Achtem v. Boese, 2021 ONCA 284

Achtem v. Boese

Ontario Reports

Court of Appeal for Ontario

Huscroft, Nordheimer and Harvison Young JJ.A.

May 4, 2021

155 O.R. (3d) 383 | 2021 ONCA 284

Case Summary

Debtor and creditor — Execution — Delay — Applicant having British Columbia order registered as Ontario judgment — Applicant not issuing writ of seizure and sale as of right within six years, requiring him to obtain leave — Motion judge inferring waiver and finding it would be inequitable to enforce judgment based on respondent's reliance on applicant's delay — Motion for leave dismissed — Appeal allowed — Motion judge palpably erred by inferring waiver based on delay alone — Applicant explained delay based on belief of little or no equity in respondent's properties — Respondent did not detrimentally rely on applicant's lack of enforcement — Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 60.07.

The applicant obtained an order in the Supreme Court of British Columbia against the respondent in August 2009. He then obtained an order in September 2011 registering the British Columbia order as an Ontario judgment. He had received some payment on the judgment, but an amount in excess of $300,000 was outstanding. His Ontario lawyer advised him that any further expenditure of time or effort would not recover anything, given the likely value of the respondent's Ontario properties and her disability income, which would not be garnishable. The applicant did not issue a writ of seizure and sale as of right within six years of obtaining the Ontario order, and as such had to obtain leave to issue the writ. He served a motion record in October 2018. The motion judge found that the applicant provided no evidence to explain his delay other than his admission that he did not take action because of the value of the respondent's properties. The judge inferred that the applicant was waiving his rights because it would not be worth his cost to pursue them. The judge also found that the respondent had relied on the applicant's lack of enforcement to change her financial position. The motion for leave to file a writ was dismissed. The applicant appealed.

Held, the appeal should be allowed.

The motion judge's inference of waiver was palpably unjustified on the record. There was no evidence of waiver other than the delay itself, which was a relatively short 13 months. The respondent had not alleged any words or conduct on the part of the applicant that he was waiving his right to enforce his judgment. [page384] The applicant also met the low evidentiary threshold for providing an explanation for the delay, being that he believed there to be little or no equity in the applicant's Ontario properties at the time he obtained his judgment. There was no evidence before the motion judge to suggest that the explanation was not a bona fide one.

The motion judge erred in finding that it would be inequitable to enforce the judgment. It was not reasonable for the respondent to believe, based only on the absence of communication from the applicant, that he had waived his right to enforce his judgment at some point. Nor did the respondent detrimentally rely on any reasonable belief. The applicant was granted leave to issue a writ of seizure and sale.

Cases referred to

Adelaide Capital Corp. v. 412259 Ontario Ltd., [2006] O.J. No. 4175, 35 C.P.C. (6th) 389, 2006 34725 (S.C.J.); Royal Bank of Canada v. Correia, 2006 26976 (ON SC), [2006] O.J. No. 3206, 36 C.P.C. (6th) 284 (S.C.J.)

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 60.07, (2), 60.08(2)

APPEAL from dismissal of motion for leave to file a writ of seizure and sale.

Derek M. Sinko, for appellant.

Matthew J. Lambert, for respondent.

BY THE COURT: --

1The appellant, Mr. Achtem, obtained an order in the Supreme Court of British Columbia against the respondent, Ms. Boese, on August 10, 2009. Mr. Achtem obtained an order from the Ontario Superior Court of Justice on September 19, 2011, which registered the order from British Columbia as an Ontario judgment. Mr. Achtem has received some payment on the judgments, but there is still $333,717.50 that remains outstanding.

2Ms. Boese owns two properties in Brantford, Ontario. She resides in one property and rents out the other. In July 2012, Mr. Achtem's Ontario lawyer, Mr. Cohen, advised Mr. Achtem that any further expenditure of time or effort would not recover anything, given the likely value of the properties and Ms. Boese's disability income, which would not be garnishable. On August 15, 2012, Mr. Cohen sent a letter to Ms. Boese inquiring for "the last time" on a voluntary basis about her income and the income and expenses of the properties she owns, and threatening enforcement proceedings if she did not provide the information voluntarily. Mr. Achtem did not pursue further action to enforce because he thought that there was little equity in [page385] Ms. Boese's properties. There was no further communication with Ms. Boese after that letter.

3Mr. Achtem did not issue a writ of seizure and sale within six years of obtaining the Ontario order. In March 2018, Mr. Achtem was advised by his British Columbia lawyer that the British Columbia order would expire soon. At that point, Mr. Achtem reassessed the options available to him. He served a motion record on Ms. Boese on October 29, 2018, for an order granting leave to issue a writ of seizure and sale.

4The motion judge referred to rule 60.07 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Judgment creditors may issue writs of seizure and sale as of right if less than six years have elapsed from the date of the judgment. Under rule 60.07(2), however, if six years or more have elapsed since the date of the order, leave of the court is required to issue a writ of seizure and sale. He observed that a very low evidentiary threshold applies to a judgment creditor who requests leave and that it is a rare case where a judgment creditor cannot meet the test. He cited the test for leave to file a writ, which is the same as the test for granting leave to issue a notice of garnishment under rule 60.08(2), from Royal Bank of Canada v. Correia, [2006] O.J. No. 3206, 2006 26976 (S.C.J. (Master)) [at para. 6]:

. . . [W]hen a plaintiff seeks leave under rule 60.08(2) to issue a notice of garnishment more than six years after the date of judgment, he must adduce evidence explaining the delay such [that] the court may conclude that the plaintiff has not waived its rights under the judgment or otherwise acquiesced in non-payment of the judgment. The defendant may raise other grounds to convince the court that it would be inequitable to enforce the claim. For example the defendant could demonstrate that he has relied to his detriment or changed his financial position in reliance on reasonably perceived acquiescence resulting from the delay. Of course the onus would be on the defendant to adduce evidence of such reliance and detriment.

(Emphasis in original)

5The motion judge found that Mr. Achtem did not provide evidence to explain the delay, "other than his admission that he did not take action as he felt there was little value in any of the properties that would make it worth his while to pursue his enforcement rights". The motion judge noted that this went to the inference that Mr. Achtem was waiving his rights precisely because it would not be worth his cost to pursue his rights.

6The motion judge also referred to Ms. Boese's evidence that she had relied on the lack of enforcement by Mr. Achtem by changing her financial position, including incurring new debts and financing secured by her properties, not declaring bankruptcy, and managing her properties differently, especially her rental property where she completed renovations. The motion [page386] judge found that Ms. Boese did rely on the lack of enforcement and that if Mr. Achtem had diligently pursued his rights, Ms. Boese could have had financial options other than maintaining her properties, such as entering into proposals or bankruptcy.

7The motion judge accordingly dismissed Mr. Achtem's motion for leave to file a writ. Mr. Achtem appeals the motion judge's order.

A. Discussion

8The standard of review, as the parties agree, is palpable and overriding error.

9The parties also agree that the motion judge set out the correct test for leave to issue a writ of seizure and sale. The party seeking leave is required to explain the delay such that the court may conclude that the judgment creditor has not waived its rights under the judgment or otherwise acquiesced in non-payment of the judgment.

10Mr. Achtem submits that the motion judge made findings and drew inferences that were not reasonable and not supported by the evidence regarding both his explanation for the delay and whether it would be inequitable to enforce the order. Ms. Boese submits that the motion judge's findings were a result of assessing the evidence as a whole and weighing the evidence, such that his findings and conclusions do not amount to palpable and overriding error.

(1) The trial judge erred in inferring waiver

11Mr. Achtem argues first that the motion judge fell into error in inferring waiver on the evidence before him. We agree.

12To begin, there was no evidence of waiver other than the delay itself, which was relatively short. Mr. Achtem's motion record was served on Ms. Boese in October 2018, some 13 months after the expiration of the six-year period in September 2017. Both parties relied on various cases in support of their respective arguments about the sufficiency or insufficiency of the delay in this case. We are satisfied that these cases do not support the proposition that a delay of this length, without more, can constitute a waiver in the presence of a plausible explanation for the delay. Mr. Achtem and Ms. Boese had never met and never communicated except through lawyers. Ms. Boese, notably, does not allege any words or conduct on the part of Mr. Achtem or his lawyers that suggested that he was waiving his right to enforce his judgment.

13Second, Mr. Achtem provided an explanation for the delay, which was that he believed there to be little or no equity in the [page387] Ontario properties owned by Ms. Boese at the time he obtained his judgment. In 2012, communication with Mr. Cohen indicated that this was likely still the case, and that it would be a waste of time and money to try to enforce the judgment at that time. Mr. Cohen thought that the properties were "either underwater (mortgages exceed value) or are so close that a forced sale . . . would be an expensive waste" and that the properties would be "almost impossible to market". There was no evidence before the motion judge to suggest that this was anything other than a bona fide explanation for the delay.

14The motion judge's inference of waiver was palpably unjustified on the record before him. The appellant had an outstanding judgment of around $333,000. As the motion judge himself observed, the evidentiary threshold of providing an explanation for the delay is low: at para. 22. In finding that Mr. Achtem's explanation that it was not worth his while to enforce his judgment earlier constituted a waiver of his right to enforce, the motion judge effectively imposed a much higher threshold. Further, the motion judge stated that Mr. Achtem's explanation for the delay went "more to the inference that he was waiving his rights precisely because it would not be worth his cost to pursue his rights". This read into Mr. Achtem's explanation an intention to waive his rights for all time that is not supported by any evidence: at para. 26.

15In addition, the conclusion that Mr. Achtem, on these facts, waived his right to enforce his judgment, is contrary to the principles forming the context of motions for leave to issue writs. First, there is no limitation period on the enforcement of judgments. Second, as the motion judge himself noted, it would be a rare case where the party seeking leave is unable to meet the test by sufficiently explaining the delay: Adelaide Capital Corp. v. 412259 Ontario Ltd., [2006] O.J. No. 4175, 2006 34725 (S.C.J.), at para. [13]. In the presence of Mr. Achtem's explanation, and in the absence of evidence other than this relatively short delay from which any waiver could be inferred, the motion judge fell into palpable and overriding error in concluding that the appellant had waived his right to enforce his $333,000 judgment against the respondent.

(2) The trial judge erred in finding that it would be inequitable to enforce the judgment

16Ms. Boese submits that the motion judge correctly found that it would be inequitable to grant the motion to file the writ in these circumstances for two reasons. First, she reasonably believed, based on the delay, and not having heard from the [page388] appellant for over six years, that he was not pursuing the enforcement of the judgment. Second, she argues that she detrimentally relied on this understanding by choosing to repair and maintain her homes and in the manner in which she conducted her finances.

17We disagree. First, we do not agree with Ms. Boese that it was reasonable to believe, based only on the absence of communication from Mr. Achtem, that he had waived his right to enforce his judgment at some point. This was a significant amount of money. Ms. Boese acknowledged that she had never met or spoken to Mr. Achtem. There is nothing in the evidence that could support a reasonable belief on her part that Mr. Achtem would not enforce his judgment. As already discussed, we do not accept that the mere passage of this period of time, given his explanation and the absence of any suggestion from him that he would not enforce, could constitute the basis of a reasonable belief that he was waiving his rights for all time.

18Nor do we agree that Ms. Boese detrimentally relied on any reasonable belief. All the expenses to which she refers are, as Mr. Achtem points out, expenses that were necessary to continue earning the rental income from one of her two properties, such as painting of units for new tenants, a new roof at one point, and on one occasion, a new furnace. Her suggestion that she would have taken other steps such as declaring bankruptcy is not persuasive. There is no evidence that she has ever taken any steps to declare bankruptcy, including during the period before the expiration of the six-year period. The conclusion that the respondent detrimentally relied on her belief that the appellant had waived his right to enforce his judgment for all time by not enforcing it earlier was a palpable and overriding error that warrants the intervention of this court.

B. Disposition

19For the foregoing reasons, the appeal is allowed. The order below is set aside, and leave is granted to the appellant to issue a writ of seizure and sale against the respondent as sought. All inclusive costs of $8,000, as agreed, are payable by the respondent to the appellant.