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Execution - Garnishment


Part 2

. Benzacar v. Terk

In Benzacar v. Terk (Ont CA, 2023) the Court of Appeal considered a rarely-advanced appeal from a R60.08 garnishment motion.

In this passage, the court clarifies aspects of 'insolvency', here in the context of an allegation in a garnishee statement:
[48] The assertion that 604 was insolvent as its bank had called in its loans was irrelevant to the existence and continuing accrual of debts to Mr. Terk. Insolvency “is the factual situation that arises when a debtor is unable to pay its creditors”: Century Services Inc. v. Canada (Attorney General), 2010 SCC 60, [2010] 3 S.C.R. 379, at para. 10. It does not wipe out nor negate the existence of the debts. There was no evidence that 604 was the subject of any formal insolvency proceedings that would stay enforcement of debts. And as I have already pointed out, that Mr. Terk was not taking his salary did not mean that 604 was not, and would not be, indebted to him for it.
. Benzacar v. Terk

In Benzacar v. Terk (Ont CA, 2023) the Court of Appeal considered a rarely-advanced appeal from a R60.08 garnishment motion.

In these quotes, the court addresses orders issued by the motion judge that a garnishee's statement was "inadequate":
[5] After being served with notices of garnishment in 2017, both 604 and 410 filed garnishee statements, prepared and signed on their behalf by Mr. Terk. The garnishee statements did not acknowledge that there were or would be any debts owing by either company to Mr. Terk. Only the part of each form applicable to a garnishee who does and will not owe any money to the debtor was filled out. However, between 2019 and 2021, 604 did pay certain amounts to the sheriff, representing 20% of the amounts it actually paid as salary in those years to Mr. Terk.

[6] On a motion by Ms. Benzacar contending that the response of the garnishees was inadequate, the motion judge granted certain relief. She found that the exemption for wages payable to Mr. Terk should be reduced, such that 40%, rather than 20%, of his salary was subject to garnishment. She also found that 40% of the management fees paid by 604 to Mr. Terk’s alter ego company was subject to garnishment and should have been paid to the sheriff.

[7] The primary issue raised by Ms. Benzacar on appeal is that the relief granted by the motion judge did not go far enough. She submits the motion judge erred in declining to find that the garnishee statement of 604 was so deficient as to be the equivalent of no statement at all, which would have rendered 604 liable for the entire debt owed by Mr. Terk to Ms. Benzacar. For the reasons that follow, I conclude that the motion judge erred in failing to grant this relief.

[8] The purpose of a garnishee statement is to accurately delineate the issue between the creditor and the garnishee − it is not the first step in “a catch me if you can” process. 604’s statement was the antithesis of what was required. It did not acknowledge the debts it did and would owe to Mr. Terk, and it could only be read as falsely claiming there were and would be no debts. It was, functionally, no statement at all. The motion judge ought to have given effect to Ms. Benzacar’s entitlement to an order against 604 as a garnishee who had failed to comply with this fundamental obligation.


When a Materially Misleading Garnishee’s Statement Is Considered to be the Equivalent of No Statement

[38] Both parties accept the proposition that if a garnishee statement proves to be false, the court may treat the garnishee as though it has not filed the required statement at all: Turchiaro v. Liorti, [2004] O.J. No. 6289 at paras. 16-17, aff’d 2006 CanLII 8872 (ON CA), [2006] O.J. No.1113 (C.A.).

[39] Although the proposition in Turchiaro has not been the subject of extensive treatment in the case law, in my view it is subject to two caveats. First, for the proposition to apply the statement must be materially false. Second, there must be no reasonable justification for the statement’s incorrect content. The first caveat underscores that it is falsehoods that undermine the essence of what the statement should have conveyed that are the concern; the second underscores that good faith positions taken or assertions made by a garnishee with reasonable care and on a plausible factual scenario will not engage the proposition even if later proven to be incorrect.

[40] So expressed, this proposition fits comfortably within the structure of the garnishment process in r. 60.08. A garnishee statement is critical to the efficiency and efficacy of that process. A garnishee must file a garnishee statement if it wishes to contest the garnishment, in whole or in part: r. 60.08(15). The seriousness of this obligation is underscored by the fact that there is a prescribed consequence for failing to file such a statement: r. 60.08(17).

[41] The statement must acknowledge what is or will be owing or declare that nothing is or will be, with an explanation. An acknowledgment that there is a debt owing by the garnishee to the debtor triggers an obligation on the garnishee to make a payment to the sheriff: r. 60.08(14). A proper denial of any debt, with a proper explanation, provides the creditor with information so that it may consider what other steps might be taken. A garnishee statement that falsely claims no debt is or will be owing when one is or will be, or that provides misleading or incomplete information in support of a false assertion of no indebtedness, is the antithesis of what is required of a garnishee statement. It avoids the immediate obligation to make payments to the sheriff, may send the creditor in the wrong direction, and necessitates further steps and expenditures by the creditor to determine the true state of affairs.

[42] Whether a garnishee statement is materially false without reasonable justification must be judged by assessing it as a whole, taking into account what it says and what it omits to say on the subjects the statement is required to address.


Ms. Benzacar Was Entitled to the Remedy in r. 60.08(17)

[51] The motion judge refused to make an order under r. 60.08(17). In my view, she erred in this regard. The garnishee statement was materially false without reasonable justification and should have been treated as no statement at all.

[52] Ms. Benzacar was “entitled … to an order against [604] for payment of the amount that the court finds is payable to the debtor by the garnishee, or the amount set out in the notice, whichever is less”: r. 60.08(17). In other words, Ms. Benzacar was entitled to an order for payment by 604 of the amount in the notice of garnishment served on 604 ($256,143.49), unless the amount payable by 604 to Mr. Terk was less than that amount.

[53] The phrase “amount ... payable to the debtor by the garnishee” in r. 60.08(17) would appear to refer to the amount payable at the time the court makes (or should have made) a finding on this issue, which here would be the date of the motion judge’s decision.

[54] The motion judge did not make a specific finding of what amount was payable to the debtor, Mr. Terk, by the garnishee, 604. She implicitly found he actually received total salary of $150,000 after November 6, 2017, as she noted that 20% of what 604 paid Mr. Terk from 2019 to 2021 had been paid was remitted to the sheriff, and the total remitted was about $30,000. She also found that management fees had been paid to Ego Capital, for Mr. Terk, without specifying the amount (other than the pre-garnishment amount, which was $12,000 per year). She found that a conspiracy to defer or conceal income had not been shown.

[55] I do not consider the motion judge’s findings to be the equivalent of a finding that nothing more was payable by 604 to Mr. Terk than what was actually paid to him up to the time of her decision. Rule 60.08(17) uses the term “payable,” which refers to a debt that is due and the time for payment has arrived. It is not synonymous with “paid”. Indeed, the form for garnishee statements contemplates that there will be situations in which a garnishee is paying less that what is owed. Nor is it necessary to find a conspiracy to defer payments to reach the conclusion that all amounts payable have not been paid.

[56] I agree with Ms. Benzacar’s argument that what was payable by 604 to Mr. Terk exceeded what was paid and exceeded the amount in the notice of garnishment. As Ms. Benzacar points out, the motion judge found that the salary arrangements in place for Mr. Terk prior to service of the notice of garnishment called for payments of $220,000 per year plus car allowance. The entitlement is supported by a corporate resolution of 604’s parent company calling for Mr. Terk to be paid these amounts. As Ms. Benzacar notes, there is no evidence of any resolution modifying this entitlement. Accordingly, Mr. Terk’s legal entitlement to salary was, in the relevant time frame, always for these amounts, which clearly exceeds what he was paid. The accumulation of salary (pre and post notice of garnishment) from the period when the motion judge found he stopped taking his full salary in 2016 to the time of the motion judge’s decision almost six years later totals more than the amount in the notice ($256,143.49), even after giving effect to the Wages Act exemption as determined by the motion judge, and any amounts she found had actually been paid.
. Benzacar v. Terk

In Benzacar v. Terk (Ont CA, 2023) the Court of Appeal considered a rarely-advanced appeal from a R60.08 garnishment motion.

In these quotes, the court considers the appellate SOR for a garnishment motion, which it finds is a non-discretionary power and thus subject to a lesser degree of deference:
The Standard of Review

[35] The corporate respondents argue that the motion judge’s order was entirely discretionary and is accordingly subject to appellate deference. They place significant reliance on the following statement in Entes Industrial Plants Construction & Erection Contracting Co. Inc. v. Centerra Gold Inc., 2023 ONCA 294, 481 D.L.R. (4th) 160, at para. 10:
Garnishment is a statutory, and not a common law, remedy; it is a broad, equitable, discretionary remedy: Waxman v. Waxman (2006), 2006 CanLII 35815 (ON CA), 216 O.A.C. 379, at para. 37. Rule 60.08(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that garnishment is available as follows: “A creditor under an order for the payment or recovery of money may enforce it by garnishment of debts payable to the debtor by other persons.” Rule 60.08(16) allows the court, in response to a garnishment motion, to make any order it deems just: 20 Toronto Street Holdings Ltd. v. Coffee, Tea or Me Bakeries Inc. (2001), 2001 CanLII 28048 (ON SC), 53 O.R. (3d) 360, at para. 5. The court’s order is entitled to appellate deference, absent reversible error. We see no such error here”.
[36] In Entes, the court was speaking of orders made under r. 60.08(16), which contains broad discretionary language. That language is not found in r. 60.08(17), upon which Ms. Benzacar relies.

[37] Subrule 60.08(17) speaks of a creditor’s entitlement to an order in the lesser of two specified amounts if a garnishee statement is not served and filed. Under that subrule, the first inquiry is whether a garnishee’s statement has been served and filed − as discussed below, this includes determining whether a statement that was served and filed is, by reason of material misrepresentations or omissions, in effect no statement at all, a question of mixed fact and law. If no statement has been served and filed, the court’s second task is to determine the amount payable by the garnishee to the debtor, another question of mixed fact and law. The court’s third task is, as a matter of law, to give effect to the creditor’s entitlement to an order in the lesser of the amount payable by the garnishee to the debtor or the amount in the notice. The usual appellate standards of review to each of these inquiries should apply. The court is not granted a discretion to do other than as the subrule dictates.
. Friendly v. 1671379 Ontario Inc.

In Friendly v. 1671379 Ontario Inc. (Ont CA, 2023) the Court of Appeal dealt with a complex garnishment dispute where priorities were at issue:
[15] The motion judge recognized that s. 2(1) of the Creditors’ Relief Act, 2010, S.O. 2010, c. 16, Sched. 4 (the “CRA”), provides: “Except as otherwise provided in this Act, there is no priority among creditors by execution or garnishment issued by the Superior Court of Justice.”

[16] However, based on s. 20(1)(a) of the PPSA and 1889072 Ontario Limited v. Globealive Wireless Management Corp. et al, 2016 ONSC 3578, 37 C.B.R. (6th) 39, at para. 12, the motion judge held that perfected security under the PPSA takes precedence over a later notice of garnishment.

[17] On that basis, the motion judge described his task as being to evaluate the claims to priority of both MCAP and ACC and determine whether they should be given priority over the other creditors in the hearing, as well as whether MCAP or ACC had priority over the other. If there was no priority, then, in the view of the motion judge, the creditors would be entitled to the amounts owed under the BTIG on a pro rata basis, as contemplated by the CRA. ...
. Entes Industrial Plants Construction & Erection Contracting Co. Inc. v. Centerra Gold Inc.

In Entes Industrial Plants Construction & Erection Contracting Co. Inc. v. Centerra Gold Inc. (Ont CA, 2023) the Court of Appeal considered a basic principle of garnishment law, that the payment to be garnished must be directed to the debtor:
[10] Garnishment is a statutory, and not a common law, remedy; it is a broad, equitable, discretionary remedy: Waxman v. Waxman (2006), 2006 CanLII 35815 (ON CA), 216 O.A.C. 379, at para. 37. Rule 60.08(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that garnishment is available as follows: “A creditor under an order for the payment or recovery of money may enforce it by garnishment of debts payable to the debtor by other persons.” Rule 60.08(16) allows the court, in response to a garnishment motion, to make any order it deems just: 20 Toronto Street Holdings Ltd. v. Coffee, Tea or Me Bakeries Inc. (2001), 2001 CanLII 28048 (ON SC), 53 O.R. (3d) 360, at para. 5. The court’s order is entitled to appellate deference, absent reversible error. We see no such error here.

[11] It is common ground that, unless the Republic can be characterized as the debtor to whom Centerra was obligated to make its payment, the appellant has no entitlement to garnish the $50 million intercompany payment made by Centerra to KGC.
. 1770650 Ontario Inc. v. McEnery

In 1770650 Ontario Inc. v. McEnery (Ont CA, 2023) the Court of Appeal considered denial of a garnishment motion ["to compel payment of the amount of their judgments from the lawyer’s insurer"] under R60.08(16) against an insurer (LPIC), here where the appellants had judgment against the insurer's insured. The garnishment was unsuccessful as the insurer had exhausted the coverage value ($500k) of the policy on legal defence and investigation efforts - but the interesting point (to me) was the use of garnishment provisions in an effort to effectively obtain judgment against the insurer:
[4] In February 2020 each of the appellants obtained a judgment against McEnery; the appellant 1770650 Ontario Inc.’s judgment is for $241,000 plus interest and costs, and the appellant 1062484 Ontario Inc.’s judgment is for $380,000 plus interest and costs.

[5] McEnery did not pay the judgments. The appellants therefore commenced garnishment proceedings. They moved, under r. 60.08(16) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for a determination that the respondent Lawyers’ Professional Indemnity Company (“LawPRO”) owed money to McEnery under a policy of insurance (the “Policy”) that it had issued in 2015. McEnery was one of the insureds under the Policy. The appellants asked that the proceeds of the Policy be paid to them in satisfaction of McEnery’s judgment debts.


[19] In analyzing this issue there are a few matters that are particularly germane. First, on a motion under r. 60.08(16), the creditor (here, the appellants) stands in the shoes of the debtor (here, McEnery) in terms of the ability to prove an entitlement against the garnishee (here, LawPRO). Therefore, we are concerned with whether LawPRO breached a duty to McEnery in spending funds on defence and in not effecting a settlement with the appellants.
. Royal Bank of Canada v. Rastogi

In Royal Bank of Canada v. Rastogi (Ont CA, 2020) the Court of Appeal considered and dismissed an appeal against two banks that seized funds of an account-holder without authorization (they had only started a lawsuit, so it was basically an illegal garnishment). The underlying motion was brought under CJA 104(1) [recovery of possession of personal property], but the court converted the motion to one for summary judgment and granted to account-holder's sought relief:
The Nature of the Motion

[15] Rastogi’s motion was brought under Rule 44. That rule applies to a motion for an “interim order” made under s. 104(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43. That section provides:
In an action in which the recovery of possession of personal property is claimed and it is alleged that the property,

(a) was unlawfully taken from the possession of the plaintiff; or

(b) is unlawfully detained by the defendant,

the court, on motion, may make an interim order for recovery of possession of the property. [Emphasis added.]
[16] Section 104 and Rule 44 speak of recovery of possession of “personal property”. That phrase is not defined in the Act or in Rule 44.

[17] A credit in a customer’s bank account is treated as a debt owed by the banker to the account holder. The relationship between the bank and the account holder is one of debtor and creditor: BMP Global Distributions Inc. v. Bank of Nova Scotia, 2009 SCC 15 (CanLII), [2009] 1 S.C.R. 504, at para. 63. Although RBC Direct is not a bank, I see no reason to treat credits in the RBC Direct accounts any differently. Those credits represented a debt owed by RBC Direct to Rastogi.

[18] The language of s. 104 of the Courts of Justice Act and, even more so, the language of Rule 44, suggest that “personal property” means property that is tangible and capable of physical description. The security requirements addressed in rule 44.03 suggest the same interpretation.[2] On this interpretation a debt would not constitute “personal property” for the purpose of Rule 44.

[19] It is unnecessary for me to come to any firm conclusion as to whether a debt is included within the phrase “personal property” in s. 104 and Rule 44. Even if the section and the rule could have application to a debt, Rastogi was not seeking an interim order for possession of property, and was not offering to post any security. Rastogi wanted the release of his funds plain and simple. The order made by the motion judge reflects the nature of the relief sought. There is nothing interim about the relief ordered by the motion judge.[3] The relief granted was not available under Rule 44.


Should Summary Judgment be Granted on Rastogi’s Claim to the Funds held by RBC Direct and TD?

[26] Rastogi’s claim to the funds in RBC Direct and TD is straightforward. The credit in those accounts represents debts owed to him by RBC Direct and TD. He has demanded payment. Neither RBC Direct nor TD advanced any claim against Rastogi, much less a claim that would give rise to any right of set off. Counsel for Rastogi submits that RBC does not, merely by commencing a lawsuit in which it claims a right to the funds, acquire any right to unilaterally prevent Rastogi from obtaining those funds. Counsel contends that, absent a court order, RBC was not entitled to preemptively interfere with Rastogi’s rights in respect of his accounts at RBC Direct and TD.

[27] RBC’s claim that the funds should not be released to Rastogi rests on the assertion that the material filed on the motion demonstrates that RBC has an arguable claim to a restitution order with respect to the funds. RBC asserts that its remedy goes beyond damages and that the funds in those accounts in fact belong to RBC. The restitutionary claim is based on either a constructive trust flowing from Rastogi’s breach of his duties to RBC, or on RBC’s mistaken payment of the funds into Rastogi’s accounts at RBC. RBC maintains that its arguable restitutionary claim, combined with the uncontroverted evidence that some of the proceeds of the currency trading are in the accounts in issue, is enough to give RBC a valid interest in those funds and create what counsel called a “interpleader situation” as between RBC and Rastogi.

[28] RBC’s position confuses its undenied right to pursue its restitutionary claims and any right it has to unilaterally deprive Rastogi of his property while RBC pursues its restitutionary claim. The fact that RBC has an arguable case would certainly preclude Rastogi from obtaining summary judgment on RBC’s restitutionary claim. The mere fact that RBC has an arguable restitutionary claim, however, does not give it any right to interfere with Rastogi’s property pending a determination of the merits of that claim.

[29] RBC’s restitutionary claim comes down to the assertion that the funds in Rastogi’s accounts at RBC Direct and TD belong to RBC and not to Rastogi. If RBC had concerns about the disputed property disappearing before trial, it could have sought an interlocutory injunction. Had RBC chosen to do so, however, it would have been required to show more than an arguable case before it could obtain an order freezing those accounts. Under the well-known tripartite test in RJR MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, RBC would have been required to show:
• An arguable case (serious issue to be tried);

• Irreparable harm if injunctive relief was not granted;

• The balance of convenience favoured injunctive relief.
[30] RBC cannot escape the tripartite test for injunctive relief because the nature of the property in issue has permitted RBC to unilaterally achieve a de facto injunction without a court order. Surely RBC would not argue that it was entitled to go into Rastogi’s garage and unilaterally seize his vehicles and hold them until trial if it had an arguable case that the vehicles were purchased with the proceeds of the currency trading. I do not see how RBC’s legal position is improved because the assets in issue are debts owed to Rastogi by another bank and an affiliate of RBC.

[31] For whatever reason, RBC has not sought an interlocutory injunction in the two years since it started this action. RBC is not entitled to what would effectively be an interlocutory injunction merely by showing that its allegations, including those related to his restitutionary claims raise arguable issues. On the motion record, Rastogi’s entitlement to the funds vis-à-vis RBC Direct and TD is undeniable. He is their creditor. RBC’s entitlement to the funds is contingent upon RBC establishing the merits of its claim.

[32] Any entitlement RBC has to freeze Rastogi’s accounts pending trial is not improved merely because RBC Direct is a subsidiary of RBC. RBC accepts that the credit in Rastogi’s RBC Direct accounts constituted a debt owed by RBC Direct. While the relationship between RBC Direct and RBC permitted the latter to freeze Rastogi’s accounts by what counsel for RBC referred to as an “internal demand”, the subsidiary status does not make the debts of RBC Direct debts of RBC. The two are separate corporate entities. RBC cannot claim any right to set off of a debt owed by RBC Direct to Rastogi against a debt owed by Rastogi to RBC.

[33] I also agree with the motion judge’s interpretation of s. 437(2) of the Bank Act. That section gives TD the right to hold the funds in Rastogi’s account that it would otherwise be obligated to pay on demand to Rastogi. That right is triggered by RBC’s claim in which it names TD as a defendant. Section 437(2) does not give RBC any rights in respect of the funds in Rastogi’s TD account or inhibit the court’s power to make orders directing payment of funds out of those accounts.



[34] For the reasons set out above, RBC has offered no legal basis upon which either RBC Direct or TD can withhold the funds held by them to the credit of Rastogi. There are no issues requiring a trial in respect of Rastogi’s entitlement to those funds. Rastogi is entitled to summary judgment on his counterclaim to the extent that the claim seeks judgment directing the return to him of all funds held in Rastogi’s accounts at RBC Direct. He is similarly entitled to judgment on the crossclaim to the extent that he seeks judgment directing that TD release all funds in Rastogi’s joint account to him.
. Vetro v. Vetro

In Vetro v. Vetro (Superior Court, 2017) the Superior Court set out this useful garnishment decision, dealing with a debtor who only had CPP and ODSP income [the CPP provisions are replicated in the Old Age Security Act, s.36]:

[21] Garnishment is an enforcement process of long-standing. Notwithstanding that it is generally available as a matter of course, it nevertheless is considered to be governed by equitable principles. The court retains discretion as to whether it will permit garnishment proceedings: see Parker v. Parker (2014), 19 C.B.R. (6th) 154 (Ont. Div. Ct.) at para. 4; 20 Toronto Street Holdings Ltd. v. Coffee Tea or Me Bakeries Inc. (2001), 2001 CanLII 28048 (ON SC), 53 O.R. (3d) 360 (S.C.J.), at para. 5; International Union of Painters and Allied Trades, Local 200 v. S & S Glass and Aluminum (1993) Ltd. (2004), 2004 CanLII 12611 (ON CA), 185 O.A.C. 38 (C.A.), at paras 19-20.

[22] In this case, garnishment is sought from a number of financial institutions, and from the Canada Pension Plan.

[23] As far as the Canada Pension Plan is concerned, s.65 of the Act creating and governing the Canada Pension Plan is apposite. The relevant provisions provide:
Benefit not to be assigned, etc.

65 (1) A benefit shall not be assigned, charged, attached, anticipated or given as security, and any transaction purporting to assign, charge, attach, anticipate or give as security a benefit is void.

Benefit not subject to seizure or execution

(1.1) A benefit is exempt from seizure and execution, either at law or in equity.
[24] These provisions must be read in conjunction with the Family Orders and Agreements Enforcement Assistance Act, the relevant provisions of which read as follows:
Her Majesty may be garnisheed

24 Notwithstanding any other Act of Parliament preventing the garnishment of Her Majesty, Her Majesty may, for the enforcement of support orders and support provisions, be garnisheed in accordance with this Part in respect of all garnishable moneys.

Provincial garnishment law applies

25 Subject to section 26 and any regulations made under this Part, garnishment under this Part shall be in accordance with provincial garnishment law.

Inconsistencies with provincial garnishment law

26 In the event of any inconsistency between this Part or a regulation made under this Part and provincial garnishment law, the provincial garnishment law is overridden to the extent of the inconsistency.
[25] In Trick v. Trick (2006),2006 CanLII 22926 (ON CA), 83 O.R. (3d) 55 (C.A.), the Court of Appeal held that as a result of these provisions, Canada Pension Plan disability benefits can be garnished to the extent of 50 per cent of the benefits that are payable.

[26] As far as Ontario Disability Support Payments are concerned, the following provisions of the Ontario Disability Support Program Act, 1997, are apposite:
No attachment, etc., of income support

18 (1) Income support under this Act,

(a) is not subject to alienation or transfer by the recipient; and

(b) is not subject to garnishment, attachment, execution, seizure or receivership under any other Act.

Deduction re money owed for family support, etc.

(2) Despite subsection (1), the Director may deduct a portion of income support to recover,

(a) the amount of a support deduction order that is enforceable against a member of the benefit unit under section 20 of the Family Responsibility and Support Arrears Enforcement Act, 1996; or

(b) the prescribed government debts owed by a member of the benefit unit.
[27] In this case, the order is not being enforced by the Family Responsibility Office, and thus s.18(2)(a) does not apply.

[28] In Metropolitan Toronto (Municipality) v. O’Brien (1995), 1995 CanLII 7053 (ON SC), 23 O.R. (3d) 543 (Gen. Div.), O’Brien J. held, in a case that was not a family law case, that where Canada Pension Plan payments are paid into a bank account, the bank account itself ought not to be garnishable to the extent of the CPP payments. He held that to permit garnishment of the bank account would simply be an indirect way of allowing garnishment of the CPP payments, which was impermissible. In the alternative, he held that, garnishment being a discretionary remedy, it was appropriate, in the exercise of his discretion, to decline to permit garnishment.

[29] This reasoning would clearly apply to the ODSP payments, but, subject to the ability to garnish 50 per cent of the payments, would not apply to the CPP disability payments.

[30] That leaves me, in the final analysis, with the question of whether I ought to exercise my discretion in Mr. Vetro’s favour, and decline to allow garnishment in these circumstances.

[31] The evidence is uncontradicted (although Ms. St. George sought to persuade me that I should not accept it) that since Mr. Vetro’s bankruptcy in 2013, he has been unemployed and suffers from serious psychological and psychiatric conditions. His only source of income is the CPP disability payments and the ODSP payments. He lives with his parents, and it is clear that there are no assets out of which the claim for over $800,000 can be satisfied.

[32] On the other hand, Ms. St. George does not dispute that she lives a very comfortable lifestyle, and she and her spouse have been very successful in accumulating a considerable degree of wealth. While this is irrelevant to a Motion to Change, as held by Miller J., it is relevant to the exercise of my discretion in the garnishment proceedings.

[33] The parties’ children are well-educated and three of them are working in Europe. The other is in a Master’s program in England.

[34] In my view, to permit garnishment in these circumstances would be inequitable. Mr. Vetro is close to living in poverty, and is unable to work. Ms. St. George is living in relative luxury. To deprive Mr. Vetro of his modest CPP and ODSP payments, in whole or in part, would be unjust. In the exercise of my discretion, I decline to permit garnishment, and I order that the notices of garnishment be set aside.


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Last modified: 21-11-23
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