Court File and Parties

Court File No.: FO-15-80810 Date: 2016-08-02

Ontario Court of Justice

Between:

The Director of the Family Responsibility Office for the Benefit of Robyn Cornofsky Levy

Carolyn Brett, for the Applicant

Applicant

- and -

Jordan Kevin Levy

Acting in Person

Respondent

Heard: July 27, 2016

Justice: S.B. Sherr

Reasons for Decision

Part One – Introduction

1The default hearing in this matter was heard on July 27, 2016.

2The applicant (the Director) seeks a default order against the respondent (the father) on the following terms:

a) That the father shall make child support payments of $600 on both August 1st and September 1st, 2016;

b) That the father shall make support payments in accordance with the January 5, 2010 order of Justice Susan Healey of the Superior Court of Justice (the existing order) in the sum of $2,224 per month, starting on October 1, 2016;

c) That the father shall make payments of $776 per month on account of arrears that have accumulated under the existing order, starting on October 1, 2016; and

d) That the father shall be committed to jail for 3 days, or until such time as the outstanding payment is made in full, for each payment in default.

3The father asked the court to make a default order that he pay $600 per month for support. He asked that the court not attach a committal order to any default in payment.

4The parties provided considerable affidavit evidence at this hearing, including an affidavit from a lawyer who was employed by the father's previous lawyer. The father testified and was cross-examined.

Part Two – Background Facts

5The father is the parent of three children - eight-year old twins and a 13-year old son.

6On January 5, 2010, Justice Healey made the existing order imputing the father's income at $60,000 per annum. She ordered the father to pay child support to Robyn Cornofsky Levy (the mother) in the sum of $2,224 per month. This consisted of the Child Support Guidelines (guidelines) table amount for three children of $1,177 per month and special expenses of $1,047 per month.

7Justice Healey also ordered the father to pay the mother retroactive child support of $25,394 and costs of $1,500.

8The father did not defend this action. The existing order was made on default.

9The father did not appeal the existing order.

10The father moved to change the existing order on August 7, 2010.

11The mother brought a summary judgment motion to dismiss the father's motion to change. On September 25, 2013, Justice Cory Gilmore of the Superior Court of Justice made orders requiring the father to pay $15,000 for security of costs and $5,000 towards support, failing which his motion to change would be dismissed. She also ordered the father to provide the mother with specific financial disclosure.

12On October 17, 2013, Justice Gilmore ordered the father to pay the mother $4,000 in costs within 45 days.

13The father did not comply with Justice Gilmore's orders.

14On December 10, 2013, Justice Peter Douglas of the Superior Court of Justice dismissed the father's motion to change.

15The father appealed this decision.

16On September 17, 2014, on the hearing date, the father withdrew his appeal. The father was ordered to pay the mother her costs of $5,000.

17The Director issued its Notice of Default Hearing on May 15, 2015.

18On November 9, 2015, this court made a temporary default order requiring the father to pay $600 per month. He would be committed to jail for 3 days for each payment in default, to a maximum of 180 days. The father was also ordered to provide the Director with financial disclosure and to bring his motion to change the existing order within 20 days. The default hearing was adjourned to permit the father to do this.

19The father issued his motion to change the existing order in the Superior Court of Justice on November 26, 2015.

20The default proceeding has been on adjournment to permit the father's motion to change to proceed.

21The father has remained in compliance with the temporary default order.

22The mother brought a summary judgment motion to dismiss the father's motion to change in the Superior Court of Justice. This was heard by Justice Sherrill Rogers on March 10, 2016.

23Justice Rogers stayed the father's motion to change until he paid $15,000 security for costs, $5,000 towards support arrears and paid outstanding costs to the mother of $4,000. She also made a financial disclosure order. [1]

24Justice Rogers gave the father until June 1, 2016 to comply with her order, failing which the mother could bring a Form 14B motion to dismiss his motion to change. [2]

25On April 25, 2016, Justice Rogers ordered the father to pay the mother $12,000 for her costs of the summary judgment motion.

26The father did not provide security for support, or pay anything towards support or costs, as required by Justice Rogers' order of March 10, 2016.

27On June 14, 2016, Justice Heather McGee dismissed the father's motion to change and ordered the father to pay the mother her costs of $2,500.

28The Director filed its updated Statement of Arrears. Its contents were not disputed by the father. He is $164,962.41 in arrears of support under the existing order, as of July 27, 2016.

Part Three – The Father's Evidence

29Much of the father's evidence was focused on the unfairness of the Superior Court of Justice orders, his belief that the mother is not entitled to the amounts ordered and the sins of lawyers he has dealt with. This evidence was not relevant to the issues this court has to decide. The existing order remains in force and its support terms will continue until changed by that court. It is not this court's function to determine if the existing order is correct or to change it. This court's function is to determine how the existing order will be enforced.

30The father is 46 years old. He attended, but did not complete, the Business program at Ryerson University in Toronto. He obtained a Bachelor of Science and Accounting Degree from LaSalle University in Louisiana.

31The father married the mother in 2000. They separated in 2008 and divorced in 2009. Their three children live with the mother.

32The father is single and lives alone. He has no other children.

33The father worked part-time while in school assisting his parents in their property management business. He also worked at a bar. He said that he obtained a certificate to become a mortgage broker, but only worked in that field for six months.

34The father said that he has been self-employed as a computer consultant since 1990. He said that he does "everything" with computers, including service, repairs, upgrades and designing websites.

35The father deposed that he earned annual income ranging between $33,150 and $42,000 from 2006 to 2008, principally from his business.

36In 2008, the father went bankrupt.

37The father was in receipt of social assistance from 2009 until 2012. His annual income did not exceed $7,742 during those years.

38The father's 2013 income tax return showed gross business income of $42,000 and net business income of $20,895. His 2014 income tax return showed gross business income of $48,000 and net business income of $20,836. The father declared gross business income of $6,550 in 2015, with no expenses.

39The father stated that he has also worked with his mother over the years, assisting her with her law practice. He said that he assisted her with bookkeeping, estate work and reconciling accounts. His mother is no longer practising law. She is 92 years old.

40The father said that he also worked part-time from 2012 to 2014 for a company doing window blind installations. The father said that his driver's licence was suspended for the fourth time by the Director late in 2014 for being in default of support. He could no longer work for this employer.

41The father's driver's licence continues to be suspended.

42The father testified that his mother has dementia and he has been solely responsible for her care. He is the power of attorney for her. He said that she was hospitalized in October of 2014. He arranged to sell her home. His mother received net proceeds of just over $136,000 from its sale.

43The father arranged for his mother to live in a retirement home from January until August of 2015. However, this was becoming unaffordable. His mother moved into the father's apartment from August of 2015 until January of 2016. The father said that he was fully responsible for his mother's physical care and couldn't work during this time. He said that he used her funds from the sale of her home, her Old Age Pension and her Sun Life Pension to support the two of them during this period. He went back on social assistance in November of 2015.

44The father said that he was able to find a subsidized retirement home for his mother and she has lived there since January of 2016.

45The father remains on social assistance and receives $600 per month. He said that he uses these monies to pay the temporary default order.

46The father said that he has started doing computer work again, but it is difficult because he does not have a car due to his licence suspension and he cannot get to his clients' homes in a timely manner. He deposed that he also lost many clients during the time he was caring for his mother and not working.

47The father said that he has also been working with the Law Society of Upper Canada, helping them wrap up his mother's law practice.

48The father added that he has done some minor part-time work in the past year helping a friend out at his bar and occasionally doing handyman work.

49The father said that he has not been earning enough monthly income to be removed from social assistance.

50The father testified that he leads a very modest lifestyle. He lives in a junior one bedroom apartment of less than 600 feet and pays $1,057 per month for rent. He said that he has struggled to make rent payments.

51The father deposed that he has been able to survive through loans and gifts from family and friends. He said that he has sold most of his personal items.

52The father hopes to have his driver's licence restored and continue operating his computer consulting business.

Part Four – Legal Considerations

53The current statutory scheme governing default hearings is found in section 41 of the Family Responsibility and Support Arrears Enforcement Act (the Act) and rule 30 of the Family Law Rules. The Director may initiate the default proceeding. The Director prepares a statement of arrears. The payor files a financial statement and, if so inclined, a default dispute. The court may hear oral testimony, direct the production of other relevant documentation and add parties to the default proceedings. See: Fischer v. Ontario (Family Responsibility Office), 2008 ONCA 825, paragraph 17.

54At the hearing, the amount of arrears owed and the payor's ability to pay are the central issues. Subsection 41(9) of the Act puts the onus on the payor, as follows:

Presumptions at hearing

(9) At the default hearing, unless the contrary is shown, the payor shall be presumed to have the ability to pay the arrears and to make subsequent payments under the order, and the statement of arrears prepared and served by the Director shall be presumed to be correct as to arrears accruing while the order is filed in the Director's office.

55Subsection 41(10) of the Act sets out the powers of the court on a default hearing as follows:

Powers of court

(10) The court may, unless it is satisfied that the payor is unable for valid reasons to pay the arrears or to make subsequent payments under the order, order that the payor,

(a) pay all or part of the arrears by such periodic or lump sum payments as the court considers just, but an order for partial payment does not rescind any unpaid arrears;

(b) discharge the arrears in full by a specified date;

(c) comply with the order to the extent of the payor's ability to pay;

(d) make a motion to change the support order;

(e) provide security in such form as the court directs for the arrears and subsequent payment;

(f) report periodically to the court, the Director or a person specified in the order;

(g) provide to the court, the Director or a person specified in the order particulars of any future change of address or employment as soon as they occur;

(h) be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the arrears are paid, whichever is sooner; and

(i) on default in any payment ordered under this subsection, be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the payment is made, whichever is sooner.

56Subsection 41(11) of the Act states:

No effect on accruing of arrears or other means of enforcement

(11) An order under subsection (10) does not affect the accruing of arrears, nor does it limit or otherwise affect any other means of enforcing the support order.

57Subsection 41(17) of the Act reads:

Imprisonment does not discharge arrears

(17) Imprisonment of a payor under clause (10)(h) or (i) does not discharge arrears under an order.

58At a default hearing, the payor must show an inability to pay due to valid reasons. A valid reason is an event over which the payor has no control which renders the payor totally without assets or income with which to meet his or her obligations, such as disabling illness or involuntary unemployment. See: Ontario (Director, Family Responsibility Office) v. Carney, 2004 ONCJ 11. The payor must also show that he or she has accepted their responsibilities and placed the child's interests over their own and has provided frank disclosure to the court. See: Ontario (Director, Family Responsibility Office) v. Labrash.

59In Ontario (Director, Family Responsibility Office) v. De Francesco, 2012 ONCJ 6338, Justice Carolyn Jones further explores the meaning of "valid reason" under section 41(10) as follows at paragraph 21 of her decision:

"21 Valid reasons, within the meaning of s. 41(10) of the Act, imply reasons for which the payor cannot be faulted or for which the payor does not bear responsibility in the culpable sense. The court would expect some evidence of circumstances where, despite reasonable, diligent and legitimate efforts by the support payor to comply with the support order, the support payor has been unable to do so for reasons that are not connected with an unwillingness to pay, a lack of effort, a failure to prioritize the support obligation or a deliberate neglect, failure or avoidance on the part of the payor. Evidence relating to the past and present circumstances of the payor, including his financial circumstances since the time of the first default under the order, the manner in which he has applied his available income and assets, and his efforts to secure employment or income during the time that the arrears have arisen will have some bearing upon the determination of the legitimacy of the reasons the payor puts forward for his default under the support order. Circumstances that are beyond the control of the payor, resulting in the payor's inability to pay, would be valid reasons. An illness on the part of the payor, including a mental disorder, rendering the payor completely unable to work on either a full or part-time basis, as in the case before the court, would amount to a valid reason for the payor's failure to pay."

60The court is not required to incorporate the payment terms of the existing support order in its default order. De Francesco, supra, par. 22.

61Clause 41(10)(i) of the Act contemplates an order of imprisonment for failure to pay an amount owing at the time the order is made or a failure to make future payments required under the order: See: Saunders v. Saunders; Fischer, supra.

62Enforcement legislation should be viewed as remedial rather than punitive. See: Saunders, supra.

63Imprisonment is a last resort. Something more than non-payment is required. The payor's conduct must demonstrate a willful and deliberate disregard for the obligation to comply with court orders. It is meant as a mechanism to enforce support and not as a means of punishing the payor. See: Fischer, supra.

64In Fischer, supra, the court writes at paragraph 25:

Further, the case law and the Act recognize that imprisonment for non-payment is meant as a means of enforcing the support order and not as a means of punishing the payor. The payor must be released upon payment of the amount owed: see s. 41(10)(i). A committal order, imposed as a term of either a temporary or final order in a default hearing, is intended to induce compliance with the payment terms of the order. The prospect of imprisonment hopefully focuses the payor's mind on the importance of making the required payments. The enforcement rationale for imprisonment upon non-payment makes sense only if the payor has the ability to make the payments required by the order: see Saunders, at paras. 11-13 …

65The maximum jail time should be reserved for the most severe cases. See: Ontario (Director, Family Responsibility Office) v. Kirkpatrick.

Part Five – Analysis

5.1 Partial Rebuttal

66The father was only able to partially rebut the presumption that he has the ability to pay the arrears and subsequent payments under the existing order.

67The court accepts that the father's ability to earn income was disrupted for about one year as he had to care for his mother. This will also likely have some future impact on his earning ability, as it is reasonable to assume that he lost some customers when he wasn't available to assist them.

68The court also recognizes that the father has no assets and does not lead a lavish lifestyle. The Director did not seek payment of a lump sum payment towards the arrears.

5.2 Problems with the Father's Evidence

69However, the father did not rebut the presumption that he could afford to make significant payments towards the existing order.

70The father was not a credible witness. He has not acted in good faith with respect to his child support obligations. The court does not accept the father's evidence about his income or about his ability to earn income.

71The father has a very poor history of paying child support. He does not pay child support until forced to.

72The father did not voluntarily pay any child support under the existing order until February of 2012.

73The father did not voluntarily pay any child support between August 16, 2014 and August 28, 2015. He only resumed payments when the Director started this default hearing.

74The father did not provide a good reason for why he was on social assistance between 2009 and 2012. He is educated, intelligent and has several job skills. He provided no evidence about efforts to seek employment during those years. He said that he took a program through social assistance to become a firefighter. He provided no evidence of a job application for employment in this field.

75Justice Rogers made a detailed financial disclosure order against the father on March 10, 2016. The mother advised that court in her Form 14B motion that none of the 20 disclosure items ordered had been complied with by the father. At this hearing, the father insisted that the mother had received most of this financial disclosure. However, he could not produce any evidence that any financial disclosure had been delivered to the mother between March 10, 2016 and June 14, 2016, when his motion to change was dismissed.

76The father claimed that he had given much of this information to his lawyer at the time for delivery, continuing a pattern of deflecting blame onto lawyers for his predicament. [3]

77At no time did the father acknowledge that he has had any responsibility for the array of orders that have been made against him.

78The father did provide significant disclosure in this case, but some important disclosure was still missing. On June 3, 2016, the father agreed to a disclosure order. He only partially complied with it. He did not produce:

a) An affidavit setting out his current employment status and attempts to obtain additional employment and supporting documents.

b) An affidavit setting out any gifts received from January 1, 2012 to date and the status of those gifts.

79The evidence the father provided about his business was internally inconsistent and unreliable.

80A self-employed person has the onus of clearly demonstrating the basis of his or her net income. This includes demonstrating that the deductions from gross income should be taken into account in the calculation of income for support purposes. See: Whelan v. O'Connor.

81The self-employed also have an inherent obligation to put forward not only adequate, but comprehensive records of income and expenses, from which the recipient can draw conclusions and the amount of child support can be established. See: Meade v. Meade. The father failed to do this and an adverse inference will be drawn against him.

82The father said that he operated only one bank account and all of his business revenue went into that account. This should have made it easier to confirm his evidence about his business affairs. It did not.

83In his Statement of Business or Professional Activities attached to his 2013 income tax return, the father declared gross revenue of $48,000. There was no evidence proving those revenues. The Director pointed out that the father's bank account statements for 2013 showed deposits of over $82,000. The father struggled in explaining the high amount of deposits. He speculated that these included funds that he was processing for his mother at the time, but provided no tangible evidence of this. [4]

84The father's evidence about his 2014 income made even less sense. He declared gross revenue of $42,000 (once again a round number). Despite his evidence that all of his revenues were deposited into his bank account, he only deposited $36,489 into this account in 2014, leaving one to wonder where the other revenue went, or whether he was partly operating his business in cash.

85Compounding this issue was the father's evidence that he sold off most of his personal items in 2014. He provided a list of the amounts he received for these items, which coincidentally totaled $36,489 – the exact amount deposited into his bank account in 2014. [5] This leads to the question of where did the business revenue go? [6]

86The father also aggressively deducted expenses from his gross revenues in his income tax returns. Many of the expenses were clearly personal. It was interesting to note that the father was spending $1,112 per year on ETR fees in 2013, but not paying appropriate child support.

87The father claimed that he spent $38,500 for his lawyer on both this default hearing and his motion to change. He did not provide meaningful evidence about how he paid for these legal fees, [7] the temporary default payments and his living expenses while only receiving social assistance payments of $600 per month. [8] Clearly, the father has more access to funds than he is revealing.

88The father claimed that he received many loans and gifts from family and friends. However, his evidence was seriously deficient in identifying the persons he received these monies from, the amounts, when they were received and documentary evidence proving receipt of the loans and gifts. He was given another opportunity to do this in the June 3, 2016 order but he failed to comply with this disclosure provision.

89The father also could not justify why he has not been applying for employment since 2010 despite being required to provide a job search list. If the father has been earning so little from his business, it does not make sense that he would continue it, particularly given his support obligations to his children. A payor cannot be excused from his or her support obligations in furtherance of unrealistic career aspirations. See: Hanson v. Hanson; Gobin v. Gobin, 2009 ONCJ 245; Charron v. Carriere, 2016 ONSC 4719. A reasonable inference is that the father is not looking for another job because he is already earning more income than he is revealing through his business.

90The father provided no medical evidence that he is restricted in any way from obtaining any form of employment.

91It is inexplicable that the father, with his job skills, has spent 3.5 of the last 6 years on social assistance.

92The father's argument that he does not have the ability to pay the support order due to his licence suspensions carries little weight with the court. His driver's licence has been suspended four times because he has ignored his support obligations. Further, the father testified that much of his work is done from his home. The court is not convinced that he requires a vehicle to earn what he is capable of earning.

5.3 What Default Order is Appropriate?

93This leaves the court to determine what default order is appropriate in these circumstances.

94The court's sympathies lie with the mother who has engaged in this exhausting chase to obtain a fair amount of child support and the children who have not been fairly supported by the father. It is one of the court's primary objectives in a default hearing to maximize the enforcement of an order.

95The court also has to consider that imprisonment is the last resort for enforcement. In making a default order with a term of imprisonment attached, the court should be confident that the father has the ability to make the payments ordered. The consequences to the father if the court orders an amount he cannot afford are profound.

96Reconciliation of the objective to maximize the enforcement of an order while not unjustly imprisoning a payor for non-payment of a default order is a delicate balancing act for the court. This court prefers to err on the side of caution in balancing these considerations.

97The court accepts the Director's position that a committal term should be attached to any payment order. The father has a poor payment history and generally only pays child support when forced to. Suspending the father's driver's license four times did not result in a better payment record. The committal term in the temporary default order resulted in consistent support payments, albeit at an amount much lower than in the existing order.

98The evidence indicates that the father has either earned or has been capable of earning somewhere between $45,000 per annum and the $60,000 per annum imputed to him in the existing order. [9]

99The court recognizes that the father's ability to earn this level of income was disrupted in 2015 due to his caregiving responsibilities for his mother. The court accepts that it will take him a while to either fully restore his business or find employment that pays him at this income level. The court will make a default order that takes this into consideration and gradually increases the payment terms in the default order.

100At a gross income of $60,000 per annum, the father only receives net income of about $3,800 per month, after taking into account required deductions. At a gross income of $50,000 per annum, his net income is reduced to about $3,200 per month. The father no longer has any assets. The Director's request that the father pay $3,000 per month is not realistic and would not result in an effective or just enforcement of the existing order.

101The court will order the father to continue to pay the mother $600 per month for August and September as requested by the Director. In October, this amount will go up to $1,000 per month. In January of 2017, it will increase to $1,500 per month and in April of 2017 it will increase to $1,800 per month. The father will be committed to jail for 3 days for each default in payment (or until such time as the payment is made if earlier), up to a maximum sentence of 180 days in jail.

Part Six – Conclusion

102There shall be a final default order on the following terms:

a) Child support arrears are fixed in the sum of $164,992.41, as of July 27, 2016.

b) The father shall be required to pay the sum of $600 towards support for August (to be paid by August 15, 2016) and September 1, 2016.

c) The father shall be required to pay the sum of $1,000 towards support on October 1, 2016, November 1, 2016 and December 1, 2016.

d) The father shall be required to pay the sum of $1,500 towards support on January 1, 2017, February 1, 2017 and March 1, 2017.

e) Starting on April 1, 2017, the father shall be required to pay the sum of $1,800 per month towards support.

f) The father shall be committed to jail for 3 days (or until the outstanding amount is paid in full, if earlier) for each payment in default as set out in this order.

g) The maximum length of time, cumulatively, that the father can be imprisoned under this default order is 180 days.

h) The payment terms in this order shall continue even if one or more of the father's children becomes ineligible for support.

i) Nothing in this order precludes the Director from collecting arrears from any other source, including income tax or HST refunds and lottery or prize winnings.

j) The father shall immediately notify the Director if he is informed that he is entitled to funds pursuant to his claim under the Law Society of Upper Canada Compensation Fund. [10] Any monies the father is entitled to under that fund are subject to collection by the Director.

k) The father shall immediately notify the Director if he obtains employment, including the name, address and phone number of his employer and evidence about his rate of pay, including any employment contract or pay slips.

l) The father shall provide the Director with copies of his full income tax returns and notices of assessment by June 30th each year.

103The court wishes to make it clear to the father that this order does not change the existing order. Arrears will continue to accrue under that order unless changed by the Superior Court of Justice.

104The court also wishes to make it very clear to the father that unless there is a material change in circumstances not foreseen in this decision, the provisions in this order regarding imprisonment in the event of default will be strictly enforced. The court is very serious that these payments be made.

Released: August 2, 2016

Justice S.B. Sherr

Footnotes

1The financial disclosure ordered included financial disclosure remaining outstanding from Justice Gilmore's order of September 25, 2013.

2These are motions that are read and decided in chambers by the judge.

3The lawyer who handled the father's appeal has been suspended by the Law Society of Upper Canada.

4The bank deposit entries did not identify the source of the payments.

5The father provided minimal supporting evidence about the sale of his personal property.

6In addition to these amounts, the father claimed that he was also receiving loans and gifts to survive.

7The father did state that he sold a car for $2,500 to pay legal fees.

8This is particularly the case after January of 2016, when the father's mother was no longer living with him.

9In making this finding, the court is taking into account that his income would be grossed-up because he is deducting personal expenses from his business revenue in his tax returns.

10The father testified that he has made such a claim against the lawyer who handled his appeal.