COURT FILE NO.: CV-18-00138604-0000 DATE: 20240212 CORRECTED DATE : 20240214

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 784773 Ontario Limited O/A Lowton Co-Tenancy, Plaintiff AND: Michael Larkin and Larkin + Land Use Planners Inc., Defendants

BEFORE: Justice V. Christie

COUNSEL: Neil Wilson and Roshni Khemraj, Counsel for the Plaintiff Michael Larkin, self represented

HEARD: February 8, 2024

Corrected Endorsement: The text of the original Endorsement was corrected on February 14, 2024 and the description of the correction is appended.

ENDORSEMENT

RE: CONTEMPT / REFUSALS / EXAMINATION IN AID

CHRISTIE J.

Overview / Background Facts

[1] This is a post-judgment motion brought by the Plaintiff, initially seeking the following relief:

a. A contempt order under Rules 60.11(1) and 60.18(5) against the Defendants Michael Larkin and Larkin + Land Use Planners Inc.; b. An order compelling production of the Refused Documents; c. An order that the Defendants re-attend at their examination in aid of execution; d. An order under r. 60.18(6) for the examination of Michael Larkin's wife, Joan Larkin; e. Costs of this motion on a full indemnity basis.

By the time this motion was heard, the Plaintiff acknowledged that the Defendants had substantially complied with the previous orders of this court, and, therefore, the request for a contempt order was only pursuant to r. 60.18(5).

[2] This action involves an admitted misappropriation of funds by the Defendants when acting as trustees over the course of several years.

[3] By way of background, on March 3, 2021, this court granted a partial judgment in the amount of $1,038,616, pursuant to a r. 51.06 motion, an amount which was not opposed by the Defendants. The Plaintiff’s position was, and continued to be, that there was more owing. At that time, the Plaintiff took the position that the total misappropriation was in excess of $3.5 million, however, by the time of the summary judgment motion, in the spring of 2023, the position on the total misappropriation was significantly less.

[4] During submissions on the summary judgment motion heard on May 26, 2023, the Defendants admitted that money was misappropriated, and that they took $1,728,304 which they were not entitled to take. The Defendants also agreed that they were responsible to pay for the work conducted by the forensic accountants in the amount of $50,238. Of this total amount of $1,778,542, $1,038,616 had already been paid, in satisfaction of the earlier judgment in 2021. The Defendants did not dispute the fact that the remaining funds, $739,926, were not their funds, however, it was their position that the Plaintiff, Lowton, had not demonstrated that the entirety of this money belonged to them as opposed to one of the other two developers, Ardree or Lindvest.

[5] On May 29, 2023, this court issued a judgment against the Defendants. That judgment now amounts to $889,186 ($739,926 plus interest and costs). It should be noted that the Defendants now clearly take issue with this Court’s judgment. This is their prerogative. However, this is not the issue before this court. A decision has been made. A judgment has issued. The amounts owing are determined.

[6] Since that judgment, the total payments made have been $28,204.50, which include $15,880 paid from the Defendants’ former counsel’s trust account pursuant to Court Order dated September 15, 2023, and further monies received by the enforcement office through garnishments. While not all payments have made their way to the Plaintiff, this amount is not in dispute. It should be noted that none of the payments have been voluntary.

[7] On June 13, 2023, counsel for the Plaintiff wrote to counsel for the Defendants requesting a list of the Defendants’ assets and bank statements.

[8] On June 21, 2023, counsel for the Plaintiff wrote to counsel for the Defendants, again, requesting financial information for Michael Larkin and the company. Specifically, the information request was for:

a. Personal tax returns for Michael Larkin from 2019 to present; b. Corporate tax returns for Larkin + Land Use Planners Inc. from 2019 to present; c. Financial statements for Larkin + Land Use Planners Inc. from 2019 to present; d. A list of all bank accounts or investments, current balances and copies of statements from 2019 to present for Michael Larkin; e. A list of all bank accounts or investments, current balances and copies of statements from 2019 to present for Larkin + Land Use Planners Inc.; f. Records showing mortgage payments made towards 1168 Kingdale Road, Newmarket; g. Documents related to the purchase of 21 Oldenburg Court, Oro-Medonte, including a copy of the lawyer's trust statement and evidence of the source of funds for the purchase; h. Records of payments from Larkin + Land Use Planners to Michael Larkin and Joan Larkin from 2019 to present; i. A list of all assets of Michael Larkin and of Larkin + Land Use Planners Inc.

[9] On June 29, 2023, the Defendant Michael Larkin was ordered to attend for an examination in aid of execution on July 27, 2023 and ordered to produce certain documents requested by the Plaintiff, including to produce the documents requested in the letter sent by Mr. Wilson dated June 21, 2023 as soon as possible, and certainly in advance of the July 27, 2023 examination.

[10] On July 26, 2023, the day before the scheduled examination in aid, counsel for the Defendants sent an email to counsel for the Plaintiff and produced some of the information requested in the June 21, 2023 letter. The following documents were not included:

a. Records of payments from Larkin + Land Use Planners to Joan Larkin from 2019 to present; b. Tax returns for Michael Larkin for 2021 or 2022; c. Tax returns or financial statements for Larkin+ Land Use Planners Inc. for 2022; and d. The bank records that were produced did not include copies of cancelled cheques showing payees or payors.

[11] On July 27, 2023, the examination in aid of execution proceeded. There were numerous questions refused.

[12] On August 16, 2023, counsel for the Plaintiff sent a letter to counsel for the Defendants with a list of the questions refused. No response was provided to the letter.

[13] On November 7, 2023, the Defendant Michael Larkin was again ordered to produce the documents requested and to answer a number of undertakings, under advisements and refusals from his examination in aid of execution that occurred on July 27, 2023. Mr. Larkin was present at the Zoom hearing that day and the court was satisfied that he fully understood his obligations within the following 60 days.

[14] On December 28, 2023, counsel for the Defendants produced various partial answers, including an authorization to access bank records. However, the Defendants failed to provide the complete answers required. In particular:

a. Michael Larkin refused to produce records of payments from the company to Joan Larkin from 2019 to present despite two court orders that he do so. The Defendant Larkin stated that he was not authorized to share tax returns for Joan Larkin. b. Michael Larkin failed to provide answers to Refusals #17, #19, #44, #48, #50, #52 and #59 as ordered by the court; c. Michael Larkin also failed to produce personal tax returns, corporate tax returns, and financial statements for 2022 and 2023 as ordered by the court.

With respect to Joan Larkin’s annual salary from the company, Michael Larkin advised that it was $150,000 in 2022 and 2023. This was double what the salary was in 2020. With respect to the undertaking to advise which bank account Michael Larkin’s pay was deposited into, Mr. Larkin responded that his pay and pension payments were previously going into a joint TD Account, which had been blocked by the Plaintiff. The pay, therefore, was now deposited into a CIBC account owned by Joan Larkin which was used for household expenses, including mortgage payments, CPP pension, and old age payment deposits.

[15] According to the Defendant, the November Court Order was respected, and all documents were provided to the Plaintiff, except some that were overlooked or simply not yet available. However, the Defendant claims that personal returns were received from his accountant on January 12, 2024, and have now been provided. The 2022 corporate tax return is in the process of being finalized, however a draft of the 2022 financial statement has been shared. Once the 2022 final tax return is completed, it will be shared.

[16] As previously stated, the Plaintiff accepts that the Defendants have now substantially complied with previous orders of this court, and no longer request a contempt order on that basis. However, according to the Plaintiff, the Defendants have taken steps to avoid paying the judgment, while enjoying a relatively affluent lifestyle, such that a contempt order ought to be made pursuant to r. 60.18(5). The Defendants argue that a contempt order is not necessary and that any steps they have taken were out of necessity in order for them to survive.

Contempt Order

[17] Contempt orders are not made lightly.

[18] In this case, the contempt order is sought pursuant to r. 60.18(5) of the Rules of Civil Procedure which provides as follows:

(5) Where it appears from an examination under subrules (2) to (4) that a debtor has concealed or made away with property to defeat or defraud creditors, a judge may make a contempt order against the debtor.

[19] A civil judgment must be taken seriously. In this case, the Defendants have admitted that money was misappropriated while they acted as trustees, and, at least at one point, they admitted that they took $1,728,304 which they were not entitled to take. This was never their money to use and enjoy. The Court has determined that they must pay this money back. An examination in aid of execution must also be taken seriously. This is a remedy available to a creditor who has obtained a judgment against a debtor, the main purpose of which is to obtain information about the debtor’s ability to pay the judgment. A creditor is, therefore, entitled to ask and should ask questions about the debtor’s income, assets, and liabilities, as well as the debtor’s present, past, and future means to satisfy the judgment. The debtor is expected to help the creditor to understand the full financial picture, which requires full, fair, and frank disclosure to aid in enforcing the judgment.

[20] In 6071376 Canada Inc. v. 3966305 Canada Inc., 2021 ONSC 205, the Plaintiff sought an order to compel the Defendants to disclose records which they claimed were needed to assist in obtaining execution of a judgment totaling nearly $1.2 million. Gomery J. stated in part as follows:

[20] In short, a judgment debtor examination is not a cat and mouse game or any kind of game at all. The plaintiff's claim has been adjudicated and the defendant is liable to pay any damages assessed to the best of his ability. The examining creditor has the right to obtain a full account of the debtor's property, as well as how he has disposed of property he held, all the way back to the time that the debt came into existence. The debtor is obliged to cooperate and even assist in this exercise. If it appears, from the examination, that the debtor "has concealed or made away with property to defeat or defraud creditors", he may be found in contempt; r. 60.18(5).

[21] In Bank of Montreal v. Novapro Equipment Ltd., 2012 ONSC 443, the Plaintiffs sought an order compelling one of the Defendants to comply with his undertakings on examination, and a finding of contempt against the same Defendant, relying on r. 60.18(5). There was some evidence that the Defendant was carrying on business from his home and had transferred inventory to a warehouse. Snowie J. found the Defendant in contempt under r. 60.18(5) and sentenced him to 10 days in jail, with the opportunity to purge the contempt on certain specific terms.

[22] In Thompson v. Thompson, (1988), 65 O.R. (2d) 794 (HCJ), the Rule was utilized in the family law context. A husband was in arrears of child support. The parties had entered into minutes of settlement in which the husband agreed to a lump sum payment or as directed by the court, reserving enforcement to the court. The amount was not paid. The court stated:

[8] In the material before me there is the undisputed fact that the respondent received a $30,000 bequest from his late mother's estate and completely refused to answer questions concerning same (26th May 1987), this being, of course, the subject-matter of the motion before Master Cork because the respondent refused to answer questions about the $30,000 bequest. He finally did answer questions which were most unsatisfactory, simply indicating that he, after paying creditors, had about $15,000 and he spent the rest of the money, inter alia, for trips to Ireland and Cuba. He paid the petitioner nothing, notwithstanding the order against him. Mr. Bohm says this matter is mentioned in the notice of motion, namely, R. 60.18(5), and that from the facts I have before me, I can jail the respondent for contempt because he has flouted court orders. He says this is the basis upon which I can order the respondent jailed for contempt.

The court held the husband in contempt, pursuant to r. 60.18(5).

[23] Following the judgment of this court in May 2023, while this court is willing to accept that Mr. Larkin and the company are struggling in some respects, Mr. Larkin continues to have a comfortable lifestyle with the benefit of business and personal expenses being paid since the date of the judgment. He has been able to maintain this lifestyle despite the Plaintiff’s persistent efforts to collect. Mr. Larkin has been able to accomplish this by concealing assets and putting the assets out of the reach of the Plaintiff. Specifically:

a. Rather than having his pay deposited into a known account, his own account, which would be subject to garnishment, Michael Larkin, admittedly, had his pay deposited into his wife’s account – Joan Larkin’s account. As stated in his response to an undertaking on this issue:

Mr. Larkin's pay and pension payments were going into a joint TD Account, which has been blocked by the Plaintiff. The pay is now deposited into a CIBC account owned by Joan Larkin which is used for Household expenses, including mortgage payments, CPP pension (Michael and Joan) and Old Age payment deposits (Michael and Joan).

In his affidavit served in response to this motion, Mr. Larkin explained that the first Notice of Garnishment issued to the company was on November 6, 2023, although earlier Notices were issued to various banks. (This court notes that a letter was faxed to the company on November 3, 2023 enclosing the Notice of Garnishment issued November 2, 2023, although Mr. Larkin explained that the company does not receive faxes and that this letter was received a few days later.) Therefore, Mr. Larkin argued that his pay, when issued prior to November 2023, was deposited into his wife’s personal account “by necessity” and that it would not have been in violation of the Garnishment. He further explained that he did not take any pay in October or November, only partial pay in December, and none in January. Based on this information, apart from some unknown amount received in December, it is not clear to this court that Mr. Larkin received any pay from the company after the company received the Notice. Although, it is clear that once the Notice of Garnishment was issued to the company, the company was required to make the payments to the sheriff, subject to section 7 of the Wages Act (Rule 60.08(14) of the Rules of Civil Procedure). The Wages Act, R.S.O. 1990, c. W.1, section 7, makes it clear that it is the net wages that are subject to garnishment, and that only 20% of the wages are to be sent to the Sherriff as, pursuant to 7(2), 80% of a person’s wages are exempt from seizure or garnishment. Given that it appears that the 20% was not sent to the Sherriff for the money received in December, this is a clear violation of the Garnishment on the part of the company. However, before the Notice of Garnishment was issued to the company, but after the judgment, and after Notice of Garnishment to the banks, Mr. Larkin was re-directing the money received into his wife’s account to avoid the reach of the creditors. Mr. Larkin’s intention to deposit his pay into his wife’s account as stated is clearly a “work around” paying this judgment and making his own expenses the priority. The Plaintiff is unable to garnish said account because there is no judgment against Mrs. Larkin. This is a clear intention to make away with assets to defeat the creditors, given the intention to have assets placed deliberately outside the reach of the creditors. This falls squarely into the behaviour captured in r. 60.18(5).

b. Michael Larkin opened a new account at Scotiabank in August 2023, the existence of which he did not disclose to the Plaintiff until the end of January 2024, days before this hearing. Quite arguably, the failure to disclose this account was in breach of this court’s order from November 7, 2023, wherein it was specifically ordered that the Defendants produce a list of all bank accounts, balances, and statements. The Scotiabank records now provided show that, since its opening, approximately $346,000 has gone into this account from customers. The money then flowed out of this account to various sources, some of which would appear likely to be legitimate business expenses, while others would appear to be personal living expenses. This court accepts that Mr. Larkin would have had no ability to receive his pay into and pay expenses (business or personal) from a garnished account. This court accepts that Mr. Larkin would need access to some funds simply to survive. However, the proper way to ensure this is not to open a new undisclosed account. The proper way to do this would have been to negotiate with the Plaintiff for access to a percentage of the funds, failing which, to seek an Order from the court. Rather than following this approach, Mr. Larkin did an “end run around” the garnished accounts. This is not proper. The opening of this account allowed Mr. Larkin to receive substantial amounts of money in customer receivables, from which he paid his spouse, and his personal expenses, apparently his lawyer, as well as other unknown transfers, while making no payment whatsoever to the Plaintiff toward this judgment. Whether specifically drawing a salary or not, Mr. Larkin reaped the benefits of this money, while the Plaintiff received nothing at all. All of this “receivables” money would have been subject to garnishment if received into the known business accounts. Mr. Larkin’s response, that he had no choice because his accounts were frozen, demonstrates a desire and commitment to prioritize himself, his family, and his company over that of this judgment. Again, this is not how this works. Certainly, receivable deposits would have been permitted and accepted into the known garnished accounts. Of course, withdrawals, as occurred in the Scotiabank account, would not have been permitted. Rather the money would have been directed to the Sherriff to satisfy the judgment. Rather than setting up an entirely new account to defeat his creditors completely, Mr. Larkin could have requested access to certain funds to pay expenses, either by approaching the Plaintiff with a proposal or by coming to court to seek some relief. He did not do that. Instead, Mr. Larkin took full control of this money and used it as he saw fit, which did not include any payment toward the judgment. Again, this is exactly the behaviour that r. 60.18(5) is contemplating.

c. Michael Larkin has refused, and continues to refuse, to disclose the names associated with the accounts receivables for the company. These receivables are unquestionably the main asset of the company. Like any other asset, those receivables can be garnished, a step which has not been possible for the Plaintiff to take as the persons / entities associated with the receivables are unknown. While the identity of persons / entities associated with the receivables remain unknown, significant monies have been received into the Scotiabank account, presumably from some of these receivables. Mr. Larkin’s reason for refusal to provide this information is simply that he does not want the Plaintiff to approach the customers / clients, resulting in lost business. In his responding affidavit to this motion, he stated, at P1.23:

(d) The Plaintiff is seeking to be advised as to which clients of Larkin + Land Use Planners owes the company money (Refusal #29): I have provided a list of receivables to the Plaintiff previously and have included the list on the document server (with Client names redacted for the reason specified). As noted in paragraph P1.23(b), should the Plaintiff proceed with Notices of Garnishee to my Clients then the Plaintiff will have effectively destroyed my business: I would have no funds to maintain my business operations and the company would be forced to close. This will ultimately frustrate the Plaintiff ability to achieve payment of the funds deemed due to them through Justice Christie's Judgement of May 29, 2023. (e) The Plaintiff is seeking to be provided with a current receivables list of Larkin + Land Use Planners, complete with names (Refusal #30): This is essentially the same request as (d). I have provided a list of receivables to the Plaintiff previously and have included them on the document server (with Client names redacted for the reason specified). The Plaintiff wants the names included so they may proceed to issue notices of garnishee to my clients. This action will destroy my business and render any opportunity to pay the judgement impossible.

This is not an appropriate basis upon which to refuse to provide this information. Assets cannot be concealed in this way. These assets are not any different from any other assets of the business. This is a professional services business. The main assets are these receivables. Those receivables are subject to garnishment. This court accepts that providing these names, and having the Plaintiff approach these clients, may well damage the business, however, this is not a proper basis upon which to refuse this information. This is simply a function of the debt owing and the obligation of the Defendants to pay that debt. Further, Mr. Larkin’s suggestion that it is to the Plaintiff’s benefit that his business be maintained and able to collect receivables has not been demonstrated. The company has been collecting considerable receivables through the Scotiabank account since August and this has not benefited the Plaintiff one bit.

d. Joan Larkin, Michael Larkin’s wife, is now being paid $150,000 per year for being the office manager / bookkeeper of this small planning business in deep financial trouble. The progression of her salary is admitted. In Mr. Larkin’s affidavit in response to this motion, he explained that his wife’s initial salary was $70,000 when she joined the company in 2016 on a part-time basis. It increased in 2018 to $78,000 in “response to her increased workload commensurate with the growth of the company to 18 employees, and the hours she was putting in which were close to full-time employment.” Mr. Larkin explained that the salary was subsequently reduced to $75,000 due to cash-flow issues and it remained at this level until 2021. In 2021, her salary was increased to $90,000. In 2022, her salary was increased to $150,000, where it remained for 2023. Mr. Larkin claims that the salary was adjusted in consultation with his accountant and prior to this court’s judgment. This is an extraordinary salary for the role being performed and the modest nature of this company, especially given the struggles in 2023. Mr. Larkin was unable to pay himself at all since October 2023, yet his wife continued earning $150,000 per year from this struggling company.

e. Michael Larkin and his wife continue to live a very comfortable lifestyle, with their only source of income, other than OAS and CPP, being the company. This is certainly not a situation of impecuniosity. The personal expenses paid, as demonstrated by the documentation, show a family who is assisting their adult daughter with her rent, payment for various streaming services, restaurants, and wineries. This is most certainly a lifestyle out of reach for many people. In 2023, Joan Larkin purchased a new truck, a Chevy Sierra, for $110,000, and is making substantial payments on this truck each month - $1400. The couple leased a new Mercedes in January 2023, which requires payments of $1600 per month. The couple own and maintain a $1.7 million home, which Joan Larkin purchased in July 2022. Mr. Larkin claims that these purchases were made at a time when he did not believe that he owed any further money to the Plaintiff. Even accepting this to be true, the payments to maintain this home and vehicles are continuing to be made with full knowledge of the judgment currently outstanding. While there may have been nothing wrong with the family making these purchases when they did, this lifestyle is completely inconsistent with an outstanding $900,000 judgment, toward which there have been no voluntary payments.

[24] Frankly, it would appear to this court that Mr. Larkin does not have his priorities in the proper order. As stated, this is not a situation of impecuniosity. There is money available, but it is not flowing in the right direction. Mr. Larkin is most concerned with keeping his business operating at a successful level and maintaining his accustomed to lifestyle. While Mr. Larkin acknowledges the importance of paying this debt, it would seem that he is only willing to do so after him, his family, and his business are taken care of, in the manner they are used to, and that this debt will receive the leftovers, if any. This is simply not how it works.

[25] This court is satisfied, beyond a reasonable doubt, that Michael Larkin and the company have not complied with their obligations as judgment debtors. Mr. Larkin has actively and improperly avoided his obligations. He has concealed and made away with assets that defeat his main creditor, the Plaintiff. As a result of his deliberate actions, he has rendered the judgment unenforceable. His deliberate steps have allowed him to continue to receive substantial account receivables, maintaining his accustomed to lifestyle, without a penny being paid toward the judgment. The net result of this conduct is that minimal payments have been made toward the judgment and no voluntary payments.

[26] Mr. Larkin claims that a contempt order is not necessary to ensure that he understands and complies with his obligations pursuant to this judgment. His actions would demonstrate otherwise. This court is fully satisfied, beyond a reasonable doubt, that Mr. Larkin has acted in the way contemplated by r. 60.18(5) and that a contempt order is necessary. A contempt order in these circumstances is consistent with the purpose of contempt orders generally, that being to encourage compliance and encourage respect for the court process.

[27] A finding of contempt pursuant to r. 60.18(5) is made. Before sentencing, Mr. Larkin will have ample opportunity to purge the contempt and make things right.

Answer All Remaining Refused and Under Advisement Questions

[28] With respect to the remaining refused and under advisement questions, there are several that remain outstanding, however, during the hearing, the Defendant agreed to provide, or make best efforts to provide, most of the information sought, including refusals 3, 6, 11, 33, 41, 49, 51, 57, 58, and under advisements 1 (to sign an authorization to allow the Plaintiff to obtain these documents from the financial institution), 3, and 8. Mr. Larkin stated that he had previously refused on the basis of legal advice, but he is now willing to provide this information. With respect to refusal 25, Mr. Larkin stated that he does not have a copy of the accountant’s file, but if it is ordered by this court, he will obtain it, to the extent that a file exists, from the accountant. Certainly, the accountant’s file will shed light on the means available to satisfy the debt. It must be provided. As for refusal 26, Mr. Larkin indicated that he was prepared to provide the employment contracts (offers of employment) redacted for names, including one employee that is no longer with the company. There is no valid reason to redact this information. The Plaintiff is entitled to know the full financial picture of the company and is willing to accept employment contracts (offers of employment) from 2021 forward in an unredacted form. This is to be provided.

[29] As for refusals 27, 28, 29, and 30, this all relates to providing the identity of the customers, including those that owe the company money. Mr. Larkin expressed his concerns about providing this information. This court understands the Defendant’s position. If the Plaintiff approaches these customers, it could very well have a negative impact on the business. However, this is not a proper reason for refusal as indicated above. It is admitted that the receivables are the major assets of the company and are subject to garnishment the same as any other asset. The Plaintiff should not be denied this information.

[30] As for under advisement 2, Mr. Larkin argued that this is Joan Larkin’s personal information and, therefore, this is not an appropriate request. This court does not agree. A T4 slip identifies all of the remuneration paid by an employer to an employee during a calendar year. The remuneration that the company Defendant is reporting paying Joan Larkin is obviously highly relevant in these proceedings. This is a business record of the company. This must be provided. As for under advisement 10, Mr. Larkin states that he only has one insurance policy for $15,000 which is in place to cover expenses on his passing. He stated that he did not know the value of providing this to the Plaintiff. The insurance policy is relevant as it appears to have a cash value. A policy with a cash value is considered an asset of the Defendant. It must be provided.

[31] All of the remaining refusals and under advisements are completely appropriate and reasonable. There was no basis upon which to refuse these requests in the first place. All of these must be answered.

Re-attend at Examination

[32] There is no question that the Plaintiff is entitled to a proper examination in aid of execution, one without improper refusals and with complete documentation. So far, the Plaintiff has been denied this. Mr. Larkin is to reattend for an examination in aid of execution.

Attendance of Joan Larkin at Examination in Aid

[33] Joan Larkin is the wife of the Defendant, Michael Larkin. Significantly, she is also the bookkeeper and office manager for the business. She is now being paid $150,000 per year for her work with the company. Further, Michael Larkin’s pay, when received, is being deposited into her bank account. This is admittedly for the pay to avoid the impact of the garnishment.

[34] Rule 60.18(6) of the Rules of Civil Procedure allows for an examination of a person other than the debtor “where any difficulty arises concerning the enforcement of an order”, where the court is satisfied that person may have knowledge of the financial circumstances.

[35] It seems obvious that Joan Larkin would have knowledge of the relevant financial circumstances, given that:

a. She is Michael Larkin’s wife; b. The matrimonial home is in her name; c. She purchased a new truck in 2023; d. She is / was receiving Michael Larkin’s pay into her personal account; e. She is the office manager / bookkeeper of the company

[36] Mr. Larkin claims that his wife will experience great stress and anxiety from such an examination and that there is nothing she can offer that is not already known.

[37] While this court is satisfied that there is a basis upon which to order Joan Larkin to attend for an examination, it is hoped that this can be avoided. If Mr. Larkin takes the steps required of him and refrains from taking steps that he should not take, the financial picture should come into focus. For the time being, perhaps, written questions and answers can avoid the need for an examination. The Plaintiff must put their specific questions in writing and Joan Larkin must respond to those questions, in affidavit form, within 15 days of receiving the questions.

Conclusion

[38] For all of the foregoing reasons, there will be an Order to go as follows:

(a) The Defendants, Michael Larkin and Larkin + Land Use Planners Inc., are hereby found in contempt of court pursuant to r. 60.18(5) of the Rules of Civil Procedure. (b) The Defendants, Michael Larkin and Larkin + Land Use Planners Inc., may purge this contempt by taking a number of steps prior to the return date of this matter, including:

(i) Immediately stop having money owing to Michael Larkin or the company paid into an account held by someone else that is not subject to garnishment. For example, immediately stop Michael Larkin’s pay from being paid into his wife’s account; (ii) Produce an up-to-date list of all bank accounts or investments for Michael Larkin and Larkin + Land Use Planners Inc; (iii) Refrain from opening any new financial accounts for either Michael Larkin or Larkin + Land Use Planners Inc.; (iv) Prepare and provide a proposal to the Plaintiff to allow Michael Larkin and/or the company to have an operating bank account, and pay expenses, while having the accounts garnished.

(c) The Defendants shall answer the questions refused and taken under advisement listed in Schedule “A” hereto within 30 days of the date of this Order. (d) Michael Larkin shall re-attend to be examined in aid of execution on a date to be arranged between the parties. (e) The Plaintiff shall provide Joan Larkin with a list of specific questions, which Joan Larkin will answer in affidavit form within 15 days of receiving the questions. (f) The parties shall attend before this court on April 18, 2024, at 2:15 pm, virtually, for a half day, for sentencing or to demonstrate that the contempt has been purged. (g) Costs are reserved to the return of the motion.

Justice V. Christie

Date: February 12, 2024

February 14, 2024 – Correction

1. Para 38(c) refers to Schedule “A” herein. Schedule “A” is now appended to this Endorsement.