Court File and Parties
DATE: April 21, 2022 COURT FILE # 234/20 ONTARIO COURT OF JUSTICE 491 Steeles Avenue East, Milton, ON L9T 1Y7
Applicant(s): Laura Clark Counsel: Mr. A. Baker
Respondent(s): Joseph Carta Counsel: Mr. G. Peires
Endorsement
[1]
Overview
The parties have one child, KC ([…], 2019). They attended before Justice Hilliard on July 9th, 2021, and agreed that the court should order the Respondent father to pay child support in the amount of $783.00 per month based upon his annual income of $84,000.00.
2The Respondent moves to vary the July 9, 2021, temporary child support order to reflect his decreased income retroactively effective November 1st, 2021. He seeks to pay the amount payable under the Child Support Guidelines (Ontario) (CSG) based on his sharply reduced income.
3The Applicant submits that he is intentionally underemployed within the meaning of section 19 of the CSG and questions his stated motivation for the reduced income. She submits that his income for the purposes of the CSG should be imputed back up to his agreed upon July 2021 annual income.
[4]
Background
The fact of the Respondent’s change of income is not in dispute. At the time of the consent order in July 2021 he was working as a chef with a company that provided on set catering to the film and TV production industry. He had worked with them for six years. His income was generous, but he states that the working conditions were poor, and the required hours were too long. His job took a heavy toll on his body and emotional health and the long hours made his time with K less.
5The Respondent states that finally he could no longer continue at his then employer and he quit that job in late August 2021, soon after the consent order.
6The Respondent then commenced a job search. During his search a former colleague approached him with an offer to start at a company that the employer hoped to grow. On October 12th, 2021, the Respondent started to work for his new employer as a self-employed contractor at a monthly salary of $3,000.00 ($36,000.00 per annum).
7The Respondent states that he will receive a raise to $4,000.00 per month ($48,000.00 per annum) (still self employed) in May, and there is a prospect of another raise in July of this year. He expects that his status will change from contractor to employee in June.
8He notes that the change in employment has resulted in improvements to his health and his ability to be with K.
9The Respondent seeks an order that reduces his child support starting on November 1st, 2021, and states that as his income increases, he will disclose this and pay the CSG amount for K as required.
10In support of his statement of long hours he attaches a pay stub from his former employer. In support of his statement of the medical and emotional toll of his former job he attaches letters from his chiropractor and family doctor. The family doctor’s letter references a referral and diagnosis by a specialist. That psychiatric diagnosis is hearsay and is not properly in evidence before me today.
11On March 18th, 2022, Justice S. Sullivan addressed the issue of disclosure by the Respondent prior to the argument of this motion. She ordered that he provide copies of all bank statements in his name or jointly held. Instead, the Respondent has filed a summary of what he says are monies going into his two accounts (Exhibit “F”). The institution is not identified.
12The Applicant questions the Respondent’s timing and motives for reducing his income by more than one-half. She submits that there is no doubt that the Respondent intentionally reduced his income and that his stated reasons for doing so are not reasonable. She asks that I impute income to the level agreed to in July 2021.
[13]
Analysis
The disposition of this matter engages the application of paragraph 19 (1) (a) of the CSG.
14There is no doubt that the Respondent intentionally became under-employed within the meaning of the paragraph. He essentially admits this himself. Rather it is the reason for that intentional under-employment that is pleaded: I had to quit for medical, emotional and child centred reasons.
15I do not find that the Respondent’s reference to K’s needs is meant to engage the “needs of the child” aspect of the paragraph. That is more related to special needs rather than the genuine need for children to see both parents.
16Nor is the intentional under-employment related to educational needs. The focus instead is on his health needs.
17The leading cases here remain the decision of the Ontario Court of Appeal in Drygala v. Pauli (2002), 61 OR (3d) 711, as revisited by that court in Lavie v. Lavie 2018 ONCA 10.
18A person is intentionally under-employed within the meaning of section 19 when she or he is capable of work but chooses not to do so. Bad faith is not required. When a court determines that a party is intentionally under-employed then the inquiry changes to whether the income change is based on reasonable facts. At that stage the onus is upon the party who assets the reasonable basis for the under-employment.
19A parent has a duty to her or his children to take reasonable steps to maximize her or his income. A decision to reduce such income only to reduce child support is patently unreasonable. Is Mr. Carta’s choice here a reasonable explanation for his intentional under-employment?
20Here, Mr. Carta met with counsel and the other side at a case conference on July 7th, 2021. At that conference, based upon his income from the same employment he had held for six years, he conceded his annual income as $84,000.00 and the parties properly agreed to chart support.
21At the time of that meeting the Respondent had to have known essentially nearly all of the medical, emotional and scheduling issues that he now says lead to his decision to leave his lucrative job. He’d had that job for six years. There were certainly no issues of frostbite in the catering truck between his agreement in July and his quitting the next month. Similarly, his back issues had been raised and addressed by his chiropractor a year before and yet he had continued to work at the same job. He and the Applicant had reached a congenial childcare arrangement and that arrangement had persisted since at least the fall of 2020 even though he was working long hours.
22The only added evidence post-dating the consent order is the statement from his family doctor which forms Exhibit “D” to his April 11th, 2022, affidavit. He saw Mr. Carta on August 15th, 2021, roughly five weeks after the consent order. A range of medical complaints were discussed. It is difficult to understand that the symptoms only surfaced during those five weeks.
23The difficulty in assigning credibility to the Respondent’s medical and emotional explanation for his need to take on a less taxing job is founded on the great inconsistency between how he appears to have felt or at least presented on July 7th, 2021, and how he presented to his doctor five weeks later. The only likely change seen on this record is that now he was facing a court order for child support. Everything else already existed when he agreed to pay support.
24I am not satisfied with the Respondent’s income disclosure. He has not complied with Justice Sullivan’s order. Bank statements have the added imprimatur of being created by a non-interested party. The summary presented cannot be so tested. Further, as an independent contractor he does not address the business deductions he has available by virtue of that mode of employment. His employer is a former colleague. There is no evidence as to whether he receives market rent from his partner. In other words, his income and expense picture remain incomplete.
25The fact that the Respondent now finds it easier to schedule time with K is helpful to him and to K but is not in and of itself a basis to intentionally choose to become under-employed. Proper child support is itself in the best interests of K.
26Here the Respondent seeks to cut his child support obligation by over 50% and by slightly less than that when his next step-up in income takes place. Such a large reduction will naturally greatly impact K’s care. To reduce K’s support by this amount requires a more reasonable explanation than that before me today.
27To be clear, parties can change jobs and income as they decide. What they actually make and what income they should make for CSG purposes may well be different. The issue however is whether by changing employment unreasonably they are liable to have added income imputed to them for the purposes of calculating child support under the CSG. Mr. Carta believes that his change of employment assisted both his health and K’s times in his care. This may well be true. The fact that he has done so under these circumstances however leads me to conclude that his change of employment for the purposes of section 19 of the Act was unreasonable and I will therefore exercise my discretion under section 19 to impute to Mr. Carta the income for CSG purposes he agreed he had on July 7th, 2021.
28I note that this is a temporary disposition and that the result may be different on a more fulsome, tested, record at a trial.
[29]
Costs and Disposition
The parties had no time today to reference the issue of costs. I note that many very important issues engaging K’s welfare have been or soon will be settled between the parties. If the parties are unable to agree on the issue of costs of this motion, I will receive written submissions as follows: by the Applicant within 15 days of today, by the Respondent within 10 days after receiving the Applicants submission, and any brief reply if desired within 5 days thereafter. Submissions will not exceed two 8.5 by 11-inch double spaced pages, exclusive of attachments and offers to settle.
30The Respondent’s motion dated April 11th, 2022, is dismissed.
31Adjourned to June 1st, 2022, at 12 noon TBST only via teleconference as already endorsed.
“B.E. Pugsley” Justice’s Signature: ________________________________ The Honourable B. E. Pugsley