COURT FILE NO.: FC-09-3129-3 DATE: 2018/12/07
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Vu Diep Hong, Applicant -and- Lam Nguyen, Respondent
BEFORE: Justice P. MacEachern
COUNSEL: Matt Brown, for the Applicant Respondent, Not Appearing
HEARD: November 27, 2018
ENDORSEMENT
[1] This Application commenced on July 18, 2018. The Applicant, Ms. Hong, seeks:
- Child support for the youngest child, Tony Nguyen, born October 17, 2002, retroactive to January 1, 2009, based on imputing income to the Respondent, Mr. Nguyen, in the amount of $59,702 per year; and
- An Order requiring Mr. Nguyen to maintain life insurance to secure his child support obligation with coverage of $15,000.
[2] This Application is under section 33 of the Family Law Act. The parties were divorced by a Divorce Order granted on October 10, 2012, which did not contain any corollary relief.
[3] For the reasons set out below, I grant the Applicant’s requested relief, with some modification as set out below.
Background
[4] This trial proceeded on an uncontested basis. Mr. Nguyen, although served on July 20, 2018, has not filed an Answer nor has he provided a sworn financial statement or any income information.
[5] Ms. Hong filed an Affidavit in support of her claims. She also provided oral evidence at the trial. I found her evidence to be credible.
[6] The parties were married on December 5, 1997. They separated on September 30, 2008. There are three children from the marriage. The two oldest children are now 30 and 31 years of age, independent, and not the subject of these proceedings. The youngest child is 16 years of age and continues to reside with Ms. Hong.
[7] The parties signed a Separation Agreement on September 28, 2009. At that time, the oldest child was independent. The two younger children resided with Ms. Hong. The pertinent provisions of the agreement respecting child support are as follows:
“8. b. The parties acknowledge that the Husband, at the time of this Agreement, is unemployed. 8. c. The Husband shall immediately inform the Wife of any change in his employment status. 8. d. Child support shall be payable pursuant to the Child Support Guidelines for the children of the marriage commencing the first day of the first month after the employment of the Husband. 8. e. The parties shall exchange their Income Tax Returns, together with all enclosures, and Notices of Assessment no later than June 1st in each and every year to determine the amount of child support pursuant to the Child Support Guidelines for the subsequent year effective July 1st in every year. 8. f. If, as a result of the exchange of income tax resort returns pursuant to subparagraph (e) above, or, if as a result of established changes in either party’s income as at the date of the review, the parties determined that an adjustment ought to be made to the table amount payable in child support for the ensuing year (July to June) the parties shall confirm the change in writing by way of Amending Agreement, a draft copy of which is appended as Schedule “A” hereto. For clarity, the parties agree that, the re-determination of the monthly support amount shall be based upon the confirmation of income in respect of the previous calendar year as established in the parties’ income tax returns, unless a party has experienced a change in his/her employment status or income level as at the date of the review, in which latter case the parties shall rely upon the most current and accurate income information is the basis for the change. 8. g. The Husband shall pay to the Wife support for the children of the relationship until the happening of one of the following events: i The child ceases to reside with the mother, meaning to live in the home of the mother or maintain a home base at the mother’s home. The child does not cease to reside in the mother’s home if the child is temporarily away from the home to attend an educational institution, for the purpose of summer employment or to enjoy a reasonable holiday; however, such an event shall be deemed a material change in circumstances at which time child support shall be reviewed; ii. the child becomes 18 years of age and ceases to be in full-time attendance at a high school, university or community college; iii. the child becomes 23 years of age or completes his or her first postsecondary degree or diploma; iv. the child marries; and/or v. the child dies. 8. h. The parties shall immediately inform the other of any change in their annual income that would have the effect of increasing or decreasing the annual income as reported to Canada Revenue Agency, by 15% or more. The support shall be adjusted retroactively to reflect the said change in income.”
[8] The Separation Agreement included terms requiring the parties to share extraordinary expenses related to the support of the children in proportion to their respective incomes (paragraph 10), including the costs of post-secondary education (paragraph 11). Mr. Nguyen was also required to acquire an insurance policy or the equivalent thereof, with coverage of $100,000, naming the wife as in irrevocable beneficiary in trust for the children as long as the obligation to support the children remained in force and effect (paragraph 15).
Analysis and Disposition
[9] I make the following factual findings based on the evidence before me:
- Since the Separation Agreement was signed, Mr. Nguyen never paid Ms. Hong any child support, nor advised that he was employed, nor provided her with any of his Income Tax Returns or other income information;
- Although Mr. Nguyen continues to have some contact with the children: a. Ms. Hong only asked Mr. Nguyen for financial support on one occasion, approximately two years ago. His response was that he could provide $300 per month, but nothing more, and if she did not agree, she should take him to court. This exchange lead to these proceedings; b. Ms. Hong never requested Mr. Nguyen’s income information prior to letters from her lawyer sent on June 14 and 27, 2018. This correspondence requested Mr. Nguyen’s income tax information from 2009 to 2017 as well as proof that Mr. Nguyen had maintained the insurance policy with coverage of $100,000, naming Ms. Hong as the irrevocable beneficiary in trust for the children. Mr. Nguyen did not provide any response to these requests.
- Ms. Hong did not previously have sufficient funds to retain a lawyer to pursue child support from Mr. Nguyen. She testified that she had to save for a number of months before being able to initiate the requests for child support through a lawyer;
- Mr. Nguyen was engaged in work as a roofer, and/or floor contractor, shortly after the parties signed the Separation Agreement, if not earlier. The evidence supports that he has continued to work in a similar capacity to present day. This is based on the following: a. Mr. Nguyen worked as a roofer prior to separation, often working long hours such as 10 to 12 hours per day; b. When the Separation Agreement was signed, Mr. Nguyen was able to pay the sum of $20,000 to Ms. Hong for her interest in the matrimonial home, which they had purchased for $175,000, and assume the mortgage; c. Mr. Nguyen continues to reside in the former matrimonial home, which Ms. Hong estimates has a current market value of $400,000; d. Ms. Hong has witnessed Mr. Nguyen working at roofing jobs; e. Ms. Hong has witnessed Mr. Nguyen driving a late model work truck, towing a trailer carrying roofing supplies; f. Ms. Hong has witnessed that Mr. Nguyen appears to continue to be able bodied and capable of working; g. Mr. Nguyen has two other children from a new relationship, which he appears able to support; h. Mr. Nguyen enjoys the operation of two vehicles which he appears to own, one being a fairly new Audi vehicle and the second being the work truck noted above; and i. Mr. Nguyen has had the financial means to take the children on trips, including trips to Cuba and London, England.
[10] There is insufficient evidence to make a finding that Mr. Nguyen was working prior to the date the parties signed the Separation Agreement, being September 28, 2009. Accordingly, I make the finding that Mr. Nguyen has been working since September 28, 2009, but not since January 1, 2009, which is what Ms. Hong requested in her relief.
[11] Ms. Hong also provided hearsay evidence in support of her position that Mr. Nguyen has been, and continues to be, employed. I have not relied on this hearsay evidence in making the above findings.
[12] Having made the finding that Mr. Nguyen has been working since September 28, 2009, paragraph 8 d. of the Separation Agreement imposes on Mr. Nguyen an obligation to pay child support, at least for the youngest child, as of October 1, 2009, based on the Child Support Guidelines.
[13] The issue then becomes what income I should attribute to Mr. Nguyen in order to calculate his child support obligation. The evidence of Mr. Nguyen’s income since the date of the Separation Agreement is limited.
[14] Section 19 of the Child Support Guidelines permits the court to impute such an amount of income as it considers appropriate in the circumstances. These circumstances include where the parent has failed to provide income information when under a legal obligation to do so. This section applies in this case – Mr. Nguyen is under a legal obligation to provide income information pursuant to the express terms of the Separation Agreement as well as the provisions of the Child Support Guidelines and Rule 13 (1) (b) and (3.1) of the Family Law Rules. He has failed to provide this information.
[15] Ms. Hong has provided a document printed from the internet labelled “Roofer salary in Canada” that makes statements about the average roofer salary in Canada. Upon this information, the Applicant seeks to impute an income of $59,702 per year to the Respondent, back to January 1, 2009.
[16] This information from the internet is hearsay, with no evidence as to the source of the information and no evidence with respect to its reliability or accuracy. Ms. Hong’s counsel urged me to accept this information on the basis that this was the best information available. Respectfully, I disagree. An affidavit from an expert could have provided evidence of income. Ms. Hong’s counsel argued that this was not feasible given the expense of retaining an expert, but did not provide any information of the amount of this expense. In addition, there is evidence available from government websites, such as Statistics Canada, which would be significantly more reliable than the information presented and which may satisfy the courts’ requirements for reliability.
[17] I am not prepared to rely on the internet information presented by Ms. Hong as evidence of Mr. Nguyen’s income.
[18] This leaves me with the following evidence upon which to determine Mr. Nguyen’s income:
- He is an experienced roofer, as I accept Ms. Hong’s evidence that he has been working as a roofer since before separation and continues to work now;
- He has a history of working long hours;
- He enjoys a comfortable lifestyle, residing in a home valued at approximately $400,000, operates two vehicles, and travels on trips abroad with family members;
- He has been on notice on these proceedings that Ms. Hong is seeking to impute income to him of $59,702 per year yet he choose not to provide any income information in support of a lower income; and
- Minimum wage in Ontario is currently $14 per hour under the Employment Standards Act, 2000, which results in income of between approximately $25,000 and $28,000 per year assuming full time employment.
[19] The onus is on the person requesting an imputation of income to establish an evidentiary basis for such a finding. However, in Graham v. Bruto, 2008 ONCA 260, the court inferred that the failure of the payor to properly disclose mitigates the obligation of the recipient to provide an evidentiary basis to impute income. Where a party fails to provide full financial disclosure relating to their income, the court is entitled to draw an adverse inference and to impute income to them: Szitas v. Szitas, 2012 ONSC 1548; Woofenden v. Woofenden, 2018 ONSC 4583, Smith v. Pellegrini, 2008 ONSC 46927; Maimone v. Maimone, 2009 ONSC 25981.
[20] Evidence as to the payor’s lifestyle may provide an evidentiary basis for income. In Bak v. Dobell, 2007 ONCA 304, Lang J.A., of the Ontario Court of Appeal, observed that “lifestyle is not income, but rather evidence from which an inference may be drawn that the payor has undisclosed income that may be imputed for the purpose of determining child support.”
[21] Based on the evidence before me, I find that there is an evidentiary basis to find, as I do, that Mr. Nguyen earns more than minimum wage income. His lifestyle, occupation, and experience supports this finding. These factors, along with the adverse inference I make given his failure to provide income information in the face of his legal obligation to do so, and on notice that Ms. Hong sought to impute income of $59,702 per year to him, warrants imputing income to Mr. Nguyen of $50,000 per year. I rely on these same factors to impute this income to Mr. Nguyen for the period since October 1, 2009.
A. Future Child Support
[22] The youngest child is now 16 years of age and continues to reside with Ms. Hong. Child support is still payable for this child. Mr. Nguyen shall be required to pay ongoing child support of $461 per month, commencing January 1, 2019, being the table amount payable for one child for a payor in Ontario earning $50,000 per year.
B. Past Child Support
[23] Given the findings above, pursuant to the provisions of the Separation Agreement, Mr. Nguyen should have been paying child support for one child as of October 1, 2009 based on his income of $50,000 per year.
[24] The tables under the Child Support Guidelines have been amended from time to time since they came into force. In 2009, the table amount payable for one child for a payor in Ontario earning $50,000 per year was $462 per month. Effective January 1, 2012, this changed to $450 per month. Effective November 22, 2017 (which I will apply as of December 1, 2017), it became $461 per month.
[25] Mr. Nguyen therefore should have been paid the following child support:
| Period | Amount |
|---|---|
| October 1, 2009 to December 31, 2009 | $1,386 |
| January 1, 2010 to December 31, 2010 | $5,544 |
| January 1, 2011 to December 31, 2011 | $5,544 |
| January 1, 2012 to December 31, 2012 | $5,400 |
| January 1, 2013 to December 31, 2013 | $5,400 |
| January 1, 2014 to December 31, 2014 | $5,400 |
| January 1, 2015 to December 31, 2015 | $5,400 |
| January 1, 2016 to December 31, 2016 | $5,400 |
| January 1, 2017 to November 30, 2017 | $4,950 |
| December 1, 2017 to December 31, 2017 | $461 |
| January 1, 2018 to December 31, 2018 | $5,532 |
| Total | $50,417 |
[26] The legal principles set out by the Supreme Court of Canada in D.B.S. and S.R.G. v. T.A.R. and L.J.W., 2006 SCC 37, structure the discretion of the court when determining whether to award retroactive child support. In that decision the Court articulated two overarching principles governing claims for retroactive child support and retroactive increases in support: 1) Each parent has an obligation to insure that his/her child receives proper support in a timely manner; and 2) courts considering these claims must balance the payor’s interest in the certainty of the status quo with the need for fairness and flexibility. The Court set out four factors to be considered in such claims:
- Reason for the delay in bringing the claim;
- Conduct of the payor parent;
- Circumstances of the child; and
- Hardship that may be caused by a retroactive award.
[27] These principles do not necessarily apply to the claim in this matter, which may be characterized as the enforcement of the terms of the Separation Agreement, rather than a true claim for retroactive support. In this matter, Mr. Nguyen was aware, when he signed the Separation Agreement, that he had a child support obligation commensurate with his income. He cannot avoid this obligation through his willful refusal to share his income information and pay child support as stipulated in that agreement.
[28] Even taking into consideration all of the factors under the D.B.S. analysis, I would still find that it is fair, in all of the circumstances, to require Mr. Nguyen to pay the stipulated child support for the period from October 1, 2009 to present. Specifically, I find that his conduct, in failing to comply with his obligations under the agreement, to be blameworthy. His conduct is not relieved in any way by the delay by Ms. Hong, who I find acted reasonably given her financial limitations to retain counsel to pursue child support earlier. Ms. Hong’s financial circumstances support that the child will benefit from this support and has experienced financial hardship as a result of Mr. Nguyen’s failure to pay.
[29] I have considered Ms. Hong’s evidence that she did not provide Mr. Nguyen with her income information after the parties signed the Separation Agreement. However, Ms. Hong is not seeking a contribution to section 7 expenses and the child was primarily residing with her. As such, her income was not relevant to the determination of Mr. Nguyen’s child support obligation. I find that given these circumstances, she was not required to provide her income information to Mr. Nguyen pursuant to the terms of the Separation Agreement or the Child Support Guidelines, and that this factor does not diminish Mr. Nguyen’s liability for past support.
[30] I therefore order Mr. Nguyen to pay child support for the period from October 1, 2009 to December 31, 2018 fixed at $50,417.
C. Insurance Coverage
[31] The Separation Agreement requires Mr. Nguyen to maintain life insurance to secure his child support obligation. Ms. Hong has requested that he provide proof that he has complied with this obligation. He has not done so.
[32] The terms of the agreement contemplate that the amount of life insurance coverage may be reduced from time to time as the child support obligation is reduced. As such, Ms. Hong has only sought an order requiring Mr. Nguyen to maintain coverage with coverage of $15,000, rather than the $100,000 amount provided for in the agreement. I find this is reasonable and make this order as set out below.
D. Costs
[33] In Mattina v. Mattina, 2018 ONCA 867, the Ontario Court of Appeal recently confirmed that the modern costs rules are designed to foster four fundamental purposes (1) to partially indemnify successful litigants; (2) to encourage settlement, and; (3) to discourage and sanction inappropriate behaviour by litigants: and (4) to ensure that cases are dealt with justly (Rule 2(2) of the Family Law Rules).
[34] Rule 24(12) of the Family Law Rules sets out factors relevant to setting the amount of costs, and specifically emphasizes “reasonableness and proportionality” in any costs award. Rule 24(12) requires the court to consider:
“(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues: (i) each party’s behaviour, (ii) the time spent by each party, (iii) any written offers to settle, including offers that do not meet the requirements of rule 18, (iv) any legal fees, including the number of lawyers and their rates, (v) any expert witness fees, including the number of experts and their rates, (vi) any other expenses properly paid or payable; and (b) any other relevant matter.”
[35] Ms. Hong seeks her costs in this matter, fixed at $2,171.29. These costs include approximately 10 hours of counsel time, plus approximately $100 in disbursements.
[36] Taking into consideration all of the factors under Rule 24(12), I find that these fees are reasonable and proportional. Mr. Nguyen should have anticipated that Ms. Hong would incur legal fees in this range to pursue this matter, and in fact appears to have counted on such costs to insulate him from his obligations under the Separation Agreement.
[37] I find further that Mr. Nguyen’s conduct in failing to provide any income information or other response to Ms. Hong’s Application, or her counsel’s earlier correspondence, was unreasonable and warrants an award of full recovery costs. It is necessary to discourage and sanction such conduct. An award of costs of $2,171.29 is just in all of the circumstances.
[38] All of these costs were incurred to enforce Mr. Nguyen’s support obligation and shall be enforceable as such.
Disposition
[39] Accordingly, I make the following final orders:
- The Respondent, Lam Nguyen, shall pay to the Applicant, Vu Diep Hong, child support for the child Tony Nguyen, born October 17, 2002, in the amount of $461 per month commencing January 1, 2019. This amount is based on Mr. Nguyen’s income being imputed to be $50,000 per year.
- The Respondent, Lam Nguyen, shall pay to the Applicant, Vu Diep Hong, child support for the child Tony Nguyen, born October 17, 2002, for the period from October 1, 2009 through to and including December 31, 2018, fixed in the amount of $50,417. This amount is based on Mr. Nguyen’s income during this period being imputed to be $50,000 per year.
- Mr. Nguyen shall maintain life insurance coverage in the amount of $15,000, and shall designate Ms. Hong as the irrevocable beneficiary of this coverage as security for his child support obligation for Tony Nguyen, born October 17, 2002. Mr. Nguyen shall maintain this coverage, paying all premiums when due, for as long as he has a child support obligation for Tony Nguyen. Within 30 days of this Order, and thereafter on the anniversary date of this Order, Mr. Nguyen shall provide Ms. Hong with proof that this coverage is in place, the policy is in good standing, he has paid all premiums due, and that she is the irrevocable beneficiary.
- Mr. Nguyen’s child support obligation to Tony Nguyen, born October 17, 2002, binds Mr. Nguyen’s estate.
- The Respondent, Lam Nguyen, shall pay to the Applicant, Ms. Hong, her costs of this Application fixed at $2,171.29. All of these costs were incurred to enforce Mr. Nguyen’s obligation to pay child support and shall be enforceable as such.
- This Order shall bear interest at the post judgement interest rate as set out in the Courts of Justice Act from the date of any default.
Justice P. MacEachern Date: December 7, 2018