Q.B. A.D. 1994 J.C.S. IN THE COURT OF QUEEN'S BENCH JUDICIAL CENTRE OF SASKATOON BETWEEN: TRENT KOEHLER and CINDY KOEHLER APPLICANTS (PLAINTIFFS) and PLEASUREWAY SALES (1973) LTD. and BEN RATKE RESPONDENTS (DEFENDANTS) AND BETWEEN: TRENT KOEHLER and CINDY KOEHLER APPLICANTS (DEFENDANTS BY COUNTERCLAIM) and PLEASUREWAY SALES (1973) LTD. RESPONDENT (PLAINTIFF BY COUNTERCLAIM) K.J.W. Sandstrom for the applicants J.H. Gillis for the respondents JUDGMENT HRABINSKY J. May 27, 1994 This is an application for an order setting asidethe default judgment and writ of execution issued against theapplicants (plaintiffs, defendants by counterclaim) pursuantto Queen\'s Bench Rule 346 and for an order setting aside allgarnishee summonses issued pursuant to Queen\'s Bench Rule 441and s. 10 of The Attachment of Debts Act, R.S.S. 1978, c. A-32. FACTS The applicants, acting on their own but with some obvious assistance from solicitor in the preparation of their statement of claim, commenced an action on February 23, 1994 against the respondents who were represented by counsel. On March the applicants were served with notice of intention to defend and on March 14 were served with statement of defence and counterclaim. On March 18 the respondents filed two separate affidavits for garnishee summons before judgment naming Bank of Nova Scotia and Saskatoon Credit Union respectively as garnishees. As result the Bank of Nova Scotia paid into court the total amount of $2,922.26. The applicants did not file statement of defence to the counterclaim within the time limit. They were noted for default on April and judgment for the sum of $7,670.43 was entered against them on April 8. On the same date the respondents filed praecipe for writ of execution. The respondents, contemporaneously with the applicants' application, apply for payment out of the monies garnisheed. At the time that the applicants were served with the statement of defence and counterclaim, they were not represented by counsel nor did they know that they had to serve and file statement of defence to the counterclaim. However, immediately upon being served with the garnishee summons on April they contacted solicitors who searched the file and discovered that the applicants had been noted for default on April 6. On April 28 the applicants' solicitors filed notice of motion requesting an order setting aside the noting for default and an order setting aside the garnishee THE LAW Queen's Bench Rule 346 reads: 346 Subject to Rule 271 any judgment by default, whether by reason of non-delivery of defence or non-compliance with any of these rules or with any order of the court, may be set aside or varied by the court upon such terms as to costs or otherwise as the court may think fit. In Klein v. Schile, 1921 CanLII 107 (SK CA), [1921] W.W.R. 78 (Sask. C.A.) at pp. 79-80, Lamont J.A. stated: The circumstances under which Court will exercise its discretion to set aside judgment regularly signed are pretty well settled. The application should be made as soon as possible after the judgment comes to the knowledge of the defendant, but mere delay will not bar the application, unless an irreparable injury will be done to the plaintiff or the delay has been wilful. Tomlinson v. Kiddo, Sask. L.R. 132, W.W.R. 93, 1914 CanLII 139 (SK CA), 29 W.L.R. 325; Mills v. Harris, Sask. L.R. 114. The application should be supported by an affidavit setting out the circumstances under which the default arose and disclosing defence on the merits. Chitty's Forms, 13th ed., p. 83. It is not sufficient to merely state that the defendant has good defence upon the merits. The affidavits must show the nature of the defence and set forth facts which will enable the Court or Judge to decide whether or not there was matter which would afford defence to the action. Stewart v. McMahon, Sask. L.R. 209, W.L.R. 643. If the application is not made immediately after the defendant has become aware that judgment has been signed against him, the affidavits should also explain the delay in making the application; and, if that delay be of long standing, the defence on the merits must be clearly established. Sandhoff v. Metzer, W.L.R. 18. In this case the application to set aside thedefault judgment was made as soon as possible after thejudgment came to the attention of the applicants who haveexplained to the satisfaction of this court their failure todefend the counterclaim. The applicants have clearly shownthat they have a good defence on the merits to thecounterclaim. The applicants did not delay their applicationto set aside the judgment so that it cannot be argued thatdelay will cause irreparable injury to the respondents. There shall be an order setting aside the default judgment, the noting for default and the writ of execution. The applicants will have ten days from this date to serve and file statement of defence to the counterclaim. now turn to the application to set aside the garnishee summons. This application is made on the following grounds: 1.That the amount of the liquidated debtor demand in the affidavit for garnishee summons is inconsistent with the previous position of the Defendant (Plaintiff by Counterclaim); 2.That the affidavit for garnishee summons does not strictly comply with Section 3(2) of The Attachment of Debts Act. Section 3(2) reads: (2) The summons shall be issued by the local registrar upon the plaintiff or judgment creditor, his solicitor or agent, filing an affidavit; (a) showing the nature and amount of the claim against the defendant or the amount remaining due and unsatisfied under the judgment, and swearing positively to the indebtedness of the defendant or judgment debtor to the plaintiff or judgment creditor; (b) stating, that, to the best of the deponent's information and belief, the proposed garnishee, naming him, is indebted to the defendant or judgment debtor, or, if the moneys sought to be attached are wages or salary, that, to the best of the deponent's information and belief, the defendant or judgment debtor was or is employed by the garnishee and where and in what capacity the defendant or judgment debtor was or is so employed. The pertinent paragraphs of the affidavit for garnishee summons read as follows: 1.THAT am the President of Pleasureway Sales (1973) Ltd., the above-named Defendant and as such have personal knowledge of the facts and matters hereinafter deposed to save where stated to be on information and belief, and where so stated do verily believe the same to be true. 2.THAT the above-named Trent Koehler and Cindy Koehler are justly and truly indebted to Pleasureway Sales (1973) Ltd., jointly and severally, in the sum of $7,192.49, constituting the balance due and owing by them to Pleasureway Sales (1973) Ltd., as set forth in paragraph 11 of the Statement of Defence and Counterclaim filed by Pleasureway Sales (1973) Ltd. in this matter. 3.THAT hereby expressly affirm that Trent Koehler and Cindy Koehler expressly agreed to pay Pleasureway Sales (1973) Ltd. sums totalling $18,520.31, that they have paid Pleasureway Sales (1973) Ltd. the sum of $11,327.82 on account thereof, and that they accordingly are justly and truly indebted to Pleasureway Sales (1973) Ltd. in the sum of $7,192.49. 4.THAT to the best of my information and belief, the Bank of Nova Scotia, at its branch located at 2414 22nd Street West, in the City of Saskatoon, in the Province of Saskatchewan, is indebted to the above-named Trent Koehler. Counsel for Pleasureway Sales (1973) Ltd. submits that the amount of the liquidated debt or demand in the affidavit for garnishee summons is inconsistent with the previous position of Pleasureway Sales (1973) Ltd. In support of this submission Trent Koehler has exhibited to his affidavit copy of summons issued by Pleasureway Sales (1973) Ltd. in Provincial Court pursuant to The Small Claims Act, S.S. 1988-89, c. S-50.1 wherein the amount claimed is $6,354.62 and not $7,192.49 as set out in the affidavit for garnishee summons. There must be strict compliance with s. 3(2). Theaffidavits filed by the applicants challenging the affidavitfor garnishee summons have no bearing on whether the garnisheesummons should be set aside. If the affidavit for garnishee summons complies with s. 3(2) that is the end of the matter. On an application such as this, it is not the function of judge to look into the merits of the case. Mr. Justice Sherstobitoff in Coast Paper v. Craft Litho Ltd. and Hartshorn (1990), 1990 CanLII 7766 (SK CA), 83 Sask. R. 288, stated at p. 291: The issues to be tried did not arise from any irregularity or ambiguity in the appellant's affidavit in support of the garnishee, but from the respondent's affidavit in support of the motion to set aside and its statement of defence. The judge weighed the competing affidavits against each other and decided that there were triable issues. If the order made on that basis were upheld, no prejudgment garnishee could stand in any case where defendant chose to contest the claim, and the purpose of s. would be defeated. The existence of triable issues as to the amount owing, or defences which, if proven, would defeat the claim, is not ground for setting aside garnishee so long as s. of the Act has been complied with. In this case the affidavit for garnishee summonscomplies strictly with s. 3(2). It shows the nature and amount of the claim against the defendants by counterclaim. The deponent swears positively to the indebtedness of the defendants by counterclaim and states that to the best of the deponent's information and belief, the named proposed garnishee is indebted to the defendants by counterclaim. The application to set aside the garnishee summonsis dismissed. Lastly, turn to the application of Pleasureway Sales (1973) Ltd. for an order pursuant to s. 14(2) of The Attachment of Debts Act for payment out of court to Pleasureway Sales (1973) Ltd. of all of the monies paid into court pursuant to the garnishee summons before judgment. Section 14(1) of The Attachment of Debts Actprovides that no order shall be made for payment out of anymoney paid into court by the garnishee when a garnisheesummons issues prior to judgment until the plaintiff hasrecovered a judgment against the defendant. Since thejudgment has been set aside the application for payment out ispremature and is therefore dismissed without prejudice to re-apply. The respondents shall have only the taxable costs of entering judgment and the disbursements in relation thereto. However, there shall be no other costs on either of the two motions.
1)Application by plaintiffs (defendants by counterclaim) for an order setting aside the default judgment, writ of execution and 2)garnishee summonses issued against them. 3)Application by respondents (plaintiffs by counterclaim) for payment out of the monies garnisheed. HELD: 1)Application allowed. At the time that the applicants were served with the statement of defence and counterclaim, they were not represented by counsel nor did they know that they had to serve and file a statement of defence to the counterclaim. However, immediately upon being served with the garnishee summons they contacted solicitors. The application to set aside the default judgment was made as soon as possible after the judgment came to the attention of the applicants who have explained to the satisfaction of the court their failure to defend the counterclaim. The applicants have clearly shown that they have a good defence on the merits to the counterclaim. The applicants did not delay their application to set aside the judgment so that it cannot be argued that delay will cause irreparable injury to the respondents. 2)Application to set aside guarishee summons dismissed. There has been strict compliance with s.3(2) of the Act. The affidavits filed by the applicants challenging the affidavit for garnishee summons have no bearing on whether the garnishee summons should be set aside. It is not the function of a judge to look into the merits of the case on such an application. 3)Application for payment out of monies garnisheed dismissed. Section 14(1) of The Attachment of Debts Act provides that no order shall be made for payment out of any money paid into court by the garnishee when a garnishee summons issues prior to judgment until the plaintiff has recovered a judgment against the defendant. Since the judgment has been set aside the application for payment out is premature and is therefore dismissed without prejudice to reapply.