Taylor-Made Enterprises Inc. v. Lance Reffell, 2015 ONSC 4752
DIVISIONAL COURT FILE NO.: 19/15
DATE: 20150721
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: TAYLOR-MADE enterprises inc. (Creditor/Respondent)
- AND –
lance reffell (Debtor)
- AND –
comda ALSO CARRYING ON BUSINESS AS SOS MARKETING (Garnishee/Appellant)
BEFORE: Then, Harvison Young, Lederer JJ.
COUNSEL: Anthony J. O’Brien, for the Creditor/Respondent
Allan Herman, for the Garnishee/Appellant
HEARD at Toronto: July 21, 2015
ENDORSEMENT
HARVISON YOUNG J. (ORALLY)
[1] This is an appeal from the garnishment order of the Honourable Madam Justice Stewart made under Rule 60.08 of the Rules of Civil Procedure requiring COMDA/SOS Marketing, the appellant, to pay Taylor-Made Enterprises Inc., the respondent.
[2] The initial Order was for the amount of $233,955.71. The appeal was commenced in the Ontario Court of Appeal upon an endorsement of a motions judge and 80% exemption under the Wages Act, R.S.O. 1990, c. W.1 was applicable. This brought the total amount payable to under $50,000 and the appeal was transferred to the Divisional Court.
[3] The appellant seeks to have the garnishment Order of Madam Justice Stewart set aside.
[4] The respondent seeks an Order that the appellant pay the full amount as stated in the decision of Madam Justice Stewart.
[5] The central issue on this appeal is whether the motions judge erred in finding that the appellant was a garnishee within the meaning of Rule 60.08(1) which states that “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”. The appellant argues that she did so err. It also argues that she erred in considering affidavits delivered after cross-examinations contrary to Rule 39.02(2) of the Rules of Civil Procedure.
[6] The Supreme Court of Canada set out the standard of review applicable to appeals from judges’ orders in Housen v. Nikolaisen, 2002 [2002 SCC 33, 2 SCR 235] S.C.C. 33. On questions of law the standard is correctness.
[7] On questions of fact, the standard is palpable and overriding error.
[8] On questions of mixed fact and law the court stated that there is a spectrum.
[9] The standard of review with respect to discretionary decisions was set out recently in Penner v. Niagara (Regional Police Services Board), [2013] 2 SCR 125, 2013 SCC 19. There the Supreme Court of Canada set the standard for the reversal of the judge’s exercise of discretion at paragraph 27 as follows:
A discretionary decision of a lower court will be reversible where that court misdirected itself or came to a decision that is so clearly wrong that it amounts to an injustice: Elsom v. Elsom, 1989 100 (SCC), [1989] 1 S.C.R. 1367, at p. 1375. Reversing a lower court’s discretionary decision is also appropriate where the lower court gives no or insufficient weight to relevant considerations: Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 110 (SCC), [1992] 1 S.C.R. 3, at pp. 76-77.
[10] The appellant submits that the motions judge erred in finding that it was indebted to the judgment debtor. In its submission, the appellant was indebted to an “arms-length intermediate party”. The appellant argues that where there is an intermediate party, as was the case with the subcontractor in Reffell, the jurisprudence does not allow for garnishment unless the intermediate party is non-arms-length to at least one of either the garnishee or debtor. In this instance, it submits there were no relationships that would have allowed the motions judge to find that the appellant’s payments to the sub-contractor were payments to Reffell. Mr. Herman suggests that the motions judge further erred because the law requires that the “reality on the ground” supports this conclusion. Here, in addition to the fact that the companies were at arms-length, the relationship between Wharton and Mr. Reffell pre-dated the litigation which ultimately gave rise to this appeal. In short, he submits that the evidence does not show a scheme to avoid judgment and also submits that the motion judge’s decision is therefore essentially perverse.
[11] This argument must fail.
[12] First, we do not agree that the case law relied on by the appellant precludes a finding that a party in the position of the appellant may properly be found to be a garnishee in circumstances such as those in the case at bar. The cases are all fact specific and there is no principle that precludes such a finding. Mr. Herman acknowledged that the central issue is one of fact, that is, whether there is a basis for finding that the reality of the situation was that there was an arrangement whose affect was to avoid payment.
[13] In our view, the appellant has shown no palpable or overriding error in this regard. There was evidentiary support in the record for the motion judge’s conclusion that Reffell was in fact an employee. The record does show some indicia of employment including the fact that Reffell worked within the offices of the appellant; all his equipment was provided by the appellant; he generated the appellant’s invoices and purchase orders and sales and deliveries were conducted by the appellant. In effect, the appellant asks this Court to re-weigh the evidence before the motions judge. That is not the role of this Court. We find no error of law or principle or palpable or overriding error that could justify interfering with her decision in this regard.
[14] The second and related issue is whether the motions judge erred in considering the affidavits after cross-examination contrary to Rule 39.02. These affidavits contain material which originated with the appellant which had not been disclosed to the respondent in a timely way. We see no error of law or principle that could justify interfering with the exercise of the motions judge’s discretion to consider the affidavits in the circumstances of this case. Accordingly, the affidavits properly formed part of the record before this Court.
[15] In conclusion, we see no error of law or principle or palpable or overriding error that would justify interfering with the motions judge’s conclusion that the garnishee was indebted to the debtor under proper garnishee.
[16] The appeal is therefore dismissed.
Then J.
Harvison Young J.
Lederer J.
Date of Reasons for Judgment: July 21, 2015
Date of Release: August 6, 2015