L.L.D. v. B.K.D. Date:, 2017 BCPC 282

Citation: L.L.D. v. B.K.D. Date: 20170925 2017 BCPC 282 File No: F35209 Registry: Nanaimo IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY MAINTENANCE AND ENFORCEMENT ACT , R.S.B.C. 1996 c. 46 BETWEEN: DIRECTOR OF MAINTENANCE ENFORCEMENT, on behalf of L.L.D. APPLICANT AND: B.K.D. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE GOUGE

Counsel for the Director: A. Leslie Appearing in person: B.K.D. Counsel appearing on behalf of the Trustee J.B.D.: C.J. Murphy Place of Hearing: Nanaimo , B.C. Date of Hearing: September 21, 2017 Date of Judgment: September 25, 2017 The Parties [ 1 ] B.K.D. (“the Respondent”) is the son of J.B.D. (“the Applicant”). Doris Cecile [surname omitted for publication] (“the Grandmother”), now deceased, was the mother of the Applicant.

The Director of Maintenance Enforcement (“the Director”) is a public official, responsible for the collection of arrears of child and spousal support under the authority of the Family Maintenance Enforcement Act RSBC 1996, c 127 (“the FMEA ”). The Issue [ 2 ] The Applicant applies to set aside a notice of attachment delivered to him by the Director in May, 2016 under the authority of

section 15 of the FMEA . Section 16(5) of the FMEA provides (underlining added): If the court determines that the attachee is no longer liable or determines that the notice contains or is based on a material error , the notice of attachment no longer has any effect and must be withdrawn. The Facts [ 3 ] Under the terms of an order of this court pronounced on July 31, 2002, the Respondent is liable to pay child support in the amount of $173 per month.

He is presently in arrears in the amount of $19,075.86 in respect of that obligation. [ 4 ] The Respondent is the beneficiary of a trust (“the Trust”), of which the Applicant is the trustee. The Trust was established by the Grandmother’s will. The terms of the Trust empower the Applicant, in his “… absolute discretion …” to “… pay or transfer to [the Respondent] or apply on [the Respondent’s] behalf for any purpose or purposes whatever all of part of the income and capital [of the Trust] for [the Respondent’s] use or benefit …”.

The estate of the Grandmother is the residuary beneficiary of the Trust if its corpus is not exhausted during the lifetime of the Respondent. [ 5 ] Since December, 2013, the Trust has received $110,000 from the estate of the Grandmother.

The estate’s solicitors hold in their trust account a further sum of $24,211, which is payable to the Trust on completion of administration of the estate. [ 6 ] The Applicant maintains a separate bank account for the Trust, to which he deposited the funds received from the estate, and from which he has made payments to, or on behalf of, the Respondent, exercising the discretionary authority conferred on him by the terms of the Trust. As at February 5, 2016, the balance in the account was $38.20. [ 7 ] The Respondent made no payments on account of his child support obligation in 2013, 2014 or 2015.

The Director recovered $1006.50 on account of that obligation in 2015 by attaching funds due to the Respondent from the Government of Canada. In 2016: (

i) the Director recovered $843 by attaching funds due to the Respondent from the Government of Canada; and (ii) the Respondent made a payment of $3300 on account of his child support obligation. [ 8 ] In May, 2016, the Director served the Applicant with a notice of attachment under

section 15 of the FMEA . The notice of attachment was addressed to “[the Applicant], executor of the estate of Dorothy [surname redacted for publication] ”. [ 9 ] The Applicant has not paid any money to the Director in response to the notice of attachment. [ 10 ] The Applicant deposes that: I have not provided any funds from [the Trust] to [the Respondent] since prior to receiving FMEP’s notice of attachment. At this time I do not intend to pay any further funds to [the Respondent] from [the Trust]. [ 11 ] On June 27, 2017, Her Honour Judge Crockett of this Court presided at a default hearing under

section 21 of the FMEA . The Respondent, the Applicant and counsel for the Director appeared on the application. Neither the Respondent nor the Applicant was represented by counsel. Judge Crockett ordered the Applicant to “… cause to be paid to the Director … the trust funds in the approximate amount of $20,000, which trust funds shall be held by the Director until further court order or for six months, whichever is earlier …”. The order, as entered, indicates that it was made by consent. The Applicant says that he did not consent to the order, and has filed an appeal on that ground.

No application has been made for a stay of the order pending appeal. The Applicant has not complied with the order. The Submissions Advanced by the Applicant [ 12 ] The Applicant now applies to set aside the notice of attachment, on the ground that it “… contains or is based on a material error …”: FMEA , section 16(5). He asserts two errors:

a. He is not an executor. He is the trustee under a testamentary trust, but the executor of the estate from which the corpus of the trustwas derived is [omitted for publication]. b. The name of the testator and settlor was Doris Cecile [surname omitted for publication], not Dorothy [surname omitted forpublication]. [13] The Applicant also asserts that no money has been payable to the Respondent under the terms of the Trust because: (

i) it isdiscretionary trust, and no money is payable to the Respondent unless and until the Applicant exercises his discretion to make adistribution; and (ii) the estate of the Grandmother is a residuary beneficiary of the Trust, with the result that the rule in Saunders v.Vautier does not apply. Those issues are not before me on this application. I am asked to decide only whether the notice of attachmentwas based on or contained material errors. If so, it must be withdrawn.

Were the Errors Material? [14] I was referred to no authority providing a comprehensive definition of “material” in this context, and have found none formyself. I note the following: a. The applicable definition given by the Canadian Oxford Dictionary is: Law (of evidence, a fact, etc.) significant, influential, esp. to the extent of determining a cause, affecting a judgment, etc. (a materialwitness) b. In Mackechnie v.

Mackechnie, [1998] BCJ No. 2096 @ paragraph 38, Justice Martinson concluded that the error in the notice ofattachment in that case was not “material”, because: In this case, though the amount contained in the Notice was in error, it did not have an effect on the outcome. Mr. Mackechnie did notsuffer prejudice as a result of that error. c. A notice of attachment under the FMEA is similar in many ways to a garnishing order before judgment.

It is often said that,because a garnishing order before judgment is an extraordinary remedy, the garnishing creditor must comply strictly with the statuteunder which the garnishing order is obtained, and that any error in the garnishing order or supporting materials will cause the court to setaside the garnishing order. However, that rule is less rigorously enforced than it used to be. In Golder Associates Ltd v.

North Coast Wind Energy Corporation, [2010] BCJ No. 968; 2010 BCCA 263; 319 DLR (4th) 653, Justice Chiasson said @ paragraphs 12 - 16: I recognize that a garnishing order before judgment, which is not allowed in all Canadian jurisdictions, is an extraordinary remedy, butthe Supreme Court, quite correctly in my view, has approached defects in the material to obtain the remedy in a practical, sensible way. Strict compliance is required, but not perfect compliance.

The objective is to ensure that those who are subjected to garnishing ordersbefore judgment must not be confused or uncertain about the basis on which the order was granted. As McKenzie J. stated in Winroc atp. 290, "the main thing is to assure that no one is misled even though he or she might be momentarily puzzled. One is not 'left to guesswhat is meant' ...". In my view, the concern is to ensure that the recipient of the garnishing order understands the substantive basis on which it was made.

Although form sometimes can sufficiently mask substance so as to cause confusion, I would be reluctant to conclude that occurred in thecircumstances of this case. This accords with the observations of Hutchinson J. in Sutton Group - Resource Realty at p. 381: A careful search of the authorities indicates that the objective sought by the application of the meticulous observance test is theassurance of such a degree of certainty in pre-judgment attachment proceedings that the interest of justice are not subverted and the rightof opposite parties, and innocent third parties are safeguarded.

Thus there must be an inquiry in each case to determine whether in theparticular circumstances will govern the determination of whether the defect has either misled or caused substantial prejudice to a party. Where, as here, the defect is of such a nature that there is no evidence as to any resultant confusion, ambiguity, or prejudice, it followsthat the defect is a mere irregularity. Golder contends this passage leads to the conclusion the respondent was required to lead evidence of prejudice and the judge erredconcluding it was not required to do so.

Where an error is prima facie misleading or confusing, prejudice can be presumed. This appears to be the position taken by thechambers judge. I agree with him. Where the error is not prima facie misleading or confusing, prejudice will not be presumed and theparty subjected to the garnishing order before judgment must adduce some evidence to show it was prejudiced. d.

A less rigorous standard of procedural compliance and accuracy is required of the Director, when preparing and serving a noticeof attachment under the FMEA, than is required of a garnishing creditor, when preparing and issuing a garnishing order before judgment:Director of Maintenance Enforcement v. Trustees of IWA Forest Industry Pension Plan, [1991] BCJ No. 3504; (BCCA), 61 BCLR (2d) 264; (1991) 37 RFL (3d) 266 @ paragraphs 20 - 21.

Having considered those matters, I think that a “material error”, in this context, is an error which has affected the outcome of thelitigation in a manner adverse to the interests of (

i) the person to whom the notice of attachment was addressed; or (ii) the person who isliable to pay child or spousal support. In the absence of prejudice accruing to one of those people, the error is not “material”. [15] Judged by that standard, the errors of which the Applicant complains are not material. It is not suggested that he was misled orconfused in any way by them, nor that the legal rights and obligations of the parties would now be any different if the errors had not beenmade. For that reason, section 16(5) of the FMEP Act does not apply, and the application must be dismissed.

September 25, 2017. ___________________________ T. Gouge, PCJ