Court File and Parties

Court File No.: D42808/07

Date: 2014-12-15

Ontario Court of Justice

Between:

Marina Rosalina Rodrigues Jose Bento Rodrigues, for the Applicant Applicant

- and -

Eduardo Antunes de Sousa Acting in Person Respondent

And Ontario Court of Justice Court File No.: FO-42808-E000

The Director of the Family Responsibility Office for the Benefit of Maria Rosalina Rodrigues Applicant

- and -

Eduardo Antunes de Sousa Respondent

Carolyn Brett, for the Applicant Acting in Person

Both Heard: December 11, 2014

Justice: S.B. Sherr

Reasons for Decision

Part One – Introduction

[1] The respondent (the father) has brought a motion to change the support order of this court dated November 6, 2008 (the existing order). He has asked the court to reduce his child support obligations for the parties' 22-year-old daughter (the child) and to reduce his support arrears accrued pursuant to the existing order.

[2] The applicant (the mother) asks that the motion to change be dismissed.

[3] The Director of the Family Responsibility Office for the benefit of the applicant (the Director) has brought a default proceeding against the father pursuant to section 41 of the Family Responsibility and Support Arrears Enforcement Act (FRSAE).

[4] The parties agreed that these two matters would be heard consecutively. This is my decision in both cases.

[5] The parties agreed that there would be a focused trial of the father's motion to change pursuant to Rule 2 of the Family Law Rules. They agreed that the motion to change should be determined on the basis of the affidavits and financial statements filed; the father was permitted to give supplemental oral evidence and the mother was permitted to cross-examine the father. The parties did not call any other witnesses.

[6] The Director made submissions in the default proceeding at the close of the hearing of the father's motion to change. The Director asked that the terms of the default order it sought be applied to any new order made by the court. [1] The father stated that he had no submissions to make on this issue.

Part Two – Factual Background

[7] The parties lived together from 1992 until September 19, 2005. They had the one child together. The child attends university. There is no dispute that the child is in a full-time program of education and entitled to child support.

[8] The father is 67 years old. He is an experienced life insurance salesperson and financial advisor. He has worked as a branch manager. At one point he was earning over $150,000 per annum. In 2002, the father began his own business, selling life insurance policies and RRSPs. He continues to run this business.

[9] The father holds the following certifications: Certified Financial Planner, Chartered Life Underwriter and Chartered Financial Consultant.

[10] The mother applied for custody and child support in 2008.

[11] The father claimed he was earning nominal income at that time. His income tax returns from 2005-2008 reflected the following incomes:

• 2005 - $1,923
• 2006 - $2,427
• 2007 – $1,483

[12] The father blamed medical reasons, suspensions of his driver's licence for non-payment of support, as well as the behaviour of the mother for his inability to earn more income at that time.

[13] In a temporary decision dated July 14, 2008 (Rodrigues v. de Sousa 2008 ONCJ 807), the court made the following findings:

a) The father had supported the mother and the child in a comfortable lifestyle while they cohabited.

b) The father paid minimal support after the parties separated in 2005.

c) It made little sense that the father would continue in a business for many years that did not even generate income of $3,000 per annum, when he could have earned much more income with his job skills.

d) The father had made little effort to find remunerative employment.

e) The father demonstrated his hostility towards paying the mother any child support in questioning. At one point he said, "it is the mother's turn to support the child and do her share, because I mainly supported the child while I was working".

f) He provided little medical evidence in support of his inability to work.

g) The father was not revealing his true income as he was maintaining his expenses of $3,000 per month, as well as making spousal support payments to his ex-spouse, despite his claims of earning minimal income.

[14] The court imputed income of $45,000 per annum to the father for the purpose of the temporary child support calculation. He was ordered to pay the mother child support of $415 per month, being the table amount of child support for one child pursuant to the Child Support Guidelines.

[15] On November 6, 2008, the court made the existing order. It was made on consent. The father was ordered to pay child support to the mother of $415 per month, based on an income of $45,000 per annum, to be increased to $510 per month, based on an imputed income of $55,000 per annum, as of January 1, 2010. Arrears were fixed at $3,191 and the father was permitted to repay the arrears at the rate of $100 per month. The father was also required to provide annual financial disclosure to the mother.

[16] The father issued this motion to change on March 19, 2014 after the Director had commenced this enforcement proceeding against him in June of 2013. The father sought to reduce his child support payments to $125 per month, based on an annual income of $17,000. He also asked to readjust child support from 2008, based on his income reported in his annual income tax returns, and to rescind outstanding support arrears.

[17] The father is currently $19,267.09 in support arrears under the existing order.

Part Three – Legal Considerations

[18] The father's motion to change support is governed by subsection 37 (2.1) of the Family Law Act which reads as follows:

Powers of court: child support

(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,

(a) discharge, vary or suspend a term of the order, prospectively or retroactively;

(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and

(c) make any other order for the support of a child that the court could make on an application under section 33.

[19] In DiFrancesco v. Couto, 2001 O.J. No 4307 (C.A.) the Ontario Court of Appeal stated that the discretion to reduce arrears must be exercised judicially and set out the following factors to be considered:

a) The nature of the obligation to support, whether contractual, statutory or judicial.

b) The ongoing financial capacity of the payor.

c) The ongoing need of the custodial parent and the dependant child.

d) Unreasonable and unexplained delay on part of the custodial parent in seeking to enforce payment of the obligation, tempered, however, in the case of child support with the fact that such support exists for the child's benefit, is charged with a corresponding obligation to be used by the custodial parent for the child's benefit and cannot be bargained away to the prejudice of the child.

e) Unreasonable and unexplained delay on the part of the payor in seeking appropriate relief from his obligation; and

f) Where the payment of substantial arrears will cause undue hardship, the exercise of the court's discretion on looking at the total picture, weighing the actual needs of the custodial parent and child and the current and financial capacity of the respondent, to grant a measure of relief where deemed appropriate.

[20] The mere accumulation of arrears without evidence of a past inability to pay is not a change in or special circumstance. Present inability to pay does not by itself justify a variation order. It 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. See: Haisman v. Haisman (1994) 1994 ABCA 249, 157 A.R. 47 (C.A).

[21] The court has the discretion under clause 37 (2.1) (a) of the Family Law Act to retroactively recalculate support based on the correct income information (as opposed to imputed income), once it has found that there has been a change in circumstances. See: Trembley v. Daley, 2012 ONCA 780.

[22] In paragraphs 51-60 of Trang v. Trang, 2013 ONSC 1980, the court discussed how courts should address support change motions when income was imputed to a payor in the existing order as follows:

51. When a court imputes income, that's a determination of a fact. It's not an estimate. It's not a guess. It's not a provisional order awaiting better disclosure, or further review. It's a determination that the court had to calculate a number, because it didn't feel it was appropriate to rely on – or wait for -- representations from the payor.

52. A party who argues that an imputed income level is no longer appropriate must go beyond establishing their subsequent "declared" income. They must address why income had to be imputed in the first place. They must present evidence of changed circumstances which establish that either:

a. It is no longer necessary or appropriate to impute income. The payor's representations as to income should now be accepted, even if they weren't accepted before.

Or,

b. Even if income should still be imputed, changed circumstances suggest a different amount is more appropriate.

53. If "declared income" automatically prevailed on a motion to change support, it would defeat the purpose of imputing income in the first place. It might even be a disincentive for payors to participate in the initial court process. They could simply ignore support Applications – as they often do. They could wait to see if the court imputes income, and how much. If dissatisfied with the amount, the payor could later return to court waving their tax returns, to suggest that the original judge got it wrong.

54. Support claimants should not be forced to go through this two-step process. Our family court system certainly can't afford it.

55. Similarly, the onus should not fall on the support recipient to establish why income should still be imputed on a motion to change. That determination has already been made. The onus is on the support payor to establish that there should be a change in the way their income is to be calculated.

56. If for example the original support order imputed income because the court concluded an unemployed payor should have been working, it would be illogical to allow the payor to extinguish that determination by returning on a motion to change, with proof that he wasn't working. That wouldn't constitute a change in circumstances.

57. If a trial judge imputed income to a self-employed person on the basis that their tax return didn't reflect cash sales and excessive write-offs, there should be a presumption that so long as the payor maintains the same business activities and accounting practices, subsequent tax returns will be equally unreliable.

58. Imputed income matters. The reason why income had to be imputed matters.

59. If an aggrieved party feels income was wrongly imputed, they can take timely steps to correct the original determination. They can appeal. They can bring a motion to set aside the order based on mistake or misrepresentation.

60. But if a payor proceeds by way of motion to change, they must face the presumption that the original order was correct – and the original imputation of income was correct. If they want to rely on their declared income, they must establish why this time their representations should be accepted by the court.

Part Four – Review of the Father's Evidence

[23] The father has continued operating his business since the existing order was made.

[24] The father filed his notices of assessment from 2008-2013 showing the following annual incomes:

• 2008 - $12,282
• 2009 - $6,605
• 2010 - $27,527
• 2011 - $11,150
• 2012 - $7,911
• 2013 - $8,519

[25] The father filed meagre evidence of efforts to find more remunerative employment since 2008.

[26] The father testified that he is now receiving about $1,120 per month from the combination of Old Age Security (OAS) and Canada Pension Plan (CPP) payments. He said that he also received a lump sum of about $8,000 for retroactive payments from these sources in the summer of 2014. He said that 50% of those payments were garnished by the Director and applied towards his support arrears. He also testified that he is only earning about $3,500 per annum from his business.

[27] The father provided reasons similar to those that he provided to the court in 2008 about why he hasn't been earning more income. He attributed this to his poor health and the suspension of his driver's licence (arising from his failure to pay support).

[28] The father testified that he suffers from sleep apnea, asthma, depression, an ulcer and sinusitis. He also requires procedures to test for colon cancer and lung cancer.

[29] The father provided two clinical notes from hospitals indicating that he needed to be monitored for cancer.

[30] The father also provided two short letters from his family doctor. In his letter dated June 26, 2014, the family doctor confirmed the father's ailments and stated that in his opinion, primarily due to the father's depression and poor sleep, he was unable to engage in employment.

[31] In his second letter dated September 22, 2014, the family doctor stated that the father has had sleep apnea since 2005. He indicated that the father has had chronic sinusitis since 2004, surgery was offered, but the father declined this. He said that the father has had depression on and off for 10 years and had been off anti-depressants for a few years, until he started them again one year ago.

[32] The father attended at the Sleep and Alertness Clinic in Toronto in November of 2014. The clinic report confirmed that the father has difficulty initiating and maintaining sleep.

Part Five – Credibility of the Father

[33] One of the difficulties in assessing the father's motion is that he is not a credible witness. He was not credible in 2008 and he was not credible at this hearing.

[34] The father gave inconsistent information about his income. His oral evidence that he was only earning $3,500 per annum was contradicted by his own financial statement where he declared that his income from commissions, tips and bonuses was $17,000 per annum. His reported income to Revenue Canada states that he earned $8,519 in 2013. The father provided no books or records from his business to assess what amount he actually earned.

[35] The father deposed in his affidavit sworn on March 19, 2004 that his average income for the years 2008-2013 (excluding 2010) was $17,000 per annum. This contradicts the income figures he submitted to Revenue Canada set out in paragraph 24 above.

[36] When confronted with the inconsistency in these numbers in an effective cross-examination by mother's counsel, the father quickly rationalized that he put in the average income for 2008-2013, including 2010. However, a plain reading of his affidavit indicates that this was not the case. He clearly excluded 2010 from his calculation. He writes:

In the years 2008, 2009, 2011 and 2012 and 2013 I averaged an income of approximately $17,000.

In the year 2010, I had an approximate income of $37,000.

[37] It is also interesting to note that the above statement about his 2010 income is $10,000 higher than that reported to Revenue Canada, as reflected in the father's Notice of Assessment.

[38] The court only learned about the father's CPP and OAS payments when this was explored at trial. He did not disclose these payments in his financial statement.

[39] Despite the court's comment in 2008 that it made little sense for the father to continue to operate his business if he was earning such little income, the father chose to continue to do so, operating at very low reported income levels. The logical inference (which seems supported by his statements in his affidavit about additional income) is that the father was earning more income than he claimed.

[40] The father has a very poor history of meeting his support obligations. This was a problem before 2008 and has continued. Despite consenting to the final order, the father paid support of less than $3,000 for 2008 and 2009 combined. In 2012 and 2013 combined, he paid total support of $1,440. More support has been collected in 2014 because the Director has been able to garnish his CPP and OAS payments, including 50% of the large retroactive award. The father has not made any voluntary support payments since August of 2012.

Part Six – Analysis

[41] The court agreed with many of the mother's submissions, such as:

a) The father claimed that he was earning nominal income in 2008 and that hasn't changed in 2014.

b) The father did not provide proper financial disclosure about his business in 2008 and that was the case in 2014.

c) The father's evidence about his income since 2008 was inconsistent and could not be relied upon.

d) The father attributed, in part, his inability to earn income in 2008 to the suspension of his driver's licence and he continues to do so in 2014.

e) The father suffered from sleep apnea in 2008 and he continues to do so in 2014.

f) The father claimed that he suffered from asthma in 2008 and he continues to do so in 2014. There was no independent evidence that this condition has worsened.

g) The father had chronic sinusitis in 2008 and he continues to have this in 2014. There was no independent evidence that this condition had worsened.

h) The medical letters produced by the father have to be treated with caution. They have several limitations including:

i) They are brief and contain little detail.

ii) They don't specifically set out how, when and to what extent the ailments described affected the father's ability to work.

iii) It appears from the doctor's letter of September 22, 2014, that his opinion about the father's inability to work is primarily based on self-reporting by the father.

iv) The court is mindful of the decision in Westerhoff v. Gee (Estate), 2013 ONSC 2093 (Ont. Divisional Court). The court in Westerhoff set out that professional witnesses, including doctors, can provide the court with their clinical observations of a patient and details of treatment. This is factual and not opinion evidence. Simply put, a treating physician or other treating professional who limits his or her evidence in this way does not need to be qualified and is not treated as an expert. It is when the witnesses seeks to offer opinions as to the cause of the injury, its pathology or prognosis, that the evidence enters into the area of expert opinion and there must be compliance with Rule 20.1 of the Family Law Rules. [2]

v) The opinion evidence of the family doctor is problematic in this case. He makes a diagnosis of depression and states that the father cannot work as a result of this and his sleep apnea. This falls into the area of expert opinion and the need to comply with Rule 20.1 of the Family Law Rules. Rule 20.1 was not complied with in this case. The rule was enacted to provide safeguards to ensure the reliability of expert evidence. None of those protections exist here. There is no evidence that the doctor has the requisite expertise for the court to give these opinions any weight. There is no indication that the family doctor has any expertise in mental health or in assessing how the father's mental health issues affect his vocational opportunities. The fact that the doctor makes a blanket statement that the father is unable to work, in large part due to self-reporting, causes the court to question whether the opinion is objective and non-partisan, or if the doctor understands the importance of giving evidence to the court in such a manner.

i) The father led no evidence to explain why he waited so long to move to change the existing order. This action appears to have been in response to the enforcement proceeding started by the Director.

j) The father has failed to provide the mother with adequate support since the existing order was made.

k) The father persisted in engaging in his business after 2008, despite his ability, based on his job skills, to earn far more income.

l) The father failed to provide the mother with annual financial disclosure, despite being required to do so in the existing order.

[42] In assessing the factors in DeFrancesco v. Couto, supra, the court finds that:

a) The nature of the support obligation was judicial.

b) The father is leading a very modest lifestyle. However, based on the figures provided in his financial statement, he had a monthly surplus (income less expenses) of $430 in 2013. Despite this surplus, he paid no support to the mother that year.

c) The child has the ongoing need for support. The mother has had to unreasonably bear most of the child support obligation since the existing order.

d) The mother did not delay in enforcing the order.

e) The father did not provide a reasonable explanation for his delay in bringing this motion to change.

f) The payment of substantial arrears may cause the father hardship. However, this hardship can be adequately addressed through a fair repayment plan.

g) The court did not receive any evidence about the financial circumstance of the mother or the child.

[43] Notwithstanding many of the adverse findings against the father, the court finds that there has been a change in circumstances since 2008 warranting a change in the existing order and a rescission of a portion of the accrued arrears of support.

[44] There is evidence that the father now has additional health issues. He has developed an ulcer. In February of 2013, the father had an operation for the removal of a mass on his rectum and now has to be monitored for cancer. In 2013, a nodule was found on his left lung and he is being monitored every three months for cancer. He provided some medical evidence at this hearing confirming sleep and breathing issues that would compromise his ability to earn income.

[45] The father is now 6 years older than when the existing order was made. That passage of time is a more important factor when someone was already 61 years old at the time of the existing order and already had several health issues. The court accepts, to some degree, that it has become increasingly difficult for the father, particularly since the beginning of 2013, when his newer health issues materialized, to earn as much income as that imputed to him in the existing order.

[46] The determination of the rescission of arrears is not a precise mathematical exercise. Balancing all of the findings and considerations set out above the court finds that the father's support arrears should be reduced to $12,000.

[47] The court next needs to determine the father's ability to pay ongoing support. The father says that this should be fixed at $17,000 per annum (being his self-employed income of $3,500 plus his OAS and CPP payments).

[48] The court has little confidence in the father's evidence and will continue to impute income to him. Imputing 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. See: Drygala v. Pauli, [2002] O.J. No. 3731(Ont. CA).

[49] The court must have regard to the payor's capacity to earn income in light of such factors as employment history, age, education, skills, health, available employment opportunities and the standard of living earned during the parties' relationship. The court looks at the amount of income the party could earn if he or she worked to capacity. See: Lawson v. Lawson.

[50] The court finds that the father's evidence that he has been earning $17,000 per annum from commissions to be the best evidence of his earned income, or his ability to earn income. [3] When the court adds the OAS and CPP Benefit payments of $13,440 per annum to this amount, the father's annual income is $30,440. He will be required to pay the mother the guideline table amount of child support for one child at this level starting in 2015. This will be $250 per month.

Part Seven – Repayment of Arrears and Default Order

[51] The father proposed that his combined payment of ongoing child support and arrears should be $400 per month. The mother proposed that this figure should be $630 per month.

[52] The court will order the father to pay $200 per month towards arrears at this time (for a combined payment of $450 per month). The mother is to immediately notify the father and the Director by ordinary mail when the child is no longer entitled to support. On the first day of the first month following this notification, the father will be required to start paying the mother $450 per month towards the arrears, until they are repaid.

[53] This order will not preclude the Director from collecting arrears from any government source, such as HST or income tax returns, or from any lottery or prize winnings. They will be limited to garnishing $450 per month from the father's CPP and OAS payments as long as he is in good standing under this order.

[54] The Director sought a default order pursuant to subsection 41 (10) of the FRSAE [4] that the father be committed to jail for three days for each default in the ongoing or arrears support payments, as established in the new support order. The court finds that the father has the ability to pay the arrears by making periodic payments as set out in paragraph 52 above. Given the father's abysmal payment history, the society's submission is appropriate and will be ordered. If the Director seeks a warrant of committal for non-compliance with this default order, the Director will be required to serve the father with this motion by special service to give him the opportunity of addressing his default in court before he is imprisoned.

Part Eight – Conclusion

[55] In the father's motion to change, a final order will go on the following terms:

a) The existing order is changed to provide that the father shall pay to the mother the table amount of child support for one child, based on the father's imputed income of $30,440 per annum, in the sum of $250 per month, starting on January 1, 2015.

b) The father's support arrears shall be reduced and fixed at $12,000 as of the date of this order.

c) The father shall repay these arrears at the rate of $200 per month, starting on January 1, 2015.

d) The mother shall immediately notify the father and the Director, by ordinary mail, when the child is no longer entitled to support.

e) Starting on the first day of the first month following this notification, the father shall repay the remaining support arrears at the rate of $450 per month, until they are repaid.

f) This order will not preclude the Director from collecting arrears from any government source, such as HST or income tax returns, or from any lottery or prize winnings of the father. They will be limited to garnishing $450 per month from the father's CPP and OAS payments, as long as he is in good standing under this order.

g) A Support Deduction Order shall issue.

[56] In the Director's default proceeding, a final order shall go as follows:

a) The father shall be required to pay the ongoing child support and arrears payments determined by the court in the father's motion to change as set out in paragraph 55 above.

b) The father shall be committed to jail for 3 days, or until the outstanding amount is paid (whichever is lesser) for each default in payment of ongoing support accruals or payment of monthly arrears.

c) The Director shall serve the father with any motion for committal arising from any default by special service.

[57] If any party seeks costs in the motion to change case, they are to serve and file written submissions by January 5, 2015. The other party will then have until January 19, 2015 to make written response. The submissions should not exceed two pages, not including any bill of costs or offer to settle. The submissions should be delivered to the trial coordinator's office on the second floor of the courthouse.

Justice S.B. Sherr

Released: December 15, 2014

Footnotes

[1] Subsection 41 (22) of the FRSAE provides that if an order changing a support order is made while a default hearing is under way, the default hearing continues, it is not necessary to serve fresh documents and the payment terms of the changed support order shall be incorporated into any subsequent default order under subsection 41 (10).

[2] Rule 20.1 provides protections to ensure the reliability of expert evidence. In particular, subrules 20.1 (1) and (10) read as follows:

DUTY OF EXPERT

20.1 (1) It is the duty of every expert who provides evidence in relation to a case under these rules,

(a) to provide opinion evidence that is fair, objective and non-partisan;

(b) to provide opinion evidence that is related only to matters that are within the expert's area of expertise; and

(c) to provide such additional assistance as the court may reasonably require to determine a matter in issue.

CONTENT OF REPORT

(10) A report provided by an expert shall contain the following information:

1. The expert's name, address and area of expertise.

2. The expert's qualifications, including his or her employment and educational experiences in his or her area of expertise.

3. The instructions provided to the expert in relation to the proceeding.

4. The nature of the opinion being sought and each issue in the proceeding to which the opinion relates.

5. The expert's opinion respecting each issue and, where there is a range of opinions given, a summary of the range and the reasons for the expert's own opinion within that range.

6. The expert's reasons for his or her opinion, including,

i. a description of the factual assumptions on which the opinion is based,

ii. a description of any research conducted by the expert that led him or her to form the opinion, and

iii. a list of every document relied on by the expert in forming the opinion.

7. An acknowledgement of expert's duty (Form 20.1) signed by the expert.

[3] This is the evidence set out in his financial statement, motion to change and affidavit in support of his motion to change.

[4] This subsection reads as follows:

Powers of court

41 (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.