Court of Appeal for Ontario
Before: Simmons, Juriansz and Epstein JJ.A.
Between:
Michelle Ernestine Crosbie Applicant (Respondent in appeal)
and
Stephen Mark Crosbie Respondent (Appellant)
Counsel: Maurice W. Pilon, for the appellant Jeffrey R. Robles, for the respondent
Heard: July 18, 2012
On appeal from the judgment of Justice Peter Z. Magda of the Superior Court of Justice, dated September 15, 2011.
Endorsement
1The appellant father, Mr. Crosbie, appeals an order that he pay the following: (1) child support arrears plus interest on those arrears in the amount of $49,650.78, (2) child support adjusted retroactively to start January 1, 2005 – by an amount that would add $37,063.20 to the arrears, (3) ongoing monthly child support of $611.00 commencing January 1, 2010 based on imputed income of $66,131.00, (4) 43% of section 7 expenses, and (5) costs in the amount of $30,428.06 to the respondent mother, Ms. Crosbie.
2The parties’ only child was born in 1990. The parties separated in 1993. Ms. Crosbie returned to Canada from Jamaica while Mr. Crosbie remained. The original child support order, made in 1995, ordered Mr. Crosbie to pay monthly child support of $300. He made no payments under this order until after his return to Canada in late 1999. From April 2000 until June 2008, when the child turned 18 and left school, Mr. Crosbie paid $300 monthly.
3On October 7, 2009, Mr. Crosbie brought an application: (1) to change his child support obligations retroactively from July 2008 to May 2009 by an amount that would yield a balance owing of $1,489, (2) to establish his support payments from May 2009 based on an imputed annual income of $38,000 plus an additional $1,000 per year for extraordinary expenses, and (3) to fix arrears at $8,400 with all interest forgiven.
4Ms. Crosbie opposed the application and brought a cross-application: (1) for payment of arrears of $25,489.00 plus accrued interest of $24,161.78 for a total of $49,650.78, (2) for increased child support from January 1, 2005 of $27,892, (3) for payment of section 7 expenses of $1,604, and (4) for a tax gross-up on arrears to March 2000 of $3,360.
5The application judge dismissed Mr. Crosbie’s application and granted the relief requested by Ms. Crosbie. Mr. Crosbie appeals.
6For the reasons that follow, the appeal is allowed, in part.
(1) Mr. Crosbie’s claims for relief
7The dismissal of Mr. Crosbie’s application to change his child support obligations was based on the motion judge’ conclusion that Mr. Crosbie had not established that a change in child support was warranted. This conclusion was available to the application judge on this record and we see no reason to interfere. It is unfortunate that the application judge did not acknowledge the need to reconsider support in the light of the coming into force of the 1997 Child Support Guidelines. However, there is no evidence to sustain the conclusion that consideration of the Guidelines would have assisted Mr. Crosbie’s arguments concerning child support.
8In considering Mr. Crosbie’s request that arrears be rescinded, the application judge made the following findings, supported by the evidence: that Mr. Crosbie earned income in Jamaica, that his efforts to seek a change were delayed, that paying the arrears would not cause him to suffer undue hardship, and that his son was in need of support. The application judge’s conclusion not to rescind the support arrears involved an application of the analysis recommended in DiFrancesco v. Couto (2001), 56 O.R. (3d) 363 (C.A.) to those facts. There is no reason to interfere.
9We are concerned however about the application judge’s failure to exercise his discretion to relieve Mr. Crosbie of the obligation to pay interest at the rate of 10% on the arrears from 1995 onwards.
10The statutory post-judgment interest rate should apply unless there are compelling and exceptional reasons to change the interest rate: Robert McAlpine Ltd. v. Byrne Glass Enterprises Ltd., 116 A.C.W.S. (3d) 441 (Ont. C.A.), [2001] O.J. No. 3208.
11The statutory post-judgment rate of interest when the order was made in 1995 was 10%. It has steadily fallen since then and is now 3%.
12In our view, the application judge erred in failing to view the dramatic decline in interest rates since 1995, combined with the extensive passage of time during which arrears have accumulated, as amounting to exceptional and compelling circumstances warranting a change in the rate of post-judgment interest: see MacKinnon v. Duffy (2000), 10 R.F.L. (5th) 336 (Ont. S.C.). Allowing arrears to continue to attract an interest rate of 10% would be unfair to Mr. Crosbie and provide an excessive return to Ms. Crosbie but might also be perceived as an incentive for a party in Ms. Crosbie’s position to delay enforcement.
13We would set aside the amount of interest on the arrears established by the application judge and replace it with an amount calculated on the basis of the average rate of post-judgment interest between the date of the 1995 order and the order under appeal.
(2) Ms. Crosbie’s claims for relief
14Mr. Crosbie challenges the application judge’s decision to grant the relief sought by Ms. Crosbie on the following bases:
The application judge erred in failing to consider Ms. Crosbie’s delay in pursuing child support claims;
The application judge erred in awarding an increase in child support that was made retroactive for five years from the date of notice; and
The application judge erred in his analysis of Mr. Crosbie’s income.
15While the payee’s delay is a valid consideration, it is mitigated in these circumstances by the fact that during the period of non-payment, Mr. Crosbie was in Jamaica and Ms. Crosbie was in Canada. The challenges of pursuing collection of child support in these circumstances are obvious.
16Retroactive increases in child support should be limited to three years except where there is a finding of disreputable conduct by the payor spouse: D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231. Such conduct is implicit in the finding at para. 21 that Mr. Crosbie threatened Ms. Crosbie to try to prevent her from re-opening the issue of child support. Again, we see no basis to interfere.
17Central to the relief sought by both parties, was Mr. Crosbie’s income from 2005 to 2011. Unfortunately, the evidence relevant to this issue was unsatisfactory, as noted by the application judge when he commented that Mr. Crosbie “provided no documentary proof whatsoever of his income or that of his spouse”, and rejected the only evidence Mr. Crosbie did proffer – his testimony.
18Section 19(1) of the Guidelines provides that the court may impute such amount of income to a spouse as it considers appropriate in the circumstances. These circumstances include where the spouse has failed to provide income information when under a legal obligation to do so.
19The application judge arrived at an income figure for Mr. Crosbie based on the information the parties provided, primarily being Ms. Crosbie’s reconstruction of Mr. Crosbie’s gross income. While, the important task of imputing income is extremely difficult, the reasons should demonstrate that, notwithstanding the paucity of evidence, some degree of rigor has been applied in arriving at the amount. Here, given Mr. Crosbie was self-employed, the application judge should have indicated that he took other factors into account such as legitimate business expenses and taxable and non-taxable benefits.
20That said, Mr. Crosbie failed to provide evidence to support the business expenses he now argues the application judge should have taken into account. The application judge used the information the parties provided him to arrive at an amount of imputed income. A payor such as Mr. Crosbie, who does not disclose income information as required runs the risk that income will be attributed to him – accurately or otherwise. The application judge’s decision is entitled to deference. We would not interfere.
21For these reasons, Mr. Crosbie’s appeal of the relief granted Ms. Crosbie in her cross-application, is dismissed.
(3) Motion to Adduce Fresh Evidence
22Finally, Mr. Crosbie’s motion to introduce fresh evidence relating to his income for 2008 and 2010 in the form of CRA reassessments, is dismissed as the proposed evidence satisfies none of the requirements of the test established in R. v. Palmer, [1980] 1 S.C.R. 7591. While the reassessments were from 2012, after the hearing of this application, Mr. Crosbie gave no explanation for his failure to produce the income documentation he had at the time of the hearing. Further, given the nature of Mr. Crosbie’s business, as noted, we are not persuaded that this proposed evidence would have affected the result.
(4) Consent Amendment
23The parties agree that para. 24 3. of the reasons contains an error in the date for the commencement of increased child support. To avoid double-counting, the paragraph should provide that “[o]ngoing child support payable by [Mr. Crosbie] to [Ms. Crosbie] shall be $611 per month from September 1, 2011, … “, and the parties have consented to a variation of the judgment, accordingly.
(5) Disposition
24The appeal is, therefore, allowed, in part. The judgment will be varied in accordance with these reasons.
25While success has been divided, Ms. Crosbie was, for the most part, successful and is therefore entitled to her costs. We would fix those costs in the amount of $3,000 inclusive of disbursements and applicable taxes.
“Janet Simmons J.A.”
“Russell Juriansz J.A.”
“Gloria Epstein J.A.”
Footnotes
- In civil cases, this court has used two different tests to determine the admissibility of fresh evidence – the Palmer test (used in criminal cases) and the test established in Sengmueller v. Sengmueller (1994), 17 O.R. (3d) 208 (C.A.): Chiang (Re), 2009 ONCA 3, 93 O.R. (3d) 483 at paras. 72-77. As the evidence in this case does not meet either test, it is unnecessary that we decide which is correct.
