Civil Litigation

How to collect on a small claims court judgment

By Staff

In this final instalment of a three-part series on how to navigate small claims court, Toronto litigator Stefan Rosenbaum explains how to collect on a judgment.

Winning a judgment in small claims court isn’t the end of the process, warns Toronto litigator Stefan Rosenbaum — now you have to collect.

“You'd think it would be fairly simple once you have a judgment against a business,” he tells “But it isn't always.”

Even before launching an action, it’s prudent to consider the chances of actually collecting on a judgment, says Rosenbaum, an associate with Shibley Righton LLP.

Fly-by-night contractors are notoriously hard to track down, he says, and you could spend thousands more trying to enforce the court's decision.

In most cases, you will be able to collect from the other party, says Rosenbaum, especially if they’re a well-established enterprise with employees, a head office and other locations. You’ll also find it relatively easy to collect from a party if they own property or a home, for example.

The first search should be to see if they are bankrupt, he says, because if they are, there's little point in continuing.

You should also do a litigation search to see what other court matters they may have been dragged into, he says. It might turn up the names of other parties that are looking to collect, and you may be able to share notes with them since you both have a common purpose.

The takeaway, says Rosenbaum, is to do your homework before you enter into a contract for services or goods — know who you’re dealing with, and make sure they’re not simply working off a cellphone from their truck. Ensure they are a viable business with bona fide references.

Relying on small claims court litigation in the event things go wrong is not a secure plan, he says.

If you do launch an action and win, says Rosenbaum, the next step is to find them to collect — and that may be hard if all you have is a phone number which might well be disconnected at some point.

“You have to go through all the documentation you have and see if there’s a bank account or an address — something you can work with,” he says. “Even a cheque they wrote might help.”

Rosenbaum says you’ll need the exact account number and branch to get the bank to co-operate and even then, there might be no money in the account.

“You can go to the small claims court office and fill out a notice of garnishment, Form 20E, which the court will then certify. But of course, you’ll have to pay more money for this,” he says. “The next step is a land titles search, but you’ll have to do it by area since listings in the GTA are different than those in Peterborough, for example.”

If you discover the person has a regular job and was working on the side, you can use the same process to garnish their wages, though you won’t get all the money at once, Rosenbaum says.

If they own property, he says, you can file for a writ of seizure, but it takes about four months before the Sheriff can act on it, he adds.

You can also search the Personal Property Security Registration system, which lists property used as collateral to secure loans, Rosenbaum says.

The entire process requires a significant amount of work and can get expensive if you hire someone to do all the legwork, he says, which will diminish any returns on the judgment.

“By the time you get to court, you’ve spent quite a bit of money — even if you did the work yourself — and now you have to take time off work,” Rosenbaum says.

“You could go through the entire court process, only to find out they have nothing. That’s the risk of small claims court. Even if you win, you may not be able to collect.”

To read part one, where he discusses how to be successful in small claims court, click here.

To read part two, where he reviews how to prepare for the process, click here.

To Read More Stefan Rosenbaum Posts Click Here