Court File and Parties

Court File No.: Brampton 643-96 Date: 2014-02-20 Ontario Court of Justice

Between:

Julie Ann Gee Applicant,

— AND —

Valmond Alphee McGraw Respondent.

Before: Justice S.R. Clark

Motion to Change and Cross-Motion re Child Support and s.7 Expenses

Motion heard on: January 31, 2014 Ruling released on: February 20, 2014

Counsel:

• Ms. Sherri D. Moss for the Applicant
• Valmond McGraw self-represented

CLARK, J.:

1:0 INTRODUCTION

[1] The respondent father, Valmont McGraw (the father) brings a Motion to Change the final Order of Justice J. Baldock, dated August 26, 2003 (the Order) to vary or terminate child support and s.7 expenses for the child, Alyssa McGraw, born August 25, 1995, presently age 18. The date of the Motion to Change is July 15, 2013.

[2] The applicant mother, Julie Ann Gee (the mother) filed a Response, dated August 13, 2013, seeking to dismiss the Motion to Change and to increase child support and s.7 expenses.

[3] This case illustrates how imprudent and costly it can be for a payor to merely forge ahead and use the Court process without trying to contact the recipient to attempt to negotiate a resolution.

[4] The Order was made on the basis of Minutes of Settlement, setting out the following relevant terms:

1. The father shall pay $345.00 per month for child support on annual income of $40,000.00, commencing April 1, 2003, plus $145.00 per month for s.7 expenses, for a total of $490.00 per month.

2. He and the mother (if applicable) must provide updated income disclosure to one another each year within 30 days of the anniversary date of the Order.

[5] The parties never married. They started living together in September, 1994, and separated in January, 1997.

[6] The father seeks to reduce his child support payments based on a reduced annual income of $32,000.00, commencing June 1, 2013. He lost his job in May, and obtained a new, but lesser paying job in early June, 2013. Therefore, child support payable for this short period should be forgiven. Furthermore, the Court should fix any arrears at nil. Alternatively, if any money is owing, he will pay $50.00 per month until the full amount owing is paid. Should there be any resulting overpayments, these can be applied to future child support.

[7] The mother, on the other hand, asks the Court to order the following:

1. Child support be adjusted retroactively for 3 years, from August 1, 2010 to reflect the father's increased income, and to impute income from January 1, 2013 based on him being under-employed.

2. He should pay his proportionate share for Alyssa's post-secondary educational costs.

3. He should pay costs on a full recovery basis.

[8] She submits the father commenced the Motion to Change without any discussion or negotiation with her. Furthermore, he has always threatened to stop paying child support when Alyssa turned 18 (August 25, 2013).

2:0 THE ISSUES

[9] The three main issues are as follows:

1. Has the father established a material change in circumstances?

2. Should the Court vary child support retroactively, and if so, to what date?

3. Is the father under-employed, and if so, should the Court impute income to him for purposes of determining child support and s.7 expenses?

3:0 THE POSITIONS OF THE PARTIES

3:1 The Father

[10] He is 38 years of age.

[11] He presently lives with his 8 year old son from another relationship. He has full custody of the child. The child's mother is required to pay $100.00 per month of child support but apparently does not. He has not brought any enforcement proceedings to collect it.

[12] He claims his income for the relevant years is as follows:

2011 - $54,000.00 2012 - $56,000.00 2013 - $35,000.00

[13] He worked at the same company, Matrix Logistics Services Limited, for 13 years, from March 21, 2000 to May 6, 2013. He was earning $21.95 per hour, according to his Record of Employment (ROE), filed. He was dismissed ("fired"), however, for telling his employer, "where to go". He was unwilling to provide any more detail when presenting his oral argument. To his credit, he quickly found a new job at Vertical Staffing Resources, but is only earning $15.00 per hour. His paystub, submitted, does not indicate the precise start date, but it appears to have been May 31, 2013. He obtained this job through an agency. Although he has been working there for the last 6 or 7 months, it is still a temporary placement. He is hoping it will continue.

[14] He did not advise the mother of his annual income after the Order was made because she never asked for it. Furthermore, he did not believe he was required to.

3:2 The Mother

[15] The thrust of her position is that there should be no reduction of the quantum of child support. Furthermore, the Court should find that the father is under-employed and should not be rewarded for effectively quitting a job by his own voluntary actions causing his termination. Accordingly, he is not working to his full capacity. He, like many other payors, is under the misconception his child support obligation is only based on reported income. In fact, it is based on one's ability to earn. He is still required to pay support, particularly if dismissed through his own fault. He provided no details of the event, whether he attempted to appeal the decision, or whether he could have done something to salvage or rehabilitate the situation.

[16] In any event, the Motion to Change is "premature", because the father's annual income from date of the Order in 2003 to the present has never been less than the amount on which the Order was based ($40,000.00).

[17] Furthermore, he has not complied with that term of the Order which requires him to provide her with a statement of his annual income.

[18] His actual income increased since the date of the order and he has failed to make increased payments for the child.

[19] If he is not earning to his full capacity, he has a positive duty to do something about it. He could secure a part-time job, for example, to supplement his income. There is no evidence to suggest he has made any efforts to do so.

[20] He is not entitled to merely rush into a lower paying job.

[21] There is also no evidence of any effort to obtain another job at his previous hourly rate.

[22] He has reported his income for the relevant years inaccurately. His notices of assessment disclose the following:

2010 - $55,785.00 2011 - $53,815.00 2012 - $56,846.00

[23] He claims his income for 2013 is $32,000.00. However when considering his paystub from Vertical Staffing, filed, his projected income, not including any overtime, would be in excess of $48,000.00. Based on the father's paystub, it appears his monthly gross income is $2,900.00. For the 7 remaining months of 2013 from June through to the end of December, the total gross income is $20,300.00. Projecting this amount over an entire 12 month period in 2013 would yield gross income of $48,584.06 [1].

[24] She filed a chart titled, "Calculation of Income 2013", setting out her position on the amounts owing on a retroactive basis as follows:

2010 Paid $490.00 Should have been paid based on income of $55,785.00 Guideline Support: $517.00 per month Paid: $490.00 x 12 = $5,880.00 Actual Amount: $517.00 x 12 = $6,204.00 Difference: $324.00 arrears

2011 Paid $490.00 per month Should have paid based on income $53,815.00 Guideline Support: $498.00 per month Paid: $490.00 x 12 = $5,880.00 Actual Amount: $498.00 x 12 = $5,976.00 Difference: $96.00 arrears

2012 Paid $490.00 per month Should have paid based on income of $56,846.00 Guideline Support: $516.00 per month Paid: $490.00 x 12 = $5,880.00 Actual Amount $516.00 x 12 = $6,192.00 Difference: $312.00 arrears

2013 If Court imputes/uses 2012 income Guideline Support: $516.00 per month Paid: $490.00 x 6 = $2940.00 Actual Amount: $516.00 x 12 = $6192.00 Difference: $3,252.00 arrears

Total Arrears 2010 – December 31, 2013 $324.00 + $96.00 + $312.00 + $3,252.00 = $3,984.00

[25] She submits he should pay retroactive child support for the 3 years prior to the date of the Motion to Change (July 15, 2013) in accordance with the law, as follows:

• child support retroactive to August 1, 2010, in the amount of $517.00 per month to December 31, 2010, based on his income of $55,785.00;

• $498.00 per month, from January 1, 2011 to December 31, 2011, based on his annual income of $53,815.00;

• $516.00 per month, from January 1, 2012 onward, based on his 2012 income of $56,846.00, taking into account the guidelines that changed on December 31, 2011.

[26] Her counsel has filed a Book of Authorities for the Court's consideration, which cases support the following propositions:

1. A payor is under-employed if he is not earning what he is capable of earning, particularly if laid off or dismissed for cause. In any event, the determination does not require a finding of bad faith.

2. The onus is on the payor to show he was only able to earn less, and that his current income represents his maximum earning capacity.

[27] The Court can also draw an adverse inference that the father had something to "hide". He has not provided complete financial disclosure including a 2013 T4, a statement of any overtime earnings for 2013, a statement of what efforts if any were made to find meaningful employment at his previous rate of pay, and reasons or grounds for his dismissal from Matrix Logistics. Additionally, he has not responded to her form 20 Request for Information, seeking the following:

• copies of all applications sent to various employers following termination;

• proof of all employers who rejected him based on his previous record;

• copies of all letters from any employer who rejected his application based on having a criminal record;

• a current resume;

• a letter from his previous employer, Matrix Logistics Services Limited, setting out grounds for dismissal, and a letter outlining length of employment and particulars as to the basis for termination;

• a copy of every letter already received from Matrix Logistics with respect to the dismissal;

• a copy of his criminal record and proof that the criminal record restricts his employability.

[28] It should be noted the father has not paid any child support since June, 2013. Up to this point, his wages at Matrix Logistics were being garnished.

[29] She confirms Alyssa is still enrolled in school, completing her grade 12 credits. She intends to enrol in a post-secondary college program in September, 2014. She undertakes to provide all financial disclosure of school expenses, including progress reports, in an effort to allow them to negotiate the appropriate contribution by both, and to avoid the necessity of having to return to Court to litigate this matter in the future.

[30] Finally, she is seeking costs fixed in the amount of $2,500.00 plus HST.

4:0 ANALYSIS

4:1 Issue 1 – Has the father established a material change in circumstances?

[31] The onus is on the father to establish, on a balance of probabilities, there has been a change in circumstances that would result in a different order.

[32] According to the father, he believes he has met this onus. He was earning $40,000.00 at the time of the order. When he commenced the Motion to Change, he calculated his income as $32,000.00. Furthermore, Alyssa had turned 18 (on August 25, 2013) and he had no information she was enrolled in school, thus still requiring child support.

[33] On the other hand, had he sought legal advice or information, or more carefully and accurately done his due diligence to review his legal obligations under the terms of the order, or merely contacted the mother or Alyssa to confirm her education status, he would have discovered his Motion to Change was not only premature, but substantially without merit.

[34] Accordingly, the Court finds he has not met this onus.

[35] This would have effectively ended the matter if his Motion to Change was the only matter to consider.

[36] However, the Court must consider the mother's response regarding retroactivity and whether the father is under-employed.

4:2 Issue 2 – Should the Court vary child support retroactively, and if so, to what date?

[37] The Court has jurisdiction to order retroactive child support payments.

[38] The leading decision in this area is D.B.S. and S.R.G. v. T.A.R. and L.J.W., 2006 SCC 37, [2006] 2 S.C.R. 231 (hereinafter referred to as D.B.S.). The majority decision of the Supreme Court of Canada addressed two general principles, namely, that both parents have an obligation to ensure their child receives the appropriate amount of support in a timely manner, and when faced with a retroactive claim, must balance the payor's interest in relying on the status quo with the need for fairness and flexibility.

[39] The Court set out 4 main factors to be considered:

1. The reason for the delay in bringing the claim.

2. The conduct of the payor.

3. The circumstances of the child.

4. Any hardship that may be caused by a retroactive award.

[40] There is no priority, necessarily, to these factors. None of them is decisive. The Court should strive for a holistic approach.

[41] Generally speaking, a claim for an increase in support should be calculated as of the date of "effective notice". That is, when the recipient indicated an increase in child support was requested. Unless the payor demonstrates bad faith or blameworthy conduct, the award should not be more than 3 years before formal notice.

[42] By applying these principles, it is intended that parents will understand they must pay their fair share when they should. This will hopefully discourage those who have been avoiding their financial responsibility and to serve as a reminder there is no profit or benefit from same.

[43] Applying the above-noted criteria, and the principles set out in D.B.S., the Court finds the following to be relevant factors:

1. Reasons for delay

[44] It is quite likely the father's incentive for bringing this Motion to Change had to do with his receiving notification that he was in arrears. Otherwise, given the significant passage of time (10 years) he would have continued to do nothing as he had a significant financial informational advantage where he was paying less than he should have. He should not be entitled to benefit from this delay.

[45] On the other hand, the mother could have made efforts to seek updated financial disclosure from him. However, the Order did not bestow on her a positive duty to do so. In any event, she was likely unaware of his financial circumstances, since they had little or no communication with one another.

[46] Accordingly, delay ought not to be a particularly weighty factor militating against the mother's position in this analysis.

2. The Conduct of the Payor

[47] The Court is entitled to take an expansive view of what constitutes blameworthy conduct. Anything that privileges the payor's own interest over his child's right to an appropriate amount of support constitutes blameworthy behaviour.

[48] The father cannot rely on the fact the mother did not request income information. The Order created a positive duty on him to provide same. Furthermore, it was not reasonable for him to assume the mother was content with the amount of support being paid.

[49] Accordingly, the Court places much more weight on this factor.

3. The Circumstances of the Child

[50] Although there was no specific evidence regarding any of Alyssa's past, present or future needs being unmet, it is a reasonable inference to draw that her interests could have been further advanced if there was more money available to support her. There was no evidence advanced that the mother or child were leading anything other than a basic lifestyle, notwithstanding her income over the relevant years was substantially more than the father's.

4. Hardship for the Payor

[51] This factor has diminished significance when the father, through his own misconduct, brought about the hardship.

[52] Although he should be entitled to move on in his life, and should not be left, necessarily, in a state of perpetual financial hardship, there is no evidence there has been an unfair burden placed on him with a debt for which he did not have a chance to address or plan for.

[53] Notwithstanding he is supporting another child on his own, his obligation to Alyssa should not be diminished.

[54] In all the circumstances, the Court finds child support should be increased retroactive to August 1, 2010 (the month following the actual 3 year anniversary date, July 15, 2010), 3 years from the date of the Motion to Change (July 15, 2013), in accordance with the D.B.S. principles.

4:3 Issue 3 – Is the father under-employed, and if so, should the Court impute income to him for purposes of determining child support and s. 7 expenses?

[55] Caution should be used when exercising judicial discretion to impute income.

[56] It is both an art and a science. It should be a contextual and purposive analysis.

[57] It is but one method employed by the Court to give effect to the joint and ongoing obligation of parents to support their child.

[58] Income may be imputed in circumstances where an individual is intentionally under-employed or unemployed (see: Drygala v. Pauli, 2002 CarswellOnt 3228 (C.A.) and s.19(1) of the Guidelines).

[59] However, the Court must undertake a 3-part analysis set out in Drygala as follows:

1. Is the payor intentionally under-employed or unemployed?

2. If so, is it by virtue of the needs of the child?

3. If not, what income is appropriately imputed in the circumstances?

[60] The onus is initially on the party seeking to impute to establish an evidentiary basis that the payor meets term #1 above. The Court must also consider the following factors:

• It is not necessary to establish bad faith or an attempt to thwart support obligations before imputing income.

• A payor is intentionally under-employed if he earns less than he is capable of earning having regard to all the circumstances.

• The Court must consider what is reasonable in the circumstances taking into consideration the age, education, experience, skills, and health of the payor, as well as his past earning history and the amount of income he could reasonably earn if he worked to capacity.

• There is a duty on the payor to actively seek out reasonable employment opportunities that will maximize his income potential so as to meet the needs of his dependant.

• A self-induced reduction of income is not a basis upon which to avoid or reduce support payments.

• The amount of income the Court imputes is a matter of discretion. The only limitation is there must be some basis in the evidence for the amount the Court chooses to impute.

• A party who voluntarily ceases his employment for selfish or bad faith reasons must make every effort to find alternate employment.

• The law is clear that where the under-employment is a result of one's own actions, or an event over which the payor had some control, the support obligation will not be reduced or cancelled.

• If an employer was justified in the firing, the payor cannot use his dismissal as a reason to reduce his support obligation.

• It is incumbent on the payor to provide evidence of the availability of job opportunities and adequate information on the types of jobs available, the hourly rates for such jobs and the number of hours that could be worked. If this is not provided, the Court can consider his previous earning history and impute an appropriate amount.

[61] The various cases provided by counsel for the Applicant support the above-noted propositions.

[62] Applying these, the Court finds the father is presently under-employed for the following reasons:

1. He made a unilateral decision, based on his dissatisfaction with his job at his own, and his daughter's expense.

2. His acts were not reasonable. He put his own needs ahead of hers, with no appreciation that his decision would have any short or long-term impact or benefit to the child.

3. The Court understands the practicality that one's obligation to pay child support should not necessarily control one's life. However, the decision to have a child carries with it an obligation to make personal sacrifices and compromises and to facilitate and provide for a child's best interests.

[63] In all the circumstances, the Court has no difficulty finding the father is intentionally under-employed from the date of his dismissal. It was not reasonable for him to have placed his long-term, apparently secure, and well-paying job in jeopardy.

[64] There is nothing about his age, health, experience, or skills which serves as an impediment or limitation on his ability to have either found a job with a similar remuneration range to the one he lost, or alternatively, to prevent him from seeking additional employment to reach that same level.

[65] He has not shown he has done everything possible to earn this comparable range of income.

[66] Accordingly, the three-part test set out in Drygala has been met.

5:0 CONCLUSIONS

[67] When considering the D.B.S. factors relating to retroactivity, and the principles relating to under-employment, the Order should not be changed in the father's favour.

[68] The Order should be changed, however, to reflect the position advanced by the mother.

[69] It should be noted the monthly amount of $145.00 for s.7 expenses was not contested by either party. Accordingly, this amount will continue on an ongoing basis.

6:0 ORDER

[70] The Court accepts the calculations made by counsel for the mother as set out in the chart in paragraph 23.

[71] Accordingly, the Court makes the following final order:

1. The final order of Justice J. Baldock, dated August 26, 2003, is hereby varied as follows:

(a) Arrears of child support from August 1, 2010 to December 31, 2010 are fixed at $3,984.00. The respondent father, Valmond Alphee McGraw, shall pay to the applicant mother, Julie Ann Gee, the said amount within 90 days of the date of this order.

(b) The said father shall pay to the said mother on behalf of the child, Alyssa Amber Lea McGraw, born August 25, 1995, the amount of $516.00 per month on imputed annual income of $56,846.00 from January 1, 2014, and on the first of each successive month thereafter.

2. The said father shall continue to pay $145.00 per month for s.7 expenses for the said child.

3. The said father shall pay his proportionate share of the said child's post-secondary educational costs. The said mother shall provide copies of all receipts and invoices to the said father, including progress reports and report cards, if authorized.

4. The parties shall exchange financial disclosure annually, including a sworn financial statement and copies of income tax returns, notices of assessment and notices of reassessment, by June 30, commencing in 2014.

5. Costs are fixed in the amount of $2,500.00 plus HST, which amount is payable within 120 days, and is to be otherwise enforced as child support.

6. A support deduction order shall issue.

7:0 COSTS

[72] The mother is the successful party in this proceedings.

[73] She was prepared to negotiate the issue of retroactivity, however the father did not contact her at all prior to filing his Motion to Change.

[74] The costs amount sought by the mother is reasonable in the circumstances.

Released: February 20, 2014

Justice S.R. Clark

[1] Respectfully, this does not appear to be accurate. 12 months x $2,900.00 = gross annual income of $34,800.00, not $48,584.06.