



COURT OF APPEAL FOR ONTARIO

CITATION:
Mio v. Romano, 2012
    ONCA 451

DATE: 20120627

DOCKET: C54114/C54128

Cronk, Juriansz and Epstein JJ.A.

BETWEEN

Richard Mio

Plaintiff/Creditor (Respondent)

and

Frank Romano

Defendant/Debtor (Appellant)

and

Homelife Romano Realty
    Ltd.

Garnishee (Appellant)

B. Romano, for the garnishee/appellant

L. Marzinotto, for the defendant/debtor(appellant)

A. Riswick, for the plaintiff/creditor (respondent)

Heard: May 9, 2012

On appeal from the order of Justice Anne M. Mullins of
    the Superior Court of Justice dated June 30, 2011.

ENDORSEMENT

[1]

These reasons relate to two appeals from the order of Mullins J. of the
    Superior Court of Justice dated June 30, 2011. The respondent Mio, as judgment
    creditor, had brought a motion for an order requiring the appellant Homelife,
    as garnishee, to pay the sum of $124,366.14 to the Sheriff pursuant to a notice
    of garnishment he had served on Homelife relating to the judgment debt of the
    other appellant, Romano.

A.

Facts

[2]

The facts are as follows. Mio and Romano were two of three partners in a
    numbered company. Romano held all the shares of the partners in trust. The
    company owned a property. When the property was sold, Romano, who received the
    funds, paid himself and the other partner, but failed to pay anything to Mio.
    Mio obtained summary judgment against Romano in the amount of $221,832.29 in
    2005. On March 27, 2006, Mio issued a notice of garnishment on Homelife, the
    company that employed Romano and was owned by his father.

[3]

Romano made an assignment in bankruptcy on September 13, 2006. On
    December 7, 2006, Registrar Nettie made an order that ss. 69 - 69.3 of the
Bankruptcy
    and Insolvency Act
,

R.S.C. 1985, c. B.3 (
BIA

) no longer operated to stay Mios
    action against Romano but that no steps should be taken to enforce any judgment
    until the trustee in bankruptcy was discharged or further order of the court.
    Romano received a discharge from bankruptcy on June 14, 2007. Homelife received
    a written notice from the Trustee indicating that Romano had been discharged
    from bankruptcy and had been released from all debts except those referred to
    in s. 178(1) of the
BIA
. Homelife alleges that on July 5, 2007,
    the trustee advised it that it was not required to send any payments to Mio,
    the creditor. The trustee in bankruptcy was discharged on November 27, 2009. No
    monies were remitted to the Sheriff under the notice of garnishment.

[4]

On an examination-in-aid-of-execution in March 2010, Romano acknowledged
    that Homelife had paid him approximately $75,000 in 2008 and $49,366.14 in
    2009. Mio brought the motion for an order to have Homelife, as garnishee, pay
    these amounts to the Sheriff. Counsel advised that the amount now in issue is
    $50,000.

[5]

The motion judge found that the judgment debt owed by Romano to Mio fell
    within s. 178(1) of the
BIA
and was not discharged by Mio's assignment
    in bankruptcy and his subsequent discharge. The motion judge also found that
    the enforcement of the judgment was not subject to a condition within the
    meaning of rule 60.08(2) of the
Rules of Civil Procedure
, so as to
    require leave for the issuance of a garnishment notice. In the event that such
    leave was necessary, she granted leave,
nunc pro tunc
. Finally, the
    motion judge also ordered a trial of issues as to whether in fact the trustee
    in bankruptcy had advised Homelife of any circumstances that would estop Mio
    from enforcing the garnishment notice as against Homelife and, if estoppel does
    not apply, to determine the quantum of the monies that Homelife is obliged to
    remit to the Sheriff.

B.

Romanos Appeal

[6]

Romano appeals the entire order of the motion judge raising several
    procedural issues. He argues that the motion judge erred by refusing him an
    opportunity to make submissions on the motion, by granting relief not contained
    in the notice of motion, by refusing Romano an adjournment for the purpose of
    filing responding material, by considering material that was not before the
    summary judgment motion judge, and by finding that Mios judgment survived
    Romanos bankruptcy under s. 178(1) of the
BIA
.

[7]

Romano's procedural arguments are without merit. The motion was case
    managed. His counsel participated in the case management process. It was clear
    that his counsel did not intend to file material on the motion. The relief sought
    on the motion  that the garnishee remit money that it had improperly paid to
    Romano  necessarily required a determination that the debt survived the bankruptcy.
    This was sufficient to raise the question whether the debt had been released by
    Romano's discharge from bankruptcy. Moreover, para. 5 of Mios notice of motion
    explicitly addressed the issue whether the judgment was based on a
    misappropriation of funds and was not discharged.

[8]

Accordingly, it cannot be said that the motion judge went beyond the
    relief contemplated by Mios notice of motion. The fact that a determination
    had to be made as to whether the debt fell within s. 178 was the foundation of
    the relief sought. We note that at no time prior to the motion did Romano take
    the position that the debt was not enforceable.

[9]

We see no error on the part of the motion judge in limiting the
    submissions of Romanos counsel and in refusing Romanos request for an
    adjournment. Counsel had filed no material on the motion and had indicated at
    the outset that she did not intend to make any submissions. Her request for an
    adjournment was made late, toward the end of the hearing.

[10]

Romano
    cites no authority or rationale for the proposition that it was improper for
    the motion judge to consider material that was not before the summary judgment
    motion judge or that the motion judge should not have proceeded to grant relief
    on the garnishment hearing without having all the material that was filed
    before the summary judgment motion judge.

[11]

The
    material before the motion judge, which included the pleadings in the action
    and the reasons of the summary judgment motion judge, amply supported her
    conclusion that the judgment debt fell within the meaning of s. 178(1) of the
BIA
and, hence, survived Romanos bankruptcy. The record before the motion judge
    established that Romano had received the monies in a fiduciary capacity, that
    he failed to remit to Mio the funds to which Mio was plainly entitled and
    that he further failed to provide any explanation for this failure. In these
    circumstances, his wrongful retention of Mios funds met s. 178(1) of the
BIA
.

C.

Homelifes Appeal

[12]

Homelife
    first argues that the stay of Mios execution of the judgment debt against
    Romano continued in effect after the trustee was discharged. That proposition
    is at odds with s. 69.3(1.1) of the
BIA
, which provides that a stay of
    proceedings under s. 69.3(1) ceases to apply  on the day on which the trustee
    is discharged.

[13]

Homelife
    next argues that the enforcement of Mio's judgment debt against Romano became
    subject to a condition within the meaning of rule 60.08(2), such that it could
    no longer be enforced without leave of the court. It submits that the condition
    stems from the intervening bankruptcy of the debtor which, it says, made the
    enforcement of the judgment subject to the condition that it first be found to
    survive Romano's discharge from bankruptcy. This, in turn, required that a new
    notice of garnishment be obtained, with leave of the court.

[14]

We
    do not agree. In our view, rule 60.08(2) has no application to this case. The
    judgment obtained by Mio was unconditional when granted. Accordingly, Mio did
    not require leave of the court to issue the notice of garnishment on March 27,
    2006. The notice, once issued, was stayed upon Romano's assignment into
    bankruptcy. But the stay ceased to apply when the trustee was discharged. When
    the stay ceased to apply, the notice of garnishment was revived and there was
    no impediment to enforcement by Mio of his judgment.

[15]

We
    do not accept Romanos submission that if leave to issue a new garnishment
    notice is not required, commercial uncertainty arises regarding the obligations
    of a garnishee. The notice of garnishment clearly and unambiguously sets out
    those obligations, including the risk of double payment. A garnishee may avoid
    that consequence by complying with the notice of garnishment.

D.

Disposition

[16]

The
    appeals are dismissed. As agreed by counsel, the respondents costs against
    Homelife are fixed in the amount of $5,000, and against Romano, in the amount
    of $6,500, both amounts including disbursements but not applicable taxes.

E.A. Cronk J.A.

R.G. Juriansz J.A.

G.J. Epstein J.A.


