Court File and Parties

Ontario Court of Justice

Date: 2013-10-29

Court File No.: Brampton 538/02

Between:

Malika Daley-Francis Applicant

— And —

Wayne Peddie Respondent

Before: Justice L.S. Parent

Heard on: September 3, 2013

Reasons for Judgment released on: October 29, 2013

Representation:

• Malika Daley-Francis: on her own behalf
• Wayne Peddie: on his own behalf

PARENT J.:

BACKGROUND

[1] The parties are the parents of one child, namely Nathan Daley Peddie, born February 25th, 1999. On November 28th, 2002, a final order was granted by Justice Kerrigan-Brownridge incorporating the terms of a consent reached by the parties. The relevant provisions of this order are:

(a) Nathan would be in the sole custody of the Applicant;

(b) Nathan would have access to the Respondent;

(c) Based on an annual income of $50,000.00, the Respondent would pay child support in the amount of $429.00 per month to the Applicant commencing on the 1st day of each month; and

(d) arrears of support were fixed at $258.00.

[2] On July 12th, 2012, the Applicant brought a Motion to Change which was subsequently amended on August 17th, 2012.

[3] In her claim, the Applicant is requesting a retroactive increase in child support to January 1st, 2009, namely for three years. The Applicant further seeks to fix arrears of child support owing should the Court grant her request for retroactive child support.

[4] The Respondent filed a Response to the Motion to Change on September 28th, 2012. He disagrees with the claims requested by the Applicant. In his Response, the Respondent seeks an order fixing child support in the amount of $700.00 per month effective October 1st, 2012 based on an annual income of $90,000.00. The Respondent is seeking this amount, which is lower than $801.00 set by the Child Support Guidelines (hereinafter referred to as "the Guidelines"), given his financial obligations.

[5] The Respondent filed an updated financial statement prior to the hearing. His position is that his child support obligation should be reduced even further than the amount pleaded in his Response given his loss of employment in October, 2012. The Applicant filed an affidavit sworn August 28th, 2013 in support of her claim. Both parties testified at the hearing and were permitted to cross-examine the other party.

[6] There is no dispute between the parties that Nathan continues to be a dependent child entitled to child support.

ISSUES

[7] The issues to be determined are as follows:

(1) Should the Respondent's child support obligation be made retroactive and if so, effective which date?

(2) Should an amount lower than the Child Support Guidelines be ordered and if so, at what amount and effective which date? and

(3) Should income be imputed to the Respondent so as to trigger a payment amount in accordance with the Child Support Guidelines and if so, at what amount and effective which date?

POSITION OF THE APPLICANT AT THE HEARING

[8] The Applicant submits that child support should be increased retroactively to January 1st, 2009 so that support payable by the Respondent is in accordance with the Guidelines.

[9] In advancing this position, the Applicant relies on the financial disclosure provided by the Respondent attached to his sworn financial statement filed September 28th, 2012, namely his income for the relevant years as being:

(a) 2009 - $32,449.00;

(b) 2010 - $67,696.00;

(c) 2011 – $95,262.00; and

(d) 2012 - $90,000.00.

[10] The Applicant submits that pursuant to s.19(1) of the Guidelines, the Court can impute income to the Respondent as he is intentionally unemployed. The Applicant submits that, based on the Respondent's income history, the Court should impute an income of $90,000.00 for the current year and set child support in the amount of $801.00 per month.

[11] The Applicant submits that the Respondent's child support obligation should be retroactive to January 1st, 2009 as the Respondent failed to disclose his annual increases to her and refused to engage in any discussions regarding child support despite her requests to do so. She relies on the decision in D.B.S. v. S.R.G. [2006] S.C.C.A. No. 100 which allows for retroactive child support and argues that the Respondent engaged in blameworthy conduct by not voluntarily disclosing the annual increases in his income. Such conduct, she submits, supports a finding that the Respondent's child support obligation should be retroactively increased to January 1st, 2009.

POSITION OF THE RESPONDENT AT THE HEARING

[12] The Respondent agrees that there should be an adjustment to his current child support obligation. He submits however that this adjustment should be a decrease to $196.00 per month based on his estimated 2013 income of $20,448.00.

[13] The Respondent filed an updated financial statement on August 16th, 2013. This document indicates that the Respondent is currently unemployed and receiving $1,704.00 per month in Employment Benefits or $20,448.00 per year.

[14] The Respondent's submits that there should be no retroactive award. The Respondent also relies on the decision of D.B.S. v. S.R.G. [2006] S.C.C.A. No. 100 in support of his position. In relying on this decision, the Respondent submits that (1) it is not always appropriate to order retroactive child support, (2) in the present circumstances, his son has a reasonable lifestyle which the Respondent has assisted in by fulfilling his child support order under the current order, and (3) there would be hardship caused to the Respondent by the payment of a retroactive order given his current unemployment. The Respondent further relies on the decision of Madden v. Simm [2010] O.J. No. 4670 in support of his position that the Applicant's claim for a retroactive order should be dismissed.

ANALYSIS

(1) Should the Respondent's child support obligation be made retroactive and if so, effective which date?

[15] The leading decision on retroactive child support is the Supreme Court of Canada's decision in D.B.S. (supra). Bastarache, J. states that there are four factors to be considered when faced with a claim for retroactive support namely:

1. the reasons for delay in a recipient parent's application;

2. the parent's behaviour or blameworthy conduct;

3. the children's general circumstances; and

4. whether a retroactive award would constitute hardship.

[16] None of these factors are to be viewed independently of the other but rather in a holistic manner. Not one factor is more important that the other.

Factor 1: Is there a reasonable excuse why an increase in child support was not sought earlier by the Applicant?

[17] The Applicant commenced her Motion to Change on July 16th, 2012. She thereafter amended her Motion on August 20th, 2012 seeking a retroactive adjustment for a period of three years.

[18] The Applicant testified that she attempted to discuss with the Respondent additional contributions by him prior to beginning legal proceedings. She testified that these requests were not consistent given what she described as an absence of civil communication between the parties and a threat by the Respondent in 2002 that he would claim undue hardship should she bring him back to court.

[19] The Applicant however acknowledged in her testimony that the parties discussed and agreed to not reduce the Respondent's child support obligation in 2008 while he was unemployed for a period of eight (8) months.

[20] The Respondent testified that he voluntarily provided additional financial support when the Applicant requested it. He testified that there was an understanding between the parties that he would contribute. The Applicant acknowledged in her testimony that the Respondent did contribute however not to the extent she requested especially in regards to her seeking contributions to Nathan's extracurricular sporting activities.

[21] Given the evidence of both parties, the Court concludes that the Applicant and the Respondent did discuss and implement a process whereby the Respondent would contribute to Nathan's financial needs over and above the order of Justice Kerrigan-Brownridge. The evidence supports a finding that this informal process was respected by both parties to a point whereby neither party felt the need to return the matter before the court for determination and despite decreases and increases in the Respondent's annual income between the periods of 2002 to 2012.

Factor 2: Conduct of the Payor Parent

[22] In D.B.S. supra, Bastarache, J. provides an extensive definition of "blameworthy conduct" that the Court should consider in assessing a claim for retroactive child support. He states that such conduct could include "anything that privileges the payor parent's own interest over his/her children's right to an appropriate amount of support."

[23] The order of Justice Kerrigan-Brownridge dated November 28th, 2002 did not require the Respondent to provide ongoing financial disclosure to the Applicant. The evidence clearly establishes that the Respondent did not disclose his income on an annual basis to the Applicant. Rather the Respondent was selective in the years he chose to advise the Applicant of his income, namely the years he suffered a decrease lower than $50,000.00. However, the evidence also demonstrates that during these years, the parties agreed to not lower the Respondent's child support obligation as set out in Justice Kerrigan-Brownridge's order.

[24] The absence of a court ordered obligation to disclose income coupled with the fact that the Respondent, as admitted by the Applicant in her testimony, maintained his existing child support obligation despite a decrease in income and voluntarily contributed more financial assistance when requested by the Applicant, albeit not on a consistent basis, are factors which lead the Court to conclude that the Respondent has not acted in a blameworthy manner.

Factor 3: Nathan's circumstances

[25] Both parties testified that Nathan is an active, healthy, and loved child.

[26] The evidence at the hearing demonstrates that the income earned by the Respondent for the years 2008 and 2009 would have resulted in a decrease in child support while the years 2010, 2011 and 2012 would have seen an increase. The evidence however also supports a finding that the Respondent, throughout these years, fulfilled his existing child support obligations. Furthermore, the evidence supports the finding that the Respondent voluntarily, although not on a consistent basis, contributed to expenses incurred by the Applicant for Nathan.

[27] A review of the evidence does not reveal that Nathan has suffered any financial or other adversity at the time of his parents' separation or the years following.

Factor 4: Risk of Hardship resulting from a retroactive award

[28] The Applicant does not dispute the evidence provided by the Respondent regarding his financial circumstances for the years 2009 to present. She accepts that the Respondent was discharged from his employment in October 2012. She claims however that the Respondent has chosen to take university courses rather than attempting to secure employment. It is on this basis that she seeks to impute income to the Respondent for the years 2012 and 2013.

[29] If the Court accepts to retroactively adjust the Respondent's child support obligation as requested by the Applicant, the following support would have been payable by him for the years 2009, 2010 and 2011:

(a) 2009 income of $32,449.00 and corresponding child support payable $275.00 per month or $3,300.00 per year;

(b) 2010 income of $67,696.00 and corresponding child support payable $619.00 per month or $7,428.00 per year; and

(c) 2011 income of $95,262.00 and corresponding child support payable $842.00 per month or $10,104.00 per year.

[30] The total support owed for the period between January 1st, 2009 to December 31st, 2011 would be $20,832.00 less the support paid by the Respondent, namely $15,444.00, being $429.00 x 36 months, resulting in an amount owing of $5,388.00.

[31] Given all of these circumstances, the evidence supports a finding that a retroactive order to January 1st, 2009 to December 31st, 2011 for child support in accordance with the Guidelines would occasion hardship on the part of the Respondent.

[32] The Court, given the above analysis, therefore declines to exercise its discretion and make a retroactive child support order for the period January 1st, 2009 to December 31st, 2011.

[33] The question remains therefore should an order be made retroactively to begin in 2012.

[34] The Applicant's initial Motion to Change was filed by her on July 16th, 2012. It was subsequently amended on August 20th, 2012. It is clear that notice was given as of July 16th, 2012 that the Applicant was seeking an increase in child support.

[35] The Respondent admitted during cross-examination that he had verbally agreed to increase his child support obligation in August 2012. Such an admission re-enforces the Applicant's position that child support should be made retroactive, at a minimum, to the month of the filing of her initial Motion to Change. Furthermore, the evidence is such that despite his agreement, the Respondent continued to pay child support in the amount of $429.00 per month.

[36] Given this undisputed evidence, the Court finds that the Respondent's child support obligation should have increased in accordance with his income effective July 1st, 2012. The court record indicates the filing of the Motion to Change on July 16th, 2012 however the Court is satisfied on the evidence that discussions occurred between the parties prior to this date which supports a commencement date of July 1st, 2012.

[37] The evidence also supports a finding that the Respondent's income from January 1st, 2012 to October 27th, 2012 was $92,623.90.

[38] The Respondent attached his Record of Employment to his sworn Financial Statement. This document indicates that his last day of employment was October 16th, 2012. This disclosure also indicates as follows:

(a) that the pay period earnings received by the Respondent totalled $87,331.20;

(b) he received vacation pay in the amount of $1,831.16;

(c) he received pay in lieu of notice in the amount of $3,461.54; and

(d) the total insurable earnings were $50,985.03 representing 1778 hours of employment

[39] The Court therefore finds that the Respondent's child support obligations for the months of July, August, September and October 2012 should have increased to $822.00 based on his income of $92,623.90. Accordingly, the total amount owed for these months is $3,288.00 less the amount of $1,716.00 paid, being $1,572.00. Should the evidence show that the payments made by the Respondent during these months are less than $1,716.00, the arrears are to be adjusted accordingly.

(2) Should an amount lower than the Child Support Guidelines be ordered and if so, at what amount and effective which date?

[40] The Respondent seeks an order reducing his child support obligation to lower than the amount provided for at his income on the basis of hardship.

[41] The Respondent testified that his current income is from unemployment benefits which he has annualized to an income of $20,448.00. He testified that he is able to meet his own financial obligations as he is supported by family and friends, including the mother of his two other children who supports him residing in their matrimonial home for the benefit of their two children. The Respondent was evasive and vague in his testimony regarding the amount of financial support he receives and whether or not these amounts are gifts or loans.

[42] A review of the Respondent's financial statement sworn and filed on August 16th, 2013 indicates a monthly deficit of $4,353.00 yet only one credit card balance owing of $6,500.00 which the Respondent swears he is making a monthly payment of $150.00.

[43] The Court does not find sufficient evidence to reduce the Respondent's child support obligation for the months of July to October 2012 based on hardship. There was no evidence and specifically any Standard of Living Analysis provided by the Respondent to support his position of undue hardship therefore this claim is dismissed.

(3) Should income be imputed to the Respondent following his loss of employment so as to trigger a payment amount in accordance with the Child Support Guidelines and if so, at what amount and effective which date?

[44] The Respondent has provided evidence that he was dismissed from his employment at the end of October, 2012. He testified that he began receiving unemployment benefits in the amount of $1,704.00 per month following his loss of employment. The Respondent submits that his child support obligation should be decreased to $163.00 per month in accordance with the Guidelines for his current income which he has annualized to be $20,448.00.

[45] The Applicant seeks an order imputing income to the Respondent in the amount of $90,000.00 and increasing his child support obligation to $801.00 per month.

[46] Section 19(1) of the Child Support Guidelines permits the Court to impute income to a parent in appropriate circumstances such as when a parent is intentionally under-employed. The onus is on the Applicant to satisfy the Court as to the appropriate amount to impute. It is also clear that caution should be used when exercising judicial discretion to impute income.

[47] I am not satisfied that the Applicant has met her burden that the Respondent's income be set at $90,000.00. I am however satisfied that a higher income than the annualized income as claimed by the Respondent should be imputed to him.

[48] The Respondent's own evidence is that he receives assistance from a variety of sources in order to assist him to meet his financial obligations. Child support, at an amount set which assist in the financial caring of his son, should be an obligation the Respondent cannot choose to ignore in his current arrangement which includes assistance from family and friends. Furthermore, the Respondent is well educated and clearly employable given his employment history to prior to losing his position with his former employer in October 2012. The Respondent did not lead any evidence to explain why he has been unable to secure employment, even on a part-time basis, since his loss of employment.

[49] For these reasons, the Court imputes an income of $32,000.00 to the Respondent effective November 1st, 2012 to present. Accordingly, the Respondent's child support obligation would be decreased from the current order of $429.00 to $269.00 per month. Given this order, the amount payable by the Respondent would have been $3,228.00, for the twelve (12) months between November 1st, 2012 to October 31st, 2013.

[50] The evidence is unclear as to the amount of support paid by the Respondent from the months of November and December 2012 and January, 2013. The temporary order of Justice Clark dated February 11th, 2013 reduced child support to $199.00. If this order was complied with for the period between February, 1st to October 31st, 2013, payments in the amount of $1,791.00 would have been paid leaving a balance owing of $1,437.00. Should the evidence show that the payments made by the Respondent during these months are less than $1,437.00, the arrears are to be adjusted accordingly.

ORDER

[51] For the reasons expressed above, I make the following final order varying the order of Justice Kerrigan-Brownridge as follows:

1. The Applicant's Motion to Change seeking to vary child support retroactively is hereby granted to provide that the Respondent's child support obligation, effective July 1st, 2012 to October 31st, 2012, is $822.00 based on his annual income of $92,623.90 and thereafter in the amount of $269.00 effective November 1st, 2012 and on the 1st day of each month thereafter based on an imputed annual income of $32,000.00;

2. The arrears of child support for these periods, namely July 1st to October 31st, 2012 and November 1st, 2012 to October 1st, 2013, are hereby fixed at $1,572.00 and $1,437.00 respectively for a total of $3,009.00. This amount can be adjusted by the Family Responsibility Office to correct the arrears based on payments made by the Respondent during these periods;

3. The arrears will be paid at the rate of $150.00 per month with the first payment due on November 1st, 2013 and thereafter on the 1st day of each month thereafter until they are paid in full;

4. The parties shall exchange annual financial disclosure by providing copies of their respective income tax returns and notices of assessments by June 30th of each year, commencing in 2014;

5. A Support Deduction Order will issue; and

6. Given the divided success in this matter, each party shall bear their own costs.

Released: October 29, 2013

Justice L.S. Parent