ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-443754
DATE: 20120712
BETWEEN:
ALIAMISSE O. MUNDULAI Applicant – and – ROBERT WILSON, P.C. BLOOMFIELD and WINDSOR (CITY) POLICE SERVICE Respondents – and – LEGAL AID ONTARIO Garnishee Applicants
Aliamisse O. Mundalai, in person
Rolf M. Piehler, for the Respondents
J. Stanley Jenkins, for Legal Aid Ontario
HEARD: July 10, 2012
goldstein j.
REASONS FOR JUDGMENT
[ 1 ] The Applicant is a former lawyer. The Respondent City of Windsor obtained a judgment debt against him of $61,519.29. A Notice of Garnishment dated October 22, 2007 was served on Legal Aid Ontario (“Legal Aid”), obliging Legal Aid to pay all debts payable by Legal Aid to the Applicant to the sheriff in satisfaction of the debt.
[ 2 ] The Applicant says that the Wages Act , R.S.O. 1990, c. W-1, applies to his solicitor account, and, therefore, that 80% of the amounts should be exempt from garnishment. He also says that Legal Aid has failed to furnish proper statements regarding his account.
[ 3 ] The Applicant asks for the following relief:
A declaration that payments from Legal Aid to solicitor accounts constitute “wages” pursuant to s. 1 of the Wages Act ;
A declaration that Legal Aid Ontario is not required to remit 100% of the Applicant’s account in satisfaction of the garnishment;
An order that Legal Aid Ontario provide a full and complete Statement of Account concerning any payments received and distributed pursuant to the Notice of Garnishment;
An order that Legal Aid release to the Applicant all funds not paid out on his account and provide to him full access to Legal Aid’s billing system;
Costs.
[ 4 ] In oral argument, the Applicant also indicated that he wanted funds collected in excess of the exemption found in the Wages Act to be returned forthwith.
[ 5 ] Section 1 defines “wages” as:
“wages” means wages or salary whether the employment in respect of which the same is payable is by time or by the job or piece or otherwise.
[ 6 ] The Applicant argues that solicitor’s fees payable on a Legal Aid debt fall within the definition set out in the Wages Act .
[ 7 ] “Wage” is defined in Black’s Law Dictionary as “payment for labour or services, usually based on time worked or quantity produced; specifically, compensation of an employee based on time worked or output of production.”
[ 8 ] A review of the Wages Act makes it clear that the Legislature intended that it apply to salaried employees rather than to independent contractors. For example, s. 2 provides that where there is an assignment of property for the general benefit of creditors, the wages of employees of the debtor will take priority over the claims of ordinary or general creditors. Sections 3 and 4 also refer to “persons who were “in the employment” of an execution debtor (s. 3) or an absconding debtor (s. 4).
[ 9 ] In Re Kryspin (1983), 1983 1703 (ON SC) , 40 O.R. (2d) 424 (H.C.) Catzman J., as he then was, dealt with a self-employed doctor who received payments from OHIP:
In my view, however, moneys paid by OHIP to a physician under the Health Insurance Act do not constitute “wages” within the meaning of the Wages Act .
The phrase “salary or wages” (appearing, admittedly, in a different statute) has been held to import a contract for service as distinguished from a contract for services in Re Parkin Elevator Co. Ltd.; Dunsmoor’s Claim (1916), 1916 548 (ON CA) , 37 O.L.R. 277, 31 D.L.R. 123, in which Masten J. illustrated the distinction as follows, pp. 286-87 O.L.R.:
To come within the benefit of sec. 70, the contract must be a contract for service, not a contract for services. It is not to every employment that the Act applies. It is confined to employments of which it can be predicated that the person employed receives salary or wages.
Whatever else they may connote, I think that the words “salary or wages” import a contract for service, as distinguished form a contract for services.
A bookkeeper employed by the year makes a contract for service. A surgeon employed to perform an operation makes a contract for services. The one is paid a salary, the other a fee.
The former is employed to obey his master’s orders and submit throughout to his supervision and direction. The latter is employed to exercise his skill and achieve an indicated result in such a manner as is most likely in his judgment to ensure success.
Correspondingly, in my opinion, payments for accounts submitted by physicians to OHIP under the Health Insurance Act for the performance of insured services do not fall within the phrase “wages or salary” found in the definition section of the Wages Act …
[ 10 ] Mr. Jenkins, for Legal Aid, took the position that a solicitor receiving payments from Legal Aid is in the same position as a doctor receiving payments from OHIP. I agree. The Applicant is a solicitor who billed Legal Aid through the online system. He was not a salaried employee. Legal Aid did not deduct income tax, Canada Pension Plan contributions, or Employment Insurance premiums. The Applicant was a self-employed lawyer. I therefore find that the Wages Act does not apply to a Notice of Garnishment in these particular circumstances.
[ 11 ] The Applicant also relies on Dhaliwal v. Ontario (Ministry of Health and Long Term Care) , [2002] O.J. No. 4717 (Sup.Ct.) . Dr. Dhaliwal owed creditors a substantial sum of money and a Notice of Garnishment was served on OHIP. He sought an order pursuant to varying the garnishment so that 80% of all money owing to him by OHIP would be exempt from seizure of garnishment. Justice Cullity accepted that s. 7 of the Wages Act could apply by analogy and ordered that 60% of Dr. Dhaliwal’s billings be exempt from garnishment.
[ 12 ] The Applicant appears to argue that, by analogy, the amounts owed to him by Legal Aid should also be exempt from garnishment.
[ 13 ] There are several problems with the Applicant’s argument. He has not brought an application pursuant to Rule 60.08(16)(c) to vary the payments and, in any event, there is no evidence before me that would support a variation. It also appears to me that Rule 60.08(16)(c) is prospective, in that it would apply to payments going forward, and cannot be applied to payments already made; otherwise the Applicant would be required to seek disgorgement, which is a very different remedy that must be brought in a different proceeding, requiring different evidence.
[ 14 ] Since Legal Aid states that it does not, in any event, owe the Applicant any money, this brings me to the accounting issue.
[ 15 ] The Applicant seeks a full and proper accounting of all amounts paid to the Sheriff, or otherwise owed to him. He takes the position that the accounting is inadequate, and even fraudulent, although he provided no evidence to support that claim. Legal Aid concedes that the Applicant has the right to this information, but takes the position that it has been provided to him.
[ 16 ] I have examined the material filed by all parties and I agree that Legal Aid has provided a full and proper accounting to the Applicant. At the hearing before me Mr. Jenkins filed an updated spreadsheet indicating that $38,430.13 has been applied to the garnishment. The spreadsheet is supported by deposit advices showing that the funds have been paid, as well as cancelled cheques paid to the sheriff. Although there are some minor discrepancies, the material provided to the Applicant and filed with the Court accounts for the funds paid in satisfaction of the Notice of Garnishment. There is no mystery about where the money went.
[ 17 ] The Applicant further argues that Legal Aid owes him more fees in respect of other work. It was difficult for me to understand how much he believes he is owed, but it is clear from the evidence that the origins of this dispute lie in the online accounts that he submitted. The Applicant did not specifically raise these fees in his Notice of Application, but did ask for relief in in oral argument before me and Mr. Jenkins did not object. In any event, the alleged failure to pay fees owed to the Applicant is intimately bound up in the application for a proper accounting.
[ 18 ] In 2005 Legal Aid introduced an online billing system, whereby counsel submitted accounts and disbursements without the requirement of filing supporting dockets and invoices. Accounts are randomly subject to post-filing inspection. Legal Aid also has the right to audit or examine these accounts even after they have been paid, and if it is found that there has been an improper payment or an overpayment, Legal Aid may withhold future payments on other accounts: see s. 31 of the Legal Aid Services Act , 1998, S.O. 1998, c. 26. This is essentially what happened to the Applicant.
[ 19 ] Between 2005 and 2007 the Applicant submitted accounts through the online billing system. The record reveals several attempts by Legal Aid to obtain information from the Applicant. The Applicant either failed to respond to Legal Aid or supplied Legal Aid with inadequate information. Legal Aid asked for information respecting 31 accounts; the Applicant eventually provided information on all but 12 accounts. Legal Aid eventually determined that it had overpaid the Applicant by $20,181.08, which the Applicant disputes.
[ 20 ] I have examined the material filed and again, as with the funds paid to the Sheriff, although there are some discrepancies, I am satisfied that there have been proper accounts provided to the Applicant and filed with the Court, and an adequate basis for the Applicant and the Court to understand the basis on which Legal Aid refused to pay the accounts.
[ 21 ] It should be pointed out that there is an internal mechanism for lawyers to review Legal Aid accounts. At s. 46(1) of the Regulation made under the Legal Aid Services Act, a lawyer may request a review. Pursuant to s. 47(1) of the Regulation, a lawyer who is dissatisfied with the internal review may appeal to an assessment officer under s. 90 of the Courts of Justice Act , R.S.O. 1990, c. C.43. The Applicant has never sought to review his accounts pursuant to the internal review mechanism, a process that would have been less expensive and likely more expeditious.
[ 22 ] The Applicant has also asserted that there are members of Legal Aid who have shown animus to him and that Legal Aid’s withholding of funds is based on this animus. Although I do not need to decide this issue in order to decide the Application, it should be noted that the evidence does not support that allegation.
[ 23 ] The Application is therefore dismissed. Costs are fixed at $7000 in total, with $4000 payable to the Respondent Legal Aid, and $3 000 to the other Respondents.
Goldstein J.
Released: July 12, 2012
COURT FILE NO.: CV-12-443754
DATE: 20120712
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
ALIAMISSE O. MUNDULAI Applicant – and – ROBERT WILSON, P.C. BLOOMFIELD and WINDSOR (CITY) POLICE SERVICE Respondents – and – LEGAL AID ONTARIO Garnishee Applicants
REASONS FOR JUDGMENT
Goldstein J.