Court File and Parties
Date: July 18, 2022 Court File No.: FO-20-40046
Ontario Court of Justice
Between:
THE DIRECTOR OF THE FAMILY RESPONSIBILITY OFFICE FOR THE BENEFIT OF ANASTASIYA KRASNOVA Applicant
Counsel: Diane Gillies, for the Applicant
- and -
MOHAMMAD SALMAN Respondent
Counsel: Acting in Person
Heard: July 15, 2022
Before: Justice S.B. Sherr
Reasons for Decision
Part One – Introduction
[1] The default hearing in this matter was heard on July 15, 2022.
[2] The applicant (the Director) seeks a default order against the respondent (the payor) on the following terms:
a) That he shall pay support arrears of $23,537.84 within 30 days, failing which he shall be committed to jail for 90 days, or until the outstanding amount is paid in full.
b) In the alternative, that he shall be committed to jail immediately for 90 days, or until the outstanding arrears are paid in full.
c) In the further alternative, that he shall pay the sum of $5,000 forthwith towards the arrears, failing which he shall be committed to jail for 90 days, or until the outstanding amount is paid in full, and further, that he shall pay $500 each month towards the support arrears, starting on August 1, 2022, failing which he shall be committed to jail for 3 days for each missed payment, or until the outstanding amount is paid in full.
d) That he shall make ongoing support payments of $300 each month, starting on August 1, 2022, failing which he shall be committed to jail for 3 days for each missed payment, or until the outstanding amount is paid in full.
[3] The payor asked the court to defer making any default order for one year to permit him to get his financial affairs into order.
[4] The payor declined the assistance of duty counsel. He was self-represented at the default hearing.
[5] The court permitted the payor to serve and file documentation during the hearing despite his having failed to comply with financial disclosure orders. The Director was offered the option of an adjournment to review his documentation and declined. The payor also gave oral evidence and was cross-examined.
Part Two – Background facts
[6] The payor is the father of a nine-year-old girl who primarily resides with her mother (the mother) in Milton, Ontario.
[7] The payor and the mother entered into a separation agreement dated May 27, 2014 (the agreement). The agreement states that the payor and the mother were married in 2012 and separated in May 2014.
[8] The agreement provides that the payor shall pay the mother $300 each month for child support. This is the Child Support Guidelines (the guidelines) table amount for one child, based on an annual income of $27,502.
[9] The mother filed the agreement on June 28, 2017 at the Ontario Court of Justice in Milton Ontario. Pursuant to subsection 35 (2) of the Family Law Act, the support provisions in the agreement can be enforced as an order of the court where it was filed. For ease of reference, the agreement will also be referred to as the order.
[10] The Director issued its Notice of Default Hearing on January 22, 2020. The case was administratively adjourned due to the pandemic.
[11] The case returned to court in March 2021. The payor advised the court that he had lived with the mother after the agreement was executed and that he had supported the child. The matter was adjourned to give the payor the opportunity to bring a motion to change the support terms in the order and to seek a reduction of the arrears owing. The court made a temporary default order that the payor pay the ongoing child support amount of $300 each month. It attached a three-day committal term for each payment in default. The court also ordered the payor to serve and file:
a) A sworn financial statement.
b) Complete copies of his last three income tax returns and notices of assessment.
c) All of his personal and business bank statements since January 1, 2020.
d) Documentary proof of all income from any source since January 1, 2020.
[12] The court granted subsequent adjournments to the payor as he advised the court that he was getting legal aid and searching for a lawyer to start his motion to change. On October 13, 2021, the court endorsed that the payor must serve and file a financial statement at least 14 days before the next court date, together with the balance of the documentation ordered on March 31, 2021.
[13] On January 14, 2022, the Director agreed to one more adjournment of the default hearing as a lawyer had written confirming that the payor had been approved for legal aid to bring his motion to change.
[14] The payor did not attend at court on April 4, 2022. The Director advised the court that the lawyer had informed it that he was not retained by the payor. The court scheduled the default hearing and made it peremptory on the payor.
[15] The default hearing could not proceed on June 7, 2022, as the payor had difficulty connecting to the audio function at the remote virtual hearing. The hearing was adjourned to be held in person. The court made a further disclosure order that the payor serve and file by June 30, 2022 the following:
a) An updated sworn financial statement.
b) Copies of his 2021 income tax return and notice of assessment.
c) Copies of any other documents he intended to rely upon at the hearing.
[16] The payor did not start a motion to change. He provided little financial disclosure to the Director and did not file any of it with the court.
[17] The Director filed its updated Statement of Arrears at the hearing. Its contents were not disputed by the payor. He is $23,537.84 in arrears of support as of July 4, 2022.
[18] The Statement of Arrears shows that the payor made no support payments prior to the filing of the agreement. It also shows that he has not made one voluntary support payment since it was filed. The only support collected has been through federal diversions by the Director. The payor has not complied with the temporary default order.
Part Three – The payor’s evidence
[19] Much of the payor’s evidence was focused on the unfairness of his treatment by the mother and the Family Responsibility Office. He presented as the victim in this case. He told the court that being in court “is not about the money”.
[20] This evidence was not relevant on this hearing. The existing order remains in force and will continue until changed by a court on a motion to change. The payor had ample time to bring a motion to change and chose not to do so. It is not this court’s function to determine if the existing order is correct or to change it. This court’s function is to determine how the existing order will be enforced.
[21] The payor is 39 years old. He lives on his own. He has no other children.
[22] The payor attended, but did not complete, a university Bachelor of Commerce course. He said that he attended the Ontario College of Trades in 2017 and 2018.
[23] The payor said that he started a sole proprietorship in 2019. He said that he is self-employed as a consultant for electrical services. He said that he is hired to look at floor plans and give advice for smart-home automation.
[24] The payor also said that he does renovation work, including indoor plumbing and electrical work. He said that he is not licensed in those areas.
[25] The payor said that he lived with his parents until March 2021, when his parents purchased a condominium. He said that he lives in the condominium and pays rent to them.
[26] The payor claims that he has earned little income since 2015. His notices of assessment set out the following annual income:
2015 - $19,532 2016 – Nil 2017 – Nil 2018 - $20,517 2019 - $19,776 2020 - $22,165
[27] The payor testified that he earned no income in 2016 and 2017 because he went into an emotional spiral after he separated from the mother. He provided no medical evidence to support this statement.
[28] The payor provided a Record of Employment indicating that he worked at Bayramco Electrical Inc. from November 2018 until September 2019. The Record of Employment indicated that the payor left this employment because he quit. The payor did not explain why he quit. The payor deposed that he also operated his business in 2019.
[29] The payor testified that his 2020 income consisted of $20,000 from Canada Emergency Response Benefits. He claimed that he also earned net business income of $2,165.
[30] The payor stated that he has not filed his 2021 income tax return.
[31] The father deposed that he was in receipt of Canada Recovery Benefits in 2021 and that he also operated his business. He estimated that his 2021 income was $25,000.
[32] The payor estimates that he will earn $30,000 in 2022. In cross-examination, he acknowledged that he was paid $47,000 in 2022 for a variety of projects he worked on in 2021 and 2022. He estimated that he will net $17,000 from this amount. He provided no evidence to support this statement. He testified that he expects to be paid $5,000 shortly for another project and hopes to “ink a new project soon”.
[33] The payor claimed that he has been in a financial hole. He testified that he owed his father $18,000. He also testified that he owed his father $9,000 and that he has paid his father back about $10,000 by doing renovation work for him. He said that he had owed family and friends over $20,000 and reduced that amount to about $10,000, by doing renovation work for them. None of this work was declared as income on his income tax returns.
Part Four – Legal considerations
[34] 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.
[35] At the hearing, the amount of arrears owed and the payor's ability to pay are the central issues. Subsection 41 (9) of the Act puts the onus on the payor, as follows:
Presumptions at hearing
(9) At the default hearing, unless the contrary is shown, the payor shall be presumed to have the ability to pay the arrears and to make subsequent payments under the order, and the statement of arrears prepared and served by the Director shall be presumed to be correct as to arrears accruing while the order is filed in the Director’s office.
[36] 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.
[37] 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.
[38] 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.
[39] 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. The payor must also show that he or she has accepted their responsibilities and placed the child’s interests over their own and has provided frank disclosure to the court. See: Ontario (Director, Family Responsibility Office) v. Labrash, 2002 CarswellOnt 90 (OCJ).
[40] In Ontario (Director, Family Responsibility Office) v. De Francesco, 2012 ONCJ 633, Justice Carolyn Jones further explores the meaning of “valid reason” under subsection 41 (10) as follows at paragraph 21 of her decision:
“21 Valid reasons, within the meaning of s. 41(10) of the Act, imply reasons for which the payor cannot be faulted or for which the payor does not bear responsibility in the culpable sense. The court would expect some evidence of circumstances where, despite reasonable, diligent and legitimate efforts by the support payor to comply with the support order, the support payor has been unable to do so for reasons that are not connected with an unwillingness to pay, a lack of effort, a failure to prioritize the support obligation or a deliberate neglect, failure or avoidance on the part of the payor. Evidence relating to the past and present circumstances of the payor, including his financial circumstances since the time of the first default under the order, the manner in which he has applied his available income and assets, and his efforts to secure employment or income during the time that the arrears have arisen will have some bearing upon the determination of the legitimacy of the reasons the payor puts forward for his default under the support order. Circumstances that are beyond the control of the payor, resulting in the payor's inability to pay, would be valid reasons. An illness on the part of the payor, including a mental disorder, rendering the payor completely unable to work on either a full or part-time basis, as in the case before the court, would amount to a valid reason for the payor's failure to pay.”
[41] The court is not required to incorporate the payment terms of the existing support order in its default order. DeFrancesco, supra, par. 22.
[42] In determining ability to pay the payor must give priority to child support before consumer debts. See: Baumann v. Clatworthy, 35 R.F.L. (3d) 200 (Ont. General Division).
[43] Clause 41 (10) (i) of the Act contemplates an order of imprisonment for failure to pay an amount owing at the time the order is made or a failure to make future payments required under the order: See: Saunders v. Saunders, [1987] O.J. No. 1578, 10 R.F.L. (3d) 284 (Dist. Ct.), at para. 11; Fischer, supra.
[44] Enforcement legislation should be viewed as remedial rather than punitive. See: Saunders, supra.
[45] 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.
[46] 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 …
[47] The maximum jail time should be reserved for the most severe cases. See: Ontario (Director, Family Responsibility Office) v. Kirkpatrick, 60 R.F.L. (6th) 435 (SCJ).
[48] In Director, Family Responsibility Office v. Masoud, 2021 ONCJ 265, this court wrote that the court must also consider the interests of the child 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 – Analysis
[49] The payor was only able to partially rebut the presumption that he has the ability to pay the entire amount of arrears owing immediately, and the ongoing support payments of $300 each month.
[50] The evidence indicates that the payor does not lead a lavish lifestyle and that he does not have the assets or the ability to access funds to immediately satisfy the entire amount of arrears owing.
[51] Given the dearth of financial disclosure provided to the Director prior to the hearing, it was understandable why in its opening submissions it sought full payment of the arrears in 90 days, or in the alternative, an immediate committal order. To its credit, after hearing the evidence, the Director proposed a third option of an immediate payment of $5,000, with the balance of arrears paid at $500 each month, with committal terms attached in the event of default.
[52] The payor did not rebut the presumption that he could afford to make significant payments towards the existing order.
[53] The payor was not a credible witness. He has not acted in good faith regarding his child support obligations. The court does not accept his evidence about his income or about his ability to earn income.
[54] The payor has a very poor history of paying child support. He has not made one voluntary payment. The only support collected has been through federal diversions by the Director. And this only started in June 2021.
[55] The payor has improperly prioritized payment of debts to family and friends to his support obligations to the child.
[56] Even if the court accepted the payor’s stated annual income, he had the ability to pay the ongoing child support and chose not to. The support was based on a modest annual income of $27,502.
[57] The payor has also breached multiple court orders as follows:
a) He breached the temporary default order to pay ongoing child support of $300 each month. He has not made any effort to comply with that order.
b) He breached several court orders to serve and file a sworn financial statement.
c) He disregarded the court order to serve and file his bank statements, which would have permitted a realistic assessment of his cash flow.
d) He did not file a 2021 income tax return. He did not provide a satisfactory reason for not doing so. He was aware that this was important evidence for the court to have at this hearing. The court had ordered that he produce it.
e) He did not file any documentary evidence of his 2021 or 2022 income.
f) He was ordered to serve and file any documentary disclosure he intended to rely upon at the hearing by June 30, 2022. He did not do this. Instead, he sought to present documentation in the middle of the hearing that the Director had never seen.
[58] The financial disclosure provided by the payor was inadequate for any meaningful assessment of his ability to pay support. He is self-employed. He failed to provide his statements of Business or Professional Activities that would have allowed the Director and the court to assess the legitimacy of his business deductions on his income tax returns.
[59] The self-employed have an inherent obligation to put forward not only adequate, but comprehensive, records of income and expenses, from which the recipient can draw conclusions and the amount of child support can be established. See: Meade v. Meade, 31 R.F.L. 5th 88 (SCJ). This includes the obligation to present information in a user-friendly fashion. This was not done.
[60] The payor testified that he felt “hurt” by the Director’s requests for his financial information and that is why he put it on the “back burner”.
[61] The payor claimed that he received loans and gifts from family and friends. However, his evidence was seriously deficient in identifying the persons he received these monies from, the amounts, when they were received, when they were paid back and documentary evidence proving receipt and payment.
[62] The court will usually draw an adverse inference against a party for his or her failure to comply with their disclosure obligations as provided for in section 21 of the guidelines. See: Smith v. Pellegrini, [2008] O.J. No. 3616, (Ont. S.C.); Maimone v. Maimone, [2009] O.J. No. 2140, (Ont. S.C.); Isaya v. Ozo, 2022 ONCJ 321. The parent 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.
[63] The court draws an adverse inference against the payor for his failure to provide meaningful financial disclosure.
[64] The court found the payor’s oral evidence to be scattered and often difficult to follow. He did not answer questions directly. His answers were sometimes contradictory. For example, his evidence about his debt obligations kept changing and made little sense.
[65] It became apparent that the payor earns unreported income, at the very least by paying off debts he claims that he owes through his labour.
[66] The only evidence that the payor provided about his income, expenses and debts was based on self-reporting. He provided no independent evidence and expected the court to accept his representations.
[67] The payor earns or has the ability to earn much more income than he represented earning. He is educated, well-trained and has numerous job skills. He consults in the design of electrical systems. He also described himself as an Electrical Assistant. He said that he has worked in construction and recently completed a home renovation. He does plumbing and electrical work. He said that he has a certificate as an Architect Technician. The court does not believe that his actual average annual income has been under $20,000 since 2015, or that he is only capable of earning $25,000 to $30,000 each year.
[68] The payor has also had modest living expenses. Until March 2021, he lived with his parents. He now lives in a condominium owned by his parents. He did not produce any rental agreement with them. Any rent he pays to his parents is based on an arbitrary agreement between his parents and him.
[69] The payor alleged that he has made direct payments, such as for toys and clothes for the child. In the absence of any documentary corroboration, the court does not accept this evidence. Further, as with his claim that he cohabited with the mother after the agreement was executed, the payor was given many opportunities to bring a motion to change before this hearing proceeded. He can still do this.
Part Six – The default order
[70] This leaves the court to determine what default order is appropriate in these circumstances.
[71] The court’s sympathies lie with the mother and the child who have not received a fair amount of child support from the payor. It is one of the court’s primary objectives in a default hearing to maximize the enforcement of an order.
[72] The court also has to consider that imprisonment is the last resort for enforcement. In making a default order with a term of imprisonment attached, the court should be confident that the payor has the ability to make the payments ordered. The consequences to the payor if the court orders an amount he cannot afford are profound.
[73] 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.
[74] The court accepts the Director’s position that a committal term should be attached to any payment order. The payor has a terrible payment history. He has demonstrated little regard for court orders. He did not voluntarily pay any support even after the court attached a committal term to its temporary default order. The order this court makes must have teeth to it if it is to be effective and to achieve long-awaited justice for the mother and the child.
[75] The evidence indicates that the payor earns or has the ability to earn far more income than he states and that he has the ability to obtain loans to permit him to make meaningful payments towards the support arrears.
[76] The payor also revealed that he has a $5,000 payment that will be released to him very soon.
[77] The payor is self-employed and does not have identifiable revenue sources from which the Director can directly deduct monthly arrears payments. Accordingly, the court will structure its order to require the payor to make significant lump sum payments to satisfy the arrears over the next year, including an immediate payment of $5,000. To be clear, this $5,000 payment must be made whether or not the payor receives the $5,000 payment he testified that he expects to receive shortly. Committal terms will be attached to this order.
Part Seven – Conclusion
[78] There shall be a final default order on the following terms:
a) Child support arrears are fixed in the sum of $23,574.84, as of July 4, 2022.
b) The payor shall be required to pay the sum of $5,000 towards the support arrears forthwith.
c) The payor shall then be required to pay the balance of the arrears as follows:
i) The sum of $6,000 on or before December 31, 2022.
ii) The sum of $6,000 on or before March 31, 2023.
iii) The sum of $6,574.84 by July 15, 2023.
d) The payor shall be committed to jail for 30 days for each default of the lump sum payments set out in subparagraphs a) and b) above, or until the payments are made, if earlier.
e) The payor shall also pay the ongoing child support payments of $300 each month starting on August 1, 2022. He shall be committed to jail for 3 days (or until the outstanding amount is paid in full, if earlier) for each payment in default.
f) The maximum length of time, cumulatively, that the payor can be imprisoned under this default order is 180 days.
g) Nothing in this order precludes the Director from collecting arrears from any other source, including income tax or HST/GST refunds and lottery or prize winnings.
h) The payor shall provide the Director with copies of his full income tax returns, including all attachments and schedules, and his notices of assessment by July 30th each year.
i) 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. After six months, any motion must be served by special service. Any committal hearing should be scheduled to take place in person at the court.
[79] The court also wishes to make it very clear to the payor that unless there is a material change in circumstances not foreseen in this decision, the provisions in this order regarding imprisonment in the event of default will be strictly enforced. The court is very serious that these payments be made.
Released: July 18, 2022
Justice S.B. Sherr