Timothy C. Flannery

Following a prior ruling that the defendants incorporated a company to defeat enforcement of a judgment obtained by the plaintiff, the court addressed costs of the motion.

The evidence established that the defendants collaborated to divert income through a corporation to prevent garnishment and frustrate the plaintiff’s efforts to enforce her judgment arising from fraudulent misrepresentation.

The court found the defendants’ conduct akin to fraud and held that substantial indemnity costs were warranted.

In the absence of responding submissions from the defendants, the court reviewed the claimed fees and disbursements and fixed costs.

Substantial indemnity costs were awarded jointly against both defendants.

Following the dismissal of the plaintiff’s action on summary judgment and the dismissal of the plaintiff’s motion to amend pleadings, the court addressed costs.

The defendant relied on two offers to settle and sought partial indemnity costs to the close of pleadings and substantial indemnity costs thereafter.

The court held that under Rule 49.10(2) a defendant’s offer to settle does not give rise to substantial indemnity costs and that the offers lacked sufficient compromise to justify such an award.

The court fixed the defendant’s costs on a partial indemnity basis.

A judgment creditor brought a motion alleging that the debtor incorporated a company and directed his earnings to it in order to defeat enforcement of a judgment exceeding $415,000.

The court examined the debtor’s arrangement under the Assignments and Preferences Act and Rule 60.08(16) of the Rules of Civil Procedure.

Evidence showed that the corporation was created after judgment and that the debtor’s spouse became the sole shareholder while the debtor continued performing the same services, with the admitted purpose of prioritizing repayment to the spouse over the creditor.

The court held that the arrangement constituted an improper preference intended to hinder the creditor.

The garnishee was ordered to honour the notice of garnishment by paying amounts owing to the debtor to the sheriff, though the court declined to find the debtor in contempt.