Court File and Parties

Court File No.: D 47309/09

Ontario Court of Justice

Between:

Director, Family Responsibility Office for the benefit of Sandra Louise De Francesco Applicant

— And —

Frank De Francesco Respondent

Before: Justice C.J. Jones

Heard on: September 5, 2012

Reasons for Judgment released on: September 26, 2012

Counsel:

• Ms. Carolyn Brett for the applicant(s)
• Mr. David Pomer for the respondent(s)

Judgment

C.J. JONES, J.:

Background and Jurisdiction

[1] This proceeding is a default hearing brought by the Director, Family Responsibility Office (FRO) for the benefit of the support recipient, Sandra Louise De Francesco, (referred to as the recipient) against the support payor, Frank De Francesco, (referred to as the payor) arising from the payor's default in the payment of his child and spousal support due under the terms of the order of Nelson, J. dated April 27, 2005. The Director's Notice of Default Hearing dated December 1, 2009 was served personally on the payor. The enforcement remedy being sought by Director in the proceeding is an order for incarceration of the payor.

[2] The evidence of the Director consisted of, firstly, the Director's Statement of Arrears sworn August 23, 2012 showing the arrears under the order to be $68,335.56 as of August 23, 2012 and secondly, a copy of the child and spousal support order of Nelson, J., establishing the support obligation. The Director was otherwise relying upon the presumptions set out in s. 41 (9) of the Family Responsibility and Support Arrears Enforcement Act, 1996 (referred to as the Act).

The Support Order

[3] Pursuant to paragraph 2 of the order of Nelson, J. the payor was ordered to pay child support for the two dependent children of the marriage in the sum of $959.00 per month commencing March 1, 2005, based upon an income imputed to the payor of $73,000.00 per year. In addition, pursuant to paragraph 10 (1) of the order, the payor was ordered to pay $650.00 per month on account of spousal support, with such payments to commence March 1, 2005, for a total payment on account of child and spousal support of $1,609.00 per month. The spousal support was to be indexed annually by the lesser of the indexing factor set out in sections 34 (5) and (6) of the Family Law Act and the actual increase in the payor's income. The Director's Statement of Arrears indicates that the total of the support payments, accruing monthly, had increased to $1,661.83 per month as of the most recent support accrual shown on the statement, dated August 1, 2012.

[4] The support order also included other clauses relating to the payment, by the support payor, of a portion of the children's special and extraordinary expenses as defined by s. 7 of the Child Support Guidelines including their post-secondary education expenses and provision for ongoing extended medical coverage for the children, among other terms. However, it would appear that all of the arrears being enforced by the Director, as shown on its Statement of Arrears, relate to the ongoing monthly child and spousal support payments.

Payment History

[5] The Director's Statement of Arrears indicates that payments were made by the support payor under the order, on a fairly regular basis, from the date the order was granted in 2005 until December 2008. Thereafter, there were no payments made on account of support for the ensuing ten months. Between October 2009 and July 2010 seven partial payments were received in varying amounts on account of support, in much lesser sums than that provided by the order. From July 2010 onward, the only payments that have been received and applied to the support order have been paid by way of a federal garnishment of any funds owing to the payor.

Evidence of the Payor's Psychiatrist

[6] Two witnesses were called on behalf of the support payor: firstly, his psychiatrist, Dr. Eva Styrsky; and secondly, the payor himself. As well, a documents brief, marked as Exhibit 1, was filed at the hearing containing documentation relevant to the issues in dispute. The documents brief was admitted into evidence in the proceeding on consent of both parties.

[7] Dr. Styrsky holds a degree as a medical doctor from the University of Toronto, and a certification in psychiatry, also granted by the University of Toronto, and on consent of both parties, she was qualified as an expert in medicine and psychiatry. Dr. Styrsky testified that the payor has been a patient under her care since September 2010, he attends upon her every 6 to 8 weeks and is compliant with treatment. Dr. Styrsky testified that the payor suffers from severe clinical depression and a severe anxiety disorder, as well as other physical conditions that compound his medical difficulties. The payor's depression is chronic in nature. Dr. Styrsky has diagnosed the payor with a major depressive disorder as well as a generalized anxiety disorder. Dr. Styrsky states that the payor suffers from severe clinical depression with depressed mood that limits his energy and motivation, both of which are poor. As well, the payor has other sequelae arising from his disorder, including cognitive impairment, poor concentration and short term memory difficulties, as well as associated issues with sleep disruption and chronic insomnia. Dr. Styrsky testified that, by reason of his mental disorder as well as his physical issues, the payor suffers from a disabling condition that is severe, prolonged and of indefinite duration and that renders the payor unable to perform any employment or occupation on either a part-time or full time basis. The payor is currently prescribed anti-depressants, as well as medication for sleep. Dr. Styrsky related that trials of other anti-depressants have also been attempted with the payor in the past, without any significant improvement. Dr. Styrsky described the payor's depression as being quite treatment-resistant. In addition to medication, Dr. Styrsky provides ongoing supportive psychotherapy to the payor. She stated that while the payor always attends, he has shown little improvement. In terms of his prognosis, Dr. Styrsky testified that the payor's condition is chronic and long-term, with the result that his impairment is expected to be ongoing, continuous and likely to deteriorate. Nevertheless, she suggested that a review of his condition after a period of three years would be reasonable.

[8] The oral evidence of Dr. Styrsky was supplemented by a copy of her Health Status Report relating to the payor dated April 20, 2012, included in Exhibit 1 at Tab 6, prepared in support of an application made by the payor to the Ministry of Community and Social Services (MCSS) for disability benefits under the Ontario Disability Support Program (ODSP). Dr. Styrsky testified that this report is the second report completed by her for the purpose of submission to MCSS in support of the payor's application for ODSP. A copy of her first report was not available and was not placed in evidence in this proceeding. Dr. Styrsky testified that on the payor's first application to ODSP, the Ministry determined that the payor did not meet the program's definition of disability, and his application for ODSP benefits was denied in or about December 2011. In relation to this denial, the psychiatrist testified that she felt that this had been due to her own failing. She explained that she had not provided sufficient detail in the first medical report to support the finding of a disability. The psychiatrist indicated that she had been rushed and busy at the time of her completion of the first medical report, resulting in insufficient information as to the nature of the payor's mental disorder, and she indicated that, in this respect, the denial of benefits based on the first medical report was a result of her own lapse, as a practitioner, in failing to provide sufficient detail in the application.

[9] The court heard evidence that, based on the Health Status Report of Dr. Styrsky dated April 20, 2012, the payor has now received confirmation from ODSP that he meets the definition of disability that is applied by the program. A copy of a letter dated June 27, 2012 to the payor from the Ontario Disability Support Program is included in Exhibit 1, Tab 8, confirming that the payor's application for ODSP benefits has been accepted.

Evidence of the Payor

[10] In his evidence, the payor testified that in September 2008 he was effectively terminated from a long-term position with a company that produced moulded polyurethane products, where he had previously worked in various capacities for almost twenty-five years. While the payor signed a "Voluntary Separation Proposal and a Full and Final Release" ending his relationship with the company, the evidence disclosed that if he had not accepted the severance terms, he would have been terminated from the company for performance related issues. Exhibit 1, Tab 4 included a letter from the company, indicating that upon termination, the payor received a total net payment of $50,000.00. In his oral evidence, the payor testified that he did not receive the full payout of $50,000.00, as the company claimed a set-off for amounts they maintained were owing to the company by the payor for various employment related expenses, with the result that the payor received only approximately $31,000.00 from the termination allowance. The payor testified that these funds were received by him in or around September, 2008, at a time when his child and spousal support payments were up to date. The payor testified that the bulk of these funds were used to pay outstanding legal fees that the payor owed to his two former lawyers in relation to his matrimonial litigation involving the support recipient.

[11] Following the loss of his employment, the payor continued to pay the ongoing child and spousal support payments from September 2008 to December 2008 inclusive, at which time the payor began to default on his payments of child and spousal support due under the terms of the order. The payor testified that, at the time his contract of employment with the company ended, he did not conceive of the possibility he might not find alternate employment or that he would be unemployed for any significant period of time. He indicated that he had worked continuously on a full time basis for over twenty-four years and he expected to promptly obtain alternate employment following his termination from the company. Therefore, he used his severance funds to pay debts that existed at that time. Without the severance funds to fall back on, and after being without work for several months, the payor was not only unable to pay the ongoing support, but was also unable to pay his own living expenses. The payor testified that he was forced to apply for social assistance for himself in February 2009.

[12] In hindsight, it would certainly have been more prudent had the payor safeguarded his severance funds, holding them as security for the future child and spousal support payments that would come due, to ensure that he would be in a position to pay his support obligation, if employment prospects failed to materialize. It is a very sad fact that the bulk of the payor's termination allowance, intended to provide him with replacement income during a reasonable job search period, was entirely consumed by legal fees relating to the prior separation of the parties, leaving no financial cushion either for the payment of his own expenses or those of his dependants during the period of unemployment that followed. Had there been any arrears of support at that time, there would be no excuse for not applying these funds towards the child and spousal support obligation rather than to his creditors. A support payor is not entitled to prefer payment to his lawyers or other creditors over his support arrears.[^1] However, the Director's Statement of Arrears bears out the fact that the child and spousal support payments were current at the time of the payor's termination from his contract employment and discloses that the payor continued to make the full child and spousal support payments to the end of the year in 2008.

While the payor may be the subject of some criticism for being overly optimistic regarding his re-employment prospects, no mala fides can be attributed to him in expending the termination allowance funds towards the reduction of debts in September 2008. There is no evidence of a deliberate or calculated attempt by the support payor to deprive his children and former spouse of their future support payments. Although it would now appear that the payor acted unwisely in failing to hold-back some portion of the severance funds to allow for the contingency that he might not succeed in directly obtaining alternate employment from which to pay his support, the evidence falls short of demonstrating a wilful or deliberate disregard by the payor for his obligation under the support order, an obligation that he was fulfilling at that time.

[13] Subsequently, after an unsuccessful job search and some limited employment as a consultant in the same industry, the payor developed the symptoms of depression from which he now suffers.

[14] In his evidence the payor indicated that he has been unemployed since May 2010. The payor testified that, at present, his only source of income is social assistance. He is now 52 years of age and he resides with his mother. The payor's sworn financial statement dated August 22, 2012, filed in Exhibit 1, Tab 1, shows no property, vehicle or other assets owned by the payor. The payor testified that he has no bank account.

Prior Motion to Change

[15] During the time that this default proceeding has been pending, the payor brought a motion to change to the Superior Court of Justice, seeking to change the child and spousal support order to terminate support for the older child, to reduce the child support for the younger child to zero for 2009 and to rescind the arrears of child support that had arisen pursuant to the order of Nelson, J. As well, the payor sought to terminate spousal support and to fix the arrears of spousal support at a very modest level, to be repaid at the rate of $100.00 per month. The payor's motion to change came before the Superior Court in January 2012, and was argued on the basis of the affidavit evidence filed on the motion. The evidence apparently also included the initial Health Status Report completed by Dr. Styrsky, namely the report referred to by her as lacking in detail. The judgment of the court was delivered by way of a six page typewritten endorsement, and a copy of that endorsement was filed in the evidence in this proceeding. It is clear from the endorsement that the evidence put before the Superior Court relating to the payor's depression was insufficient and unpersuasive. The Ministry of Community and Social Services was a party to the motion to change as an assignee, and they had placed evidence before the court to demonstrate that although the payor had applied for social assistance, it had been determined by the program that he did not meet the ODSP criteria as a person with a disability and he was denied benefits in December 2011. The Superior Court referred to the initial Health Status Report completed by Dr. Styrsky dated May 13, 2011 and a letter of September 27, 2010 of Dr. Perusco, another physician who had previously treated the payor. The Superior Court noted that neither of the physicians had filed an affidavit in the motion to change to identify these documents, explain the context in which they were prepared or to comment on the payor's health status or employability in any way. The Superior Court noted that the Health Status Report had been filled out with handwriten notes that were often illegible. Other frailities of the medical evidence were noted by the Superior Court in its decision on the motion to change. At paragraph 30 of the Endorsement on the motion to change, the court stated as follows: "I do not say the Respondent could never demonstrate that he is unemployable due to depression but he has not done so on the record in this case."

[16] It would appear that the evidence placed before the Superior Court on the motion to change was inadequate pertaining to the payor's depression and the impact of his mental condition on his ability to work. The payor, having the burden of proof on the motion to change, was unsuccessful in persuading the court that he had met the threshold of a change in circumstances sufficient to result in a change in the support order of Nelson, J. The payor's motion to change was dismissed, and in addition, in relation to the support arrears assigned to MCSS, the court made an order requiring the payor to pay $150.00 per month towards the arrears, until fully paid.

Quality of Medical Evidence

[17] The medical evidence before this court on the default hearing is clearly much superior to the medical evidence tendered in the prior proceeding. This court had the benefit of the oral testimony of Dr. Styrsky, as well as her recent medical report, namely the Health Status Report dated April 20, 2012, containing significant detail and elaboration of the payor's mental health condition, symptoms and prognosis, and the effect of these factors upon his employability.

Jurisdiction and Legal Framework

[18] As well, the issue before this court in the default hearing is different than the issue that was before the Superior Court of Justice in the motion to change. The within proceeding is not a motion to change the terms of the support order of Nelson, J. That order is a valid and subsisting order of the Superior Court, and indeed, this court would be without jurisdiction to vary or change the terms of a Superior Court order. The proceeding before this court is a default hearing brought by the Director pursuant to section 41 of the Family Responsibility and Support Arrears Enforcement Act, 1996 seeking to enforce the terms of the support order. The issue before this court is whether the support payor has satisfied the court that he is unable, for valid reasons, to pay either the arrears of support that have accrued under the order, or to make subsequent payments of the ongoing support due under the terms of the order.

Burden of Proof and Presumptions

[19] In a default hearing, the burden or onus of proof is upon the support payor. Pursuant to section 41 (9) of the Act, unless the contrary is shown, two legal presumptions apply. Section 41 (9) reads as follows:

"s. 41 (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."

[20] These presumptions are not absolute, rather they are rebuttable presumptions. However, the onus or burden of disproving the presumptions rests squarely with the support payor. In relation to the ability to pay the arrears and to make subsequent payments under the order, the support payor must prove, on a balance of probabilities, through admissible evidence, that he does not have the ability to pay. Further, by virtue of section 41 (10) of the Act, the payor has the onus of proof to demonstrate that this inability to pay is for valid reasons.

Definition of "Valid Reasons"

[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.[^2] 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.

Interpretation of Section 41(22)

[22] Counsel for the Director argues that s. 41 (22) (c) of the Act is applicable, and that, given the payor's lack of success on his motion to change, this court is compelled to incorporate the payment terms of the changed support order granted in the Superior Court of Justice into any order made on this default hearing. The Superior Court did not, in fact, grant a change to the support order in relation to either the ongoing payments or the amount of the arrears, although it did make an order for instalment payments, regarding the arrears owed to MCSS that had accrued under the original support order. Counsel for FRO argues that this court is required to incorporate the order for instalment payments of $150.00 per month on account of the arrears owing to MCSS, into any order made in this proceeding.

[23] This court is of the view that the Director's interpretation of section 41 (22) of the Act is flawed. The purpose of section 41 (22) of the Act is both practical and remedial. Section 41 (22) is a saving provision, such that if a different support order is made on a motion to change while a default hearing is pending, the jurisdiction of the court to continue the default hearing is not lost, and the Director does not have any obligation to serve fresh documents in order to proceed. If, as a result of a change motion that is disposed of while a default hearing is pending, a new support order is granted that changes either the quantum of the ongoing support or the arrears being enforced or both, the court may nevertheless continue with the default proceeding. In any order made on the default hearing, the court may substitute the new amounts of the ongoing support or arrears for the amounts originally claimed in the Notice of Default Hearing and accompanying documents.[^3] Section 41 (22) of the Act does not limit or restrict the orders that may be made by the court on a default hearing, pursuant to section 41 (10). Similarly, section 41 (22) does not limit the court's jurisdiction or discretion, in determinng any of the issues in the proceeding.

Court's Finding

[24] Based upon the evidence adduced by the support payor at the default hearing, the court is satisfied that the payor has discharged the burden of proof that rests upon him. The evidence supports a finding that the payor is unable, for valid reasons, to pay either the arrears of support or to make subsequent payments under the order at this time. The payor testified that, while his application for ODSP disability benefits has now been accepted and approved, he has not yet received any disability payments, nor has he been advised of the amount of disability benefits he will receive. The payor's sole source of income remains public assistance through the Ontario Works program, at the present time.

Order

[25] The court therefore makes the following order on this default hearing, pursuant to s. 41 (10) of the Act:

1. The payor shall report in writing to the Director, Family Responsibility Office, full particulars of any future change in his address, income, financial means or employment, as soon as such changes occur, including full details of the receipt, by the payor, of any ODSP disability benefits;

2. Once annually, on June 1st of each year, beginning June 1, 2013, the payor shall forward to the Director, F.R.O., the following:

   (a) a copy of his income tax return and notice of assessment for the preceding calendar year;

   (b) his up-to-date sworn Financial Statement (Form 13 under the Family Law Rules); and

   (c) an up-to-date report from his attending physician or psychiatrist, summarizing his current mental health and medical condition and the opinion of his doctor or psychiatrist as to his ability to perform any remunerative employment on either a full or part time basis;

3. The Director's claim for an order incarcerating the support payor for his default under the support order is dismissed at this time, based upon the evidence before the court.

This order, granted on the default hearing, does not affect the right or obligation of the Director, F.R.O. to enforce the support order through other available means, which may include, for instance, a Writ of Seizure and Sale to attach any future property the payor may acquire, or a federal garnishment, to the extent that execution may be made. However, in the circumstances of this case, the enforcement remedy of incarceration, being an enforcement remedy of last resort,[^4] is neither warranted nor is it appropriate.

Released: September 26, 2012

Signed: "Justice C.J. Jones"

Footnotes

[^1]: Director, S.C.O.E. v. McLeod, [1991] O.J. No. 1689; 4 C.P.C. (3d) 292; 36 R.F.L. (3d) 331; 28 A.C.W.S. (3d) 934 (OCJ).

[^2]: Director, S.C.O.E. v. McLeod (June 27, 1990), [1990] W.D.F.L. 1260 (OCJ); referred to in subsequent proceedings at , [1991] O.J. No. 1689; 4 C.P.C. (3d) 292; 36 R.F.L. (3d) 331; 28 A.C.W.S. (3d) 934 (OCJ).

[^3]: Fischer v. Ontario (Director, Family Responsibility Office), 2008 ONCA 825, [2008] O.J. No. 4922; 59 R.F.L. (6th) 237; 92 O.R. (3d) 721; 2008 Carswell Ont 7447; 173 A.C.W.S. (3d) 560 (Ont. C.A.).

[^4]: Ibid, at paragraph 24.