Court File and Parties

Court File No.: 325/11 Date: 2013-07-18

Ontario Court of Justice

Re: Maddison Jelena Jean Kojic and Tamra Kaylin Kojic - Applicants

and

Veskolinko Kojic - Respondent Susan Kojic - Respondent

Before: Justice Roselyn Zisman

Counsel:

• V. Lailla Pavicevic for the Applicants
• David Goddard for the Respondent Veskolinko Kojic
• Susan Kojic – self-represented

Heard On: May 14, 15, and 16, 2013

1. Introduction and Background

[1] This is an application for child support by the applicants, Maddison Jelena Jean Kojic born on January 27, 1993 ("Maddison") and Tamra Kaylin Kojic born on January 4, 1995 ("Tamra") from their parents.

[2] The respondent, Veskolinko Kojic ("father") is the biological father of Maddison and Tamra and the respondent, Susan Kojic ("mother") is their biological mother.

[3] Maddison and Tamra have been in the care of their maternal grandparents pursuant to a court order of December 12, 1996 as their mother could not care for them. The father lived in the home of the grandparents and with both children for about 3 years until he moved out and married his current wife, Deborah Kojic. The father and his wife have two children who are six and eight years old.

[4] The mother and the maternal grandparents were involved in lengthy and costly custody proceedings up to 2007. The mother and grandparents do not communicate and only have contact with each other at court.

[5] The mother did not provide any support for the children. Maddison and Tamra received $6,000 each as a result of a lawsuit the mother was involved in.

[6] The father did not pay anything while he lived with the grandparents. He gave the grandparents a total of about $6,000 from 2001 to 2003 for child support. In about February 2010 he gave Maddison and Tamra $1,000 each; thereafter he paid some monies in accordance with the temporary court orders in these proceedings but he is in arrears of those orders.

[7] The grandparents requested support but were ignored by the mother, father and his wife. This support application was prompted as a result of Maddison deciding to attend university. She approached her father but he told her he could not afford to help her. As her grandparents had limited means to assist, Maddison and Tamra commenced this application for support with a first return date of August 29, 2011.

[8] At the case conference on November 7, 2011 it was agreed that based on the father's income of $48,500 he would pay child support for Tamra in the amount of $366 for the months of June, July and August 2011 and thereafter $448 per month. It was also agreed that the he would pay child support for Maddison in the amount of $366 for the months June, July and August 2011 and thereafter in an amount to be determined for her university expenses for the academic year 2011 to 2012. Maddison was required to provide particulars of her income and any other sources of funding including student loans and prepare a budget. The grandparents, although not parties to these proceedings, agreed to complete and file a joint financial statement and any particulars of special expenses. There was also a disclosure order.

[9] At the next court attendance, Maddison and Tamra were self-represented as their counsel (not Ms Pavecivic) had required them to sign a Notice of Change in Representation as he had run out of hours on his legal aid certificate. There were several further court attendances as Maddison and Tamra who were only 19 and 17 years old attempted to represent themselves with the assistance of duty counsel and other adjournments due to the lack of disclosure by the parents.

[10] On May 8, 2012 the case management judge made an order requiring the father to pay Maddison and Tamra $2,000 each on account of outstanding support arrears and made an order for specified disclosure.

[11] At the settlement conference on August 10, 2012 the matter was set for a trial management conference as the parties could not resolve the issues. Maddison and Tamra continued to attempt to obtain legal assistance. A temporary without prejudice order was made requiring the father to pay child support of $660 per month for his 2 children based on an imputed income of $44,754. The applicants were also granted permission to bring a motion, if necessary, to strike their father's pleadings for his failure to provide financial disclosure.

[12] At the trial management conference before me on November 30, 2012 Maddison and Tamra had just retained their current counsel and she required some time to review the documents and arrange for a possible motion to question the father's wife. Further, the father only that day complied with the financial disclosure that had been ordered. The parties were not ready to proceed to trial until the week of March 18th, 2013. Unfortunately the court could not accommodate the trial that week and it could then not proceed until May 14th, 2013.

2. Position of the Parties

[13] The applicants seek retroactive support as of January 1, 2009 being about 2 ½ years prior to commencing this application. They also seek to impute income to their father in the amount of $100,000 on the basis that there is unreported income and/or income is being diverted to his wife. They also seek to impute income to their mother on the basis that although she is in receipt of Ontario Works, her expenses exceed her income and she is operating two businesses. On a prospective basis, Tamara seeks ongoing support of $880 per month and payment for her section 7 expenses when she commences her post-secondary education. Maddison seeks a contribution of $25,000 for her section 7 expenses for her two remaining years of university.

[14] It is the father's position that he is self-employed doing fire and restoration work for insurance companies and that he struggles to make a living. He submits that he has two children he needs to support and is prepared to pay child support of a total of $660 per month but cannot afford to pay for any section 7 expenses.

[15] The mother did not attend the first two days of the trial and when she testified took the position that her only income had been from Ontario Works but that source of income has now been terminated and therefore she could not afford to pay any child support.

3. Evidence Regarding the Grandparents' Financial Circumstances and Support of the Children

[16] Ms Sandra Patterson, the maternal grandmother is 75 years old. She testified that she and her husband had spent $200,000 in legal fees over the years in ongoing court proceedings against their daughter who tried to regain custody of their granddaughters since they have been in their care. They tried to go to court six or nine years ago for child support but dropped the proceedings due to a lack of funds.

[17] They asked the father many times for assistance with supporting his children but he just ignored them. They then sent emails to the father's wife but she also ignored them. An example of one such email was entered into evidence dated October 14, 2009. There were also emails from Deborah Kojic, the father's wife to the grandparents dated November 8, 2010 and February 17, 2011 basically indicating that she understood their financial struggles in supporting Maddison and Tamra but they had no funds and that the mother should also be responsible for supporting her daughters.

[18] Ms Patterson testified that both girls have been heavily involved in competitive baton twirling for many years and they are both involved in international competitions. The cost was about $300 per month for each and now it is about $6,000 a year for Tamra. Since Maddison commenced university they paid for her rent and other miscellaneous items to set up her apartment. They have spent about $20,000.

[19] Both grandparents are retired and their total income is $35,000. They have sold a rental property they owned and downsized their home and are now in the process of selling their current home. They have contributed as much as they can to support their grandchildren and have sold all of their available assets. They have tried their best to support their grandchildren but simply do not have any other means to assist.

4. Evidence Regarding Maddison's Circumstances

[20] Maddison is now 20 years old. She has currently completed her second year of an undergraduate degree at the University of Ottawa. During her first year she lived in residence and hereafter in an off-campus apartment. She only went to school part-time for one semester as she suffered a concussion and therefore she has two years and one semester to complete her degree.

[21] Maddison testified and provide documents to substantiate that she worked part-time from September 2012 to February 2013 in a retail store and earned about $3,500. She is planning to find summer employment.

[22] For the academic years 2011 to 2012 and for 2012 to 2013 she has received student loans totaling $17,181 and grants totaling of $9,368.

[23] Maddison testified that she has not had a relationship with her father since she finished high school. In August 2011 she called her father to ask him to help with her upcoming university expenses and for child support and he stopped talking to her since then. He told her that he had no money as he was renovating his new home and had two other children to support.

5. Evidence Regarding Tamra's Circumstances

[24] Tamra is currently 18 years old and has just completed high school. She is registered to commence an Early Childhood Education diploma course in September 2013. She is planning to complete the diploma course in one semester and then work to save money to return to school. She cannot continue in school without funds. Her plan is to obtain her Early Childhood Education certificate which is a two to three year program.

[25] Tamra testified that she has not talked or seen her father for several years as he has two other children and is more involved with them. She testified that he does not make an effort to see her or her sister.

6. Evidence Regarding Susan Kojic's Financial Circumstances

[26] The mother testified that she has not had a relationship with her parents since they obtained custody of her daughters.

[27] The mother was trained and worked as a personal support worker. In January 2011 she was involved in a serious tobogganing accident and since then she has been unable to work. She was in receipt of Ontario Works and received about $680 per month. In September 2012 those benefits were cut off because she had not divulged that she was living with her boyfriend. She applied for ODSP but was rejected as she has an asset in her name which is her home. She can either appeal that ruling or apply for a one time exemption for the asset. She testified that her boyfriend no longer lives with her. She produced a letter from her doctor confirming she is unable to work.

[28] At the present time her only source of income is about $700 per month from student boarders she has in her home from time to time and she earns about another $600 to $700 per month trying to sell items over the internet of through a business she tried to set up on the internet. She has sold things from her house to survive. She received a $30,000 settlement from a lawsuit and also used those funds.

[29] The only financial statement she filed in these proceedings is sworn August 3, 2011. She still resides in the townhouse where she and the father lived before their separation. Despite her financial statement not listing any debts, an abstract for the property indicates there are multiple mortgages of about $125,875 and liens against the property by the condominium corporation that do not indicate the amounts owing. The townhouse was purchased in 1995 for $85,000 but there was no evidence of its current value.

[30] In cross-examination, she agreed that she had not filed her tax returns since 2009 despite being required to file and produce her tax returns for these proceedings. She testified that she was afraid to file as was worried that she would lose her house due to any unpaid income taxes and she was desperate to hold onto her house.

7. Evidence Regarding Veskolinko and Deborah Kojic's Financial Circumstances

7.1 Background and Incomes

[31] The father testified that he came to Canada in 1989 and that he was a millwright by trade but that his credentials were not recognized in Canada. He began to work as a painter and for some subcontractors. After he met the mother is 1992, her father who was in the insurance business helped him establish a new business of restorations related to insurance claims. His company was called Prism Painting and then in 2006 or 2007 he changed the name of the company to VK Construction and Restoration. However, the bank records that he produced only indicate a bank account being opened for VK Construction and Restoration as of February 18, 2010.

[32] He testified that his relationship with the mother was over in 1999 and the grandparents stepped in to care for the children. He agreed that they asked him for child support but he was struggling himself and could not provide any support. He testified that he only gave them a bit of cash in 2010 to 2011 but he knew it was not a lot.

[33] Shortly after he separated from the mother he began a relationship with his current wife, Deborah Kojic and then moved into her home. He appeared to suggest that he put no funds into this home and that it belonged to his wife. No proof was offered nor was Deborah Kojic questioned about this. However, both testified that the father did extensive renovations to the home and the home was sold for a profit in 2010.

[34] The father testified that he reports all of his income as his income is mainly from insurance companies and he only has one or two private jobs. He is not good with books or computers and all of the banking and record keeping is done by his wife.

[35] Deborah Kojic is a teaching assistant and when she works fulltime she earns about $35,000 to $38,000. She testified that when her first child was born in 2004 she took a one year maternity leave and then a two year unpaid leave during which she worked part-time at a fitness facility and earned about $160.00 a month. She then testified that she has been on sick leave and only recently returned to work.

[36] The father's gross sales and net income and his wife's income for the years 2006 to 2011 is as follows:

Year	Father Gross Sales	Father's Net Income	Deborah Kojic's Income
2006	$83,838	$-18,927	$21,134
2007	$77,064	$-6,248	$6,669
2008	$65,416	$6,503	$2,400
2009	$368,170	$147,829	$19,955
2010	$394,188	$46,786	$25,593
2011	$191,896	$15,630	$36,979

[37] The father explained that his high income in 2009 was due to a lot of work due to flooding. When questioned about why his net income was lower in 2010, despite the sales being higher, he explained that his cost for subcontractors was substantially higher than in 2009. But the statements produced indicate that in fact the cost of the subcontractors was only about $53,000 higher than the previous year.

[38] The father also produced copies of his company VK Construction Profit and Loss Statements for the calendar years 2009, 2010 and 2011. These statements indicate they were prepared by Brandi Plumstead of Executive Bookkeeping Services. Mr. Plumstead was not called as a witness. Those statement indicate a net income as follows:

• 2009: $161,760.48 revised to $135,520.04
• 2010: $48,377.44
• 2011: $41,132.35

[39] The father testified about how dire his financial circumstances were in that he was not earning an income from his business, that he was looking for a job but had no offers, he had no cell phone or car. He also testified that he has to leave work early to pick up the children as they cannot afford daycare.

[40] The father's financial statement sworn May 13, 2013 estimates that his income for 2012 will be $48,000 and he lists his expenses as $36,540. His expenses include $630 per month for daycare even though both he and his wife testified they could not afford daycare and he had to leave work early to pick up his children. His expenses also include discretionary items such as holidays, entertainment, meals outside the home, children's activities, clothing, alcohol and tobacco, grooming etc. that total $1,098 per month.

[41] Ms Kojic testified that they struggle financially, the father has no income and the father does not have enough money to support their own kids as opposed to "his kids". She felt no obligation to support his children.

[42] Initially she testified that the first time child support was requested was in the court application and maybe the grandparents asked them to help one time. But when confronted with the emails dated October 14, 2009, November 8, 2010 and February 17, 2011 she stated that she did not recall them but agreed that the grandparents were asked for support but they were struggling and she needed to do things for her family.

[43] When the father was cross-examined he agreed that he was at least $9,500 in arrears on the temporary support order. He agreed that he had an obligation to pay child support but he couldn't always pay as he was in debt. But he also then stated that he had an obligation to support "his kids" and not "these kids". He then stated that "it is not my choice, it is Deb's decision". He further explained that it was her view that he and the mother should make an equal contribution so if the mother does not have to pay then he shouldn't have to pay.

7.2 Assets and Debts

[44] After the father and his wife sold their home in 2010, they bought their current home in Brantford for $385,000. That home is registered only in the name of the father's wife. Ms Kojic testified that she qualified for the initial mortgage of $210,000 on her own and that the father had bad credit. She testified that the mortgage was increased to $285,000 and $50,000 was used for renovations to the house. Both the father and Ms Kojic testified that the father did most of the work with his uncle. The father also testified that he used some supplies from his job sites. Maddison and Tamra testified that they had been to the house and it was a very large home and there were extensive renovations including finishing the basement and adding an upper level.

[45] Currently, the father and his wife pay $318.95 bi-weekly on the mortgage and the taxes for the home are $4,684.89 annually. Their housing costs, without the cost of any utilities are therefore about $13,615 a year.

[46] In May 2009 Ms Kojic bought a Dodge van for $23,226 but could not recall how she paid for it but it could be either from her line of credit or maybe her husband paid. She testified that she bought the van for "his kids' but since they were not coming, she traded it in for a car she wanted. In February 2011 she bought a new 2010 BMW for $31,701 and other than testifying that she received a credit of $12,500 for her Dodge van she did not explain the source of the funds to purchase the car.

[47] In May 2010 she purchased a boat for $42,448 that is also registered in her name alone. She testified that she used $37,000 from her line of credit to purchase the boat.

[48] In 2010 she also purchased a new camper trailer for $18,034. She charged $1,000 on her credit card and the balance she paid from the government subsidies she received as a result of the father filing his past two or three years of tax returns. She explained that her family spends the winter in Florida so it is cheaper to visit them and stay in the trailer rather than a hotel. They also use it during the summer for holidays.

[49] Ms Kojic agreed that she had been required, pursuant to her undertakings during her questioning, to produce copies of all loan or credit applications including mortgage, line of credit, vehicle financing and any other loans. She testified that she had used her best efforts to obtain such information and no one had it. She then testified that she had never been asked about her income or requested to produce any proof of income and the mortgage application was done over the telephone. She then testified that she was asked her income for the initial mortgage of $210,000 on her home but it was only verbal.

[50] Ms Kojic was asked to explain how she was able to pay off $84,000 in debts from 2010 to 2012. She explained that in 2010 when she purchased her home the bank required her to pay her credit card debts of $18,000 and either her husband paid or she used other credit cards to pay.

[51] She further explained that in 2011 she used her line of credit to pay $16,000 towards their debts and in 2012 she paid $45,338 towards their debts. She testified that her husband charges things to her credit cards or she had to borrow from her lines of credit to pay for his expenses. She finally admitted that it was really her husband who paid and that she used his business account to pay her credit cards debts and her line of credit. She also pays the mortgage, insurance through the business account as well as the telephone expenses.

[52] She also confirmed that she had two lines of credit that had in total had a limit of $21,400. She testified that the total debts now owing are $50,000. But no verification of these debts was filed in the trial.

[53] The father's financial statement sworn May 13, 2012 lists his only assets as a 2008 Ford 150 HD truck and that he owes $10,000 with monthly payments of $643.00. He also lists a 2001 Chevy worth only $800.00.

[54] The father's evidence regarding his truck was confusing in that he testified that he bought the truck used in 2010 and then he borrowed $18,000 from his cousin for the truck and had to pay $3,500 as the truck was re-possessed. This loan was never listed on any of his financial statements nor was any proof of such a loan produced.

[55] His most recent financial statement lists his outstanding debts for both personal taxes and HST at $22,000. According to his financial statement he is paying $800 per month with respect to his tax debts, $200 per month for a TD Visa credit card debt of $5,700 and $200 per month for a Home Depot debt of $4,000.

[56] When asked in cross-examination to explain how he reduced the debt to Canada Revenue Agency by $20,000 as his May 1, 2012 financial statement lists the tax debt owing of $42,000, he testified that he borrowed the money from his wife and used her credit cards and repeated several times that he had no money. He finally agreed that if he was paying for the line of credit and the credit cards debts through his business account then he was paying his own debts and had indirectly paid for the boat, car and trailer in his wife's name. He also agreed that he paid some personal expenses through his business account.

[57] When cross-examined about various cash withdrawals from his bank account such as withdrawals totalling of $60,000 in 2010 and $27,200 in 2011 the father testified that he was not sure about anything and then offered that he sometimes pays for materials in cash. He explained that he had a safe in the house where he kept the money but he no longer has the safe. He explained a withdrawal of $40,000 in March 2010 by explaining that his wife needed to pay credit cards and he thought there was a payment to Canada Revenue Agency.

[58] He identified his bank statements and agreed that there were payments for both his wife's line of credit and her credit cards. He also identified payments to his TD Visa and American Express credit cards. The latter credit card was not listed on his most recent financial statement nor were any of his credit cards statements produced. It is clear from the bank statements that there are numerous charges for personal expenses for food, clothing, toys, shoes and expenses related to the home.

[59] In cross-examination, the father was asked to explain why his 2011 Notice of Assessment indicated gross sales of $394,188 and his deposits for that year totalled $538,711 being a discrepancy of $144,523. The father could not explain this discrepancy and blamed his accountant.

[60] The next day counsel for the father, despite having already closed his case, asked to recall his client to explain this discrepancy. Counsel for Maddison and Tamra consented subject to being permitted to cross-examine the father on his new evidence.

[61] The father testified that $66,164.78 of a $153,000 deposit in 2010 related to work in 2009. In cross-examination, he agreed that there was still about $85,000 of unaccounted deposits. He suggested that some of the deposits were then returns but could only point to $2,599 in credits. But even those returns were for personal transactions which he finally admitted.

[62] The father also attempted to explain that in 2010 he closed and opened a new bank account when he changed the name of his business from Prism Painting to VK Construction. This evidence contradicted his prior evidence that he changed the names in 2006 or 2007.

[63] He agreed that the bank statement did not indicate that the Prism Painting bank account was closed. He could not explain why the balance on the January /February 2010 statement for Prism Painting was $37,999 and the balance for the statement for VK Construction for February/March 2010 was $74,131 comprised of transfers of $25,000, $10,000 and $20,000 totalling $55,000 and deposits of $30,000 and $14,507. He could not recall where the funds came from. He suggested that maybe there was a missing bank statement. He offered no explanation as to what account the transfers were from and there was no further statement from the Prism Painting bank account to verify the funds came from that account. He then suggested that the funds came from the line of credit but when it was pointed out that the line of credit had reached its limit he then recalled that he received a personal loan of $30,000 from Slobitan Pueloric for his truck. He confirmed that was nothing in writing to substantiate this loan nor was it ever stated on his financial statement. He testified that he paid this loan back by 2012 and this accounts for some of the cash withdrawals.

[64] The father never explained the discrepancy between the income stated on his Notice of Assessments and his Profit and Loss Statements for VK Construction.

8. Analysis

8.1 Are Maddison and Tamra Entitled to Child Support?

[65] The dependent children, Maddison and Tamra have applied for child support from both of their parents in accordance with subsection 33(1) of the Family Law Act, R.S.O. c. F., as amended. A court has the authority to make an order for support and determine the amount. Every parent has an obligation to provide support for his or her child who is a minor or is enrolled in a program of education to the extent that the parent is capable of doing so.

[66] In this case, there is no dispute that Maddison and Tamra are entitled to support as long as they continue with their post-secondary education. The only issue is the extent to which either parent has the ability to pay.

8.2 Should Income be Imputed to Either the Father or Mother and if so, How Much?

[67] Father's counsel in closing submissions submitted that based on the evidence it is clear that the father and his wife lived recklessly and that the lenders were reckless to extend such credit to them and they are now "overextended". He submitted that "some modest attribution" of income should be imputed to the father. He suggested that income on the range of $50,000 was appropriate and that the father's income in 2009 should not be used as a benchmark as that was an exceptional year and his sales have continued to decline since then.

[68] Section 19(1) of the Child Support Guidelines permits the court to impute such income as it considers appropriate in the circumstances, which include:

(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

[69] Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children.

[70] The Ontario Court of Appeal in Drygala v. Pauli set out the following three questions which should be answered by a court in considering a request to impute income:

1. Is the party intentionally under-employed or unemployed?
2. If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs, the needs of the child of the marriage or reasonable health needs?
3. If not, what income is appropriately imputed?

[71] In Drygala v. Pauli, supra, the court interpreted section 19(1)(a) by stating that "intentionally" means a voluntary act and that a parent is intentionally under-employed if that parent choose to earn less than he or she is capable of earning. The court does not need to find a specific intent to evade child support obligations or bad faith.

[72] The onus is on the party seeking to impute income to the other party to establish that the other party is intentionally under-employed or unemployed. Once under-employment is established, the onus shifts to the payor to prove that his decision was reasonable.

[73] If the payor is intentionally under-employed, the court must consider if this by virtue of his or her reasonable educational needs, the needs of the child or reasonable health needs.

[74] If a court finds a payor is intentionally under-employed or unemployed, a court cannot arbitrarily allocate an imputed income. There must be an evidentiary basis for the chosen income. Factors such as age, education, experience, skills, health and availability of job opportunities must be considered.

[75] I find that income should be imputed to the father in this case.

[76] The father and his wife have not provided any credible explanations as to how they have been able to finance their lifestyle and pay their debts on their stated incomes. I found the evidence of both the father and his wife to be evasive, convoluted, misleading and incapable of belief.

[77] For example, it belies common sense that the bank would require the wife's credit card debts to be paid off before her mortgage would be approved but that she then used other credit cards to pay off those credit cards. I do not accept her evidence that she was never asked to provide any proof of income or could not obtain copies of mortgage or other loan applications. I find that it is not probable that based on her income alone she would have qualified for all of these loans.

[78] The father and his wife initially tried to explain how she paid for these assets and her credit card debts by using her lines of credit but both of them finally conceded that the payments were made from the father's business account.

[79] When the father could not explain the source of various deposits, he alleged that he received personal loans that had never been disclosed, listed on any financial statement and no documents were provided to substantiate these alleged loans. I find that the father simply invented these loans in a vain attempt to explain various deposits in his bank account.

[80] The father also tried to explain the discrepancies on the closing and opening of his business accounts and surmised that perhaps there were missing bank statements. This is despite that fact that he had been asked to provide copies of all of his bank records.

[81] He could not explain how in 2010 he had $85,000 of deposits that exceeded his gross sales. If this amount is added back to his declared income of $46,786 this income for 2010 would be about $131,000. There was no plausible explanation as to the source of funds that were used to pay about $73,000 in debts in 2010 comprised of $28,000 for his income tax debt and $45,000 towards his wife's credit cards and line of credit when the father's declared net income was only $46,786 and Ms Kojic's income was only $25,593. I find that the father must have a source of income that has not been disclosed.

[82] I do not accept the submission of father's counsel that the father and his wife lead a modest lifestyle. They have been able to renovate two homes, buy an expensive boat, a luxury car and camper trailer. I find that all of the family's assets have been put into his wife's name so that the father can shield himself from his creditors which would include his child support debts.

[83] I do not accept the evidence of both the father and his wife that they are struggling financially. There was no evidence that they had changed their lifestyle, sold any of their assets or reduced their discretionary expenses. The father has managed to find the funds to meet his debts and the debts in his wife's name and make periodic payments on those debts. It appears that the only debt he has ignored is his child support obligation.

[84] Both the father and his wife testified that he had to leave work early to pick up the children from school. No explanation was provided as to why his wife was not picking them up as until very recently she was on sick leave and not working. There was no explanation as to why the wife once she started to work again could not have picked them up as her hours of employment would be more suitable to doing so. I do not accept that these parties cannot afford to hire a babysitter for a couple of hours until the wife finished her duties at the school she was employed with.

[85] Therefore, if it is true that the father is leaving work early to pick his children up from school, then he is working less than he is capable of working but then his financial statement listing a monthly expense for daycare is false. In either scenario it is another example of the father not being candid.

[86] The father did not provide any proof of his 2012 income. I do not accept that only $50,000 should be imputed to father as submitted by his counsel. I do not accept the father's explanations as to 2009 being an unusual year when his sales where even slightly higher in 2010. I have considered that it appears his sales were then considerably lower in 2011 but by then he was aware of these proceedings and he has also chosen not to disclose any information about his sales in 2012 or for this year. Given the complete lack of candour by the father, I do not accept his evidence that his business income has been so drastically reduced. The father has estimated that his income was about $48,000 in 2012 and will be the same amount in 2013. But on average his personal expenses for the three years that he provided banking information would be at least another $50,000 and if these are added back his income it would be over $100,000.

[87] I find that it is reasonable to impute income to the father on the basis of $100,000 which I find would be consistent with his lifestyle and the income he is capable of earning based on his actual income in 2009 and 2010.

[88] The applicants also seek to impute a modest income to their mother based on her failure to provide financial disclosure. Although the mother did not provide copies of her income tax returns as required, I accept her evidence that she has not filed her income tax returns because she was afraid she would owe taxes and that she might lose her home as a result. I also accept that she is earning a very modest rental income and earns some funds from her business on the internet. She did provide a letter from her doctor that confirmed her inability to work at the current time. While I recognize the little weight can be attributed to the very brief letter she introduced, it was clear from her presentation in these court proceedings that she has a great deal of limitations.

[89] Based on the mother's current circumstances I do not find that the mother is capable of earning any more income than she is currently earning. I would not impute an income to her. Based on her evidence her income is about $700 per month from student boarders excluding the summer months, so about $7,000 per year and about $600 to $700 per month from her businesses. But as this income is somewhat sporadic, I find that it is reasonable to estimate her actual income is about $14,800. In view of her lack of assets or any ability to pay any order predating this order, I would only order her support payment to commence after the date of this order so she can try to arrange her finances accordingly. I also find that based on her limited income that she does not have the ability to pay any share of her daughters' post-secondary expenses.

8.3 Should There be a Retroactive Order for Child Support?

[90] The applicants seek an order for retroactive support from January 1, 2009 based on the father's actual income. They do not seek a retroactive support order from the mother.

[91] The criteria for a claim for retroactive child support is set out in the seminal case of D.B.S. v. S.R.G. et al. The court held that generally a claim for an increase in support should be calculated as of the date of "effective notice" that is, when the recipient indicated that an increase in child support was requested and that unless the payor demonstrated bad faith or blameworthy conduct, the award should not be more than three years before formal notice.

[92] The court further held that the decision to order retroactive support should be based on a consideration of factors and that none of the factors is decisive. The court should strive for a holistic approach and strive to balance the payor's need for certainty with the need for fairness and flexibility. The factors to be considered are:

a) The reasonable excuse for the delay in seeking an increase in support; b) The conduct of the payor; c) The circumstances of the child, both past and present; d) Any undue hardship.

[93] I see no basis that would preclude the principles from D.B.S. from applying to dependent children seeking retroactive support in an initial proceeding as opposed to a parent doing so. In applying the criteria of D.B.S. to the facts of this case, I find the following factors to be relevant.

a) Reason for Delay

[94] In this case, Maddison personally asked her father for support in February 2011. However, the grandparents had requested support from the father since the children were in their care. The father admitted that he knew the grandparents were seeking child support. Although his wife testified that it was not until this application that they knew support was being sought, when confronted with the various emails as of October 2009 she too conceded that she was aware that support was being sought.

[95] It is understandable that the grandparents on behalf of their grandchildren did not pursue child support having already used their financial resources to obtain custody. But Maddison and Tamra should not be deprived of their rights to child support because of their grandparents did not pursue it. It is of course understandable that until they were older neither Maddison nor Tamra would on their own pursue child support from their parents. Their delay is therefore reasonable.

b) Conduct of the Payor

[96] The evidence is overwhelming that the father engaged in blameworthy behaviour. He preferred the interests of his new family over the needs of Maddison and Tamra. As he testified his children lived under his roof and Maddison and Tamra did not and in his mind this seemed to absolve him of all financial responsibility. If not for counsel's submissions that she was only seeking retroactive support to January 1, 2009, I would have made an order retroactive support to 2003 when the father stopped giving any money to assist in supporting his own children.

[97] The grandparents have selflessly devoted themselves to caring for their grandchildren and sacrificed their retirement security by selling all of their assets in order to meet their granddaughter's needs. Whereas, the father and his wife have indulged themselves by buying luxury items such as an expensive car, boat and camper trailer and bought a new larger home. The father has not even complied with the modest temporary order for child support made in these proceedings.

c) Circumstances of the Children

[98] The children's past needs have been met by their grandparents. But Maddison is already in debt over $17,000 and has two more years of university to complete. Tamra is deferring her ongoing education because of a lack of funds. These children are in need of ongoing support and the lack of any support in the past has impacted on their future.

d) Undue Hardship

[99] Any retroactive support order will cause a hardship for the father. But since his exact financial circumstances have been concealed and all of the family assets diverted into his wife's name, the exact impact is difficult to determine. However, his blameworthy conduct is the overwhelming factor to be considered. Perhaps it is time for him to make a sacrifice for these children.

[100] I therefore find that there should be an order that the father pay retroactive support for Maddison and Tamra as requested to January 1, 2009.

[101] For 2009, the amount of child support should be based on his income of $141,829 as assessed by Canada Revenue Agency on his Notice of Assessment. When the Profit and Loss Statements for VK Construction were introduced into evidence by the father, there was a covering letter from his bookkeeper attached that explained that the father only provided in October 2012 some receipts for expenses which had not been previously deducted and which were then used to reduce the father's income in 2009 as set out on the Profit and Loss statement from $161,760 to $135,520.

[102] No explanation was offered as to why either of these amounts differs from the father's income on his Notice of Assessment.

[103] I would not reduce the father's income based the explanation in this covering letter in view of the large number of personal expenses the father deducts from his business income, the lack of any details or any supporting documentation regarding these expenses, the lack of information regarding the credentials of the bookkeeper, the fact he was not produced as a witness and the father's lack of explanation regarding this re-adjustment.

[104] For 2010, father's Notice of Assessment indicates an income of $46,786. Counsel for the children submitted that income should be based on the net income in the father's Statement of Profit and Income for VK Construction which is slightly higher, namely $48,377. I agree that this is a fair representation of the father's income. I also note that counsel for the father, in his opening submissions, also agreed that this was a fair assessment of the father's income for 2010 although he also maintained there should not be an order for retroactive support.

[105] For 2011, the father only provided a copy of his income tax return that provides his income was only $15,630. The VK Construction Profit and Loss Statement for 2011 indicates a net income of $41,132 which is far below what I find the father actually earned or is capable of earning. However, both counsel were content that this is a fair reflection of income to be attributed for a retroactive support order.

[106] As of the date of this application the father should pay child support based on an imputed income of $100,000.

[107] As the father did not contribute to the cost of Maddison's university expenses for her first two years of university from September 2011 to the end of her semester this year, I find that it is appropriate to require that he pay table amount child support for two children for those years despite the fact that Maddison was living away from home while attending university. As of September 1, 2013, I find that it is appropriate to calculate child support based on Tamra being entitled to the table amount of child support and Maddison being entitled to support based on living at home for the summer months with that amount being calculated over a year.

[108] The father will also pay a one-time lump sum of $25,000 towards Maddison's university costs as was requested by her counsel. This was estimated to be a third of the total costs for both of her remaining years of university. There was no evidence of the estimated cost of Tamra's post-secondary education costs. Once she determines those costs, I find that it would be appropriate for the father to pay a third of the costs on the same basis that he is paying for Maddison's post-secondary expenses.

9. Order

[109] Order as follows:

1. The Respondent, Veskolinko Kojic shall pay child support to the Applicants, Maddison Jelena Jean Kojic born on January 27, 1993 and Tamra Kaylin Kojic born on January 4, 1995 as follows:

a) From January 1, 2009 to December 31, 2009, based on an income of $144,829.00 and in accordance with the Child Support Guidelines for two children $1,952.00 per month for a total owing of $23,424.00;

b) From January 1, 2010 to December 31, 2010, based on an income of $48,377.00 and in accordance with the Child Support Guidelines for two children $720.00 per month for a total owing of $8,640.00;

c) From January 1, 2011 to August 31, 2011, based on an income of $41,132.00 and in accordance with the Child Support Guidelines for two children $599.00 per month for a total owing of $4,792.00;

d) From September 1, 2011 to December 31, 2011, based on an imputed income of $100,000.00 and in accordance with the Child Support Guidelines for two children $1,416.00 per month for a total owing of $5,664.00;

e) From January 1, 2012 to December 31, 2012 based on an imputed income of $100,000 and in accordance with the Child Support Guidelines for two children $1,416.00 per month for a total owing of $16,992.00;

f) From January 1, 2013 to August 31, 2013 based on an imputed income of $100,000 and in accordance with the Child Support Guidelines for two children of $1,416.00 per month for a total owing of $8,472.00;

g) As of September 1, 2013 based on an imputed income of $100,000.00 and in accordance with the Child Support Guidelines for one child residing full-time at home and the other child being away at school of $1,059.00 per month and each month thereafter;

h) On September 1, 2013 a one-time lump sum of $25,000.00 as his contribution to the Applicant, Maddison Jelena Jean Kojic's post-secondary expenses; and

i) Within 30 days of being provided with proof of the cost of the Applicant, Tamra Kaylin Kojic's post-secondary expenses, a third of that cost.

2. The Respondent, Veskolinko Kojic shall receive credit for any payments made pursuant to the temporary orders of November 7, 2011 and August 10, 2012 and for clarity this order supersedes those orders.

3. The Respondent, Susan Kojic based on an income of $14,800.00 shall pay to the Applicants in accordance with the child support guidelines for two children $189.00 per month as of September 1, 2013.

4. The Applicants shall provide written verification to both Respondents that they are registered in a full-time program of post-secondary education on or about September 1 and January 1 of each year. The Applicants shall notify the Family Responsibility Office when they have completed their post-secondary education or are otherwise not entitled to ongoing child support and execute any necessary documents.

5. Support Deduction Order to issue.

[110] I have attached to these reasons a copy of the calculations used. If there are any mathematical errors, counsel can contact the judicial secretary to arrange a process to correct any such errors.

[111] As the Applicants are the successful parties, they are presumed to be entitled to costs. If costs are being sought and counsel cannot agree on an amount, the Applicants serve and file submit brief written submissions with a Bill of Costs and any Offers to Settle within 14 days and the Respondents shall serve and file their responding submissions within 14 days thereafter.

Zisman J.

Date: July 18, 2013