Court File and Parties

Date: October 31, 2025

Court File No.: FO-72172/14

Ontario Court of Justice

Between:

The Director of the Family Responsibility Office for the Benefit of Karinna Margaret Gerda Petersoo

Stefania Perrella, for the Applicant

Applicant

- and -

Tonu Elmar Petersoo

Acting in Person

Respondent

Heard: October 29, 2025

Justice: S.B. Sherr

Reasons for Decision

Part One – Introduction

[1] The default hearing in this matter was heard on October 29, 2025. The applicant (the Director) seeks to enforce the support arrears that have accumulated under the order of Justice James F. Diamond of the Ontario Superior Court of Justice, dated August 4, 2020 (the existing order).

[2] The Director seeks a default order against the respondent (the payor) on the following terms:

a) He shall pay the outstanding arrears in this case of $85,382, by February 28, 2026, failing which he shall be committed to jail for 150 days, or until such earlier date the arrears are paid.

b) He shall pay the amount of $7,051 each month for ongoing child support, starting on January 1, 2026, failing which he shall be committed to jail for three days for each missed payment, or until such earlier date the payments are made.

[3] The payor stated he did not dispute the amount of arrears owing. He asked the court to order that he pay $1,000 each month, failing which he shall be committed to jail for one day for each missed payment, or until such earlier date the payments are made.

[4] The payor was given the opportunity to consult with duty counsel prior to the hearing. The court also held the matter down after the parties made their opening statements for the payor to receive further assistance from duty counsel in presenting his case. The payor gave oral evidence and was cross-examined by the Director.

Part Two – Brief Background Facts

[5] The payor is 54 years old. He has an engineering degree from the University of Guelph.

[6] The payor is the sole director and shareholder of a corporation that provides many services, including air quality testing, water quality testing, ventilation system assessments and worker safety assessments. He has run this company for 26 years.

[7] The payor married the support recipient in 2003 and separated from her in 2011. They have three teenage children (the children). The children reside with the support recipient.

[8] The existing order requires the payor to pay the support recipient table child support of $4,051 each month. This was the Child Support Guidelines (the guidelines) table amount for three children, based on his annual income that was assessed at $250,000. In addition, the payor is required to pay the support recipient $3,100 each month for the children's special and extraordinary expenses, pursuant to section 7 of the guidelines (section 7 expenses).

[9] The payor did not appeal this order. He has not brought a motion to change it.

[10] Most of the payor's arrears have accumulated since June 28, 2024. At that time, his arrears were $2,588.

[11] The Director issued the Notice of Default Hearing on December 4, 2024. The payor was served on February 4, 2025, pursuant to an order for substituted service.

[12] The payor has not filed a Dispute. He has not filed a financial statement.

[13] On April 1, 2025, the payor consented to a temporary order to serve and file financial disclosure, including his 2022 to 2024 income tax returns and notices of assessment, proof of his gross business income and expenses from 2022 to 2024, copies of his bank statements from January 2024 to April 2025 and medical documentation verifying any alleged inability to work due to disability.

[14] The payor produced one medical report at trial. Otherwise, he has not complied in a meaningful way with the financial disclosure order.

[15] On May 2, 2025, the payor consented to a temporary default order to pay ongoing child support of $7,151 each month, starting on June 1, 2025, failing which he would be incarcerated for three days for each default.

[16] The payor made the first required monthly payment. He has made no further payments.

[17] On July 3, 2025, the court granted the payor's request for an adjournment to permit him to bring the temporary default order into good standing and provide his outstanding disclosure.

[18] On August 1, 2025, this default hearing was scheduled.

Part Three – The Payor's Evidence in Support of His Position

[19] The payor deposed that:

a) He understands his financial obligations and wants to meet them.

b) He has never earned the $250,000 attributed to him in the existing order. He says he never earned annual income exceeding $120,000. He blamed his previous lawyers and claimed "I wasn't in the right of frame of mind", for his income being set at this level.

c) He has physical and emotional limitations that have resulted in a drastic decrease in his income since 2020.

d) At one time he employed five people. He can no longer afford to employ anyone. Now, he does all the work himself.

e) He has knee issues that prevent him from working. He is only taking small projects that involve little walking. He has seen a specialist for the past eighteen months. He believes knee braces would help him do more work. However, he cannot afford them – they cost $2,000 each.

f) He only earned about $7,000 in the past year.

g) He has clients who owe him money. However, it is difficult to collect this money. He plans to wait until they need his services again before he collects it.

h) He regularly sees a psychologist due to his stress and anxiety.

i) His mental health issues have made it very difficult for him to prepare his financial information – both for the Canada Revenue Agency and this court. He has not filed personal or corporate income tax returns since 2020.

j) He cannot refinance his properties without providing his income tax returns and notices of assessment to the bank. He plans to get this done and then refinance his home in Toronto.

k) He is working on his financial information every day. He hopes to have it ready in a month.

l) He cannot afford an accountant or a lawyer to help him with preparing his income tax returns.

m) He expects he can refinance his home and pay the arrears in two months.

n) He agreed to the temporary default order because he did not have good legal advice (the payor was represented by an experienced duty counsel at that hearing).

o) He intends to bring a motion to change the existing order. He believes the support recipient will agree to this.

[20] The payor brought a letter from his psychologist, dated July 1, 2025, to the hearing. This was not served and filed in advance of the hearing. The psychologist reports that:

a) He has been meeting with the payor in psychotherapy for many years.

b) He meets with the payor regularly.

c) The payor experiences severe symptoms of anxiety and depression. This has worsened in recent months.

d) He has diagnosed the payor with Severe Major Depressive Disorder, Panic Disorder and Generalized Anxiety Disorder.

e) The payor's mental health conditions have significantly interfered with his ability to attend to and accomplish work-related responsibilities and attend to day-to-day activities.

Part Four – General Legal Considerations on Default Hearings

[21] The 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.

[22] Subsection 41(9) of the Act places the onus on the payor to establish he is unable to pay the arrears.

[23] Subsection 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.

[24] Subsection 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.

[25] Subsection 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.

[26] At 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; Ontario (Director, Family Responsibility Office) v. Muslim, 2024 ONCJ 116.

[27] The payor must also show at a default hearing that they have 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.

[28] The court will usually draw an adverse inference against a party for his or her failure to comply with their disclosure obligations. See: Smith v. Pellegrini; Maimone v. Maimone; Isaya v. Ozo, 2022 ONCJ 321. The party must make full and complete financial disclosure to ensure that the information required to make a decision on the issue is before the court. See: Charron v. Carriere, 2016 ONSC 4719; Ontario (Director, Family Responsibility Office) v. Ramgopaul, 2024 ONCJ 562.

[29] The self-employed have an inherent obligation to put forward not only adequate, but comprehensive, records of income and expenses, from which the Director and the court can draw conclusions regarding the payor's financial circumstances. This includes the obligation to present information in a user-friendly fashion. The court will usually draw an adverse inference against a payor for their failure to comply with their disclosure obligations as provided for in section 21 of the guidelines. See: Ontario (Director, Family Responsibility Office) v. Salman, 2022 ONCJ 329; Ontario (Director, Family Responsibility Office) v. Knotek, 2025 ONCJ 97.

[30] This principle also applies where the person's employment income is derived from a corporation that he or she fully controls. See: MacKenzie v. Flynn, 2010 ONCJ 184; Yocheva v. Hristov, 2019 ONSC 1007; Poulin v. Poulin, 2017 ONSC 64; Oshugbemi v. Taylor, 2025 ONCJ 549.

[31] In Ontario (Director, Family Responsibility Office) v. De Francesco, [2012] O.J. No. 6338, Justice Carolyn Jones further explores the meaning of "valid reason" under subsection 41(10) as follows at paragraph 21 of her decision:

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.

[32] Inability to pay is not the same as difficulty paying. See: Aitken v. Aitken; Ontario (Director, Family Responsibility Office) v. Ramsay, 2024 ONCJ 64.

[33] Imprisonment 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.

[34] In 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…

[35] In FRO v. Hennessy, 2022 ONSC 2594, the court set out the following non-exhaustive set of factors (the Hennessy factors) to consider before ordering imprisonment:

1. Pattern of accumulated arrears.

2. Voluntary vs. involuntary payments.

3. Income source disclosure.

4. Previous findings.

5. Timeliness of actions of payor.

6. Other evidence of prioritization of self over support.

[36] In Director, Family Responsibility Office v. Masoud, 2021 ONCJ 265, this court wrote that the court must also consider the interests of the children and the support recipient who are not before the court, and the consequences to them of the payor's failure to meet his support obligations. The court wrote at paragraphs 71 and 72:

[71] In Michel v. Graydon, 2020 SCC 24, at paragraph 121, the Supreme Court of Canada emphasized the importance of support payors meeting their support obligations and commented that the neglect or underpayment of support is strongly connected to child poverty and female poverty.

[72] It is imperative that courts not contribute to that hardship and to the feminization of poverty by failing to enforce valid and subsisting court orders when a payor does not establish a valid inability to pay and fails to provide adequate financial disclosure – as is the case here.

Part Five – The Payor's Ability to Pay the Arrears

[37] The court finds that the payor cannot immediately pay the entire arrears owing. However, he does have the ability to pay the entire amount of arrears and the ongoing support payments, accrued starting on November 1, 2025, by February 27, 2026.

[38] The payor's evidence was problematic for the following reasons:

a) He did not file a financial statement. No evidence was provided regarding his income or expenses. No evidence was provided in advance of this hearing regarding his assets or debts.

b) He did not comply with the financial disclosure order.

c) He has not filed business or corporate income tax returns since 2020.

d) He provided no disclosure regarding the revenues or expenses of his corporation.

e) He provided no business or bank account statements, as required.

f) He provided no supporting documentation to support his evidence that his income has declined.

g) He provided no medical evidence that he has a knee injury affecting his ability to earn income. He was ordered to provide this.

[39] In its opening statement, the Director sought a default order that the payor pay the ongoing child support payments of $7,151 each month and $2,300 each month towards the arrears, for a total of $9,451 each month, failing which he be incarcerated for three days for each payment in default.

[40] The Director justifiably changed its position in closing submissions after hearing the payor's evidence. It was apparent the payor had not previously disclosed to the Director that he owned two properties.

[41] The payor owns a semi-detached property in Toronto. He testified he lives there alone. He bought the property 12 years ago for $600,000. He estimated its present value is between $800,000 and $850,000. He said the mortgage on the property is between $400,000 and $450,000.

[42] Accepting the payor's figures (he provided no evidence of this), his Toronto property has equity of $400,000.

[43] In cross-examination, the payor disclosed that he owns a cottage in Peterborough. It is a detached property. He estimated its value at $600,000. He said the mortgage on the property was $250,000 and then changed his answer to $300,000.

[44] Again, accepting the payor's figures, his Peterborough property has equity of $300,000.

[45] The payor has equity of $700,000 between his two properties. This is more than enough for him to pay the outstanding arrears and ongoing child support payments for the foreseeable future.

[46] The payor testified he has made no effort to sell either of these properties. He provided no documentation showing attempts to refinance them.

[47] The payor will be able to pay the arrears and ongoing child support once he sells one of his properties. He should list one of his properties for sale immediately. The court will provide him with reasonable time to do this.

[48] The court finds that the payor has been unable to establish an inability to pay due to valid reasons.

[49] The payor has had a long time to prepare his financial information, file his income tax returns and refinance his Toronto property. He has not done so, despite multiple adjournments of this proceeding. The court has little expectation he will do this unless highly motivated. He still has the option of satisfying this order by refinancing one of his properties.

[50] If the payor believes the existing order should be changed because of a reduction in his income, his remedy is to bring a motion to change to the Superior Court of Justice. This court's function is to enforce the existing order and to determine if the payor has valid reasons for not paying the arrears and ongoing child support payments – not to change it.

Part Six – The Default Order

[51] This leaves the court to determine what default order is appropriate in these circumstances.

[52] It is one of the court's primary objectives in a default hearing to maximize the enforcement of an order.

[53] The court also has to consider imprisonment as the last resort for enforcement. In making a default order with a term of imprisonment attached, the court should be confident that the payor has the ability to make the payments ordered. The consequences to the payor if the court orders amounts that he cannot afford are profound.

[54] Reconciliation 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. See: Ontario (Family Responsibility Office) v. Levy, 2016 ONCJ 474.

[55] The court accepts the Director's position that a committal term should be attached to any payment order in these circumstances. Applying the Hennessy factors, the court finds:

a) The payor has neglected his financial responsibility to the children for the past eighteen months.

b) The payor has prioritized his financial interests over the children's financial interests.

c) The payor has had the ability to pay the arrears by either refinancing or selling one of his properties. He has chosen not to do so.

d) The payor has breached court orders. He breached the financial disclosure order. He breached the temporary default order.

e) Other methods used to compel the payor to pay these arrears have been unsuccessful. A committal term attached to non-payment is required to compel him to meet his support obligations.

f) The payor did not provide transparent or timely disclosure about his significant assets.

g) The payor took little responsibility for this situation. He blamed his prior lawyers for his support obligations under the existing order and a lack of legal advice for agreeing to the temporary default order.

[56] The payor will likely avoid paying support unless the consequences are such that compliance is the preferred option. The order this court makes must have teeth to it if it is to be effective to ensure the support recipient and children receive the support they are entitled to.

[57] The court will order that the payor must pay the present arrears of $85,382 by February 27, 2026. He must also make his monthly support payments, accrued starting on November 1, 2025, by February 27, 2026. If he fails to do so, he shall be committed to jail for 140 days, or until such earlier time as the payments are made. This gives him almost four months to comply with this order – much more than the two months he testified he required.

[58] In addition, the payor will be required to pay the ongoing child support payments of $7,151 each month, starting on the first day of the first month after he pays the arrears set out in paragraph 57. If he fails to do so, he will be incarcerated for three days for each missed payment, or until such earlier time as the payment is made.

Part Seven – Conclusion

[59] There shall be a final default order on the following terms:

a) Child support arrears are fixed in the sum of $85,382, as of October 20, 2025.

b) The payor shall pay the arrears of $85,382 by February 27, 2026. He must also make his monthly support payments accrued starting on November 1, 2025 by February 27, 2026. If he fails to do so, he shall be committed to jail for 140 days, or until such earlier time as the payment is made.

c) Once the arrears set out above are paid, the payor shall also pay the ongoing child support payments of $7,151 each month, starting on the first day of the first month after paying the arrears, failing which he shall be committed to jail for three days for each payment in default, or until such earlier time as the payment is made.

d) The maximum period of incarceration under this order cannot exceed 180 days.

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

f) The payor is to keep the Director updated about his current address and email address.

g) The Director may serve the payor with any motion for committal by both ordinary mail and email addressed to him at his last known addresses in its records, if he is served within six months from today. After six months, any motion must be served by special service.

Released: October 31, 2025

Justice Stanley B. Sherr