Creditor Assistance Act

Creditor Assistance Act 83 1996 781755088/96083/tlc96083_f E3tlc96083 Definitions 1 In this Act: certificate means the certificate of the district registrar certifying the amount of claim to which a creditor is entitled under this Act, whether the claim be uncontested or found by the court; court means the Supreme Court; rateably means in proportion to the amount of a person's executions or certificates; writ of execution includes an order for seizure and sale issued under the Small Claims Rules. Sheriff's notice of levy 2 1 When a sheriff levies money on an execution against the property of a debtor, the sheriff must enter promptly in a book a notice stating that the levy has been made, its amount and the date of the entry. 2 The book must be kept in the sheriff's office and must be open to public inspection without charge. Distribution 3 The money collected under section 2 must be distributed rateably among all execution creditors and other creditors whose writs or certificates, under this Act, were in the sheriff's hands at the time of the levy, or within one month from the entry of notice, subject to the provisions for retention of dividends for contested claims, and to the payment of the costs of the creditor whose writ initiated the levy. Exceptions 4 1 Sections 2 and 3 do not apply to money received by a sheriff as proceeds of a sale of property by the sheriff under an interpleader order. 2 In subsections (3) and (4) adverse claim means a contested claim in which an interpleader issue is directed. 3 If the interpleader issue is decided in favour of the creditors, the sheriff must distribute the money, whether held by the sheriff or the court, among the creditors contesting the adverse claim. 4 If the sheriff or other officer takes proceedings under a provision relating to interpleader, only those creditors who are parties to the proceedings and who agree to contribute rateably to the expense of contesting an adverse claim are entitled to share in any benefit derived from a contest of the claim so far as may be necessary to satisfy their executions or certificates. 5 The court may direct that a one creditor has the carriage of the interpleader proceedings on behalf of all interested creditors, and b the costs of the proceedings, as between solicitor and client, are a first charge on the money or goods that may be found by the proceedings to be applicable on the executions or certificates. 6 On an interpleader application, the court may allow other creditors who want to take part in the contest a reasonable time to place their executions or certificates in the sheriff's hands, on terms about costs and otherwise as may be just. Subsequent levy 5 1 If, after the notice is entered but within the month, the sheriff levies a further amount from the property of the debtor, it must be dealt with as if that amount had been levied before the notice was entered. 2 If, after the month a further amount is levied, a new notice must be entered and distribution made according to section 4. Claims by other creditors 6 1 If a debtor permits an execution against the debtor, under which any of the debtor's goods or chattels are seized by a sheriff, to remain unsatisfied in the sheriff's hands until 2 days before the time set for sale by the sheriff or for 20 days after the seizure, other creditors of the same debtor may make their claims for their debts, whether due and payable or not. 2 An affidavit of claim of debt with particulars may be made in duplicate by a the creditor, b one of the creditors for a joint debt, or c a person knowledgeable of the facts. Service on debtor 7 1 The claimant must serve on the debtor a a duplicate of the affidavit, and b a notice stating that i the claimant intends to file the other duplicate with the district registrar, because there is in the sheriff's hands a writ of execution against the debtor's goods and chattels, and ii the claimant intends to require the sheriff to levy the debt out of the debtor's property under the authority of this Act. 2 The notice must also advise the debtor that if the debtor contests the claim, or part of it, the debtor must file in the registry, within 10 days of service, an affidavit stating that the debtor has a good defence on the merits to the whole claim or part stated, otherwise the claim or part will be treated as admitted by the debtor. 3 The notice must a require an address for service within 5 km of the place where the registry is located, or of a solicitor in British Columbia who may be served for the debtor, and b advise the debtor that, if the debtor does not supply an address as required, a document to be served may be served by mail addressed to the debtor at the place where the registry is located. 4 The notice may be endorsed on the claimant's affidavit or attached to it. 5 If the claimant's affidavit is to be served outside of British Columbia, the court must set the time for the claimant's next step. 6 If practicable, the claimant's affidavit and notice must be personally served on the debtor. 7 If it appears to the court that the claimant is unable to effect prompt personal service, the court may a order substituted or other service, or b appoint some act to be done that is deemed to be sufficient service. Procedure in registry 8 1 The claimant must file with the district registrar a a duplicate affidavit of claim, b a copy of the notice, and c an affidavit of service. 2 Before or with the filing in the registry, the claimant must file a certificate of the sheriff or an affidavit showing that there is in the sheriff's hand an execution against the debtor to entitle the creditor to proceed under this Act. 3 The district registrar with whom the affidavit is to be filed must be determined by regulation, having regard to the sheriff who gives the notice provided for by section 2. Address for service 9 1 An execution debtor may give the sheriff a written notice that any claim to be served on the execution debtor may be served a on a solicitor in British Columbia, whose name and address is stated in the notice, or b by mailing the claim to an address stated in the notice located in or within 5 km of the place where the office of the district registrar is located. 2 The sheriff must a enter the notice in the book established under section 2, b so long as any execution in the sheriff's hands at the time the notice was given remains in the sheriff's hands, repeat the entry immediately below any levy notice given for the execution, and c if the notice is revoked in writing, mark the entry "revoked". 3 So long as the notice is not revoked, an affidavit of claim and accompanying notice under this Act may be served on an execution debtor a if a solicitor is named, by serving them on the solicitor, or b if mailing is required, by mailing them by registered mail i to the address given in the notice, or ii if no address is given in the notice, to the place where the office of the district registrar is located. Service on claimant 10 If the notice under section 7 served on a debtor does not state an address for service in or within 5 km of the office of the district registrar, or does not give the name and address of a solicitor in British Columbia who may be served, a document may be served on the claimant by mailing it by registered mail, addressed to the claimant at the place where the district registrar's office is located. Certificate of claim 11 1 If the claim is not contested, the district registrar, 10 days after the day of service of the notice, personally or under section 9 (3), or within the time mentioned in the order for substituted or other service, on application and the filing of proof of that service, or on the termination of a dispute in favour of the claimant, in whole or in part, must deliver a certificate of claim to the creditor, or the creditor's agent. 2 If the claim is only disputed in part, the creditor may elect, by writing filed in the registry, to abandon the part and obtain a certificate for the residue. 3 The certificate must be delivered to the sheriff, and from the time of delivery the claimant is an execution creditor within the meaning of this Act, and entitled to share in whatever is recovered under the executions in the sheriff's hands, as if the claimant had delivered to the sheriff an execution against goods. 4 The certificate binds the goods of the debtor. 5 Despite subsection (4), a creditor may dispute the debt after the delivery of the certificate to the sheriff. 6 For the purposes of an interpleader proceeding, a certificate is deemed to be an execution. 7 If the certificate is obtained by a solicitor, it must state the solicitor's name and address. 8 If the certificate is obtained by the claimant in person, it must state some place, in or within 5 km of the place where the office of the district registrar is located, at which service may be made on the claimant. 9 If no place is stated in the certificate, service may be made on the claimant by registered mail addressed to the claimant at the place where the office of the district registrar is located. Sheriff to make another levy 12 On receiving the certificate, the sheriff must make a further seizure of the debtor's goods and chattels, if any, worth enough to cover the amount certified plus the sheriff's fees. Expiry of certificates 13 1 Unless renewed, a certificate remains in force for 3 years from its date. 2 The certificate may be renewed in the same manner as a writ of execution. 3 Despite the expiry of a writ or certificate, it has full effect for any money levied during the month in which a notice of money having been made is required to be entered. Right to contest claim by debtor 14 1 The claim may be contested by the debtor or by a creditor interested in contesting it. 2 A debtor who contests a claim must file in the registry an affidavit stating that the debtor has a good defence on the merits to the claim, or to a specified part of it. 3 The court may dispense with the affidavit on terms or otherwise. 4 The debtor must serve a copy of the affidavit on the claimant a within 10 days after the affidavit of claim and the notice are served on the debtor, or b within the time set by the court. 5 The address provisions in section 11 (7) to (9) apply to the affidavit and the debtor. Contest by creditor 15 1 A creditor who contests a claim must file in the registry an affidavit stating that the creditor believes the debt claimed is not in good faith due from the debtor to the claimant. 2 The court may dispense with the affidavit on terms or otherwise. 3 The affidavit by a creditor may be filed and a certificate of filing delivered to the sheriff at any time before distribution. Duties of parties if claim contested 16 1 A claimant whose claim is contested may apply to the court for an order allowing the claim and determining the amount. 2 The claimant is deemed to have abandoned the claim if the claimant does not apply within a 8 days of receiving notice of the contest, or b such further time, if any, as the court allows if the delay is reasonably accounted for. 3 If a creditor contests a claim and there is reason to believe that the contest is not in good faith, any other creditor may apply for an order permitting the other creditor to intervene. Examination of parties 17 Parties or other persons may be examined a either before or at the trial, as in an ordinary action, and b before the application to the court and as a foundation for it. Writs for any county 18 A creditor entitled to a certificate from the district registrar may have a writ of execution issued for any county in the same manner as on an ordinary judgment. Decision in one county binding in others 19 1 If a claim is contested in one county, the decision determines, for the parties, the amount of the claim for the purposes of this Act in all other counties in which the claim is filed. 2 The certificate of the district registrar of the decision is proof of the decision. Record and index of claims 20 1 The district registrar must maintain a record for every claim in respect of which the district registrar issues a certificate. 2 The record must state the following: a the name of each claimant and each debtor; b the amount of debt on each certificate exclusive of costs; c the amount of costs; d the judgment on each dispute; e the setting aside of the proceeding, if any, with a short statement of the reason. 3 Entries must be indexed alphabetically by the debtor. 4 Subject to this Act, an entry in favour of the claimant is an award of judgment for the debt and costs. Copy of record as evidence 21 If original papers are lost or destroyed, a copy of an entry in the record is evidence of matters in the entry. Time to pay 22 1 Before or after a certificate is issued by the district registrar or delivered to the sheriff, the court may allow the debtor further time to pay if a the debtor has made an application and given notice to the claimant, and b the court believes that this may be done without injustice to the creditor, or on terms that it believes are just. 2 There may be successive orders but no claim may be delayed for more than 3 months in all. 3 This section does not apply to a creditor who has obtained judgment in the ordinary way, and the orders for time are not to prejudice an execution by that creditor on the judgment. Payment before sale 23 1 A notice under section 2 must not be entered if, without a sale by the sheriff, all executions and claims in the sheriff's hands are withdrawn or paid in full, and no other claim has been filed with the district registrar. 2 If a debtor without a sale by the sheriff pays the sheriff part of the amount owing on an execution or claim in the sheriff's hands, and there is at the time no other execution or claim in the sheriff's hands, the sheriff must apply the amount paid to the execution or claim in the sheriff's hands, and section 2 does not apply to the money so received by the sheriff. Expiry of writs 24 After a certificate has been filed with the sheriff, the expiry, return, setting aside, stay or withdrawal of the writ on which the proceedings are founded or the satisfaction of the plaintiff's claim do not affect certificate proceedings under this Act, except a so far as the action taken may affect the amount to be levied, or b as provided in section 23 (2). Costs of claimant 25 The district registrar must state in the certificate the amount of costs to which the claimant is entitled against the debtor as follows: a serving affidavit of claim, the same fees allowed to a sheriff under the Supreme Court Civil Rules; b court registry fees, the same fees payable to the government for similar matters in the Supreme Court, to be allowed as costs to the claimant; c if there is no contest, the sum of $12 for fees of a solicitor, if employed, on a claim over $300, $8 on a claim under $300 and over $100, and $5 on a claim under $100; d in the case of a contest, the costs must be taxed on the Supreme Court scale appropriate to the claim allowed, and the costs of any contest are in the discretion of the court; e obtaining an order for substitutional service or similar order, or for service out of British Columbia, costs taxed by the district registrar on the basis provided for in paragraph (d). Fund in court 26 If there is in any court a fund to which an execution debtor is entitled, the money, or enough of it to meet claims in the sheriff's hands, may be paid over, on the application of the sheriff or any party interested, to the sheriff as money levied under execution within the meaning of this Act. Deficiency in levy 27 If the amount levied by the sheriff is not sufficient to pay the execution debts and other claims, with costs, in full, the money must be applied rateably to pay the debts and costs of the creditors, after paying the sheriff's fees, the taxed costs and the costs of execution to the creditor at whose instance the seizure and levy were made. Interest and further costs 28 If the certificate so directs, the sheriff must levy interest from the date of the certificate or the date named in the certificate, and also $1.25 for disbursements and $3 solicitor's costs, if any, on each renewal of the certificate. Sheriff's fees 29 If money is to be distributed by a sheriff under this Act, the sheriff is not entitled to poundage on each writ or claim, but only on the net proceeds of the estate distributable by the sheriff, and at the same rate as if the whole amount had been payable on one writ. Recovery for benefit of all 30 1 If money is recovered on one writ, the money must be treated as recovered on all writs or certificates entitled to benefit. 2 On paying a person entitled on a writ or certificate, the sheriff must endorse on it a memorandum of the amount paid, but, except if requested by the party issuing the writ, or directed by the court, the sheriff must not return the writ until it has been fully satisfied or has expired. Compelling payment by sheriff 31 The same proceedings may be taken to compel the sheriff to pay money payable on an execution or claim as may be brought to compel the sheriff to return a writ of execution. Statement pending distribution 32 1 Until distribution of the proceeds of a levy, the sheriff must keep in the book mentioned in section 2 a statement showing, for any debtor whose property has been levied, all of the following: a the amounts and dates of levy and particulars of each execution, certificate or order in the sheriff's hands at the time of entering the notice under that section or subsequently received during the month; b the amount for debt and costs; c the date of receipt. 2 The statement must be amended as an additional amount is levied or a new execution, certificate or order is received. Sheriff to give information 33 The sheriff must, without fee, a answer any reasonable question that the sheriff may be asked, orally or by letter, about a debtor's estate by a creditor, or anyone on the creditor's behalf, and b facilitate the creditor obtaining full information about the whole estate and probable dividend to be realized from it in the sheriff's jurisdiction, and any other information about the estate that the creditor reasonably wants. Attaching orders 34 1 A sheriff may attach debts owing to a debtor by any person resident in the sheriff's jurisdiction in the same manner as a creditor, if there are several executions and claims and there do not appear to be sufficient goods to pay them all and the sheriff's own fees. 2 The proceeds of the debts attached must be distributed in the same manner as if realized by levy under execution. 3 If the sheriff does not proceed, a person entitled to distribution may attach the debts owing to the debtor. 4 An attached debt must be paid to the sheriff. 5 Any creditor who attaches a debt does so for the creditor and all creditors entitled under this Act. 6 The sheriff in making distribution must apportion to the garnishor a share proportionate to the garnishor's claim, in the whole amount to be distributed under this Act, but the share distributed to the garnishor must not exceed the amount recovered by the garnishee proceedings unless the garnishor has given the sheriff a writ of execution or claim under this Act. 7 The sheriff is entitled to charge poundage on money garnisheed at the rate of 1 1/4% only, unless the sheriff has taken the garnishee proceedings. 8 The sheriff may recover from the attaching creditor money paid directly or through the court to the attaching creditor by the garnishee. Distribution if claim is contested 35 1 If a creditor contests a claim after a certificate has been delivered to the sheriff, the sheriff, unless the court otherwise orders, must proceed and levy as if the claim had not been contested. 2 Until the contest is concluded, the sheriff must a retain the amount that would be apportionable to the claim if valid, and b as soon as practicable, distribute the residue among those entitled. Priority for wages and salary 36 1 All persons entitled to share in the distribution who at the time of the levy by the sheriff, or within one month before the levy, were employed by the debtor, are entitled to be paid the wages or salary due or accruing due from the debtor to them at the time of the levy, not exceeding 3 months' wages or salary, in priority to the claims of the other creditors of the debtor. 2 They are entitled to their share, rateably with the other creditors, for the residue of their claims, if any. 3 In the distribution of the estate of an execution debtor under this Act, the provisions of this Act supersede the provisions of sections 46, 47 and 48 of the Court Order Enforcement Act . Distribution to established claimants only 37 A creditor is not entitled to share in the distribution of money levied unless the creditor a is an execution creditor, or b has established a claim under this Act either alone or jointly with another person. Distribution if amount levied insufficient 38 1 If the money levied is insufficient to pay all claims in full, the sheriff may a distribute that money promptly as directed by this Act, or b first prepare, for examination by the debtor and the creditors, a list of the creditors with the amount due to each for principal, interest and costs. 2 The list must show the amount for each creditor under this Act and the total amount to be distributed. 3 The sheriff may deliver or mail, prepaid registered, to each creditor or the creditor's solicitor a copy of the list. Distribution and objections 39 1 If within 8 days after the copies of the list under section 38 have been delivered or posted, or within further time allowed by the court, no objection is made, the sheriff must distribute promptly, according to the list. 2 If an objection is made the sheriff must distribute promptly an amount of the money to those persons as may not interfere with the effect of the objection. 3 The sheriff may disregard objections that are frivolous or clearly insufficient to interfere with the distribution. How objections are made and heard 40 1 A person who objects to the proposed distribution scheme may contest it by giving the sheriff a a notice in writing stating distinctly the objection to the scheme, or part of it, and the grounds of objection, and b an affidavit of previous service of a copy of the notice on the debtor and the creditors interested in resisting the objection, unless the court, by order, has dispensed with service, or an affidavit of service, as the court determines. 2 The person who objects must then, within 8 days, apply on notice for a court order determining the dispute. 3 If the steps in subsection (1) and (2) are not followed, the objection is deemed to be abandoned. 4 The court may a determine any question in dispute in a summary manner or direct an issue for trial, either by a jury or otherwise, and b make an order for costs of the proceeding as may be just. 5 If the person who objects fails or is only entitled to part of the claim, the money retained until the contest, or the portion freed, must be distributed among the creditors who would have been entitled. Intervening encumbrance 41 1 In this section, security agreement has the same meaning as in the Personal Property Security Act . 2 If an execution debtor, subsequent to the sheriff's receipt of the first execution and before the time for distribution has expired, has executed a mortgage, a security agreement or other charge on the debtor's estate, the sheriff must proceed as under this Act, but in distributing any money realized the sheriff must deduct and retain for the person entitled the amount of the encumbrance so created rateably from the amount otherwise payable to the subsequent creditors. Court's power on contest 42 1 The court may a direct the sheriff to levy an amount sufficient to cover a disputed claim, or a part of it, b if it appears to the court that it is improbable that the defendant has other sufficient property, order the sheriff to retain in the sheriff's hands during the contest the share that, if the claim is sustained, will be apportionable to it, or c make an order combining these orders or a similar order as may be just. 2 An order to levy under this section gives the sheriff the same power the sheriff would have under a writ of execution. Powers of court 43 1 To carry out this Act, the court has all the powers it has for other purposes. 2 Any proceeding wrongly taken under this Act may be set aside by the court, with or without costs. Decisions binding on all creditors 44 A decision under this Act of the court, or the Court of Appeal on appeal, binds all creditors, unless it appears that the decision was obtained by fraud or collusion of the parties. Deposit of money 45 1 A sheriff must deposit in a savings institution in British Columbia any money amounting to $100 or more, if the sheriff cannot immediately pay it over to the execution creditors or other claimants under this Act. 2 The deposit must be in the name of the sheriff in a special account as "Trustee for the creditors of .............. [the debtor]". No priority 46 There is no priority among execution creditors in the Supreme Court or the Provincial Court. Defects in form 47 A proceeding under this Act is not void for a defect in form. Supreme Court Civil Rules 48 The Supreme Court Civil Rules apply so far as they are consistent with this Act. Fees 49 In addition to the fees otherwise payable under this Act, there must be paid to the district registrar, on the filing of an affidavit of claim or on the issue or renewal of a certificate, the fee prescribed by the Lieutenant Governor in Council for that service. Application 50 1 This Act is not intended to interfere with, but is intended to be subject to, the insolvency laws in force in British Columbia. 2 Otherwise this Act applies to all debtors, solvent or not. Power to make regulations 51 The Lieutenant Governor in Council may make regulations for the purposes of section 8 (3) to provide for the district registrars with whom affidavits must be filed.