2017 QCCQ 8311, 2017 QCCQ 8311

Office municipal d'habitation de Montréal c. Kittnar 2017 QCCQ 8311 COURT OF QUEBEC (Practice Division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-22-240432-172 DATE: July 25, 2017 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ OFFICE MUNICIPAL DE L’HABITATION DE MONTRÉAL, Creditor-Applicant v.

MATHANAMOHAN KITTNAR, Debtor-Respondent ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Court is seized of a Contestation of the Debtor’s Declaration pursuant to art. 667 of the Code of Civil Procedure (C.C.P.). [ 2 ] The Debtor, Mr.

Mathanamohan Kittnar, is a tenant of the Creditor, Office Municipal D’Habitation de Montréal (“OMHM”), of a dwelling known as […], Verdun […] (P-2, lease commencing June 1, 2015). [ 3 ] He currently owes OMHM rent in arrears since April 2017 in the amount of $819, the monthly rent being $264 per month. This is a subsidized rent available to Mr. Kittnar pursuant to a social welfare housing system operated by the Creditor. [ 4 ] Mr.

Kittnar sought to avail himself of the system of voluntary deposit established by articles 664 through 670 of the C.C.P. [ 5 ] In his Declaration by Voluntary Deposit Debtor dated June 29, 2017, registered with the Court office in case number 500-20- 022375-171, Mr. Kittnar declares that he owes $653 to the OMHM on account of rent. His Declaration does not mention any other creditor. Under the heading “Calculation of seizable portion of income”, he states $926.26, the amount that he receives as financial assistance pursuant to the Individual and Family Assistance Act [1] , referred to in the Inscription de la

partie débitrice au dépôt volontaire” as “ aide sociale” (“financial assistance”) . [ 6 ] The amount indicated as monthly exemptions (meaning monthly exemptions from seizure) is $1,192.50. He would therefore not have any payment to make to his Creditor from his monthly income.

He nevertheless undertook in his voluntary deposit to pay $100 per month for the benefit of the Creditor. [ 7 ] OMHM’s application states the obvious, namely that it would not be equitable for the Debtor to benefit from this social housing program by paying only $100 per month toward his rent while other tenants pay the full amount of the subsidized low rental housing. It is also obvious that the system would collapse if similar tenants could avoid paying this highly subsidized rent using the technique of the voluntary deposit.

It should also be noted that the Debtor has availed himself of protection under the bankruptcy system and is subject to a

summary administration in case number 41-2223676 (P-3). [ 8 ] The Creditor also points out that the Declaration is inaccurate in that the arrears are incorrectly declared and the Debtor does not indicate, as a modality, the monthly rent on an ongoing basis. [ 9 ] The crux of the matter is whether a person who does not have a salary and is supported by financial assistance under the Individual and Family Assistance Act is entitled to use the voluntary deposit system, as this is a system which, historically, was put in place to protect workers from having seizures made on their salaries.

The social purpose of the so-called “Lacombe Law” [2] was to protect debtors who were engaged in productive work from the inconvenience and stigma of garnishment of their wages, while simplifying the recourse of creditors over the seizable portion of their salaries. [ 10 ] The information available to the public on the website of Justice Quebec mentions that a creditor may contest a debtor’s admissibility to voluntary deposit if the debtor is a beneficiary “du programme d’aide sociale” (fiche du site web de Justice Québec, sous la rubrique “Pour bénéficier du dépôt volontaire”) . [ 11 ] The website does not refer to any particular statutory or regulatory source for this affirmation.

[ 12 ] The attorney acting for the OMHM pointed out that the only source of income known in the case of Mr. Kittnar, his financial assistance, is unassignable and unseizable pursuant to the Individual and Family Assistance Act : 20. Financial assistance granted under this Act to a natural person who is not an employer is unassignable and unseizable, with the exception of the part of an employment-assistance allowance exceeding an amount determined by regulation, up to 50% of which may be seized for non-payment of support. [ 13 ] In this case, it would therefore be impossible for Mr.

Kittnar to deposit a portion of his seizable income for the benefit of his creditors, given that he has no seizable income. It would therefore not be appropriate for him to use this system, because his financial assistance payments are, by definition, unseizable. The Debtor does not require the protection afforded by the system of voluntary deposit, because his sole income is already exempt from seizure. [ 14 ] The judgments of this Court in Dubé c. Amos (Ville) [3] and G.U.S. Canada inc./division Légaré c.

Janet St-Jean [4] , though founded on the old Code of Civil Procedure that specifically mentioned the garnishment of salary or wages, are illustrative of the principle that the declaration is only admissible if it sets out salary or wages (or payments that replace them) that are, a priori , seizable and that it cannot be used by a debtor to declare income in the form of financial assistance payments. [ 15 ] Paradoxically, the payments that Mr.

Kittnar receives are destined to be used for his basic alimentary obligations such as clothing, food and shelter, but they are not seizable by his creditors, even those providing such basic alimentary needs. [ 16 ] The unavailability of these payments for seizure has the beneficial effect of making it possible for Mr.

Kittnar to make his rent payments to the OMHM without disruption from other creditors. [ 17 ] The Declaration made by the Debtor in the present file for the purpose of a deposit and distribution to creditors and the undertaking to commit to such a deposit, for an amount that is less than the monthly rental payment, is illegal. [ 18 ] To make such a declaration and undertaking, the debtor must show that he receives seizable income, since the purpose of the exercise is to make him exempt from the seizure of such income, which would otherwise be available as the common pledge of his creditors pursuant to

article 2644 of the Civil Code of Québec . [ 19 ] The OHMH, being the only Creditor mentioned in the Debtor’s Declaration, by contesting the Declaration pursuant to art. 667 C.C.P., brings about the result that the Declaration will be quashed and the Debtor will be declared inadmissible according to the facts as currently established to benefit from the system of voluntary deposit.

BY THESE REASONS, THE COURT: ALLOWS the Creditor’s Contestation of the Debtor’s Declaration; QUASHES the Debtor’s “Declaration by Voluntary Deposit Debtor” registered with the Court office in case number 500-20-022375- 171, dated June 29, 2017; DECLARES the Debtor’s income from financial assistance pursuant to the Individual and Family Assistance Act inadmissible for the effects of voluntary deposit according to articles 662 and following of the Code of Civil Procedure ; The whole without legal costs. __________________________________ DAVID L. CAMERON, J.C.Q.

Me Mélanie Chaperon Me Gabrielle O’Reilly Patry Attorneys for the Creditor Mathanamohan Kittnar (Absent) Date of hearing: July 21, 2017