Court File and Parties

Ontario Court of Justice

Date: 2014-12-16

Court File No.: Halton 346/12

Between:

Sarah Mason Applicant

— And —

Bjorn Blanchard Respondent

Before: Justice S. O'Connell

Heard on: July 23, September 17, 2014

Reasons for Judgment released on: December 16, 2014

Counsel:

• Dani Z. Frodis and Samantha Dimeno, counsel for the applicant
• Bjorn Blanchard, on his own behalf

O'CONNELL J.:

Introduction

[1] The parties have brought two motions before me. The respondent, Mr. Blanchard, has brought a motion to change the final order of the Honourable Justice R. Zisman dated May 17, 2013. The applicant, Ms. Mason, has brought a motion for summary judgment within the context of Mr. Blanchard's motion to change. She seeks to have the motion to change dismissed summarily as there is no genuine issue requiring a trial or a hearing.

Overview of the Motion to Change

[2] Mr. Blanchard brought a motion to change on February 10, 2014 seeking to change the child support provisions of the final order of Justice Zisman. He seeks to reduce his child support payment from $892.00 per month, based on an imputed income of $60,000.00, to $397.00 monthly based on his stated income of $27,040.00, retroactive to January 1, 2013. Mr. Blanchard also served an amended motion to change on June 13, 2014 and further seeks to reduce child support arrears and to pay the arrears support at a rate of $150.00 monthly.

[3] Both parties also sought a number of changes to the access schedule, travel arrangements, pick up and drop off arrangements and in her response, Ms. Mason sought a restraining order against Mr. Blanchard. The parties resolved all of the other issues within the motion to change on a final basis with the exception of the issue of whether an additional two Thursdays each month should be provided to Mr. Blanchard and the children under the access order.

Background

[4] The parties have two children, namely Layla Mason-Blanchard born April 15, 2006, and Rowan Mason-Blanchard born July 27, 2010. The parties separated after an 11 year relationship on August 27, 2011. They were not married.

[5] Layla and Rowan reside primarily with Ms. Mason with specified access to Mr. Blanchard. Ms. Mason has sole custody of the children in accordance with the final order of Justice Zisman, dated May 17, 2013.

[6] The final order of Justice Zisman was made following Ms. Mason's motion to strike Mr. Blanchard's pleadings and for summary judgment. Justice Zisman granted her motion and made the following final order:

1. The Respondent's pleadings are struck for failure to comply with the disclosure order made December 7, 2012.

2. The applicant shall be granted custody of the children, Layla Mason Blanchard born April 15, 2006 and Rowan Mason Blanchard born July 27, 2010.

3. The Respondent shall be granted access as follows:

   a. Alternate weekends from Friday after school or daycare to Sunday evening at 7:00 pm to be extended on Monday at 7:00 pm on a statutory long weekend

   b. Alternate Thursdays from after school or daycare until Friday morning when the children will be returned to school or daycare

   c. The respondent will arrange for the children to attend any extracurricular activities, recitals or other special events while they are in his care; if he is unable to transport the children he shall notify the applicant and provide her the option of doing so.

   d. The parties shall share the holidays in accordance with the schedule attached.

4. As of January 1, 2013 the respondent shall pay to the applicant, in accordance with the child support guidelines and based on an imputed income of $60,000.00, child support of $892.00 per month.

5. The respondent pay retroactive child support to the applicant based on an imputed income of $48,000.00, $715.00 per month from September 1, 2011 to November 30, 2012 less a credit of $1,927.05.

6. The respondent pay to the applicant $1,275.00 as his share of retroactive special expenses. The respondent shall pay 65% of any ongoing special expenses. The applicant shall present the respondent with proof of the cost of any such expenses and the respondent shall within 14 days pay his share; if the respondent fails to pay his share the applicant can submit the expenses to the Family Responsibility Office to be collected as child support.

7. This order is made without prejudice to the respondent being permitted to bring a motion, on proper notice to the applicant, to seek to change his financial support obligations in this order, without the necessity of proving there has been a material change in his circumstances, upon providing proof to the court that he has complied with the outstanding disclosure order on December 7, 2012 and provided he has complied with his obligation to provide ongoing financial disclosure.

8. The respondent shall provide to the applicant commencing June 30, 2013 and each year thereafter, a copy of his income tax return with all attachments and a copy of his Notice of Assessment or any Notice of Re-Assessment.

9. The applicant shall provide the respondent commencing June 30, 2013 and each year thereafter, a copy of her income tax return with all attachments and a copy of her Notice of Assessment or any Notice of Re-Assessment.

10. The respondent's share of the special expenses shall be re-adjusted to take into consideration any tax credits. Until changed on consent or by further court order the amount of child support payable shall remain as in this order.

11. For clarity, this order supersedes the support order of December 7, 2012.

12. Support Deduction Order to issue

[7] In making her final order, Justice Zisman states the following at para. 12 and 13 of her written reasons dated May 17, 2013:

"12. Although it is clear that striking a party's pleadings should only be used sparingly and as a last resort especially where children's interests are involved, however I must also consider that Court orders are not made as a form of judicial exercise. An order is an order, not a suggestion. Non-compliance must have consequences. One of the reasons that many family proceedings degenerate into an expensive merry-go-round is the all too common casual approach to compliance with Court orders.

13. The father has taken a cavalier attitude to the necessity of proving disclosure in a timely fashion and, despite being self-represented, he has been warned about the necessity of compliance and the consequences. I see no other realistic alternative to striking the father's pleadings on a without-prejudice basis to being reinstated once he has fully complied with the disclosure order. In my view, this will strike the necessary balance of providing a serious consequence to the father's ongoing lack of compliance and still permit the father to reargue at some time in the future that support should be paid on an income different from the amount being imputed."

[8] In then proceeding with the motion for summary judgment, Justice Zisman relied on the limited evidence that the father did file, which were most of his bank statements for 2012 indicating cash and cheque deposits totalling in excess of $60,000. The father had not filed either his 2011 Notice of Assessment or proof of his 2012 income. According to Mr. Blanchard's financial statement sworn October 15, 2012, his income was $52,000 per annum. Justice Zisman found that the bank statements provided evidence of a more realistic income and accordingly, imputed income to the father at $60,000.00 per annum.

[9] Justice Zisman also awarded Ms. Mason her costs of the motion to strike Mr. Blanchard's pleadings and for summary judgment in the amount of $12,000.00. This order was made on July 15, 2013 and in her written reasons for the costs order, Justice Zisman held that, "In view of the respondent's history and pattern of evading and ignoring court orders, this order of costs shall be enforced by the Family Responsibility Office."

[10] Mr. Blanchard did not make any voluntary payments for child support or payments towards the costs order. Mr. Blanchard commenced this motion to change on February 10, 2014 after the Family Responsibility Office commenced enforcement proceedings against him. On January 21, 2014 Mr. Blanchard brought a motion for a restraining order to avoid having his driver's licence suspended as the Family Responsibility Office served notice of an intention to suspend his licence. A restraining order was granted with terms. Mr. Blanchard entered into a payment arrangement with the Family Responsibility Office towards the ongoing and arrears owing and then commenced this motion to change. As of July 15, 2014, Mr. Blanchard owed arrears in the amount of $38,035.50.

[11] In his motion to change, Mr. Blanchard states the following changes in his financial circumstances:

1. His self-employed business as a subcontractor terminated due to loss of clients and poor management, causing bankruptcy;

2. He has found new stable employment with Dextar General Contracting and that his new income will be a yearly salary of $27,040.

[12] It is not disputed that Mr. Blanchard has been employed as a subcontractor for approximately 14 years, if not longer. Mr. Blanchard specializes in drywall and metal framing. At the time that the final order was made by Justice Zisman, Mr. Blanchard was continuously employed as a subcontractor with MEW General Contracting Inc. ("MEW").

[13] It is further not disputed that because Mr. Blanchard was a subcontractor with MEW, not an employee, the Family Responsibility Office ("FRO") was unable to enforce the support order through MEW it did not have confirmation that this company was an income source for Mr. Blanchard. Moreover, it appeared that Mr. Blanchard was receiving payments from MEW through his registered business called "Overboard Construction", which is a sole proprietorship that he has owned for a number of years. MEW was one of Mr. Blanchard's major clients.

[14] Given that Mr. Blanchard had not paid any child support pursuant to the Order of Justice Zisman and FRO indicated that it could not enforce the support order through MEW unless there was confirmation that it was an income source for Mr. Blanchard, Ms. Mason, with the assistance of her counsel, contacted MEW to request confirmation that it was an income source for Mr. Blanchard.

[15] On November 19, 2013, Mr. Morris Williams of MEW provided written confirmation that the company was an income source for Overboard Construction/Mr. Blanchard.

[16] On November 22nd, 2013, three days after Mr. Williams provided this confirmation, Mr. Blanchard informed Ms. Mason that he was now unemployed. Mr. Blanchard claimed that he was fired from MEW as a result of the inquiries made to confirm that the company was an income source for Mr. Blanchard.

[17] Mr. Blanchard deposed that he found new employment with Dextar General Contracting commencing February 10, 2014 and attached as an exhibit to his affidavit a copy of a letter dated January 10, 2014 confirming that Mr. Blanchard would be employed as a "service worker" at Dextar General Contracting commencing on February 10, 2014 with an annual salary of $27,040. The letter was signed by Edward Barlow, whom Mr. Blanchard stated was his employer and the owner of Dextar General Contracting. In his amended motion to change, dated June 12, 2014, Mr. Blanchard once again reiterated that his self-employed business had terminated due to loss of clients and poor management and that he now had stable employment with Dextar General Contracting at the yearly salary indicated.

[18] On April 28, 2014, a case conference was held before me with respect to Mr. Blanchard's motion to change. I ordered that Mr. Blanchard provide the following disclosure with respect to his claims:

a) Copies of his three last pay stubs with Dextar;

b) Confirmation of the Dextar's office address (not P.O. box);

c) Details of Mr. Blanchard's efforts to secure new employment following his alleged termination from MEW on November 21, 2013 and when he received his offer of employment from Dextar and the copies of statements from Mr. Blanchard's Royal Bank account from January 1, 2013 to the present.

[19] On May 27, 2014 Mr. Blanchard delivered an affidavit sworn on that date purporting to comply with the order for disclosure. He included correspondence from MEW dated May 14, 2014 purporting to confirm that his services were terminated by MEW. The letter signed by Mr. Morris Williams indicates the following: "MEW General Contracting has issued no cheques to Bjorn Blanchard or Overboard Construction since November 2013." In addition, Mr. Blanchard provided an email exchange between himself and his current employer, Mr. Edward Barlow, regarding his employment with Dextar Corporation. The email exchange provides that on May 27, 2014, Mr. Blanchard writes:

Hey, Ed, for my court case they are requesting your actual address. They won't accept a P.O. box address and they are wondering why it is a P.O. box instead of an actual office address. Sorry to be a pain in the ass, but it seems they don't believe I work for you for some reason. When you get a chance, I'd appreciate it.

To this, Edward Barlow replies:

No problem at all. Wasn't the letter of employment enough? How can they not believe that you work for me? You have pay stubs and cheques going in. I don't envy you that's for sure. The reason I have a P.O. box address is, as you know, I'm generally at my girlfriend's apartment in Oakville. I'd never get my mail otherwise. Home/office address is 2-131 Symons Street, Etobicoke, Ontario, M8V 1V1.

[20] Mr. Blanchard also provided copies of pay cheque stubs from Dextar General Contracting showing a weekly salary of $526.00. It was clear from the evidence that was sworn by Mr. Blanchard on May 27, 2014, in accordance with the order for financial disclosure, that he was stating that he was an employee of Dextar General Contracting hired to commence work on February 10, 2014 by Mr. Edward Barlow, earning an annual salary of $27,040.00.

[21] It is not disputed that the address on the Dextar letterhead is a P.O. box at a shopping plaza across the street from Mr. Blanchard's home. After receiving this information, Ms. Mason's lawyer made further inquiries and requested a corporate profile report with respect to Dextar General Contracting Incorporated. A copy of the corporate profile report was produced in these proceedings. The corporate profile report obtained confirms that Mr. Blanchard, in fact, incorporated Dextar General Contracting Incorporated on November 3, 2013. The corporate head office is registered as Mr. Blanchard's home address, 2043 Marine Drive, Oakville, Ontario, L6L 1D6. Mr. Blanchard is listed as the administrator and the first director of the corporation.

[22] It is not disputed that Mr. Blanchard is, in fact, the sole operating mind of this corporation. This company was incorporated shortly after the Family Responsibility Office was able to confirm MEW General Contracting as an income source for Mr. Blanchard's former corporation, Overboard Construction.

[23] After this information came to light, Mr. Blanchard filed a further affidavit sworn July 16, 2014 seeking to clarify some of the "misunderstandings" regarding his previous job and his current employment. Mr. Blanchard states the following in his affidavit sworn July 16, 2014:

a) Mr. Blanchard had a sole proprietorship called Overboard Construction. Due to poor management and loss of clients, he filed for bankruptcy in 2012. During his bankruptcy, he was not allowed to open a registered business. His bankruptcy was discharged on October 22, 2013.

b) Mr. Blanchard then registered an incorporated business called Dextar General Contracting in attempt to start over and to try to run a successful business. In November of 2013, he lost his main client. This was at the time that FRO was threatening to suspend his driver's licence, so he was forced to file a restraining order and this motion to change.

c) Mr. Blanchard was introduced to Edward Barlow. Mr. Barlow and he worked out a business arrangement where he would run Dextar General Contracting, including finances, estimating and obtaining clients, while Mr. Blanchard's role was to do all of the work and run the crew. Mr. Barlow and he worked out a salary that he would draw from the company and Dextar would directly pay for all work expenses such as tools, material, gas, insurance, income taxes and salaries.

The Law

[24] A motion to change under Rule 15 of the Family Law Rules proceeds as a motion unless the Court orders otherwise under Rule 15(26). A motion to change does not automatically conclude with a trial. There is not an entitlement to a trial in a motion to change. Under Rule 15(26) of the Family Law Rules, if the Court is of the opinion that a motion, whether proceeding on consent or not, cannot be properly dealt with because of the materials filed, because of the matters in dispute or for any other reason, the Court may give directions, including directions for a trial.

[25] Before considering whether or not to order a trial for a motion to change, the Court first has to find that the motion cannot be properly dealt with as a motion. The Court has a wide discretion in making this finding, as the Court can rely on the material filed, the matter in dispute or on any other reasons to so decide. Here, the parties agreed with the Court's direction that the motion to change could proceed by way of a motion on the basis of the affidavit and documentary materials filed.

[26] As this is a motion to change child support, s. 37(2.1) of the Family Law Act is the applicable test. The section only requires a moving party to show a change in circumstances, not a material change, within the meaning of the Child Support Guidelines, or that evidence not available on the previous hearing has become available to successfully change a child support order. Section 14 of the Child Support Guidelines sets out the circumstances that must be proven in order to warrant a variation in a child support order:

14. For the purposes of subsection 17(4) of the Act, any one of the following constitutes a change of circumstances that gives rise to the making of a variation order in respect of a child support order:

(a) in the case where the amount of child support includes a determination made in accordance with the applicable table, any change in circumstances that would result in a different child support order or any provision thereof;

(b) in the case where the amount of child support does not include a determination made in accordance with a table, any change in the condition, means, needs or other circumstances of either spouse or of any child who is entitled to support; and

(c) in the case of an order made before May 1, 1997, the coming into force of section 15.1 of the Act, enacted by section 2 of chapter 1 of the Statutes of Canada, (1997).

[27] The burden of proof lies upon the moving party, on a balance of probabilities, to establish a change in circumstances that would result in a different order than the order that had been made.

[28] A party may make a motion for summary judgment under Rule 16 of the Family Law Rules. These are the sub-rules in Rule 16 that are relevant to this case:

"(2) A motion for summary judgment under subrule (1) may be made in any case (including a child protection case) that does not include a divorce claim. O. Reg. 114/99, r. 16 (2).

(4) The party making the motion shall serve an affidavit or other evidence that sets out specific facts showing that there is no genuine issue requiring a trial. O. Reg. 114/99, r. 16 (4).

(4.1) In response to the affidavit or other evidence served by the party making the motion, the party responding to the motion may not rest on mere allegations or denials but shall set out, in an affidavit or other evidence, specific facts showing that there is a genuine issue for trial. O. Reg. 91/03, s. 5.

(5) If a party's evidence is not from a person who has personal knowledge of the facts in dispute, the court may draw conclusions unfavourable to the party. O. Reg. 114/99, r. 16 (5).

(6) If there is no genuine issue requiring a trial of a claim or defence, the court shall make a final order accordingly. O. Reg. 114/99, r. 16 (6)."

[29] What is clear from this rule is that where there is no genuine issue for trial, it is mandatory that the court make a final order. The onus is on the moving party to persuade the Court that there is no genuine issue for trial. If there is not a genuine issue for trial, the Court is required to make a final order and grant summary judgment.

[30] On a motion for summary judgment, the Court is required to take a hard look at the merits of the case to determine if there is a genuine issue for trial. There has recently been some debate in the case law as to whether or not the court should adopt the broader approach to a court's powers on a summary judgment motion, by finding that subrule 16(6) has been bolstered by the new tools the court has pursuant to Rule 20.04 of the Rules of Civil Procedure that permit a court to weigh the evidence, evaluate the credibility of deponents and draw reasonable inferences. The Supreme Court of Canada, in the case of Hryniak v. Mauldin 2014 SCC 7, has clarified the process of applying the expanded summary judgment rule.

[31] In Children's Aid Society, Region of Halton v. K.C.L., Justice Zisman referenced the Supreme Court of Canada's decision and considered the expanded summary judgment rule. She states the following at paragraphs 17, 18, and 19 of that decision:

"The Supreme Court of Canada, in the case of Hryniak v. Mauldin 2014 SCC 7, has clarified the process of applying the expanded summary judgment rule. The court held that the judge should first determine if there is a genuine issue requiring a trial based on the evidence before her, without using the new fact-finding powers. There will be no genuine issue for trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure. If there appears to be genuine issue for trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04 (2.1) and (2.2).

Accordingly, the first step under either process is to determine if there is a genuine issue for trial based on the evidence presented without relying on any expanded powers to weigh evidence or assess credibility.

In determining if there is sufficient evidence led by the parent, the question is not whether there is any evidence to support the position, but whether the evidence is sufficient to support a trial. (Children's Aid Society of Dufferin v. J.R., [2002] O.J. No. 4319 (Ont. C.J.)."

Application of the Governing Principles to the Facts of this Case

[32] Here, I have no hesitation in finding that there is no genuine issue for trial. Mr. Blanchard has not established an involuntary change in his financial circumstances resulting in a reduction of the child support that is owed.

[33] Mr. Blanchard has misled this Court. He was actively employed as a subcontractor providing his services to MEW General Contracting until November of 2013. Once MEW was established as an income source for Mr. Blanchard, and a support deduction order was issued to the company by FRO, MEW stopped issuing cheques to Mr. Blanchard and his sole proprietorship, Overboard Construction. I do not accept that MEW terminated Mr. Blanchard's services. The letter provided by Mr. Blanchard simply indicates that the company 'no longer issues cheques to Overboard Construction'.

[34] Mr. Blanchard has sworn three misleading affidavits in these and the FRO default proceedings. He has stated in his affidavit sworn January 14, 2014, his affidavit sworn May 27, 2014, and in his affidavit sworn June 10, 2014 that he was terminated as a self-employed contractor by MEW General Contracting and that he started new employment as a salaried employee with Dextar General Contracting. He went to great lengths establishing Mr. Barlow as his employer and even provided pay stubs indicating that he was earning a weekly salary. He failed to disclose to the court that he was, in fact, the first director of Dextar General Contracting Incorporated and that he incorporated the company on November 8, 2013 and that he is the sole operating mind of the corporation.

[35] Mr. Blanchard is in no different position than he was at the time that Justice Zisman made her final order on May 13, 2013, except that, rather than be sole proprietor, he had incorporated a company to contract his services as a subcontractor in drywall and metal framing, which is not disputed he has been doing for at least 14 years.

[36] In my view, it is clear that Mr. Blanchard incorporated this company in November of 2013 in an effort to evade his child support obligations and the FRO enforcement. By incorporating this company, he has tried to insulate himself so that his income could not be garnished. He then initiated this motion to change to reduce his child support obligation on the basis of an artificially reduced income as an "employee" of his own corporation.

[37] It is also worth noting that Mr. Blanchard has continued to fail to provide the financial disclosure that was ordered by Justice Zisman in her final order dated May 27, 2013 and he has refused to make any voluntary payments of child support or pay the costs order of Justice Zisman since May of 2013.

[38] The father's motion to change the final order of Justice Zisman is therefore dismissed. With respect to the father's request for additional two days of Thursday access, the father has not established a material change in circumstances that affects the children's best interests justifying a change in Justice Zisman's order. However, I encourage the parties to have further discussions about this issue.

[39] In dismissing the father's motion, the court wishes to emphasize that Justice Zisman's final order was made without prejudice to Mr. Blanchard being permitted to bring a motion, on proper notice to the applicant, "to seek to change his financial support obligations in this order, without the necessity of proving there has been a material change in his circumstances, upon providing proof to the court that he has complied with the outstanding disclosure order on December 7, 2012 and provided he has complied with his obligation to provide ongoing financial disclosure" [paragraph 13 of that Order, emphasis added]. Mr. Blanchard has chosen not to comply with this provision of Justice Zisman's order. If he provides the required financial disclosure under the December 7th Order, demonstrating a real and not manufactured change in his financial circumstances, then he is free to bring a motion adjusting his child support obligations.

[40] If Ms. Mason seeks costs, brief submissions with a bill of costs and any offer to settle to be attached to be served and filed within 30 days. Any response by Mr. Blanchard to be served and filed within two weeks thereafter and any reply within one week.

Released: December 16, 2014

Signed: "Justice Sheilagh O'Connell"

[1] This was his affidavit in support of his motion for a restraining order in the FRO default proceedings.