Seizure of RRSP (Enforcement Proceeding)

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Collins Barrow Leamington LLP v Tiessen, 2014 CanLII 72252 (ON SCSM)

53. I find that an RRSP investment does not constitute a debtor-creditor relationship, but it is personal property of the beneficiary. For the foregoing reasons, I must regrettably find that an RRSP cannot be seized by a Notice of Garnishment, but that any such seizure must take place by way of a Writ of Seizure and Sale of Personal Property.

60. But none of those features exist here. Scotia Securities Inc. did absolutely nothing to look into the matter and provide a meaningful or substantive response, either by letter or by the preferred Garnishee’s Statement. Instead, it issued a form letter in the same form and content as a letter it sent 4 months earlier in response to a April 19, 2013 Notice of Garnishment. The same letter was sent 1 year later on September 15, 2014, not in response to a Notice of Garnishment, but in response to a letter from Mr. Lammers dated September 10, 2014 seeking an explanation for the non-payment pursuant to either of the garnishments. This response starts, “We are in receipt of your Notice of Garnishment, dated September 10, 2014 naming The Bank of Nova Scotia as Garnishee.”, but there was no such Notice of Garnishment. The 3 letters were signed by different individuals and each contains 3 references to “the tax debtor” when the matter has absolutely nothing to do with a tax debt. It is obvious that the Garnishee did not respect or take the Court process and Notices of Garnishment seriously. I find that the Garnishee considered it satisfactory to simply issue a form letter when the Garnishee’s Statement contemplates so much more. The Garnishee simply did not give such matters the attention they deserve and require under the Court Rules.

61. Oddly enough, the Garnishee relies on the procedural technicality of the Creditor’s improper attempt to seize the RRSP by garnishment rather than by writ of execution, but then asks the Court to overlook its procedural shortcoming in failing to file a Garnishee’s Statement pursuant to the Rules.

62. It is not as if the Garnishee did not know better, it is a financial institution. Garnishee’s Statements were filed in response to 2 out of 3 Notices of Garnishment. While it may not be the place or obligation of the Garnishee to advise or assist a Creditor with how to effect a seizure, a proper and meaningful Garnishee’s Statement may have alerted the Creditor of the ineffectiveness or inappropriateness of the Notice of Garnishment which may have prompted the Creditor to issue and execute a Writ of Seizure and Sale of Personal Property prior to the bankruptcy of the Judgment Debtor which occurred 6 months later. The failure to file a meaningful Garnishee’s Statement therefore may have prejudiced the Creditor in its efforts to collect on the Judgment.

63. I find that the form letter dated September 4, 2013 (Appendix B) was woefully inadequate and does not represent a substitute for, or constitute substantial or sufficient compliance with, the requirement to file a Garnishee’s Statement. I further find that the provisions and consequences of Rule 20.08(17) apply and that there is no justification or reason to exercise my discretion to order otherwise. The Garnishee, Scotia Securities Inc., failed to file the required Garnishee’s Statement to the Notice of Garnishment issued on August 16, 2013 and served by registered mail on August 28, 2013.

64. For the foregoing reasons, in accordance with Rule 20.08(17), the Creditor is entitled to and shall have Judgment against Scotia Securities Inc. in the sum of $6,090.22. This Judgment shall bear post judgment interest from November 19, 2014 at the rate of 3% per year.

Fiorito v. Wiggins, 2017 ONCA 765 (CanLII)

[24] I do not accept this submission. In Manitoba, a farm property is exempt from execution by creditors. As a result, a proprietary order would have been necessary to allow a spouse to realize on such property outside bankruptcy. By contrast, in Ontario, outside of bankruptcy, RRSP’s are not exempt from execution by creditors, as they are not a class of property specified under the Execution Act. Therefore no order under ss. 9(1)(b) or (d) is necessary to allow a spouse to execute any debt against an RRSP belonging to the other spouse. However, once a spouse makes an assignment into bankruptcy, that spouse’s RRSP’s become exempt property: see BIA, s. 67(1)(b.3). Accordingly, the lift-stay remedy allows the creditor spouse to execute any debt against RRSP’s; they are only exempt under the bankruptcy regime, not under the provincial property and creditor’s rights laws.