Court File and Parties
Court File No.: 380/08-01 Date: 2016-05-19 Ontario Court of Justice
Applicant Counsel: Jennifer Lynn Deneau (formerly Riberdy) Gordon M. Gervais
and
Respondent: Wilfred Eric Scott (in person)
Heard: April 28, 2016
Endorsement
1: Introduction
1The Respondent, as moving party, ("father") brought a Motion to Change the Order of Phillips, J. dated January 13, 2010 seeking:
a. an order rescinding all arrears of child support owing under that Order; and
b. ordering that the table amount of child support be $196.50 per month starting May 1, 2016, based upon his 2015 annual income of $15,049.88.
2The Applicant, responding party, ("mother") opposes the request to rescind all arrears. She requests an order fixing child support arrears in the amount of $10,000.00 and that it be repaid at the rate of between $75.00 and $100.00 per month without interest.
3Mother's counsel did not make submissions with respect to ongoing support.
4On April 12, 2016, Justice Phillips directed that there be a trial of the issues raised in the Motion to Change.
5I considered the affidavits contained within the Continuing Record and the father's oral evidence and exhibits tendered. The mother did not testify.
2: Facts
6The parties are the parents of two children, Emily Margaret Scott, born March 3, 2006, and Eric Andrew Scott, born September 11, 2007.
7Both children reside in the care of their mother, pursuant to the Order of Justice Phillips, dated November 13, 2008 which granted her custody.
8On August 17, 2010, Justice Phillips granted a temporary order allowing the mother to move the ordinary place of residence of the children to Warren, Michigan. A final order allowing the relocation was made by Justice Phillips on April 19, 2011.
9The children and the mother continue to reside together in Michigan.[1]
10On February 12, 2009, Justice Phillips made an order that dealt with the father's access and child support. Access has been the subject of a number of proceedings, but it is not in issue on this Motion to Change.
11The February 12, 2009 Order provided that the father was to pay to the mother child support of $600.00 per month based upon his total income of $40,400.00 per year. That was a final order.
12On January 13, 2010, Justice Phillips made an order requiring the father to pay child support to the mother in the amount of $440.00 per month, based upon his 2008 income of $29,749.88. That order was made retroactive to February 12, 2009. It is described on the face of the order as a temporary one.
13I was not directed to a final order that subsequently dealt with child support, nor did I find one in the Endorsement Record.
14Neither party suggested that the support provisions of the order were temporary.
15For the purpose of this Motion to Change, I will assume that the child support provisions of the January 13, 2010 Order were intended to be final.[2]
16A Schedule A from a Director's Statement appended to the father's financial statement sworn September 8, 2015, disclosed that support accrued at the amount of $440.00 per month and the amount outstanding as of May 12, 2015 was $19,038.56.
17The father also put into evidence the last page of a Schedule A statement ending September 24, 2015 showing arrears owing of $17,506.40. The father added to that form, accruals from that date to February 2016, together with monies diverted to the FRO. The total amount owing to February 2016, according to the father, was $19,349.19. This sum was not disputed by the mother.
18The Respondent's evidence is that his total annual income for child support purposes (line 150) has been as follows:
| Year | Income |
|---|---|
| 2011 | $18,067.00 |
| 2012 | $7,202.00 |
| 2013 | $7,300.00 |
| 2014 | $9,785.00 |
| 2015 | $15,050.00 |
19The Respondent provided handwritten calculations that were marked as Exhibit Number 1, showing the amount of child support paid in each year since 2011 and the amount due for child support under what he claims was his annual income.
20Based on his calculations, there are no child support arrears owing. He claims there has been a small overpayment.
21When the January 13, 2010 Order was made requiring the father to pay $440.00 per month he was employed as a transport dispatcher. He had held this type of a position for approximately 8 years prior to the date of the Order.
22He last worked as a dispatcher on October 1, 2010.
23The father's evidence is that he lost his employment in part because of the turndown in the economy in Windsor and because he shut down emotionally when he was not able to see his children. The latter occurred when the children were permitted to move to Michigan in August 2010.
24In 2011 he received Employment Insurance.
25He attempted to find work through networking and sending applications to many companies.
26He described himself as being "pissed off" from 2010 until 2013. He was most upset by not being able to see his children. He also described himself as being "seriously pissed" when the Court declined jurisdiction in 2012 to deal with his Motion to Change custody and access in Ontario.
27The father was in receipt of social assistance in 2012, 2013, 2014 and part of 2015.
28In 2013 he stopped looking for employment. He described himself not as "depressed" but as "homicidal". He did not seek the help of a doctor. He lived on his social assistance payments and handouts from his mother. He denied working under the table.
29In 2015 he found employment with a firm called Labour Ready. He provides day labour services. Since at least January 1, 2016 he has been working at Diamond Home Improvement as a day labourer where he earns $15.00 per hour. He is not guaranteed a specific number of hours each week.
30The father also put in evidence a paystub from Diamond Home Improvements showing that from January 1, 2016 until April 15, 2016, his gross pay was $1,951.70. It confirms that his hourly wage is $15.00.
31When asked why he had not moved a number of years ago to change the support, he answered that he was not ready to give up then.
32Mother's counsel asked him how it was possible to live on the income that he disclosed when he had expenses for rent and cigarettes that exceeded the amount of his stated income. The father's answer was that the financial statement is a point-in-time document. Sometimes he would pick up cigarettes off the street to smoke. He had the help of his mother. In essence, he described himself as living hand-to-mouth.
33The father has a university degree in Business Administration as well as computer skills. His evidence is that he is now looking for employment but has only been able to obtain the job he now has with Diamond Homes.
3: Issues
34The issues to be decided at this trial are:
should the arrears that have accumulated under the January 13, 2010 Order be rescinded or reduced;
if they are to be reduced, by what amount; and
what should the father's ongoing child support obligation be?
4: Position of the Parties
35The father argues that his retroactive support obligation and the arrears calculation should be based on his actual income during the relevant period. On this basis he owes no arrears. If arrears are found to be owing he asks that they be rescinded as he does not have the ability to pay.
36The mother's argument is that income should be imputed to the father on the basis of his intentional unemployment and underemployment. She did not specify the amount of income that should be imputed. She also asks as set out in paragraph 2 of these reasons, that arrears be fixed at $10,000 and be repaid monthly at $75.00 to $100.00.
5: Legal Considerations – Rescission or Reduction of Arrears
37The Court has the power to retroactively discharge or rescind child support arrears: Family Law Act ss. 37(2.1).
38This power can be exercised in this case only if there has been a change in circumstances within the meaning of the Child Support Guidelines: Family Law Act ss. 37(2.1).
39In this case where the amount of child support was determined in accordance with the table, any change in circumstances that would result in a different order for child support constitutes a change in circumstances that gives rise to a variation: Child Support Guidelines (Ontario) s.14, ¶1.
40The accumulation of arrears without evidence of a past inability to pay is not a change in circumstances. As well, the present inability to pay does not by itself justify a change order. Such an order should only be granted if the payor can also prove a future inability to pay. Otherwise, the option is to suspend or order repayment of arrears: Haisman v. Haisman (1994) 1994 ABCA 249 (CanLII), 1994 Carswell Alta 179 (Alta C.A.)
41In Gray v. Rizzi 2016 ONCA 152, the Ontario Court of Appeal recently addressed the principles to be applied when a support payor moves to retroactively change a support obligation based on a reduction in income as follows:
(a) by incorporation the D.B.S. principles to the analysis;
55In Corcios v. Burgos, 2011 ONSC 3326 (Ont. S.C.J.), Chappel J. adapted the D.B.S. principles to a motion to change a child support order where the payor requested a retroactive decrease in support or rescission of arrears. I find it hard to improve on the analysis set out at para. 55 of her reasons. I adopt her analysis and summarize the key principles below.
56First, when applying the adapted D.B.S. principles on a motion to retroactively vary child support, one must always keep in mind the ultimate issue: namely, the best interests of the child: DiFrancesco, at para. 24. As Chappel J. stated, "Ultimately, the goal in addressing child support issues is to ensure that children benefit from the support they are owed when they are owed it, and any incentives for payor parents to be deficient in meeting their child support obligations should be eliminated."
57Next, a court should distinguish cases where a payor seeks relief from payment of arrears based on current inability to pay from those where arrears accumulated due to a change in the payor's circumstances that affected the payor's ability to make the child support payments when they came due.
58A payor's request for relief from payment of arrears based on a current inability to pay generally will not result in the rescission or reduction of arrears unless the payor has established, on a balance of probabilities, that he cannot and will not ever be able to pay the arrears. Evidence that the recipient agreed to non-payment of the support is irrelevant, as child support is the right of the child and cannot be bargained away by the recipient parent.
59Where, however, the payor demonstrates that a change in circumstances took place during the time that arrears were accumulating which rendered the payor unable to make child support payments for a substantial period of time, the court may provide relief by varying the child support order or rescinding arrears. As Chappel J. stated: "[the court] may determine that it is appropriate to retroactively suspend enforcement of the support order during the time when the payor was unable to pay, or decrease the amount of child support owed during that time and reduce or rescind the arrears owing accordingly."
(b) by identifying the factors the Court should consider when deciding whether to retroactively rescind or reduce support arrears;
60The present case falls into this second category. While there is no fixed formula a court must follow when exercising its discretion in this circumstance, Chappel J. identified the following factors to guide a court in determining whether to grant retroactive relief, the date of retroactivity, and the quantum of relief:
The nature of the obligation to support, whether contractual, statutory or judicial;
The ongoing needs of the support recipient and the child;
Whether there is a reasonable excuse for the payor's delay in applying for relief;
The ongoing financial capacity of the payor and, in particular, his ability to make payments towards the outstanding arrears;
The conduct of the payor, including whether the payor has made any voluntary payments on account of arrears, whether he has cooperated with the support enforcement authorities, and whether he has complied with obligations and requests for financial disclosure from the support recipient. As stated by Chappel J.: "Behaviour that indicates wilful non-compliance with the terms of the order or failure to work cooperatively to address the child support issue is a factor that militates against even partial rescission or reduction of arrears";
Delay on the part of the support recipient, even a long delay, in enforcing the child support obligation does not, in and of itself, constitute a waiver of the right to claim arrears; and
Any hardship that may be occasioned by a retroactive order reducing arrears or rescinding arrears, or by an order requiring the payment of substantial arrears. As put by Chappel J.: "[I]f a retroactive order reducing child support would result in the child support recipient having to repay money to the child support payor, this may militate against making the order, particularly if the payor has not given the recipient notice of the change in their circumstances, has not provided appropriate disclosure to support their claim for an adjustment to the child support, or has delayed initiating court proceedings to change the order."
(c) and by considering how a retroactive reduction should be calculated, including determining a start date;
61If a retroactive reduction of child support is appropriate in light of these factors and any other relevant considerations, the court must determine the date from which the reduction should take place and the extent of the reduction. Following S. (D.B.), a retroactive order normally should commence as of the date of effective notice that a request is being made for a child support adjustment. It is generally inappropriate for a retroactive order to extend back more than three years before formal notice is given.
62Where a payor seeks a retroactive reduction in child support or rescission of arrears, effective notice requires the payor to provide "reasonable proof to support the claim for a change to the [order], so that the recipient can independently assess the situation in a meaningful way and respond appropriately." As put by Chappel J.: "A child support recipient is entitled to expect that the existing order will be complied with, and to arrange their financial affairs respecting their children accordingly, unless they are in receipt of reasonable proof that a relevant change in the payor's circumstances has occurred."
63This obligation to disclose and negotiate with the recipient parent is ongoing, so that the recipient can assess and react to changes in the payor's financial situation. A payor's failure to comply with his continuing notice and financial disclosure obligations most likely will impact the remedy which the court crafts.
64Finally, "with respect to the quantum of any retroactive child support order, the Child Support Guidelines apply, provided that the date of retroactivity is not prior to the date when the Guidelines came into force, and subject to the principles set out in the statutory scheme under which the Court is operating."
6: Application of Legal Considerations – Rescinding or Reducing Arrears
Has there been a change in circumstances?
42In this case, the father seeks relief from the payment of arrears that accumulated due to a change in his circumstances.
43As set out above, in 2010 the father lost his employment. From 2010 until September 2015 he was unemployed and in receipt of Employment Insurance benefits and then social assistance. At present, he is a labourer who works when jobs are available. His ability to pay the arrears with his current income is compromised.
44The father has demonstrated that since the making of the January 13, 2010 Order, he experienced a significant and sustained reduction in his annual income compared with the income which formed the basis of that Order.
45This reduction in income constitutes a change in circumstances within the meaning of the Child Support Guidelines as provided for under s.37 (2.1) of the Family Law Act. The father's prolonged unemployment occurred after the original order was made and was not considered or expected when it was made.
Should the arrears be rescinded or reduced?
46The threshold for a variation of child support has been met. It is therefore necessary to consider the factors set out in Grey v. Rizzi in deciding if there should be a retroactive reduction in support arrears on the basis of the father's reduction in income.
47In this case, the father's child support obligation was judicially determined by the Court and resulted in the January 13, 2010 Order.
48When the order was made, the father was employed at the type of job he had held for approximately 8 years and had annual income of $29,749.88.
49The father's excuse for waiting from 2010 until 2015 to seek a change in his support obligation was stated to be that he shut down because he could not see his children. He believed he was a victim of alienation.
50While the Court can appreciate the father's frustration with not being able to see the children, his excuse for doing nothing about accumulating arrears and obtaining employment until September 2015 is not reasonable.
51The father borrowed or took money from his mother to help him make ends meet and he chose to provide none of it to help support his children.
52There is no medical evidence that the father was incapacitated or otherwise unable to seek some employment. He is educated and articulate.
53In his evidence, he described that he did not have the clothes to make himself presentable or transportation to take him to prospective employers. There is no evidence that he applied any of his resources, including his mother's financial help, to put him in a position to seek and gain employment – until he decided he wanted to in September 2015.
54There is no evidence that the father made any attempt to voluntarily pay child support. The FRO Schedule A forms contained in the record disclosed that up to September 15, 2011, support was in arrears of approximately one-and-a-half months. From October 2011 until April 2015, no payments were made.
55There is no evidence that throughout this period the father made any disclosure to the mother of his financial circumstances.
56The Court also takes into account that the mother did not provide much evidence of her financial circumstances, such that consideration of her and the children's ongoing need could be made. All that was provided in evidence is that one of the children takes medication that costs $100.00 per month and the mother must pay for mental health professionals for that child. As well, the Court is unable to assess what, if any, hardship to them may be occasioned by an order reducing or rescinding arrears. No financial statement was provided.
57The Court also takes into account that throughout the period of time arrears accumulated, the support order was the subject of enforcement by the Family Responsibility Office. Any relief to be granted to the father will not, in all the circumstances of this case, be based upon a delay on the part of the mother in seeking to enforce the child support order. The FRO tried on her behalf to collect child support but with limited success.
58The father filed his Motion to Change in September 2015. There is no evidence that the father gave notice any earlier of his intention to seek a reduction in child support.
59I am satisfied that, based on this evidence, a retroactive reduction in child support arrears, but not rescission, from that based upon the January 13, 2010 Order, is appropriate because:
a) there was blameworthy conduct on the part of the father. For part of the period he was wilful in his non-compliance. He should have been looking for employment throughout the period;
b) he did not work co-operatively with the mother to address the child support issue;
c) he did not provide ongoing disclosures except as part of this case;
d) the father's income was significantly less than that upon which the original order was made. There is no evidence or suggestion that the father hid assets or income, or that he caused his loss of employment;
e) the father's current employment income and reasonable prospects for the immediate future will not give him the ability to pay all or substantially all of the arrears. The Court must take into account the hardship that would be occasioned by any order to pay the arrears;
f) the Court has scant evidence of the hardship a reduction would have upon the mother or children; and
g) the mother's position is that some arrears be rescinded.
60The date of effective notice given by the father was the date this Motion to Change was brought: September 2015.
61A date generous to the father would be to make a retroactive order that starts three years prior to the date of effective notice.
62In order to take into account the father's past and present financial circumstances and the generous position of the mother, the start date for a retroactive reduction will be three years prior to the start of the change of motion.
63According to the Family Responsibility Office printout, the amount owing in August 2012 for child support – being the date three years prior to the bringing of the Motion to Change – was $5,524.90.
64There will not be any reduction in the father's child support obligation prior to August 2012. His delay and non-disclosure are significant factors in this regard. This is not a case where the Court should extend the retroactive period beyond three years.
65The mother argues that in calculating the arrears to be rescinded regard should be had to what the father could have earned instead of what he earned. She asks that income be imputed to the father during the period he asks for rescission and then consider the reduction in arrears that is appropriate.
66Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this obligation, the parties must earn what they are capable of earning. If they fail to do so, they will be found to be intentionally under-employed. Clause 19(1)(a) of the guidelines is perceived as being a test of reasonableness: See Drygala v. Pauli 2002 CanLII 41868 (ON CA), [2002] O.J. No. 3731(Ont. C.A.).
67Section 19 of the Child Support Guidelines (Ontario) provides that the court may impute to a spouse "such amount of income … as it considers appropriate" and provides a non-exhaustive list of such circumstances. The relevant portions of s. 19 read as follows:
19.(1) Imputing Income – The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include,
(a) the spouse is intentionally under-employed or unemployed, other than where the underemployment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the spouse;
68The Ontario Court of Appeal in Drygala v. Pauli set out the following three questions which should be answered by a court in considering a request to impute income:
Is the party intentionally under-employed or unemployed?
If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?
If not, what income is appropriately imputed?
69It is appropriate to base the determination of the amount to rescind arrears by imputing income to the father during the period January 2012 to August 2015 on the basis that he was intentionally unemployed. I agree with Mr. Gervais that this is a reasoned and transparent way to approach the issue of reduction in arrears in this case.
70I accept that the father lost his employment in or about 2010 due to economic circumstances that were beyond his control. For part of that year he received Employment Insurance income. I also accept that initially he did look for employment.
Intentional unemployment
71I find that that the father was intentionally unemployed based upon the following:
a) inadequate disclosures of his financial circumstances. In this case the only financial statement provided was sworn September 8, 2015. It was filed when the Motion to Change was brought. A financial statement as required by rule 23(1)¶3 was not filed;
b) other than stating that he looked for employment and networking, no other evidence of job searches were provided;
c) the father acknowledged that at one point he gave up looking for work; and
d) his evidence is that he shut down because of not being able to see the children beginning in 2010. However, he continued to work until he lost his employment a number of months afterwards.
No reasonable excuse
72I also find that the father did not provide a reasonable excuse for his unemployment based upon the following:
a) The father did not provide any medical evidence which would suggest that he was unable to obtain employment at any time from 2011 to the present;
b) He remained unemployed until the fall of 2015 at which time he decided to deal with his support arrears. He had been contacted by the FRO a number of times. His evidence is that he was audited by the FRO and received "threats" that steps would be taken to suspend his driver's licence; and
c) When the father decided it was time to deal with his support obligation he was able to:
i. file all outstanding income tax returns;
ii. bring this Motion to Change; and
iii. obtain employment.
Amount of income to impute
73The amount of income to impute in this case should be based upon the father's capacity to earn income having regard to his employment history, education, skills, health and available opportunities.
74The parties did not provide much evidence to assist in deciding the amount of income to impute.
75What is known is that when the father decided to deal with the matter of support, he was able to find some employment.
76The best evidence of the amount of income to impute is the amount it is agreed he is now earning: approximately $15,000.00 per year.
77In answer to the three Drygala questions:
the father was intentionally unemployed from January 1, 2012 until September 2015;
the father has not offered a reasonable excuse for his unemployment; and
the appropriate income to impute for this period is $15,000.00 per year during this period.
78Based upon imputed income of $15,000.00 per year, the monthly child support payment due was $195.00 during this period.
79The amount of support that should have been paid from September 2012 to May 2016 was $8,775.00.
80The father is entitled to credit for the sum of $4,484.96 paid through FRO diversions to December 2015.
81I also take into account that there have been diversions to the FRO since January 1, 2016 for which the Respondent is entitled to credit.
82I have also considered the father's present ability to repay these arrears.
83For these reasons, the support arrears, which the father calculated at $19,349.19 as of February 2016 under the January 13, 2010 Order, are hereby reduced to $9,500.00 as of May 31, 2016.[3]
84The father's ongoing financial capacity to make payments towards the now outstanding arrears will also be taken into account in determining the repayment schedule. His income on a part-time basis is now expected to be $15,000.00. He testified that at present his work is weather dependant. At this time of the year his prospects for more hours is greater. He also testified that he is looking for work. I take that to mean more remunerative work.
85The support arrears of $9,500.00 shall be paid at the rate of $50.00 per month reviewable at the instance of either party having regard to any changes in the father's circumstances in the future. That is, should the father's income increase and his capacity to pay more towards the arrears also increase, the repayment schedule may be revisited. The father shall be given a grace period before being required to start paying the arrears.
86The father's ongoing child support obligations will be based upon his expected income of $15,000.00. This is the best evidence that has been provided and was not disputed.
7: Order
87For all of these reasons, a final order shall issue as follows:
- the Order of the Honourable Justice Phillips, dated February 12, 2009, as varied by the Order of the Honourable Justice Phillips, dated January 13, 2010, shall be further varied as follows:
a) commencing on the first day of June 2016 and on the first day of each month thereafter, the Respondent, Wilfred Eric Scott, shall pay to the Applicant, Jennifer Lynn Riberdy, for the support of the children, Emily Margaret Scott, born March 3, 2006, and Eric Andrew Scott, born September 11, 2007, the monthly sum of $195.00 based upon the Respondent's 2015 annual income of $15,000.00 and Child Support Guidelines (Ontario) clause 3(1)(a);
b) arrears of child support owing under the Order of the Honourable Justice Phillips, dated February 12, 2009, as varied by the Order of Justice Phillips, dated January 13, 2010, shall be fixed in the amount of $9,500.00 as of May 31, 2016;
c) the arrears of child support shall be payable at the rate of $50.00 per month commencing on the first day of September 2016, and on the first day of each month thereafter until paid in full. This repayment schedule is reviewable at the instance of either party having regard to any changes in the father's circumstances in the future. That is, should the father's income increase and his capacity to pay more towards the arrears also increase, the repayment schedule can be revisited;
d) if the father is more than 31 days late in making an ongoing or arrears of support payment, the entire amount of arrears then owing shall immediately become due and payable;
e) nothing in this order precludes the Director, Family Responsibility Office from collecting arrears from any government source such as HST or income tax refunds or any lottery or prize winnings;
f) a Support Deduction Order shall issue; and
g) the father shall notify the mother in writing of any change in his employment and income, including particulars of his employer, rates of pay and availability of benefits, within 10 days of any change.
88If either party seeks costs, written submissions of not more than 3 pages double-spaced, together with any offers with proof of service and a bill of costs is to be provided within 10 days of the release of these reasons, and any response within 5 days thereafter.
Original signed and released
Justice Barry Tobin
Date released: May 19, 2016
Footnotes
1Jurisdiction was not raised as an issue.
2Reviewing the endorsement record discloses that at the January 13, 2010 court attendance, child support was dealt with on a final basis because it refers to the remaining issues having to do with mobility and custody. The May 12, 2010 endorsement does not refer to child support as an outstanding issue going forward.
[3] Support arrears to August 2012: $5,574.90 Support due September 2012 to May 2016 @ $195.00 per month for 45 months: $8,775.00 Credit payments made: ($4,484.96) Total: $9,864.94
