Court File and Parties

Court File No.: Toronto D20692/02 Date: 2014-09-25 Ontario Court of Justice

Between: Michelle Tameanko, Applicant

— And —

Joel Goldman, Respondent

Before: Justice Carole Curtis

Motion heard on: 13 and 26 May 2014 Endorsement released on: 25 September 2014

Counsel:

• Dani Frodis for the Applicant
• Paul McInnis for the Respondent

CURTIS J.:

Over-view

[1] This is the decision regarding the mother's motion to change the default order of Curtis, J. made 8 December 2011. That order changed the consent order of Nevins, J. made 21 October 2005.

Background

[2] The mother, the applicant, and the moving party on this motion, was born 25 May 1963, and is 51 years old.

[3] The father, the respondent, was born 22 February 1952, and is 62 years old.

[4] The parents never lived together and were never married to each other. They had a relationship for seven years while they were both married to other people. They had two children:

• Zachary Lawrence, born 16 January 1995, now 19; and,
• Harrison Terry, born 15 July 1996, now 18.

[5] Zachary was in post-secondary studies and lives at home with the mother. Harrison is autistic and requires speech and language therapy. Because of Harrison's special needs, the mother is unable to work full-time. She works part time as a personal trainer and earns from $3,000 to $10,000 per year. Her husband, Chris Lodge, is also a trainer and he earns about $30,000 per year.

[6] The father has never had any relationship with the children. He has two other children with his wife.

Litigation History

[7] The mother brought the original application in 2002, claiming custody and child support (among other things). The litigation has been acrimonious for many years. Both parents have been represented by lawyers throughout the litigation. The mother has been represented by Dani Frodis since at least 2002. The father was represented by Lynda Dranoff in 2002, but was represented by Paul McInnis when the original case settled in 2005, and continues to be represented by him. These lawyers (Frodis and McInnis) have been working for these parents on this case for nearly 10 years. The parents are very experienced and knowledgeable family law litigants, represented long-term by senior and experienced specialist family law lawyers.

[8] The father was a full-time dentist at the start of the court case in 2002. A temporary child support order was made on a contested motion on 30 October 2002 by Brownstone, J. for $2,474.17 per month on imputed annual income of $218,574. The court also "declines to order extra-ordinary expenses, for oral reasons given".

[9] This original application settled in 2005 and there was a consent order by Nevins, J. dated 21 October 2005 that the father pay the mother $1,400 per month support for two children, on annual income of $115,000 from 1 November 2005. The order specifies that the "amount includes the father's proportionate contribution to the children's special expenses". When the court asked, in this motion to change, about the income amount used, and where it came from, the parents told the court that the income amount was a negotiated number the parents agreed on for settlement purposes.

[10] The consent order by Nevins, J. dated 21 October 2005 provided for annual financial disclosure. The order also provides that the "support will be variable on a yearly basis, starting 1 November 2006, in accordance with the Child Support Guidelines".

[11] The 2005 order also provided the following dispute resolution mechanism:

Any disagreements with respect to the adjustment of child support from or after 1 November 2006 will be mediated/arbitrated by Terrence Caskie. The mediator/arbitrator's costs will be paid equally by the parties, subject to re-apportionment by the mediator/arbitrator.

[12] The father developed osteoarthritis in the wrists and elbows, and could no longer practice dentistry. From 2009 to 2011 he cut back the number of hours of work per week. He stopped working as a dentist in 2011.

[13] Between 2009 and 2011 the father's lawyer attempted to arrange for mediation/arbitration with the mother regarding child support. He contacted the mother's lawyer and the mother. This attempt was unsuccessful and on 28 September 2011 the father started a motion to change the consent order of 21 October 2005. The mother did contact the father's lawyer by phone messages, but she did not file any responding materials, her lawyer did not contact the father's lawyer, she did not come to court, and she did not participate in the motion to change in any way. A default order was made by Curtis, J. on 8 December 2011, changing the consent order of 21 October 2005, and ordering child support of $281 per month based on annual income of $18,000 (the father's then disability payments) from 1 August 2011.

[14] The mother did not appeal the decision, did not move to set it aside, and did not bring a motion to change that order for almost two years. She says that she could not afford to fight this litigation.

[15] The mother started this motion to change on 4 July 2013. There have been motions, conferences and several court appearances. There was questioning (out of court) of the parties in this motion to change in February 2014.

[16] The father received disability benefits for two years, but no longer receives this income. He is not working. He is supported by his wife Cathy Goldman. He shows the following as his recent income history:

Year	Income
2009	$57,069
2010	$48,124
2011	$24,808
2012	Not provided
2013	$29,000

Court File

[17] There has been a great deal of material filed by both sides in this case. In fact, there has been an overwhelming amount of material filed. Not all of the material filed was relevant. The amount of material filed was more than was needed and it reached the stage of being quite unhelpful. Given the seniority of the lawyers involved, and their specialist status in family law, this was surprising. Parties and their lawyers need to keep the principle of proportionality in mind, and control and limit the amount of material presented to the court.

[18] As well, there are several affidavits, filed by each side, which were not placed in the continuing record and are loose in the court file. The contents of the court file in this matter are disorganized and hard to follow. It was difficult for the court to follow the path of the affidavits filed and relied on. The lawyers are requested to clean up this file, and ensure that all material filed regarding this motion to change is placed in chronology and in the continuing record.

Position of the Parents

[19] At the motion, the mother sought:

a) various different amounts for the table amount of child support, based on unspecified imputed annual income to the father, or, based on various imputed annual incomes to the father as follows (the mother sought all of the following at various different times in her submissions on the motion to change):

i. $1,165 or $1,400 per month child support, based on an unspecified annual income imputed to the father; or,

ii. $1,165 per month based on imputed annual income of $79,450; or,

iii. $1,721 per month based on imputed annual income of $125,000; or,

iv. To re-instate the table amount from the 2005 consent order, that is, $1,400 per month based on $115,000 imputed annual income to the father (which amount would be adjusted based on changes to the Child Support tables as follows):

• $1,586 per month, from 1 May 2006;
• $1,599 per month, from 31 December 2011.

b) S. 7 expenses re Harrison's therapy of $873 per month;

c) Table amount of child support changes to start 1 August 2011 (the effective date of the last court order), or 1 August 2013 (the start of the motion to change);

d) Costs.

[20] The mother was unsure what income she wanted imputed to the father and the court had difficulty getting the mother to be clear on this, and had to ask the mother's lawyer many questions to get a straight answer on this. Eventually she determined that she wanted the court to impute $125,000 to the father as annual income and to order child support on that basis of $1,721 per month.

[21] At the motion to change, the father was not disputing that either of the children was eligible for child support. He wants the mother's motion to change dismissed, and the order made in 2011 to continue. He says that he is prepared to continue at the 2011 rate of $281 per month on annual income of $18,000 even though he no longer receives the disability benefits that order was based on.

[22] On the face of the financial documents filed, neither of these parents can afford the lifestyle they show that they enjoy. Both parents allege that their current spouses cover the deficits in their expenses over their incomes.

Mother's Finances

[23] The father says that the mother has sold several homes over the years, and has netted about $350,000 from these sales.

[24] The default order was made 8 December 2011. Three months later, on 21 March 2012, the mother sold a home for $1.43 million. In May 2012, she bought another home for $862,000 (for $17,000 over the asking list price).

[25] The mother says that she is impoverished, and that she is now living in rental accommodation and is just scraping by. She was getting support from her father, and her friends lent her money. She says that she paid back these loans when the houses sold.

[26] The father takes the position that Harrison does not need therapy but that if he does, that this therapy is far too expensive and that he cannot afford to contribute to it.

[27] Harrison's therapy costs $18,000 per year. The mother says that she stopped the therapy in 2012 after the child support was reduced in the default order of 11 December 2011.

[28] The mother says that she is unable to litigate this case, to prove what the father's income is.

Father's Finances

[29] The father's income and asset history is complicated. He was a successful self-employed business person for many years, was heavily involved in investing, earned a substantial income, and had the benefit of accountants to assist in arranging his affairs so as to minimize his tax liability and to pay very little in taxes.

[30] This is what the mother says about the father's finances and income:

a) she says that the father lives a luxurious life, that he lives in an expensive home (worth $3,000,000 to $4,000,000, with tennis courts and a pool, and with a mortgage of about $1,000,000), owned by his wife. There is about $2.5 million in equity in this house. This was not denied by the father. He says that he has no assets;

b) She says that his children that live with him attend private schools and expensive camps, that they go to university, and that both his children have cars. She notes that his children that live with him have a markedly different standard of living than the two children she has with the father. This was not denied by the father. She says that her two children with the father are entitled to be supported at the same standard of living as the father's two children that live with him;

c) She says that he had net gains of $2,500,000 over a five year period. She says that he sold his practice in 2008 and received net $526,000. She says that in 2011 he sold inherited property that he owned jointly with his sister for $540,500, and received net $270,250 from this sale. Between 2008 and 2011, he netted $796,000 from the sale of these assets. She says it is not believable that after a long and distinguished career in which he was once earning $400,000 to $500,000 per year, he would now have a net worth of $1,300;

d) She says that until this motion to change was served on him, he had $500,000 in a Scotia Capital Trading Account. In December 2011 when he brought his motion to change, that account had $691,000 in it. By February 2013 that account had $759,000 in it. In July 2013 that account had $584,741 in it. By September 2013 (after the mother served her motion to change) the account was reduced to 0. He says that this money belonged to his wife;

e) She says that he had more than $300,000 in his RRSP in November 2009, which had been reduced to 0 by December 2009;

f) She says that there are assets of the father that are not shown on his financial statement; and,

g) she says that what the father earned and was paid has never been reflected in his income tax returns. The father admitted that he has a creative accountant. He says that the accountant tried to show his income at its highest, in order to shelter his wife's income and even his sister's income on his income tax returns. He says that those income numbers are not correct and should not be relied on by the court for child support purposes. She says that the court should not now rely on the information from the father's income tax returns, just as the parents did not rely on that information in arriving at the income amount they used for the consent order of 21 October 2005.

[31] The father's material is full of attacks on the mother's credibility. The father seems to be saying that the mother is a person who lies, and that therefore, he should not have to pay child support for his children.

Legal Issues

[32] The legal issues for determination are these:

a) Can the court change the default order made 8 December 2011 at the mother's request, and if so, what is the test and what criteria would apply? In other words, is the mother entitled to a "do-over" of the motion to change which resulted in the default order of 11 December 2011?

b) Did the father waive his ability to rely on the arbitration clause in the 2005 consent order by coming to court on his motion to change in 2011?

c) Are all of the father's children entitled to live at the same or similar standards of living? and,

d) If the 2011 order is to be changed, what is the correct date to adjust child support, and what is the proper annual income on which to base child support?

The "Do-over" Issue

[33] The default order of 8 December 2011 was a valid, enforceable order, based on the evidence then before the court. This was not disputed by the parents.

[34] The mother did not respond to that motion to change. She did not appeal, and did not move to set it aside. She took no steps to go to court about it until August 2013 (about 20 months later). There were letters between the lawyers in the intervening period. The father says that he provided his income tax returns for 2006, 2007, and 2008, in either 2009 or 2010. The father says that he fulfilled the disclosure requests that were made.

[35] In this motion to change the mother did not seek to set the order aside. She did not plead that she was asking the court for a "do-over", and did not really argue that. She did not attempt to fit her circumstances into the framework of the jurisprudence (the leading case on this is Scaini v. Prochnicki, 2007 ONCA 63, 2007 CarswellOnt 408, 39 C.P.C. (6th) 1, 85 O.R. (3d) 179, 219 O.A.C. 317 (Ont. C.A.)). But she nonetheless asked the court to do exactly that, to go back and change the default order of 8 December 2011, retroactive to the effective date of that order, 1 August 2011, in effect, as though that order was never made.

[36] There is no specific rule in the Family Law Rules granting jurisdiction to the court to set aside an order. In these circumstances, an order could be set aside under Rule 1(7). An order could be changed under Rule 25(19):

MATTERS NOT COVERED IN RULES

1. (7) If these rules do not cover a matter adequately, the court may give directions, and the practice shall be decided by analogy to these rules, by reference to the Courts of Justice Act and the Act governing the case and, if the court considers it appropriate, by reference to the Rules of Civil Procedure. O. Reg. 114/99, r. 1(7).

CHANGING ORDER — FRAUD, MISTAKE, LACK OF NOTICE

25. (19) The court may, on motion, change an order that,

(a) was obtained by fraud;

(b) contains a mistake;

(c) needs to be changed to deal with a matter that was before the court but that it did not decide;

(d) was made without notice; or

(e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present. O. Reg. 151/08, s. 6.

[37] In Scaini v. Prochnicki, (2007, Ont. C.A.), para. 12, the Court of Appeal set out a four-prong test for setting aside orders in these circumstances. The moving party must satisfy the court on these issues:

• the explanation for the litigation delay;
• any inadvertence in missing the deadline;
• the motion being brought promptly; and,
• no prejudice to the responding parties on the motion.

[38] Ultimately, the court will exercise its discretion upon a consideration of the relevant factors and will attempt to balance the interests of the parties. This is the guiding principle in deciding whether to set aside an order in these circumstances: Steele v. Ottawa-Carleton (Regional Municipality), [1998] O.J. No. 3154 (Sup. Ct.) para. 17.

[39] A contextual approach to this question is to be preferred to a rigid test requiring a moving party to satisfy each one of a fixed set of criteria. This approach is not mandated by the jurisprudence. A fixed formula is simply too inflexible to allow the court in each case to reach the just result contemplated by the rules. Scaini v. Prochnicki, (2007, Ont. C.A.), para. 23.

[40] The key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case. What is important is that the analysis be contextual to permit the court to make the order that is just. Scaini v. Prochnicki, (2007, Ont. C.A.), para. 24-25.

[41] As set out in rule 2(2) and 2(3) of the Family Law Rules, the primary objective of the rules is to enable the court to deal with cases justly. This includes ensuring that the procedure is fair to all parties: Davis v. Morris, [2006] O.J. No. 1043, 264 D.L.R. (4th) 193, 2006 CarswellOnt 1623, 146 A.C.W.S. (3d) 961 (Ont. C.A.), para. 21.

[42] A contextual approach to this motion to change and a fairness analysis and perspective requires the court to consider the impact of the default order on the two children. The default order reduced the child support from $1,400 per month to $281 per month, a reduction of about 80%. The mother's evidence is that she had to stop therapy for the youngest child (who is autistic) when the child support order was changed. Such a dramatic reduction in the child support order would, no doubt, have had adverse consequences for both the children in this case.

Did the Father Waive his Ability to Rely on the Arbitration Clause?

The Law on Arbitrations

[43] The Arbitration Act, 1991, S.O. 1991, c. 17, as amended ("the Arbitration Act") limits the court's involvement in a dispute where the parties have agreed to arbitrate: Thomson v. Thomson, [2012] O.J. No. 1177, 2012 ONCJ 141, 18 R.F.L. (7th) 483, 2012 CarswellOnt 2629, 212 A.C.W.S. (3d) 9 (Ont. Ct.), para. 39.

[44] Section 7(1) of the Arbitration Act provides that if a proceeding in respect of a matter submitted to arbitration is commenced in a court, that proceeding shall be stayed on the motion of another party to the arbitration agreement.

Stay

7. (1) If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding. 1991, c. 17, s. 7(1).

[45] There is no longer discretion in the court, as there had been prior to 1991, to deny a stay in these circumstances, unless the case comes within one of the exceptions set out in section 7(2): Puigbonet-Crawford v. Crawford, [2006] O.J. No. 4626, 152 A.C.W.S. (3d) 991, para. 3.

[46] Section 7(4) of the Arbitration Act deals with the effect of a court's refusal to stay an application, as follows:

Effect of refusal to stay

(4) If the court refuses to stay the proceeding,

(a) no arbitration of the dispute shall be commenced; and

(b) an arbitration that has been commenced shall not be continued, and anything done in connection with the arbitration before the court made its decision is without effect. 1991, c. 17, s. 7(4).

The Arbitration Clause

[47] The consent order of Nevins, J. made 21 October 2005 contained an arbitration clause:

Any disagreements with respect to the adjustment of child support from or after November 1, 2006 will be mediated/arbitrated by Terrence Caskie. The mediator's/arbitrator's costs will be paid equally by the parties, subject to reapportionment by the mediator/arbitrator.

[48] The consent order was not varied in the order of 11 December 2005, other than as to the amount of child support.

[49] The existence of the arbitration clause and its possible impact on the motion to change was rarely raised by either of the parties, either in the case conferences held or in argument of the motion. Neither party pleaded this issue. Neither party argued this issue. Neither party presented any case law on this issue. For the most part, the parties conducted the motion to change as though there was no such clause in the 2005 consent order.

[50] The father conceded in his argument, at one point, that in going to court in 2011, he may have acquiesced to a waiver of the arbitration clause in the 2005 consent order. However, he later took the position that he had not waived his right to rely on the arbitration clause, but that he was not seeking a stay of the mother's motion to change on that basis, as the parties had come too far in the litigation and had spent too much money, and that both parties wanted the court to make an order to resolve the dispute. He asked that the court maintain that clause from the consent order of 21 October 2005.

[51] Neither parent took the position that the Arbitration Act did not apply to this clause in the court order.

[52] The named arbitrator, Terrence Caskie, has since died. Neither parent raised this fact as an issue leading to the unenforceability of the arbitration clause. This fact alone does not result in this clause being unenforceable.

[53] Neither parent asked the court to stay the motion to change under s. 7(1) of the Arbitration Act as a result of the arbitration clause in the order.

[54] Neither parent raised the arbitration clause in the motion to change heard in 2011, nor was the arbitration clause brought to the court's attention then. Although the consent order of 21 October 2005 was attached to the father's affidavit in the 2011 motion to change, the arbitration clause was not mentioned in his Motion to Change (From 15), in his Change Information Form (Form 15A), nor in the Form 14B motion in which he asked for final orders on an unopposed basis.

[55] The court did not refuse to stay the motion to change, either in 2011 nor in 2014, as a stay was not sought of either motion to change. However, no stay of the motion to change was granted, in either 2011 or in 2014. Where a stay is not granted and the court hears the motion to change, then no arbitration shall be commenced. Where no stay of the motion to change is granted, the arbitration clause no longer has effect, and the motion to change is properly before the court.

[56] Once the father was successful in his 2011 motion to change, the arbitration clause became null and void. The arbitration clause was voided as soon as the court did not stay his 2011 motion to change.

[57] The mother is therefore permitted to bring a motion to change, and the court has jurisdiction to hear that motion. Neither parent is able to rely on the arbitration clause. This clause is set aside entirely.

Are all of the Father's Children Entitled to Live at the Same or Similar Standards of Living?

[58] Can a payor of child support prefer children from one family to those of another?

[59] The objectives of the Child Support Guidelines, O. Reg. 91/97, as amended, are set out in s. 1:

Objectives

1. The objectives of this Regulation are,

(a) to establish a fair standard of support for children that ensures that they benefit from the financial means of their parents and, in the case of divorce, from the financial means of both spouses after separation;

(b) to reduce conflict and tension between parents or spouses by making the calculation of child support more objective;

(c) to improve the efficiency of the legal process by giving courts, and parents and spouses, guidance in setting the levels of child support and encouraging settlement; and

(d) to ensure consistent treatment of parents or spouses and their children who are in similar circumstances. O. Reg. 391/97, s. 1; O. Reg. 25/10, s. 1.

[60] This section is capable of two rational interpretations. First it can mandate that children of separated or divorced parents, whose situations are comparable, ought to receive like treatment, i.e., that support awards will be equivalent in comparable situations. It equally implies that children within the microcosm of a particular (extended) family, who obviously are in similar circumstances, will receive consistent treatment: Miller v. Bouchard, [2002] O.J. No. 659, [2002] O.T.C. 146, 23 R.F.L. (5th) 291, 112 A.C.W.S. (3d) 533 (Ont. Sup. Ct.), para. 29-30.

[61] There is no reason to prefer the children born within a marriage to those born outside it. Children in both families should be treated equally: Ramphal v. Doodnauth, [2008] O.J. No. 1701, 167 A.C.W.S. (3d) 349 (Ont. Sup. Ct.), para. 20.

[62] The father does not deny that he lives a luxurious life, that he lives in a home worth $3,000,000 to $4,000,000, with tennis courts and a pool. He does not deny that his children attend private schools and expensive camps, that they go to university, and that both his children have cars. He does not deny that his children that live with him have a markedly different standard of living than the two children he had with the mother.

[63] A payor of child support cannot deliberately cause one family to have a higher standard of living than the other.

[64] The father deliberately prefers his first family over the children he has with the mother in this case (his second family). An adverse inference can easily be drawn from these circumstances. The children from the second family are entitled to be supported to a similar standard of living as the children from the first family. The father can afford to support both families at the level that he is supporting the first family.

If the 2011 Default Order is to be Changed, What is the Correct Date to Adjust Child Support?

Start Date of a Change in Support

[65] The factors for the court to consider in determining whether a retroactive order should be made changing support are set out in the D.B.S. decisions: D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, J.E. 2006-1543, [2006] A.W.L.D. 2466, [2006] A.W.L.D. 2467, [2006] W.D.F.L. 2909, [2006] W.D.F.L. 2917, 61 Alta. L.R. (4th) 1, 351 N.R. 201, [2006] 10 W.W.R. 379 (S.C.C.) (referred to as "D.B.S.", or "the D.B.S. cases"), para. 133.

The factors are:

a) Was there delay by the recipient?

b) Was there blameworthy conduct by the payor?

c) Is there hardship in the circumstances of the child? and,

d) Is there hardship to the payor?

[66] The mother wants child support changed starting 1 August 2011. She effectively asks the court for a "do-over" regarding the default order made 8 December 2011. She argues that it is in the children's best interests to have any child support adjustments be retroactive to the date of the previous variation, which was 1 August 2011. She says that the information provided to the court in 2011 was incomplete, that in fact, there had not been a material change in circumstances that would support a change in the 2005 consent order. She says that the father's failure to disclose these facts constitutes blameworthy conduct under the test in D.B.S., and gives the court jurisdiction to make a retroactive support adjustment.

[67] The mother's fall-back position on the correct start date to change support is 1 August 2012, the date of formal notice that she was seeking a change in support.

[68] The father says that if the court changes the default order of 11 December 2011, that the start date for such change should be no earlier than 1 September 2013, the start of this motion to change. He says that he made the disclosure that was requested. He says there is no blameworthy conduct on his part, and that the mother has not adequately explained her reasons for the delay.

[69] The mother's argument was not really about whether the father was intentionally unemployed or underemployed, or whether he should now be working as a dentist or earning that level of income. She argues that the father should be paying an appropriate amount of child support, that he can well afford to do so (based on an analysis of all of his financial circumstances) and that he should not be allowed to reduce child support solely on the basis that she failed to respond to the 2011 motion to change.

What is the Proper Start Date for Adjusting Child Support?

[70] Retroactive child support must be considered in the framework of the principles set out by the Supreme Court of Canada in the D.B.S. decisions. The umbrella determination in these cases is this: courts have the jurisdiction to award retroactive child support, and, in appropriate cases they should do so.

[71] These are some of the framework principles set out in the D.B.S. decisions:

• The obligation of support arises automatically upon birth: D.B.S., para. 36-37;
• Child support is the right of the child: D.B.S., para. 60;
• The term "retroactive" is misleading in the technical sense, as these "retroactive" awards do not hold parents to a legal standard that did not exist at the relevant time: D.B.S., para. 2;
• It is clear that retroactive awards cannot simply be regarded as exceptional orders to be made in exceptional circumstances: D.B.S., para. 5;
• The specific amounts of child support owed will vary based upon the income of the payor parent;
• The ultimate goal must be to ensure that children benefit from the support they are owed at the time when they are owed it. Any incentives for payor parents to be deficient in meeting their obligations should be eliminated: D.B.S., para. 4;
• Where ordered, an award should generally be retroactive to the date when the recipient parent gave the payor parent effective notice of her intention to seek an increase in support payments; this date represents a fair balance between certainty and flexibility: D.B.S., para. 5; and,
• Courts must be open to ordering retroactive support where fairness to children dictates it, but should also be mindful of the certainty that fairness to payor parents often demands. It is only after a detailed examination of the facts in a particular case that the appropriateness of a retroactive award can be evaluated: D.B.S., para. 6.

[72] The certainty offered by an agreement does not absolve parents of their responsibility to continually ensure that their children receive the appropriate amount of support: D.B.S., para. 64.

[73] Parents should not have the impression that child support agreements are set in stone. Even where an agreement does not provide for automatic disclosure, variation or review, parents must understand that it is based upon a specific snapshot of circumstances which existed at the time the agreement was made. For this reason, there is always the possibility that agreements may be varied when these underlying circumstances change: D.B.S., para. 64.

[74] A retroactive child support order does not involve imposing an obligation on a payor parent that did not exist at the time for which support is being claimed: D.B.S., para. 68.

The Fairness Umbrella Regarding Retroactive Child Support

[75] In the D.B.S. cases, the Supreme Court of Canada inserted a new test in child support cases, that is, an umbrella test of "fairness", into this analysis. The court refers to the "balance between certainty and flexibility" in this area of the law, describing it as fairness to children and certainty for the payor.

[76] The payor parent's interest in certainty must be balanced with the need for fairness and for flexibility. In doing so, a court should consider whether the recipient parent has supplied a reasonable excuse for any delay, the conduct of the payor parent, the circumstances of the child, and the hardship the retroactive award might entail: D.B.S., para. 133.

[77] This requires the judge to examine all the factors and weigh those factors, keeping in mind the need to balance these interests. It is curious that the S.C.C. suggests that the interest of the child in fairness is a competing interest to that of the parent in certainty. Surely the child's need for fairness and the child's entitlement to the appropriate amount of child support may compete with the parent's needs for certainty, but the child's needs should have a higher priority.

Was there Delay by the Recipient?

[78] Delay in seeking an increase in child support is a factor in determining whether a retroactive award is justified: D.B.S., para. 100, 101.

[79] The mother did not respond to the 2011 motion to change brought by the father. A default order was made on 8 December 2011 reducing child support. The mother did not bring a motion to change that order until 4 July 2013. If the child support order is changed with a start date that is earlier than the start of this motion to change (that is, a start date before 4 July 2013), there are no consequences for the mother due to her failure to respond to the motion to change in 2011. The mother is rewarded, in effect, for her failure to respond to the father's motion to change. If the order is changed with a start date before 4 July 2013, it is as though the father's motion to change and the order that resulted had never happened.

[80] These parents are very experienced family law litigants, with years of experience in the family law litigation system, and years of assistance from their specialist, senior family law lawyers. It is not unreasonable to expect that they understand the justice system and are aware that there may be consequences for failing to respond to litigation.

Blameworthy Conduct of the Payor

[81] The payor parent's interest in certainty is least compelling where he engaged in blameworthy conduct: D.B.S., para. 105.

[82] Blameworthy conduct is anything that privileges the payor parent's own interests over his children's right to an appropriate amount of support: D.B.S., para. 106.

[83] A payor parent should not be permitted to profit from his wrongdoing: D.B.S., para. 125.

[84] No level of blameworthy behaviour by payor parents should be encouraged. Even where a payor parent does nothing active to avoid his obligations, he might still be acting in a blameworthy manner if he consciously chooses to ignore them. Put simply, a payor parent who knowingly avoids or diminishes his support obligation to his children should not be allowed to profit from such conduct: D.B.S., para. 107.

[85] Whether a payor parent is engaging in blameworthy conduct is a subjective question: D.B.S., para. 108.

[86] The father engaged in blameworthy conduct in not disclosing to the court in 2011 that one of the children was autistic, and had special needs, and in not disclosing that his wife was supporting him and their children, and that they all lived a very comfortable lifestyle at a high standard of living. The father misled the court in his 2011 motion to change. This is blameworthy conduct.

Hardship in the Circumstances of the Child

[87] Courts should consider the present circumstances of the child -- as well as the past circumstances of the child -- in deciding whether a retroactive award is justified: D.B.S., para. 110. The autistic child's therapy was stopped when the 2011 order reduced the support, as the mother could not afford to continue this therapy. This no doubt affected the child.

Hardship to the Payor

[88] The father did not plead hardship and did not argue hardship. He argued there is no reason why there should be any retroactive adjustment, and that there should be no changes in child support at all from the 2011 default order.

Start Date of the Order

[89] The court in D.B.S. identified four choices for the date to which the award should be retroactive:

a) the date when an application was made to a court;

b) the date when formal notice was given to the payor parent;

c) the date when effective notice was given to the payor parent; or,

d) the date when the amount of child support should have increased.

[90] The court adopted the date of effective notice as a general rule for the commencement date of retroactive support awards: D.B.S., para. 118.

[91] "Effective notice" means any indication by the recipient parent that child support should be paid, or if it already is, that the current amount of child support needs to be re-negotiated. Thus, effective notice does not require the recipient parent to take any legal action; all that is required is that the topic be broached. Once that has occurred, the payor parent can no longer assume that the status quo is fair, and his interest in certainty becomes less compelling: D.B.S., para. 121.

[92] Once a court decides to make a retroactive award, it should generally make the award retroactive to the date when effective notice was given to the payor parent. But where the payor parent engaged in blameworthy conduct, the date when circumstances changed materially (that is, the date when the amount of child support should have increased) will be the presumptive start date of the award: D.B.S., para. 134.

[93] The date when increased support should have been paid, however, will sometimes be a more appropriate date from which the retroactive order should start. This situation can most notably arise where the payor parent engages in blameworthy conduct. Once the payor parent engages in such conduct, there can be no claim that he reasonably believed his child's support entitlement was being met: D.B.S., para. 124.

[94] The presence of blameworthy conduct will move the presumptive date of retroactivity back to the time when circumstances changed materially. A payor parent cannot use his informational advantage to justify his deficient child support payments: D.B.S., para. 124.

Analysis re Start Date of the Order

[95] There are several relevant dates regarding child support here:

• 1 August 2011: the effective date of the 2011 default order changing support;
• 1 August 2012: the date of formal notice that the mother was seeking an increase in child support; and,
• 4 July 2013: the date the mother started motion to change seeking an increase in child support.

[96] The court finds that the latest date the father can rely on as the date of actual notice is 1 August 2012.

[97] The court is required to balance fairness and the need for certainty, as well as to take into account the children's interests and right to be supported at an appropriate level. This cannot be accomplished if the 2011 order is allowed to stand. The mother should not be granted an order which effectively ignores the fact that she did not respond to the father's 2011 motion to change. However, the father engaged in blameworthy conduct in the Spartan and misleading information he provided to the court in his 2011 motion to change.

[98] On an overall fairness analysis of all the circumstances in this case, it is fair, just and appropriate that there be an order for the adjustment of the child support starting on 1 July 2013.

What is the Proper Annual Income on Which to Base Child Support?

[99] The default order made on 11 December 2011 was made on the basis of incomplete information and even misleading information. The court did not have a full picture of the father's income, assets, or lifestyle. That order is not correct and should not stand. The annual income number used for that determination should not be used today to determine the father's child support obligation.

[100] The father's finances are complicated, he has owned many assets and investments, and his accountant has intentionally manipulated his income numbers to produce certain results. It is difficult for the court to determine a suitable current annual income for him, imputed or otherwise.

[101] The father has money available to him to support him and his children at a substantial standard of living. That is clear from his lifestyle, the home he lives in, the life his children lead, and the money that has come to him and through his bank accounts and other assets over recent years. Although he is not working as a dentist and is not receiving disability payments, he has access to a substantial income to support himself and his children who live with him.

[102] The parents have never relied on the numbers in the father's income tax returns to determine his annual income for child support purposes. In 2005 when they consented to a final child support order they chose the number of $115,000 as the father's annual income for child support purposes. The parents did not rely on the father's income tax returns in 2005 to determine his annual income for child support purposes, and neither should the court.

[103] The best evidence available to the court is the annual income number the parents agreed on in 2005 for child support purposes. Neither parent produced sufficient evidence to convince the court that this number (annual income of $115,000) is no longer the correct number on which to base child support. Both of the father's families should live at a similar standard of living. That cannot be accomplished if another, smaller annual income number is chosen for child support purposes. There is no reason to deviate from this number for the father's annual income for child support purposes.

Orders

[104] The arbitration clause in the consent order of 21 October 2005 (paragraph 4) is set aside entirely.

[105] The father shall pay child support of $1,400 per month for two children on imputed annual income of $115,000 from 1 July 2013. This amount includes the father's proportionate contribution towards the children's special and extraordinary expenses.

[106] The father shall produce to mother every year, on 1 June, starting in 2015, copies of his Income Tax Returns and Notices of Assessment, pursuant to s. 24.1 and the disclosure requirements of the Child Support Guidelines.

Costs

[107] This matter has been costly for the parents. There is blame to go around on both sides here. It may be that neither parent should seek costs of this litigation. The parents should discuss this issue carefully with their lawyers.

[108] However, if either parent wants to seek costs, this is the timetable for written submissions:

a) written submissions of two pages maximum, accompanied by any offers to settle, and summary of the time spent;

b) submissions to be delivered with a Form 14B motion form;

c) mother to serve and file by Friday 24 October 2014; and,

d) father to serve and file by Friday 7 November 2014.

Released: 25 September 2014

Justice Carole Curtis