CITATION: Petryshyn v. Berry, 2013 ONSC 6034
COURT FILE NO.: CV-12-0516-00
DATE: September 26, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MARTHA PETRYSHYN
Mr. Daryl Fukihara, for the Creditor
Applicant
- and -
MELISSA BERRY
Self-Represented, Debtor
Respondent
HEARD: September 19, 2013 at Thunder Bay, Ontario
BEFORE: Mr. Justice D.C. Shaw
Reasons On Motion
[1] This is a motion by the debtor, Melissa Berry. Ms. Berry is subject to a garnishment under a notice of garnishment that has been served on her employer by her former solicitor, the creditor, Martha Petryshyn, for unpaid legal fees and disbursements. These fees and disbursements were assessed on July 5, 2013. The assessment officer required Ms. Berry to pay $19,926.81.
[2] Ms. Berry asks to be released from the garnishment, and to have a payment plan put in place of the garnishment. She also asks that she be released from payment of interest of 3 percent per year ordered by the assessment officer to be payable on the account as assessed.
[3] Ms. Berry is employed as a social worker at St. Joseph’s Care Group, St. Joseph’s Hospital in Thunder Bay. Her gross salary is $2,241.00 every two weeks, based on 60 hours at $37.35 per hour. The garnishee amount is $344.02 every two weeks, which is 20 percent of Ms. Berry’s salary after deductions for income tax, CPP and employment insurance. This is consistent with s. 7(2) of the Wages Act which provides that 80 percent of a person’s wages (net of amounts that an employer is required by law to deduct) are exempt from seizure or garnishment.
[4] Ms. Petryshyn represented Ms. Berry in a family law matter. The retainer was terminated some time after Ms. Petryshyn rendered her last account in November 2012. The family law matters have not yet been finalized. The matters have been set for trial. Ms. Berry is unrepresented.
[5] In June 2011, Ms. Berry and her husband sold the matrimonial home, netting $19,979.35. That money was held in trust by the solicitor who acted on the sale. The sum of $10,000.00 was released to Mr. Berry. The balance of the monies remain in trust. Ms. Berry deposes that Mr. Berry refuses to agree to have those monies released to her. She proposes that this $10,000.00 be paid to Ms. Petryshyn as part of a repayment plan.
[6] I informed Ms. Berry during the hearing of her motion that I have no grounds to order that these monies be released to her. There is no evidence before me as to the terms on which the monies are being held in trust. A decision on those monies will have to await a decision in Mr. and Ms. Berry’s family law trial.
[7] Ms. Berry is the mother of two children, ages two and four. The youngest child has certain medical issues, including a sleep disorder which has resulted in a referral to the Hospital for Sick Children in Toronto. Ms. Berry deposes that the youngest child also has food and environmental allergies that require medication and a special, costly diet.
[8] Ms. Berry has attended Thunder Bay Credit Counselling for assistance in working on a budget. She deposes that she has taken out a second mortgage on her home to pay debt that she incurred during her family law proceeding. Ms. Berry filed a budget prepared through Thunder Bay Credit Counselling which shows a surplus of $78.00 per month, before the garnishment. Ms. Berry purchased a new home from a builder in July 2011, for $305,000.00, with a mortgage of $270,830. She later placed the second mortgage on the home.
[9] Ms. Berry is not disputing the amount owing under the assessment, only her ability to pay it.
[10] Counsel for Ms. Petryshyn notes that Ms. Berry has no unsecured debt other than the assessed account. Counsel submits that Ms. Berry chose to pay her other unsecured creditors rather than her lawyer’s bill. Counsel also submits that it was Ms. Berry’s choice to buy a brand new home for $305,000.00. Counsel notes that the house is now valued at $379,000.00. Counsel submits that interest of 3 percent should continue to accrue on the outstanding balance.
DISCUSSION
[11] Section 7(5) of the Wages Act provides that a judge, on motion by the debtor with notice to the creditor, may order that the exemption from garnishment of 80 percent of a person’s wages, under s. 7(2) of the Act 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.”
[12] Rule 60.08(16) of the Rules of Civil Procedure provides that a court may vary or suspend periodic payments under a notice of garnishment.
[13] I have reviewed the budget that Ms. Berry prepared with the assistance of Thunder Bay Credit Counselling, which shows that she has a surplus of $78.00 before the garnishment. The discretionary expenses shown in the budget are very limited. While Ms. Berry’s spending can be reduced somewhat, there is nothing in her housing expenses, work expenses, living expenses and personal expenses that can be greatly reduced, at least in the immediate future. It may be that Ms. Berry over-extended herself in purchasing her new home which, with a second mortgage payment, consumes $2,282.23 of her income each month.
[14] The garnishment is approximately $700.00 per month. With her budget surplus of $78.00 Ms. Berry would have to reduce her current expenses by approximately $600.00 per month, or increase her income by that amount, to pay the garnishment. There is nothing to indicate that this is realistic at this time.
[15] I take into account that Ms. Berry has not avoided paying her legal bill in its entirety. She deposes that she paid approximately $25,000.00 in legal fees. Ms. Petryshyn’s affidavit indicates that Ms. Berry was billed a total of $42,447.01 and paid $18,287.92. There is a copy of a bank draft and receipt in Ms. Berry’s materials showing that $21,294.27 was paid to Petrone, Hornak, Garofalo, Mauro on July 20, 2011. Regardless of the exact amount paid, it is clear that Ms. Berry did pay a significant sum in legal fees. I also note that Ms. Berry acknowledges that she owes the money and that she seeks to pay a good portion of it by having the $10,000.00 in trust from the matrimonial home proceeds of sale paid to Ms. Petryshyn.
[16] It may be the case that after the family law trial Ms. Berry will have access to additional funds. That remains to be determined. I am prepared, at this stage, to give Ms. Berry some temporary relief, having regard to her financial circumstances, the needs of her children and her previous payments of her legal fees
[17] There will be an order, pursuant to s. 7(5) of the Wages Act and rule 60.08(16) that until March 15, 2014, 90 percent of Ms. Berry’s wages, as defined by s. 7(1) of the Wages Act, shall be exempt from seizure or garnishment. The interest of 3 percent per annum will not be varied. After March 15, 2014, Ms. Berry may return to court to have her request for variation of the notice of garnishment reviewed.
The Hon. Mr. Justice D.C. Shaw
Released: September 26, 2013
CITATION: Petryshyn v. Berry, 2013 ONSC 6034
COURT FILE NO.: CV-12-0516-00
DATE: September 26, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
MARTHA PETRYSHYN
Creditor
- and –
MELISSA BERRY
Debtor
REASONS ON MOTION
Shaw J.
Released: September 26, 2013
/nf