Court File and Parties

Court File No.: D1573/98

Date: 2015-01-12

Ontario Court of Justice

Between:

Fiona Baxter Not Attending and Noted in Default Applicant

- and -

Michael Beharry Acting in Person Respondent

And Ontario Court of Justice Court File No.: FO-98-1573-E000

The Director of the Family Responsibility Office for the Benefit of Fiona Baxter Applicant

- and -

Michael Beharry Respondent

Counsel:

• Carolyn Brett, for the Applicant
• Acting in Person (Michael Beharry)
• Carol J. Smith, for the Assignee, City of Toronto

Both Heard: January 6, 2015

Justice: S.B. Sherr

Reasons for Decision

Part One - Introduction

[1] The respondent (the father) has brought a motion to change the support order of Justice Russell Otter dated January 4, 2006 (the existing order). He has asked the court to rescind all of his child support arrears.

[2] The applicant (the mother) did not file any responding material on this motion to change or attend at court. She was noted in default.

[3] The mother was on public assistance for several periods of time prior to January 4, 2006 and assigned her interest in support for these periods to the assignee, the City of Toronto (the assignee).[1]

[4] The existing order resulted from a prior motion to change brought by the father. Justice Otter reduced the father's support arrears in the existing order to $60,000, entirely payable to the assignee. He ordered the father to pay ongoing child support to the mother for their child (now 21 years old), in the sum of $345 per month, based on an imputed income of $40,000 per annum.

[5] The father is presently $39,080.42 in arrears of child support. The sum of $8,080.42 is owing to the mother and the sum of $31,000 is owing to the assignee.

[6] The assignee asks that the court dismiss the father's motion to rescind the support arrears owed to them. It proposed that the father repay these arrears at the rate of $300 per month. It took no position with respect to the arrears owed to the mother.

[7] The Director of the Family Responsibility Office for the benefit of the applicant (the Director) has brought a default proceeding against the father pursuant to section 41 of the Family Responsibility and Support Arrears Enforcement Act (FRSAE).

[8] The parties agreed that these two matters would be heard consecutively. This is my decision in both cases.

[9] The Director made submissions in the default proceeding at the close of the hearing of the father's motion to change. The Director asked that the terms of the default order it sought be applied to any new order made by the court.[2] The father opposed any default order being made.

Part Two – Background Facts

[10] The father is 42 years old.

[11] The mother and father never cohabited. They dated from 1996 until 2001. They had the one child together.

[12] The mother applied for custody and child support in 1998. On February 14, 2000, Justice Heather Katarynych held a hearing and made a final order imputing annual income to the father in the sum of $1,000,000.00 dollars for support purposes.

[13] The court was advised that the father was subsequently jailed on two occasions after default proceedings. On one occasion, in 2003, he was committed to jail for 87 days, or until he paid the sum of $30,000. He paid this amount and was released from jail after three days.

[14] The father moved in 2004 to change the order of Justice Katarynych. A trial was held before Justice Otter over 9 days in 2004 and 2005. The existing order was made on January 4, 2006. See: Baxter v. Beharry, 2006 ONCJ 1.

[15] The reasons for decision of Justice Otter set out that the father had owed child support in the sum of $642,391.34 as of November 29, 2004. Justice Otter reduced these arrears to $60,000, all owing to the assignee.

[16] The Director started their latest enforcement proceeding on September 19, 2013. The default hearing was adjourned to permit the father to bring this motion to change. With the assistance of the Family Law Service Centre, he issued his motion to change on June 19, 2014.

Part Three – The Father's Evidence

[17] The father spent considerable time at the hearing airing his grievances about the mother, his former lawyers, The Director and the assignee. He feels that he has been unfairly persecuted since 2000. He deposed that he has never earned the incomes imputed to him and has never had the ability to pay the support orders.

[18] The father claims that he was self-employed as a Disc Jockey from 1986 until December 21, 2011, earning about $8,000 per annum. The father filed income tax returns for the years 2006-2013. His 2013 return reflects that no income was earned. In the other years, the highest reported income was $10,695.75 in 2010 and the lowest reported income was $4,360 in 2011.

[19] On December 21, 2011, the father was involved in a car accident. He says that he has not worked since then. He says that he suffered injuries to his left shoulder, neck and head. He says that he has suffered from depression since the accident and is unable to work.

[20] The father says that he has been fully supported by his aunt and father since the accident.

[21] The father has not applied for Ontario Disability Support Payments (ODSP). He advised the court that he has applied for accident benefits through his automobile insurer, but has been denied. He said that an arbitration hearing with the insurer has been scheduled.

[22] The father is estranged from the child. He said that he was advised in 2013 that the child had completed school and was working full-time. He sent a request to the Director on June 4, 2014 to terminate support. The mother did not agree with this.

[23] The father told the court that he has another child living with him.

Part Four – Legal Considerations

[24] The father's motion to change support is governed by subsection 37 (2.1) of the Family Law Act which reads as follows:

Powers of Court: Child Support

(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,

(a) discharge, vary or suspend a term of the order, prospectively or retroactively;

(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and

(c) make any other order for the support of a child that the court could make on an application under section 33.

[25] In DiFrancesco v. Couto, 2001 O.J. No 4307 (C.A.) the Ontario Court of Appeal stated that the discretion to reduce arrears must be exercised judicially and set out the following factors to be considered:

a) The nature of the obligation to support, whether contractual, statutory or judicial.

b) The ongoing financial capacity of the payor.

c) The ongoing need of the custodial parent and the dependent child.

d) Unreasonable and unexplained delay on part of the custodial parent in seeking to enforce payment of the obligation, tempered, however, in the case of child support with the fact that such support exists for the child's benefit, is charged with a corresponding obligation to be used by the custodial parent for the child's benefit and cannot be bargained away to the prejudice of the child.

e) Unreasonable and unexplained delay on the part of the payor in seeking appropriate relief from his obligation; and

f) Where the payment of substantial arrears will cause undue hardship, the exercise of the court's discretion on looking at the total picture, weighing the actual needs of the custodial parent and child and the current and financial capacity of the respondent, to grant a measure of relief where deemed appropriate.

g) Whether the payor made any voluntary efforts at compliance with the order.[3]

[26] The mere accumulation of arrears without evidence of a past inability to pay is not a change in or special circumstance. Present inability to pay does not by itself justify a variation order. It should only be granted if the payor can also prove a future inability to pay. Otherwise, the option is to suspend, or order repayment of arrears. See: Haisman v. Haisman, 1994 ABCA 249, 157 A.R. 47 (C.A.).

[27] Parents have a joint and ongoing obligation to support their children. In order to meet this obligation, the parties must earn what they are capable of earning. See: Drygala v. Pauli, [2002] O.J. No. 3731 (Ont. CA).

[28] The court must have regard to the payor's capacity to earn income in light of such factors as employment history, age, education, skills, health, available employment opportunities and the standard of living earned during the parties' relationship. The court looks at the amount of income the party could earn if he or she worked to capacity. See: Lawson v. Lawson.

[29] Support payors must use reasonable efforts to address whatever medical limitations they may have to earn income. This means following up on medical recommendations to address these limitations. See: Cole v. Freiwald, [2011] O.J. No. 3654, per Justice Marvin A. Zuker, paragraphs 140 and 141.

[30] In Mao v. Zhao, [2007] O.J. No. 4587 (SCJ) the court did not rescind arrears of a payor in receipt of ODSP, because the medical evidence filed did not indicate that the disability would prevent the payor from working in the future.

Part Five – Change in Circumstances and Arrears Owing to the Mother

[31] The court is satisfied that there have been changes in circumstances that warrant a reexamination of the existing support order and the arrears owing to the mother.

[32] The child is almost 22 years old. The father alleged that the child has not been eligible for support since at least 2013. The mother, despite being properly served, chose not to oppose the father's motion to terminate support and rescind the arrears owing to her.

[33] Further, the father filed enough evidence to show that his ability to earn income since his car accident on December 21, 2011 has been compromised.

[34] The father filed the following corroborative evidence:

a) A medical note from Dr. Ingber dated June 4, 2014, stating that the father is unable to work at this time due to a left shoulder injury, chronic, suffered in the motor vehicle accident. He wrote that the father had weakness and a decreased range of movement. He said that the father also had depression. Lastly, he wrote that the father will likely be off work for an indefinite period.

b) A report of Dr. Jones, a psychiatrist, dated June 5, 2014, stating that the father remains unable to work due to Persistent Depressive Disorder and Chronic Pain resulting from the motor vehicle accident.

c) A letter from ICS Legal Services dated June 6, 2014, confirming that the father is claiming accident benefits.

d) A letter dated December 29, 2014 from KMH Diagnostic Centre, stating that the father attended in December of 2014 for two MRI appointments, as requested by his family doctor.

[35] The court also had the opportunity to observe the father. He is clearly a very troubled and unhappy man. He had difficulty maintaining his focus and his presentation was often rambling. He would quickly change topic, for example switching from complaining about his treatment by the Director and the assignee to advising the court that he knows that he is handsome or aggrandizing about his reputation in the music community. It is difficult to imagine that he would presently be an attractive employee to most employers. The court finds that his employment prospects are limited at this time.

[36] The arrears owing to the mother were accumulated after the existing order was made. Most (if not all) of the arrears were accumulated after the father's ability to earn income was impaired by the car accident. A portion of the arrears were also accumulated after the child was likely no longer eligible for support.

[37] The court will terminate the ongoing support order and rescind all of the arrears owing to the mother.

Part Six – Arrears Owing to the City of Toronto

[38] The arrears owing to the City of Toronto must be treated differently than those owing to the mother. This is because they were accumulated prior to the existing order on January 4, 2006 and before any change in the father's circumstances.

[39] The father wanted the court to go behind the existing order and find that it was wrongly decided. The court is not prepared to do this. Justice Otter made findings of credibility after a nine-day trial. He was in the best position to assess the father's ability to earn income. The father did not appeal this decision. The law was summarized by Justice Sheilagh O'Connell, who wrote in paragraph 38 of Nejatie v. Signore, 2014 ONCJ 653:

It is well settled law that, if income is imputed, then the issue will generally be res judicata on a motion to vary or change support. See: Bemrose v. Fetter, 2007 ONCA 637, 228 O.A.C. 311, 42 R.F.L. (6th) 13, [2007] O.J. No. 3488. Although the court always has discretion with respect to the issue of res judicata and can consider fraud, fresh evidence, additional disclosure or issues of fairness, the principle of res judicata provides that generally, a matter cannot be re-litigated once it has been determined on its merits.

[40] Justice Otter did not find the father to be a reliable witness. He made the following findings in his decision:

a) The evidence of Mr. Beharry suffered from an almost total lack of credibility.

b) Mr. Beharry is healthy, intelligent and able-bodied, with limited work experience and education.

c) The level of $100,000 per year was imputed to Mr. Beharry when the evidence showed that he loaned his company $100,000 per year for four consecutive years.[4]

[41] There is also no merit to the father's request to adjust the amount of income imputed to him (for the purpose of rescinding arrears) from 2006 until the date of the accident on December 21, 2011. In paragraphs 51-60 of Trang v. Trang, 2013 ONSC 1980, the court discussed how courts should address support change motions when income was imputed to a payor in the existing order as follows:

51. When a court imputes income, that's a determination of a fact. It's not an estimate. It's not a guess. It's not a provisional order awaiting better disclosure, or further review. It's a determination that the court had to calculate a number, because it didn't feel it was appropriate to rely on – or wait for -- representations from the payor.

52. A party who argues that an imputed income level is no longer appropriate must go beyond establishing their subsequent "declared" income. They must address why income had to be imputed in the first place. They must present evidence of changed circumstances which establish that either:

a. It is no longer necessary or appropriate to impute income. The payor's representations as to income should now be accepted, even if they weren't accepted before.

Or,

b. Even if income should still be imputed, changed circumstances suggest a different amount is more appropriate.

53. If "declared income" automatically prevailed on a motion to change support, it would defeat the purpose of imputing income in the first place. It might even be a disincentive for payors to participate in the initial court process. They could simply ignore support Applications – as they often do. They could wait to see if the court imputes income, and how much. If dissatisfied with the amount, the payor could later return to court waving their tax returns, to suggest that the original judge got it wrong.

54. Support claimants should not be forced to go through this two-step process. Our family court system certainly can't afford it.

55. Similarly, the onus should not fall on the support recipient to establish why income should still be imputed on a motion to change. That determination has already been made. The onus is on the support payor to establish that there should be a change in the way their income is to be calculated.

56. If for example the original support order imputed income because the court concluded an unemployed payor should have been working, it would be illogical to allow the payor to extinguish that determination by returning on a motion to change, with proof that he wasn't working. That wouldn't constitute a change in circumstances.

57. If a trial judge imputed income to a self-employed person on the basis that their tax return didn't reflect cash sales and excessive write-offs, there should be a presumption that so long as the payor maintains the same business activities and accounting practices, subsequent tax returns will be equally unreliable.

58. Imputed income matters. The reason why income had to be imputed matters.

59. If an aggrieved party feels income was wrongly imputed, they can take timely steps to correct the original determination. They can appeal. They can bring a motion to set aside the order based on mistake or misrepresentation.

60. But if a payor proceeds by way of motion to change, they must face the presumption that the original order was correct – and the original imputation of income was correct. If they want to rely on their declared income, they must establish why this time their representations should be accepted by the court.

[42] The father did not meet his onus of showing that there was a change in circumstances affecting his income from January 4, 2006 until December 21, 2011. He continued to report annual income to Revenue Canada similar to that reported in the years leading up to the trial before Justice Otter. He provided no evidence of medical impairment during this period. He attributed large deposits in his bank accounts to casino winnings and managing monies for his disabled mother. He provided no corroboration for this. It is more probable than not that he was earning income, or was capable of earning income, between 2006 and the end of 2011, similar to that imputed to him by Justice Otter. The father also reported in 2011 that he had lottery winnings of over $10,000. He applied none of this money to his support arrears.

[43] The father also gave the court no reason to differ with Justice Otter's findings about his credibility. The father explained to the court that he would lie about his income on credit and bank applications in order to be approved for financing.[5] He claimed to have no knowledge of how to get ODSP, yet Justice Otter wrote about how the father's own father had been on ODSP. He has historically tried very hard to avoid his child support obligations.

[44] While the court accepts that the father's present ability to work has been compromised, the evidence did not establish that the father would be unable to pay child support in the future.

[45] The court makes this finding for the following reasons:

a) The father has an outstanding claim for accident benefits against his insurer. An arbitration hearing has been scheduled. There is the possibility that the father will be entitled to a substantial award. The father submitted that this potential award was necessary to "set up his future" for him and his other son. He did not want any of these proceeds to be applied to his support arrears. This was an unreasonable position and highly reflective of the father's historical attitude towards his child support obligations.

b) The father appears to be eligible for ODSP. This would pay him about $13,000 per annum. The father has an obligation to maximize his ability to obtain income, and at a minimum, he should be applying for these benefits.

c) The father provided no evidence that his inability to work is permanent.

d) The father has not followed treatment recommendations of his doctors. He has not:

1. Attended at a multi-disciplinary pain clinic.

2. Attended for cognitive behavioural therapy.

3. Addressed his substance abuse issues.

e) The father has not been taking the necessary steps to address his pain and depression. He has a responsibility to do this when he has an outstanding support obligation. If he takes these steps, it could increase his opportunities to earn income.

f) The father provided scant information regarding treatment, counseling, therapy or regular psychiatric treatment, despite a court order that he provide details about this.

g) Cogent medical evidence in the form of detailed medical opinion should be provided by the payor in order to satisfy the court that they will be unable to work. See: Cook v. Burton, [2005] O.J. No. 190 (SCJ) and Stoangi v. Petersen, [2006] O.J. No. 2902 (SCJ).

[46] The court also considered the following:

a) The father has not historically exercised good faith towards his child support obligations. He has treated this obligation with hostility. He has been jailed twice as a result of enforcement proceedings. On one occasion, he spent 3 days in jail until he paid $30,000 in arrears. The father advised the court that he only was able to pay this because his father won $80,000 at the racetrack. The father won over $10,000 in lotteries in 2011. None of this money was paid towards his support arrears. His explanation was that he had to pay back other people who had helped him. This was unreasonable behaviour. He stopped paying any child support in 2012.

b) The court does not accept the father's evidence that he is not receiving any income. He has historically worked "under the table" and has reported income at a poverty level. Yet, he has always been able to support himself, and currently supports himself and his son. There is evidence that he uses a substantial amount of marijuana. He has to finance this. The father's bank accounts often show large deposits. The father deposed that these are due, in part, to casino winnings. Again, none of these monies have been applied to child support. The father also provided no corroboration to support his evidence that many of these deposits related to handling monies for his mother. The father claimed that he was being supported by his father, but in Justice Otter's decision, it was noted that his father was on ODSP. The father provided no tangible evidence about how he supports himself and his son.

c) Any hardship arising from a requirement to repay the arrears can be ameliorated by a reasonable repayment order.

d) The taxpayer has had to substantially support the child when the father was found to have the ability to support him. This is fundamentally unfair. The father would have had to present compelling evidence that he would be unable to repay his arrears in the future to have them discharged. He did not do this.

[47] The next step is to determine a reasonable repayment order. The assignee asks that the father be required to pay $300 per month towards his arrears. Its primary argument was that the father was still capable of earning close to $40,000 per annum and could afford this amount. The court finds that this sum is too high and the father is not capable of paying this amount, particularly based on its observations of him set out in paragraph 35 above.

[48] The court finds that the father is capable of paying the sum of $150 per month towards his arrears at this time, based on its findings above. At a minimum, the father should be immediately applying for ODSP. The father will be ordered to begin making these payments on March 1, 2015. The delay is deliberate to give the father every reasonable opportunity to organize his affairs in order to make these payments.

[49] This order will not preclude the Director from enforcing arrears against any insurance proceeds arising from his car accident, or against any government payments (such as HST or income tax refunds), lottery or prize winnings.

[50] The father will be required to provide the Director and the assignee with:

a) Copies of his income tax returns and notices of assessment by June 30th each year.

b) Notification about when he will receive any insurance proceeds, within 5 days of his becoming aware of this.

c) Details of any employment within 5 days of being hired, including the name, address and phone number of the employer and his rate of pay.

[51] The assignee will be entitled to move for an order for accelerated repayment of the arrears if it learns about any additional ability of the father to obtain income.

Part Seven – Default Order

[52] The Director sought a default order pursuant to subsection 41 (10) of the FRSAE that the father be committed to jail for three days for each default in the monthly payments, as established in the new support order.[6]

[53] The court finds that the father has the ability to pay the arrears by making periodic payments as set out in paragraph 48 above. The father has had a poor payment history. Collection efforts have rarely been successful without the threat of imprisonment. The court finds that the Director's submissions concerning the terms of a default order are fair and proportionate and an order will go on those terms.

[54] If the Director seeks a warrant of committal for non-compliance with this default order, the Director will be required to serve the father with this motion by special service to give him the opportunity of addressing his default in court before he is imprisoned.

Part Eight – Conclusion

[55] In the father's motion to change, a final order will go on the following terms:

a) The existing order for the father to pay child support is terminated.

b) The child support arrears owing to the mother are rescinded.

c) The child support arrears owing to the assignee, City of Toronto are fixed at $31,000 as of December 31, 2014. The father's motion to rescind all or part of these arrears is dismissed.

d) The father shall repay these arrears to the assignee, City of Toronto, at the rate of $150 per month, starting on March 1, 2015.

e) This order will not preclude the Director from enforcing arrears against any insurance proceeds arising from the father's car accident or against any government payments (such as HST or income tax refunds), lottery or prize winnings.

f) The father will be required to provide the Director and the assignee with:

1. Copies of his income tax returns and notices of assessment by June 30th each year.

2. Notification about when he will receive any insurance proceeds, within 5 days of his becoming aware of this.

3. Details of any employment within 5 days of being hired, including the name, address and phone number of the employer and his rate of pay.

g) The assignee, City of Toronto, will be entitled to move for an order for accelerated repayment of the arrears if they learn about any additional ability of the father to obtain income.

h) A Support Deduction Order shall issue.

[56] In the Director's default proceeding, a final order shall go as follows:

a) The father shall be required to pay the amount of $150 per month towards arrears, as ordered in paragraph 55 above, starting on March 1, 2015.

b) The father shall be committed to jail for 3 days, or until the outstanding amount is paid (whichever is lesser) for each default in payment.

c) The Director shall serve the father with any motion for committal arising from any default by special service.

[57] The court understands that this was a very difficult process for the father. It was intimidating to act on his own with two highly-skilled lawyers opposing him. Despite his anger and frustration he treated the process and the court with respect. The court appreciates that. Hopefully, this decision will provide him with clarity about his child support obligations. The monthly amounts he has to pay to avoid jail are relatively modest. The court hopes that he will follow his doctor's recommendations and move forward constructively with his life, now that this case is over.

[58] This decision also means that, even though it will likely take many years, the taxpayer will be indemnified for supporting the child, during the time that the father should have been paying this support.

[59] Lastly, the court thanks counsel for the assignee and the Director for their sensitive and balanced presentation of this case.

Justice S.B. Sherr

Released: January 12, 2015

Footnotes

[1] Subsection 34 (3) of the Family Law Act provides that an order for support may be assigned to a municipality that provides social assistance payments to a support recipient.

[2] Subsection 41 (22) of the FRSAE provides that if an order changing a support order is made while a default hearing is under way, the default hearing continues, it is not necessary to serve fresh documents and the payment terms of the changed support order shall be incorporated into any subsequent default order under subsection 41 (10).

[3] The payor's failure to make such efforts was a factor that militated against even partial rescission of the arrears in DiFrancesco.

[4] Justice Otter determined support arrears by attributing different levels of income to the father between 2000 and 2006. He imputed his annual income at $100,000 for four of those years.

[5] The father explained that it had been wrong for the court to impute income based on his exaggerated statements of his income on his credits applications as everybody does this.

[6] Subrule 41 (10) of the FRSAE reads as follows:

Powers of Court

41 (10) The court may, unless it is satisfied that the payor is unable for valid reasons to pay the arrears or to make subsequent payments under the order, order that the payor,

(a) pay all or part of the arrears by such periodic or lump sum payments as the court considers just, but an order for partial payment does not rescind any unpaid arrears;

(b) discharge the arrears in full by a specified date;

(c) comply with the order to the extent of the payor's ability to pay;

(d) make a motion to change the support order;

(e) provide security in such form as the court directs for the arrears and subsequent payment;

(f) report periodically to the court, the Director or a person specified in the order;

(g) provide to the court, the Director or a person specified in the order particulars of any future change of address or employment as soon as they occur;

(h) be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the arrears are paid, whichever is sooner; and

(i) on default in any payment ordered under this subsection, be imprisoned continuously or intermittently until the period specified in the order, which shall not be more than 180 days, has expired, or until the payment is made, whichever is sooner.