Court File and Parties

Court File No.: Brampton 2013/04 Date: 2012-02-22 Amended: 2012-03-19 Ontario Court of Justice

Between: Jennifer Gyles, Applicant

— And —

Fitzroy Card, Respondent

Before: Justice J.C. Baldock

Heard on: February 13, 2012

Reasons for Judgment released: February 22, 2012

Amended: March 19, 2012

Counsel:

• Anita K. Kania, for the applicant
• Fitzroy Card, on his own behalf

BALDOCK, J.:

[1] Introduction

This is a motion made by the applicant mother to change the order with respect to child support made by Justice Karswick on February 14, 2005.

BACKGROUND

[2] The Children

The parties are the parents of two children:

• Jennessa Keosha Card, born […], 1993 (now 19);
• Nickeisha L.C. Card, born […], 2001 (now 10).

[3] Current Support Order

The current order was made in the amount of $493.00 per month, plus a contribution of $166.00 per month towards s.7 expenses.

[4] Imputed Income

In the absence of financial disclosure, the applicant agreed that the respondent's income be imputed at $33,300.00 per year.

[5] Older Child's Plans

Jennessa is completing high school and plans to attend college in September 2012.

[6] Respondent's Business

The respondent is a welder, who operates his own business, incorporated in 2007 as 2131730 Ontario Ltd. – Cards Welding.

[7] Prior Income

The respondent's "line 150" taxable income for 2004 was $91,000.00. This was the income upon which the February 2005 order would have been based had there been adequate disclosure.

[8] Business Revenue and Income Since Incorporation

Since incorporating, the respondent's revenue/income has been as follows:

Year	Gross Revenue	Net Disclosed for Tax Purposes
2008	$118,000.00	$4,000.00
2009	$104,000.00	$4,000.00
2010	$122,000.00	$17,000.00

DISCLOSURE ISSUES

[9] Respondent's Claims Regarding Assets

The respondent maintains that his current spouse provided the deposit for their residence, a house valued at $400,000.00, and paid for the Mercedes Benz car which he drives.

[10] Lack of Proof

The applicant's counsel, Ms. Kania, made a formal request for proof of this, but none was provided.

[11] Inadequate Documentation

The respondent did provide Ms. Kania with a banker's box containing loose invoices and other documents.

[12] Follow-up Requests Ignored

Ms. Kania made a follow up request for specific information arising from her review of this material. This has not been provided.

[13] Banking Records Discrepancies

Ms. Kania's review of banking material provided by the respondent revealed that in 2010, $120,000.00 was deposited into the respondent's business account and $105,000.00 transferred out of the account.

[14] Unanswered Inquiry

Ms. Kania wrote to the respondent on March 28, 2011 requesting details of where the funds had been directed. There was no response to this request.

EVIDENCE

[15] Personal Expenses Written Off

The respondent's business records show that he writes off personal expenses for tax purposes, including utilities at his residence, meals, beer store purchases, etc.

[16] Unreported Rental Income

In 2008 the respondent wrote off $16,000.00 as a business expense for rent, but had sublet a portion of the premises for $600.00 per month and failed to include that as income. He states that the sublet was only for a short period, not the whole year.

[17] Expense Write-offs

The respondent effectively writes off 85 per cent of his gross sales as expenses.

[18] Alleged Cash Component

It has been alleged by the applicant that there is a substantial cash component which is not reflected in the respondent's reported income.

[19] Allegation Not Denied

This has not been denied in any material filed by the respondent.

[20] Income Diversion Allegation

It is also alleged that the respondent diverts some income to his current spouse, which is claimed as an expense.

[21] Allegation Not Denied

This is also not denied.

[22] Financial Anomalies

The respondent's financial material filed discloses a number of anomalies. His stated income is $2,783.00 per month ($33,405.00 per year), however his mortgage payment is $2,600.00 per month or $31,200.00 per year. In his submissions the respondent claims he only pays 50 per cent and his spouse pays the rest. However, he has not provided any evidence to support that contention and it is not what is shown on his financial statements.

[23] Multiple Financial Statements

The respondent filed two financial statements, the first on March 11, 2010 at which time he was represented by counsel. The second was on December 20, 2011.

[24] Financial Progress in Twenty-One Months

It appears from these sworn documents that the respondent has in twenty-one months:

• increased his savings by $1,850.00;
• reduced his mortgage by $11,000.00;
• reduced his debts by $3,650.00;
• purchased new equipment at a capital cost of $10,000.00.

[25] Respondent's Claims of Ignorance

The respondent argues that he knows little about the preparation of his business statements or tax returns as his girlfriend and accountant do this for him.

[26] Acknowledgment of Information Source

He acknowledges however that these documents are compiled based on information provided by him.

[27] Travel and Vacations

The respondent has taken several trips, most recently for a month from mid December 2011 to mid January 2012.

[28] Applicant's Argument on Disposable Income

The applicant argues the fact that the respondent incurs considerable expenses including travel and car rental while at the same time he is not earning income demonstrates the respondent's disposable income is much higher than stated.

[29] Implausible Wage Rate

The respondent has told the applicant that he works sixteen hours a day. If he was in fact generating an income of $17,000.00, he would essentially be working for $4.00 an hour.

[30] Implausibility of Career Change

It is simply not credible that the respondent would voluntarily give up a job where he earned $91,000.00 to work for himself at such a low wage.

[31] Applicant's Financial Hardship

The applicant mother's evidence is that she is in a dire financial situation. She is unable to enrol the children in any activities as she has no funds with which to pay for them.

[32] Respondent's Acknowledgment of Applicant's Hardship

Oddly, the respondent in his material acknowledges that at times the applicant's situation has been so dire he has given her small amounts of cash.

[33] Respondent's Statements Before Justice Nelson

The applicant has filed a transcript of the proceedings before Justice Nelson on October 19, 2011, at which time Her Honour stressed the importance for the respondent of having some legal advice. He responded:

"I rather go to jail your Honour."

"I rather go to jail. I don't have the money to spend with a lawyer. I can't afford it."

"I work too hard to give a lawyer my money."

[34] Respondent's Threatening Statements

Her Honour then spent some time explaining the process for the applicant's motion to change to be heard by another judge. She stressed the importance of getting legal advice and noted the availability of duty counsel to which the respondent replied:

"I'm really sorry, but if that's what you want, I'm moving back to my native land and she's got to come there and file for child support."

and further:

"I can quit doing what I'm doing so it's going to be less for her."

[35] Assessment of Respondent's Conduct

While I accept that the respondent was somewhat upset at the time, this reaction is particularly troubling in light of the fact that Justice Nelson was clearly addressing the respondent's best interests in suggesting he speak with duty counsel.

ANALYSIS

[36] Burden of Proof for Retroactive Orders

When seeking a retroactive order, the applicant has the obligation to demonstrate her need and the respondent's ability to pay.

[37] Requirement for Timely Action

It is also incumbent upon the applicant to act in a timely manner once the grounds for her motion come to her attention.

[38] Applicant's Timely Response

The applicant's evidence, which is not contradicted is that, on becoming aware of the respondent's purchase of a new residence, she retained counsel and gave notice of her intention to address the support issue. Her counsel attempted to work with the respondent to arrive at a negotiated settlement. Once it became clear that this was a fruitless enterprise, she commenced the court action.

[39] Applicant's Justified Delay

If there was any delay in taking the initial steps to revise the order, it was because the applicant was afraid she would end up with nothing. That fear would seem to be well founded given the respondent's October 19, 2011 comments on the record, referred to above.

[40] Shift of Burden to Respondent

Having brought the matter before the court the onus shifts to the respondent to provide meaningful disclosure upon which the applicant, and ultimately the court, can assess the appropriate amount upon which child support should be based.

[41] Inadequate Disclosure

That disclosure has not been forthcoming.

[42] Fraudulent Conduct

It is clear from the material that the respondent has at the very least deceived the applicant and the court by failing to provide proper disclosure of his income when the original order was made. This could well be considered fraudulent, especially since the applicant was persuaded to accept a vastly lower amount than the respondent's actual income in order to get any support at all.

[43] Reassessment from Original Order Date

Given the history of the matter and the respondent's blameworthy conduct, I have no hesitation in reassessing the support obligation from the date of the original order.

[44] Respondent's Eleventh Hour Offer

In an eleventh hour attempt to appease the applicant, the respondent has suggested that an income of $50,000.00 could be imputed to him.

[45] Rejection of Proposed Income

I find that to be totally inadequate and unrealistic.

[46] Credibility Assessment

The respondent's evidence is largely devoid of credibility. Furthermore, his claims of being naïve and illiterate, even if true, do not absolve him of responsibility. I find the respondent to have a much greater understanding of business operations than he would have others believe.

[47] Acceptance of Applicant's Evidence

In short, I find the respondent's evidence with respect to his finances to be unreliable and largely useless. Where there is any discrepancy between his evidence and that of the applicant, I accept hers.

[48] Imputed Income Basis

For these reasons, I conclude that the respondent should have paid child support based on $91,000.00 effective February 14, 2005. The applicant is in fact only claiming retroactive to March 1, 2006.

[49] Factors Supporting Income Imputation

I accept the applicant's submissions that income should be imputed to the respondent having regard to:

(a) lack of proper disclosure from which an adverse inference is drawn;

(b) the respondent's ability to leave his business for a month at a time for vacations, while still producing gross revenues of over $100,000.00 for the year;

(c) the net taxable incomes disclosed which do not in any way reflect the respondent's actual income for guideline purposes;

(d) the respondent's lifestyle and minimal debt;

(e) the respondent's ability to secure credit;

(f) the respondent's failure to disclose his income at the time of the original order.

and without regard to any cash component.

[50] Imputed Income Amount

I impute income of $90,000.00 per annum to the respondent for the years 2006 onwards.

[51] Monthly Support Amounts

On this basis, the respondent should have paid $1,136.00 per month for two children up to and including December 31, 2011 and thereafter $1,306.00 per month effective January 1, 2012.

[52] Section 7 Expenses

The older child is registered to attend a post secondary institution in September 2012. The applicant's income is $37,000.00. The respondent's portion of s.7 expenses is therefore 71 per cent and the applicant's share is 29 per cent.

ORDER

[53] Order to Issue

1. The respondent shall pay for the support of two children, Jennessa Keosha Card, born […], 1993 and Nickeisha L.C. Card, born […], 2001, the sum of $1,306.00 per month effective January 1, 2012.

2. Arrears of support are fixed in the amount of $45,000.00 as of December 31, 2011, to be paid forthwith.

3. The respondent shall be given credit for any payments made on or after January 1, 2012.

4. The respondent shall pay 71 per cent of any extra expenses incurred by the applicant for the children, including any extracurricular activities and the uninsured portion of any health related expenses including dental, drugs or vision care. The respondent shall pay his proportionate share within 15 days of being presented with proof of the expenses.

5. The respondent shall pay 71 per cent of the cost of post secondary education for each child, including:

(a) tuition fees

(b) books and/or required equipment

(c) public transportation

6. The respondent shall pay his proportionate share within 30 days of being presented with a copy of the invoice(s) for such expenses.

7. So long as the applicant claims a contribution from the respondent towards post secondary education costs, she shall provide the respondent with a copy of the child's course time table and grades assigned at the end of each semester to demonstrate the child's continued enrolment, attendance and achievement.

[54] Costs

The applicant is entitled to her costs. Counsel may make brief written submissions to include any formal settlement offers and a bill of costs, within 15 days.

Released: February 22, 2012 Amended: March 19, 2012

Justice J.C. Baldock