is different than registering a Supreme Court Judgment. A Supreme Court judgment is registered under the Land Title Act by delivering a certificate of judgment to the registrar in the land title office in the district in which the land is located. Once registered, the judgment becomes a charge against the property (see ss. 86 and 88 COEA). Parties who have registered a judgment against a debtor’s title should be aware that the registration expires after two years unless it is renewed (see ss. 83 and 91 COEA).

Pursuant to section 89 COEA, and after the completion of a registration under section 88, the registrar of the land title office must then send to the owner against whose title the judgment has been registered a notice in the prescribed form, together with a copy of the certificate of judgment. This notice gives the owner an opportunity to dispute whether they are in fact the judgment debtor. Subsections 89(5)-(14) provide more detail on the steps that follow should an owner dispute being the judgment debtor.

After registering a judgment, the process for causing the real property to be sold involves three hearings:

1. The show cause hearing;

2. The registrar’s hearing to ascertain land and settle priorities; and

3. The confirmation hearing and order for sale.

The Show Cause Hearing (s. 92 COEA)

If a judgment creditor has registered a judgment under the COEA, and alleges that the judgment debtor is entitled to or has an interest in any land, an application may be made in Supreme Court Chambers, by the judgment creditor calling on the judgment debtor to show cause why any land in the land title district in which the judgment is registered should not be sold to realize the amount payable under the judgment (see s. 92 COEA).

Reference to Ascertain Land and Settle Priorities (s. 94 COEA)

If an order is made on an application under section 92 (show cause hearing), there must be included in the order a reference to a district registrar of the Supreme Court to:

1. find what land is liable to be sold under the judgment;

2. find what is the interest of the judgment debtor in the land and of his or her title to it;

3. find what judgments form a lien and charge against the land and the priorities between the judgments;

4. determine how the proceeds of the sale are to be distributed; and

5. report all the findings to the court.

The district registrar must deal with all judgments registered against the land whether registered before or after the judgment on which the proceedings are taken. It is important to note that unless good reason is found to the contrary, the creditor first taking proceedings is entitled to his or her costs in priority to all claims under the judgment whether before or after his or her own.

The district registrar’s report requires confirmation by the Supreme Court. All persons affected by the report must have notice of the application for confirmation. On application, the court may then confirm all or part of the report, alter it, or refer it back to the district registrar.

Confirmation Hearing and Order for Sale of Land (s. 96 COEA)

If the district registrar finds that any land, or the interest of any judgment debtor in it, is found liable to be sold, then an order must be made by the court declaring what land, or what interest in it, is liable to be sold, and directing the sale of it by the sheriff. Generally, the sheriff must not offer the land for sale within a period less than one month from the day on which the order for the sale of it is delivered to the sheriff.

The court may defer the sale, subject to terms and conditions of payment, if a premises situated on the land is the home of the debtor. A detailed procedure of how the sheriff is to sell the land, and how the proceeds are to be paid out, is set out in sections 100 to 114 COEA.