QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2005 SKQB 538 Date: 20051221 Docket: Q.B.G. No. 1820/2005 Judicial Centre: Saskatoon BETWEEN: 623936 SASKATCHEWAN LTD., Plaintiff (Defendant by Counterclaim) and NEW YORK TAXI CO. LTD., Defendant (Plaintiff by Counterclaim) and SHIRLEY SCOTT, Defendant by Counterclaim Counsel: Jason A. Peszko for the applicant George A. Green for the respondent FIAT DOVELL J. December 21, 2005 [1] The applicant defendant, New York Taxi Co. Ltd., seeks an order pursuant to s. 10 of The Attachment of Debts Act, R.S.S. 1978, c. A‑32, setting aside the plaintiff’s pre‑judgment garnishees in which $2,291.90 was paid into Court from the defendant’s bank account at Biggar and District Credit Union on December 7, 2005. [2] The issue is whether the plaintiff’s claim is a liquidated demand within the meaning of s. 3(1) of the Act, and if so, whether the affidavit of Shirley Scott, filed in support of the issuance of both of the pre‑judgment garnishees, complies with s. 3(2) of that Act. [3] This case involves pre‑judgment garnishee as opposed to garnishee after judgment taken out the same date as the statement of claim was issued, being November 14, 2005. [4] As stated by Baynton J. in Rolls‑Royce Canada Ltd. v. La Ronge Aviation Services Ltd. (1996), 1996 CanLII 7112 (SK QB), 143 Sask. R. 296 at para. (Q.B.): [3] It is trite law that plaintiff has statutory right to garnishee the defendant’s funds before the validity of the claim has been determined if the action is for debt or liquidated demand. But pre‑judgment garnishment is an extraordinary remedy and failure to strictly comply with the provisions of the Act goes to jurisdiction and renders the garnishee summons nullity. The Attachment of Debts Act, s. as interpreted by Reed Ford Tractor Sales Ltd. v. Todorowich, 1994 CanLII 4687 (SK CA), [1995] W.W.R. 259 at 261 (Sask. C.A.); Mumford Medland Limited v. Certified Concrete (Central) Limited and Royal Bank of Canada (1967), 1967 CanLII 432 (SK CA), 59 W.W.R. (N.S.) 378 (Sask. C.A.). [5] Before setting out its reasons for whether or not this application should be allowed, the Court first wants to clarify which materials it has considered in making its decision. The only materials considered by the Court in this application are the statement of claim and affidavit of Ms. Scott filed in support of the pre‑judgment garnishee. The Court has not considered any of the contents of the affidavit of Larry Robb, filed by the applicant, or the statement of defence and counterclaim. The reason for that is important. In an application to set aside pre‑judgment garnishee, the Court is not to consider potential defences to the action or the existence of triable issues as grounds for setting aside garnishee summons. Phoenix Rotary Equipment Ltd. v. Denis, 2004 SKQB 129 (CanLII), 246 Sask. R. 148. [6] In Conexus Credit Union v. Shec Labs‑Solar Hydrogen Energy Corp, 2005 SKCA 119 (CanLII), [2005] S.J. No. 627 (QL), Chief Justice Bayda, at paragraphs and 10, outlined the purposes of the various constituent subsections of s. of the Act as follows: ¶9 Subsection 3(1) lays the foundation (and prescribes the foundation’s limits) for the issuance of garnishee summons. summons may issue in two kinds of situations: (i) where person has obtained judgment or order for the recovery of money, and (ii) where plaintiff has not obtained judgment, but has commenced particular type of action for the recovery of money, namely, an action for debt or liquidated demand. No other type of action for the recovery of money qualifies. Nor, of course, does any action that is not for the recovery of money. ¶10 Subsection 3(2) requires the plaintiff or judgment creditor to file an affidavit before the local registrar is put in position to issue the summons. The purpose of the affidavit is fourfold: (i) to “show” the nature of the plaintiff’s claim or alternatively, the fact of an unpaid judgment. The underlying purpose of that “showing” is to establish whether the indebtedness claimed to be owing fits within the limits of the foundation laid down in s. 3(1), namely whether it is for an unpaid judgment or alternatively, claim for debt or liquidated demand and not an indebtedness that falls outside those limits; (ii) to “show” with precision the amount of the indebtedness owing on the judgment, the debt or the liquidated demand as the case may be. The need for “showing” the amount is obvious; (iii) to require the plaintiff or his/her agent to not merely allege that the indebtedness is owing but to formally attest to the existence of the indebtedness and thereby warrant, not only that the claim is genuine, but that it is not provisional or contingent; (iv) to identify some third party (the “garnishee”) who is alleged to owe money to the defendant that can be attached and applied to the payment of the indebtedness. [Emphasis added.] [7] The Court is satisfied that the statement of claim discloses prima facie claim for debt or liquidated damage pursuant to s. 3(1) and that the affidavit of Ms. Scott “shows” and “establishes” that the nature of the plaintiff’s claim fits within the limits of the foundation laid down in s. 3(1), being claim for debt or liquidated demand. [8] However, the Court’s analysis does not stop there. There are four purposes of the affidavit filed pursuant to s. 3(2) of the Act as outlined by Chief Justice Bayda in Conexus, supra. What is troubling to the Court is whether or not the content of the affidavit of Ms. Scott has shown with the required precision the amount of the debt or liquidated demand as the case may be, as outlined as the second purpose of the affidavit filed pursuant to s. 3(2) of the Act by Chief Justice Bayda. [9] The statement of claim, at paragraphs and 7, provides: 6. As per the Agreement and Amalgamation, the Plaintiff provided the Defendant managerial services and as of October 31, 2005, there existed debt due and owing from the Defendant to the Plaintiff in the amount of $24,155.94. 7. It was agreed by the Defendant and/or 101020738 Saskatchewan Ltd. that the indebtedness on such account would be subject to interest at the rate of 2.0% per month, compounded monthly. [10] The affidavit of Shirley Scott, in support of the pre‑judgment garnishee summons, attaches as exhibits copy of the Operating Agreement dated September 10, 2001, and copy of an invoice dated October 31, 2005. [11] Paragraph of Ms. Scott’s affidavit in support of the pre‑judgment garnishee summons provides: 4. That pursuant to the Agreement and Amalgamation, services were provided and debt became due and owing from New York Taxi Co. Ltd. to 623936 Saskatchewan Ltd. in the amount of Twenty‑Four Thousand, One Hundred and Fifty‑Five Dollars and Ninety‑Four Cents ($24,155.94). Attached hereto as Exhibit “C” to this my Affidavit is true copy of an invoice dated October 31, 2005. [12] Although there is reference in the statement of claim to an agreement that interest would be paid at 2.0 percent per month, compounded monthly, there is no mention of interest in the Operating Agreement of September 10, 2001. [13] Of more concern to the Court is the four‑page invoice dated October 31, 2005, attached to Ms. Scott’s affidavit as Exhibit “C”, supposedly attached to confirm the amount of debt owed by the defendant in the amount of $24,155.94. The invoice is vague and is of no assistance to the Court in clarifying the precise amount of the debt owing. On the first page of the invoice balance forward as at December 31, 2003, of $16,990.44 is indicated. Page of the invoice appears to be summary of pages and 3, and page 4, starting with balance forward as at December 31, 2003, of $6,420.00, has total amount due of $10,577.06. Is that additional debt? The Court is at complete loss. Unlike the information provided in the affidavit in Kuznitsoff v. Hilltop Ford Equipment Sales Ltd. (c.o.b. Hilltop Equipment Sales) (1998), 176 Sask. R. 293 (Q.B.), wherein the affidavit charted the alleged gross profits by listing the equipment, date of sale, model number, sale price, cost and gross profits on a line by line basis, the contents of Ms. Scott’s affidavit is severely deficient in showing with precision the amount of the indebtedness owing. [14] The Plaintiff has accordingly not strictly complied with the provisions of s. 3(2) of the Act, and the garnishee summons are a nullity. [15] There shall therefore be an order: 1. The garnishee summons shall be set aside, and if no appeal is taken, the funds paid into court will be repaid to the garnishee, Biggar and District Credit Union, to the credit of the defendant after the expiration of the time for appeal. 2. The applicant shall be entitled to costs of this application which the Court fixes at $500.00, payable within 30 days of this fiat. J. M.L. Dovell
FIAT: The applicant defendant seeks an order pursuant to s. 10 of The Attachment of Debts Act setting aside the plaintiff's pre-judgment garnishees in which $2,291.90 was paid into court from the defendant's bank account in December 2005. The issue is whether the plaintiff's claim is a liquidated demand within the meaning of s. 3(1) of the Act, and if so, whether the affidavit filed in support of the issuance of both of the pre-judgment garnishees complies with s. 3(2) of the Act. HELD: The plaintiff has not strictly complied with the provisions of s. 3(2) of the Act, and the garnishee summons are a nullity.  1) In an application to set aside a pre-judgment garnishee, the court is not to consider potential defences to the action or the existence of triable issues as grounds for setting aside a garnishee summons. 2) The court examined whether or not the affidavit showed, with the required precision, the amount of the debt or liquidated demand. Although there is reference in the statement of claim to an agreement that interest would be paid at 2.0 % per month, compounded monthly, there is no mention of interest in the Operating Agreement. 3) Of more concern is the four-page invoice attached to the affidavit supposedly attached to confirm the amount of the debt owed by the defendant. The invoice is vague and is of no assistance to the court in clarifying the precise amount of the debt owing. Unlike the information provided in the affidavit of Kuznitsoff v. Hilltop Ford Equipment Sales Ltd. (c.o.b. Hilltop Equipment Sales), wherein the affidavit charted the alleged gross profits by listing the equipment, date of sale, model number, sale price, cost and gross profits on a line by line basis, the contents of the affidavit here is severely deficient in showing with precision the amount of indebtedness owing.