Court File and Parties

Date: June 18, 2013

Court File No.: Belleville, Ontario 22/12

Ontario Court of Justice

Between:

Director, Family Responsibility Office Applicant

— AND —

James McMurter Respondent

Before: Justice E. Deluzio

Heard on: April 18, 2013

Ruling on Constitutional Question released on: June 18, 2013

Counsel:

• C. L. Burnett for the Applicant
• C. Desrochers and S. Fairley for the Respondent
• H. Schwartz, Counsel for the Intervenor, Attorney General, Constitutional Law Branch

Decision

Deluzio J.:

Constitutional Challenge to Section 41 of the FRSEAA

[1] The Respondent is challenging the constitutionality of Section 41 of the Family Responsibility and Support Arrears Enforcement Act, 1996, SO 1996, c 31 (the FRSEAA). He has raised this constitutional challenge in response to default proceedings instituted against him by the Family Responsibility Office. The Respondent was served with a Notice of Default dated July 20, 2012.

Background Facts

[2] The Respondent and his ex-wife Kelly Ann McMurter were married on July 23, 1977 and separated on August 25, 2007. They were divorced on June 26, 2010. By Order of Justice McKinnon dated April 6, 2010 the Respondent is required to pay spousal support to Kelly McMurter in the amount of $2,500 per month. At the time the default proceedings were commenced the Respondent was in arrears in the amount of $77,815.00.

[3] The Respondent's driver's licence was suspended by the Family Responsibility Office on September 29, 2011. The Respondent has filed a separate Notice of Application dated July 7, 2012 before another court, challenging the constitutionality of Part V of the FRSEAA relating to the suspension of his driver's licence.

The Respondent's Constitutional Position

[4] The Respondent, a status Indian who lives and holds personal property on reserve lands, takes the position that Section 41 should not apply to him because it intrudes into the core federal power over Indians by impairing the Respondent's vested legal rights under Sections 29 and 89(1) of the Indian Act.

Relevant Provisions of the Indian Act

[5] Section 29 of the Indian Act provides that "reserve lands are not subject to seizure under legal process" and the Attorney General concedes that any real property owned by the Respondent on the reserve cannot be seized by the Director.

[6] Section 89(1) of the Indian Act provides as follows: "Subject to this Act, the real and personal property of an Indian or a Band situated on a Reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or a Band."

Analysis of Section 89(1) and the Director's Powers

[7] If the Director's power to initiate default proceedings against a status Indian pursuant to Section 41 of the FRSEAA is authorized by Section 89 of the federal Indian Act and specifically by the words "in favour or at the instance of any person other than an Indian or a Band", then no constitutional question arises because there is no conflict between the FRSEAA and the Indian Act.

[8] The question is whether the Director, in pursuing enforcement against James McMurter's personal property, is acting "in favour or at the instance of" Kelly McMurter, who is also a status Indian.

[9] The Respondent takes the position that the Director is not simply acting "in favour of or at the instance of" Kelly McMurter because the Director has rights and powers that are independent of Kelly McMurter. In her submissions, counsel for the Respondent argued that the Director "wields untrammelled discretionary powers to seriously impair Mr. McMurter's functions and status as an Indian with personal property on reserve land". There is no foundation for this argument. The Director's power to request that the Director of Motor Vehicles suspend a payor's driver's licence or fishing licence is dealt with in Sections 33 to 39 of the FRSEAA and is the subject of a separate constitutional challenge. The only power that is specifically granted to the Director in Section 41 of the FRSEAA is the power to initiate a default hearing by preparing a statement of arrears, and serving a notice of default hearing on the payor which requires the payor to file a financial statement and appear before the court to explain his default.

[10] Section 41 of the FRSEAA does not give the Director powers or rights that are independent of the support recipient. At the default hearing, the court, not the Director, determines whether the payor has valid reasons for non-payment of the arrears, and the court, not the Director, determines the appropriate default order, which may involve enforcement against the payor's personal property or imprisonment.

Court's Powers Under Section 41

[11] Section 41(10) sets out the powers of the court to enforce payment of the arrears at a Default Hearing.

[12] Sections 41(10)(e) and 41(19) are the only provisions that specifically authorize the court to make orders affecting the personal property of the payor. Section 41(1)(e) provides that the court can order that the payor "Provide security in such form as the court directs for the arrears and subsequent payment". Section 41(19) provides that "an order of security under clause (10)(e) or a subsequent order of the court may provide for the realization of the security by seizure, sale or other means, as the court directs."

[13] The court also has the power to order that a payor who is in default of his support order be imprisoned for a period not exceeding 180 days: Section 41(10)(h).

The Director's Role and Duties

[14] In this case, Kelly McMurter, a status Indian, is a recipient entitled to support under a support order. Her support order has been filed with the Family Responsibility Office. Under the FRSEAA, the Director of the Family Responsibility Office is required to act for the benefit of Kelly McMurter and Kelly McMurter cannot take any steps to enforce the order herself.

[15] Section 5(1) of the FRSEAA outlines the duties of the Director and specifies that the Director has a duty to enforce a support order that has been filed, and the Director must "pay the amounts collected to the person to whom they are owed".

[16] Section 6(7) of the Act provides that "no person other than a Director can enforce the support order" meaning that once a support order is filed, the recipient can no longer take any steps on her own to enforce the order. This is reinforced in Section 9(1) which provides that "the order shall state in its operative part unless it is withdrawn from the Director's office, it shall be enforced by the Director and amounts owing under the order shall be paid to the Director who shall then pay them to the person to whom they are owed".

[17] Section 6(1) of the Act provides that "the Director shall carry out his or her duties in the manner, if any, that appears practical to the Director and, for the purpose, may commence and conduct a proceeding and take any steps in the Director's name for the benefit of recipients, including, (a) enforcing support deduction orders that are filed in the Director's office as provided by this Act.

[18] The Director has no personal or pecuniary interest and acts solely for the benefit of the support recipient. There is no fee, commission or percentage collected by the Director, as there might be with a collection agency or legal counsel.

Interpretation of "For the Benefit Of"

[19] I find, as other courts have also found, that the phrase "for the benefit of" in Section 6(1) of the FRSEAA has the same meaning as the phrase "in favour of" used in Section 89 of the Indian Act.

Relevant Case Law

[20] In the case of Ontario (Director of Support and Custody Enforcement) v. Nowegejick, [1989] 2 C.N.L.R. 27, Justice Glowacki, of the Ontario Provincial Court (Family Division) was faced with a similar constitutional challenge to a wage garnishment by the Director of Support and Custody Enforcement (the previous incarnation of the Family Responsibility Office) against a status Indian. After citing Section 89(1), Justice Glowacki writes: "The Director of Support and Custody Enforcement is, to the best of my information, not an Indian, but the garnishment in this case is 'for the benefit of' an Indian, namely the mother of the debtor's child. On its face, therefore, s 89(1) would permit the attachment of the debtor's wages to meet his obligation to support his child."

[21] The case of Bellegarde v. Walker, 36 D.L.R. (4th) 700 is a decision of the Saskatchewan Court of Queen's Bench. The Saskatchewan court was dealing with a similar challenge to the Enforcement of Maintenance Orders Act case. Both the payor and the support recipient were status Indians. The court found that the Section 89 exemption from attachment of personal property did not apply because the maintenance enforcement office was acting "on behalf of the respondent, standing in her place, in enforcing the order........ The relationship between the claimant and the director is, in fact, comparable to that of solicitor and client. The director is clothed with no independent right but acts only on behalf of the claimant."

[22] This interpretation of Section 89(1) was also applied in the case of Potts v. Potts, 1991 ABCA 10, 77 D.L.R. (4th) 369 (C.A.) a decision of the Alberta Court of Appeal. In that case both the payor husband and the support recipient wife were status Indians. The husband raised a constitutional challenge against the attachment of his wages, earned as a member of the band council on the Reserve. The court held that: "An Indian who seeks the aid of the Alberta Director of Maintenance Enforcement to enforce payment of a maintenance order against and other Indian on an Indian reserve is not caught by the prohibition in the Indian Act against enforcement of process on a reserve by non-Indians".

[23] Because the language of Section 89(1) permits the enforcement measures taken by the Director against Mr. McMurter pursuant to Section 41 of the FRSEAA, the provincial FRSEAA does not conflict with the federal Indian Act.

[24] Section 89(1) permits the Family Responsibility Office, which acts "for the benefit" of James McMurter's spouse, Kelly McMurter, who is herself a status Indian, to enforce the support arrears owed to her by James McMurter, against Mr. McMurter's personal property.

Application of Section 88 of the Indian Act

[25] Although I have already found that the language of Section 89(1) of the Indian Act permits the Director to enforce support orders against the personal property of status Indians, and therefore no constitutional issue even arises in this case, I agree with counsel for the Attorney General that Section 88 of the Indian Act also applies in this case since the FRSEAA is a provincial law of general application.

[26] Section 88 of the Indian Act provides as follows:

Subject to the terms of any treaty and any other Act of Parliament, all laws of general application from time to time in force in any province are applicable to and in respect of Indians in the province, except to the extent that those laws are inconsistent with this Act or the First Nations Fiscal and Statistical Management Act, or with any order, rule, regulation or law of a band made under those Acts, and except to the extent that those provincial laws make provision for any matter for which provision is made by or under those Acts.

[27] The Respondent takes the position that Section 88 does not apply and relies on the recent Supreme Court of Canada decision in NIL/TU O Child and Family Services Society v. B.C. Government and Service Employees' Union, [2010] S.J.J. No 45 at paragraph 71 where the court considered Section 88 and made the following comments: "It follows that a provincial law of general application will extend to Indian undertakings, businesses or enterprises, whether on or off a reserve, ex proprio vigour and by virtue of s 88 of the Indian Act, R.S.C. 1985, c I-5, except when the law impairs those functions of the enterprise which are intimately bound up with the status and rights of Indians".

Respondent's Section 88 Argument

[28] The Respondent's position is that the enforcement measures the Director can take pursuant to Section 41 of the FRSEAA, even if limited to Mr. McMurter's personal property, would have the effect of impairing aspects of Mr. McMurter's life which are intimately bound up with his status and rights as an Indian. The Respondent argues that enforcement measures would interfere with his relationship with other Indian families within his community, including his marital relationship with his ex-wife and would possibly interrupt economic benefits to the community if he is imprisoned due to his default, unable to operate his business and forced to lay off First Nations employees.

Court's Rejection of Section 88 Argument

[29] The courts have consistently held that Section 88 cannot be relied on to permit provincial family legislation affecting the real property of status Indians located on reserve lands: see Derrickson v. Derrickson, [1986] S.C.R. 285. However, in the Derrickson case, the Supreme Court also affirmed that provincial family legislation can apply to order the payment of money by one status Indian for the benefit of his or her native spouse to compensate that spouse for the value of property that cannot be the subject of a court order.

[30] I find the Respondent's argument completely without merit. Mrs. McMurter is a status Indian. Mr. McMurter is a status Indian. Their status as Indians is not affected by the enforcement proceedings authorized by Section 41 of the FRSEAA. The Respondent points out that other status Indians on the reserve might suffer economic hardship if he is imprisoned or unable to operate his business, but Mrs. McMurter will definitely suffer economic hardship if the support order is not enforced. She is currently owed over $77,000.00 in support payments by the Respondent. Clearly, the obligation to provide for dependent family members must also be an important aspect of the status and rights of Indians living in reserve communities.

[31] As a status Indian and a resident of the province of Ontario, Mrs. McMurter is entitled to the benefit of the FRSEAA which is a law of general application enacted for the purpose of enforcing support orders that are in default. The Respondent Mr. McMurter, is a payor who is in default of his court ordered support obligations, and he is subject to the default procedures and enforcement mechanisms authorized by Section 41 of the FRSEAA.

Scope of Enforcement Powers

[32] The Respondent's bank accounts situated on a reserve, and any wages that he receives from a business located on a reserve, are subject to garnishment proceedings following enforcement action by the Director. The Director may also ask this court to require that the Respondent provide security under Section 41(10)(e) of the FRSEAA and may order seizure of personal property, including funds in a bank account, under section 41(19) of the FRSEAA.

Disposition

[33] The Respondent's constitutional question is hereby dismissed and this matter is adjourned to Wednesday, July 24, 2013 at 11:00 a.m. for default hearing.

Released: June 18, 2013

Signed: "Justice E. Deluzio"