An overseas supplier has filed a claim against a British Columbia company for an unpaid contractual debt. The case may take months to resolve, but the creditor discovers something potentially more important than the debtor’s bank balance: one of the debtor’s customers is about to pay a substantial outstanding invoice.
Must the creditor wait for judgment before trying to reach that payment?
Not necessarily.
British Columbia has an unusual statutory remedy that can, in the right case, allow a plaintiff to obtain a garnishing order before judgment. Instead of attaching property already held by the defendant, the order can reach a qualifying debt owed to the defendant by a third party — for example, a commercial receivable owed by one of the defendant’s customers.
The remedy is powerful, but deliberately narrow. The creditor’s own claim must satisfy strict requirements, the third-party obligation must be capable of garnishment, timing matters, and a defective application can result in the order being set aside.
There is also an important statutory distinction: ordinary salary or wages cannot be attached before judgment under this procedure, even though certain commercial receivables may be.
How can a receivable be garnished before judgment?
Part 1 of British Columbia’s Court Order Enforcement Act governs attachment of debts.
Section 3 allows a plaintiff in a pending action to apply for a garnishing order before obtaining judgment. The application may be made without advance notice to the defendant.
The basic structure involves three parties:
- the plaintiff, who says money is owed to it;
- the defendant, against whom the action has been brought; and
- the garnishee, a third party that owes money to the defendant.
Consider a simplified commercial example.
A foreign manufacturer sells equipment to a British Columbia distributor for CAD 250,000. The distributor receives the equipment but does not pay. Litigation begins in British Columbia.
The manufacturer then learns that a large customer of the distributor owes the distributor CAD 180,000 under a completed commercial contract.
If the statutory requirements are satisfied, the manufacturer may seek to attach that third-party debt before obtaining final judgment against the distributor.
The purpose is not to transfer the customer’s money immediately into the creditor’s pocket. The garnishing process instead intercepts qualifying money that would otherwise be payable to the defendant and brings it under the control of the court pending the applicable procedure.
For an international creditor, this can substantially change the economics of litigation. A defendant that appears to own few obvious assets may nevertheless have valuable accounts receivable that can be identified before trial.
The creditor’s own claim must be sufficiently certain
Pre-judgment garnishment is not available merely because a plaintiff has demanded a specific amount of money.
Section 3 requires the supporting affidavit to state, among other matters:
- that an action is pending;
- when it was commenced;
- the nature of the cause of action;
- the actual amount of the debt, claim or demand; and
- that the amount is justly due and owing after making all just discounts.
British Columbia case law treats this as a remedy for a liquidated claim.
A liquidated claim is generally one where the amount has already been determined or can be established by straightforward calculation rather than by a judicial assessment of damages.
An unpaid contractual invoice may therefore present a much stronger basis than a claim for an estimated loss of future profits, reputational damage or other damages that require the court to decide what amount is appropriate.
The distinction was examined by the British Columbia Court of Appeal in Dhaliwal v. Bonterra Resources Inc., 2019 BCCA 303.
The Court emphasized that simply pleading a fixed figure does not automatically transform a disputed claim into a liquidated debt. The court must look at the real nature of the dispute, including the relevant contract, the parties’ obligations, acknowledgements or performance and the evidentiary basis for the amount claimed.
For a commercial creditor, this means that the phrase “unpaid invoice” is only the beginning of the analysis.
The underlying documents should show why the amount is presently owing and how it is calculated.
What should a creditor have before applying?
A foreign creditor considering pre-judgment garnishment should normally assemble the evidence supporting both sides of the proposed attachment.
First, it needs evidence of its own claim against the defendant. Depending on the transaction, this may include:
- the contract or purchase order;
- invoices;
- delivery records;
- acceptance certificates;
- account statements;
- agreed pricing;
- evidence of partial payments;
- credits or adjustments;
- correspondence acknowledging the balance; and
- documents showing when payment became due.
Second, the creditor needs a credible basis for saying that the proposed garnishee is itself indebted or liable to the defendant.
That information might come from contracts, litigation records, disclosed business relationships, accounting records, admissions, transaction documents or other lawful asset-tracing work.
The creditor should not assume that every customer of the defendant necessarily owes an attachable debt.
A business relationship may exist without money currently being owing.
Which commercial receivables can fall within the mechanism?
The Court Order Enforcement Act defines the relevant concept broadly enough to include debts, obligations and liabilities that are owing, payable or accruing due, subject to the statutory limitations.
This makes ordinary contractual receivables a potentially important target.
For example, a defendant company may have:
- an unpaid invoice issued to a customer;
- money due under a completed supply contract;
- a contractual payment becoming payable on a specified date;
- amounts owed for completed services; or
- another existing contractual claim against a third party.
But the existence of a commercial relationship is not enough.
The creditor should distinguish an existing obligation that has not yet reached its payment date from a merely anticipated opportunity to earn money in the future.
Section 15 of the Act is important here. It provides that where an attached claim or demand is not yet due at the time of attachment, an order may be made for payment when it matures.
This means that the fact that a payment date has not yet arrived does not necessarily prevent attachment.
The key question is whether there is already a qualifying debt, obligation or liability capable of being attached.
Suppose the defendant has fully performed a contract and its customer is contractually required to pay CAD 100,000 in 30 days. That situation is materially different from a defendant merely hoping to receive a future order from the same customer.
The first may involve an existing contractual receivable with a future maturity date. The second may involve no debt at all.
Why service on the garnishee matters
Timing is one of the most important practical features of the mechanism.
Under section 9 of the Court Order Enforcement Act, qualifying debts, obligations or liabilities in the hands of the garnishee are bound from the time the garnishing order is served on the garnishee or notice is given as directed by the court.
That makes asset identification and timing closely connected.
Imagine that a debtor’s customer owes CAD 200,000 and is preparing to pay it on Friday.
A creditor may know about the receivable, but knowledge alone does not attach the money. If the customer pays the defendant before the garnishing order becomes effective against the garnishee, the factual position may change completely.
By contrast, timely service while the qualifying debt remains in the garnishee’s hands can bring that obligation within the garnishment process.
For this reason, a creditor considering the remedy should establish not only who owes the defendant money, but also:
- why the money is owed;
- whether the obligation already exists;
- when it becomes payable;
- whether payment has already been made;
- the correct legal identity of the garnishee; and
- where and how the garnishee can properly be served.
These questions can be more important than the nominal size of the receivable.
Why wages are different
British Columbia law draws an express line between ordinary commercial debts and salary or wages.
Section 3(4) of the Court Order Enforcement Act states that a garnishing order under this Part must not be made before judgment for attachment of a debt due to an employee for the employee’s salary or wages.
The statutory definition of “wages” is also broader than basic salary. It includes salary, commissions, fees and other money payable by an employer to an employee for work or services performed in the course of the employment relationship.
This produces an important contrast.
If a company owes a defendant money under a commercial contract, that receivable may potentially fall within pre-judgment garnishment if all statutory conditions are satisfied.
If an employer owes an individual defendant ordinary employment wages, the statute expressly protects that wage debt from attachment before judgment.
The distinction matters because garnishment is sometimes described too broadly as a method for intercepting “money owed to the debtor.”
That description is incomplete.
The legal character of the payment matters.
After judgment, wage garnishment is governed by a different statutory position. Section 3(5) contains a general wage exemption under which 70% of wages are exempt from seizure or attachment, subject to other provisions of the Act and possible variation in accordance with the statutory regime.
A creditor should therefore avoid treating a commercial receivable and an employee’s wages as interchangeable assets.
An invoice is not automatically enough
Another common mistake is to assume that a stack of invoices automatically establishes the type of liquidated debt required for pre-judgment garnishment.
That depends on the underlying dispute.
Suppose a supplier invoices CAD 300,000 under a fixed-price contract and the purchaser simply refuses to pay despite accepting all goods.
That may look very different from a construction or services dispute in which the purchaser alleges defective performance, credits, incomplete work, contractual deductions or substantial set-offs.
Section 3 requires the amount claimed to be justly due and owing after making all just discounts.
Credits, contractual adjustments and other amounts that properly reduce the claim therefore cannot simply be ignored when the affidavit is prepared.
The plaintiff should be able to explain the calculation it swears is presently owing.
This is one reason why pre-judgment garnishment can be particularly useful for straightforward contractual debt but more difficult where the monetary claim depends on extensive factual or legal assessment.
Shier shows how an order can be lost after it is obtained
Obtaining the order is not necessarily the end of the dispute.
The defendant can challenge the garnishment.
A useful warning appears in Shier v. Copper Mountain Mining Corporation, 2023 BCSC 152.
The plaintiff had obtained a pre-judgment garnishing order in an employment dispute. When the defendant challenged it, the Supreme Court of British Columbia examined both the nature of the alleged liquidated claim and the material that had been presented when the order was sought.
The court concluded that material provisions of the employment agreement had not been disclosed in the application for the order.
Because the application had been made without notice, disclosure was especially important. The court held that a party seeking such an order must disclose facts material to the decision whether the order should be made.
The garnishing order was set aside.
The practical lesson extends beyond employment disputes.
A creditor should not draft the affidavit as an advocacy document that presents only the strongest facts and omits contractual terms that complicate the claim.
If a provision may materially affect whether the debt exists, whether it has matured, how it is calculated or whether it is subject to a condition, ignoring that provision can put the entire garnishment at risk.
Recent British Columbia litigation confirms the remedy remains active
Pre-judgment garnishment in British Columbia is not merely a historical mechanism.
In Versatile Media Ltd. v. Zhang, 2026 BCSC 1032, the Supreme Court of British Columbia considered garnishing orders arising from a commercial dispute involving film-production equipment and soundstage arrangements.
The claimant asserted contractual payment obligations exceeding US$1.5 million. The defendants sought to have the pre-judgment garnishing orders set aside and disputed whether the claim was sufficiently liquidated.
The Court dismissed the application to set aside the orders.
The decision is useful because it demonstrates how the liquidated-claim analysis continues to matter in a modern commercial contract dispute. A defendant’s disagreement with liability does not by itself mean that the amount is necessarily unliquidated. The court must examine the contractual structure and the real basis on which the amount is said to be owing.
For creditors, however, the case should not be read as meaning that every contractual claim supports pre-judgment garnishment.
The precise agreement, performance history, calculation of the amount and available defences remain central.
The defendant can seek release of the garnishment
A pre-judgment garnishing order is a protective mechanism, not a final adjudication of the creditor’s underlying claim.
Section 5 of the Court Order Enforcement Act permits an affected defendant to apply for release of all or part of the garnishment, and the court may grant relief where it considers that just in the circumstances.
A creditor should therefore plan for the possibility that the application will later be tested in an adversarial hearing.
That means the initial file should be prepared as though the defendant will challenge:
- whether the plaintiff’s claim is liquidated;
- whether the amount was properly calculated;
- whether material contractual terms were disclosed;
- whether all appropriate discounts or credits were taken into account;
- whether the garnishee actually owed a qualifying debt;
- whether the relevant debt existed when the order was served; and
- whether maintaining the garnishment is otherwise justified.
An order that cannot survive scrutiny may provide only temporary leverage and create additional cost.
A practical example for an overseas supplier
Assume a German manufacturer supplies industrial components to a British Columbia company.
The contract price is CAD 400,000. The goods are delivered and accepted. The purchaser pays CAD 100,000 but fails to pay the remaining CAD 300,000 by the contractual due date.
The manufacturer commences proceedings in British Columbia.
Through lawful investigation, it learns that a Canadian retailer owes the purchaser CAD 220,000 for goods already delivered under a separate contract.
This is the kind of situation in which pre-judgment garnishment may deserve immediate analysis.
The creditor would still need to establish that its own CAD 300,000 claim satisfies the statutory requirements. Any contractual credits, disputes or deductions must be considered.
It would also need a proper basis for identifying the retailer as a garnishee and for asserting that the retailer owes an attachable debt to the defendant.
If the conditions are satisfied and the order is obtained and served before the retailer pays the defendant, the receivable may potentially be brought within the garnishment process.
Now change one fact.
Instead of the retailer owing the defendant company CAD 220,000, suppose the defendant is an individual and a corporation owes that person CAD 20,000 in ordinary monthly salary.
The result is fundamentally different. Section 3(4) prevents pre-judgment attachment of that salary or wage debt.
The economic value may appear similar, but the legal classification of the payment changes the available remedy.
What should a foreign creditor verify first?
Before considering pre-judgment garnishment in British Columbia, an international creditor should answer several questions in sequence.
Is the creditor’s own claim a debt or other sufficiently liquidated monetary claim?
The amount should be ascertainable from the legal obligation and evidence rather than dependent on a discretionary assessment of damages.
Have all credits and contractual deductions been taken into account?
The amount sworn to be due should withstand scrutiny under the requirement to make all just discounts.
Who owes money to the defendant?
Identifying a bank, customer, contracting party or other potential garnishee requires more than speculation.
What is the legal basis of that third-party obligation?
The creditor should establish whether the defendant has an existing contractual or trust-based claim capable of falling within the statutory definition.
Has the receivable already been paid?
Section 9 makes the timing of service critical.
Is the payment actually wages or salary?
If so, the statutory prohibition on pre-judgment wage attachment must be considered.
Are there contractual provisions or adverse facts that must be disclosed?
A without-notice application should be prepared with the possibility of a later challenge firmly in mind.
This makes pre-judgment garnishment partly an enforcement issue and partly an asset-information issue. The remedy is much easier to evaluate when the creditor knows how the debtor’s business generates receivables and who controls the relevant payment streams.
British Columbia’s enforcement law is changing, but not yet
Creditors should also distinguish the current regime from British Columbia’s forthcoming enforcement reforms.
The province has enacted the Money Judgment Enforcement Act, which is intended to modernize the enforcement of money judgments.
However, as of September 2026, the substantive provisions of that Act — sections 1 to 214 — are not yet in force.
The present analysis therefore remains based on the existing Court Order Enforcement Act.
This distinction matters when reviewing commentary on future British Columbia enforcement procedures. A statute that has been enacted but has not yet commenced should not be treated as the law currently governing a creditor’s application.
Why the mechanism matters in cross-border recovery
For an overseas creditor, the most valuable asset of a British Columbia debtor may not be real estate, machinery or cash already sitting in an identifiable bank account.
It may be money that another business owes the debtor.
Where the creditor has a sufficiently certain contractual claim and can identify a qualifying third-party receivable, British Columbia’s pre-judgment garnishment regime may create an opportunity to protect value before the litigation reaches judgment.
But the mechanism is not a substitute for proving the underlying debt.
The plaintiff’s own claim must satisfy the statutory requirements, the amount must be properly calculated, material facts must be disclosed, the third-party obligation must actually be capable of attachment and the order must reach the garnishee at the right time.
The wage exception also demonstrates why asset classification matters. A commercial account receivable and an employee’s salary may both represent money owed to a defendant, but British Columbia law does not treat them the same way before judgment.
For international creditors, pre-judgment garnishment should therefore be considered as one potential provincial tool within the broader strategy for debt collection in Canada, rather than as an automatic remedy in every unpaid-debt case.
Where a creditor knows that a British Columbia debtor is expecting a significant customer payment, the practical priority is to examine the receivable, the creditor’s underlying claim and the timing before the payment disappears into the debtor’s ordinary cash flow.
