Hathaway v. Hathaway, 2015 ONSC 212

COURT FILE NO.: FD1344/08

DATE: January 13, 2015

SUPERIOR COURT OF JUSTICE – ONTARIO

FAMILY COURT

RE: Michelle Suzanne Hathaway, Applicant/Recipient

AND:

Randall Lee Hathaway, Respondent/Payor

BEFORE: MITROW J.

COUNSEL: Thomas G. Chalmers, for the Applicant/Recipient

Genevieve M. Samuels, for the Respondent/Payor

HEARD: January 7, 2015

ENDORSEMENT

[1] A garnishment hearing was conducted on January 7, 2015.

[2] The applicant issued two notices of garnishment on November 14, 2014 pursuant to Rule 29 of the Family Law Rules, O.Reg. 114/99 as amended: one notice of garnishment was to enforce periodic child support payments in the amount of $2,248 per month; the other notice of garnishment was issued to enforce a lump sum of $6,639.87 representing the amounts that the applicant alleged were owing by the respondent for periodic child support past due and s. 7 expenses for hockey and university.

[3] The garnishee was the solicitor who was holding money in trust from the sale of the parties’ jointly-owned matrimonial home. That solicitor has complied with the notices of garnishment.

[4] The respondent submits in his dispute that both notices of garnishment should be set aside. Both parties also filed affidavit material in support of their respective positions.

[5] For reasons that follow the notice of garnishment as it relates to s. 7 expenses is set aside; in relation to the notice of garnishment as it affects future periodic payments, although that notice of garnishment is found to have been properly issued, there shall be no further amounts garnished.

Brief Background

[6] Pursuant to minutes of settlement filed during the course of the trial, a divorce order was made on September 26, 2014, that included dealing with all corollary relief issues and any other issues on a final basis.

[7] There are four children of the marriage. The applicant was granted custody of the three youngest children (the eldest of those three children being age 16 at the date of the divorce order). The eldest child, age 19 at the time of the divorce order was and continues to be a university student.

[8] Pursuant to the divorce order the table amount of periodic child support payable by the respondent is $2,248 per month commencing September 1, 2014.

[9] There is no dispute between the parties that at the time of the issuance of both notices of garnishment, that the divorce order had been withdrawn from the Director’s office, as contemplated by the minutes of settlement, and pursuant to a notice of withdrawal signed by both parties on the date of the divorce order.

[10] The divorce order dealt with the disbursement of the matrimonial home sale proceeds. There was a little under $42,000 remaining in trust. The divorce order provided that each party was to receive his or her equal share of the sale proceeds, but subject to two adjustments: from the applicant’s share the equalization payment owing by her to the respondent was to be deducted; and from the respondent’s share the amount owing by him to the applicant for child support arrears was to be deducted. The net result of those adjustments was that the applicant was to receive a little over $28,000 and the respondent was to receive a little under $13,800.

[11] By the time both notices of garnishment had been issued, the respondent had made the October, 2014 child support payment (albeit by cheque dated October 17^th rather than October 1^st); however the November 1^st child support payment in the amount of $2,248 remained outstanding, although it was paid by cheque dated November 18, 2014, very soon after the issuance of the notices of garnishment.

[12] A letter dated October 30, 2014 from Mr. Chalmers to Ms. Samuels stated that $3,199.37 was owing for the eldest child’s university expenses; and that $1,192.50 was owing for hockey expenses for two of the younger children. This letter contained a schedule summarizing the calculations of both the university and hockey expenses. Among other complaints, the respondent deposes that he had never been provided with all the necessary back-up documents to corroborate the expenses.

Discussion

A. The Hockey Expenses

[13] The applicant bases the quantification of hockey expenses at $1,192.50 (and this amount is included in the lump sum notice of garnishment) by relying on paragraph 17 of the divorce order, that states as follows:

Subject to paragraph 18 below, the parties will share the children’s special and extraordinary expenses in accordance with section 7 of the Child Support Guidelines. Neither party shall be obliged to contribute to such expense without prior written notice and his or her prior written consent, such consent not to be unreasonably withheld. [My emphasis]

[14] It is noted that paragraph 18 of the divorce order contains a formula that defines each party’s responsibility to contribute to the eldest child’s university expenses.

[15] During argument it was acknowledged by the applicant that she had not given prior notice to the respondent as required by the order, nor had she obtained the respondent’s prior consent as required by the order. Further assuming that the respondent had an enforceable obligation to contribute towards the hockey expenses (which on the evidence he did not) there remains an issue as to what portion of these hockey expenses, if any, would be “extraordinary” within the meaning of s. 7 and not already covered in the table amounts of child support.

[16] Also during the course of the argument, the applicant conceded, properly, that the amount allegedly owing for hockey expenses should not have been included in the notice of garnishment. The amount garnished should be returned. This concession was proper because at the time the notice of garnishment was issued there was no enforceable obligation on the respondent to contribute towards hockey expenses; nor had such expenses been quantified in any event.

B. The University Expenses

[17] I agree with the respondent’s submission that as at the date of the notice of garnishment, that he had not been given all the necessary back-up documents to confirm the amount that he had to contribute towards the tuition expenses.

[18] Although there is some dispute on the evidence as to what back-up documents had been provided by the applicant, it is not in dispute that the necessary statement of assessment from OSAP had not been provided by the applicant. In her affidavit sworn December 23, 2014 the applicant attaches that document as an exhibit and concedes (at paragraph 23) that this document had not been provided.

[19] A notice of garnishment must relate to an amount owing pursuant to an order that is readily ascertainable and not in dispute.

[20] Where a court order contains, as in the present case, a formula to quantify s. 7 expenses, I find that at the very minimum the support recipient must demonstrate, prior to enforcement by notice of garnishment or otherwise, that full details quantifying the amount owing with all supporting documents have been provided to the support payor, and that no dispute as to the amount owing has been raised; it should not be open to a support recipient to issue a notice of garnishment in circumstances where full disclosure has not been provided or where the other party raises a dispute, for to do so results in a support recipient enforcing an order that has not yet been made.

[21] In most cases, where a s. 7 expense is formula-based, and if a party does not consent to the calculation, then the most prudent course of action is to ask the court to quantify the amount owing pursuant to the order. If a party acts unreasonably in failing to agree to the amount, then that conduct can be addressed when dealing with costs.

[22] Although the notice of garnishment as it relates to university expenses is set aside, the respondent, reasonably, is not requesting that the amount garnished ($3,199.37) be returned to him, but rather, that it should be credited towards his obligation towards his eldest child’s university expenses.

C. Periodic Child Support

[23] I agree with the applicant that ongoing periodic payments can be the subject of a notice of garnishment. I reject the respondent’s submission to the contrary.

[24] Ongoing periodic support payments are very common in family law proceedings. Considering Rule 29 as a whole, I find that the rule is broad enough to allow future child support payments to be attached by a notice of garnishment. See for example Rule 29(10) and Rule 29(19) paragraphs 2 and 2.1 that provide as follows:

29(10) A notice of garnishment continues to attach future periodic payments even though the total amount owed when it was served is fully paid up.

29(19) At a garnishment hearing, the court may make one or more of the following temporary or final orders:

2. An order that changes how much is being garnished on account of a periodic payment order. The court may make an order under this paragraph even if it does not have the authority to change the payment order itself.

2.1 An order that changes how much is being garnished on account of a periodic payment order and that, at the same time, changes the payment order itself. The court may make an order under this paragraph only if,

i. the payment order is one that the court has the authority to change, and

ii. the parties to the payment order agree to the change, or one of those parties has served and filed notice of a motion to have the change made.

[25] At the time of the issuance of the notice of garnishment, the periodic payment due November 1, 2014 was outstanding. Although it was paid thereafter, the notice of garnishment can attach the future child support payments.

[26] The respondent submits, that historically, given that he gets paid mid-month, his support payments (although they have been due on the first day of each month), were regularly paid mid-month or shortly thereafter. There is some confirmation of that evidence in the Director’s statement of arrears. The respondent also submits that shortly after the date of the divorce order, that he spoke to the applicant and that she agreed to allow him to make the child support payments mid-month when he gets paid. The applicant disputes this evidence, and she points to an email that she forwarded to the respondent dated October 1, 2014 reminding him of the October 1^st due date for the child support.

[27] The order is clear: child support is due on the first day of each month. Given the conflicting evidence, the order speaks. I am unable to conclude that there was an oral agreement between the parties in effect varying payment of child support from the first day of the month to mid-month.

[28] The respondent submits that the effect of the notice of garnishment is to vary the payout of the matrimonial home sale proceeds as set out in the divorce order and for that reason alone, the notice of garnishment should be set aside. In making this submission the respondent relies primarily on Ruttan v. Ruttan, 1982 CanLII 181 (SCC), [1982] 1 S.C.R. 690 (S.C.C.).

[29] I am unable to accept the respondent’s submission. Ruttan is not engaged on the facts of the present case. Enforcement of the respondent’s child support obligation set out in the divorce order, by way of garnishment of his share of the matrimonial home sale proceeds due to him pursuant to the divorce order, does not constitute a variation of the divorce order.

[30] Notwithstanding the above, the immediacy with which the applicant sought to garnish the periodic child support payments appears somewhat heavy-handed. The respondent merely wanted to coincide his child support payment with his pay-day. There was a history of that. Even in her email to the respondent dated October 1, 2014, the applicant suggested that he bring the cheque not later than October 5, 2014.

[31] Given the circumstances, and considering the volume of material filed and time spent by both counsel on this matter, it may have been prudent for the applicant to exercise some discretion and forbearance prior to attempting to garnish the periodic child support payments.

[32] Given the facts, although the notice of garnishment for periodic child support technically was properly issued, this is not a case where any further amounts should remain subject to that notice of garnishment. The respondent is making his payments; he should be very aware by now that they are due on the first day of each month.

Order

[33] For reasons set out above, I make the following order:

1. The notice of garnishment in relation to the amounts owing for university expenses and hockey expenses is set aside;

2. The applicant shall return to the respondent forthwith the sum of $1,192.50 garnished for hockey expenses;

3. Notwithstanding paragraph 1 of this order, the applicant shall retain the sum of $3,199.37 garnished for university expenses, but this amount shall be credited to the respondent’s obligation to pay university expenses for the eldest child pursuant to the divorce order, including paragraphs 17 and 18 thereof;

4. Effective immediately, no further amounts shall be paid pursuant to both notices of garnishment issued by the applicant, and without limiting the generality of the foregoing, the notices of garnishment shall not attach any child support payments due after the date of this order;

5. If the parties are unable to agree on the university expenses for the eldest child that are payable by the respondent to the date of this order, then I remain seized with that issue and the parties shall contact the trial co-ordinator to arrange an appointment before me; and

6. If the parties cannot agree on costs, then the parties shall forward written costs submissions to the trial co-ordinator (not to exceed three typed pages double spaced, not less than font-size 12) plus any offers or authorities, as follows: the respondent shall forward his submissions within two weeks; the applicant shall forward her responding submissions within two weeks thereafter; and the respondent shall forward his reply submissions, if any, within one week thereafter with those submissions not to exceed two pages.

“Justice Victor Mitrow”

Justice Victor Mitrow

Date: January 13, 2015