ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-09-0467 & CV-10-0131
DATE: 2015-11-18
IN THE MATTER OF: The Creditor’s Relief Act
B E T W E E N:
Court File No: CV-09-0467
Cheadles LLP,
Claimant
K. Daniel Reason, for the Claimant
- and -
Walter Zanewycz,
Debtor
Michael Cupello and Roy Karlstedt, for the Debtor
AND BETWEEN:
Cheadles LLP,
Claimant
Court File No: CV-10-0131
K. Daniel Reason, for the Claimant
- and -
Walter Zanewycz,
Debtor
Michael Cupello and Roy Karlstedt, for the Debtor
HEARD: May 14 and August 19 , 2015,
at Thunder Bay, Ontario
Regional Senior Justice D. C. Shaw
Reasons On Motions
[1] Cheadles LLP brings two motions. The first, in file CV-09-0467, is for an order that a writ of seizure and sale be issued in the amount of $30,801.56 with respect to specified legal services provided by Cheadles to Walter Zanewycz. The second, in file CV-10-0131, is for an order that a writ of seizure and sale be issued in the amount of $64,241.74 with respect to specified legal services provided by Cheadles to Mr. Zanewycz.
Background
File No: CV-09-0467
[2] Mr. Zanewycz retained Cheadles in 2006 to represent him in matrimonial litigation. Cheadles provided legal services to Mr. Zanewycz for several years, billing him at regular intervals.
[3] On July 8, 2009, an order was granted for the assessment of 23 bills of costs which Cheadles had rendered to Mr. Zanewycz. Included in those 23 bills were three accounts dated January 8, January 23 and March 27, 2009, respectively. The total amount outstanding on those three accounts was $29,725.06.
[4] The assessment hearing took place on July 21, 2009. On November 5, 2009, the assessment officer released his decision, including his Report and Certificate of Assessment dated October 1, 2009. The Assessment Officer determined that Mr. Zanewycz owed Cheadles $27,887.51, plus interest at 2% from July 21, 2009.
[5] Until it was repealed in October 2010, the Creditors’ Relief Act R.S.O. 1990, c. 45 (sometimes hereafter referred to as “the Act”) gave a creditor, in certain circumstances, the status of an execution creditor, notwithstanding that the creditor had not obtained a judgment against the debtor.
Under the Act, if the Sheriff had in his hands an unsatisfied execution against the property of a debtor, a creditor was allowed to file with the Local Registrar an Affidavit of Claim, setting out the particulars of the debt said to be owing to the creditor, and a Notice to the debtor. The debtor had 10 days from the date of service to contest the claim. Section 10 of the Act set out the procedure to be followed if a debtor wished to contest the claim. (Section 10 also set out the procedure if another creditor wished to dispute the claim.) If the debtor did not contest the claim within 10 days from the date of service, then upon proof of service of the Affidavit of Claim and Notice, the Registrar would deliver to the creditor a Certificate of Proof of Claim in the form prescribed by the Act.
[6] Section 9(2) of the Act provided:
(2) Upon delivery of the certificate to the sheriff, the claimant shall be deemed to be an execution creditor within the meaning of this Act and is entitled to share in any distribution as if the claimant had delivered an execution to the sheriff, and the certificate binds the lands and goods of the debtor in the same manner as an execution, subject however, to the debt being afterwards disputed by a creditor as hereinafter provided.
[7] Section 9(6) of the Act provided:
(6) A certificate remains in force for three years from the date thereof, but may from time to time be renewed in the same manner as an execution.
[8] Section 1 of the Act defined execution:
“execution” includes a writ of seizure and sale and every subsequent writ for giving effect thereto.
[9] Sections 6, 7, 9 and 10 of the Act are set out in Schedule “A” to these reasons.
[10] The Creditors’ Relief Act was repealed in October 2010, by the Creditor’s Relief Act, 2010 S.O. 2010, c. 16, Schedule 4. Section 21 of the repealing legislation contains transitional provisions regarding a certificate issued under the Creditors’ Relief Act:
21 The following rules apply with respect to a certificate issued by a claimant under subsection 9(1) of the Creditors’ Relief Act that is still in force on the day that Act is repealed:
The certificate continues to remain in force for three years from the date of the certificate and may from time to time be renewed in the same manner as an execution.
On delivery of the certificate to the sheriff either before or after this Act comes into force, the claimant is deemed to be an execution creditor for the purposes of this Act whose execution is deemed to have been filed with the sheriff on the day the certificate is delivered to the sheriff, subject to the debt to which the certificate relates being disputed subsequently by another creditor under proceeding referred to in section 5.
[11] Before the Assessment Officer released his decision on the Cheadles’ accounts on November 5, 2009, Cheadles prepared and served on Mr. Zanewycz on September 26, 2009 an Affidavit of Claim and Notice, both dated September 25, 2009, under the provisions of the Act. The Affidavit of Claim set out the particulars of the three accounts dated January 8, January 23 and March 27, 2009, totalling $29,725.06. An Affidavit of Service was sworn September 27, 2009 by a process server, deposing that Mr. Zanewycz was served personally with the Affidavit of Claim and Notice, at 3061 Oriole Place, Thunder Bay, and that the process server was able to identify Mr. Zanewycz by means of Mr. Zanewycz’s admission to the process server that he was the debtor.
[12] At all material times, Mr. Zanewycz has been the registered owner of and has resided at 3061 Oriole Place, Thunder Bay.
[13] Mr. Zanewycz did not contest the claim within the 10 days prescribed by the Act after he was served with the Affidavit of Claim and Notice. Mr. Zanewycz deposes that he does not recall the Affidavit of Claim or the Notice being served on him.
[14] By letter dated October 9, 2009, Cheadles forwarded the Affidavit of Service, the Affidavit of Claim and Notice to the Local Registrar in Thunder Bay, with a draft Certificate of Proof of Claim. On October 9, 2009, the Local Registrar delivered to Cheadles, pursuant to s. 9(1) of the Act, a signed Certificate of Proof of Claim in Form 5, as prescribed by the Act.
[15] Effective October 19, 2009, the Certificate of Proof of Claim was filed with the Sheriff of the District of Thunder Bay and given file number 09-0000502.
[16] By letter dated April 14, 2010, Cheadles advised the Sheriff that accounts relating to Cheadles’ claim had been assessed and that the decision of the Assessment Officer had been released on November 5, 2009. Cheadles provided a copy of the Certificate of Assessment dated October 1, 2009, in the amount of $27,887.51. The letter stated: “Accordingly, the amount owing under Execution No. 09-0000502 should be reduced by the sum of $1,837.55 to $27,887.51. Would you please amend your records in this regard.”
[17] A “Writ Details Report” certified by the Sheriff of the District of Thunder Bay, dated April 4, 2014, shows the amount of the “original writ” at $29,725.06. Under the heading “Financial Transactions” the Writ Details Report shows on April 16, 2010, “$1,837.55 Amt. Reduced Pursuant to Cert. of Assess.” The Writ Details Report also shows “Writ Renewed On 2012-01-19.”
[18] Cheadles has been unsuccessful in recovering the amount of the assessed accounts.
[19] In 2013, solicitors for Cheadles advised the Local Registrar that Cheadles wished to proceed with a Sheriff’s Sale of Land with respect to real estate owned by Mr. Zanewycz. The Supervisor of Court of Operations responded:
“… we cannot move forward on the above sale of lands until we receive either an order from the court directing the Sheriff to seize and sell the lands, or a proper Writ of Seizure and Sale is filed with our office.
[20] As a result of the position taken by the Supervisor of Court Operations, Cheadles has brought this motion and the motion in file CV-10-0131.
(Decision continues exactly as in the source judgment with paragraphs [21] through the end, including the Discussion, Conclusion, Costs sections, and Schedule “A”, reproduced verbatim.)