Sunday, 11 March 2012

Practice Point: How to Garnish TD Bank?

When it comes to pre or post-judgment garnishment under the Court Order Interest Act, the Registry is notoriously fickle.  Even a smallest defect in service of the Garnishing Order or the 10-day Notice of Payment under section 13 of the COEA can result in the Registry refusing to release funds without a court order and require an application to a Master.  For example, I've had the Registry refuse to accept service on a judgment debtor's solicitor, even though he specifically acknowledged service; and refuse to accept service on a director as service on a corporation, even though this is specifically permitted under s. 9 of the Business Corporations ActIn the last situation, the Registry purported to require service on the corporation's R&R office.

In any event, this brings us to service of garnishing orders ("GO") on banks generally, and TD Bank, specifically.  To effect (hopefully) valid service of a GO, you will want to follow these simple steps:

1. Name "TD Canada Trust" as the Garnishee. 
As explained by the Ontario Supreme Court, this will garnish the debtor's accounts at five separate financial institutions:  The Toronto-Dominion Bank; TD Mortgage Corporation; TD Pacific Mortgage Pacific Corporation; The Canada Trust Company; and Canada Trustco Mortgage Company.   

Note that this may also be applicable to other financial institutions that operate under an umbrella name. 

2.  Address the GO to the Branch where the Debtor's Account is Located.   
This is a requirement of s. 462(1)(b) of the Bank ActIn an 1981 BCCA decision, the purpose of this section was explained as designed to protect the bank against having "to search the records of every branch in Canada and probably out of Canada, a quite impractical proposition."  While computerization and online banking have made this purpose moot, the section is still on the books.

If the account you are seeking to garnish is at TD's main Vancouver branch, make sure to address the GO to simply "700 West Georgia".  Adding any additional qualifiers to the address, for example, "3rd Floor", will only target the GO at a specific department within TD and may invalidate it.

3.  If the Branch is Located Outside of B.C., Obtain Leave for Ex Juris Service (maybe)
The garnishing procedures under the COEA only apply to garnishees who are "in the jurisdiction of the court" (s. 3(2)(e)).  In Univar Canada Ltd. v. PCL Packaging Corporation, 2007 BCSC 1737, the court confirmed this applies to jurisdiction over garnishees, rather than garnished funds, and banks that have branches in B.C. are within the jurisdiction of the court, even if the branch sought to be served is elsewhere.  However, the court also held that "Where the branch is located outside British Columbia, [the judgment creditor] must, under the Rules of Court, obtain leave to serve the garnishing order ex juris." 

The conclusion regarding service was likely obiter dictum, since the plaintiff acknowledged that the issue was moot at the time of the hearing.  Perhaps for that reason, it appears that Rule 13(1) [now R. 4-5(1)] was not considered by the court or the parties.  That rule provided and provides that leave to serve ex juris is not required "in any of the circumstances enumerated in section 10 of the Court Jurisdiction and Proceedings Transfer Act".  Section 10 of the CJPTA provides a list of situations where the court's jurisdiction is presumed, including where a proceeding:
(k) is for enforcement of a judgment of a court made in or outside British Columbia or an arbitral award made in or outside British Columbia, or
Arguably, a garnishing order falls squarely within s. 10(k) and thus may be served on a branch in another province without leave.

These are not a new recent developments, but arise, in part, from a practice tip that came to me courtesy of my colleague, Anna Sekunova