ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-12-111399-00
DATE: 20150901

BETWEEN:

SUZANNE MILLER
Plaintiff

– and –

ROSETTA DEBARTOLO-TAYLOR, 2070935 ONTARIO INC. and (JAMES) KEVIN TAYLOR
Defendants

Ms. Miller, acting in person

M.L. Biggar, for the Defendants

HEARD: Heard in writing

VALLEE, J.

Nature of the Motions

[1] Ms. Miller is Mr. Taylor’s judgment creditor. She brings this motion in writing to appoint a receiver. Mr. Taylor also brings a motion in writing to discharge a certificate of pending litigation, obtained by Ms. Miller, which is registered against his matrimonial home.

Events Leading to the Motions

[2] Ms. Miller and Mr. Taylor were business partners. On May 9, 2005, Mr. Taylor transferred his interest in the matrimonial home to his wife. Sometime prior to July 27, 2007, Mr. Taylor began misappropriating money from the business for his own purposes.

[3] On March 12, 2008, Ms. Miller brought an action against Mr. Taylor. Ms. Miller obtained judgment against Mr. Taylor on November 28, 2008. Two months prior to the trial, Mr. Miller transferred his interest in the business to his wife’s company.

[4] After attempting various methods to collect the amount of the judgment, Ms. Miller carried out an examination in aid of execution of Mr. Taylor on June 3, 2011. One week before he was required to answer his related undertakings, he made an assignment in bankruptcy.

[5] On her application and with the consent of the trustee, the bankruptcy court assigned to Ms. Miller the trustee’s rights to pursue assets for which Mr. Taylor had not provided an accounting and to commence an action.

[6] Ms. Miller commenced a fraudulent conveyance action against Mr. Taylor and his wife on October 3, 2012. On October 9, 2012 Ms. Miller obtained a certificate of pending litigation.

[7] On April 24, 2015, I determined that Mr. Taylor’s transfers of his interests in the matrimonial home and the business were made with the intent to defeat, hinder, delay and defraud creditors including Ms. Miller. I allowed Ms. Miller’s motion for summary judgment. See Miller v. Debartolo-Taylor, 2015 ONSC 2654.

The Issues

Would it be just or convenient to appoint a receiver in aid of execution of judgment?

Do special circumstances exist in this matter which would render the normal methods of execution ineffective or impractical?

Applicable Law

[8] Section 60.02(1) (d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 states that in addition to any other method of enforcement provided by law, an order for the payment or recovery of money may be enforced by the appointment of a receiver.

[9] The purpose of appointing a receiver in aid of execution is to protect the interests of the claimant seeking the order where there is a real risk that their recovery would otherwise be in serious jeopardy. See Ryder Truck Rental Canada Ltd. v. 568907 Ontario Ltd. (Trustee of), [1987] O.J. No. 2315 (H.C.) at par 6.

[10] In Weig v. Weig, 2012 ONSC 7262, the court referred to Bennett on Receiverships, 3rd ed. (Toronto: Carswell, 2011) in which the author stated on page 800,

The court may also appoint an equitable receiver in a situation where the debtor has arranged his or her affairs in such a way that there is an appearance that the assets have been sheltered and that there is more than a substantial impediment in the way of ordinary methods of recovery.

Mr. Taylor’s position

[11] Mr. Taylor states that Ms. Miller has not described any of the following in her motion record:

• the amount likely to be collected if a receiver were appointed;

• the nature of the assets including that one of the principal assets is a matrimonial home which, for the purpose of this proceeding, is jointly owned;

• the probable cost that will be incurred in the appointment of a receiver; or,

• the amount of debt owed to her.

[12] Mr. Taylor states that the appointment of a receiver in aid of execution is not just or convenient. Mr. Taylor and his wife have obtained a commitment letter to be registered against the matrimonial home to finance all outstanding judgments and debts. The parties have agreed on the amount owing, subject to interest adjustments to be made. Ms. Miller’s certificate of pending litigation needs to be discharged so that the financing can be put in place to allow for the payment of the funds.

Analysis

[13] Clearly, Mr. Taylor has taken every possible step to delay or defeat payment of the judgment dated November 28, 2008. He fraudulently transferred his assets to his wife and her company, thereby placing them out of Ms. Miller’s reach. He made an assignment in bankruptcy. He failed to account for some of his assets in the bankruptcy proceedings. Ms. Miller has had to pursue Mr. Taylor in two civil actions over seven years to attempt to obtain payment of the money that he misappropriated from their business.

[14] I have heard four motions in this action including Mr. Taylor’s motion to strike the claim in which he alleged that the fraudulent conveyance action was brought outside the applicable limitation period. I have heard and read evidence in those motions regarding the amount of the first judgment, the amount that the Taylors paid for their matrimonial home and the consideration paid by Ms. DeBartolo-Taylor’s company for the transfer of Mr. Taylor’s interest in the business. The fact that Ms. Miller has not included these details in her motion record does not concern me.

[15] With respect to Mr. Taylor’s concern regarding the amount that will be incurred in the appointment of a receiver, this cost could have been completely avoided had Mr. Taylor simply made arrangements to pay the amount of the judgment dated November 28, 2008.

Conclusion

[16] Given Mr. Taylor’s efforts to hinder and defeat Ms. Miller’s attempts to collect the judgment, I find that the appointment of a receiver in aid of execution of a judgment is just and convenient and that special circumstances exist in this matter that render the normal methods of execution ineffective or impractical.

[17] The motion for the appointment of a receiver is allowed.

[18] Ms. Miller may serve and file a draft appointment order, together with an affidavit of service, for my consideration. Counsel for Mr. Taylor may provide submissions in writing regarding the draft within 10 days of service. The documents shall be filed with the trial co-ordinator in Barrie to the attention of my assistant, Nicole Anderson.

The Certificate of Pending Litigation

[19] Mr. Taylor and his wife request that the CPL registered against their matrimonial be discharged to permit funding to be advanced in order to pay the amount of the judgment. They state that the parties have agreed on the amount, subject to interest adjustments. On the parties’ last court attendance, Ms. Miller strongly denied that she had agreed to the amount proposed by the defendants. There is no subsequent indication from her that she has now agreed on the amount.

[20] Given the fact that seven years have passed since the date of the original judgment, interest will comprise a significant component of the amount that Mr. Taylor owes. Discharging the CPL at this time is premature. The parties must either come to an agreement regarding the full amount owed or obtain a determination of that amount before the defendants can assert that they have obtained a commitment letter sufficient to ensure payment. Subsequently, the parties must agree on a procedure to discharge the CPL and guarantee payment of the amount owing.

[21] The defendants are granted leave to return their motion in writing on seven days’ notice after the steps set out above have been taken. A further affidavit must be filed. Ms. Miller may provide responding materials if she wishes.

VALLEE J.

Released: September 1, 2015