COURT FILE NO.: FS 84/16 DATE: 2017/05/09

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Rebecca Marjorie DeRose Judith Holzman, for the Applicant Applicant/Recipient

- and -

Anthony Peter DeRose David I. Shapiro, for the Respondent Respondent/Payor

HEARD at WELLAND, Ontario: April 28, 2017

The Honourable Justice T. Maddalena

DECISION ON GARNISHMENT HEARING

The Issues

[1] At this garnishment hearing, the applicant Ms. DeRose requests that $73,160.84 be paid out to her from the monies paid into court by Mr. DeRose as a result of a garnishment notice, with the rest remaining with the court pending the outcome of the respondent’s motion/application to vary the spousal support order.

[2] The respondent Mr. DeRose requests that the amount of $14,432.75 be paid out to Ms. DeRose with the balance to remain in court pending the outcome of the respondent’s motion/application to vary the spousal support.

Background Facts

[3] A garnishment notice was served by Ms. DeRose on three financial institutions, National Bank, RBC and TD. The respondent Mr. DeRose dealt with each of these financial institutions. The notice requested that the total payment not exceed $193,195.74. The garnishment notice was dated October 6, 2016.

[4] The three financial institutions did not respond in accordance with proper garnishment proceedings, and that was dealt with in my endorsement of December 6, 2016 released to the parties herein.

[5] Further, a garnishment hearing was set for February 24, 2017. On February 23, 2017 Mr. DeRose paid to the Sheriff the amount of $193,195.74 which was the full amount requested by the notice of garnishment.

[6] As a result of the garnishment monies paid, the representatives of the three banks were no longer required to attend court.

[7] The issue now is the distribution of the proceeds being held by the Sheriff.

[8] Also, once the funds were paid into court, they were inadvertently paid out by the court to Ms. DeRose in their entirety. Ms. DeRose, via her counsel, has returned the funds to this court and the funds have now been redeposited by the court on April 28, 2017.

[9] Ms. DeRose submits that at this hearing the amount of $73,160.84 be released to her forthwith as there are arrears owed to her for two reasons.

[10] Firstly, Mr. DeRose did not pay the indexing for the years 2011 through to the end of December 2015. This indexing was automatically to occur in accordance with the terms of the separation agreement.

[11] Based on the evidence, this cost of living adjustment would have amounted to approximately $67,955. Further, this figure of $67,955 did not take into account interest accrued on those payments commencing from 2011.

[12] Secondly, Ms. DeRose submits that Mr. DeRose chose unilaterally to reduce payment of support from the $25,800 monthly that he was paying to $5,300. The respondent stopped paying support for May, June and July of 2016 and did not resume until August 2016 when counsel for Ms. DeRose intervened. It was on December 2, 2016 that the court ordered the ongoing payments of $25,800 per month to continue, pending further court order.

[13] Mr. DeRose acknowledges that $67,955 represents indexing in accordance with the parties’ separation agreement.

[14] However, he also submits taking into consideration his total overpayment of $178,763 and deducting same from the monies held pursuant to the garnishment of $193,195.74 would then net Ms. DeRose the amount of $14,432.75. This is based on his calculation of income for 2016 at $211,280 together with full retroactive adjustment to January 2016. This calculation is also more fully detailed in the affidavit of Kim Graves, sworn April 24, 2017, in paragraph 14.

Analysis

[15] As there was no agreement on variation, Mr. DeRose chose to unilaterally reduce the support he was paying from the amount of $25,800 per month to $5,300 per month. Even if the court accepts that his income has been reduced to $211,280 in accordance with his position, the amount of $5,300 monthly is below the range of the Spousal Support Advisory Guidelines.

[16] If Mr. DeRose has overpayment concerns, then issues of overpayment can be dealt with by way of recovery from future ongoing support payments.

[17] Further, paying out the amount requested by Ms. DeRose would still leave $120,034.90 with the court.

[18] Further, on the substantive motion/application to vary, income analysis reports are still outstanding from Ms. DeRose’s expert. Procedural fairness dictates that she should be permitted to obtain her own report. The disclosure of documentation has contributed to delay in the preparation of her report. As a result, Mr. DeRose’s income for 2016 and forward remains in dispute.

[19] Further, the substantive hearing must also yet determine the issue of any retroactive variation.

[20] Pending all of the aforementioned, and a final adjudication by the court on the outstanding issues, these parties entered into a separation agreement dated October 18, 2010. Each is therefore entitled to rely on the provisions of that agreement until and unless a new agreement is entered into, or a court order is granted. Each is also entitled to expect that courts will uphold these agreements and not sanction unilateral variations of same.

[21] Therefore, Ms. DeRose is entitled to request compliance with the executed agreement, and that includes indexing of support as well as a claim for outstanding interest.

[22] For all of the above-noted reasons, it is appropriate that Ms. DeRose at least receive the indexing amount that was provided for in the separation agreement, together with any interest that may accrue to her. Therefore, of the money being held by the court, the amount of $73,160.84 shall be paid out to Ms. DeRose with the balance to remain in court.

Orders

[23] The following orders are made:

(1) It is ordered that of the monies being held in court, the amount of $73,160.84 shall be paid to Ms. DeRose forthwith.

(2) The balance shall remain in court in order pending further order.

Costs Submissions

[24] I have already received the costs submissions of both parties at the garnishment hearing, however written costs submissions may be made with respect to any offers to settle. The submissions are limited to two pages, plus any applicable copies of offers to settle. The applicant Ms. DeRose’s submissions shall be served and filed by May 23, 2017 and the respondent Mr. DeRose’s submissions shall be served and filed by June 6, 2017. Once the submissions on offers to settle have been received, I will release a costs endorsement.

Maddalena J.

Released: May 9, 2017