@B,00021747,OR
@1@Z20060707
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Trick v. Trick
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83 O.R. (3d) 55
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Court of Appeal for Ontario,
Laskin, Cronk and Lang JJ.A.
July 7, 2006
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Family law -- Support -- Enforcement -- Pensions -- Motions
judge erring in granting order vesting 100 per cent of
husband's private pension in wife in order to enforce payment
of arrears of child and spousal support under Divorce Act
-- Section 100 of Courts of Justice Act not providing stand-
alone jurisdiction to grant vesting order but only providing
mechanism to vest title to property in which there was
separate, valid claim to ownership -- Section 66(4) of Pension
Benefits Act restricting execution to enforce support order to
50 per cent of payor's pension -- Motions judge also erring in
ordering garnishment of 100 per cent of husband's Canada
Pension Plan and Old Age Security benefits -- Garnishment to be
capped at 50 per cent of those benefits -- Courts of Justice
Act, R.S.O. 1990, c. C.43, s. 100 -- Divorce Act, R.S.C. 1985,
c. 3 (2nd Supp.) -- Pension Benefits Act, R.S.O. 1990, c. P.8,
s. 66(4).
The respondent was in substantial arrears of spousal and
child support. His only assets in Canada were his private
pension and his Canada Pension Plan and Old Age Security
benefits. The applicant brought an application for an order
vesting the respondent's private pension in her name and an
order directing the garnishment of 100 per cent of his CPP and
OAS benefits. The motion was granted. In support of his
jurisdiction to grant the enforcement relief, the motion judge
relied on s. 100 of the Courts of Justice Act ("CJA"), s. 34(1)
(c) of the Family Law Act, R.S.O. 1990, c. F.3, and those
provisions of the Divorce Act that permit a court ordering
support to "impose terms, conditions or restrictions in
connection with" a child or spousal support order. The
respondent appealed.
Held, the appeal should be allowed.
The motion judge erred in vesting 100 per cent of the
respondent's private pension in the applicant. Section 100 of
the CJA does not provide stand-alone jurisdiction to grant the
relief claimed. Section 100 only provides a mechanism to vest
title to a property in respect of which there is a separate,
valid claim to ownership. Although the motion judge relied on
the Family Law Act as conferring such a valid claim, the
support order was made under the Divorce Act and not under the
Family Law Act. Further, the Family Law Rules, O. Reg. 114/99,
which provide the procedure for the enforcement of Divorce Act
support orders, do not list vesting orders as an available
enforcement mechanism. The Divorce Act does give a court
jurisdiction to secure a spousal support order. In that sense,
it might be construed as providing the CJA s. 100 authority to
"encumber" an asset. However, even if that were so, the
Pension Benefits Act ("PBA") prohibits the granting of a
vesting order. Section 66(1) of the PBA exempts money payable
under a pension plan from "execution, seizure or attachment".
Section 66(4) provides that moneys payable under a pension plan
are subject to execution, seizure and attachment to a maximum
of 50 per cent to satisfy support orders. There is no authority
to increase the 50 per cent exemption. Section 65(3) of the PBA
cannot provide relief from the s. 65(1) general prohibition
against pension assignment. If, by virtue of s. 65(3), a
recipient spouse could by court order force the assignment of
100 per cent of a payor's pension, then s. 66(4) would be
rendered meaningless. This would run afoul of the presumption
[page56 ]of coherence in statutory interpretation. When read
in conjunction with s. 51 of the PBA, it is apparent that s.
65(3) was intended to provide a mechanism to permit the
assignment of a pension to equalize property or, perhaps, for
the purpose of lump sum spousal support, but not as an
additional mechanism intended to denude s. 66(4) of meaning.
The applicant was not seeking the assignment of the
respondent's pension for equalization purposes or for the
purpose of lump sum support. Rather, she was seeking to
execute, seize or garnishee 100 per cent of the respondent's
pension to enforce his outstanding obligations. She was
precluded from doing so by s. 66(4) of the PBA. The vesting
order could not be upheld on the basis that it constituted
equitable relief. Even if it did, in fact, constitute equitable
relief, a court should decline to grant equitable relief that
would run directly counter to a prescribed legislative scheme.
The applicant was entitled only to the garnishment of 50 per
cent of the respondent's private pension and was not entitled
to a vesting order with respect to that pension.
The motion judge also erred in ordering the garnishment of
100 per cent of the respondent's CPP and OAS benefits. Although
CPP and OAS benefits are generally protected from execution,
they are subject to garnishment for support enforcement in the
terms set out in Part II of the Family Orders and Agreements
Enforcement Assistance Act, R.S.C. 1985, c. 4 (2nd Supp.)
("FOAEAA"). Section 25 of the FOAEAA provides that subject
to s. 26, garnishment under Part II shall be in accordance with
provincial garnishment law. Section 26 provides that in the
event of any inconsistency between Part II and provincial
garnishment law, the provincial garnishment law is overridden
to the extent of the inconsistency. The order in question was a
support order for the purposes of the FOAEAA, and the
respondent's CPP and OAS benefits were "garnishable moneys"
subject to garnishment in accordance with the FOAEAA. There is
no conflict between the FOAEAA and Ontario's garnishment law
such as to attract the override provision of s. 26 of FOAEAA.
Ontario garnishment law caps garnishment at 50 per cent.
Section 23(1) of the Family Responsibility and Support Arrears
Enforcement Act, 1996, S.O. 1996, c. 31 ("FRSAEA") caps
garnishment at 50 per cent of the payor's "income source",
which is defined in s. 1 as including a "disability, retirement
or other pension". Section 23(1) of the FRSAEA thus restricted
the Director's garnishment to 50 per cent of the respondent's
CPP or OAS benefits. Even if the applicant was seeking
garnishment on her own behalf, garnishment still had to be
capped at 50 per cent. Rule 29(19) of the Family Law Rules
permits a court at a garnishment hearing to change "how much is
being garnished" on account of either a periodic or non-
periodic payment order. That discretion should be exercised
in a manner consistent with the FRSAEA, the FOAEAA and s. 66(4)
of the PBA to restrict individual garnishment to 50 per cent,
the same restriction as is placed on garnishment by the
Director. It was a matter of common sense that the Director and
the individual payee should have the same remedies available to
enforce support orders.
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Cases referred to
Beattie v. Ladouceur (1995), 1995 7192 (ON SC), 23 O.R. (3d) 225, [1995] O.J. No.
1149, 1995 17879 (ON SC), 13 R.F.L. (4th) 435 (Gen. Div.); Hooper v. Hooper
(2002), 2002 44963 (ON CA), 59 O.R. (3d) 787, [2002] O.J. No. 2158 (C.A.), apld
Kennedy v. Sinclair, 2003 57393 (ON CA), [2003] O.J. No. 2678, 42 R.F.L. (5th) 46
(C.A.), affg 2001 28208 (ON SC), [2001] O.J. No. 1837, 18 R.F.L. (5th) 91
(S.C.J.); Nicholas v. Nicholas, 1998 14871 (ON SC), [1998] O.J. No. 1750, 37
R.F.L. (4th) 13 (Gen. Div.); Saric v. Saric, [1996] O.J. No.
2810 (Gen. Div.); Simon and Simon (Re) (1984), 45 O.R. (2d)
534, 1984 2001 (ON SC), [1984] O.J. No. 3135, 2 O.A.C. 299, 7 D.L.R. (4th) 128,
1984 4745 (ON SCDC), 50 C.B.R. 161, 42 C.P.C. 133, 38 R.F.L. (2d) 198 (Div. Ct.),
consd [page57 ]
Other cases referred to
2747-3174 Québec Inc. v. Québec (Régie des permis d'alcool),
1996 153 (SCC), [1996] 3 S.C.R. 919, [1996] S.C.J. No. 112, 140 D.L.R. (4th)
557, 1996 153 (SCC), 205 N.R. 1; Alexander v. Alexander, [1997] O.J. No. 1092,
1997 24475 (ON SC), 31 R.F.L. (4th) 131 (Gen. Div.), supp. reasons [1998] O.J. No.
4540, 43 R.F.L. (4th) 166 (Gen. Div.); Bielanski v. Bielanski,
[2005] O.J. No. 2171, 139 A.C.W.S. (3d) 885 (S.C.J.); Crump v.
Crump, 1984 4920 (ON SC), [1984] O.J. No. 1056, 38 R.F.L. (2d) 92, 24 A.C.W.S.
(2d) 109 (H.C.J.); Hohn v. Hohn, [1995] O.J. No. 2754 (Gen.
Div.); Koyama v. Leigh, [1998] B.C.J. No. 279, 46 B.C.L.R.
(3d) 299, 1998 4193 (BC CA), 36 R.F.L. (4th) 64 (C.A.); Long v. Long, [1993] A.J.
No. 966, 1993 7276 (AB KB), 1 R.F.L. (4th) 110 (Q.B.); Nicklason v. Nicklason,
1989 2944 (BC SC), [1989] B.C.J. No. 1546, 22 R.F.L. (3d) 185 (S.C.); Ontario
(Director, Family Responsibility Office) v. Johnson, [2003]
O.J. No. 2318, 123 A.C.W.S. (3d) 903 (C.J.); Perrier v.
Perrier, 1987 8317 (ON SC), [1987] O.J. No. 1232, 12 R.F.L. (3d) 266 (H.C.J.)
Statutes referred to
Canada Pension Plan, R.S.C. 1985, c. C-8, s. 65(1)
Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 100, 101 [as
am.]
Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), ss. 2(1) "support
order" [as am.], 15, 15.1(1) [as am.], (4) [as am.], 15.2(1),
(3), 17(3), 20(3) (a), (b) [as am.]
Family Law Act, R.S.O. 1990, c. F.3, Parts I, III, ss. 9(1)(d)
(i), 34(1)(c)
Family Law Reform Act, R.S.O. 1980, c. 152
Family Orders and Agreements Enforcement Assistance Act, R.S.C.
1985, c. 4 (2nd Supp.), Part II, ss. 23(1) [as am.], 24, 25
[as am.], 26
Family Responsibility and Support Arrears Enforcement Act,
1996, S.O. 1996, c. 31, ss. 1 "income source" [as am.], 6(7),
6(8), 9(1), 20(5) [as am.], 23(1) [as am.], (2) [not in
force], (4) [not in force]
Garnishment, Attachment and Pension Diversion Act, R.S.C. 1985,
c. G-2
Judicature Act, R.S.O. 1980, c. 223, s. 79
Old Age Security Act, R.S.C. 1985, c. O-9, s. 36(1.1) [as am.]
Pension Benefits Act, R.S.O. 1980, c. 373, ss. 27(1), (2)
Pension Benefits Act, 1987, S.O. 1987, c. 35
Pension Benefits Act, R.S.O. 1990, c. P.8, ss. 51(1), (2) [as
am.], 65(1), (3), 66(1), (4)
Pension Benefits Standards Act, 1985, R.S.C. 1985, c. 32 (2nd
Supp.)
Public Service Pension Act, R.S.O. 1990, c. P.48
Wages Act, R.S.O. 1990, c. W.1, ss. 7(2), (3), (4), (5)
Rules and regulations referred to
Family Law Rules, O. Reg. 114/99, rules 1(2)(a)(iv) [as am.],
2(1) "payment order""support order" [as am.], 26 [as am.],
26(2), (3), 29(19) [as am.]
Family Support Orders and Agreements Garnishment Regulations,
SOR/88-181, ss. 3(g), (h)
Federal Child Support Guidelines, SOR/97-175, s. 12
Authorities referred to
Ontario Law Reform Commission, Report on the Enforcement of
Judgment Debts and Related Matters, Pt. II (Toronto: Ministry
of the Attorney General, 1981)
Sullivan, R., Sullivan and Driedger on the Construction of
Statutes, 4th ed. (Markham, Ont.: Butterworths, 2002)
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APPEAL from the order of Fragomeni J., [2005] O.J. No. 5670
(S.C.J.) vesting the husband's private pension in the wife
and [page58 ]ordering the garnishment of 100 per cent of the
husband's Canada Pension Plan and Old Age Security benefits.
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D. Smith and Brinley Evans, for appellant.
Jacqueline M. Mills, for respondent.
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The judgment of the court was delivered by
[1] LANG J.A.: -- This appeal raises the primary question of
the court's jurisdiction to vest a payor spouse's private
pension in a recipient spouse to enforce a support order made
under the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) ("DA").
This appeal also raises the question of the court's
jurisdiction to order the diversion by garnishment of 100 per
cent of a payor's Canada Pension Plan ("CPP") and Old Age
Security ("OAS") benefits.
[2] In this case, the motion judge, Fragomeni J., vested 100
per cent of the appellant's pension in the respondent wife,
Edwina Trick, and ordered the garnishment of 100 per cent of
the appellant's CPP and OAS benefits. These orders, and other
relief, were granted because the appellant husband, John Trick,
was in substantial arrears of child and spousal support. The
appellant seeks to set aside both orders as well as the order
made against him to pay $10,000 in costs. The appellant,
however, does not pursue his appeal of the dismissal of his
motion to vary, in which he sought to reduce his child support
obligations and rescind all support arrears.
[3] For the reasons that follow, in my view, the motion judge
erred in granting a vesting order of the appellant's private
pension plan because such an order would contravene s. 66(4) of
the Pension Benefits Act, R.S.O. 1990, c. P.8 ("PBA"). Section
66(4) permits execution against a pension benefit to enforce a
support order but to a maximum of 50 per cent of the benefit.
Further, the vesting order contravened s. 65(1) of the PBA,
which voids every transaction purporting, among other things,
to assign a pension. The order in issue does not fall within
the exception provided by s. 65(3). The motion judge also erred
in ordering the diversion or garnishment of more than 50 per
cent of the appellant's CPP and OAS benefits. Finally, in the
circumstances of this case, I would not interfere with the
costs order below or award any costs for this appeal.
Facts
[4] In 1991, the parties entered into a separation agreement
that provided for both child and spousal support. The [page59
]parties' 1992 divorce judgment, although silent on the
issue of spousal support, provided for child support for the
parties' two children.
[5] At the time of separation, the appellant was employed by
Nortel, earning approximately $120,000 annually. Months later,
Nortel terminated his employment, thereby triggering payment of
the appellant's $31,000 annual Nortel pension. Within four
months, the appellant accepted employment in Texas at an income
much greater than he earned at Nortel. From 1995 to 2001, the
appellant earned an average annual income of $194,258 CAD,
including his Nortel pension. He did not disclose his increased
income to the respondent.
[6] In the meantime, the respondent's health deteriorated to
the point that she was unable to earn any significant income.
When the respondent eventually learned of the appellant's
actual financial circumstances, she sought a retroactive and
ongoing variation of support.
[7] After an eight-day trial of the variation application in
2003, the trial judge, Seppi J., awarded the respondent
retroactive spousal and child support totaling $225,675 and
$117,936.41 in costs. She also ordered ongoing monthly spousal
support as well as child support under the Federal Child
Support Guidelines, SOR/97-175.
[8] Following the variation judgment, the appellant appealed
to this court. However, his appeal was late and the appellant
decided not to review the order refusing him an extension of
time. Instead, he simply reduced his support payments and,
according to the respondent"judgment-proofed his U.S.
assets". In Canada, the appellant's only assets are his Nortel
pension and his CPP and OAS benefits.
[9] The variation judgment concluded with the usual paragraph
providing for the enforcement of the support order by the
Director of the Family Responsibility Office pursuant to the
provisions of the Family Responsibility and Support Arrears
Enforcement Act, 1996, S.O. 1996, c. 31 ("FRSAEA"). On the
record before this court, it appears that the Director has not
withdrawn from enforcement [of] the 2003 support variation
judgment and the related Support Deduction Order, which was
made under FRSAEA.
The Motion Below
[10] By March 2005, the appellant owed the respondent
$422,192.17, including arrears of support, interest and costs.
In May 2005, the respondent brought a motion for, among other
relief, the two orders at issue on this appeal: one vesting
[page60 ]the appellant's Nortel pension in her name and the
other directing the garnishment of 100 per cent of the
appellant's CPP and OAS benefits. In response, the appellant
brought a cross-motion to vary Seppi J.'s judgment to reduce
his support obligations.
[11] After reviewing the parties' circumstances and the
reasons for the 2003 variation, the motion judge dismissed the
appellant's motion to vary. He concluded that, in essence, the
appellant was asking the motion judge to sit on appeal from the
earlier variation judgment. I agree. In any event, as I have
mentioned, the appellant does not appeal this part of the
motion judge's order. In argument, the appellant advises that
he pursues only his challenge of the motion judge's
jurisdiction to make the diversion orders.
[12] It is clear from para. 35 of the motion judge's reasons
that both the vesting order and the garnishment relief were
granted "to enforce" the support order. [See Note 1 below] In
support of his jurisdiction to grant the enforcement relief, the
motion judge relied on s. 100 of the Courts of Justice Act,
R.S.O. 1990, c. C.43 ("CJA"), s. 34(1)(c) of the Family Law Act,
R.S.O. 1990, c. F.3 ("FLA"), and those provisions of the DA that
permit a court ordering support to "impose terms, conditions or
restrictions in connection with" a child or spousal support
order. The motion judge, after commenting on the appellant's
extensive history of non-payment and on the appellant's argument
that diversion would be inequitable in light of the appellant's
age and financial circumstances, concluded that the relief
should be granted.
[13] With respect to the 100 per cent garnishment of the
appellant's CPP and OAS benefits, the motion judge's reasons
were brief: "I am also satisfied that the full amount payable
from CPP and OAS pensions ought to be garnished."
Issues
[14] The appellant raises three issues on this appeal:
(1) Did the motion judge err in vesting 100 per cent of the
appellant's Nortel pension in the respondent?
(2) Did the motion judge err in ordering the garnishment of 100
per cent of the appellant's CPP and OAS benefits? [page61 ]
(3) Did the motion judge err in awarding costs of $10,000
against the appellant?
Analysis
- Did the motion judge err in vesting 100 per cent of the
appellant's Nortel pension in the respondent?
Summary
[15] The appellant argues that the PBA restricts execution
against a pension to 50 per cent for spousal support. The
respondent argues that any such statutory restrictions are not
relevant to the court's exercise of its equitable jurisdiction
under s. 100 of the CJA, a jurisdiction that is akin to the
appointment of an equitable receiver under s. 101 of the CJA.
[16] In my view, s. 100 of the CJA does not provide stand-
alone jurisdiction to grant the relief claimed. Section 100
only provides a mechanism to vest title to a property in
respect of which there is a separate, valid claim to ownership.
Although the motion judge relied on the FLA as conferring such
a valid claim, the support order was made under the DA and not
under the FLA. Further, the Family Law Rules, O. Reg. 114/99
("FLR"), which provide the procedure for the enforcement of
DA support orders, do not list vesting orders as an available
enforcement mechanism. The DA, however, does give a court
jurisdiction to secure a spousal support order. In that sense,
it may be construed as providing the CJA s. 100 authority to
"encumber" an asset. However, even if that is so at law, the
PBA prohibits the granting of such a vesting order.
Consequently, in my opinion, even if a vesting order is
available in equity, that relief should be refused where it
would conflict with specific provisions of the PBA. This is
particularly so because the exigibility of pensions is fraught
with social and political policy issues, issues that are
better-suited for the legislature than the courts. Accordingly,
I would allow the appeal and set aside the vesting order.
[17] These conclusions follow from a consideration of the
legislation, although the wording of the legislation and the
interaction between the applicable statutes are by no means
straightforward.
Legislative provisions
[18] The following provisions are relevant to the question of
the court's jurisdiction to make a vesting order with respect
to a pension: [page62 ]
- A court may by order vest in any person an interest in
real or personal property that the court has authority to
order be disposed of, encumbered or conveyed.
101(1) In the [Unified Family Court or the] Superior Court
of Justice, an interlocutory injunction or mandatory order
may be granted or a receiver or receiver and manager may be
appointed by an interlocutory order, where it appears to a
judge of the court to be just or convenient to do so.
34(1) In an application under section 33 [for support], the
court may make an interim or final order,
(c) requiring that property be transferred to or in
trust for or vested in the dependant, whether
absolutely, for life or for a term of years;
2(1) "support order" means a child support order or a
spousal support order.
15.1(1) A court of competent jurisdiction may, on
application by either or both spouses, make an order
requiring a spouse to pay for the support of any or all
children of the marriage.
15.2(1) A court of competent jurisdiction may . . . make an
order requiring a spouse to secure or pay, or to secure and
pay . . . such . . . sums, as the court thinks reasonable for
the support of the other spouse.
s. 15.1(4) and s. 15.2(3) The court may make an order . . .
and may impose terms, conditions or restrictions in
connection with the order . . . as it thinks fit and just.
17(3) The court may include in a variation order any
provision that under this Act could have been included in the
order in respect of which the variation order is sought.
20(3) An order that has legal effect throughout Canada
pursuant to subsection (2) may be
(a) registered in any court in a province and enforced
in like manner as an order of that court; or
[page63 ]
(b) enforced in a province in any other manner provided
for by the laws of that province, including its
laws respecting reciprocal enforcement between the
province and a jurisdiction outside Canada.
Federal Child Support Guidelines
- The court may require in the child support order that
the amount payable under the order be paid or secured, or
paid and secured, in the manner specified in the order.
2(1) In these rules, ...
"payment order" means a temporary or final order, but not a
provisional order, requiring a person to pay money to another
person, including,
(a) an order to pay an amount under Part I or II of the
Family Law Act or the corresponding provisions of a
predecessor Act,
(b) a support order,
(c) a support deduction order,
(e) a payment order made under rules 26 to 32
(enforcement measures) or under section 41 of
the Family Responsibility and Support Arrears
Enforcement Act, 1996,
(i) the costs and disbursements in a case;
"Support order" means an order described in subsection 34(1)
of the Family Law Act or a support order as defined in
subsection 2(1) of the Divorce Act (Canada) or in section 1
of the Family Responsibility and Support Arrears Enforcement
Act, 1996.
26(2) An order that has not been obeyed may, in addition to
any other method of enforcement provided by law, be enforced
as provided by subrules (3) and (4).
26(3) A payment order may be enforced by,
(a) a request for a financial statement (subrule
27(1));
(b) a request for disclosure from an income source
(subrule 27(7));
(c) a financial examination (subrule 27(11));
(d) seizure and sale (rule 28);
(e) garnishment (rule 29);
(f) a default hearing (rule 30), if the order is a
support order; [page64 ]
(g) the appointment of a receiver under section 101 of
the Courts of Justice Act; and
(h) registration under section 42 of the Family
Responsibility and Support Arrears Enforcement Act,
Pension Benefits Act -- Benefits
51(1) A domestic contract as defined in Part IV of the
Family Law Act, or an order under Part I of that Act is not
effective to require payment of a pension benefit before the
earlier of,
(a) the date on which payment of the pension benefit
commences; or
(b) the normal retirement date of the relevant member
or former member.
(2) A domestic contract or an order mentioned in subsection
(1) is not effective to cause a party to the domestic
contract or order to become entitled to more than 50 per cent
of the pension benefits, calculated in the prescribed manner,
accrued by a member or former member during the period when
the party and the member or former member were spouses.
Pension Benefits Act -- Locking In
65(1) Every transaction that purports to assign, charge,
anticipate or give as security money payable under a pension
plan is void.
(3) Subsections (1) and (2) do not apply to prevent the
assignment of an interest in money payable under a pension
plan or money payable as a result of a purchase or transfer
under section 42, 43, clause 48(1)(b) or subsection 73(2)
(transfer rights on wind up) by an order under the Family
Law Act or by a domestic contract as defined in Part IV of
that Act.
66(1) Money payable under a pension plan is exempt from
execution, seizure or attachment.
(4) Despite subsection (1), payments under a pension or
that result from a purchase or transfer under section 42 or
43, clause 48(1)(b) or subsection 73(2) are subject to
execution, seizure or attachment in satisfaction of an order
for support enforceable in Ontario to a maximum of one-half
the money payable.
Review of the Legislation
[19] The starting point referenced by the motion judge is s.
100 of the CJA, which provides a court with jurisdiction to vest
property in a person but only if the court also possesses the
"authority to order [that the property] be disposed of,
encumbered or conveyed". Thus, [page65 ]s. 100 [See Note 2
below] only provides a mechanism to give the applicant the
ownership or possession of property to which he or she is
otherwise entitled; it does not provide a free standing right to
property simply because the court considers that result
equitable.
[20] Accordingly, the question is whether, at law or in
equity, the motion judge had that necessary authority to
dispose of, encumber or convey the appellant's interest in his
pension.
(b) Family Law Act
[21] The FLA, which the motion judge relied upon, permits the
diversion of pensions for two purposes. First, Part I,
specifically s. 9(1)(d)(i), gives a court the jurisdiction to
make a vesting order as a means to effect the equalization of
net family property, including pensions. This section, however,
does not apply because equalization was not the issue in this
case.
[22] Second, Part III of the FLA, specifically s. 34(1)(c),
gives a court jurisdiction, when dealing with support, to
transfer or vest property "in the dependant, whether absolutely,
for life or for a term of years". [See Note 3 below] In this
case, however, the judgment sought to be varied was not granted
under the FLA, but under the DA.
[23] Consequently, it was an error to rely on the FLA as the
authority necessary to vest the appellant's Nortel pension in
the respondent.
(c) Family Law Rules
[24] The FLR, which set out the procedures available for the
enforcement of a support order, apply whether the order is made
[page66 ]under the FLA or under the DA. Rule 26 sets out the
enforcement mechanisms available, including garnishment,
seizure and sale, equitable receivership under s. 101 of the
CJA, and, finally, by registration against land under the
FRSAEA. A vesting order under s. 100 of the CJA, however, is
not included among Rule 26 enforcement methods. Accordingly,
the FLR, which in any event are only procedural in nature, do
not provide the additional authority to dispose of, encumber or
convey the appellant's pension as required by the CJA.
(d) Divorce Act
[25] The motion judge also referred to the DA s. 15
jurisdiction to "impose 'terms, conditions, or restrictions in
connection with' a child or spousal support order". In
addition, s. 17(3) provides, on a variation application, that a
court may make an order that "could have been included in the
order in respect of which the variation order is sought".
[26] In my view, these provisions do not assist the
respondent. The phrase"in connection with", only modifies the
terms of the support being ordered so that a judge may impose
various terms and conditions on the payments being ordered. The
provision does not go so far, however, as to provide
jurisdiction for the judge to order enforcement of the order or
to order security for the payments. I say this because both
enforcement and security are specifically addressed elsewhere
in the DA.
[27] The DA gives a court jurisdiction to require a spouse
"to secure and pay" spousal support pursuant to s. 15.2(1)
and s. 17(3) of the DA. Jurisdiction to secure an order for
child support is provided by s. 12 of the Federal Child Support
Guidelines. The securing of support, which has been available
since the 1985 DA amendments, was addressed in Long v. Long,
1993 7276 (AB KB), [1993] A.J. No. 966, 1 R.F.L. (4th) 110 (Q.B.). In that
case, Veit J. held that because "there is specific authority in
the Divorce Act allowing the courts to secure the payment of
support" she had the jurisdiction to order support payments
deducted from the payor's wages. She explained at para. 18 that
such an order "is like a receivership order and is therefore
within the category of securing orders that also contains
mortgages, bonds, and pledges." [See Note 4 below] [page67 ]
[28] Such an order for security arguably could provide the
necessary additional authority upon which to found a subsequent
CJA s. 100 vesting order because such an order could be
interpreted as providing the "authority" to "encumber"
property. In any event, apart from the fact that this analysis
was not argued by the respondent, in my view, the provisions of
the PBA, which I will now discuss, preclude such an order, at
least at law.
[29] To encourage the establishment of pensions, and to ensure
that they are available to workers for their retirement years,
the pension legislation provides that pensions are non-
assignable and non-exigible, [See Note 5 below] subject to
certain exceptions.
[30] Accordingly, certain provisions are included in the PBA
to preserve pensions. The legislation distinguishes between the
protection given to pension benefits which a member will
receive in the future and protection for pension moneys
actually being received, i.e., a pension in pay. The Act also
distinguishes between what a pensioner or court can do by way
of assigning a pension and the extent to which a creditor can
execute against a pension.
[31] However, preserving a member's interest in his or her
pension can conflict with other important objectives reflected
in family law legislation. From a property perspective, the
value of the pension accumulated during marriage is part of the
spouses' net family property subject to equalization. From a
support perspective, a pension in pay is an income source
relevant to the ongoing needs of the family members. Thus,
pension income may be a source of revenue to enforce support
and equalization obligations.
[32] Predecessor legislation, the Pension Benefits Act,
R.S.O. 1980, c. 373, generally prohibited both assignment of
and execution against a pension. However, that Act made an
exception and permitted execution against 100 per cent of a
pension in pay to enforce a support order:
27(1) Moneys payable under a pension plan shall not be
assigned, charged, anticipated or given as security and are
exempt from execution, seizure or attachment, and any
transaction purporting to assign, charge, anticipate or give
as security such moneys is void.
(2) Subsection (1) does not apply to the execution, seizure
or attachment of moneys payable under a pension plan in
satisfaction of an order for support under the Family Law
Reform Act. [page68 ]
[33] In 1988, the legislature amended the legislation to cap
execution to enforce a support order at 50 per cent of the
payor's pension and to permit the assignment of a maximum of 50
per cent of a pension to satisfy an equalization order. In this
way, the current PBA balances the competing interests of
support enforcement and pension preservation.
[34] I begin with the current legislative provisions
restricting execution against pensions for support enforcement
because they benefit from greater clarity of language than
those restricting the assignment of pensions. Apparently none
of these provisions was brought to the attention of or argued
before the motion judge.
(i) PBA -- Execution against pensions
[35] Section 66(1) of the PBA exempts money payable under a
pension plan from "execution, seizure or attachment". For
convenience, I repeat s. 66(4):
66(4) Despite subsection (1), payments under a pension
. . . are subject to execution, seizure or attachment in
satisfaction of an order for support enforceable in Ontario
to a maximum of one-half the money payable.
[36] This subsection, enacted in 1988, [See Note 6 below]
provides that moneys payable under a pension plan are subject to
execution, seizure and attachment to a maximum of 50 per cent to
satisfy support orders. This exemption applies to all support
orders "enforceable in Ontario", which includes both orders made
under the FLA and orders made under the DA, such as the one in
this case. [See Note 7 below]
[37] The 50 per cent exemption is replicated in the Wages Act,
R.S.O. 1990, c. W.1, at ss. 7(2) and 7(3) ("WA"). However,
unlike the PBA, ss. 7(4) and (5) of the WA give a court
jurisdiction to increase or decrease the percentage exemption
"if the judge is satisfied that it is just to do so, having
regard to the nature of the debt owed to the creditor, the
person's financial circumstances and any other matter the judge
considers relevant". [See Note 8 below] The legislature [page69
]did not give a court the same discretion with respect to
exemptions in the case of pensions.
[38] The objective of pension preservation is reflected in s.
23(1) of the FRSAEA, which precludes the Director bringing
enforcement proceedings under a Support Deduction Order from
garnisheeing more than 50 per cent of a payor's pension. While
the legislature also proposes to provide a judicial discretion
to increase or decrease that exemption, that amendment has not
yet been proclaimed in force. [See Note 9 below]
[39] Since there is no similar proposed amendment to the PBA,
the legislature can be taken to have determined that, at least
currently, there should be no judicial authority to increase
the 50 per cent exemption.
[40] Accordingly, I conclude that, for the purpose of support
enforcement, at law, s. 66(4) of the PBA permits execution
against money payable under a pension plan to a maximum of 50
per cent.
[41] I now turn to the question of whether a contrary result
follows from an interpretation of s. 65(3) of the PBA.
(ii) PBA -- Assignment of pensions
[42] Despite the clear wording of s. 66(4), the respondent
argues that execution to enforce a DA support order is
permitted by the operation of s. 65(3). This section, however,
must be considered in light of its purpose and its context.
Section 65(1) begins by providing that "[e]very transaction
that purports to assign, charge, anticipate or give as security
money payable under a pension plan is void." Section 65(3), at
first blush, appears to describe a very broad exception to that
prohibition: [page70 ]
65(3) Subsections (1) and (2) do not apply to prevent the
assignment of an interest in money payable under a pension
plan or money payable as a result of a purchase or transfer
under section 42, 43, clause 48(1)(b) or subsection 73(2)
(transfer rights on wind up) by an order under the Family
Law Act or by a domestic contract as defined in Part IV of
that Act.
(Emphasis added)
[43] Based on this broad language, the respondent argues that
a court is not precluded from assigning 100 per cent of a
pension to satisfy a support order. I disagree for several
reasons.
[44] First, the order in this case, to the extent it
otherwise comes within s. 65(3) at all, is not an order made
under the FLA. Rather, it was made under the DA. Accordingly,
s. 65(3) cannot provide relief from the s. 65(1) general
prohibition against pension assignment.
[45] Second, the interpretation put forward by the respondent
is inconsistent with the clear legislative intention of s.
66(4). Execution to satisfy support orders is specifically
dealt with by s. 66(4) of the Act. If, by virtue of s. 65(3), a
recipient spouse could by court order force the assignment of
100 per cent of a payor's pension, then s. 66(4) would be
rendered meaningless. This would run afoul of the presumption
of coherence in statutory interpretation. In essence, it is
presumed that the legislature did not intend to make
contradictory statements within the same statute. See 2747-3174
Québec Inc. v. Québec (Régie des permis d'alcool), [1996] 3
S.C.R. 919, 1996 153 (SCC), [1996] S.C.J. No. 112, at paras. 207-08 (per
L'Heureux-Dubé concurring) and R. Sullivan, Sullivan and
Dreidger on the Construction of Statutes, 4th ed. (Markham,
Ont.: Butterworths, 2002) at 168. In my view, s. 65(3) should
not be interpreted to strip s. 66(4) of its purpose if other
rational and consistent interpretations can be applied.
[46] Third, such an interpretation is inconsistent with the
legislative history of the provision. In 1988, the legislature
deliberately moved from 100 per cent exigibility of pensions
for support enforcement to 50 per cent. It would not be logical
to cap pension exigibility at 50 per cent in s. 66(4), but
leave it 100 per cent exigible under s. 65(3).
[47] Fourth, s. 65(3) exempts only the assignment of
pensions. An assignment of a pension is a transfer of rights to
the pension. The Act continues to void all other transactions
such as those that purport to "charge, anticipate or give as
security money payable under a pension plan". Such transactions
are akin to enforcement under s. 66 of the PBA and continue to
be prohibited. These continued prohibitions reflect the
legislature's continuing objective to preserve pensions.
[48] Fifth, I acknowledge that s. 65(3) does not explicitly
say that it is "subject to s. 51", or that its scope is
confined to Part I [page71 ]FLA equalization orders.
Legislative intent would have been clear were these points
express. However, s. 65(3) cannot be read in isolation from s.
- See p. 168 of Dreidger: "It is presumed that the provisions
of legislation are meant to work together both logically and
teleologically, as parts of a functioning whole. The parts are
presumed to fit together logically to form a rational,
internally consistent framework."
[49] When read in conjunction with s. 51, it is apparent that
s. 65(3) was intended to provide the mechanism to permit the
assignment of a pension to equalize property or, perhaps, for
the purpose of lump sum spousal support, but not as an
additional mechanism intended to denude s. 66(4) of meaning. I
say this because s. 65(3) is necessary to provide a mechanism
to satisfy a s. 51 equalization of a pension. The legislature
addresses equalization of pensions in two parts of the PBA.
First, the part entitled "Benefits" defines what benefits can
be equalized and when:
51(1) A domestic contract . . . or an order under Part I of
[the FLA] is not effective to require payment of a pension
benefit [i.e. a benefit to which a pensioner will become
entitled] before [the pension becomes available to the
pensioner].
(2) A domestic contract or an order mentioned in subsection
(1) [i.e. for equalization] is not effective to cause a
party to the domestic contract or order to become entitled to
more than 50 per cent of the pension benefits . . . accrued
. . . when the party and the member or former member were
spouses.
[50] Section 51, however, does not provide a mechanism to
accomplish that equalization. That mechanism is provided in
that part of the PBA entitled "Locking In", which permits an
assignment or transfer of money in pay under a FLA order.
[51] The relationship between s. 51 and s. 65(3) is confirmed
by the reference in s. 65(3) only to an order under the FLA;
there is no reference to an order under the DA. This must be
because an equalization order can only be made under the FLA
and is not available under the DA. If the legislature intended
an assignment order to be available to enforce support orders,
it would have included a DA order in addition to a FLA order.
However, the legislature chose not to do so, even though it
amended s. 66 to address orders "enforceable in Ontario". As I
have said, this phrase includes both DA and FLA orders for the
purpose of execution.
[52] By s. 51, the earliest payment of a pension benefit for
equalization purposes must take place after the pension is
payable and an equalization order cannot assign more than 50
per cent of the benefits accrued during the relevant period.
[page72 ]
[53] In this case, the respondent is not seeking an
assignment of the appellant's pension for equalization purposes
or even for the purpose of lump sum support. Rather, she is
seeking to execute, seize or garnishee 100 per cent of the
appellant's pension to enforce the appellant's outstanding
obligations. In my view, she is precluded from doing so at law
(f) Equitable execution
[54] The respondent argues, however, that she is not seeking
execution at law, but in equity, and that the PBA, unlike
federal pension legislation that I will discuss later, does not
preclude equitable relief. In support of her position, the
respondent argues that a vesting order under s. 100 of the CJA
is "equitable relief along the lines of the appointment of an
equitable receiver" under s. 101 of the CJA. [See Note 10 below]
I disagree for the following reasons.
[55] A vesting order and an order for equitable receivership
are fundamentally different. While a vesting order conveys
ownership to the recipient, an equitable receivership does not.
Such an order merely allows the receiver to collect and control
the asset.
[56] In any event, even if a vesting order is equivalent to a
claim for equitable relief, as is argued by the respondent,
this argument cannot succeed. I say this for two reasons.
First, the authorities on which the respondent relies are
distinguishable. Second, a court should decline to grant
equitable relief that would run directly counter to a
prescribed legislative scheme.
[57] On appeal, the respondent relies on Nicholas v. Nicholas,
1998 14871 (ON SC), [1998] O.J. No. 1750, 37 R.F.L. (4th) 13 (Gen. Div.), Re Simon
and Simon (1984), 1984 2001 (ON SC), 45 O.R. (2d) 534, [1984] O.J. No. 3135 (Div.
Ct.), and Saric v. Saric, [1996] O.J. No. 2810 (Gen. Div.). In
his reasons, the motion judge relied on Kennedy v. Sinclair,
2001 28208 (ON SC), [2001] O.J. No. 1837, 18 R.F.L. (5th) 91 (S.C.J.), affd [2003]
O.J. No. 2678, 2003 57393 (ON CA), 42 R.F.L. (5th) 46 (C.A.). [See Note 11 below]
[page73 ]
[58] Nicholas came before a court only because the pension
plan administrator refused to comply with the parties'
settlement agreement and, to effect that settlement, the wife
sought her appointment as equitable receiver. That case involved
extraordinary circumstances where the husband agreed to vest 100
per cent of his pension in his wife: 50 per cent to satisfy an
equalization order and the remaining 50 per cent for outstanding
support. The PBA contains no prohibition against this type of
order, which is known as a "stacking" order. [See Note 12 below]
Since the arrangement did not offend against either of the PBA's
50 per cent rules, Nicholas is of no application to this case.
[59] In Simon, the Divisional Court dismissed an appeal from
an order that appointed an equitable receiver to collect 100
per cent of the defaulting payor's future pension benefits to
satisfy an order made under the former Family Law Reform Act,
R.S.O. 1980, c. 152 ("FLRA"). Simon was decided before 1988,
when the PBA still permitted 100 per cent garnishment of
pensions for an FLRA support order. Since the equitable relief
granted in Simon did not conflict with the provisions of the
PBA legislation then, in effect, it does not provide authority
in the instant case.
[60] The court in Saric ordered the payor's house and RRSP
vested in the recipient spouse "on account" of support arrears.
The motion judge, however, had jurisdiction to make this order
under s. 34(1)(c) of the FLA. Her obiter reference to the
provisions of the DA included no analysis of those provisions,
particularly in relation to the prohibitions of the PBA.
Accordingly, Saric is also not helpful for the determination of
this case.
[61] Kennedy, supra, the case referenced by the motion judge,
was heard as an uncontested motion for judgment. In that
circumstance, the motion judge did not have the benefit of
submissions by the respondent payor and undertook no analysis
of the issues alive in this appeal. Furthermore, the vesting
order granted in Kennedy was a stacking order, allocating 50
per cent of pension payments for support and 50 per cent for
equalization. As was the case in Nicholas and Simon, this order
did not come into direct conflict with the provisions of the
PBA.
[62] Beattie v. Ladouceur (1995), 1995 7192 (ON SC), 23 O.R. (3d) 225, [1995]
O.J. No. 1149 (Gen. Div.) and Hooper v. Hooper (2002), 59 O.R.
(3d) 787, 2002 44963 (ON CA), [2002] O.J. No. 2158 (C.A.) [page74 ]are the leading
cases on the appointment of an equitable receiver in the pension
context. [See Note 13 below] In Beattie, which considered
federal legislation, an argument was raised by the recipient
spouse similar to the one in this case -- that the claim was not
for execution but for an equitable receiver to be appointed to
receive and apply 100 per cent of the payor's pension benefits
to the outstanding support. In setting aside the order
appointing the receiver, Justice Rutherford held that the
equitable relief claimed was beyond the court's jurisdiction. He
came to that conclusion based on the particular wording of the
federal legislation that exempted pensions from execution either
"at law or in equity". He held that the relief granted below
amounted to indirect attachment or extra-legislative
garnishment, in the sense that it contemplated the government
exceeding the garnishment authority conferred by statute.
Justice Rutherford explained at pp. 231-32 O.R.:
[I]t should be remembered that the courts of equity fashioned
"equitable" remedies to achieve justice which was
unattainable largely because of the rigidity of legal
remedies which were the creatures of the courts of law. Here,
where Parliament has fashioned statutory remedies and placed
limitations on those remedies with great specificity, I think
it is the proper role of the courts to apply and maintain
those remedies, including their limitations.
[63] Hooper cited Beattie with approval when considering a
court's jurisdiction to appoint a recipient spouse as equitable
receiver of a payor's provincial pension to enforce outstanding
FLA orders under the PBA and under the Public Service Pension
Act, R.S.O. 1990, c. P.48, which also governed the pension at
issue. Hooper considered an order made against the payor's
pension to enforce an earlier unsatisfied equalization order.
This court held that, although a court had jurisdiction under
the PBA to make an assignment order as part of an equalization
order, it had no jurisdiction to subsequently enforce an
earlier equalization order by appointing the recipient spouse
as equitable receiver of the payor's pension payments.
Specifically, the court concluded, on the basis of similar
legislation, that the court below erred in ordering equitable
receivership where the PBA specifically prohibits the diversion
of a pension for enforcement purposes. [page75 ]
[64] In arriving at his conclusion at para. 44, Goudge J.A.
commented on the rationale for statutory constraints on
execution against pensions:
The only exceptions relate to certain orders made against the
pensioner pursuant to the Family Law Act, namely support
orders or equalization orders that operate to entitle another
to receive the pension benefits. With each of these
exceptions, there is a cap. The legislative objective is to
assure that, so far as possible, an employee's participation
in a pension plan over the years will make available benefits
to provide the sustenance he or she needs upon retirement.
Even in those exceptional cases where an incursion is
permitted on that assurance because of the overriding
imperatives of family law, an upper limit is in place to
preserve this objective at least to some extent.
[65] Further, Goudge J.A. distinguished between equitable
relief employed to overcome unfair common law principles and
such relief employed to contravene the clear intention of the
legislature. He observed at para. 51:
The order appointing the respondent as equitable receiver is
not an example of the court using its equitable jurisdiction
to circumvent a common law obstacle of its own making.
Rather, that order would effect a result which, for clear
policy reasons, the legislation prohibits, namely the
enforcing of the equalization order of Fedak J. against the
appellant's pension payments. In my view, however strong the
equities might otherwise be, it is not just or convenient in
these circumstances to appoint an equitable receiver to
achieve a result which is in direct conflict with the
applicable legislation. In this I agree with Rutherford J. in
Beattie v. Ladouceur (1995), 1995 7192 (ON SC), 23 O.R. (3d) 225, 13 R.F.L.
(4th) 435 (Gen. Div.), who came to the same conclusion in
the context of similar federal legislation.
[66] In my view, the analyses in Beattie and Hooper apply to
the support issue in this case. Subsection 66(4) of the PBA
clearly restricts execution to enforce a support order to 50
per cent of the payor's pension. Had the legislature intended
to grant the court jurisdiction to increase that exemption, it
would have so provided, as it has in the WA and as it proposes
to do in the FRSAEA. It did not do so.
[67] Even if available, equitable remedies should not be
employed in this case. This is not a situation of invoking
equity to overcome limitations in the common law system of
enforcement. In this case there is no common law impediment to
preclude garnishment. The impediment is a specific statutory
one, crafted by the legislature, which was alive to and
balanced the competing policies of pension preservation and the
enforcement of support obligations in the family law context.
In those circumstances, it cannot be either just or convenient
to allow the result sought by the respondent. [page76 ]
[68] In light of this conclusion, it is unnecessary to
discuss the other grounds of appeal raised by the respondent
with respect to this issue, such as the fact that a failure to
provide for the actuarial value of the pension precluded a
vesting order.
[69] In the result, I would set aside the vesting order and
the paragraphs ancillary to that order so that the respondent
is entitled only to the garnishment of 50 per cent of the
appellant's Nortel pension and is not entitled to a vesting
order with respect to the Nortel pension.
- Did the motion judge err in garnisheeing 100 per cent of
the appellant's CPP and OAS benefits?
[70] I turn now to the second issue raised on this appeal:
whether the motion judge had jurisdiction to order the
garnishment of 100 per cent of the appellant's CPP and OAS
benefits.
[71] This is also a question of statutory interpretation
because both CPP and OAS benefits are creatures of statute,
namely the Canada Pension Plan, R.S.C. 1985, c. C-8 and the Old
Age Security Act, R.S.C. 1985, c. O-9, respectively. Generally,
this legislation provides that neither CPP or OAS benefits may
be assigned and neither are subject to execution:
CPP
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.
OAS
36(1.1) A benefit is exempt from seizure and execution,
either at law or in equity.
(Emphasis added)
[72] Since both these provisions explicitly prohibit
execution both in equity as well as at law, the respondent did
not seek equitable relief with respect to these benefits.
Instead, she limited her claim to 100 per cent garnishment.
[73] Although CPP and OAS benefits are generally protected
from execution, they are subject to garnishment for support
enforcement in the terms set out in Part II of the Family
Orders and Agreements Enforcement Assistance Act, R.S.C. 1985,
c. 4 (2nd Supp.) ("FOAEAA"):
- 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. [page77 ]
- Subject to section 26 and any regulations made under
this Part, garnishment under this Part shall be in accordance
with provincial garnishment law.
- 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.
(Emphasis added)
[74] On the facts of this case, this legislation raises four
questions: first, whether the order in this case is a "support
order"; second, whether the CPP and OAS benefits are
"garnishable moneys"; third, whether there is any
contradiction between the FOAEAA and provincial garnishment law
such as to attract the override provision of s. 26; and fourth,
whether 100 per cent garnishment of these benefits accords with
Ontario's garnishment law.
[75] On the first question, the order in this case comes
within the FOAEAA definition of a "support order" as one
"enforceable in any province". This is so because the DA
specifies that a support order made under that Act may be
"enforced in a province in any other manner provided for by the
laws of that province". [See Note 14 below] Thus, with such an
order, the recipient spouse may garnishee "all garnishable
moneys".
[76] On the second question, the appellant's CPP and OAS
benefits are "garnishable moneys" subject to garnishment in
accordance with the other provisions of the FOAEAA. By
definition"garnishable moneys" are moneys authorized to be
paid by federal statute or designated by regulation. [See Note
15 below] Apart from certain exceptions that are not germane to
this case, CPP and OAS benefits are so designated by ss. 3(g)
and (h) of the Family Support Orders and Agreements Garnishment
Regulations, SOR/88-181. Accordingly, these benefits are
garnishable, subject to "provincial garnishment law".
[77] On the third issue, I see no conflict between the FOAEAA
and Ontario's garnishment law, which I will review, such as to
attract the override provision of FOAEAA's s. 26. First, I
cannot accept the respondent's argument that the "all" in "all
garnishable moneys" reflects a parliamentary intention to
render all payments garnishable at 100 per cent under s. 24. If
Parliament had intended this result, it would have said so
clearly.
[78] Second, the Garnishment, Attachment and Pension
Diversion Act, R.S.C. 1985, c. G-2 ("GAPDA") relied upon by
[page78 ]the appellant provides for 100 per cent garnishment
for support, but it applies only against pension benefits
payable under "Acts and like enactments referred to in the
schedule". Since neither the CPP nor the OAS legislation is
included in that schedule, the GAPDA has no application to this
case.
[79] Third, the Pension Benefits Standards Act, 1985, R.S.C.
1985, c. 32 (2nd Supp.) governs private pension plans in
connection with certain federal works, undertakings and
businesses such as interprovincial and international
transportation, radio broadcasting and banking. It does not
apply to the appellant's CPP or OAS benefits. Finally, counsel
did not cite any other federal legislation that impacts on the
garnishment of these benefits.
[80] On the fourth question, in my view, Ontario law caps
garnishment at 50 per cent. I say this for the following
reasons.
[81] "Provincial garnishment law" is defined in s. 23(1) of
the FOAEAA as "the law of a province relating to garnishment as
it applies to the enforcement of support orders and support
provisions".
[82] The FLR do not specify a quantum of garnishment with
respect to pensions or benefits. In any event, because the FLR
are procedural in nature, as I have emphasized, they cannot
constitute "provincial garnishment law" since they do not
confer substantive jurisdiction.
[83] One statute in Ontario, however, specifically defines
itself as a "provincial garnishment law" for the purposes of
support enforcement: the FRSAEA. Section 20(5) of that Act
provides that a support deduction order "shall be deemed to be a
notice of garnishment made under provincial garnishment law for
the purposes of the Family Orders and Agreements Enforcement
Assistance Act (Canada)". Section 23(1) of the FRSAEA caps
garnishment at 50 per cent of the payor's "income source", which
is defined in s. 1 as including a "disability, retirement or
other pension". In Ontario (Director, Family Responsibility
Office) v. Johnson, [2003] O.J. No. 2318, 123 A.C.W.S. (3d) 903
(C.J.), the Director took the position that only 50 per cent of
CPP and OAS benefits are garnishable. [See Note 16 below] I
conclude that s. 23(1) of the [page79 ]FRSAEA restricts the
Director's garnishment to 50 per cent of the appellant's CPP or
OAS benefits.
[84] As I noted earlier in these reasons, the record before
this court indicates that the support order and the Support
Deduction Order in this case remain filed with the Director. In
this circumstance, by ss. 6(7), 6(8) and 9(1) of the FRSAEA,
support enforcement rests exclusively with the Director and, in
the result, garnishment is capped at 50 per cent.
[85] However, in my view, even if the respondent is seeking
garnishment on her own behalf, garnishment must still be capped
at 50 per cent.
[86] The principle behind s. 66(4) of the PBA, which is the
only other provincial statute that addresses garnishment for
the enforcement of support, lends support to this conclusion. I
refer to the principle behind s. 66(4) because, arguably, s.
66(4) has no direct application to the benefits at issue in
this appeal. This is so because the PBA applies only to private
pension plans that are organized and administered to provide
pensions for employees, whereas the CPP and OAS benefits are
provided by the government.
[87] However, it is unnecessary to consider this argument
because, even if the PBA's s. 66(4) does not apply, I am of the
view that a court should exercise its discretion to limit
garnishment to 50 per cent of CPP and OAS benefits. Such a
discretion is provided by rule 29(19) of the FLR, which permits
a court at a garnishment hearing to change "how much is being
garnished" on account of either a periodic or non-periodic
payment order. That discretion, in my view, should be exercised
in a manner consistent with the FRSAEA, the FOAEAA and s. 66(4)
of the PBA to restrict individual garnishment to 50 per cent,
the same restriction as is placed on garnishment by the
Director. It is a matter of common sense that the Director and
the individual payee should have the same remedies available to
enforce support orders.
[88] Accordingly, I conclude that garnishment of CPP and OAS
benefits ought to be restricted to 50 per cent and that the
motion judge erred in garnisheeing 100 per cent of these
benefits. I would set aside the order of the motion judge to
the extent that it provides for 100 per cent garnishment.
- Did the motion judge err in awarding costs of $10,000
against the appellant?
[89] The appellant also appeals the costs award of $10,000
made by the motion judge. [page80 ]
[90] I would not interfere with the costs order below. In my
view, the motion judge did not err in the exercise of his
discretion regarding costs for two reasons. First, the
respondent was entirely successful in defending against the
appellant's application to vary support and to rescind all
arrears. Second, the respondent remains entitled to orders for
garnishment of 50 per cent of the Nortel pension and the CPP
and OAS benefits. In this sense, the respondent was successful
below and is entitled to her costs.
[91] Given the particular circumstances of this case,
including the novelty of the issues raised before this court, I
would make no order as to costs of the appeal.
Result
[92] On the issues that were argued, I would allow the
appeal. I would set aside the order below with the exceptions
of para. 1 relating to the appellant's support arrears, para. 2
relating to the dismissal of the appellant's cross-motion to
vary his child support obligations and to rescind his spousal
support arrears, and para. 5 relating to beneficiary
designation. Though the appellant seeks to "[set] aside the
order made by Justice Fragomeni on September 14, 2005 in its
entirety", as mentioned previously, the appellant did not
appeal from the dismissal of his motion to vary. Further,
neither party addressed whether the motion judge erred in
designating the respondent as the sole beneficiary of the
appellant's pension plans in Canada. Absent submissions made by
counsel on this issue, I would decline to set aside this
portion of the order.
Appeal allowed.
Notes
Note 1: He stated: "In all of the circumstances of this case I
am satisfied that a vesting order of the Nortel Pension is
appropriate in order to enforce the terms of the judgment of
Seppi J. I am also satisfied that the full amount payable from
CPP and OAS pensions ought to be garnished."
Note 2: This description of a vesting order also follows from
a reading of the predecessor to s. 100, s. 79 of the Judicature
Act, R.S.O. 1980, c. 223:
- Where the court has authority to direct the sale of
any real or personal property or to order the execution of a
deed, conveyance, transfer or assignment of any real or
personal property, the court may by order vest the property
in such person and in such manner and for such estates as
would be done by any such deed, conveyance, assignment or
transfer if executed; and the order has the same effect as
if the legal or other estate or interest in the property had
been actually conveyed by deed or otherwise, for the same
estate or interest, to the person in whom the property is so
ordered to be vested or, in the case of a chose in action,
as if it had been actually assigned to the last-mentioned
person.
(Emphasis added)
Note 3: For examples of cases involving the vesting of realty,
see Crump v. Crump, 1984 4920 (ON SC), [1984] O.J. No. 1056, 38 R.F.L. (2d) 92
(H.C.J.); Perrier v. Perrier, 1987 8317 (ON SC), [1987] O.J. No. 1232, 12 R.F.L.
(3d) 266 (H.C.J.); and Hohn v. Hohn, [1995] O.J. No. 2754 (Gen.
Div.).
Note 4: See also Alexander v. Alexander, [1997] O.J. No. 1092,
1997 24475 (ON SC), 31 R.F.L. (4th) 131 (Gen. Div.); Koyama v. Leigh, [1998] B.C.J.
No. 279, 1998 4193 (BC CA), 36 R.F.L. (4th) 64 (C.A.); and Nicklason v. Nicklason,
1989 2944 (BC SC), [1989] B.C.J. No. 1546, 22 R.F.L. (3d) 185 (S.C.).
Note 5: The Ontario Law Reform Commission, Report on the
Enforcement of Judgment Debts and Related Matters, Pt. II
(Toronto: Ministry of the Attorney General, 1981) at 104.
Note 6: Pension Benefits Act, 1987, S.O. 1987, c. 35.
Note 7: See s. 20(3) of the Divorce Act and s. 1(2)(a)(iv) of
the Family Law Rules.
Note 8: Wages Act, s. 7(2):
7(2) Subject to subsection (3), 80 per cent of a person's
wages are exempt from seizure or garnishment:
(3) Fifty per cent of a person's wages are exempt from
seizure or garnishment in the enforcement of an order for
support or maintenance enforceable in Ontario.
(4) A judge of the court in which a writ of execution or
notice of garnishment enforceable against a person's wages
is issued may, on motion by the creditor on notice to the
person, order that the exemption set out in subsection (2)
or (3) be decreased, if the judge is satisfied that it is
just to do so, having regard to the nature of the debt owed
to the creditor, the person's financial circumstances and
any other matter the judge considers relevant.
(5) A judge of the court in which a writ of execution or
notice of garnishment enforceable against a person's wages
is issued may, on motion by the person on notice to the
creditor, order that the exemption set out in subsection (2)
or (3) be increased, if the judge is satisfied that it is
just to do so, having regard to the person's financial
circumstances and any other matter the judge considers
relevant.
Note 9: See proposed s. 23(4) of the FRSAEA, which has not yet
come into force.
Note 10: Indeed, it seems that a vesting order has been used
in certain family law cases as a less expensive substitute for
the appointment of an equitable receiver.
Note 11: In Kennedy, the court noted at para. 45: "[I]t is
clear that the exercise of the court's discretion to make such
[a vesting] order should be founded on the basis that the
respondent's previous actions and reasonably anticipated future
behaviour indicate that the order granted will likely not be
complied [with] without additional, more intrusive provisions,
see for example: Rostek v. Rostek, [1994] O.J. No. 1606, 6
R.F.L. (4th) 140 (Gen. Div.) and Alldred v. Alldred, [1998] O.J.
No. 3606, 82 A.C.W.S. (3d) 512 (Gen. Div.)." Those authorities,
however, offer no analysis of the issue beyond the type of
conduct required to trigger such an order. As well, neither case
addressed the jurisdiction to make a vesting order with respect
to pensions.
Note 12: For a discussion of stacking orders, see Hooper,
infra, at para. 63.
Note 13: See also Bielanski v. Bielanski, [2005] O.J. No.
2171, 139 A.C.W.S. (3d) 885 (S.C.J.) at paras. 21-25, where
Gauthier J. declined to vest 100 per cent of the payor's private
pension in the name of the recipient spouse to satisfy
equalization and support arrears.
Note 14: DA, s. 20(3)(b).
Note 15: FOAEAA, s. 23(1).
Note 16: This 50 per cent cap is subject to two proposed but
unproclaimed amendments. First, s. 23(2) would allow for
garnishment of not "less than the amount of ongoing support
specified in the support order, even if that amount is greater
than 50 per cent of the net income owed by the income source to
the payor, unless the court [making the support order] orders
otherwise". Second, s. 23(4) would authorize the Director to
bring a motion to increase the quantum of moneys garnisheed up
to the amount of the ongoing support ordered.
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