SUPERIOR COURT OF JUSTICE – ONTARIO
FAMILY COURT BRANCH
COURT FILE NO.: 4401/08
DATE: 2013/03/04
RE: DOUGLAS JAMES WALL, Applicant
AND:
CONNIE DIANE WALL, Respondent
BEFORE: The Honourable Mr. Justice I. F. Leach
COUNSEL: Counsel, for the Applicant, Norman Aitken
Counsel, for the Respondent, Sarah Ronbeck
HEARD: March 4, 2013
ENDORSEMENT
[1] The parties appeared before me today asking me to address two matters:
a. A garnishment hearing, pursuant to Rule 29(19) of the Family Law Rules, to address a “dispute” filed by the Applicant Mr Wall in response to steps taken by the Respondent Mrs Wall, (hereinafter referred to as “Ms Smets”, as per her current preference despite the formal style of proceedings); and
b. A motion brought by Ms Smets, asking that Mr Wall be found in contempt on various grounds, and punished by the imposition of penalties or fines.
[2] I will not attempt a detailed recitation of the global events leading to the immediate matters before the court, as this endorsement will form part of the continuing record, and is being typed simply for reasons of legibility and clarity.
[3] Moreover, the sad extended history of the parties’ litigation is detailed in the lengthy reasons delivered by Justice Nolan on June 22, 2012, following an extended 12 day trial that proceeded intermittently over the course of several months, between September of 2011 and February of 2012.
[4] While attempting to bring final resolution to the many outstanding issues between the parties, (which included matters relating to child custody, residence, access and support, as well as equalization), Justice Nolan’s reasons repeatedly underscored the parties’ lamentable reluctance and/or inability to agree on almost any issue, their combative nature, and their sad lack of co-operation to resolve matters without a determination to win at any cost.
[5] Unfortunately, the sorry spectacle of accusation and counter-accusation of unreasonableness, which the parties seem capable of addressing only through further costly litigation, seems destined to continue.
[6] For present purposes, I will focus only on providing the parties with immediate answers to the issues raised by the garnishment hearing and contempt motion, in an effort to move this matter forward.
Garnishment Hearing - Dispute
[7] The operative provisions of the reasons delivered by Justice Nolan on June 22, 2012, were converted to a formal approved and issued order of the same date.
[8] For purposes of the garnishment dispute, the relevant paragraphs of the order are found in paragraphs, 19, 25 and 31 of the order, which read as follows:
Each parent shall pay his or her proportionate share of any uninsured medical dental and counselling costs for the children. All reimbursement cheques received by the Applicant father shall be forwarded to the Respondent mother within ten days of receipt. The Applicant father shall provide a written release to the Respondent mother to permit her to contact the benefit carrier directly if reimbursement is not received by her for any covered medical or dental service or prescription within 45 days. ...
The Applicant father shall pay to the Respondent mother on account of equalization the total amount of $98,497.37 representing the total payment net of adjustments to December 14, 2011. The Applicant father is also entitled to deduct from that amount any further payments he has made on account of the mortgage and taxes on the matrimonial home after December 14, 2011, up to and including July 31, 2012. If the equalization payment has not been paid by October 26, 2012, the Applicant shall immediately thereafter list the matrimonial home for sale on an MLS basis. He shall accept the first reasonable offer. The equalization payment, or as much as can be, shall be paid out of the net proceeds arising from the sale of the matrimonial home. ...
The Respondent mother shall be responsible for the payment of both mortgages and taxes up to and including July 31, 2012. In the event that the Respondent mother does not make these payments and the Respondent father is forced to make them, he shall be given credit for those payments against the equalization payment he owes to her.
[9] In my opinion, Ms Smets was entitled to initiate garnishment proceedings pursuant to Rule 29, to enforce the payment obligations set forth in these provisions to the extent they were not satisfied.
[10] She has done so, apparently succeeding in garnishing approximately $93,700.00 from Mr Wall’s account with the Bank of Nova Scotia, pursuant to a Request for Garnishment dated January 10, 2013. This claims garnishment of an “unpaid lump sum” debt calculated as follows:
• $437.50 for unsatisfied obligations pursuant to paragraph 19 of Justice Nolan order that were due August 8, 2012;
• $1,075.52 for unsatisfied obligations pursuant to paragraph 19 of Justice Nolan’s order that were due September 10, 2012; and
• $98,497.37, (the equalization payment due October 26, 2012), less acknowledged credits/payments quantified in the amount of $6,310.59, (which are said to include (due $3,233.25 in mortgage payments for which Mr Wall was to receive off-setting credit deductible from the equalization payment, as well as $2,352.34 representing Ms Smets’ half of a joint Bank of Nova Scotia Visa debt paid by Mr Wall, and $725.00 representing the value of a 1996 Polaris ATV that was addressed and valued by Justice Nolan’s order but apparently retained by Ms Smets.)
[11] Notice of garnishment was served on Mr Wall’s bank on January 14, 2013.
[12] Mr Wall filed a formal dispute on January 18, 2013, leading to this formal garnishment hearing to address his dispute.
[13] Generally, Mr Wall takes the position that the garnishment was premature and inappropriate, because the amount of equalization has yet to be determined, and because he has additional off-setting claims and credits that should be applied to reduce the amount of equalization he otherwise might owe to Ms Smets.
[14] In particular:
a. He says the equalization obligation has yet to be determined, because there is still an ongoing dispute about the proper amount of mortgage contributions for which he should be credited. In particular, he says the deduction in that regard should be $3,629.39, whereas Ms Smets repeatedly has taken the position the deduction should be only $3,233.25. (This modest $396.14 difference, relied upon as a serious impediment to progress in resolving the parties’ equalization dispute, provides yet another illustration of the parties’ complete inability to co-operate in order to rise above petty differences.)
b. He says Ms Smets now should owe him $1,250.00 for appliance replacement, as she removed a washer and dryer from the matrimonial home contrary to Justice Nolan’s order. (The applicant admits taking the items, but says she did so in error, and that any resulting obligation she might have to Mr Wall should be quantified at $500, having regard to betterment considerations and the fact he essentially received new appliances for that $1,250 replacement price, rather than the old units taken.)
c. He says he should be credited with a further deduction for $2,352.34 for his payment of the parties’ joint Bank of Nova Scotia Visa debt. (Ms Smets says she already has given credit for this in her calculations and credits, outlined above.)
d. He says he should be credited with a further deduction of $725.00 for the ATV. (Again, Ms Smets says this already has been credited in her garnishment calculations.)
e. He says he should receive a credit of $4,559.42, reflecting Ms Smets’ half of a joint debt owed to Goodhue Construction, which he then will undertake to look after on behalf of both parties, in order to ensure that the debt is paid. He otherwise fears that Ms Smets will fail to pay her share, leading to further claims against him. (Ms Smets denies there is any basis for such an extraordinary order, and notes that a payment to Mr Wall will not formally relieve her indebtedness to Goodhue Construction.)
f. He says he should be entitled to a credit of $8,000, reflecting the value of a tractor and farm parts that should have been returned to his father but allegedly were retained by Ms Smets. (She contends that she tried unsuccessfully to return the items but was prevented from doing so. In any event, she says this is a third party right Mr Wall has no entitlement to assert, and that the value of the claim is overblown in any event having regard to the true value of the items.)
g. He claims that he should be entitled to a credit of approximately $16,300 spent in repairing damage to the matrimonial home, which Ms Smets allegedly “trashed” before she vacated. (Ms Smets adamantly denies all such allegations.)
h. He claims that he should be entitled to a credit of $1,500.00, in relation to further damage allegedly inflicted by Ms Smets on a hot tub prior to her departure. (This too is adamantly denied by Ms Smets.)
i. Finally, he claims a further entitlement for $6,970.00 worth of damage inflicted on the liner of the matrimonial home pool, via two deliberate slashes by a knife or similar instrument. (Not surprisingly, this too is denied by Ms Smets.)
[15] Mr Wall attempted to raise these various additional allegations and matters before Justice Nolan, after release of her decision on June 22, 2012, while she was attempting to address the issue of costs; i.e., the only issue formally still extent in the proceedings advanced to date between the parties.
[16] In a letter dated September 10, 212, Justice Nolan explained in the following terms why this was inappropriate:
Counsel for Mr Wall has now raised an issue regarding the alleged condition of the matrimonial home upon Ms Smets’ departure and suggested that somehow these allegations can be raised and dealt with in the context of costs of the litigation. I respectfully disagree. I have heard evidence on the issues before me at trial and rendered my decision. It may be that Mr Wall has further claims against Ms Smets. If so, he can deal with them in another proceeding, not within the context of this family law proceeding, which has been completed. The issues of any deficiencies and damages to his property were not issue at trial and, therefore, are not issues that can be raised now.
[Emphasis added.]
[17] Notwithstanding this clear indication from Justice Nolan as to the proper and requisite method of raising and addressing his new allegations and claims, Mr Wall apparently has not yet commenced any additional proceeding in that regard.
[18] He instead seeks to have the issues addressed in the context of this garnishment hearing.
[19] As I indicated to the parties during the course of the hearing before me, in my view this is inappropriate and impermissible, as a matter of procedure and jurisdiction.
[20] Garnishment is not “another proceeding”, as contemplated by Justice Nolan, but a further step in the same proceeding, confined to enforcement of the relief obtained therein.
[21] It certainly is not an opportunity for a wide-ranging expansion of the underlying merits dispute, in order to obtain an effective variation or expansion of the original substantive order.
[22] This is emphasized by Snead v. Snead, [2003] O.J. No. 4226 (S.C.J.), and the authorities cited therein, which confirm that, despite broad wording which might suggest otherwise, the jurisdiction and powers of a court dealing with a garnishment hearing pursuant to Rule 29(19) actually are somewhat limited, and must be exercised within relatively narrow confines.
[23] In particular, the court must not, through the “veneer” of a garnishment hearing or any ancillary exercise in purported “interpretation”, effectively embark on variation of the underlying substantive order on which the garnishment is based.
[24] To that end, the grounds for a dispute to a garnishment actually are quite limited.
[25] In particular, for present purposes, they would be limited to Mr Wall demonstrating that, at the time the notices of garnishment were served, he did not owe Ms Smets money because the alleged debts had been paid, or because the underlying substantive order had been suspended or found to be inoperative by a court of competent jurisdiction.
[26] Neither is the case here.
[27] Instead, Mr Wall essentially wishes to vary Justice Nolan’s order by indirect means.
[28] In particular, whereas Justice Nolan expressly indicated that Mr Wall’s equalization payment obligation was to be reduced only by credit for certain specified mortgage and tax contributions, Mr Wall effectively asks that this now be expanded to permit a broad range of further credits against that obligation, with the entitlement to such credits determined by way of a summary proceeding without trial.
[29] If Mr Wall seeks such relief, his appropriate remedy is commencement of a new proceeding to vary Justice Nolan’s “final” order. That request, and the inevitable ancillary issues of credibility, then can be addressed properly through the usual procedures for resolving such disputes; procedures which are lacking in the limited context of Rule 29(19).
[30] In the meantime, Ms Smets is entitled to enforce the existing court ordered obligations in her favour, which includes enforcement by way of garnishment if payment obligations are not met.
[31] Counsel for Mr Wall expressed a concern that, by the time Mr Wall initiates and pursues another proceeding to establish his new alleged off-setting entitlements, Ms Smets may have dissipated any assets received through her garnishment proceedings. (In that regard, reliance was placed on numerous indications in Justice Nolan’s reasons that Ms Smets has a demonstrated history of poor financial management.)
[32] To that end, I gave some limited consideration to the possibility of an interim order, pursuant to Rule 29(19).4 and/or Rule 29(19).6, effectively placing a temporary hold on the funds garnished by Ms Smets until such time as Mr Wall had an opportunity to institute his contemplated collateral proceeding, and pursue further relief.
[33] On further reflection, I believe this would be inappropriate.
[34] However the relief was framed, it would still represent an assault on the underlying substantive order of Justice Nolan directing entitlement to the funds as of October 26, 2012. Again, the proper venue and process for seeking a variation of that entitlement is not a garnishment hearing, where the court is obliged to proceed on the basis that the order is in place and immediately enforceable according to its terms.
[35] Nor should Mr Wall be entitled, in effect, to summary orders restraining dissipation of assets without having yet instituted his separate claim and following the necessary procedures in that regard, including provision of an appropriate evidentiary basis for requesting such relief.
[36] Finally in that regard, I note that Justice Nolan expressly contemplated that the equalization payment would be satisfied by the equity in the matrimonial home if/as necessary. This effectively is precisely what will happen if the garnishment takes effect as contemplated, and it is long overdue according to the timetable contemplated on the face of Justice Nolan’s order.
[37] In short, I accordingly find that I have no jurisdiction in the present context of a garnishment hearing to entertain and adjudicate upon many of the offsetting claims asserted by Mr Wall, or to delay Ms Smets’ garnishment on the basis of any perceived threat of possible asset dissipation.
[38] For present purposes, I therefore reject, at least as formal grounds for his dispute to garnishment, Mr Wall’s alleged claims relating to:
a. the appliances removed by Ms Smets;
b. Mr Wall’s payment of the parties’ joint Bank of Nova Scotia Visa debt;
c. the ATV retained by Ms Smets;
d. a suggested credit in relation to the Goodhue Construction debt;
e. the claims relating to the tractor and parts belonging to Mr Wall’s father;
f. alleged damages inflicted on the matrimonial home, hot tub and/or pool liner by Ms Smets.
[39] As indicated during the hearing, this does not mean Ms Smets may not voluntarily agree to a reduction of her garnishment claim, to reflect certain offsetting credits which are conceded. Indeed, she already has done so in relation to the Bank of Nova Scotia Visa credit and ATV credit claimed by MR Wall.
[40] In other words, by consent of Ms Smets, the court ordered debt giving rise to the garnishment has been and will be reduced by $2,352.34 (half of the paid joint Visa debt), and by a further $750.00 (representing the court assessed value of the retained ATV). However, this already has been addressed in her garnishment request.
[41] As for quantification of the offsetting mortgage contribution credit claimed by Mr Wall, I think this is an item that can be addressed on the garnishment hearing, in that the permissible credit obviously appears by way of description (without quantification) on the face of the order, and Mr Walsh’s claims in that regard really amount to an assertion that the relevant underlying court ordered debt obligation has been satisfied to an extent by his mortgage contributions. Pursuant to the above authorities, this brings the assertion within the scope of grounds that can be examined and resolved on a garnishment hearing.
[42] As noted above, the parties’ dispute in that regard is a petty one, amounting to little more than a dispute over $396.14. (Mr Wall alleges that the total of his mortgage payments to be taken into account totals $3,629.39, whereas Ms Smets says they total only $3,233.25.)
[43] The parties’ calculation dispute, (which clearly should have been resolved by negotiation and discussion without the need for court intervention), turns on both parties seeking to deviate in minor degrees from the precise wording of Justice Nolan’s order.
[44] In particular, that order contemplated a deduction from the equalization payment of any “further payments [Mr Wall] has made on account of the mortgage and taxes on the matrimonial home after December 14, 2011, up to and including July 31, 2012”.
[45] In her calculations, Ms Smets seeks to exclude, from that credit, payments made during that period that actually related to mortgage debt obligations accruing before that period, which Mr Wall simply paid late.
[46] In his calculations, Mr Wall seeks to include all payments made during the indicated period, (whether or not they relate to an underlying obligation that accrued outside that period), as well as payments made after that period for obligations accrued within that period.
[47] In that regard, both parties made arguments addressing the alleged “true spirit and intent” of Justice Nolan’s order. Suggestions also were made by Mr Wall’s counsel that the finalized order was at odds with the precise comments in Justice Nolan’s reasons.
[48] However, the appropriate remedy in that regard once again would be formal proceedings to vary the finalized order of Justice Nolan.
[49] For present purposes, consistent with the mandated approach to a garnishment hearing, I must be guided by the actual wording of Justice Nolan’s order. I therefore focus exclusively on payments made by Mr Wall during the specified period, in order to quantify the relevant credit authorized by Justice Nolan, (the payment of which is a permissible ground of defence, in part, to the garnishment proceedings).
[50] Based on the documentation submitted by the parties, this seems to involve the following payments on the following dates:
a. $608.29 on December 16, 2011 (first mortgage);
b. $865.60 on January 25, 2012 (first mortgage);
c. $865.60 on March 14, 2012 (first mortgage);
d. $212.16 on January 25, 2012 (second mortgage); and
e. $212.15 on March 14, 2012 (second mortgage).
[51] I therefore would have quantified the relevant and appropriate “mortgage and tax payment” deduction/credit paid by Mr Wall as being the total of these payments, or $2,763.80
[52] As Ms Smets nevertheless voluntarily has granted a slightly larger deduction of $3,233.25, and my role is limited to assessing whether the dispute ground as advanced by Mr Wall should be granted, I do no more in this context than reject the suggested greater allowance/credit suggested by Mr Wall.
[53] For all these reasons, I find that the grounds of dispute formally advanced by Mr Wall in relation to the garnishment must be rejected, and the garnishment put in place by Ms Smets’ garnishment of the Bank of Nova Scotia account therefore shall stand.
Contempt Motion
[54] As noted above, Ms Smets also now asks that I find Mr Wall in contempt for alleged breach of Justice Nolan’s order, in that he:
a. Failed to adhere to Justice Nolan’s ordered directions concerning sale of the matrimonial home to satisfy his equalization payment obligation, and instead conveyed half of his interest in the property to his new partner in an alleged “malicious attempt to frustrate [Ms Smets’ entitlement to the equalization payment”;
b. Unreasonably withheld his consent to enrol the parties’ daughters in certain skating programs; and
c. Refused to supply a requested written release permitting Ms Smets’ future direct interaction with the parties’ benefits provider, (after Mr Wall failed to forward reimbursement cheques promptly).
[55] She suggests that she is making a “concession” by not requesting imprisonment, but she does ask for the imposition of fines or monetary penalties, along with costs of her motion on a substantial indemnity basis. She says these are necessary to encourage future compliance with court ordered obligations.
[56] Having regard to the history of this matter, and the nature of the alleged order violations, I am not inclined to add grist to the parties’ litigation mill by granting the requested contempt relief.
[57] As emphasized in Fisher v. Fisher, 2003 2119 (ON SC), [2003] O.J. No. 976 (Fam.Ct.), contempt of court is the “big stick” of civil litigation. It must be used sparingly and only in the most clear cut cases. There are other procedures available to enforce orders instead of a contempt motion.
[58] Moreover, contempt relief is only appropriate where the underlying court order is absolutely clear and unequivocal in stating what should and should not be done, and not open to a variety of interpretations. Moreover, there must be evidence showing, beyond a reasonable doubt, that the order was disobeyed deliberately and wilfully. See Prescott-Russell Services for Children and Adults v. G.(N.), [2005] O.J. No. 1488 (C.A.), and Ricafort v. Ricafort, [2006] O.J. No. 2006 (O.C.J.).
[59] As far as the provisions of Justice Nolan’s order regarding sale of the matrimonial home are concerned:
a. I agree with counsel for Mr Wall that there is good reason to view these as being inherently directions to secure and implement “a payment order”, thereby taking them out of the ambit of Rule 31, dealing with contempt of court.
b. The wording and structure of the relevant obligations gave rise to at least some argument and belief, on the part of Mr Wall, that the equalization payment obligation had in fact not yet been quantified because of the ongoing dispute about mortgage payments by Mr Wall. I think the argument tenuous, and open to abuse, (insofar as it would enable a petty dispute about such payments to delay, indefinitely, a far more substantial payment obligation). However, the point for present purposes is that it at least raises the possibility, in turn giving rise to reasonable doubt, that Mr Wall’s actions were based on an interpretation of the order rather than deliberate defiance of the court’s authority.
c. To the extent there was any breach of Mr Walls’ obligations in relation to these specified obligations that rises to the level of contempt, that contempt now effectively will have been purged by the garnishment proceeding. Again, that essentially will see the equalization payment obligation satisfied from the equity that existed in the matrimonial home - which is the result contemplated by Justice Nolan’s order. A contempt ruling therefore is not necessary to ensure further compliance at this point.
[60] As for the alleged contempt regarding the withholding of consent to the daughters’ enrolment in skating programs, Justice Nolan’s underlying order refers to “unreasonable” withholding of consent and this obviously is open to varying interpretations. It accordingly is not the sort of “clear cut” obligation normally forming the basis for a finding of contempt. Counsel for Mr Wall suggested, for example, that Mr Wall’s actions were not unreasonable for various reasons, including Mr Wall’s termination of employment, pending termination of continuation pay, and his resulting contemplated inability to help fund such obligations at this point. Moreover, consent apparently was never requested prior to the enrolments actually being completed. For present purposes, I therefore am not content that the withholding of consent to such enrolment warrants a finding of contempt. Nor am I content, without further evidence, to order that such consent be ordered.
[61] As for the alleged contempt relating to the failure to provide the requested written release, permitting Ms Smets to interact directly henceforth with the benefits provider, I do not think this is worthy of a contempt order, (at least not yet), as the circumstances of the obligation once again were not absolute in the original order. They were instead dependent on the existence of other failings, which were disputed. Moreover, I think it sufficient to address any perceived failings of Mr Wall in that regard by directing, instead of a contempt finding, that Mr Wall now provide the requested written release within two weeks of the date of this order. This will eliminate the somewhat “conditional” nature of the obligation as ordered by Justice Nolan, in view of intervening events, and eliminate an ongoing source of friction between the parties.
[62] Subject to the direction outlined above concerning the written direction to the benefits provider, the motion for contempt therefore is dismissed.
Costs
[63] My preliminary disposition is to award no costs in relation to the two matters before me, as global success on the garnishment hearing and the contempt motion clearly was divided.
[64] However, because my decision was reserved, the parties were unable to make any submissions regarding costs, and my final disposition on costs therefore will be reserved until the parties have had an opportunity to consider their positions and make further submissions if desired.
[65] To that end, if the parties are unable to reach an agreement on costs and wish to pursue that aspect of the matter further, each side may serve and file written cost submissions, (not exceeding four pages in length, exclusive of any attached bill of costs), within one month of the date of this order.
[66] If no such written cost submissions are received, there shall be no costs awarded in relation to either the garnishment hearing or the contempt motion.
“Justice I. F. Leach”
Justice I.F. Leach
Date: March 4, 2013