Court File and Parties

Date: February 20, 2018

Court File No.: D57332/12

Ontario Court of Justice

Between:

Shadiki McDonald

Applicant

- and -

Jessica Profeiro

Respondent

Counsel:

• Tanya N. Howell, for the Applicant
• Karmel Sinclair, for the Respondent
• Alfred D'Souza, Agent, for the Assignee, City of Toronto

Heard: February 15, 2018

Justice: S.B. Sherr

Reasons for Decision

Part One – Introduction

[1] This trial arose out of the applicant's (the father's) motion to change the final child support order of Justice James Nevins dated September 29, 2015 (the existing order). The existing order requires the father to pay child support to the respondent (the mother) of $508 each month, starting on October 1, 2015 for the parties' two children, who are eight and four years old (the children). This was the Child Support Guidelines (the guidelines) table amount for two children at an imputed annual income of $35,000.

[2] The father asks the court to reduce child support in accordance with his actual income since October 1, 2015. The father is presently on social assistance and asks that there be no ongoing child support payment.

[3] The mother asks that the father's motion to change be dismissed.

[4] The mother has been in receipt of social assistance. She assigned her interest in child support for the period from July 1, 2015 until January 31, 2017 to the City of Toronto (the assignee). Most of the child support arrears accumulated as of January 31, 2017 are owed to the assignee. [1] The assignee also asks that the father's motion to change be dismissed.

[5] The court relied on the affidavits filed on behalf of the parties, the father's financial statement, sworn on March 15, 2017, and heard oral evidence from the father. The father was cross-examined by the mother's counsel. The father's counsel was given the opportunity to cross-examine the mother but chose not to do so.

[6] The court must determine if there has been a change in circumstances that warrants changing the existing order. If so, it must determine what, if any, support arrears should be rescinded and what, if any, ongoing child support the father should pay to the mother.

Part Two – Background Facts

[7] The father is 33 years old. The mother is 31 years old.

[8] The parties never lived together.

[9] The children have always lived with the mother and visited with the father.

[10] The father issued an application for custody of the older child on August 15, 2012. The mother issued an Answer/Claim for custody and child support on October 26, 2012.

[11] On November 26, 2012, Justice Geraldine Waldman made a temporary order that the father notify the mother when he obtained employment. No temporary child support order was made. On March 20, 2014, the parties were permitted to amend their pleadings to include parenting and support claims for the younger child.

[12] The parties had multiple court appearances from 2012 to 2015. Orders were made for the father to provide financial disclosure.

[13] On May 20, 2015, on consent, a final order was made that the mother have custody of the children and the father have alternate weekend access with them. On a temporary basis, the father agreed to pay child support to the mother of $345 each month, based on an imputed annual income of $22,880. This was the first order for child support in the case. Another order for the father to produce financial disclosure was also made.

[14] The mother subsequently moved to strike the father's pleadings for failure to provide financial disclosure and a financial statement, as required. The motion was adjourned and Justice Nevins ordered the father to pay the mother's costs of $500.

[15] On September 29, 2015, the existing order was made, on consent.

[16] The father issued his motion to change both the final parenting order and the existing order on March 29, 2017.

[17] The parenting issues are being dealt with separately by Justice Melanie Sager, the case management judge.

[18] On January 16, 2018, the parties agreed to a suspension of the existing order, on a without prejudice basis, commencing April 1, 2017, until the return of the motion to change.

[19] The City of Toronto has informed the court that the father owed it $4,430 in support arrears as of September 1, 2017, and $1,663 to the mother as of November 1, 2017. [2] The father did not dispute these figures.

[20] The father acknowledged that he has not paid any child support since September, 2017.

[21] The father has another child. The mother of that child issued a claim for custody and child support against the father. The father did not file an Answer/Claim or attend at court in that matter. On February 9, 2017, Justice Debra Paulseth made a final order imputing the father's annual income at $45,700 and ordered him to pay child support of $413 each month.

[22] The father did not appeal or move to set aside Justice Paulseth's order. He testified that he and that child's mother will be attending mediation regarding the support issue and that if they are unable to resolve the issue, he plans to bring a motion to change that order.

Part Three – Positions of the Parties

[23] The father's position is that the existing order should never have been made. At the trial, he blamed his previous lawyer for having him agree to the imputation of income. He says that he has never earned the annual income of $35,000 imputed to him. He said that he was not working at the time the existing order was made and had no ability to pay the support ordered.

[24] The father filed several of his Notices of Assessment (NOA). His 2013 NOA shows employment income of $4,091. His 2014 NOA shows employment income of $1,139 and his 2015 NOA shows employment income of $8,583. The father also received social assistance payments during those years.

[25] The father testified that he attended a welding course starting in October, 2015 for about six months. He remained on social assistance during that time.

[26] The father said that he remained on social assistance for most of 2016. He then found a welding job in the fall of 2016. He was laid off from this job on March 9, 2017. The father's 2016 tax summary shows employment income of $21,316 and social assistance payments received of $7,867, for a total income of $29,184.

[27] The father said that he looked for work without success after March 9, 2017. He deposed that he received minimal employment insurance for a short period of time and then went back on social assistance. [3]

[28] In September, 2017, the father enrolled at the Institute of Technical Trades on a full-time basis for Welding Techniques. He testified that he obtained his certificate on January 22, 2018.

[29] The father expressed confidence at trial that he would have a welding job within two weeks.

[30] The father asks that his child support obligation be reduced based on his actual income from the date of the existing order. The father claims that his choice to return to school to upgrade his welding skills, twice, was a reasonable educational choice and that this will enable him to properly support his children. He asks for a "grace period" exempting him from paying support to allow him the opportunity to find a welding job. The father relied on Corcios v. Burgos, where the court wrote at paragraph 40:

When a parent experiences a sudden change in their income, they may be given a "grace period" to adjust to the change and seek out employment in their field at a comparable remuneration before income will be imputed to them.

[31] The mother seeks a dismissal of the father's motion to change. She submits that there has been no change in circumstances since the existing order was made. The father was not working at that time and he is not working now. He was promising to find work then and he is promising to find work now. The father agreed to have his annual income imputed at $35,000 in the existing order, with the benefit of legal representation, and it is the mother's position that the father has not met his onus of demonstrating a justifiable reason to change the income imputed to him. She also states that the father's lifestyle is not consistent with someone who only receives social assistance payments and that he is able to pay the support ordered.

Part Four – Legal Considerations

[32] 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.

[33] The mere accumulation of arrears without evidence of a past inability to pay is not a change in circumstances. 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 ABCA 249.

[34] The court must determine if the income imputed to the father in the existing order should continue.

[35] 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 original order as follows: [4]

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.

[36] The Trang decision does not stand for the principle that imputed income can never be adjusted retroactively on a motion to change and in fact, courts have adjusted support in accordance with a payor's actual income. See: Trembley v. Daley, 2012 ONCA 780; Fraser v. Fraser, 2013 ONSC 815. However, it does stand for the principle that when income is imputed at the original hearing, this amount is presumed to be correct and the onus will be on the person whose income was imputed to establish why this time their representations about their income should be accepted by the court. This will be a difficult task when income was imputed because the first court concluded that the person should have been working. As set out in Trang, it will not be a change in circumstances, absent new evidence, when the person is still not working when the motion to change is heard.

[37] Where income has been imputed, a support payor is not going to be able to vary that order unless he or she can demonstrate that there has been a material change since the making of that order. It is not open to a litigant to fail to produce financial information, run the risk that a trial judge will impute income, and then come back to a new court and suggest that the imputed income was wrong. See: Ruffolo v. David, 2016 ONSC 754.

[38] 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.

[39] In Duffy v. Duffy, 2009 NLCA 48, the court sets out the following principles:

a) The fundamental obligation of a parent to support his or her children takes precedence over the parent's own interests and choices.

b) A parent will not be permitted to knowingly avoid or diminish, and may not choose to ignore, his or her obligation to support his or her own children.

c) A parent is required to act responsibly when making financial decisions that may affect the level of child support available from that parent.

d) The determination to impute income is discretionary, as the court considers appropriate in the circumstances.

e) A parent will not be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations or interests. Nor will it be acceptable for a parent to choose to work for future rewards to the detriment of the present needs of his or her children, unless the parent establishes the reasonableness of his or her course of action.

[40] The Ontario Court of Appeal in Drygala set out the following three questions which should be answered by a court in considering a request to impute income:

1. Is the party intentionally under-employed or unemployed?

2. If so, is the intentional under-employment or unemployment required by virtue of his or her reasonable educational or medical needs, or those of a child?

3. If not, what income is appropriately imputed?

[41] The court stated in Drygala that there is no need to find a specific intent to evade child support obligations before income is imputed; the payor is intentionally under-employed if he or she chooses to earn less than what he or she is capable of earning. The court must look at whether the act is voluntary and reasonable.

[42] When a career decision results in a significant reduction of child support, it needs to be justified in a compelling way: See: Riel v. Holland, at paragraph 23. As a general rule, separated parents have an obligation to financially support their children and they cannot avoid that obligation by a self-induced reduction of income. See: Thompson v. Gilchrist, 2012 ONSC 4137; DePace v. Michienzi; Drygala, supra, paragraph 39.

[43] A person's lifestyle can provide the basis for imputing income. See: Aitken v. Aitken, [2003] O.J. No. 2780 (SCJ); Jonas v. Jonas, [2002] O.J. No. 2117 (SCJ); Price v. Reid, 2013 ONCJ 373.

[44] If a change in circumstances warranting a change in the support order is established by the father, the court still needs to assess if it should make a retroactive downward variation of child support. [5] The Ontario Court of Appeal set out the considerations for courts to apply when determining such an issue in Gray v. Rizzi, 2016 ONCA 152.

[45] The court in Gray v. Rizzi set out that where a payor seeks a retroactive decrease in support, the D.B.S. factors [6] – such as taking into account the circumstances of the child, the conduct of the payor parent, the hardship of a retroactive award, and the reason for delaying in seeking a variation in support – remain relevant (par. 51). Although those factors require some minor alteration to suit circumstances where the payor's income has gone down, not up, the fundamentals still apply (par. 54). Citing Corcios v. Burgos, supra, the court wrote that:

….when applying the adapted D.B.S. principles on a motion to retroactively vary child support, one must always keep in mind the ultimate issue: namely, the best interests of the child: DiFrancesco, at para. 24. As Chappel J. stated, "Ultimately, the goal in addressing child support issues is to ensure that children benefit from the support they are owed when they are owed it, and any incentives for payor parents to be deficient in meeting their child support obligations should be eliminated."

Part Five – Analysis

[46] The father did not meet his onus to establish that the income imputed to him in the existing order should be changed.

[47] The father has a lengthy history of not working and of avoiding his child support obligations. A clear pattern has emerged.

[48] The father left high school in 2005 and subsequently attended an Adult Education program until 2007. The father said that he then worked on and off for his friend's moving company. He then went back to school in 2008 to take a construction course in home renovation for 6 months. He went back on social assistance after he completed this course. The father said that, at times, he worked for the moving company, but was very unclear about when he worked there and how much he earned. His NOA reveal nominal income earned, possibly from this job, [7] from 2013 until 2015. The father testified that he received social assistance from 2009 to 2015.

[49] In the case started in 2012, the father indicated that he would be going back to school. No child support was ordered until income was imputed to him in the temporary order made on May 20, 2015.

[50] In paragraph 55 of his affidavit sworn on November 28, 2017, the father sets out his understanding as to why the sum of $35,000 was imputed to him in the existing order as follows:

I believe this amount was imputed to me because I was unable to respond to the current proceedings for multiple reasons I was unable to balance including that I was grieving from a death in my family.

[51] This statement fails to reflect the reality that the father consented to this order, although he was still not working.

[52] At trial, the father blamed his previous lawyer for having him agree to this order. He claimed that he was improperly informed and misled. There is no independent evidence to support the father's claims. He did not mention competence of counsel in his trial affidavits – he mentioned it for the first time while being examined. He had been in litigation for three years with the mother, in court many times and was represented by an experienced lawyer. He was not a novice in court. Despite his belief that he had been poorly represented, the father never appealed or moved to set aside the existing order. He waited about 18 months to move to change it. The father provided no evidence of a request to the mother to change the order prior to starting his motion to change.

[53] The court finds that the amount imputed to the father in the existing order was reasonable given his good health, ability to work in construction jobs and his historical reluctance to seek work and pay child support. The court finds that the father was properly represented when the existing order was made and he voluntarily consented to the level of income imputed to him.

[54] The father's response to the existing order was not to look for work – instead he went back to school the next month and took the first welding course. This career choice has resulted, according to his evidence, in four months of work for him in the past 29 months. This was not a reasonable choice. The court finds that the father continues to be intentionally unemployed.

[55] The father acknowledged that he still has no health limitations that prevent him from working.

[56] The father testified that he has only sought welding jobs since the existing order was made. He admitted that he could have "definitely found work" if he had broadened his job search. He stated:

If my children were in need and didn't have things I would work at McDonald's…..but with a minimum wage job what could I do for my children?.....I could work as a mover, but that is not what I went to school for.

[57] Restricting his job search to welding jobs was not reasonable – the father should have obtained employment in other fields and complied with the child support order. In paragraph 40 of Corcios, supra, the court also had the following to say about grace periods:

However, if they have been unable to secure comparable employment within a reasonable time frame, they will be required to accept other less remunerative opportunities in order to satisfy their obligation to contribute to the support of their children. (Barta v. Barta, 2005 CarswellOnt 74 (S.C.J.); M. (S.D.) v. M. (K.F.), 2004 CarswellBC 70 (S.C.); Quintel v. Quintel, 1997 CarswellOnt 3213 (Ont. Ct. Gen. Div.)).

[58] The father took a second welding course, starting in September, 2017, instead of working and paying child support. This was also not a reasonable choice. If the father wished to upgrade his job skills, the proper choice was to obtain full-time employment and take part-time courses when he wasn't working. The father didn't even seek part-time work while he took this course, testifying, "no, I just wanted to focus".

[59] The court does not agree with the father's submission that he should be given a further grace period that would exempt him from paying child support. He had a grace period from paying child support until the court finally made a temporary support order in May, 2015 – in retrospect, far too long a grace period. When income was imputed to him in the existing order, the message should have been clear to the father – it is time to start working and support your children – not time to go back to school again.

[60] The court finds that the father's intentional unemployment is not excused by his reasonable educational needs. The father is now 33 years old and is still not working or paying any child support for the children. His children need support from him now. The time for him to pursue further education at the expense of the children has long passed.

[61] The father's reluctance to pay child support is not restricted to the children. He is not paying child support for his other child. His annual income was imputed at a higher figure ($45,700) by Justice Paulseth than by this court, as recently as February 9, 2017. He did not appeal or move to set aside that order.

[62] The father's excuse for not responding to that court case was virtually the same as his excuse for agreeing to the existing order, even though the orders were made 16 months apart. The father claimed that he had family who passed away and "a lot of things were going on at that moment".

[63] The father has led a lifestyle inconsistent with someone who only receives social assistance income. The court agrees with the mother that the father has undisclosed sources of income and has had the ability to pay the support ordered. He has chosen to prioritize his own needs at the expense of the children.

[64] According to the only financial statement filed by the father [8], in March, 2017, he has annual expenses of $26,196. [9] He provided no evidence that these expenses have changed. The father claimed that these expenses are being met by his social assistance payments and monies received from family and friends. However, his math didn't add up. He testified that he has received $1,500 from family and $3,000 from friends since March, 2017. He said that he received minimal employment insurance benefits and then social assistance payments of $670 each month during this period. Being generous to the father, this means that he has received about $9,000 since March, 2017 from these sources for a total of about $13,500. This still leaves an unexplained deficit of over $10,000 in his expenses. [10]

[65] The father spends $948 each month on his vehicle, but is not paying child support. The father thinks that this is appropriate because he will need his vehicle to transport his tools.

[66] The father also has a membership at the Goodlife Fitness Centre, but is not paying child support. He also believes that this is reasonable.

[67] The court finds that the father's choice to pay these expenses instead of paying child support is unreasonable.

[68] The father frequently claimed that "he fully supports his children". The evidence demonstrates otherwise. The father clearly doesn't appreciate the importance of his child support obligations. He testified that he finds these proceedings "completely crazy" and blamed the mother, claiming that all she wants is his money, even though it is he who started this latest court action.

[69] The circumstances that exist now are similar to the circumstances that existed when the existing order was made. The father is capable of working, is not making reasonable efforts to find work and is failing to support his children. The basis upon which income was imputed to the father in the existing order remains unchanged. It was reasonable to impute that level of income to the father then and remains reasonable to do so today.

[70] Since the father did not establish a change in circumstances that warrants changing the support terms in the existing order, it is unnecessary for the court to determine whether there should be a retroactive downward variation in support.

[71] However, even if the father had established a change in circumstances, the court would not have made a retroactive order reducing child support. The father did not provide a reasonable excuse for his delay in moving to change support and engaged in blameworthy conduct by unreasonably prioritizing his own needs and failing to pay adequate support to the children. Any hardship the father will suffer due to the accumulated arrears can be addressed through a reasonable payment agreement.

[72] Lastly, the date of effective notice [11] of the father's request to change child support was the same date as formal notice (being the date the motion to change was issued) and ordinarily the court will not order an adjustment of support beyond the date of effective notice. See: J.J. v. C.C., 2017 ONCA 357. At best, the court would have only adjusted support prospectively, starting from the date the motion to change was issued.

[73] The father will be given the opportunity to pay arrears at the rate of $200 each month, starting on May 1, 2018. The court has taken into consideration the father's child support obligation for his other child in determining the payment amount and that he father should be working full-time by the start date. However, if the father is more than 30 days late in making any ongoing or arrears support payments, the entire amount of arrears then owing, shall immediately become due and payable.

Part Six – Conclusion

[74] A final order shall go on the following terms:

a) The father's motion to change the support terms in the existing order and to reduce support arrears is dismissed.

b) The order dated January 16, 2018 suspending child support is terminated.

c) The father may pay the support arrears owing at the rate of $200 each month, starting on May 1, 2018. However, if he is more than 30 days late in making any ongoing or arrears support payments, the entire amount of arrears then owing, shall immediately become due and payable.

d) The father is to immediately notify the mother once he obtains employment. He is to provide her with the name, address and telephone number of the employer, his rate of pay and copies of his first three pay stubs.

e) A support deduction order shall issue.

f) A copy of these reasons for decision are to also be placed in File #D90055/16, Rowe and McDonald, by court staff for the benefit of any judge hearing any possible motion to change in that case.

[75] If the mother or the assignee seeks costs, they shall serve and file their written costs submissions by March 2, 2018. The father will have until March 16, 2018, to serve and file any written response. The submissions should not exceed three pages, not including any offer to settle or bill of costs.

[76] The court thanks counsel for their thorough presentation of this case.

Released: February 20, 2018

Justice S.B. Sherr

Footnotes

[1] Ontario Regulation 228/16, s. 8 amends subsection 54(1) of Ontario Regulation 134/98, made pursuant to the Ontario Works Act, 1997. This amendment provides that, starting on February 1, 2017, any child support payments the mother receives will not be deducted from her social assistance payments. This means that ongoing child support and child support arrears accumulated after February 1, 2017 belong to the mother.

[2] The court was not provided with a statement of arrears from the Family Responsibility Office. The City of Toronto also did not provide an up-to-date statement of support arrears.

[3] The father did not provide any specifics of income received from these sources in 2017.

[4] This case was cited with approval by the Ontario Court of Appeal in Gray v. Rizzi, 2016 ONCA 152.

[5] The father's request for a retroactive downward variation of support would be for the period prior to March 29, 2017 – the date he issued his motion to change. His request to reduce support after that date is prospective in nature and not necessarily governed by the principles set out in Gray v. Rizzi.

[6] D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37.

[7] The father could not name any employer he worked for in this period other than the moving company.

[8] The father did not provide an updated financial statement for this hearing as required by the Family Law Rules.

[9] This does not include many expenses the father claimed that he has paid directly for the children – claims that the mother denied and were not proved by the father. This also does not include the father's child support obligation.

[10] The court prorated the annual expenses of $26,196 for 11 months to come to a total of $24,013 and then deducted the income during this period of $13,500 to get to this figure. It is a rough calculation due to the lack of financial disclosure from the father.

[11] This is the date when the subject of reducing child support was first broached with the mother.