[2] … After 2007, her loans were obtained under a program for students with disabilities. Cissé provided me with evidence indicating that she continues to be disabled.
[3] Cissé did not repay her loans. However, she entered into a payment arrangement with the plaintiff, The Queen … On January 29, 2014, about a week after the parties entered into this arrangement, Cissé was served with a statement of claim. After being served, Cissé contacted the Canada Revenue Agency. The representative with whom she spoke confirmed the payment arrangement and told Cissé she could ignore the claim. As a result, Cissé did not defend the claim.
[5] Remarkably, in the face of this agreement, and the CRA’s advice to Cissé that she could ignore the claim, The Queen then proceeded to obtain default judgment on its claim. …
[6] Even more remarkably, The Queen then obtained a Notice of Garnishment and began to garnish Cissé’s wages while she was making payments under the payment arrangement.
[8] The Queen’s lawyers then contacted Cissé to tell her that the garnishment would continue unless it caused her hardship (a position the Queen was not entitled to take in view of the agreement between the parties).
[10] The default judgment and notice of garnishment has obviously caused Cissé hardship. Importantly, the default judgment, which The Queen was not entitled to obtain, disqualifies Cissé from repayment assistance programs for which she deposes she would otherwise qualify. She now seeks to have the default judgment set aside. …
The effect of any order the court might make on the overall integrity of the administration of justice
[16] …It is wholly unacceptable for the plaintiff – Her Majesty the Queen in Right of Canada as Represented by the Minister of National Revenue – to make a payment plan with Cissé for repayment of student loans, many of which were obtained under the Students with Disabilities program, and then serve and prosecute an action when Cissé’s payments under the payment arrangement were in good standing. To do so – and then obtain default judgment against Cissé after assuring her the claim could be ignored in favour of the payment plan – is exploitative and abusive conduct.
[17] More than that, The Queen obtained default judgment from this court without disclosing that it had entered into a payment plan with Cissé and that the payments were in good standing. The Queen’s actions were an abuse of this court’s process. The Queen was not honest with the court.
[19] Accordingly, I set aside the default judgment. It should never have been obtained in the first place.
[20] I also set aside the Notice of Garnishment and any Writs of Seizure and Sale that have been obtained. …
[25] I award $1,250 in costs payable by The Queen to Cissé within fourteen days. This amount is not to be set off by The Queen against any monies owing to The Queen by Cissé. I make this award to both, indemnify Cissé for the time she spent preparing her materials, which were very helpful to the court, and to discourage and sanction the wholly inappropriate behaviour in which The Queen has engaged, both towards Cissé and in its abuse of this court’s process.
Minister of National Revenue v Cisse, 2016 ONSC 7217 (Akbarali, J.)