The Ontario Court of Appeal has made it clear in Benzacar v Terk, 2024 ONCA 679 that they have no patience for misrepresentation and litigants manipulating the system. This latest decision, affirming a previous Court of Appeal decision that has been denied leave to appeal to the Supreme Court of Canada, provides final say on two legal principles: the effect of incorrect garnishee statements, and the narrow scope for reconsideration.
Garnishment is an enforcement remedy under Rule 60.08 of the Ontario Rules of Civil Procedure that allows a judgment creditor to recoup outstanding payment by redirecting debts payable to the judgment debtor by a third party, referred to as the garnishee, to the judgement creditor. The garnishee, which is oftentimes a bank branch or an employer, is given the chance to dispute the garnishment by filing a garnishee statement within 10 days of notice. If the garnishee fails to provide a garnishee statement, and fails to pay the garnishment, the creditor is entitled to an order for payment of the amount the court found payable by the debtor to the garnishee, or the amount in the notice, whichever is less. The garnishee statement requires the garnishee acknowledge what debts are, or willbe owing, or to explain why there are none.
The Benzacar saga began with Ms. Benzacar receiving various domestic and foreign court orders against her former spouse, Mr. Terk. Unfortunately for Ms. Benzacar, the judgments remained outstanding and so began her 13 year-long pursuit of payment, firstly through enforcement of a foreign judgment, then by garnishment of the judgment on an Ontario corporation, controlled by Mr. Terk. In response, the corporate garnishee delivered a garnishee statement omitting information about any debts owed.
The Court of Appeal found in 2023 ONCA 773 that the garnishee statement was materially false. Mr. Terk, in executing the garnishee statement, misrepresented that the 'insolvent' garnishee was not indebted to him. In reality, Mr. Terk was legally entitled to an annual salary plus car allowances, but had stopped taking payments around the time the judgment against him became enforceable in Ontario.
The Court of Appeal was clear that an incorrect garnishee statement is the equivalent of "no statement" and will be treated as such. The Court directed the garnishee to pay to Ms. Benzacar the amount in the notice of garnishment, which was less than the amount payable to Mr. Terk by the garnishee at the relevant time.
With only a draft order, Mr. Terk filed an application for leave to appeal to the Supreme Court of Canada. Absent a signed and entered Order, the Supreme Court dismissed the application for leave in 2024 SCCA No. 17 ("Benzacar 2023") pursuant to the Rules of the Supreme Court of Canada.
In a tenacious attempt, again, to manipulate a technicality, Mr. Terk launched a motion to the Court of Appeal for reconsideration while leave to the Supreme Court was pending. The basis for the request, made 6 months after initial judgment had been granted, pleaded that, since a formal order had not been taken out, the court was open to reconsider the mathematical amount of the judgment.
However, the Court of Appeal stated unequivocally that reconsideration is a privilege extended only in narrow circumstances. In this case, the court found three reasons why the request for reconsideration should fail. First, the substance of the request lacked arguable merit. Second, the request was an attempt to repackage matters that were already in issue, and third, the interests of finality strongly favoured rejection, stating:
"The narrow path to reconsideration left open by the absence of a formal order becomes, if anything, even narrower when a party has had a lengthy opportunity to take out a final order and does not do so while pursuing leave to appeal to the Supreme Court. At some point, the interests of finality trump the desire of a litigant to keep the litigation pot boiling. That point has been reached in this case."
The Court has told Mr. Terk, and all litigants who seek to prolong the inevitable through vexatious tactics and fruitless requests for reconsideration, at an appropriate point much earlier than occurred in this case, one has to calm down and pay out.
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