Debates of October 23, 2006 (day 13)

Thank you, Mr. Braden. Motion is on the floor. Motion is in order. To the motion.

Question.

Question is being called. All those in favour? All those opposed? The motion is carried.

---Carried

I’ll call Committee of the Whole to order and I would like to ask what is the wish of Committee of the Whole today? Mr. Braden.

Thank you, Madam Chair. Committee would like to consider Bill 12, Garnishment Remedies Statutes Amendment Act, Madam Chair.

Thank you, Mr. Braden. Does committee agree?

Agreed.

Okay. We will proceed with that after a break, then. Thank you.

---SHORT RECESS

I'll call Committee of the Whole back to order. Members, we have one matter before us today that the deputy chair has indicated he wants to deal with and that is Bill 12, Garnishment Remedies Statutes Amendment Act. I would like to ask the Minister of Justice, Minister Bell, if he has any opening comments.

I am pleased to be here today to review Bill 12, Garnishment Remedies Statutes Amendment Act.

This bill amends the Creditors Relief Act, the Territorial Court Act and the Public Service Garnishee Act so that a garnishment order would continue to be in effect for up to one year or until the debt is paid, whichever comes first. The legislation also amends the Exemptions Act to increase the amount of wages that are exempt from garnishment.

Garnishment orders are used to collect debts that have been ordered paid by the court. The order is served on the person who owes the debtor money, usually the debtor's employer, and an amount is deducted from debtor's pay paid into court, and ultimately paid out to the judgment creditor.

Under current legislation, this order can only apply to salaries and wages that are due at the time the summons is served. If the total amount owing is not paid in full, then another garnishment order must be obtained and so on until the entire amount is collected. This is expensive and time consuming. The judgment creditor must pay fees to file and serve each garnishment order, and this cost is added to the amount owed by the debtor. This process involves unnecessary time for court staff that can be better spent on other duties.

Madam Chair, these amendments would reduce the cost and inconvenience of filing and serving garnishment orders every payday. Recent amendments to the Territorial Court Act increased the limit of civil claims from $5,000 to $10,000. The amounts of judgments and garnishments have increased, and obtaining a continuing garnishee is an appropriate and cost-effective way to ensure collection and payment of debts.

Section 9 of the Exemptions Act limits the amount of wages or salary that can be garnished in a month. Currently, the exempt is $300 plus a further r$100 per adult and $80 per child. The proposed amendment would raise the limit to 30 percent of salary and wages. This is consistent with legislation in other jurisdictions.

These amendments will ensure the small claims process is an accessible and effective tool for resolving disputes.

Consultations have indicated general support for these amendments.

I would like to thank the Standing Committee on Social Programs for its careful review of Bill 12, and its cooperation in bringing forward amendments that improved the bill.

Madam Chair, we will be pleased to answer any questions the committee may have. Thank you.

Thank you very much, Minister Bell. At this time, I would like to ask the Minister if he would like to bring any witnesses into the Chamber.

I would. Thank you, Madam Chair.

Thank you, Minister Bell. Is the committee agreed?

Agreed.

Before we do that, Minister Bell, I'd like to turn the floor over to Ms. Lee, the chair for the Social Programs committee. Ms. Lee.

Thank you, Madam Chair. I'd like to provide committee's comments on the bill. The Standing Committee on Social Programs conducted its public review of Bill 12, Garnishment Remedies Statutes Amendment Act, on September 5th, 2006, and October 16th, 2006. During the public hearing, the Minister confirmed that the amendment will result in fewer fees as garnishment orders will have effect for up to one year and it will no longer be necessary to obtain an order very two weeks as is currently required in many cases. While a garnishment order might apply to several paycheques, the fee would only be payable once.

During the clause-by-clause review of the bill, the committee made two amendments at the government's request to remove a provision which could have created confusion about the priority of maintenance enforcement orders and to add necessary changes to the Public Service Garnishee Act, which were overlooked when the bill was initially drafted.

Following the committee's review, a motion was carried to report Bill 12, Garnishment Remedies Statutes Amendment Act, as amended and reprinted, to the Assembly as ready for Committee of the Whole. This concludes the committee's opening comments on Bill 12. Individual Members may have additional questions or comments as we proceed. Thank you, Mr. Chairman.

Thank you, Ms. Lee. Then I believe Mr. Bell would like to bring witnesses into the Chamber. Is the committee agreed?

Agreed.

Agreed, thank you. Sergeant-at-Arms, would you please escort the witnesses to the witness table.

Mr. Bell, for the record, could you please introduce your witnesses. Mr. Bell.

Thank you, Madam Chair. With me today, Reg Tolton, ADM, Department of Justice; Mark Aitken, director of legislation. Thank you.

Thank you, Minister Bell. At this time I'll ask the members of committee if they have any general comments to Bill 12. Ms. Lee.

Thank you, Madam Chair. I'd like to speak as a Regular Member in this Assembly, not as the chair of Social Programs. I just want to start by thanking the Minister for bringing this legislation forward. I do realize that any document that says Garnishment Remedies Statutes Amendment Act might not be very exciting, but I have to tell you that this is a legislative amendment that has quite important, practical implications for a lot of residents out there.

I believe the Minister has mentioned the Creditors Relief Act has not had amendments in this jurisdiction for a very long time, and this amendment here seeks to address just a few provisions dealing with that, and I do appreciate that while we couldn't do a lot more, that the Minister has been able to bring this forward and get this through and have a debate today.

I think it should be made clear, I guess for those who are not aware, that this legislation is not to go after people who have debts and are not able to do things. This legislation applies after all processes have been exhausted and debtors have had their say in court and had an opportunity to defend in court. After everything has been exhausted and resolved, this legislation seeks to help creditors to be able to collect the judgment or the debt without having to incur inconveniences and costs unnecessarily.

I can tell you, Madam Chair, that I didn't practice law for a very long time, but when I did I had some of the debtors' files and at the time I thought it was quite unreasonable that people who had money owed to them had to not only go to court and spend a lot of time getting a judgment, but once a judgment is rendered, nobody helps the creditor to collect that judgment even if they want it. Every two weeks you have to file the garnishee again and pay the fee, and I tell you I don't think unless somebody's going after a huge amount of money, anything less than a few thousand, it was just not worth collecting. The only people I knew that were collecting was to kind of make the point of collecting it on principle. So I think this legislation goes a little lengthy in trying to address that.

I think it also should be mentioned that it's really the government that would benefit as one of the biggest organizations and creditors, probably, in being able to collect some money that people owe to them that they are entitled to have. So I guess I'm speaking just in general in support of this legislation and to say that I'm happy to see that those who are in this business of trying to get what is just to them will be able to do it without having to go through the process over and over again. So let me just end there.

I am going to have a comment or a question to the Minister later on on notice. Thank you, Madam Chair.

Thank you, Ms. Lee. Any response, Mr. Bell?

I want to thank the committee again for their support in this, and thank the Member for her personal interest in this. Obviously her operational experience in the court system probably was behind a number of the suggestions that she was bringing forward in committee. I do believe that they have improved the bill and I think that that's good to see. I look forward to her questions and any other committee questions. Thank you.

Thank you, Mr. Bell. Any further general comments? Mr. Braden.

Thank you, Madam Chair. I'm speaking in favour of the bill. One point of clarification for the floor here this afternoon, in his opening remarks the Minister said that a proposed amendment to the Exemptions Act will raise the limit of the amount of wages or salaries that can be garnished to 30 percent of salaries and wages. So a maximum of 30 percent of a person's salary or wage can be garnisheed, or is it garnished? Madam Chair, is this 30 percent of gross or net earnings? Thank you.

Thank you, Mr. Braden. Minister Bell.

Madam Chair, the amount referred to is after deductions. So up to 30 percent after deductions.

So 30 percent of net pay. Mr. Braden.

Thank you very much, Madam Chair. That's fine. That's what I was hoping the answer would be. That's all.

Okay. If the committee agrees there's no further general comments, then are you ready to proceed to the clause by clause? Ms. Lee.

Thank you, Madam Chair. If I could have the indulgence of the House, I'd like to just raise a point that I'd like the Minister to speak on, because I’m not sure exactly if we have a clause that this specifically applies to and I don't want to end up at the end of the bill and find out that I did not deal with the issue. Maybe the Minister and his advisors could tell me exactly what clause I should bring this out to if it should not be in the general comments. The only issue I have is the fact that while this legislation improves the debt collection process in that right now garnishees have to be served I believe every couple of weeks, or every time you want to collect. This one would allow the garnishee to be in effect for up to a year, eliminating the need for the creditors to do the work. But at the same time, in some jurisdictions the garnishee notice has to only be served to either the employer or employee, or I should put it another way. If the garnishee notice is served to the employer, in some jurisdictions it's the same as being served to the employee as well, because the argument is how could you serve notice on an employer without the employee knowing? I'm not explaining this well, but I know the Minister and his advisors know about this because I've raised this as a Regular Member.

For example, in cases like the Maintenance Enforcement Act, the requirements for service of notice is a lot more lenient and the Minister was reluctant in putting that sort of leniency in this legislation, thinking that it should not be that difficult for an employee to be served within 30 days of the employer being served. But I can tell you especially in the Territories where there are, for example, diamond mines where there are workers on different schedules where they could work two weeks in there and two weeks out and before you know it, 30 days is up, four weeks is up. If the garnishee is not served to both the employer and employee, the collection might not be able to take effect. I've had discussions with the Minister on this issue and he's suggested that rather than going through the legislation, but going through changes in the rules or regulations could achieve the same outcome. So I'd like to ask the Minister, before we go into the clause-by-clause review, if he could state, for the record, first of all, I hope he understands my concerns here, and, second of all, that he would, once again, make a commitment to work through the internal ways of adjusting the rules of the court to make that happen? Thank you.

Thank you, Ms. Lee. Mr. Bell.

Madam Chair, for the record, we agree with the Member. She has made, what we think, is a reasoned argument. We know that we need to go to the judges, at any rate, to have the rules of court changed, so I would propose that what I do is direct my officials to sit down with the judges and propose that this be changed to allow this to happen, and I'm prepared to do that. So I think that's how we can best deal with this. The rules of court need to be changed. As the Member said, notice served to employees, the fact that another jurisdiction equals being served to the employee and I think we can accommodate that by asking the judges for a change in the rules of court. So I will direct that to happen. Thank you.

Thank you, Minister Bell. Ms. Lee.

Thank you, Madam Chair. I do have communication with the Minister in writing and I don't want to read it again, and I would like to take the Minister's commitment here to go with. But at the same time, could I just ask the Minister whether or not it would be possible to have those changes made to the rules of court on the service requirement, first of all to confirm that his officials will work toward making it acceptable to have an employer being served the same as the employee and, second of all, whether the Minister could give a commitment as to how long this will take for that to happen and could that happen before the legislation comes into force? Thank you.

Thank you, Ms. Lee. Mr. Bell.

Madam Chair, yes, to the first question. The second question as to how long it will take, it’s really in the hands of the judges. So I will direct my officials to raise this with the judges. Hopefully they are amenable and hopefully they can move this through expeditiously. Thank you.

Thank you, Minister Bell. Ms. Lee.

I think I will go with that. I will keep communicating with the Minister to follow that up. Thank you.

Thank you, Ms. Lee. General comments. Mr. Villeneuve.

Thank you, Mr. Speaker. A quick question on the 30 percent limit, raising the limit to 30 percent of net income. What were we at before we raised it to 30 percent? Thank you.

Thank you, Mr. Villeneuve. Mr. Bell.

Madam Chair, as I stated in my comments, currently the exemption is $300, plus a further $100 per adult, $80 per child. This proposed amendment raises that to 30 percent of net salaries and wages. As I have indicated as well, this is something we took from other jurisdictions. This is where the bar sits in a number of other jurisdictions. Thank you.

Thank you, Minister Bell. Mr. Villeneuve.

Thank you, Madam Chair. I think just the fact that they worded the exemption, $300 plus a further $100 and $80 per child is kind of misleading. Basically that was the maximum. I am just not sure how this can be explained better. Was the maximum just $300 plus the $80 or $100 for every extra adult or what was it? Is that the maximum that was set before the $300 and now we are moving to 30 percent, or is there another percentage that we were looking for? The word exemption is in there, so what does that exempt, the garnishee, the debt or what? Just explain it to me a little clearer.

Thank you, Mr. Villeneuve. Mr. Bell.

Madam Chair, I am sorry if it’s confusing the way it’s laid out here. The $300 currently could be exempted from seizure. So you could be left with only $300 if you had a court order against you. That was the one amount. Now it varies, depending on whether you were looking after children. There was a certain amount, if that was the case, but $300 was the number you could be left with per month. Now we are saying the most that somebody can go after is up to 30 percent net of what you make each month. Thank you.

Thank you, Minister Bell. Mr. Villeneuve.