Court File and Parties
COURT FILE NO.: CV-19-00617279-0000 DATE: 2022-01-10 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH HIESS Plaintiff
- and – MICHEL ZELNIK Defendant
Counsel: Christopher J. Somerville for the Plaintiff Ryann Atkins for the Garnishee, Lynda Reeves
HEARD: January 10, 2022
PERELL, J.
Endorsement
[1] In effect, there are four motions before me: (a) a garnishment motion brought by the judgment creditor; (b) a motion for an adjournment of the garnishment motion so that a refusals motion can be decided by an associate judge; (c) a refusals motion; and (d) a garnishment cross-motion brought by the garnishee.
[2] In the immediate case, an associate judge would have the jurisdiction to decide the refusals motion, but the associate judge would not have the jurisdiction to decide the garnishment motion and the cross-motion because under rule 60.08 (16) of the Rules of Civil Procedure, R.S.O. 1990, Reg. 194, if “the [garnishment] motion is made to an associate judge and raises a genuine issue of fact or of law, it shall be adjourned to be heard by a judge.”
[3] Although refusals motions are typically heard by an associate judge, a judge has the jurisdiction to decide a refusals motion and in the immediate case, I see no good reason to decline to exercise the jurisdiction I have to decide all the motions that are before the court and which I undoubtedly have the jurisdiction to hear.
[4] Having heard argument on the refusals motion, I dismiss Mr. Hiess’s motion.
[5] I dismiss Mr. Hiess’s refusals motion for the reasons set out in Ms. Reeves’s Refusals Chart and with respect to the questions taken under advisement, for the reasons set out below.
[6] I dismiss Mr. Hiess’s refusals motion because none of the sixteen questions and the two questions taken under advisement that Ms. Reeves refused to answer were proper questions in the context of the garnishment matter that is before the court.
[7] The fundamental core of a garnishment proceeding is whether the garnishee is currently indebted or will in the future become indebted to the judgment debtor. The notion of garnishment is that the judgment creditor intercepts this indebtedness for the benefit of all the judgment creditors.
[8] In the immediate case, fifteen of the sixteen questions that Ms. Reeves refused to answer were irrelevant to the core issue and the two questions taken under advisement were essentially a fishing expedition about Ms. Reeves’s business affairs. She was justified in refusing to answer these questions.
[9] How Ms. Reeves treated for tax purposes the loan that she made to Mr. Zelnik is irrelevant to the predicate issue of whether Mr. Zelnik is indebted to Ms. Reeves.
[10] How Ms. Reeves treated for her income tax returns, the payments she made to Mr. Zelnik, which payments she contends are gifts and which Mr. Hiess contends were payments for Mr. Zelnik’s employment by the Nicaraguan corporation known as Coconut Corp., is irrelevant as to whether Mr. Zelnik owes money to Ms. Reeves. The tax treatment of these matters is irrelevant to the core issue of this garnishment proceeding.
[11] In the immediate case, the only refused questions that had a scintilla of relevance were the matters taken under advisement with respect to Coconut Corp. and refused question #12, Q. 247, which was:
To advise if Ms. Reeves has ever entered into any written agreements with Mr. Zelnik other than the possible written agreement between her and Mr. Zelnik in relation to Coconuts Corp. and the four loan agreements attached to her Garnishee’s Statement and to produce them if they exist.
[12] Apart from the fact that this question is objectionable on a variety of grounds (including vagueness, disproportionality, and objectively fishing), its materiality and relevance could only be with respect to an alleged employment agreement that would support a current or prospective indebtedness of Ms. Reeves to Mr. Zelnik. The employment agreement would be with respect to the work he is alleged to have done for the Nicaraguan corporation known as Coconut Corp.
[13] In the cross-examination of Ms. Reeves and in Mr. Zelnik’s examinations and in his answers to undertakings, all the evidence and documents that are available about Coconut Corp. have already been provided.
[14] When and what Mr. Zelnik did for Coconut Corp. has been provided. The operational and financial history of Coconut Corp. has been provided. The corporation never became operational. The capital was expended on expenses. There was no revenue. The tax treatment of monies advanced for Coconut Corp. for payments to Mr. Zelnik with respect to Coconut Corp. are irrelevant. Thus, if the question was a proper question, it has been answered and no more information is available.
[15] A further examination is a waste of time. Both parties, however, are at liberty to make submissions about what has been proven or disproven and about what adverse inferences may be drawn about the existence of an outstanding or prospective indebtedness between Mr. Zelnik and Ms. Reeves.
[16] Therefore, the refusals motion is dismissed, and I shall proceed with the motion and the cross-motion.
Perell, J. Released: January 10, 2022
Court File and Parties (Duplicate)
COURT FILE NO.: CV-19-00617279-0000 DATE: 2022-01-10 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH HIESS Plaintiff
- and - MICHEL ZELNIK Defendant
Endorsement (Duplicate)
PERELL J. Released: January 10, 2022