Garnishment of a Bank Account: Some Comments

March 28, 2007

By Paul Jasiura

Recently we obtained Judgment on behalf of a client and took the usual step of issuing a Notice of Garnishment against the Judgment Debtor’s bank account.

We were surprised to hear back from the Bank that it would not respond to the Notice of Garnishment unless and until our client sent a further amount of $25 to cover the Bank’s service charge.

We also learned that the process is referred to their Calgary office.

We contacted the Bank immediately and suggested that it was in contempt of court if it placed conditions on its compliance with a Notice of Garnishment. It was our view that such Notice of Garnishment is effectively an Order of the Court, which demands compliance, on such terms as the Court imposes, not that the Bank might wish to impose.

The Court Rules permit the Bank to deduct only $10 from monies that are to be remitted to the Sheriff. There is no provision which compels a Judgment Creditor to pay any amounts as a service charge to have the court Order followed.

The Bank backed down quickly, and blamed it on a misunderstanding, claiming that such fees are permitted under the Rules of court in other provinces.

One wonders how many other “service charges” of this nature may have been (improperly) collected in the past.

Banks have a rather privileged position when it comes to enforcement of judgments in any event.

In order for there to be a successful garnishment in Ontario, the Judgment Creditor has to deliver the Notice of Garnishment to the correct branch of the Bank. In the “old days” the debt was more truly payable at the branch where the account was maintained, and this requirement perhaps made sense at one time.

Nowadays however the Banks are highly computerized, and can with a few simple keystrokes tell you all about what you own and owe, throughout their system. The Rules of Court however have not kept pace with this modern banking reality, as they still require a Judgment Creditor to track down each branch of the Bank where the Debtor has money on deposit.

Some reform of this anomaly would be helpful to achieve a more realistic approach to garnishment. But until that occurs, the Judgment Debtor can engage in something of a cat and mouse game. Each Judgment Creditor will have to take the steps necessary to track down the accounts, or to do a “blind” garnishment, hoping that when he spends the money to issue a Notice of Garnishment, he has picked the right branch.