Brampton Registry No. 299/08
DATE: 2012·I·10
CITATION: Ruszczak v. Scherbluk, 2012 ONCJ 14
ONTARIO COURT OF JUSTICE
BETWEEN:
OLGA RUSZCZAK,
Applicant
— AND —
THOMAS PETER ALEXANDER SCHERBLUK,
Respondent
Before Justice Juliet C. Baldock
Heard on 5 January 2012
Reasons for Judgment released on 10 January 2012
Lisa Kadoory ............................................................................................. counsel for the applicant
Thomas Peter Alexander Scherbluk ...................................................................... on his own behalf
[1] JUSTICE J.C. BALDOCK:— This is a motion brought by the respondent Thomas Peter Alexander Scherbluk who seeks to change the terms of a separation agreement dated February 20, 2006.
[2] Paragraph 6 of that agreement provided that the respondent pay the sum of $681.00 per month based on an imputed income of $35,000.00 per year.
[3] It is the respondent’s position that he did not in fact earn $35,000.00 in 2006, nor has he done so since.
[4] His evidence is that he was, at the time of the agreement, self employed. He derived no net income from his business but agreed to the support as he anticipated earning at least $35,000.00 in that and subsequent years.
[5] The respondent has filed copies of his income tax returns for 2005 to 2009 inclusive. There is no tax return for 2010, no proof of total income for 2011 and no notices of assessment.
[6] According to the tax information filed, the respondent’s taxable income was as follows:
2005
$6,248
2006
0
2007
$11,000
2008
$26,884
2009
$19,699
[7] The respondent submits that he continued working in his business in the hopes of getting lucrative contracts and earning a reasonable income. This did not materialize.
[8] The respondent is an educated and articulate man. He holds an engineering degree and a Masters in business administration.
[9] Although not in evidence, the respondent has advised that as of January 5, 2012 he is starting employment at a base salary of $2,500.00 a month, plus commissions which he estimates will double his income for a total of $60,000.00 per year.
ISSUES
(a): Change in Circumstances
[10] The respondent relies on the fact that his business did not prosper and his anticipated income did not materialize.
[11] Having regard to his actual income, and on the assumption that the income tax returns filed are accurate, the respondent’s circumstances actually improved between 2006 and 2009 although not reaching his anticipated level of income.
[12] The respondent argues that the change in circumstances arose from the failure of his business and his inability to achieve the revenue he had hoped for.
[13] On the evidence presented, I cannot conclude that there has been any negative change in circumstances.
[14] In 2006 the respondent had no income but hoped and perhaps expected to earn $35,000.00.
[15] In 2007, he had a very minimal income but continued with his efforts to grow the business.
[16] In 2008, the respondent earned a little more than minimum wage, but still persisted with his business. The same applies to 2009.
[17] There is no tax return for 2010 but the respondent submits his income was in the $25,000.00 range.
[18] He continued through 2011, for which no evidence is provided.
[19] I conclude that for the entire period since the agreement was signed, almost six years, the respondent has continued with his struggle to make the business profitable, without success.
[20] This does not, in my view, constitute a change in circumstances.
(b): Underemployment
[21] The applicant maintains that the respondent has been consistently underemployed.
[22] In this regard, I have considered the case of McGillan v. Burdney and Ancona, 2004 ONCJ 62, 131 A.C.W.S. (3d) 270, [2004] O.J. No. 2159, 2004 CarswellOnt 2151 (Ont. C.J.). In this case, Justice Robert J. Spence considered the issue of under employment in a context where a payor works at a failing business year after year.
[23] Citing the decision of Stiver v. Mercer (2000), 95 A.C.W.S. (3d) 118, [2000] W.D.F.L. 159, [2000] O.J. No. 568, 2000 CarswellOnt 487 (Ont. S.C.), he noted that the law in this area is clear such that a court “must consider not only the amount of income a spouse actually earns, but the amount of income a spouse would earn if working to capacity”.
[24] He then cited, with approval, from the decision DePace v. Michienzi, 2000 CanLII 22560, 5 R.F.L. (5th) 40, [2000] O.J. No. 453, 2000 CarswellOnt 425 (Ont. Fam. Ct.), where Justice Grant A. Campbell made the following comments (at paragraph [28]):
It [a court] may and should attribute income to a parent that (s)he could and should be earning . . ..
[25] In the instant case, the respondent has a mechanical engineering degree from the University of Toronto as well as a Masters in business administration from York University.
[26] Before the respondent started working for himself in and around 2000, he earned an income of $75,000.00.
[27] It appears that the respondent has been pursuing an apparently fruitless enterprise for over six years, and waited four years before bringing his motion to change.
[28] As Justice Susan E. Greer noted in Dang v. Hornby, 2006 CanLII 12973, 33 R.F.L. (6th) 113, [2006] O.J. No. 1634, 2006 CarswellOnt 2447 (Ont. S.C.), citing Olah v. Olah, 2000 CanLII 22590, 7 R.F.L. (5th) 173, [2000] O.J. No. 1720, [2000] O.T.C. 344, 2000 CarswellOnt 1691 (Ont. S.C.) and Drygala v. Pauli, 2002 CanLII 41868, 61 O.R. (3d) 711, 164 O.A.C. 241, 219 D.L.R. (4th) 319, 29 R.F.L. (5th) 293, [2002] O.J. No. 3731, 2002 CarswellOnt 3228 (Ont. C.A.), one does not have to make a conscious and deliberate decision to avoid or limit one’s support obligations to be considered underemployed. When a payor makes a decision to start a business, learns within one year that business is not a success, and then makes no attempts to get gainful employment in the area in which he was experienced, this constitutes underemployment.
[29] Given the respondent’s education and demonstrated previous ability to earn approximately $75,000.00 a year, I conclude that he has indeed been underemployed.
(c): Other Considerations
[30] The respondent only took steps to address the support and accumulated arrears when the Family Responsibility Office took steps to enforce the terms of the Separation Agreement, and he faced the prospect of losing his driver’s licence.
[31] The disclosure provided is meagre at best. No new material has been filed by the respondent since the motion to change was commenced in November, 2010.
[32] The respondent did not comply with the ongoing disclosure requirement set out in paragraph 10 of the Separation Agreement.
[33] The respondent offers no explanation as to why, faced with an unprofitable business, he did not at least attempt to obtain some additional income by way of part time work.
[34] If, as the respondent states, he did at some point look for other work, there is no evidence to support that claim.
[35] While the respondent may, at some time prior to the execution of the Separation Agreement have earned $75,000.00 per year, I do not impute income at that level.
[36] The Agreement was based on an anticipated income of $35,000.00 and this was accepted by the applicant.
[37] On the evidence before me, I conclude that the respondent had the ability to earn that amount and that he should have done so.
[38] Accordingly, the motion to change is dismissed.
[39] As to the claim for ongoing support, the respondent shall within 30 days serve the applicant with a letter from his employer or other proof of the following:
(a)
position held
(b)
date of hire (or contract)
(c)
base salary
(d)
commission structure
[40] Child support may then be varied to reflect the revised income, as of February 1, 2012, by way of 14B Motion and consent.
[41] In the event that there is no consent, the applicant may bring a motion, on notice to the respondent, returnable before me on a date to be arranged with the trial office, for the applicable guideline support and costs.
[42] Counsel for the applicant may make brief written submissions with respect to costs of the within motion on notice to the respondent, within 14 days. The respondent then has 14 days to respond.
Released: 10 January 2012
Justice Juliet C. Baldock