Court File and Parties
Court File No.: Halton 210/12 Date: 2015-05-15 Ontario Court of Justice
Between: Gabrielle Vetro Applicant
— And —
Dominic Vetro Respondent
Before: Justice Sheilagh O'Connell
Heard on: November 19, 2013, January 14, 2014, February 13, 2014, March 20, 2014, June 18, 2014, October 1, 2014, and December 15, 2014
Reasons for Judgment released on: May 15, 2015
Counsel:
- Gabrielle Vetro ............................................................................................... acting in person
- Faryal Rashid ........................................................................................... for the respondent
O'CONNELL, J.:
1: INTRODUCTION
[1] This is the default hearing brought at the instance of the applicant, Ms Gabrielle Vetro. She seeks an order that the arrears of support owed by the respondent be fixed in the amount of $719,975.65, as of December 30, 2014. She further seeks an order that the respondent pay the arrears in full forthwith, and that he pay the ongoing order of child support in the amount of $3,000.00 per month, commencing forthwith.
[2] The enforcement remedy being sought by the applicant in this proceeding is an order for incarceration of the Respondent.
[3] The applicant further seeks an order adding Margie McNeil, the respondent's girlfriend, as a party to the default proceedings pursuant to subsection 41 (5) of the Family Responsibility and Support Arrears Enforcement Act ("the Act").
[4] The respondent, Mr. Dominic Vetro, acknowledged in his sworn Default Dispute, dated November 4, 2013, that the arrears set out in the Statement of Money Owed, dated November 15, 2013 and updated by the applicant on December 18, 2014, are correct.
[5] The only issue to be decided is the appropriate remedy to be ordered by the court.
2: POSITION OF THE PARTIES
The Applicant's Position
[6] The applicant states that the respondent is wilfully evading the support orders made in the Superior Court of Justice. He has failed to make child support payments required under both the interim and final orders of the Ontario Superior Court of Justice, both of which orders have been upheld by the Court of Appeal of Ontario. He has been in breach of numerous court orders.
[7] The applicant submits that the respondent has brought two previous motions to change in which he has claimed that he was unable to work as a result of severe depression and anxiety. Both were dismissed. This is the same claim that the respondent is making in this proceeding as justification for his inability to pay support.
[8] The applicant further submits that despite two unsuccessful appeals to the Ontario Court of Appeal, both of which were dismissed unanimously and in their entirety, the respondent has chosen to pay nothing towards child support and continues to refuse to comply with the court orders made.
[9] Finally, the applicant claims that as soon as the appeals were dismissed, the respondent applied for Ontario Works (OW) and ODSP so as to choreograph his affairs in such a way to be unable pay support. She submits that the respondent has deliberately orchestrated his impoverishment to avoid his child and spousal support obligations.
The Respondent's Position
[10] The respondent submits that he does not have the capacity to pay the arrears and support owing and that the court should exercise one of its alternative powers under section 41(10) of the Act, more specifically, that the default hearing be adjourned pending the respondent's motion to change the support orders. In the alternative, he argues that the default hearing be heard with a motion to change the final order.
[11] He states that he is currently in receipt of Ontario Disability Support payments (ODSP) and CPP disability benefits and that he does not earn enough money to pay the child and spousal support as ordered. He states that he is currently unable to work and is under the care of a psychiatrist for severe anxiety and depression. He argues that the documentary evidence that he provided confirms that his mental health situation has rendered him disabled and that OW, ODSP, and CPP have all confirmed this diagnosis.
[12] The respondent therefore submits that his inability to pay the support and arrears owing is for valid reasons, in accordance with the Act's requirements.
3: BACKGROUND OF LEGAL PROCEEDINGS
[13] It is not disputed that the parties were married for approximately 23 years. The parties have four children, three of whom are now in university (or just finishing) and one still in high school at the time of the default hearing. The applicant was a stay-at-home mother. It is not disputed that the respondent had a history of earning high income during the parties' marriage and was earning a significantly high income at the time of the separation, well over $200,000.00 per annum.
[14] The respondent was ordered to pay interim child and spousal support in the Superior Court of Justice following the parties' separation. He fell into arrears of the interim spousal and child support orders that had been made shortly thereafter.
[15] The respondent brought two motions to change his court ordered child support and spousal support: the first motion to change was commenced on August 10, 2011 and the second motion to change was commenced on June 27, 2012. Both motions to change were dismissed in their entirety.
[16] The Family Responsibility Office ("FRO") held a default hearing in January of 2012 and brought proceedings to suspend the respondent's passport. The respondent agreed to a temporary default order and a payment schedule of $3000.00 per month towards the child support arrears as he needed his passport for a trip to Europe.
[17] The respondent left on his trip to Europe and immediately upon his return, it is not disputed that the respondent did not comply with the temporary default order. FRO suspended the respondent's driver's license on July 9, 2012 and brought a writ of seizure and sale against the respondent. FRO proceeded to suspend the respondent's passport for a second time and commenced a further default proceeding.
[18] On August 23, 2012, the respondent's pleadings were struck in the Superior Court of Justice by Justice D. K. Gray for failure to comply with a number of court orders regarding payment of child support, spousal support, financial disclosure, and costs. On June 27, 2012, Justice Gray ordered the respondent to repay the children's RESP in the amount of $5,500.00, which he had cashed out and spent. The respondent was ordered to repay this amount by July 5, 2012. The respondent did not pay this amount however, on the day before the motion to strike his pleadings, he repaid $2,000.00 towards that amount. In Justice Gray's decision to strike the respondent's pleadings, he states the following at paragraphs 34 to 40 of his decision:
"I accept that pleadings should be struck only in clear cases. However, this is such a case.
While the applicant, in his most recent affidavit, purports to acknowledge that court orders are not suggestions and that they must be complied with, his conduct suggests otherwise.
The orders for interim support were made based on the applicant's own evidence as to his income. He went into default almost immediately, and any compliance since the orders were made has been minimal, and has been made only on the eve of scheduled trials or motions. Indeed, he reneged on an agreement he made with FRO to pay $3,000 per month. He now says he cannot afford to pay the amount he agreed to pay. I find that very hard to believe.
The applicant's assertion of his financial situation and his level of income have varied according to what suits his interest at any particular point in time. His failure to pay court-ordered support is egregious, and cannot be tolerated.
Perhaps the most shocking aspect of the applicant's conduct is his treatment of the RESP. That account was set up to assist in the education of the parties' children. The applicant literally stole the money for his own purposes. When this was finally disclosed, because he could not hide it any longer, he agreed to repay the money, and now says his position was misrepresented. If I take his latest affidavit at face value, he has repaid only $2,000 of the amount he took.
I am not at all satisfied that the applicant has made full disclosure, even now. Once again, any disclosure he has made has been late, reluctantly made, and less than fulsome.
Even without the issues regarding disclosure, I would strike the applicant's pleadings simply on the basis of his non-compliance with court orders regarding support, and particularly his conduct regarding the RESP."
[19] On October 25, 2012, the respondent brought a motion before Justice Murray of the Superior Court of Justice to have his pleadings reinstated. Justice Murray dismissed the motion.
[20] On November 19, 2012, following an unopposed hearing that lasted two days, Justice M. J. Donohue of the Ontario Superior Court of Justice made a final order for monthly child support of $3,000.00, and fixing the child support arrears owed by the respondent at $231,128.44. She further ordered that the respondent pay section 7 arrears in the amount of $41,195.35 and that the total future lump sum spousal support payments owed is $770,811.00. She also ordered that the respondent pay the applicant prior cost awards and fifty percent of the interest payments owing on the joint line of credit. The total amount owing by respondent was $1,096,167.14. From that amount, Justice Donohue deducted the sum of $463,693.39 which was the respondent's share of the equity in the matrimonial home, so that the lump sum spousal support owed was $634, 973.75.
[21] For further clarification, the Order was amended on October 22, 2013 to provide that the monthly child support shall commence on November 19, 2012, and the lump sum spousal support of $634,973.75, as set out in the above Order, shall be paid as of November 19, 2012.
[22] The balance owing by the respondent to the applicant was to be enforced by the Family Responsibility Office.
[23] The respondent appealed both Justice Gray's Order and Justice Donohue's Order to the Court of Appeal for Ontario. On December 20, 2012, the respondent brought a motion before the Court of Appeal of Ontario requesting that Justice Donohue's ruling be stayed. Justice McPherson of the Court of Appeal dismissed the motion. In his endorsement dismissing the motion to stay, he states the following:
"I can see no error in Donahue J's order following an uncontested trial. The appeal strikes me as frivolous. The moving party [respondent in this proceeding] has a long history of avoiding his obligations to the respondent [applicant in this proceeding]. On the record before me the moving party has been very unfair to the respondent for a long time. The motion is dismissed."
[24] On January 31, 2013, Justice McPherson ordered that the respondent be given until Friday, February 8, 2013 to serve and file his Notice of Appeal. Before doing so, the court ordered that he must pay his outstanding costs orders totaling $7,750.00, as well as $9,000.00 representing the monthly child support payments of $3000.00 for December 2012, January and February 2013. Justice McPherson further ordered that after the Notice of Appeal was filed the respondent must continue to make his $3000 child support payments on the first day of each month until his appeals are heard. Justice McPherson ordered that if the respondent did not comply with any of these terms, then his appeal would be dismissed.
[25] Following this Court Order, dated January 31, 2013, the respondent made all of the above payments in full immediately so that his appeal could proceed (a total of $17, 750.00).
[26] On May 6, 2013, the respondent's appeals of Justice Gray's Order and Justice Donohue's order were heard in the Ontario Court of Appeal. The respondent's appeals were dismissed unanimously by the court on that day. In their reasons for dismissing the appeals, the Court of Appeal stated as follows:
The appeal from the order of Gray J. striking the appellant's pleadings
2 The appellant submits that the motion judge erred in not creating any roadmap by which the appellant could reinstate his pleadings after striking them. The appellant further submits that in striking his pleadings the motion judge was obliged to give him an opportunity to correct or explain his default and that he did not do so.
3 We disagree. The motion judge began by correctly stating the governing legal principle, namely that striking a pleading is a serious matter, and should only be done in unusual cases: Marcoccia v. Marcoccia (2009), 2008 ONCA 866, 60 R.F.L. (6th) 1 (Ont. C.A.), at para. 3.
4 The appellant had been given prior opportunities to correct and explain his default and the motion judge made findings of fact to the effect that he had not done so. Gray J. found that the orders for interim support were made on the appellant's own evidence, that he went into default almost immediately and that any compliance since then had been minimal and only on the eve of scheduled trials or motions. We note, as well, that the motion judge was not satisfied the appellant had yet made full disclosure despite the existence of a long standing disclosure order and attempts at enforcing it. The motion judge found that the appellant's assertion of his financial situation and level of income varied according to what suited his interest at any particular point in time.
5 In addition, the appellant took money from the children's R.E.S.P. for his own purposes and although he agreed to repay the money he had only repaid $2,000 of the $5,500 he took. Irrespective of the issues of disclosure, the motion judge struck the pleadings on the basis of the appellant's non-compliance with prior court orders and, having regard to the history and circumstances of the case, he was entitled to do so without giving the appellant any further opportunity to correct or explain his defaults.
6 In these circumstances we see no error in the motion judge's exercise of discretion to strike the pleadings. He correctly articulated the law and made findings of fact to support his application of it.
7 We wish to add that the reasons of Donohue J. indicate that, prior to trial, the appellant brought an unsuccessful motion before Murray J. to reinstate his pleadings. This fact was not set out in the appellant's factum, nor were any of the relevant documents, including a copy of the order dismissing the motion, in the appellant's appeal book. In the absence of a record of the proceedings before Murray J. and his order, it is not clear that we had the jurisdiction to deal with the appeal from the order of Gray J. Nonetheless, on the assumption that it was within our jurisdiction, we considered the appeal of Gray J.'s order and, as indicated, dismiss it.
The appeal from the order of Donohue J.
8 The essential aspects of the appellant's appeal from the order of Donohue J. involve: 1) the amount of income imputed to the appellant and respondent for support purposes; and 2) the vesting of title to the matrimonial home in the respondent.
Income imputed for support purposes
9 The trial judge made findings of fact for which there was ample evidence in the trial record. We are not satisfied that she made any error in the amount of income that she imputed to the appellant. She imputed to him the amount of income he had been able to earn during a substantial period of the marriage. Although the appellant complains that the trial judge did not take into consideration his financial position, it is clear that she considered such financial disclosure as the appellant saw fit to make, including his bank statements, his tax returns and his deposition under questioning in November 11, 2010. Notwithstanding counsel's submissions respecting the variations in the appellant's income, the figure the trial judge imputed was a figure that was in keeping with a long history of the appellant's income and his capacity to earn income.
10 The issues of support are tied to the imputed income and we need say nothing more about those.
Vesting of title to the matrimonial home
11 The appellant contests the valuation put on the matrimonial home by the trial judge and submits she should have used a valuation of $3 million. The appellant further submits that the respondent did not seek a vesting order and that there was no basis for the trial judge to make the order and no jurisdiction to do so.
12 We disagree. The appellant's own evidence showed valuations of the matrimonial home ranging from $1.5 million, to $1.85 million, to $3 million all as of November 7, 2008, the date of separation. In addition, there was evidence that the house needed work to be done to it.
13 In making her calculation vesting the husband's one-half interest in the matrimonial home in partial satisfaction of the appellant's arrears and lump sum support obligations, the trial judge used the current appraisal of the home obtained by the wife in the amount of $1.65 million. This figure is supportable on the evidence and we would not interfere with it.
14 As to the vesting order, the respondent asked the trial judge to make such an order given the appellant's history of non-payment and the trial judge was entitled to do so. Finally, the decision of this court in Lynch v. Segal (2006), 82 O.R. (3d) 641, supports her jurisdiction to do so.
15 Accordingly, this appeal is also dismissed."
[27] Immediately upon his appeals being dismissed, the respondent applied for social assistance. It is not disputed that the respondent applied for Ontario Works in May of 2013. He also stopped paying the court ordered child support payments of $3,000.00 per month. He made no attempt to arrange a repayment schedule for the outstanding support arrears of $655,176.80 at the time.
[28] It is the respondent's position that there was a progressive decline in his health that reached its "ultimate climax" after the Court of Appeal ruling. Hence, he sought social assistance and also applied for ODSP payments as well as CPP disability payments.
[29] The applicant attempted to enforce the support and arrears owed through the Family Responsibility Office. She was advised that it is FRO's policy not to pursue enforcement proceedings against a payor who is in receipt of social assistance. On October 3, 2013, upon receiving this information, the applicant withdrew the enforcement of the support provisions from FRO and commenced this default proceeding pursuant to section 30 of the Act.
[30] The first appearance of this default hearing occurred on November 19, 2013. At that time, the respondent attended with counsel and sought an adjournment of the default hearing to file responding materials or to commence a motion to change. For oral reasons delivered, I adjourned the default hearing at the request of the respondent to January 14, 2014.
[31] I declined to permit a longer adjournment so that the respondent could commence a motion to change. I considered the fact that the respondent had already brought two previous motions to change for the same reasons as alleged in this proceeding and both motions were dismissed in the Superior Court of Justice.
[32] I was also provided with information by the applicant that suggested that the respondent had misrepresented his financial and living situation to the Halton OW representative when he applied for social assistance. It appeared that the respondent was living with his girlfriend and/or common law spouse and being financially assisted by her, while continuing to operate his business when he applied for OW in May of 2013. It appeared that he was continuing to live a relatively comfortably lifestyle, notwithstanding his claim that he was living below the poverty line and that his only source of income and support was Ontario Works.
[33] I ordered the following terms of the adjournment to January 14, 2014:
The default proceeding was peremptory on the respondent and will proceed on that day. A full day had been booked.
The respondent shall provide updated medical information, bankruptcy information, copies of his lease, and his ODSP information. These documents should be served and filed no later than December 31, 2013.
Ms. Margie McNeil, the respondent's girlfriend, shall provide a sworn financial statement as well as copies of her lease and her three most recent income tax returns and notices of assessment, pursuant to section 41 (4) of the Act. I further ordered that Ms. McNeil shall be issued a summons to attend the hearing on January 14 to give evidence at the default hearing.
I further granted leave to hear viva voce evidence at the default hearing.
[34] On January 14, 2014 the default hearing proceeded by way of a trial with oral evidence. At that time the respondent attended with new counsel. It is not disputed that the applicant has retained at least four separate law firms during the history of the litigation between the parties (a total of seven lawyers from four different firms). It is unclear how these multiple lawyers are being paid.
[35] During the default hearing, I heard evidence from Ms. Margie McNeil, the respondent's girlfriend, Ms. Ruth Gray-Beauchamps, a Program Integrity Supervisor for the Region of Halton Ontario Works, and Ms Farzana Taiman, a caseworker with Peel Ontario Works. I also received voluminous affidavit and documentary evidence from the respondent and the applicant, approximately six volumes of evidence.
[36] The respondent submitted a number of affidavits in the default proceedings, however, he chose not to testify.
[37] The default hearing continued on February 13, 2014, March 20, 2014, June 18, 2014, and October 1, 2014. A further date was scheduled on December 15, 2014 to deliver oral reasons. At that time, the respondent provided further evidence days before this hearing from Region of Halton and the December 15 hearing was adjourned to allow the court to review the late evidence filed as well as to give the applicant an opportunity to review and respond.
[38] At the court appearance on June 18, 2014, the respondent served the applicant with his third motion to change the Order of Justice Donohue dated November 12, 2014. Despite my previous ruling that the default hearing was to proceed notwithstanding any further motion to change brought by the respondent, the respondent's counsel submitted that the respondent had now been approved and was in receipt of ODSP and was soon to be approved for CPP disability benefits. She argues that these events constituted a material change in his circumstances that permitted a further motion to change to be brought. According to his counsel, the respondent would not be eligible for ODSP and CPP if he did not have a disabling illness making him unable to work.
[39] The respondent's third motion to change was issued in the Superior Court of Justice on June 13, 2014, and served on the applicant in court on June 18, 2014, the return of the default hearing. It was agreed that the applicant did not need to file a response to the motion to change pending the conclusion of the default hearing and my reasons in this matter.
4: THE LAW AND GOVERNING PRINCIPLES
[40] In a default hearing, the burden or onus of proof is upon the support payor. Pursuant to section 41 (9) of the Act, unless the contrary is shown, two legal presumptions apply. Section 41(9) reads as follows:
"s. 41(9) At the default hearing, unless the contrary is shown, the payor shall be presumed to have the ability to pay the arrears and to make subsequent payments under the order, and the statement of arrears prepared and served by the Director shall be presumed to be correct as to arrears accruing while the order is filed in the Director's office."
[41] These presumptions are not absolute, rather they are rebuttable presumptions. However, the onus or burden of disproving the presumptions rests squarely with the support payor. In relation to the ability to pay the arrears and to make subsequent payments under the order, the support payor must prove, on a balance of probabilities, through admissible evidence, that he does not have the ability to pay.
[42] The respondent has acknowledged the accuracy of the arrears set out in the statement of arrears filed. The question for the court to decide is whether he has a "valid reason" for not paying those arrears, pursuant to section 41(10) of the Act, which sets out the powers of the court in determining the appropriate remedy to address the arrears owing:
Powers of court
(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, [Emphasis added]
(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. 2005, c. 16, s. 24 ; 2014, c. 7 , Sched. 10, s. 11 (1). [Emphasis added]
[43] As indicated, pursuant to sections 41(9) and 41(10) of the Act, the payor has the onus of proof to demonstrate that this inability to pay is for valid reasons. If no valid reason exists, then what should be the appropriate order under section 41(10) of the Act.
[44] In Hargreaves v. Hargreaves, Justice Paddy A. Hardman dealt with the meaning of "valid reason". At paragraph 13 of her reasons for judgment, she states:
The test of a "valid reason" is quite properly "an event over which the debtor has no control which renders him totally without assets or income with which to meet his obligations".
[45] In Ontario (Director, Family Responsibility Office) v. De Francesco, O.J. [2012] 6338, Justice Carolyn Jones further explores the meaning of "valid reason" under section 41 (10) as follows at paragraph 21 of her decision:
"21 Valid reasons, within the meaning of s. 41(10) of the Act, imply reasons for which the payor cannot be faulted or for which the payor does not bear responsibility in the culpable sense. The court would expect some evidence of circumstances where, despite reasonable, diligent and legitimate efforts by the support payor to comply with the support order, the support payor has been unable to do so for reasons that are not connected with an unwillingness to pay, a lack of effort, a failure to prioritize the support obligation or a deliberate neglect, failure or avoidance on the part of the payor. Evidence relating to the past and present circumstances of the payor, including his financial circumstances since the time of the first default under the order, the manner in which he has applied his available income and assets, and his efforts to secure employment or income during the time that the arrears have arisen will have some bearing upon the determination of the legitimacy of the reasons the payor puts forward for his default under the support order. Circumstances that are beyond the control of the payor, resulting in the payor's inability to pay, would be valid reasons. An illness on the part of the payor, including a mental disorder, rendering the payor completely unable to work on either a full or part-time basis, as in the case before the court, would amount to a valid reason for the payor's failure to pay."
5: APPLICATION OF THE LAW AND GOVERNING LEGAL PRINCIPLES TO THE EVIDENCE HEARD
[46] For reasons unknown to the court, the respondent did not testify in this default hearing. Further, the respondent's psychiatrist did not testify, notwithstanding that the respondent bears the onus to prove that he has a valid reason for not paying child support and the arrears owing. Despite the voluminous affidavit material provided, there was very little medical evidence filed that demonstrated that the respondent was completely unable to work. The bulk of the evidence filed appeared to be an attempt by the respondent to re-litigate the issues in the Superior Court of Justice, all of which have been unsuccessfully appealed to the Court of Appeal (and dismissed).
[47] The evidence filed also indicated that at the time that the respondent first applied for Ontario Works in May of 2013, he failed to disclose that he had a business and that he had both Canadian and US bank accounts related to the business. He also failed to disclose that he was living in a spousal relationship with his girlfriend, Ms. Margaret McNeil at the time that he applied for Ontario Works. He described her as his "landlord" and declared himself to be a "single person". It is not disputed that they were living together in her condominium in Oakville and I find, based on the evidence that I heard, that their relationship was financially interdependent. I also find they appeared to have a relatively comfortable lifestyle.
[48] It is not disputed that it was the applicant who reported the respondent's misrepresentation about his living arrangements and his financial situation to Halton Ontario Works. She had a number of discussions with the eligibility review officer, Ms. Mary Jo O'Connor. A copy of Ms. O'Connor's report and investigation, dated February 4, 2014, was filed as an exhibit in these proceedings. Based on the investigation conducted by Ms. O'Connor, Ms. O'Connor concluded that the respondent had misrepresented his living arrangements and income to Ontario works staff in order to qualify for benefits. His Ontario Works was terminated retroactive to May of 2013 and an overpayment assessed in the amount of $5,301.99 for the period of June 1, 2013 to January 31, 2014.
[49] Ms McNeil, the respondent's girlfriend, testified on behalf of the respondent. Ms McNeil was previously employed with RBC earning approximately $100,000.00 per annum. However, at the time of the default hearing, she had left RBC to become a real estate agent in the Oakville area. She owned the condominium in Oakville that she and the respondent were living in at the time he had applied for social assistance in May of 2013. The evidence established that Ms McNeil was comfortably well off financially, notwithstanding her decision to switch careers and the start-up necessary to establish herself as a real estate agent. Ms McNeil presented as a very competent and sophisticated business woman who had clearly planned and made her decision to change careers carefully.
[50] The court sympathized with Ms. McNeil, as she was placed in an extremely difficult position by the respondent, who chose not to testify in these proceedings. He placed her in the position of answering questions about his ability to pay support for his children. It also appeared that she had loaned him substantial amounts of money.
[51] Regrettably, Ms McNeil was not very helpful to the respondent's case. It appeared that she was very much in the dark with respect to the respondent's application for OW and what was required of him in May of 2013. She was also trying to protect him throughout her evidence. When asked how the respondent was able to pay her $5,500.00 in June 2013 for housing expenses, when he was apparently only in receipt of Ontario Works, she testified that this income may have come from his business as money was continuing to "trickle in". When asked why the respondent would continue to need to pay rent for an office in her condominium if his business was no longer in operation, she testified that he was working on his books and his bankruptcy during that period of time. She further acknowledged that during the time that the respondent indicated he was unable to pay child support or arrears, they took two trips to France together, a trip to Halifax, and a trip to Montréal. Although she initially denied that the respondent was her fiancé or that they were discussing marriage, email correspondence between the two of them clearly indicated otherwise.
[52] The respondent appealed the decision of Halton Region to terminate his benefits. An internal review was conducted and the respondent's appeal was denied. The respondent subsequently appealed that decision to the Social Benefits Tribunal. At the time of the default proceeding, a decision from the Social Benefits Tribunal had not been rendered.
[53] In his affidavit sworn March 17, 2014, the respondent deposes that when he first applied for social assistance he identified himself as a 'single person' because it was his understanding that as long as he was paying rent and his finances were separate from Ms McNeil he would be considered a single person. He equated it similar to his relationship with his previous landlord where he lived in the same house as him but also paid rent. He states in his affidavit: "I have now come to understand if you are living with the person with whom you are in a relationship with it is not considered to be living single."
[54] The respondent also acknowledged that Halton OW based its termination on nondisclosure of his US and Canadian business bank accounts. The respondent deposes the following with respect to that failure to disclose this information in his Affidavit, sworn March 17, 2014 at paragraph 15: "Even though I provided them with substantial amounts of disclosure, I did not realize that an incorporated company's US and CDN business accounts his own, were also subject to disclosure." The company that he is referring to is his own.
[55] Ms. Ruth Gray-Beauchamps is the Program Integrity Supervisor for the Region of Halton. She testified at the default hearing at the request of the court as the respondent was alleging that the investigation by Halton proved to be false and that Ms O'Connor, the eligibility review officer was somehow "colluding" with the applicant and had been disciplined.
[56] Ms Gray-Beauchamps testified that the respondent had misrepresented both his living arrangements and his income to the Halton Ontario Works in May of 2013 and therefore his benefits were terminated. Ms. Gray-Beauchamps indicated that it was clear that the landlord was in fact the respondent's girlfriend, and that the respondent and Ms McNeil had by all accounts what appeared to be a spousal relationship.
[57] Ms Gray-Beauchamps was aware that on June 10, 2014, the respondent had filed a complaint against the Ms O'Connor with the Privacy Commissioner, claiming that Ms O'Connor had colluded with the applicant and that she was releasing private information about him to the applicant contrary to his privacy rights.
[58] As a result of that complaint, an investigation ensued and on June 10, 2014, a letter was released confirming that Ms. O'Connor made some disclosures of personal information to the applicant that were inappropriate and should not have occurred during her investigation. However, it did not change the outcome of her investigation and the findings made.
[59] It is not disputed that in December of 2013, during the Halton investigation of the respondent's eligibility for social assistance, he moved out of his home with Ms. McNeil and moved into the basement of his parents' home in the Peel region. He then promptly reapplied for Ontario Works in the Peel region.
[60] Ms. Farzana Taiman, a case worker with Peel Region also testified in these proceedings. She has been a caseworker for the respondent since February 7, 2014 after he had moved to the Peel region from Halton. Ms Taiman testified that by the time that the respondent had moved to the Peel region, he had already become eligible for ODSP (Ontario Disability Support Program). According to her testimony, she then transferred his file to ODSP so she had no real further dealings with him except to provide him with counseling.
[61] Ms Taiman testified that she deemed the respondent to be eligible for assistance in the Peel region based on his health, his living arrangements with his parents, and the fact that he was now eligible for ODSP. Given that he had been deemed 'disabled' by ODSP, she did not have any issues with his eligibility at the time of their meeting. She testified that she was "surprised" at how the case had been handled in the Halton region.
[62] In cross-examination Ms. Taiman indicated that she only met with the respondent for two hours during their initial application. She further stated that if she had known he had $26,000 in American business account at the time of his original application in May of 2013 (denied by the respondent), then he would not be eligible. She further stated that if she had known he was living with a spouse who was earning approximately $100,000 (also denied by the respondent), then that would also be taken into account in determining eligibility and he would not be eligible. She testified that the respondent told her that he had a girlfriend but he moved to Peel after this became an issue with his eligibility in the Halton region. She testified that it would not impact on his eligibility if he spent every weekend with his girlfriend.
6: CREDIBILITY ISSUES, FINDINGS AND CONCLUSION
[63] The issue of credibility was of paramount importance in my determination in these proceedings, given the history and the respondent's conduct throughout. I draw an adverse inference against the respondent for his failure to testify in these proceedings, and for the failure of his psychiatrist to testify or provide compelling medical evidence regarding the respondent's inability to work for medical reasons. As indicated, the respondent bears the onus to prove that he has a valid reason for not paying child support and the arrears owing in a default hearing.
[64] The evidence before me raises serious concerns that the respondent is continuing to evade his support obligations. I have grave concerns about the respondent's conduct when he applied for Ontario Works in the Halton region and then immediately transferred to the Peel region when his benefits in Halton were terminated for failing to disclose material information. I do not believe that the respondent did not understand that he had to disclose his spousal relationship with his girlfriend and his US and Canadian business accounts when he first applied social assistance in Halton.
[65] The respondent is a sophisticated businessman. It strains credulity that he believed he could call himself a "single person" and not disclose that he was living with Ms McNeil in a spousal relationship when he first applied for OW. It further strains credulity that he did not realize that he would have to disclose his US bank accounts and his Canadian business accounts when applying for public assistance. Contrary to the respondent's affidavit, the investigation by Halton region did not prove false. It is clear that he failed to disclose a spousal relationship with his girlfriend and he failed to disclose his US and Canadian business accounts.
[66] The respondent agrees that he stopped working immediately following the dismissal of his appeals to the Court of Appeal and applied for social assistance. However, he states in his affidavit that this was not an attempt to avoid the support orders being enforced. He states that his mental health has been in decline since 2011 and that the culmination or "breaking point" was the dismissal of his appeals to the Court of Appeal. He states that when he realized that he was not successful with his appeals, he completely "lost his focus" and was not able to work. Despite his 'loss of focus', he has been able to appeal the decision of Halton region to terminate his Ontario Works to two separate levels of appeal, and he has made lengthy complaints to the Information Privacy Commissioner of Ontario with respect to the Halton worker's conduct during the investigation of his original application for assistance, all taking considerable time and energy.
[67] Notwithstanding my concerns with the respondent's credibility and conduct throughout, the fact remains that the respondent was approved and deemed eligible for ODSP in February 2014, retroactive to August 2013. He was also approved for CPP disability benefits during the default hearing. He is now in receipt of both. This means that two government agencies, for reasons unknown to the court, have deemed the respondent disabled and unable to work. This may be a material change in circumstance since this default hearing was commenced and rebuts, on a without prejudice basis, the presumptions against the respondent in this default hearing.
[68] The respondent's psychiatrist should have testified in this default hearing. The respondent should have testified in the default hearing. I am very concerned about the respondent's conduct throughout the history of this litigation and what appears to be a deliberate attempt to evade his support obligations.
[69] However, out of an abundance of caution, and after careful consideration, I reluctantly conclude that this default hearing must be adjourned pending the respondent's motion to change proceeding. I do this because the remedy that is being sought is incarceration. This is a remedy of last resort in default proceedings. It is an exceptional remedy. Having said that, the respondent has now been considered disabled and unable to work by two government agencies. The motion to change hearing should proceed so that full evidence on the issue of the respondent's disability, including evidence from his psychiatrist, can be properly examined.
[70] It is anticipated and expected that the respondent and his psychiatrist will testify at the respondent's motion to change hearing as well as representatives from ODSP and CPP to explain how at this time the respondent is deemed disabled, for how long, and for what reasons. The applicant has a right to cross-examine the respondent and his psychiatrist on these issues.
7: ORDER
[71] Therefore for the above reasons, I am adjourning this default hearing pending the outcome of the respondent's motion to change hearing. I decline to add Ms McNeil as a party to the default proceeding at this time.
[72] There will be no order for costs pending the motion to change hearing.
Released: May 15, 2015
Signed: "Sheilagh O'Connell"