Underneath the Golden Boy - Robson Hall Faculty of Law

212 Underneath the Golden Boy
laws of both levels of government have upon each other. The federal
government has jurisdiction in the area of bankruptcy and insolvency, 4 while
provincial governments have jurisdiction in property and civil rights. 5 Therefore,
Manitoba’s debtor-creditor regime is distinct from the federal Bankruptcy and
Insolvency Act. 6 An important aspect of bankruptcy worth noting is that
exemptions from divisible property include, “any property that…is exempt from
execution or seizure under any laws applicable in the province.” 7 This results in a
significant connection between federal bankruptcy laws and provincial property
rights. The RRSP Act will result in RRSPs held by bankrupt Manitobans to be
exempt from the property that is divisible by their creditors. 8
B. Enforcement Remedies for Creditors in Manitoba
The process in which creditors exercise their rights from judgment to enforce
payment from their debtors has been described as, “[N]ot so much a ‘system’ as
it is a collection of discrete procedures aimed at specific types of
assets…[whereby] a creditor must resort to one or more of the remedies…in
order to reach all of the debtor’s property.” 9 Why is this the case The remedies
available to creditors have their genesis in the common law, 10 can come from the
courts of equity, 11 are guided by dedicated enforcement statutes, 12 are limited by
4
The Constitution Act, 1867 (U.K.), 30 & 31 Victoria, c. 3, s. 91(21).
5
Ibid., s. 92(13).
6
Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3.
7
Ibid., s. 67(1)(b).
8
Bill C-62, An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors
Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of
Canada, 2005, 39 th Parl. 2 nd Sess., 2007, cl. 32(1) (as passed by the House of Commons 29
October 2007). This amendment adds RRSPs as a specific exemption to the divisible property
of a bankruptcy throughout Canada, except those amounts added to the RRSP within 12
months of the bankruptcy.
9
Manitoba Law Reform Commission, Review of the Garnishment Act (Winnipeg: Queen’s
Printer, 2005) at 2.
10
The writ of fieri facias allowed for the seizure of goods, chattels, leases, and crops. The writ of
elegit allowed for the possession of the debtor’s land. Early common law exemptions from
enforcement included only the wearing apparel and goods on the person. For an analysis of
common law creditors’ remedies, see C.R.B. Dunlop, Creditor-Debtor Law in Canada, 2 nd ed.
(Scarborough, ON: Thomson Canada Ltd., 1994), chapter 4.
11
Receivership occurs where the court appoints a receiver to collect the personal estate and any
amounts owing to the debtor. Where equitable execution is ordered, the receiver has the power
to sell the personal property of the debtor. Amounts held by the receiver are then distributed to
the creditor(s). The Mareva injunction (Mareva Campania Naviera S.A. v. International Bulk
Carriers S.A. [1980] 1 All E.R. 213 (C.A.)) is a creditor remedy directed at the person (rather
than the property) whereby the debtor is ordered, prior to judgment, to not dispose of specified