Settlement (Garnishment)

Raso v. Bayne, 2020 ONSC 6654 (CanLII)

[11] Frank bears the onus of demonstrating that the settlement ought to be exempt from garnishment (House v. Baird, 2019 ONSC 1712 (Ont. S.C.J.), para. 62).

[12] In 20 Toronto Street Holdings Ltd. v. Coffee, Tea or Me Bakeries Inc. (2001), 2001 CanLII 28048 (ON SC), 53 O.R. (3d) 360 (Ont. S.C.J.) Justice Nordheimer states at para. 5:

I start from the basic proposition that garnishment is an equitable remedy and, as suggested by the use of the word “may” in subrule 60.18(16) above, the court may therefore make whatever order it deems just in the particular circumstances of any given case. As stated in the Halsbury’s Laws of England, 4th ed., vol. 17 at para. 539:

The court’s power to make a garnishee order, whether it is an order nisi or an order absolute, is discretionary. A garnishee order is basically an equitable remedy, and it may be refused where the attachment of the debt would work inequitably or unfairly or cause prejudice or injustice to some person or persons other than the judgment creditor.

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[62] Pursuant to Rule 60.08(16) of the Rules of Civil Procedure, the court has the discretion to determine rights, liabilities or any matter in relation to the garnishment. The Baird settlement set damages at $500,000. It does not define the heads of damages breakdown. Baird acknowledges that it is his onus to show that the settlement is exempt from garnishment.

[63] Since Rule 60.08(16) grants the court discretion to determine any matter, I shall exercise my discretion to determine the distribution of settlement funds in order to determine what portion, if any, can be garnished. There is no settled approach to how the categories of damages should be allocated to out of court settlements. Where settlements are not broken into constituent components, the court may allocate the settlement into the heads of damages as best it can. This entails examining any evidence of the settlement negotiations.

[64] I have reviewed the affidavit of Baird’s counsel. Baird’s Pre-Trial Memorandum suggested that Baird was entitled to approximately $2.9 million, which was divided as follows: 7% for general damages; 49% for future care costs; 41% for past and future income loss (Baird was not receiving income replacement benefits at the time); and 3% for the Family Law Act claim.

70] In all the circumstances, I find that it is appropriate to designate 50% of the Baird settlement for general damages, future care costs, and the Family Law Act claim. I find that this portion of the settlement should be exempt from garnishment, for the following reasons:

a) Garnishment is an equitable remedy. As such, the court has jurisdiction to exempt personal injury damages for pain and suffering from garnishment under Rule 60.08(16). The parties agree that damages for pain and suffering are not subject to garnishment: see Mullin v. R-M & E Pharmacy (2005), 2005 CanLII 1073 (ON SC), 74 O.R. (3d) 378 (S.C.).

b) Damages that are personal in