Docket: 1698 Conexus Credit Union 2006 (Plaintiff) Respondent - v. -, 2011 SKCA 132

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2011 SKCA 132 Date: 20111110 Between: Docket: 1698 Conexus Credit Union 2006 (Plaintiff) Respondent - and - B. Bergen Holdings Ltd., Steven Sorensen, Peter Flaman, Derek Bell (Defendants) - and – Timothy Becker (Defendant) Appellant - and – Loblaws Inc., operating as “Sunspun Food Service” Garnishee Coram: Lane, Richards & Caldwell JJ.A. Counsel: Sterling G. McLean for the Appellant Gregory R. Irvine for the Respondent

Appeal: From: Q.B.G. 798 of 2007, J.C. of Regina Heard: March 1, 2011 Disposition: Dismissed Written Reasons: November 10, 2011 By: The Honourable Mr. Justice Caldwell In Concurrence: The Honourable Mr. Justice Lane The Honourable Mr. Justice Richards Caldwell J.A. I. Introduction [ 1 ] Timothy Becker appealed two ex parte orders of the Court of Queen’s Bench with respect to the post-judgment garnishment of his wages by Conexus Credit Union 2006 (the “Credit Union”) pursuant to four garnishee summonses (the “Summonses”) issued under The Attachment of Debts Act , R.S.S. 1978, c.

A-32 (the “ Act ”). [ 2 ] The first ex parte order (the “Extension Order”) extended the time for service of copies of the Summonses on Mr. Becker. The second ex parte order (the “Payment Order”) authorized the payment out of court to the Credit Union of sums paid into court by Mr. Becker’s employer, Loblaws Inc., operating as “Sunspun Food Service” (the “Garnishee”). The ex parte orders were granted separately by different chambers judges. [ 3 ] Mr. Becker submitted both ex parte orders are contrary to law, the evidence and the weight of the evidence.

In particular, he submitted the chambers judge who granted the Extension Order erred because it was not within his discretion to issue the order in the absence of a “reasonable explanation” for late service of copies of the Summonses on Mr. Becker. Mr.

Becker also appealed from both of the ex parte orders on the particular grounds that: a. he had not been served with the Extension Order; b. service of the Summonses on the Garnishee was defective; c. the Summonses had not been served within five days of his wages becoming due and payable to him, as required by s. 5(1) of the A ct ; and d. the Acknowledgements of Service returned by the Garnishee to the Credit Union were deficient. II. Background [ 4 ] Mr. Becker is a judgment debtor indebted to the Credit Union pursuant to a default judgment of the Court of Queen’s Bench.

From the affidavit material on the court file, the following facts are relevant and not in dispute: a. Mr. Becker consented to a default judgment against him in favour of the Credit Union in the amount of $14,690. b. To enforce its judgment, the Credit Union issued the Summonses, one on each of August 25, 2008, September 10, 2008, September 25, 2008 and October 10, 2008. c. The Credit Union effectively served the Summonses on the Garnishee. d.

In material response to the Summonses, the Garnishee made four payments into court in the amounts of $1,050.53 on September 11, 2008, $3,094.93 on September 25, 2008, $1,050.53 on October 9, 2008, and $6,203.73 on October 23, 2008. e. The Credit Union personally served Mr. Becker with copies of the Summonses on October 27, 2008. f. On October 30, 2008, the Credit Union applied for an ex parte order extending the time for service of the Summonses on Mr. Becker to October 27, 2008, the date of actual service on him.

g. In support, the Credit Union filed affidavit evidence which evinced service of the Summonses on the Garnishee by facsimile onAugust 26, 2008, September 10, 2008, September 26, 2008 and October 10, 2008; and service of copies thereof on Mr. Becker, bypersonal service, on October 27, 2008. h. On October 31, 2008, the chambers judge ordered the extension of time for service on Mr. Becker to October 27, 2008. i. On November 7, 2008, the Credit Union applied for an ex parte order pursuant to s. 14(2) of the Act paying out the monies paid intocourt pursuant to the Summonses. j.

On November 12, 2008, the chambers judge ordered the payment of $11,399.72 to the Credit Union. [5] I would pause here to note that the Credit Union’s application to have monies paid out of court should have been made under s.22(10) of the Act, not s. 14(2), as the monies attached by the Summonses were wages payable to Mr. Becker. This error was not raisedbefore us. Furthermore, under s. 22(9) Mr.

Becker was, and is, entitled to apply at any time to the local registrar for the exemptionsapplicable to garnished wages under subsections 22(2) and (7) of the Act, if same were not initially retained by the Garnishee on hisbehalf. This issue was not raised in the appeal before us either. However, as funds remain in court, we would expect any futureapplications for payment out to arise under the proper sections of the Act. Unfortunately, for the purposes of this appeal, we are confinedto an analysis of the matter as though the funds garnished were not wages. III.

The Appeal [6] The issues raised in this appeal fall under one or more of the following two headings: (

A) Is an appeal to this Court the propermeans of addressing the issues raised? (

B) What are the criteria which bear upon the exercise of judicial discretion in an application toextend the time to serve a copy of a garnishee summons on a judgment debtor? A. Is an appeal to this Court the proper means of addressing the issues raised? [7] Under the first particularized ground of appeal Mr. Becker submitted the chambers judge erred in the exercise of his discretionby granting the ex parte Extension Order in the absence of a “reasonable explanation” as to why an extension was required. Under theremaining grounds of appeal summarized in paragraph 3(a-

d) of these reasons, Mr. Becker identified possible technical deficiencies ordefects in service of the Extension Order and Summonses, and defects in the Acknowledgements of Service.

In my view, none of theseremaining grounds are matters to be raised at first instance in an appeal; they are more properly brought before the chambers judge whogranted the ex parte order in question on application to vary or set aside that order. [8] The authority of a judge of the Court of Queen’s Bench to set aside an ex parte order of the Court arises from the judge’s inherentjurisdiction and Rule 467(2a) of The Queen’s Bench Rules, which provides: Where an order is issued pursuant to an ex parte application, it shall be drawn with the following endorsement appearing below the lineindicated on the form for the signature of the Chamber Clerk: Take notice that every order made without notice to the respondent or a person affected by the order, except where such order isconsented to by the respondent or a person affected by the order, or is otherwise authorised by law, may be set aside or varied onapplication to the court.

You should consult your solicitor as to your rights. [emphasis in original] See L.(R.E.) v. G-S.(J.), 2000 SKQB 74, 191 Sask.R. 204, Pastuck v. Browne Motor Co. Ltd., (SK KB), [1995] 2W.W.R. 92 (Sask. Q.B.), Gresham (Bankrupt) v. Gresham (1990), (SK CA), 89 Sask. R. 314, (C.A.) (“Gresham”), R.v. Krchov (1989), (SK KB), 76 Sask. R. 93 (Q.B.), Gescan Limited v. Westburne Industrial Enterprises Limited(1988), (SK KB), 70 Sask. R. 133 (Q.B.), In re Denton Estate, (SK KB), [1926] 3 W.W.R. 186(Sask. K.B.), Britsch v. Piper et al. (1915), (SK CA), 9 W.W.R. 641 (Sask.

S.C. (en banc)), and Composers, Authorsand Publishers Association of Canada Ltd. v. International Good Music, Inc. et al., (SCC), [1963] S.C.R. 136; but seeDe Laval Company Limited v. Milhoborski, (SK KB), [1926] 1 W.W.R. 305 (Sask. Dist. Ct.). [9] Rule 467(2a) reflects the longstanding practice in Saskatchewan that a party who takes issue with an ex parte order should bringthe matter back to the Court of Queen’s Bench, preferably before the judge who granted it.

In Gresham, Vancise J.A., sitting in Court ofAppeal chambers on an application to set aside a Court of Appeal ex parte order he had previously granted, wrote: In the Court of Queen’s Bench each judge has the authority necessary to hear ex parte matters and to set aside or vary orders previouslymade by other members of the Court, although the recommended practise is reference to the judge who initially made the order. Thequestion that arises, then, is whether s. 15 of The Court of Appeal Act, R.S.S. 1978, c. C-42, modifies the authority of Court of Appealjudges to set aside or vary ex parte orders.

Section 15 reads as follows: 15. In any cause or matter pending in the court, any application or motion incidental thereto, not involving the decision of the appeal,may be heard and disposed of by a single judge of the court sitting in chambers, but the order made by the judge in any such case may be

discharged or varied by the court.

Section 15 of The Court [of Appeal] Act is an empowering provision, setting forth the jurisdiction of Court of Appeal judges in referenceto chambers matters. Pursuant to s. 15, each judge sitting in chambers has the authority to make ex parte orders. The

section also containsa right of appeal to a full panel of the Court. The respondent suggests that the right of appeal is to be interpreted as mandating that the varying or setting aside of ex parte orders mustbe carried out by a full panel of the Court. I do not accept that

interpretation. The language employed in s. 15 is permissive (may) ratherthan imperative (shall) so that the

section does not mandate that applications to initially vary or set aside ex parte orders must be heard infront of a full panel. In fact, logic dictates otherwise. There is no apparent reason why the chambers procedure should vary in this regardbetween the different levels of court. To allow one party to obtain a relatively quick ex parte order in chambers, and then require theparty seeking to vary or set aside the order to obtain its remedy through a much more time-consuming and cumbersome appeal processgrants an unfair procedural advantage to the party initially obtaining the order.

It is not necessary for a full panel of the Court of Appealto hear an application to set aside or vary an ex parte order made in chambers. The proper procedure is provided by reading the power of appeal in s. 15 of The Court of Appeal Act in conjunction with powers ofreview contained in Queen’s Bench Rule 467(2a).

If an application is made to vary an ex parte order the right of appeal does not comeinto effect until the ex parte order has been reconsidered by a single judge of the court with the power to vary or set aside the initialorder. [10] There is some authority which suggests an appeal from a Queen’s Bench ex parte order is not precluded even where the matterhad not been brought back before the judge who granted it. See Brail v. Fayerman Bros. Ltd., (SK CA), [1987] 1W.W.R. 518 (C.A.).

However, the issue was not fully canvassed before Gerwing J.A. in that case and she also noted the fact an ex parteorder had not been brought back before the judge who granted it would be taken into consideration in an application for leave to appealfrom the ex parte order. [11] I conclude that while there is a right of appeal (whether leave would be required would depend on the circumstances), it is amatter of good practice that counsel first raise any issues with the judge or a judge of the court which issued the ex parte order. [12] In any event, the orders in question were made under the Act and s. 10 of the Act provides Mr.

Becker with a statutory basis uponwhich he could have raised the possible technical deficiencies or defects in service of the Extension Order and Summonses, and defectsin the Acknowledgements of Service at first instance before a Queen’s Bench chambers judge: Application to set aside garnishee 10 The defendant or judgment debtor or the garnishee, or a person claiming to be interested in the moneys attached, may apply to ajudge in chambers to set aside a garnishee summons issued under

section 3. [13] Section 14(1) of the Act provides the time frame for making such an application: 14(1) No order shall be made against the garnishee or for payment out of any money paid into court by the garnishee, until at least tendays after service of the summons on the defendant or judgment debtor and on the garnishee, nor when a garnishee summons issues priorto judgment until the plaintiff has recovered a judgment against the defendant. [14] The ten-day window to challenge the Summonses opened by effective service of copies of the Summonses on Mr.

Becker wasunaffected by the Extension Order; and the Credit Union did not, in fact, obtain the Payment Order until after this window had closed.Given that the statutory framework of attachment of debts provides this ten-day window to challenge a judgment creditor’s compliancewith the Act, I am of the view that, if Mr. Becker wished to raise these issues, he had to raise them under s. 10 and, if not satisfied withthe chambers decision, then he could have appealed to this Court. His appeal is, therefore, premature and not properly before this Court. [15] Mr.

Becker cannot rely upon his failure to avail himself of either s. 10 or an application to set aside or vary either of the ex parteorders as the basis for an assertion each chambers judge somehow erred in his respective exercise of judicial discretion in granting theorders. I would, for this reason, dismiss the bulk of Mr. Becker’s appeal as failing to disclose any basis for an appeal. B. What are the criteria which bear upon the exercise of judicial discretion in an application to extend the time to serve a copyof a garnishee summons on a judgment debtor? [16] Returning to the first ground of appeal, Mr.

Becker submitted the chambers judge erred in the exercise of his discretion bygranting the Extension Order in the absence of a “reasonable explanation” as to why an extension was required. As framed by Mr.Becker, this ground of appeal properly calls for a review of the exercise of judicial discretion by the chambers judge for error.

[17] The standard of review here is narrow. As this Court stated in Rimmer v. Adshead, 2002 SKCA 12, [2002] 4 W.W.R. 119: [58] … [I]t is necessary to bear in mind that the powers in issue are discretionary and therefore fall to be exercised as the judge vestedwith them thinks fit, having regard for such criteria as bear upon their proper exercise. The discretion is that of the judge of first instance,not ours. Hence, our function, at least at the outset, is one of review only: review to determine if, in light of such criteria, the judgeabused his or her discretion.

Did the judge err in principle, disregard a material matter of fact, or fail to act judicially? Only if some suchfailing is present are we free to override the decision of the judge and do as we think fit. Either that, or the result must be so plainlywrong as to amount to an injustice and invite intervention on that basis. … [18] The question then is did the chambers judge err in principle, disregard some material fact or fail to act judicially in exercising hisdiscretion to grant the Extension Order?

Or, was the granting of that order so plainly wrong as to amount to an injustice? [19] A review of this nature must start with the provision of the Act under which the Credit Union made its application and underwhich the chambers judge was thereby called upon to exercise his judicial discretion: 5(3) A copy of the garnishee summons shall be served on the defendant or judgment debtor, or his solicitor, within twenty days afterservice on garnishee, or within such further time as the court or a judge may order ex parte. [emphasis added] [20] The Credit Union applied for the Extension Order because three of the Summonses had been served on Mr.

Becker after expiry ofthe 20-day window set out in s. 5(3) of the Act. The fourth Summons was served on Mr. Becker within the time allowed therefor. [21] Mr. Becker does not question that the Credit Union properly sought to remedy its service deficiencies, as the Act contemplates, byobtaining an ex parte order of a judge extending the time for service. Mr. Becker submitted that in seeking such an order the CreditUnion must provide the judge with a “reasonable explanation” as to why it required an extension order. In support, Mr. Becker referredto the unreported fiat of Hrabinsky J. in Zacharias v.

Billywalk Productions Inc. (19 March 1992), Saskatoon 3319/1991 (Sask. Q.B.),[1992] S.J. No. 171 (QL) (“Zacharias”), where the learned chambers judge declined to grant a similar application in the absence of proofof “special circumstances”. [22] While Zacharias, on its face, is of some assistance in its support of Mr. Becker’s position, it does not provide a complete answerto this matter. I say this because Hrabinsky J.’s use of the term “special circumstances” seems out of place when one considers how hedisposed of the application before him.

Hrabinsky J. did not dismiss the application; in fact, he adjourned the application to allow theplaintiff time to file further materials disclosing the dates when the plaintiff first became aware that monies had been paid into courtunder each garnishee summons. We have nothing before us to indicate whether Hrabinsky J. received these further materials and, if so,how he ultimately disposed of the application.

Furthermore, Hrabinsky J. described the parties as “plaintiff” and “defendant”, whichsuggests the matter before him involved pre-judgment garnishment with its attendant requirement of strict adherence to the rules ofservice. Finally, it is unclear from Hrabinsky J.’s fiat whether the defendant had been served with copies of the summonses at the timethe plaintiff applied for an extension of time to do so, as was the case here.

Accordingly, I find Zacharias is of little assistance in thismatter. [23] I prefer to draw my conclusions as to what criteria bear upon the exercise of judicial discretion on an application under s. 5(3) ofthe Act by analogy to a similar Rule of The Queen’s Bench Rules which has received significant judicial consideration. Rule 16 permits ajudge of the Court of Queen’s Bench to make an ex parte order extending the time for service of a statement of claim. In the relevantpart, Rule 16 is substantively exactly the same as s. 5(3) of the Act. The seminal case in Saskatchewan on the

interpretation of thisjudicial power is Simpson v. Saskatchewan Government Insurance Office (1967), (SK CA), 65 D.L.R. (2d) 324 (Sask.C.A.) (“Simpson”). Judges in this Province have applied the ratio in Simpson in a number of similar cases, including Bank of Montreal v.Noureldin, 2004 SKQB 429, Seitz v. Walker, 2000 SKQB 342 , [2000] 9 W.W.R. 564 (Sask. Q.B.), Canadian GeneralInsurance Co. et al. v. Helkenberg (1998), (SK KB), 164 Sask. R. 265 (Q.B.), Behiel v. Strum et al. (1993), (SK KB), 114 Sask. R. 149 (Q.B.) (“Behiel”); Johnson v. United Grain Growers Ltd. (1987), (SK KB),60 Sask.

R. 194 (Q.B.) (“Johnson”), Vermette v. Wardman et al., (SK KB), [1972 1 W.W.R. 389 (Q.B.), and Moroz v.Olynyk (1981), (SK KB), 11 Sask. R. 137 (Q.B.), among others. Interestingly, Behiel and Johnson involveapplications made to a Queen’s Bench judge to set aside an ex parte order either made initially by that judge or by another judge of thatCourt. [24] In Simpson, the Court was called upon to interpret then Queen’s Bench Rule 11, which then read: 11.

No original writ of summons shall be in force for more than twelve months from the day of the date thereof, including the day ofsuch date; but if any defendant therein named shall not have been served therewith, the plaintiff may, before the expiration of the twelvemonths, or within six months thereafter, apply ex parte to the court for leave to renew the writ; and the court, if satisfied that reasonable

efforts have been made to serve such defendant, or for other good reason, may order that the original or concurrent writ of summons (orboth) be renewed for six months from the date of such renewal inclusive, and so from time to time during the currency of the renewedwrit. … [emphasis added] [25] The matter before the Court in Simpson involved the renewal of a writ of summons after the expiry of a limitation period.Speaking for the Court, Culliton C.J.S. canvassed the law of this and other Canadian jurisdictions and with respect to the counterparts toRule 11 in the old English Rules of Court to ascertain the criteria bearing upon the proper exercise of judicial discretion to renew a writ,including the term “for other good reason”.

He concluded (at p. 749-50): I think an analysis of the English and Canadian cases to which I have referred justifies two observations: …

(2) There has been atendency to restrict the

interpretation of the words “for other good reason” or, “for any such cause” to reasons why the writ was notserved in time. … As to my second observation, I believe the words “for other good reason” and “for any such cause” should be given a broad and liberalinterpretation. The

interpretation of these words in their literal sense gives to the court a wide and unfettered discretion and in theirapplication I know of no better reason for granting relief than to see that justice is done. All the judgments to which I have referred have been most helpful and for the opinion expressed therein I have the utmost respect. Onthe other hand, these judgments are not binding on this court and I feel compelled to state, not without great deference, the principleswhich I believe should govern a court in the exercise of its discretionary powers on an application to renew a writ of summons.

In an application to renew a writ of summons, I think the basic fact which the court must keep in mind is that it is primarily concernedwith the rights of litigants and not with the conduct of solicitors. Non-compliance with the Rule requiring service of a writ of summonswithin 12 months of its issue is an irregularity. Under R. 11 the court is given a wide and unfettered power to relieve against thatirregularity by renewal of the writ.

I know of no reason why the same principles should not govern it in the exercise its discretion underthat Rule as governs it in the exercise of its discretion under other Rules where it may relieve against an irregularity. In Coulthard v.Coulthard (1952) (SK CA), 5 WWR (NS) 662, I expressed my views as to the principles which should govern thecourt in relieving against an irregularity and I have no reason to change them.

In an application to renew a writ of summons the basic question which faces the court is, what is necessary to see that justice is done?That question must be answered after a careful study and review of all of the circumstances. If the refusal to renew the writ would do anobvious and substantial injustice to the plaintiff, while to permit it is not going to work any substantial injustice to the defendant orprejudice to the defendant’s defence, then the writ should be renewed.

This should be done even if the only reason for non-service is thenegligence, inattention or inaction of the plaintiff’s solicitors and notwithstanding that a limitation defence may have accrued if a newwrit was to be issued. If the non-service of the writ was due to the personal actions of the plaintiff, that, of course, would be a fact to beconsidered by the court.

Each case should be considered in the light of its own peculiar circumstances and the court, in the exercise of itsjudicial discretion, should be determined to see that justice is done. [emphasis added] [26] Section 5(3) of the Act differs from old Queen’s Bench Rule 11 in that s. 5(3) does not now, and its predecessors never, expresslyset forth any criteria which bear upon the proper exercise of judicial discretion in granting or denying an application for an extension oftime to serve copies of garnishee summonses on a judgment debtor (i.e., that reasonable efforts have been made to serve the judgmentdebtor or “for other good reason”) (see: The Attachment of Debts Act, 1920, S.S. 1919-20, c. 82, s. 5(3); Saskatchewan Rules of Court1912, Rule 507(3); and An Ordinance to Amend and Extend the Judicature Ordinance and Amendments Thereto, Ordinances of theNorth-west Territories, No. 6 of 1897).

Nevertheless, the absence of express criteria does not render the principles set forth by CullitonC.J.S. in Simpson inapplicable to s. 5(3) of the Act. Indeed, the current Queen’s Bench Rule 16 does not expressly set forth any criteriaeither, but the principles first espoused in Simpson still guide its

interpretation. [27] In my view, neither the Act nor those parts of The Queen’s Bench Rules dealing with ex parte orders required the Credit Union toexplain why it had not served Mr. Becker in a timely manner to substantiate its request for an extension of time to do so. In the absenceof express criteria, s. 5(3) requires a judge to exercise judicial discretion with a view to seeing that justice is done (Simpson).

Thejudgment creditor’s explanation for the delay in service is highly relevant and obviously material to this determination, but it does notfollow that that failure to explain the delay means that it would be unjust to grant an extension.

Of course, if the Credit Union had notfiled any evidence in support of its application, it would have run the risk the chambers judge might have either dismissed the applicationoutright as wanting or adjourned it, as was done in Zacharias. [28] Here, however, the chambers judge had reviewed the court file, including the pleadings and proceedings had and taken therein, aswell as affidavit evidence from the Credit Union to the effect that copies of three of the Summonses had been served on Mr.

Becker afterthe expiry of the 20-day window set out in s. 5(3) of the Act and that a copy of the fourth Summons had been served on Mr. Beckerwithin the time allowed therefor. I would also note counsel for the Credit Union was under an obligation to the court, this being an exparte application, to proceed with utmost good faith and withhold no material facts (see: Sanfason v. Altice, (SK KB),[1931] 1 W.W.R. 118 (Sask. K.B.), and Skoretz v. Skoretz (1963), (SK KB), 38 D.L.R. (2d) 510 (Sask. Q.B.); see also:Schmitten v. Faulks, [1893] W.N. 64 (Q.B.)).

In my view, this would include drawing to the chambers judge’s attention any materialprejudice which might befall Mr. Becker as a result of the chambers judge making the order requested of him and of which counsel wasaware.

[ 29 ] My review of this same record indicates Mr. Becker consented to a default judgment, thereby admitting he had no defence to the claim against him, and had not applied to set aside the default judgment. The Garnishee had been effectively served with the Summonses having paid money into court pursuant thereto. Neither the Garnishee nor Mr. Becker, nor any third party claiming to be interested in the moneys attached, had applied to set aside the Summonses under s. 10 of the Act . Mr. Becker had actually been served with copies of the Summonses prior to the application.

Finally, nothing on the record indicates any material prejudice might have befallen Mr. Becker as a result of the chambers judge making the order requested of him. Indeed, Mr. Becker did not allege in this Court that he has suffered in consequence of the order. In the light of the peculiar circumstances of this case, it cannot be said justice was not done by the issuance of the Extension Order.

In fact, to find otherwise would, in these peculiar circumstances, merely postpone justice by delaying the inevitable payment of a judgment debt. [ 30 ] In sum, I find no basis to conclude that, when exercising his discretion to extend the time to serve copies of the Summonses on Mr. Becker, the chambers judge erred in principle, disregarded some material fact or failed to act judicially. Further, in these circumstances it cannot be said the granting of the Extension Order was so plainly wrong as to amount to an injustice and invite appellate intervention on that basis.

I would, therefore, also dismiss this avenue of Mr. Becker’s appeal. IV. Conclusion [ 31 ] As I find no error on the part of either chambers judge in granting the ex parte orders, I would dismiss the appeal. I would order the Credit Union have its costs in the usual manner. DATED at the City of Regina, in the Province of Saskatchewan, this 10 th day of November, A.D. 2011. “Caldwell J.A.” ____________________ Caldwell J.A. I concur. “Lane J.A.” Lane J.A. I concur. “Richards J.A.” Richards J.A.