Court of Appeal for Ontario
Before: Feldman, Juriansz and LaForme JJ.A.
Between:
Virginia Coleman in her capacity as Estate Trustee of the Estate of Jessie Elizabeth Brown Plaintiff (Respondent)
And
National Trust Company, Thomson Kernaghan & Co. Limited, John Ross Hetherington by his litigation guardian Robert John Hetherington, Catharine Agnes Fallis Executrix of the Estate of George A. Fallis, deceased, Ado Park, John Samuel Harcourt Carriere, John Robert Watt and Robert Charles Watt Defendants (Appellant)
Counsel: Richard Parker, for the appellant Robert Charles Watt Hilary Book, for the respondent
Heard and endorsed: February 24, 2010 On appeal from the order of Justice David Aston of the Superior Court of Justice dated May 15, 2009.
APPEAL BOOK ENDORSEMENT
1We agree with Aston J. that the estate is entitled to garnish the amounts owed by the appellant’s partnership firm to him as a partner as they arise, to satisfy the debt owed by the appellant to the estate.
2However, the appellant has raised on appeal the corollary issue that if partnership income can be garnished, is it subject to the Wages Act? We agree that the jurisprudence under that Act decides that partnership income is not “wages” because there is no employer. However, the equitable jurisdiction of the court applies to self-employed income to allow the court to reduce the amount that can be garnished in order to recognize that self-employed income is analogous to wages and can be protected from creditors in order to allow the partner to be able to bear the expenses of ordinary life.
3As this matter was raised on appeal for the first time with no material to assist the court, in our view the matter must be returned to the motion judge on proper material. In our view, the 80% default rate of protection set out in the Wages Act may not be sufficient to protect the ability of a self-employed person to live given the need to pay income tax and other expenses from the gross amount of the wages.
4In the result, the appeal is dismissed, subject to the reference of the Wages Act issue back to the Superior Court.
5Costs of the appeal to the respondent fixed at $2,000 inclusive of G.S.T. and disbursements, in light of the mixed success.