COURT FILE NO.: CV-15-5884 DATE: 2019 05 30 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Mary Aquino, Appellant (Moving Party) AND: The Minister of Finance, Respondent (Responding Party)
BEFORE: Barnes J.
COUNSEL: Jeffrey Radnoff and Charles Haworth, for the Appellant Jessica Fiore and James Elcombe, for the Respondents
HEARD: January 28, 2019
ENDORSEMENT
INTRODUCTION
[1] Pursuant to s. 18.1 of the Retail Sales Tax Act, R.S.O. 1990, c. R.31 [RSTA] [1], Mary Aquino was assessed for her common law spouse’s transfer of real property to her. Mr. Borg had a pre-existing unpaid tax debt under the RSTA. The debt from Ms. Aquino’s assessment remains unpaid.
[2] Pursuant to s. 36 of the RSTA, the Minister of Finance (the Minister) sent garnishment letters to RE/MAX West Realty Ltd. (RE/MAX) requesting: (a) that 100% of commissions earned by Ms. Aquino be paid to the Minister; and (b) that RE/MAX pay 20% of any salary and wages payable to Mary Aquino to the Minister pursuant to section 36 of the RSTA.
[3] Ms. Aquino has brought this motion for a garnishment hearing pursuant to Rule 60.08(16) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (Rules) [2] seeking an order to vary the letters of garnishment issued against her.
[4] I conclude that Rule 60.08(16) does not apply to a Minister’s garnishment letter under section 36 of the RSTA and therefore, Ms. Aquino is not entitled to a garnishment hearing under the Rules. Her motion is dismissed.
BACKGROUND FACTS
[5] The essential facts are not in dispute. In June 1994, Eugene Borg, was assessed by the Minister for failure to remit taxes in the amount of $70,096.34 from the sale of vehicles. Mr. Borg filed a notice of assessment. Ms. Aquino was not his common law spouse at that time. The Minister confirmed the assessment. Mr. Borg did not file a Notice of Appeal.
[6] On April 26, 2012, Mr. Borg transferred title in the couple’s home described as 1433 Islington Avenue, Toronto, Ontario (the Property), to Ms. Aquino. The Minister considered this a non-arm’s length transfer and held Ms. Aquino liable for $344,651.29 under s. 18.1 of the RSTA.
[7] On or about June 1, 2015, Ms. Aquino filed a Notice of Objection. On November 20, 2015, the Minister reduced the assessment by $52,719.76 and confirmed the remainder of the assessment. On December 31, 2015, Ms. Aquino served on the Minister a Notice of Appeal of the assessment to the Superior Court of Justice, pursuant to section 25 of the RSTA. As of January 2, 2019, Ms. Aquino’s outstanding debt is $370,226.99.
[8] Ms. Aquino is an independent sales representative of RE/MAX. On May 18, 2016 and September 6, 2016, based on the statutory authority granted by s. 36 of the RSTA, the Minister sent accounts receivable garnishment letters to RE/MAX, requiring it to remit money payable to Ms. Aquino as previously described.
ISSUES
[9] Ms. Aquino is not challenging the Minister’s assessment on this motion. She seeks to utilise the mechanism provided by Rule 60.08(16) of the Rules to vary the contents and effects of the Minister’s garnishment letters. Ms. Aquino is requesting that the amount of her commissions from RE/MAX payable to the Minister be reduced from 100% to 10%.
[10] Two issues arise: a) Does the court have jurisdiction over this matter? and 2) Does a 90% exemption to the garnishments strike an appropriate balance between the interests of Ms. Aquino’s creditors and her ability to continue to live and earn money? I have determined that the court has no jurisdiction and therefore, there is no need to address the second issue.
DOES THE COURT HAVE JURISDICTION OVER THIS MATTER?
[11] Ms. Aquino seeks a garnishment hearing under Rule 60.08(16) because s.18 (9) of the RSTA requires an assessed person to pay the amount assessed even if she has commenced an appeal of the assessment. This avenue is not available to Ms. Aquino unless the Rules apply to the RSTA.
[12] A garnishment is an equitable remedy and the court may refuse to grant it if it will be inequitable, unfair or cause prejudice to some person or persons: 20 Toronto Street Holdings ltd. v Coffee, Tea or Me Bakeries Inc., 53 O.R. (3d) 360 (Ont. S.C.J.).
Position of the parties
[13] Sections 25, 27 and 29 of the RSTA prescribes the appeal process for decisions made under the RSTA. Ms. Aquino submits that these sections of the RSTA grant the court jurisdiction over RSTA assessments and therefore, the Rules apply to the RSTA. In addition, the court’s inherent jurisdiction to grant discretionary relief is not ousted by the RSTA. She explains that there is no conflict between the RSTA and the Rules.
[14] The Minister submits that Ms. Aquino is not entitled to seek relief under Rule 60.08(16) because it does not apply to a Minister’s letter under s. 36 of the RSTA.
Discussion/Analysis
[15] The court has no jurisdiction to grant Ms. Aquino the relief she seeks pursuant to Rule 60.08(16). Ms. Aquino cannot utilise Rule 60.08(16) because the RSTA does not say that the Rules apply to a section 36 assessment. The Rules do not refer to a Minster’s garnishment letter issued under the RSTA.
[16] The effect of ss. 25, 27 and 29 of the RSTA on the jurisdiction of the Superior Court has been extensively analysed by the Ontario Court of Appeal in Cheong v. Ontario (Minister of Finance), 2004 CarswellOnt 500, at paras. 13 to 38.
[17] Mr. Cheong sought to exercise his right to appeal an RSTA tax assessment. The right to appeal is set out in s. 25 of the RSTA. Section 25(1) states that a notice to appeal must be served on the Minister within 90 days. Mr. Cheong served his notice of appeal after 91 days. The Minister refused to consent to an extension of time to file the notice. Mr. Cheong brought a motion to the Superior Court seeking an extension of time to appeal. The Minister brought a cross-motion asserting that the court had no jurisdiction. The motions judge ruled the court had no jurisdiction. The Court of Appeal agreed, stating at para. 26:
…when s. 29 is read in the context of ss. 25, 26, and 27 of the RSTA, it is clear that the practice and procedure of the Superior Court applies upon completion of the steps called for by both ss. 25 and 26. That is the appellant must file the notice of appeal, pay the necessary fee and serve the notice of appeal as required by s. 25. And the Minister must then serve and file his reply as required by s. 26. Short of this, the practice and procedure of the Superior Court can offer no help to the applicant.
[18] Thus, the court’s inherent jurisdiction cannot be utilised in an area in which parliament or the legislature has acted unless the statute expressly mandates court intervention. In circumstances where court intervention is mandated, such intervention can only occur in accordance with the procedure set out in the statute. There is an exception to this rule. The Superior Court can exercise its inherent jurisdiction to grant declaratory relief if there is a functional gap in the legislation: Danso-Coffey v. Ontario, 2010 CarswellOnt 1290, at paras. 29-32.
[19] In addition, the Rules do not refer to a Minster’s garnishment letter issued under the RSTA. Rule 60.02(1)(b) permits the enforcement of “an order for the payment or recovery of money” by garnishment under Rule 60.08. The Rules apply to all civil proceedings in the Court of Appeal and the Superior Court of Justice: Rule 1.02(1). Therefore, the “order for payment or recovery” applies to orders obtained by the process of the Superior Court or Court of Appeal.
[20] A Minister’s garnishment letter is not an order of the Superior Court or Court of Appeal. The garnishment letter was not issued under the Rules. A notice of garnishment is issued by a process prescribed by the Rules: Rule 60.08(6). Rule 60.08(16) (c) and (d) deal with notices of garnishment. A Minister’s garnishment letter is not a notice of garnishment.
[21] Though not raised by the parties, I note that the Minster’s decision to issue an assessment must be exercised “reasonably, not arbitrarily or capriciously”. It is subject to a duty of fairness. The Minister’s decision affects the rights, interests, property, privileges and liberties of Ms. Aquino. Under such circumstances, the Minster’s decision can be subject to judicial review and where appropriate subjected to the extraordinary remedy of certiorari: Martineau v. Matsqui Institution, [1980] 1 S.C.R. 602; West Pointe Greenhouses Ltd. v. Ontario (Minister of Agriculture & Food), 2007 CarswellOnt 8805 (Div. Ct.), at para. 17; Carter v. Ontario, 2010 CarswellOnt 10545, at para. 26; Danso-Coffey v. Ontario, 2010 CarswellOnt 1290, at para. 18.
[22] I conclude that the practical impact of the Minister’s garnishment letter on Ms. Aquino is rather draconian. Under all these circumstances, no costs shall be awarded.
Barnes J. Date: May 30, 2019
SCHEDULE A
SECTIONS OF RETAIL SALES TAX ACT
REFERRED TO IN THE ABOVE ENDORSEMENT
Section 18(1) Assessment of tax collected
18 (1) Where a vendor fails to make a return or a remittance as required under this Act or if the returns are not substantiated by the vendor’s records, the Minister may make an assessment of the tax collected by such vendor for which the vendor has not accounted and such assessed amount shall thereupon be deemed to be the tax collected by the vendor. R.S.O. 1990, c. R.31, s. 18 (1).
Section 18.1
Assessment, non-arm’s length transfers
18.1 (1) In this section,
“member of his or her family” means, in relation to a transferor, the parent, spouse, grandparent, child, grandchild, son-in-law, daughter-in-law, father-in-law or mother-in-law of the transferor; (“membre de sa famille”)
“spouse” means spouse as defined in section 29 of the Family Law Act. (“conjoint”) 2001, c. 23, s. 195; 2005, c. 5, s. 62 (9).
Liability to pay
(2) If at any time a person transfers property (including money), either directly or indirectly, by means of a trust or by any other means to a member of his or her family, to an individual who is less than 18 years old at the time of the transfer, or to another person with whom the transferor is not dealing at arm’s length, the transferor and transferee are jointly and severally liable to pay under this Act the amount determined under subsection (4). 2001, c. 23, s. 195; 2005, c. 5, s. 62 (10).
Same
(3) For the purpose of subsection (2), persons shall be deemed not to deal with each other at arm’s length if, by reason of subsections 251 (1) to (6) of the Income Tax Act (Canada), they are related to each other for the purposes of that Act. 2001, c. 23, s. 195.
Amount payable
(4) The amount referred to in subsection (2) is the lesser of “A” and “B” where,
“A” is the amount, if any, by which the fair market value of the property transferred, at the time of the transfer, exceeds the fair market value, at the time of the transfer, of the consideration given by the transferee for the transfer, and
“B” is the total of all amounts each of which is,
(a) any tax payable by the transferor under this Act at the time of the transfer or at any previous time but not paid,
(b) any tax collected, collectable or payable but not remitted or transmitted as required under this Act by the transferor for the reporting period during which the transfer took place or any previous reporting period,
(c) any penalty or interest for which the transferor is liable under this Act at the time of the transfer. 2001, c. 23, s. 195.
Same
(5) Nothing in subsection (2) or (4) limits the liability of the transferor or transferee under any other provision of this Act. 2001, c. 23, s. 195.
Assessment
(6) The Minister may assess a transferee at any time in respect of any amount payable by reason of this section, and sections 24 and 25 apply, with necessary modifications, to the assessment. 2001, c. 23, s. 195.
Effect of payment
(7) If a transferor and transferee are jointly and severally liable to pay an amount under this section,
(a) a payment by the transferee on account of the transferee’s liability discharges the joint liability, to the extent of the payment; and
(b) a payment by the transferor on account of the transferor’s liability under this Act discharges the transferee’s liability under this section to the extent that the payment reduces the balance of the transferor’s liability under this Act to an amount less than the amount of the transferee’s liability under this section. 2001, c. 23, s. 195.
Exception
(8) Subsection (2) does not apply with respect to a transfer of property (including money) between spouses,
(a) under a decree, order or judgment of a competent tribunal; or
(b) under a written separation agreement if, at the time of the transfer, the transferor and transferee were living separate and apart as a result of a breakdown of their relationship. 2001, c. 23, s. 195; 2005, c. 5, s. 62 (11).
Section 18(9) Payment
(9) Every person assessed under this section shall pay to the Minister the amount assessed whether or not an objection to, or an appeal from, the assessment is outstanding. 1994, c. 13, s. 13.
Section 25(1)
Appeal
25 (1) When the Minister has given the notification required by subsection 24 (4), the person who has served a notice of objection under that section may appeal to the Superior Court of Justice to have the assessment or statement so objected to vacated or varied, but no appeal under this section shall be instituted after the expiration of ninety days from the day notice has been mailed to such person under subsection 24 (4). R.S.O. 1990, c. R.31, s. 25 (1); 2001, c. 23, s. 198 (1).
Appeal, how instituted
(2) An appeal to the Superior Court of Justice shall be instituted by,
(a) filing a notice of appeal with the court in the form approved by the Minister;
(b) paying a fee to the court in the same amount and manner as the fee payable under regulations made under the Administration of Justice Act on the issue of a statement of claim; and
(c) serving on the Minister a copy of the notice of appeal as filed. 1997, c. 43, Sched. D, s. 9; 2001, c. 23, s. 198 (2).
Limitation
(2.1) A person is entitled to raise by way of appeal only those issues raised by the person in a notice of objection to the assessment being appealed and in respect of which the person has complied or was deemed to have complied with subsection 24 (1.1). 1997, c. 43, Sched. D, s. 9.
Exception
(2.2) Despite subsection (2.1), a person may raise by way of appeal an issue forming the basis of a fresh statement or reassessment or of a variation of an assessment or statement under subsection 24 (4) if the issue was not part of the assessment or statement with respect to which the person served the notice of objection. 1997, c. 43, Sched. D, s. 9.
Application, subss. (2.1) and (2.2)
(2.3) Subsections (2.1) and (2.2) apply only in respect of appeals in respect of which the period of 90 days referred to in subsection (1) begins after December 31, 1997. 1997, c. 43, Sched. D, s. 9.
Waived right of objection or appeal
(2.4) Despite subsection (1), no person shall institute an appeal under this section to have an assessment or statement vacated or varied in respect of an issue for which the right of objection or appeal has been waived in writing by or on behalf of the person. 1997, c. 43, Sched. D, s. 9.
Service
(3) A notice of appeal shall be served on the Minister by being sent by registered mail addressed to the Minister. R.S.O. 1990, c. R.31, s. 25 (3).
Statement of allegations
(4) The person appealing shall set out in the notice of appeal a statement of the allegations of fact and the statutory provisions and reasons that the person intends to submit in supporting the appeal. R.S.O. 1990, c. R.31, s. 25 (4).
Extension of time
(5) The time within which a notice of objection is to be served or an appeal is to be instituted may be extended by the Minister if application for extension is made,
(a) in respect of a notice of objection under subsection 24 (1),
(i) before the expiration of the time allowed under that subsection for service of notice of the objection, or
(ii) within one year from the day of mailing or delivery by personal service of the notice of assessment or statement of disallowance that is the subject of the objection where the person wishing to make objection furnishes to the Minister an explanation satisfactory to the Minister that explains why the notice of objection could not be served in accordance with subsection 24 (1); or
(b) with respect to an appeal, before the expiry of the time allowed under subsection (1) for instituting the appeal. R.S.O. 1990, c. R.31, s. 25 (5); 2006, c. 33, Sched. Z.4, s. 5.
Motion to strike out notice of appeal
(6) The Minister may move to the Superior Court of Justice to have a notice of appeal struck out in whole or in part. 2011, c. 9, Sched. 37, s. 3.
Notice of motion
(7) The Minister shall give written notice of a motion under subsection (6) to the person appealing at least 21 days before the motion is made. 2011, c. 9, Sched. 37, s. 3.
Striking out notice of appeal
(8) The court may strike out the notice of appeal in whole or in part upon being satisfied that one or more of the requirements of this section relating to a notice of appeal or to the instituting of an appeal have not been met. 2011, c. 9, Sched. 37, s. 3.
Section 26
Reply to notice of appeal
26 The Minister shall with all due dispatch serve on the person appealing and file in the court a reply to the notice of appeal admitting or denying the facts alleged and containing a statement of such further allegations of fact and all statutory provisions and reasons as he or she intends to rely on, and where the Minister has failed to serve the reply within 180 days from the date of service upon him or her of the notice of appeal, the appellant may, upon twenty-one days notice to the Minister, bring a motion before a judge of the Superior Court of Justice for an order requiring the reply to be served within such time as the judge shall order, and the judge may, if he or she considers it proper in the circumstances, also order that, upon failure by the Minister to serve the reply in the time specified in the order, the assessment or statement with respect to which the appeal is taken shall be vacated and any tax paid pursuant to such assessment, or any refund disallowed pursuant to such statement, shall be repaid or refunded to the appellant but nothing in this section revives an appeal that is void or affects a statement or assessment that has become valid and binding under subsection 18 (8), subsection 19 (3) or subsection 20 (9). R.S.O. 1990, c. R.31, s. 26; 1999, c. 9, s. 187; 2001, c. 23, s. 199.
Section 27
Appeal procedure
27 (1) Upon the filing of the material referred to in section 26 with the Superior Court of Justice, the matter shall be deemed to be an action in the court. R.S.O. 1990, c. R.31, s. 27 (1); 2001, c. 23, s. 200.
Facts not set out may be pleaded
(2) Any fact or statutory provision not set out in the notice of appeal or reply may be pleaded or referred to in such manner and upon such terms as the court may direct. R.S.O. 1990, c. R.31, s. 27 (2).
Disposal of appeal
(3) The court may dispose of the appeal by,
(a) dismissing it;
(b) allowing it; or
(c) allowing it, and,
(i) vacating the assessment,
(ii) varying the assessment,
(iii) restoring the assessment, or
(iv) referring the assessment back to the Minister for reconsideration and reassessment. R.S.O. 1990, c. R.31, s. 27 (3).
Court may order payment of tax, etc.
(4) The court may, in delivering judgment disposing of an appeal, order payment or refund of tax by the appellant or the Minister, as the case may be, and may make such order as to costs as is considered proper. R.S.O. 1990, c. R.31, s. 27 (4); 1994, c. 13, s. 8 (1).
Section 27.1
Dismissing appeal for delay
27.1 (1) If the person appealing fails to set the appeal down for trial within seven years after it is instituted under section 25, the Minister may move to the Superior Court of Justice for an order dismissing the appeal for delay. 2011, c. 9, Sched. 37, s. 4.
Notice of motion
(2) The Minister shall give written notice of a motion under subsection (1) to the person appealing at least 21 days before the motion is made. 2011, c. 9, Sched. 37, s. 4.
Order
(3) At the hearing of the motion under subsection (1), the person appealing shall show cause why the appeal should not be dismissed for delay and the court may,
(a) if it is not satisfied that the appeal should proceed, dismiss the appeal for delay with or without costs; or
(b) if it is satisfied that the appeal should proceed,
(i) set time periods for completion of the remaining steps necessary to have the appeal placed on a trial list and order that it be placed on a trial list within a specified time, or
(ii) make such other order as is just. 2011, c. 9, Sched. 37, s. 4.
Setting aside dismissal
(4) An order dismissing an appeal under this section may be set aside in accordance with the Rules of Civil Procedure. 2011, c. 9, Sched. 37, s. 4.
Section 28
Appeal proceedings closed to public
28 Proceedings pursuant to sections 25, 26, 27 and 29 shall be closed to the public on request made to the court by the person appealing or by the Minister. R.S.O. 1990, c. R.31, s. 28.
Section 29
Appeals, Superior Court of Justice practice to govern
29 The practice and procedure of the Superior Court of Justice, including the right of appeal and the practice and procedure relating to appeals, apply to every matter deemed to be an action under section 25, and every judgment and order given or made in every such action may be enforced in the same manner and by the like process as a judgment or order given or made in an action commenced in the court. R.S.O. 1990, c. R.31, s. 29; 2001, c. 23, s. 201.
Section Amendments with date in force (d/m/y)
Section 29.1
Application under subrule 14.05 (2), Rules of Civil Procedure
29.1 (1) If the following conditions are satisfied, a person may make an application under subrule 14.05 (2) of the Rules of Civil Procedure to a judge of the Superior Court of Justice:
- The application is to determine one or more issues of law that depend solely on the interpretation of,
i. this Act or the regulations, or
ii. this Act or the regulations and another Ontario statute or regulation.
The Minister has indicated in writing that the Minister is satisfied that it is in the public interest for the applicant to make the application.
The Minister and the applicant have executed a statement of agreed facts on which they both intend to rely and the applicant files the statement as part of the applicant’s application record.
No facts remain in dispute between the Minister and the applicant that either of them believes may be relevant to the determination of any issue of law that is a subject of the application. 2006, c. 33, Sched. Z.4, s. 6.
Application of rule 38.10, Rules of Civil Procedure
(2) Rule 38.10 of the Rules of Civil Procedure does not apply to an application referred to in this section, except that the presiding judge may, on the hearing of the application, adjourn the application in whole or in part and with or without terms under clause 38.10 (1) (a). 2006, c. 33, Sched. Z.4, s. 6.
Disposition of application
(3) The court may dispose of an application that is authorized under this section by,
(a) making a declaration of law in respect of one or more issues of law forming the subject of the application;
(b) declining to make a declaration of law in respect of any of the issues of law forming the subject of the application; or
(c) dismissing the application. 2006, c. 33, Sched. Z.4, s. 6.
Effect of declaration of law
(4) No declaration of law made on an application under this section,
(a) shall be binding on the Minister and the applicant except in relation to the facts agreed to by them in the proceeding; or
(b) shall otherwise affect the rights of the Minister or the applicant in any appeal instituted under this Act. 2006, c. 33, Sched. Z.4, s. 6.
No applications under subrule 14.05 (3)
(5) No person other than the Minister may bring an application under subrule 14.05 (3) of the Rules of Civil Procedure on or after the day this section comes into force, in respect of any matter arising under this Act. 2006, c. 33, Sched. Z.4, s. 6.
Other proceedings
(6) On the motion of the Minister, the court shall dismiss a proceeding commenced by an application under rule 14.05 of the Rules of Civil Procedure relating to a matter under this Act or the regulations if any condition in subsection (1) has not been satisfied or the application is prohibited under subsection (5). 2006, c. 33, Sched. Z.4, s. 6.
Section 36 Garnishment
36 (1) When the Minister has knowledge or suspects that a person (a “third party”) is, or within 365 days will become, indebted or liable to make any payment to a person (a “tax debtor”) liable to make a payment or remittance under this Act, the Minister may, by registered letter or by letter served personally, require the third party to promptly pay to the Minister any money that is otherwise payable by the third party to the tax debtor in whole or in part during the 365 days after the third party receives the letter. 2001, c. 23, s. 205 (1).
Same
(2) If the Minister has knowledge or suspects that within 365 days,
(a) a bank, credit union, trust corporation or other similar person (in this section referred to as the “institution”) will loan or advance money to, or make a payment on behalf of, or make a payment in respect of a negotiable instrument issued by a person who is liable to make a payment or remittance under this Act and who is indebted to the institution; or
(b) a person other than an institution will loan or advance money to or make a payment on behalf of a person who is liable to make a payment or remittance under this Act and who is,
(i) employed by or engaged in providing goods or services to that person or who was or will within 365 days be so employed or engaged, or
(ii) not dealing at arm’s length with that person,
the Minister may, by registered letter, or by letter served personally, require the institution or person, as the case may be, to pay forthwith to the Minister on account of the liability of the person liable to make a payment or remittance under this Act all or part of the money that would otherwise have been loaned, advanced or paid, and any money paid to the Minister shall be deemed to have been loaned, advanced or paid, as the case may be, to the person liable to make a payment or remittance under this Act. 2012, c. 8, Sched. 54, s. 3 (1).
Same
(2.1) Despite any provision of this or any other Act, when the Minister has knowledge or suspects that a person is, or within 365 days will become, indebted or liable to make any payment to,
(a) a person whose property is subject to the deemed trust created by subsection 22 (1); or
(b) a secured creditor who has a right to receive the payment that, but for a security interest in favour of the secured creditor, would be payable to the person referred to in clause (a),
the Minister may by ordinary mail or by demand served personally, require the first-named person to pay forthwith to the Minister on account of the liability of the person referred to in clause (a) all or part of the money that would otherwise be paid, and any such payment shall become the property of Her Majesty in right of Ontario despite any security interest in it and shall be paid to the Minister in priority to any such security interest. 1997, c. 43, Sched. D, s. 11 (2); 2001, c. 23, s. 205 (2).
Application
(2.2) Subsection (2.1) applies to amounts that become subject to a deemed trust under subsection 22 (1) on or after January 1, 1998, whether or not the security interest was acquired before that date. 1997, c. 43, Sched. D, s. 11 (2).
Continuing effect of requisition
(3) Where, under this section, the Minister has required a person to pay to the Minister money otherwise payable as interest, rent, remuneration, a dividend, an annuity payment or other periodic payment to a person who is liable to make a payment or remittance under this Act,
(a) the requirement shall apply to all such periodic payments to be made by the first-named person to the second-named person after the date of receipt of the Minister’s letter until the liability of the second-named person is satisfied; and
(b) the payments required to be made to the Minister shall be the full amount of each payment or in such lesser amount as the Minister may designate in the Minister’s letter. R.S.O. 1990, c. R.31, s. 36 (3); 1994, c. 13, s. 8 (1).
Receipt
(4) The receipt of the Minister for money paid as required under this section is a good and sufficient discharge of the original liability to the extent of the payment. R.S.O. 1990, c. R.31, s. 36 (4); 1994, c. 13, s. 8 (1).
Liability of debtor
(5) Every person who has discharged any liability to a person liable to make a payment or remittance under this Act without complying with the requirement under this section is liable to pay Her Majesty in right of Ontario an amount equal to the liability discharged or the amount that the person was required under this section to pay to the Minister, whichever is the lesser. R.S.O. 1990, c. R.31, s. 36 (5); 1994, c. 13, s. 8 (1).
Idem
(6) Every institution or person that fails to comply with a requirement under subsection (2) is liable to pay to Her Majesty in right of Ontario an amount equal to the lesser of,
(a) the aggregate of the money advanced or paid; and
(b) the amount that it was required under subsection (2) to pay to the Minister. R.S.O. 1990, c. R.31, s. 36 (6); 1994, c. 13, s. 8 (1); 2012, c. 8, Sched. 54, s. 3 (2).
Service of garnishee
(7) If a person (a “third party”) who is, or within 365 days will become, indebted or liable to make a payment to a person liable to make a payment or remittance under this Act carries on business under a name or style other than the third party’s own name, the letter under this section from the Minister to the third party may be addressed using the name or style under which the third party carries on business and, in the case of personal service, the letter shall be deemed to have been validly served if it is left with an adult employed at the place of business of the addressee. 2001, c. 23, s. 205 (3).
Same
(8) If persons (“partners”) who are, or within 365 days will become, indebted or liable to make a payment to a person liable to make a payment or remittance under this Act carry on business in partnership, the letter under this section from the Minister to the partners may be addressed to the partnership name and, in the case of personal service, the letter shall be deemed to have been validly served if it is served on a partner or left with an adult employed at the place of business of the partnership. 2001, c. 23, s. 205 (3).
Application of Wages Act
(9) This section is subject to the provisions of the Wages Act. R.S.O. 1990, c. R.31, s. 36 (9).
Failure to remit
(10) Where any person, without reasonable excuse, has failed to remit to the Minister the money as required under this section, the Minister may apply to the Superior Court of Justice for an order directing such person to remit the money which the person has failed to remit. R.S.O. 1990, c. R.31, s. 36 (10); 1994, c. 13, s. 8 (1); 2001, c. 23, s. 205 (4).
SCHEDULE B
SECTIONS OF THE RULES OF CIVIL PROCEDURE
REFERRED TO IN THE ABOVE ENDORSEMENT
Rule 1.02(1)
1.02 (1) These rules apply to all civil proceedings in the Court of Appeal and in the Superior Court of Justice, subject to the following exceptions:
They do not apply to proceedings in the Small Claims Court, which are governed by Ontario Regulation 258/98 (Rules of the Small Claims Court).
They do not apply to proceedings governed by Ontario Regulation 114/99 (Family Law Rules), except as provided in those rules.
They do not apply if a statute provides for a different procedure. R.R.O. 1990, Reg. 194, r. 1.02 (1); O. Reg. 484/94, s. 1; O. Reg. 288/99, s. 1 (1, 2); O. Reg. 292/99, s. 1 (1, 2); O. Reg. 131/04, s. 1 (1, 2); O. Reg. 394/09, s. 1
Rule 60.02(1)(b)
60.02 (1) In addition to any other method of enforcement provided by law, an order for the payment or recovery of money may be enforced by,
(b) garnishment under rule 60.08;
Rule 60.08(1)-(10)
60.08 (1) A creditor under an order for the payment or recovery of money may enforce it by garnishment of debts payable to the debtor by other persons. R.R.O. 1990, Reg. 194, r. 60.08 (1).
Joint Debts Garnishable
(1.1) Where a debt is payable to the debtor and to one or more co-owners, one-half of the indebtedness or a greater or lesser amount specified in an order made under subrule (16) may be garnished. O. Reg. 171/98, s. 21.
Where Leave Required
(2) If six years or more have elapsed since the date of the order, or if its enforcement is subject to a condition, a notice of garnishment shall not be issued unless leave of the court is first obtained. R.R.O. 1990, Reg. 194, r. 60.08 (2).
(3) An order granting leave to issue a notice of garnishment ceases to have effect if the notice is not issued within one year after the date of the order granting leave, but the court may grant leave again on a subsequent motion. R.R.O. 1990, Reg. 194, r. 60.08 (3).
Renewal
(3.1) A notice of renewal of garnishment may be issued under subrule (6.4) without leave of the court before the original notice of garnishment or any subsequent notice of renewal of garnishment expires. O. Reg. 14/04, s. 26; O. Reg. 186/10, s. 5.
Obtaining Notice of Garnishment
(4) A creditor under an order for the payment or recovery of money who seeks to enforce it by garnishment shall file with the registrar where the proceeding was commenced a requisition for garnishment (Form 60G) together with a copy of the order as entered, any other evidence necessary to establish the amount awarded and the creditor’s entitlement, and an affidavit stating,
(a) the date and amount of any payment received since the order was made;
(b) the amount owing, including postjudgment interest;
(c) details of how the amount owing and the postjudgment interest are calculated;
(c.1) the address of the debtor;
(d) the name and address of each person to whom a notice of garnishment is to be directed;
(e) that the creditor believes that those persons are or will become indebted to the debtor and the grounds for the belief;
(f) such particulars of the debts as are known to the creditor;
(g) where a person to whom a notice of garnishment is to be directed is not in Ontario, that the debtor is entitled to sue that person in Ontario to recover the debt, and the basis of entitlement to sue in Ontario; and
(h) where a person to whom a notice of garnishment is to be directed is not then indebted but will become indebted to the debtor, such particulars of the date on and the circumstances under which the debt will arise as are known to the creditor. R.R.O. 1990, Reg. 194, r. 60.08 (4), O. Reg. 535/92, s. 13.
(5) The affidavit required by subrule (4) may contain statements of the deponent’s information and belief, if the source of the information and the fact of the belief are specified in the affidavit. R.R.O. 1990, Reg. 194, r. 60.08 (5).
(6) On the filing of the requisition and affidavit required by subrule (4), the registrar shall issue notices of garnishment (Form 60H) naming as garnishees the persons named in the affidavit and shall send a copy of each notice of garnishment to the sheriff of the county in which the debtor resides or, if the debtor resides outside Ontario, to the sheriff of the county in which the proceeding was commenced. R.R.O. 1990, Reg. 194, r. 60.08 (6).
(6.1) A notice of garnishment issued under subrule (6) shall name one debtor and one garnishee. O. Reg. 534/95, s. 2.
Duration and Renewal
(6.2) A notice of garnishment remains in force for six years from the date of its issue and for a further six years from each renewal. O. Reg. 14/04, s. 26.
(6.3) A notice of garnishment may be renewed before its expiration by filing with the registrar where the proceeding was commenced a requisition for renewal of garnishment (Form 60G.1) together with the affidavit required by subrule (4). O. Reg. 14/04, s. 26.
(6.4) On the filing of the requisition and affidavit required by subrule (6.3), the registrar shall issue notices of renewal of garnishment (Form 60H.1) naming as garnishees the persons named in the affidavit and shall send a copy of each notice of renewal of garnishment to the sheriff of the county in which the debtor resides or, if the debtor resides outside Ontario, to the sheriff of the county in which the proceeding was commenced. O. Reg. 14/04, s. 26.
(6.5) The provisions of these rules that apply with respect to notices of garnishment also apply with respect to notices of renewal of garnishment. O. Reg. 14/04, s. 26.
Service of Notice of Garnishment
(7) The creditor shall serve the notice of garnishment,
(a) on the debtor, together with a copy of the affidavit required by subrule (4); and
(b) on the garnishee, with a blank garnishee’s statement (Form 60I) attached. R.R.O. 1990, Reg. 194, r. 60.08 (7).
(8) The notice of garnishment shall be served by ordinary mail, or by personal service or an alternative to personal service under rule 16.03. R.R.O. 1990, Reg. 194, r. 60.08 (8).
(9) A notice of garnishment may be served outside Ontario if the debtor would be entitled to sue the garnishee in Ontario to recover the debt. R.R.O. 1990, Reg. 194, r. 60.08 (9).
(10) If the garnishee is a financial institution, the notice of garnishment and all further notices required to be served under this rule shall be served at the branch at which the debt is payable. O. Reg. 54/03, s. 1 (1); O. Reg. 131/04, s. 16 (1).
(10.1) Revoked: O. Reg. 131/04, s. 16 (2).
Rule 60.08(16) Garnishment Hearing
(16) On motion by a creditor, debtor, garnishee, co-owner of the debt or any other interested person, the court may,
(a) where it is alleged that the debt of the garnishee to the debtor has been assigned or encumbered, order the assignee or encumbrancer to appear and state the nature and particulars of the claim;
(b) determine the rights and liabilities of the garnishee, the debtor, any co-owner of the debt and any assignee or encumbrancer;
(c) vary or suspend periodic payments under a notice of garnishment; or
(d) determine any other matter in relation to a notice of garnishment,
and the court may proceed in a summary manner, but where the motion is made to a master and raises a genuine issue of fact or of law, it shall be adjourned to be heard by a judge. R.R.O. 1990, Reg. 194, r. 60.08 (16); O. Reg. 536/96, s. 6 (3).
(16.1) A copy of a notice of motion for a garnishment hearing shall be served on the sheriff by ordinary mail, or by personal service or an alternative to personal service under rule 16.03. O. Reg. 536/96, s. 6 (4).
Time for Motion
(16.2) A person who has been served with a notice to co-owner is not entitled to dispute the enforcement of the creditor’s order for the payment or recovery of money or a payment made in accordance with the Creditors’ Relief Act, 2010 unless the person moves for a garnishment hearing within 30 days after being served with the notice. O. Reg. 536/96, s. 6 (4); O. Reg. 55/12, s. 6.