Court File and Parties

Date: 2017-01-03

Court File No.: D82001/15

Ontario Court of Justice

Between:

Jeevaneelosany Sivasubramaniam

Applicant

- and -

Elangeswaran Chandrasekaram

Respondent

Counsel:

• Dilani Gunarajah, for the Applicant
• Andrea B. Scharf, for the Respondent
• Donald Pyper, for the Director of the Family Responsibility Office, party only for the purpose of this motion

Heard: December 29, 2016

Justice: S.B. Sherr

Endorsement

Part One – Introduction

[1] The respondent (the father) has brought a temporary motion seeking the following relief:

a) Staying or suspending the enforcement of the child support provisions contained in the parties' separation agreement (the agreement), made on March 14, 2007 and filed with the court pursuant to subsection 35 (2) of the Family Law Act (the FLA), until resolution of his application to change child support;

b) An order staying or suspending enforcement of the existing support deduction order, until resolution of his application to change child support;

c) An order that the Director of the Family Responsibility Office (the Director) hold any monies received in this matter until the resolution of his application to change child support.

[2] The applicant (the mother) opposed the father's motion. She wants the Director to immediately release the monies it has collected in this matter to her, to satisfy the father's support arrears.

[3] The Director took no position with respect to the parties' entitlement to the funds it is holding. However, it sought court authority if monies were to be held back from the mother.

[4] The father's motion is brought within his application to change child support, to rescind any support arrears that have accumulated (as reflected in the Director's records), to be granted custody of his daughter and to obtain a restraining order against the mother.

[5] The mother has not yet filed an Answer/Claim. She advised the court that she will seek the dismissal of the father's application and a retroactive increase in child support.

[6] The main issues for the court to determine are:

a) Should the court order the Director to hold all or part of the money it has collected in this matter, pending the determination of the issue as to who is entitled to these funds (the entitlement issue)?

b) Should the court make any other order that will impact on the Director's enforcement of the order?

Part Two – Background Facts

[7] The father is 49 years old. The mother is 44 years old.

[8] The parties were married on May 16, 2000.

[9] The parties have two children (the children). Their son (the son) is 21 years old. Their daughter (the daughter) is 15 years old.

[10] The parties separated on August 27, 2006.

[11] The parties entered into the agreement on March 14, 2007. The agreement provides that the mother has custody of the children and the father has specified access to them. The father agreed to pay child support to the mother of $800 each month. This consisted of the Child Support Guidelines table amount (guidelines table amount) of $650 and the father's share of the children's special or extraordinary expenses (section 7 expenses), of $150.

[12] The parties both received independent legal advice before entering into the agreement.

[13] The parties were divorced on February 26, 2008. The Divorce Order contained no corollary terms.

[14] The mother filed the agreement in this court for enforcement on November 19, 2015, pursuant to subsection 35 (2) of the FLA.

[15] In January 2016, the father remarried in Sri Lanka.

[16] On April 8, 2016, the Director sent its first support enforcement letter to the father.

[17] The father deposed that this was the first time he had been asked to pay support by anyone.

[18] The father stated that notwithstanding the agreement and the divorce, the family resided together until February of 2014 and he fully supported them.

[19] The father retained counsel and moved in the Superior Court of Justice for similar relief to that contained in this motion in 2016. The Superior Court of Justice declined jurisdiction as it was being asked to vary an order of this court.

[20] The father sold his home in Toronto in November 2016. The Director had placed a lien on the property. The net proceeds of the sale (approximately $90,350) were paid to the Director.

[21] The Director also collected support from the father between March and July of 2016, pursuant to a support deduction order.

[22] The Director has not released any of the monies it has collected to the mother due to the father's dispute about entitlement.

[23] The father brought this motion as the Director advised him that it was legally mandated to pay the money it was holding to the mother unless he obtained a court order directing it otherwise.

[24] The father issued this application on November 29, 2016.

[25] The mother sought and obtained an adjournment of this motion on December 7, 2016, to permit her to file responding material. A temporary, without prejudice order was made requiring the Director to hold all monies in its possession pending further court order.

[26] The children presently live with the mother and visit the father.

[27] The son is a full-time college student. The daughter is a full-time high school student.

[28] The father is a driver for the Toronto Transit Commission. He earned slightly over $100,000 in 2015.

[29] The mother is a school bus driver. She earned approximately $39,400 in 2015.

[30] As of the date of the hearing, the Director's Statement of Arrears showed that the father owed support arrears of $92,350. Counsel for the Director advised the court that the Director was holding $93,542.

Part Three – The Father's Version of Events

[31] The father claims that he does not owe the mother any child support and he is entitled to all of the money being held by the Director.

[32] The father deposed that although he legally separated from the mother in 2006, the family continued to reside together. He said that when the parties entered into the agreement in 2007, their intention was for the mother and children to move out of the family home. He said that this never happened.

[33] The father stated that the family lived in three residences together after the agreement was signed. He said that he has been the primary financial supporter of the children. He maintained that although they lived together, he and the mother remained legally separated.

[34] The father said that the mother moved out of the family home in February 2014 and that the children remained with him.

[35] The father deposed that the children lived with him until October 29, 2015, when they moved in with the mother.

[36] The father said that the daughter came back to live with him just two weeks later. The son remained with the mother.

[37] The father deposed that the daughter moved back in with the mother on May 26, 2016.

[38] The father claimed that the children spent almost each day with him during the summer 2016, but did not sleep over at his residence as the mother would not permit it. He claims that the parties have had a shared parenting arrangement since June 1, 2016, as defined in section 9 of the Child Support Guidelines (the guidelines).

[39] The father claims that he has paid for most of the children's section 7 expenses. He says that he has paid for college expenses for the son, school supplies for both children and tutoring for the daughter. The father claims that he has paid more for the children over the years than the amounts he would have been required to pay under the guidelines.

[40] The father said that the parties never acted on the agreement. He deposed that the mother never sought child support from him. He said that she only filed the agreement with the court out of spite when she learned that he intended to remarry. He asks the court not to enforce the agreement.

Part Four – The Mother's Version of Events

[41] Simply put, the mother claims that the father is lying. The mother submits that she is entitled to all the money being held by the Director.

[42] The mother states that the children have always lived with her. She said that the children might see the father twice each week for a couple of hours at a time. They do not, she said, spend overnights with him.

[43] The mother claims that neither she nor the children lived with the father at any time after the agreement was signed.

[44] The mother claims that the father has never paid her child support.

[45] The mother deposed that she did not enforce the agreement earlier at the request of her father. It was only after he died that she decided to enforce it.

[46] The mother denied that the father has paid for the son's college expenses. She said that the son receives Ontario Student Loans to pay for his education. She said that she has paid for many of the children's section 7 expenses.

[47] The mother said that she intends to make a claim for a retroactive increase in child support as the father's income has significantly increased since the agreement was made.

Part Five – What Should Be Done With the Monies Being Held by the Director?

5.1 Legal Considerations

[48] Section 56 of the Family Responsibility and Support Arrears Enforcement Act (the Act) addresses the treatment of monies held by the Director when a court application is ongoing. It reads as follows:

Payments Pending Court Decisions

56. (1) The Director shall pay any money he or she receives in respect of a support order or a support deduction order to the recipient despite the commencement of any court proceeding in respect of the support obligation or its enforcement, in the absence of a court order to the contrary.

Exception

(2) If a court orders the Director to hold any of the money received in respect of a support order or a support deduction order pending the disposition of the proceeding, the Director shall, upon receipt of a copy of the order, hold any money he or she receives to the extent required by the court.

[49] Counsel were unable to direct the court to any case law interpreting section 56 of the Act.

[50] The father submitted that the court should apply the two-part test that is required to obtain a restraining order, pursuant to subsection 35 (1) of the Act. This test is:

a) The support payor (the payor) must establish that he or she has a prima facie case on his or her motion to change and;

b) The payor must come to the court with clean hands.

See: Turk v. Ontario (Family Responsibility Office), 2016 ONSC 1106.

[51] The Director submitted that this two-part test should be applied to a motion under section 56 (a section 56 motion), with the caveat that the court should only order the Director to hold funds to the extent that the payor can establish a prima facie case. So, if the father's best-case scenario is that he is entitled to $75,000 of the monies being held, the balance held by the Director should be immediately paid to the mother.

[52] The mother did not make submissions regarding the legal test on a section 56 motion.

[53] The court does not agree that the two-part restraining order test should be applied to a section 56 motion, although its components should be taken into consideration by the motions judge.

[54] A motion for a restraining order is significantly different than a section 56 motion. A section 56 motion deals with monies that are available for distribution, whereas a restraining order merely deals with an enforcement mechanism - should the court refrain the Director from suspending the payor's driver's licence, and if so, on what terms?

[55] The restraining motion is primarily focused on the rights of the payor and prejudice that a suspension of driver's licence could cause the payor. The support recipient (the recipient) is not a participant on these motions and, other than the Director's Statement of Arrears, the court usually only receives motion material from the payor. Accordingly, it is not as challenging for a payor to establish a prima facie case on a restraining motion.

[56] A section 56 motion engages different interests than a restraining motion. The recipient is a party to the motion and has the opportunity to challenge the payor's evidence. The recipient has a direct interest in the outcome of the motion – whether or not monies will be released. By extension, the children also have an interest in the outcome of the motion (their right to be properly supported) and these interests should be considered by the motions judge.

[57] The two-part restraining order test is insufficient to properly address these additional considerations.

[58] In exercising its discretion in a section 56 motion, the court should be asking itself what order is just in the circumstances? This will require, in most cases, a contextual analysis. The following are a non-exhaustive list of factors for the court to consider in conducting this analysis:

1. The onus is on the payor to establish that all or part of the monies should be held by the Director pending the outcome of the court proceeding dealing with the support obligation. The existing court order for support is presumptively correct.

2. How strong is the payor's claim to the money held by the Director after an examination of the evidence on the motion? The flow of support should not be delayed by a mere claim to the money by the payor; the standard for a holdback order should not be this low.

3. Is there a genuine issue in dispute about entitlement that requires a trial to make a just determination? The court may find, in some cases, that there is a genuine entitlement issue requiring a trial with respect to only a portion of the funds being held by the Director and order the release of the balance of monies to the recipient.

4. Has the payor come to court with clean hands?

5. What will be the prejudice to the payor if all or part of the monies being held by the Director are released to the recipient before the determination of the entitlement issue?

6. What will be the prejudice to the recipient if all or part of the monies being held by the Director are not released pending the determination of the entitlement issue?

7. What will be the prejudice to a child if all or part of the monies being held by the Director are not released to the recipient pending the determination of the entitlement issue?

8. In assessing prejudice to the recipient or a child:

   a) How long will it take to schedule and conclude a hearing to make a final determination of the entitlement issue? If a hearing can be scheduled in a reasonable period of time, there will usually be little prejudice if the Director holds funds collected on account of support arrears for a while longer.

   b) Is there an ongoing support obligation? A payor will usually be required to present a very strong case to the motions judge for the court to order the Director to hold monies it is collecting for an ongoing support obligation.

   c) Does a child have an immediate need for additional support? For instance, does the child have expenses for his or her special needs or post-secondary expenses that require immediate funding? If this is the case, the court may be more willing to release monies held by the Director on account of arrears, as well as having the ongoing support obligation flow.

5.2 Analysis

[59] The father has satisfied the court that it is just that the Director be required to hold a significant portion of the monies in its possession pending the final determination of the entitlement issue.

[60] The father provided evidence that his version of the family's living arrangements from 2007 until June 2016 may be correct. This evidence included:

a) Affidavits from relatives or friends of the father attesting to the fact that the children were living with him at various points of time.

b) A Rogers cable invoice addressed to the mother at the father's address in 2013.

c) A bank statement from his father-in-law using the father's address. This supported the father's evidence that the family and his father-in-law lived with him in 2011 and 2012.

d) The son used the father's address on his work resume. It appears that the resume was prepared in either 2014 or 2015.

e) A copy of the son's driver's licence from 2013, showing that he used the father's address.

f) The father provided video evidence of the daughter moving a substantial amount of her personal belongings from his house. He deposed that this was taken when she moved out of his house in May 2016 and that it took 3 carloads to move her belongings.

[61] The mother's failure to request support and her lengthy delay in enforcing the agreement lends credence to the father's claim that she did not take these steps because they were living together. Her explanation for delay, absent further evidence, does not appear to be strong.

[62] The mother also provided evidence that her version of the living arrangements from 2007 until June 2016 may be correct, including evidence that casts doubt on the father's credibility. This evidence included:

a) A bank statement from 2007 showing she had a different address than the father's.

b) The daughter's April 2016 report card showing that she attended school in Markham, Ontario. The mother said that it is her address on the report card. This supports the mother's contention that the daughter was living with her in Markham, and not with the father in Toronto.

c) The father declaring that he was separated and had no dependants on his income tax returns since 2007. The mother did declare the children as dependants on her income tax returns.

d) The father claimed that he paid for the son's post-secondary education. The mother provided evidence that the son has paid for his education through student loans.

[63] The court also considered that it is highly unconventional that the parties would enter into a separation agreement and subsequently divorce while still residing together.

[64] The court cannot determine, based on the affidavit evidence alone, what the family's living arrangements were from 2007 until June 2016. It may be that the actual facts lie somewhere in-between the two versions of events provided by the parties. The court will need to assess the credibility of witnesses and have the benefit of cross-examinations to properly make this determination. The issue of entitlement to most of the arrears held by the Director is a genuine one requiring a trial.

[65] The court cannot determine at this stage if the father is coming to the court with clean hands. If his evidence is believed, he fully supported his children, did not believe that the agreement was operative and received no request for support until April 2016. He immediately acted on this request and moved to court for relief. If he is not believed, then his conduct has been blameworthy.

[66] The father would suffer significant prejudice if all the monies were released to the mother at this time. If he was successful at trial, it would be very difficult for him to recover these monies from her.

[67] The monies held by the Director are on account of arrears that have accumulated since 2007, as the mother advised the Director that the father has never paid support to her. The mother waited over 8 years to enforce the agreement. She will suffer little prejudice if she is required to wait a while longer to have most of these arrears paid to her. If she is successful at trial on the entitlement issue, the arrears are fully secured by the amounts presently held by the Director.

[68] There was little evidence that the daughter would suffer prejudice from an order that the Director hold most of the arrears until the disposition of the entitlement issue, although she has been prejudiced by the father's failure to pay the mother support since she returned to live with her on May 26, 2016. The son may suffer some prejudice, as there is evidence that he has had to rely on Ontario Student Loans and his own employment income to fund his education.

[69] This matter will be case-managed. The court has set a case conference date with the expectation that full disclosure will be exchanged by the parties. If the case cannot be resolved on the return date, a timetable will be set then for the trial of the entitlement issue. Any prejudice to the recipient and the children will be mitigated by the fact that the resolution of this case will take place in a timely manner.

[70] The analysis shifts when the court assesses the strength of the father's case with respect to his support obligations since October 29, 2015.

[71] Based on just the father's evidence, the children went to live with the mother on October 29, 2015. The daughter then returned to live with him from mid-November 2015 until May 26, 2016. The father, at a minimum, had a support obligation starting on November 1, 2015, that would have varied, based on the children's changing living arrangements.

[72] The father's submission that he has had a shared parenting arrangement with the mother since June 2016 was not supported by the evidence before the court. His evidence is that since September 2016, the children spend three afternoons each week with him, each time for a few hours. He lives in Ajax, the mother in Toronto. The children go to school in Toronto. The children have not spent overnights with him, even when the father claimed that they were with him every day in the summer. Absent more compelling evidence at trial, this claim will fail.

[73] The father provided evidence that he has been paying for tutoring for his daughter ($120 each week) since September 2016. He may also be making other direct payments to the children, although this evidence was not well-supported by documentation.

[74] However, the father's income is also much higher now than it was in 2007. In 2015, he earned slightly over $100,000. In his financial statement, he claimed that his annual income was $69,000. He did not provide an up-to-date pay stub. The last pay stub he filed was for the period ending May 20, 2016. His year-to-date income based on that pay stub projects to an annual income of about $94,000. It appears that the father has seriously understated his income.

[75] The father's case for the Director to hold funds collected on account of his support obligations since November 1, 2015 is very weak. Given the weakness of this position, the father is unlikely to suffer much prejudice if an immediate payment is made to the mother to compensate her for the support he should have paid to her since November 1, 2015 and if ongoing support payments are paid to her.

[76] The mother and children will suffer prejudice if these monies are not paid to the mother immediately as the children need to be supported now.

5.3 Calculations

[77] The trial judge will be in the best position to conduct a detailed analysis of the entitlement issue. At this stage, the court is making a rough determination as to what is a just amount to have paid to the mother immediately, and what monies should be held by the Director until the entitlement issue is determined.

[78] The children have both lived with the mother since May 26, 2016. Including January 2017, this is 8 months. Based on the order for support of $800 each month, the court will require the Director to pay the mother $6,400 for this period from the monies it is holding.

[79] According to the father, there was a split custody arrangement from November 1, 2015 until the end of May 2016. This is another 8-month period. Based on the differential in the parties' incomes, the court will order the Director to release a further $4,000 to the mother for this period.

[80] The court will order the Director to immediately pay the mother a total of $10,400.

[81] The trial judge will need to assess the father's ongoing child support obligation. The son is over 18 and in college. The court will need to determine if the application of the guidelines is appropriate and how much the son should be required to contribute to his post-secondary expenses. The parties' incomes, as well as the son's, will also need to be determined for the purpose of the support calculation.

[82] In the meantime, the children need to be supported. The order remains in force and the father must continue to pay the mother the $800 each month set out in the order. According to the Director's Statement of Arrears, the Director has not been collecting support from the father since July 2016. A support deduction order should issue immediately to ensure that the father's ongoing support obligations are met from pay deductions.

[83] The Director will be directed to pay the mother $800 each month from the amounts it collects and is holding, starting on February 1, 2017. This means that if there is a shortfall from the monies it collects in any month, pursuant to either the support deduction order or through other enforcement means, the balance should be paid out to the mother from the monies it is holding.

[84] Lastly, the court has considered the father's claims of additional payments to and for the children since November 2015 in conducting this analysis. It offset this consideration against the fact that the father's income has increased considerably and that this income increase was not applied in calculating the payout to the mother for the period after June 1, 2016.

[85] The trial court will be in the best position to determine any support adjustments.

Part Six – Stay or Suspension of Support

[86] The father sought orders staying or suspending enforcement of support and the support deduction order.

[87] There is no automatic stay of enforcement pending a motion to change. The order remains in full force and effect until varied. This equally applies to a separation agreement filed with the court pursuant to subsection 35 (2) of the Act. See: Hayes v. Hayes, [2010] ONSC 3650.

[88] The Act does not provide the court with jurisdiction to stay or suspend enforcement of a court order.

[89] The authority of the court to make orders that impact upon the Director's ability to enforce an order was discussed in Garneau v. Director of the Family Responsibility Office, 2010 ONSC 2804, where the court wrote at paragraphs 29-37:

Motion to Suspend Enforcement by FRO

[29] The motion before me seeks a suspension of enforcement by FRO, together with an order refraining FRO from suspending Mr. Garneau's driver's licence. The motion does not seek an order staying the ongoing support obligation under the Separation Agreement. If this is in fact the relief being sought, it should have been pleaded.

[30] There is no automatic stay of enforcement pending a motion to change. The order or agreement remains in full force and effect until varied.

[31] The Director has a duty to enforce support orders filed with her office and the authority to determine by what means her duties are to be carried out. An order staying the Director's enforcement power would preclude FRO from exercising its legislative mandate.

[32] The Director is required to enforce a support deduction order that is filed in her office until the related support order is terminated and there are no arrears owing or until the support order and support deduction orders are withdrawn.

[33] A support deduction order is not affected by an order staying the enforcement of the related support order unless the support order is also stayed. Proceedings to stay an ongoing support obligation raise issues of entitlement as the support payor is seeking to vary, albeit temporarily, support payments agreed to between the payor and the recipient. The Director is not a party to such proceedings.

[34] The Director has the jurisdiction to consent to relief regarding the amount deducted by an income source for arrears under a support deduction order. Mr. Garneau did not request this relief.

[35] Because Mr. Garneau did not plead a request for a stay of his ongoing support obligation, I find that he should not be entitled to that relief. However, I will go on to consider whether this court should grant that relief despite the fact that there was no request for it in the motion before me.

Should the Ongoing Support Obligation Be Stayed?

[36] A motion to stay or suspend a support order is properly brought within a variation application pursuant to section 37 of the Family Law Act. On such an application, the court may discharge, vary or suspend a term of the order and relieve the applicant from the payment of part or all of the arrears. The basis for granting such relief would be a material change in circumstances.

[37] A stay of enforcement should only be granted where a support payor has demonstrated a prima facie case on the merits of the variation application and has come to court with "clean hands". Even if I were to assume that the motion to suspend enforcement of support included a motion to stay the ongoing support obligation, I find that Mr. Garneau has not established the substantive grounds for relief on the merits of his case.

[90] The court has jurisdiction to make a temporary variation of a final support order pending a trial in a case of clear hardship or where the continuation of the order would be incongruous or absurd: See: Roitman v. Ontario (Director, Family Responsibility Office), 2016 ONCJ 640, relying upon Fredette v. Fredette, [2005] O.J. No. 4938 (SCJ) and Crawford v. Dixon, [2001] O.J. No. 466 (SCJ). This would include orders suspending the order and payment of arrears pursuant to subsection 37 (2.1) of the FLA.

[91] The court is not required to make a blanket stay or suspension of the support order. It can grant a partial stay or suspension of the order pursuant to subsection 37 (2.1) of the FLA. See: Hayes v. Hayes, supra, paragraphs 46-47.

[92] As in Garneau, the father in this case did not move to suspend the enforcement of the underlying support order. However, even if he had properly moved to suspend the underlying support order, the court would not have granted this relief for the following reasons:

a) The court has found that the father has an existing support obligation and that payments pursuant to the order should continue. There is no reason the Director should be restricted in enforcing it, particularly if the father defaults.

b) The father will not suffer undue hardship from the enforcement of the order.

c) There is no need for the Director to take any further steps to collect the arrears accumulated to date. It has already collected them. The trial court will determine who is entitled to these monies.

[93] Subsection 20 (6) of the Act states that the stay of an enforcement order will not affect a support deduction order unless the underlying support order is stayed. Since the court is not staying the underlying support order, the support deduction order will not be stayed.

Part Seven – Conclusion

[94] An order will go on the following terms:

a) The Director shall immediately release the sum of $10,400 from the monies it is holding to the mother.

b) A new support deduction order shall issue reflecting that the father is required to pay the mother $800 each month, pursuant to the order.

c) The Director shall, starting on February 1, 2017, release to the mother the sum of $800 each month. If the Director is unable to collect this amount from the support deduction order, or through other enforcement means, it shall pay any shortfall to the mother from the monies it is holding.

d) Subject to clause (c), the Director shall hold the balance of the monies in its possession, pending the final disposition of the issue of entitlement, pursuant to subsection 56 (2) of the Act.

e) The balance of the father's motion is dismissed.

[95] If either party or the Director seeks their costs, they shall serve and file their written costs submissions by January 16, 2017. The others will have until January 30, 2017 to respond. The costs submissions shall not exceed 3 pages, not including any offer to settle or bill of costs. The costs submissions should be delivered to the trial coordinator's office on the second floor of the courthouse.

[96] At the conclusion of submissions, the court urged the parties to negotiate a settlement of this case. They are not wealthy and their family needs these monies. The longer the case continues, the less will be available for them because of legal fees.

[97] The matter will return to court on March 2, 2017 at 2 p.m. for a case conference. The parties are expected to exchange all relevant disclosure by then. If the case is not resolved at that time, a timetable will be set for the hearing of the entitlement issue.

[98] The court thanks counsel for their hard work on the presentation of this motion.

Released: January 3, 2017

Justice S.B. Sherr