Roerick v. Dowrich

2013 BCSC 863 Roerick v. Dowrich IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Roerick v. Dowrich, 2013 BCSC 863 Date: 20130516 Docket: 11-2763 Registry: Victoria Between: Jana Marie Roerick Claimant And Marcus Ernest Dowrich Respondent Before: The Honourable Mr. Justice Leask Reasons for Judgment Counsel for the Claimant: N. M. Silzer Counsel for the Respondent: No Appearance Counsel for the Director of Maintenance Enforcement A. P. Leslie Place and Date of Trial/Hearing: Victoria, B.C. January 29 and February 13, 2013 Place and Date of Judgment: Victoria, B.C. May 16, 2013 [1] This is an application by the claimant that the Director of Maintenance Enforcement (the "Director") pay to the Claimant the sum of approximately $26,790 that he presently holds in trust. The claimant is also seeking special costs against the Director. [2] This application arose in the following manner. The claimant, Ms. Roerick, and the respondent, Mr. Dowrich, were married for twenty-five years, separated on July 1, 2008 and divorced on August 12, 2011. The parties were joint tenants of a residential property on Salt Spring Island. As part of the Order granting the divorce, the Court ordered that Mr. Dowrich's undivided one-half interest be vested in Ms. Roerick, the property be listed for sale forthwith, and the net sale proceeds be shared equally between the parties. On December 18, 2012 the property was sold, with net sale proceeds of $168,346. One-half the net sale proceeds amounted to $84,173. [3] The Director or Maintenance Enforcement became involved because on December 7, 1992 Christine Conrad gave birth to a child. Mr. Dowrich is the father. On April 29, 1994, Ms. Conrad obtained a court order in Ontario requiring Mr. Dowrich to pay maintenance. On October 19, 2009 the 1994 Ontario court order was registered against Mr. Dowrich's interest in the Salt Spring residential property. On December 17, 2012 the Director provided a release of the charge against the Salt Spring property in exchange for payment of the total arrears owing on the Ontario maintenance orders which at that time were $109,612.47. By agreement the Director is holding $26,800 in trust pending the outcome of this application. The balance of the funds was released to Ms. Conrad. [4] Ms. Roerick's position is that the Director's lien can stand in no better position than Mr. Dowrich; the Director is entitled to one-half of the net sale proceeds and no more. The Director takes two positions. First, he says that Ms. Roerick obtained title to Mr. Dowrich's interest in the land with both express and statutorily deemed knowledge of the Director's charge in favour of Ms. Conrad. For that reason the Director argues that the Court's discretionary powers under s. 26 of the Family Maintenance Enforcement Act, R.S.B.C. 1996, c. 127 (relied upon by Ms. Roerick in this application) should not be exercised in the claimant's favour because Ms. Roerick's "equity in the property substantially increased by payment of joint family funds to the mortgage without regard to Mr. Dowrich's obligation to support the child." [5] The Director's second position is that, because his charge was registered in October 2009, it takes precedence over the Court Order of August 2011 specifying that Mr. Dowrich's entitlement was to one-half of the net sale proceeds. The Director argues that he is entitled to one-half of the gross sale proceeds, excluding real estate commission, coveyancing fees, and any other charge registered against Mr. Dowrich's one-half interest except the mortgage, which was registered prior to the FMEP lien. Analysis [6] I have no difficulty rejecting the Director's first argument. Mr. Dowrich had an undivided one-half interest in the property at the time the Director's lien was registered. I believe the Director of Family Maintenance Enforcement is not entitled to stand in any better position than Mr. Dowrich. Mr. Dowrich could not take any portion of Ms. Roerick's undivided one-half interest; standing in his shoes, the Director cannot take any portion of her one-half interest either. [7] The novelty of the Director's second position caused me to pause for reflection. After careful consideration, I have come to the conclusion that it has no greater merit than the Director's first position. The joint tenancy is irrelevant to this argument. The Director, whose claim is based on an monetary judgment of the Ontario courts in favour of Ms. Conrad, is seeking to obtain more funds than any creditor could obtain. To obtain funds, the property must be sold. The costs of sale, including real estate commission, conveyancing fees, and any correction of deficiencies the purchaser requires must all be paid before any of the purchaser's funds are available to satisfy the claim of the vendor's creditors. The only proceeds available to creditors are net sale proceeds. The Director's entitlement, on behalf of Ms. Conrad, could not exceed Mr. Dowrich's entitlement, i.e. one-half of the net sale proceeds. [8] Mrs. Roerick is entitled to judgment for the $26,800 held in trust by the Director. Costs [9] Ms. Roerick seeks special costs against the Director, counsel on her behalf argues that: 3. Ms. Roerick should not be out of pocket one penny because the Director, a major judgment creditor in this province, did not know or care to exercise its powers within the bounds of basic creditor-debtor law. 4. The director acted with outrageous disregard of its statutory authority, namely the Family Maintenance Enforcement Act's incorporation by reference of the Court Order Enforcement Act S. 86(3)(a), that its judgment was registered against only the debtor's beneficial interest in the land, not anyone else's. The Director also acted with outrageous disregard of the leading case authorities that say a judgment creditor's interest in property can be no greater than the debtor's interest. [10] The Director's position is that "regarding costs the Director has at all times acted reasonably in the resolution of the matter before the Court." [11] I find myself in agreement with the applicant's costs submissions. She is entitled to special costs on this application. "Leask J."