Ontario Court of Justice

Date: October 11, 2017

Court File No.: Toronto FO-13-10619-E000

Between:

The Director, Family Responsibility Office for the benefit of Yanet Candelario Salazar

Applicant

— AND —

Douglas Francis Roche

Payor

Before: Justice Alex Finlayson

Heard on: September 21, 2017

Reasons for Judgment released on: October 11, 2017

Counsel:

• H. Puchala, for the Director, Family Responsibility Office
• Douglas Francis Roche, on his own behalf

ALEX FINLAYSON J.:

PART I: NATURE OF THIS PROCEEDING

A. Background

[1] This is my ruling concerning a default hearing that I heard on September 21, 2017.

[2] The support recipient is Yanet Candelario Salazar and the payor is Douglas Francis Roche.

[3] The payor and recipient were not married. According to Mr. Roche, they cohabited for 2 years and 4 months only. They have one child together, Cesar Candelario Roche, born March 3, 1998. Mr. Roche told me that Cesar is not his biological child. Cesar is now 19 years old. Mr. Roche has not seen Cesar since he left Canada with his mother in June of 2013.

[4] The orders which the Family Responsibility Office ("FRO") seeks to enforce are the child and spousal support Orders of the Honourable Justice Paisley of the Superior Court of Justice in Toronto dated October 16, 2012 and May 1, 2013. Both of these Orders were made on an uncontested basis in the payor's absence.

[5] On October 16, 2012, Paisley J. made a temporary order that Mr. Roche pay $10,000 per month commencing September 1, 2012 until the hearing of a long motion. I have no evidence that the long motion ever proceeded. The $10,000 monthly amount was characterized as combined child and spousal support, although there was no breakdown as between the two forms of support. Further, Paisley J. ordered Mr. Roche to provide a 14 item list of disclosure within 60 days.

[6] On May 1, 2013, Ms. Salazar obtained a final Order of Paisley J., based on a Form 23C Affidavit for Uncontested Trial and an affidavit that she had filed. These documents were not put before me on the default hearing. The final Order grants Ms. Salazar custody of Cesar. It requires Mr. Roche to pay child support of $4,593 and spousal support of $15,376 per month, commencing January 1, 2013, based on an imputed annual income of $600,000.00. It also requires Mr. Roche to pay special or extraordinary expenses pursuant to section 7 of the Child Support Guidelines ("s. 7 expenses") of $771.00 per month as an "education expense" for Cesar commencing September 1, 2012. The Order does not state what this educational expense is, nor was I told at the default hearing. As Mr. Roche did not file the affidavit upon which Ms. Salazar relied to have the Court impute an income of $600,000 to him, I had only Mr. Roche's viva voce explanation of the basis of the Order.

[7] At some point after Paisley J. made the final Order, Mr. Roche launched a Motion to Change it[1]. As I will explain in more detail below, Mr. Roche did not diligently pursue the initial Motion to Change. Mr. Roche then launched a further Motion to Change in January 2017. On June 15, 2017, Penny J. made an order striking that Motion to Change.

[8] The FRO seeks a final default order. FRO counsel asks that I order Mr. Roche to pay $12,920, which is the remaining amount it says is outstanding pursuant to a temporary default Order of Justice Cohen dated November 19, 2015, plus the ongoing monthly amount of $20,740, plus an additional $20,740 per month towards arrears. The FRO seeks an order that Mr. Roche be jailed for 30 days for any default in these payment terms.

[9] The Director's Statement of Arrears sworn September 11, 2017 reveals that the arrears owing pursuant to these Orders are a staggering $1,118,040 as of September 8, 2017, plus an $800 administrative fee. These arrears accumulated in only 4 years and 4 months. The majority of this amount pertains to spousal support.

[10] Mr. Roche gave me his account about how these Orders came into existence in his absence. He explained that he was away working in the United Kingdom when Ms. Salazar obtained these Orders. He said that she obtained these Orders in his absence notwithstanding that he had made an agreement directly with her respecting her and Cesar's support. He provided me with no evidence regarding what efforts he made to secure adjournments, or to participate in the process before the Superior Court from abroad.

[11] According to Mr. Roche, Ms. Salazar relied on his company's financial statement as the evidentiary basis upon which the Orders were based. He claimed that the income Paisley J. imputed to him was based on corporate income, not his personal income[2]. He also testified that Ms. Salazar submitted a company financial statement from a year in which he earned an anomalously high amount of commission income. Specifically, Mr. Roche testified that he earned gross commission income of around $1 million (before expenses) in either 2011 or 2012, but he has not earned in that level since then.

[12] Mr. Roche testified that when he returned to Toronto from the UK, Ms. Salazar and Cesar were living in his apartment, so he went to stay with friends. He did not resume living in his apartment until about June 2013, after Ms. Salazar left Canada. It was at this point he says he received notice of Paisley J.'s Orders.

[13] Mr. Roche also added that Ms. Salazar is in jail in the United States for immigration issues. Attached as Exhibit "C" to his affidavit sworn September 21, 2017 is a document that appears to be some form of case history from the New Jersey District Court that identifies the "Nature of Suit" to be "463 Immigration – Habeas Corpus – Alien Detainee" covering the period February 17, 2017 to August 29, 2017. This document indicates that Ms. Salazar's "petition for habeas relief under 28 U.S.C. 2241 (ECF NO. 1) is granted", which suggests to me that she has been recently released from detention. Other than what is evident on the face of the document, Mr. Roche gave me no explanation regarding what this document is or how he obtained it. My concerns about this document's admissibility aside, I fail to see the relevance of any of Ms. Salazar's immigration issues in the US to the issues before me.

B. The Nature of the Evidence Before Me at the Default Hearing

[14] At the outset of the default hearing, counsel for FRO advised me that she was not calling any witnesses. The FRO relies only on the Director's Statement of Arrears sworn September 11, 2017, which I made Exhibit 1, the presumptions in s. 41(9) of the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, as amended that the statement of arrears is correct as to the arrears accruing while the order is filed in the Director's office[3] and the evidence in the Continuing Record and the viva voce evidence of Mr. Roche, including his cross-examination, in this proceeding. She relies on the presumption in s. 41(9) of the Act that the payor has the ability to pay the arrears and the subsequent payments. She did not call the support recipient to testify.

[15] The payor is self-represented. His documents were filed in the Continuing Record in a disorganized fashion and as FRO counsel submitted, his disclosure is incomplete. Despite this, I am nevertheless left with only Mr. Roche's evidence plus the FRO's cross-examination in this default proceeding.

PART II: ADDITIONAL FINDINGS OF FACT

A. The Payor's Education and Self-Employment

[16] Mr. Roche is 59 years old. He does not have any health issues.

[17] Mr. Roche is a highly educated person. He has a "liberal arts" degree from Harvard University, which he obtained in 1980, an LLB and an MBA from McGill University, which he obtained in 1984, a LLM from Laval University, which he obtained in 1988 or 1989 and a Chartered Financial Analyst designation, which he obtained in 1993.

[18] Mr. Roche is a self-employed investment banker. He raises capital for junior companies. He receives a commission if he is successful in raising capital for those companies. Otherwise, he is not compensated for any work that he does which does not yield results.

[19] He was at one time a fellow of the Canadian Securities Institute and a member of the Alberta District of the Investment Dealers Association of Canada, although he no longer holds these designations. He currently holds no other professional designations or memberships.

[20] Mr. Roche is the sole shareholder of two companies, Roche Securities Limited and Roche Securities Ltd. Although he is incorporated, he testified that he has been operating as a sole proprietor for the past 2 or 3 years. He testified that he did business through Roche Securities Limited from 1993 to 2003, and then through Roche Securities Ltd. after 2003 until he began operating as a sole proprietor. He testified that the companies are not wound up, but he no longer uses them.

[21] Mr. Roche referred to the time frame surrounding Paisley J.'s Orders as "the perfect storm". As set out above, he earned anomalously high income right before the support orders were made. He testified that thereafter, there was a profound downturn in his business. Many of his competitors went out of business. He testified that his strategy was to ride out the downturn and remain in business for as long as possible. He wanted to be the "last man standing when the market turned". To his credit, he has not gone out of business and he continues to work in his field.

[22] Mr. Roche testified that he used to work out of Edmonton, doing a lot of work in the oil and gas industry. He testified that his business decline was tied to the decline in oil and gas prices. He further testified that he used to do work internationally. He listed a number of examples of his international business travel in cross-examination. But he testified that he has been unable to travel abroad for work since 2013 as he lost his passport due to the non-payment of support.

B. The Payor's Income

[23] Mr. Roche's financial statement in this default proceeding was sworn February 24, 2016. In the Support Enforcement Continuing Record, he also included his financial statement sworn January 26, 2017 that he used in the Superior Court Motion to Change proceedings. He did not file an updated financial statement for the default hearing, although he did supply various bank statements and other financial documents. He provided only portions of his tax returns. I address the significance of his disclosure below.

[24] On the financial statement sworn February 24, 2016, Mr. Roche deposed he earned income of $90,000 per annum for 2015. He appended a summary/calculations of his 2015 income to his financial statement. It includes net self-employment income and Air B&B rental income. On his financial statement sworn January 26, 2017, he deposed income of $125,251. This closely approximates his Line 150 income for 2016, that he subsequently produced after it was filed.

[25] In cross-examination, Mr. Roche said that he started renting out his apartment on Air B&B for the past 1 ½ years to supplement his income. He charges $125 per night. He said he earns about $1,000 per month on average. According to the summary attached to his February 24, 2016 financial statement, he earned a net amount of $3,456 in 2015. I was not given a breakdown for 2016.

[26] Mr. Roche supplied the following income documents in this proceeding:

(a) The four page jackets for his 2013, 2014, 2015 and 2016 tax returns;

(b) His 2013, 2014 and 2015 Notices of Assessment;

(c) Comparative reviews of Mr. Roche's personal tax returns covering the years 2011 through 2016; and

(d) Various bank statements and randomly organized documents relating to the work that he does.

[27] These tax returns, comparative reviews and Mr. Roche's viva voce evidence reveal the following concerning his income:

	2011	2012	2013	2014	2015	2016
Employment Income	$165,000	N/A	N/A	N/A	N/A	N/A
Taxable Dividends	$281,250	$366,875	$337,500	$152,220	N/A	N/A
Gross Business Income	N/A	N/A	N/A	$135,550	$110,631	$166,095
Net Business Income	N/A	N/A	N/A	$41,518	$78,573	$125,893
Subtotal: Line 150 Income	$446,250	$366,875	$337,500	$193,738	$78,573	$125,893
Plus Air B&B Income					$3,456	$12,000
Plus Add Back for Business Expenses Deducted				$94,032	$32,058	$40,202
Total:	$446,250	$366,875	$337,500	$287,770	$114,087	$178,095

[28] Counsel for the FRO cross-examined Mr. Roche about various gross commissions and other income he earned since the Orders of Paisley J., but the cross-examination did not establish that Mr. Roche failed to report this income as part of his tax filings. I am not able to conclude that these commissions should be added to the income reported on his tax returns in assessing the arguments about his ability to pay.

[29] Consistent with his evidence about the downturn in the market since Paisley J.'s Orders, there has been a decline to Mr. Roche's personal income. Also consistent with his evidence that he ceased operating through a company, he has not reported any employment or dividend income since his 2014 tax return. That is also the year in which he started to report self-employment income. This lends some credibility to his oral evidence concerning the change to his corporate structure and concerning his arguments about inability to pay.

[30] That said, I was not given any corporate financial statements or corporate tax returns for the years in which he very clearly operated through a company. I was not given the schedules to any of his tax returns, including his yearly Statements of Business Activities since 2014, to better understand what his gross income or the business expenses Mr. Roche is deducting from his gross business income. There is also no line item for the rental income that he earns through Air B&B listed on his tax returns.

[31] Obviously, a certain level of expenses are necessary for Mr. Roche to earn an income. But in the absence of having the necessary evidence, I have added the $3,456 of Air B&B income to this income for 2015, $1,000 per month in Air B&B income for 2016 and I have added back all of his business expenses deducted in the relevant years.

[32] As I will discuss further below, I have drawn an adverse inference from Mr. Roche's failure to provide complete disclosure. I do so for the purpose of determining whether Mr. Roche has rebutted the presumption that he has an ability to pay the arrears and subsequent payments under the order within the meaning of s. 41(9) of the Act.

C. The Payor's Assets

[33] Regarding his assets, the payor testified that he has one bank account and almost no other assets. He testified he has a watch[4]. On his financial statement sworn February 24, 2016, he deposed he has some furniture in his apartment, which he said is worth $9,000 and a dated computer perhaps worth $1,000. He testified he has some art work, perhaps worth $5,000.00. On his Superior Court financial statement sworn January 26, 2017, he values the furniture, computer and art at $7,500.00.

[34] He testified that he has a "negative net worth of $1 million". He attached a list of debts as an appendix to his financial statement sworn February 24, 2016. The list adds up to $914,287.63, exclusive of support arrears and costs orders. The same aggregate of debts is mentioned on the Superior Court financial statement sworn January 26, 2017. On the February 24, 2016 statement, the debts include tax debt owing to the CRA of $296,536.15. According to his Notice of Assessment for 2015 issued on May 12, 2016, the tax debt has increased to $327,041.91 and this increased amount is reflected on the Superior Court financial statement sworn January 26, 2017.

[35] In my view, the list of debts is inflated insofar as it relates to two debts associated with a home at 1515 Pearl Street in Victoria BC in the approximate amount of $120,000 on the schedule. In cross-examination, Mr. Roche testified that his company purchased this property for his sister about 10 years ago to assist her to acquire a home. He testified that she sold her previous property and paid him back the debt. Apparently he made a profit of $100,000 when he was repaid. I do not know when the repayment was made. I was not told whether Mr. Roche used any of the aforementioned funds to make arrears payments, and there was no cross-examination on this point.

[36] Mr. Roche said that his company never owned the equity in the Victoria property and it was a mere title holder. However, he apparently transferred the property to his sister only in 2017. I was not told why the property was purchased 10 years ago and then held until 2017, if the house was actually the sister's all along.

[37] Nevertheless, in this default proceeding, the FRO did not allege that this was an improper transaction.

[38] Other than the loans relating to a property at 1515 Pearl Street in Victoria BC, there was no cross-examination respecting the other debts, which amount to $794,288.00 as of February 24, 2016. I was not given any evidence that that Mr. Roche had made payments towards these other debts in priority to support.

PART III: PRIOR PROCEEDINGS

A. The Default Proceeding

[39] This default proceeding commenced on August 26, 2013. Since then, this Court has made the following Orders[5]:

(a) On November 18, 2013, Cohen J. made an order permitting Mr. Roche to be served with the Notice of Default Hearing and accompanying documents by mail to his apartment;

(b) On January 6, 2014, Cohen J. granted a bench warrant to compel Mr. Roche's attendance in Court;

(c) Mr. Roche was later arrested and brought to Court. On July 8, 2014, Scully J. released Mr. Roche on an undertaking to appear pursuant to s. 150(1) of the Provincial Offences Act and made a disclosure order;

(d) On July 21, 2014, Cohen J. made a temporary default Order on consent. It required Mr. Roche to launch a Motion to Change prior to the November 3, 2014 return date in the default proceeding, and to provide disclosure;

(e) On November 3, 2014, Cohen J. made a further order regarding disclosure. She ordered Mr. Roche to provide his personal and corporate tax returns for 2013, and his notice of assessment for 2013 within 30 days, as well as business financial statements for 2013 and 2014 and various bank statements. She further ordered him to file the Motion to Change in the Superior Court within 30 days and to pay $1,000 within 7 days;

(f) On December 18, 2014, on consent, Cohen J. ordered Mr. Roche to pay $5,000 by January 15, 2015 and $5,000 by February 15, 2015. She ordered that he would be incarcerated for 3 days for each and every default, subject to a motion for committal;

(g) On February 23, 2015, on consent, Cohen J. ordered Mr. Roche to pay $5,000 towards the ongoing support on March 15 and April 15, 2015, with the same committal term in the event of default as ordered on December 18, 2014;

(h) On July 14, 2015, on consent, Cohen J. ordered Mr. Roche to proceed with his Motion to Change, to pay $2,500 towards ongoing support on August 15, 2015 with the same committal term in the event of default as ordered on December 18, 2014, and she ordered him to provide his complete tax return for 2014. She also ordered him to advise the FRO of any change of address or income source within 10 days;

(i) On November 19, 2015, on consent, Cohen J. ordered Mr. Roche to proceed "diligently" with his Motion to Change, she ordered him to pay $20,740 by December 23, 2015 and $20,740 by January 23, 2016, with 15 days of incarceration for each and every default, and she made a further disclosure order;

(j) On February 26, 2016, Cohen J. heard the FRO's motion for a warrant of committal. She adjourned the motion on condition that Mr. Roche pay the $41,480 on or before April 15, 2016 and costs of $5,000 owing to Ms. Salazar in the Motion to Change. She ordered that the motion would proceed on May 9, 2016 if the payments had not been made;

(k) On September 30, 2016, Cohen J. ordered Mr. Roche to pay $19,080, which was then the amount outstanding from the November 19, 2015 order;

(l) On July 10, 2017, Cohen J. scheduled the default hearing to proceed on September 21, 2017; and

(m) I heard the default proceeding on September 21, 2017 and reserved judgment.

B. The Payor's Payments to the Recipient

[40] There is considerable merit to the FRO's submission that a committal term is required to enforce compliance. The Director's Statement of Arrears reveals:

(a) Mr. Roche made no payments throughout 2013 and most of 2014;

(b) His first payment was $1,000 made on December 10, 2014. He did not make this payment within 7 days, as ordered by Cohen J. on November 3, 2014. Rather, he paid it on the 37th day;

(c) He paid $5,000 on January 12, 2015 and a further $5,000 on February 12, 2015. These payments complied with Cohen J.'s December 18, 2014 Order. A committal term was attached to this order;

(d) He paid $5,000 on June 12, 2015. This was not in compliance with Cohen J.'s order of February 23, 2015 that he make two $5,000 payments months earlier;

(e) He seemingly ignored Cohen J.'s July 14, 2015 and November 19, 2015 orders entirely until the FRO brought a motion for a warrant of committal;

(f) Even after the FRO brought its motion for a warrant of committal and Mr. Roche was given yet more extensions by the Court, Mr. Roche did not pay for months. He paid $1,000 on June 23, 2016, $1,400 on July 22, 2016, $10,000 on August 23, 2016 and $10,000 on September 20, 2016;

(g) Following Cohen J.'s September 30, 2016 order that he pay the remaining amount $19,080 ordered on November 19, 2015, he paid a further $5,000 only, on February 2, 2017; and

(h) He made no further payments leading up to the commencement of this default proceeding.

C. The Motion to Change

[41] Meanwhile Mr. Roche launched a Motion to Change in the Superior Court. His evidence concerning the prior proceedings in the Superior Court was very confusing and incomplete. I do not have a clear picture of what happened during those proceedings.

[42] Mr. Roche testified that he commenced the Motion to Change in the Superior Court in 2014 but an appearance there was delayed for some reason that he could not recall. He said there was a case conference, but it was put off. He said that at some point his lawyer wanted another retainer, which he could not afford, and so he began acting on his own. This was not a wise decision on his part.

[43] According to him, the Motion to Change became dormant after that. He said that he revived it when he was told to do so by Cohen J. in about 2016.

[44] In the Support Enforcement record before me, Mr. Roche filed a case conference brief that he filed in the Superior Court for a case conference on September 16, 2015 and an endorsement of Justice Paisley dated September 16, 2015. That endorsement required Mr. Roche to provide disclosure[6], and to pay an outstanding costs order before taking any further steps. The endorsement indicates that at least in 2015, he was still represented by counsel.

[45] The next relevant Superior Court documents that Mr. Roche supplied me with are further Motion to Change materials. Apparently, Mr. Roche caused a second Motion to Change to be issued on January 26, 2017. I was given no explanation as to how this was issued given that there was already an ongoing Motion to Change. By this point, Mr. Roche was self-represented and the materials from the Superior Court that he showed me are deficient for the Superior Court to have addressed the issues raised in the Motion to Change.

[46] I was then given the endorsement of Penny J. dated June 15, 2017. In the endorsement, Penny J. referred to a previous endorsement of Justice Ferguson (that I was not shown) setting out a "specific timetable for the filing of material for this motion". However, Penny J. found that Mr. Roche did not file material. Penny J. also found that Mr. Roche failed to comply with Paisley J.'s disclosure order from 2015. Penny J. rejected Mr. Roche's submission that he did not know what else to file, and struck his Motion to Change. He ordered Mr. Roche to pay $5,000 in costs.

[47] Consequently, Mr. Roche's Motion to Change has not been determined on its merits in the Superior Court. Regrettably, this leaves this Court to adjudicate the issues in the enforcement proceeding with the questions raised in the Motion to Change not dealt with on their merits.

PART IV: THE PARTIES' POSITIONS AND A SUMMARY OF MY RULING

[48] The FRO's arguments in support of the final default Order it seeks are five-fold. The FRO heavily focuses on Mr. Roche's failure to provide disclosure as being fatal to him being able to rebut the presumption of an ability to pay. In particular, the FRO argues:

(a) The payor has not provided the disclosure he is required to provide pursuant to s. 141(1) of the Act and s. 15 of O.Reg. 167/97 as amended;

(b) The disclosure that he did provide was provided in a disorganized fashion;

(c) The payor's Motion to Change in the Superior Court was struck for non-disclosure. There is a pattern of non-disclosure by Mr. Roche. There is also no further process in which the underlying Orders may be changed and so the arrears and ongoing support ought to be paid;

(d) The payor has not rebutted the presumption in s. 41(9) of the Act that he has the ability to pay the arrears or the ongoing payments; and

(e) The FRO has only been able to collect money from the payor when there has been a threat of incarceration pursuant to temporary default orders made by this Court. Therefore, a committal term is required as part of a final default Order.

[49] Mr. Roche argues that he has provided disclosure to the best of his ability and that he made payments when he was able. As he cannot pay the amount owing or the ongoing support, "no good" will come from sending him to jail to enforce compliance.

[50] Mr. Roche submits that I ought to order him to pay $12,920 in the default proceeding since this is already due pursuant to an outstanding temporary default Order, and he further argues that he can pay $3,000 per month towards the ongoing amount. Mr. Roche essentially wants me to take into account 'entitlement factors', specifically the short length of his relationship with Ms. Salazar and the fact that Cesar is now an adult in crafting a default order, in some fashion in this proceeding.

[51] Mr. Roche also told me that I ought to order him to bring a further Motion to Change. While I have jurisdiction to make this Order under s. 41(10) of the Act, based on his conduct in the Superior Court thus far, this Order on its own would be a meaningless order without teeth. And moreover, unless Mr. Roche is prepared to get legal advice and pursue that properly (especially since his pleadings have been struck in the Superior Court), such an Order on its own would be a recipe for failure and will simply result in mere delay in this enforcement proceeding.

[52] I am not prepared to give effect to either party's submissions based on the evidence that I heard at the default proceeding. I must craft an Order that is fair and balanced in the circumstances, but based only on the statutory factors that I am entitled to consider on the evidence before me.

[53] I am mindful of the parameters of s. 41 of the Act. I am also mindful Ms. Salazar's interest in receiving the support she is entitled to under a valid court Order plus the broader societal interest in ensuring that support orders are respected. But I am also weighing this against my obligation to consider Mr. Roche's ability to pay and the seriousness of the remedy sought by the FRO.

[54] I disagree with the FRO that Mr. Roche's request to vary the Order of Paisley J. has been conclusively disposed of. In my view, there may still be a process available to Mr. Roche to address entitlement in the Superior Court.

[55] Notwithstanding that, I was told that this is the 21st appearance in the default proceeding. In the result, I intend to make a finding that Mr. Roche is in default of the Orders of Justice Paisley dated October 16, 2012 and May 1, 2013 and I am making a final Order as to remedy. I do not need to Order Mr. Roche to bring a further Motion to Change. He should do so if he wishes but he is advised to do so properly.

PART V: ANALYSIS

A. The Amount Mr. Roche Owes

[56] This default hearing is governed by s. 41 of the Act. As set out above, there amount owing is not in dispute.

B. Whether Mr. Roche is Unable to Pay the Amount Owing for Valid Reasons

[57] The issue before me is whether Mr. Roche has met his onus to prove that he has an inability to pay for "valid reasons" in accordance with ss. 41(9) and (10) of the Act.

[58] In the recent decision, Ontario (Director, Family Responsibility Office) v. Garrick, 2017 ONCJ 546, Justice Marvin Kurz summarizes the applicable test that the payor must meet under these sections. In particular, as Kurz J. states:

(a) "The law places a strong onus on [the payor] to provide that he is unable to pay the arrears of the support order or that he has valid reasons for not doing so";

(b) There must be a valid reason for non-payment. Valid means a reason over which one has no control. The reason must render the payor "without assets or income with which to meet his or her obligations, such as disabling illness or involuntary unemployment";

(c) The payor must have accepted the responsibility to pay support and have placed the obligation to pay support ahead of his own interests; and

(d) The payor must provide "frank disclosure" to allow the Court to consider the first two factors.

[59] In Ontario (Director, Family Responsibility Office) v. De Francesco, [2012] O.J. No. 6338, Justice Carolyn Jones considered set out the type of evidence needed to determine whether the payor rebutted the presumptions in the legislation. She looked at evidence of the payor's past and present circumstances, his financial circumstances since the first default under the order, and the manner in which he had applied his available income and assets, among other factors, in determining whether the payor's reasons for non-payment were valid.

[60] I am following the approach of Justice Stanley Sherr in Ontario (Family Responsibility Office) v. Levy, 2016 ONCJ 474, and I find that the payor has partially rebutted the presumption that he is able to pay the arrears and to make subsequent payments under the Order. I say this for the following reasons.

1. Mr. Roche's Disclosure

[61] A main thrust of the FRO's argument is that Mr. Roche cannot rebut the presumption of his ability to pay given his failure to provide full disclosure.

[62] Sections 41(1) of the Act and 15(1) of O. Reg. 167/97 require a payor to file a financial statement and to provide a comprehensive list of disclosure in a default proceeding. Most of the disclosure listed in the regulation must be provided for the years during which the arrears accrued. In Mr. Roche's case, this means 2013 to present for the purposes of the default proceeding, although it would have been helpful to have financial information from 2011 and 2012 too.

[63] Counsel for the FRO argued that it did not have business or corporate financial statements from Mr. Roche. But Mr. Roche's non-compliance in this proceeding is broader. Having regards to these particular sections of the legislation and regulation, Mr. Roche did not file:

(a) an updated sworn financial statement for the default proceeding;

(b) complete tax returns for 2013 through 2016;

(c) his company financial statements for 2013 through 2016 (or for the years that the corporations were active);

(d) financial statements for his business for the years since 2013 after which he ceased operating through a corporation; and

(e) statements, since 2013, showing salaries, wages, management fees or other payments or benefits paid to or on behalf of persons or corporations with whom the corporation or Mr. Roche does not deal at arm's length.

[64] He also failed to file satisfactory documentation concerning the property transaction in Victoria BC and a sufficient accounting of his Air B&B income.

[65] At the default hearing, Mr. Roche testified that Paisley J. based his support order on anomalously high corporate income for the previous year, but I was not shown comprehensive records of that either to determine the extent of the subsequent decline to his circumstances.

[66] The various disorganized bank statements and other documents that Mr. Roche filed did not assist the Court. I was given almost no explanation from Mr. Roche about these documents in either his evidence in chief or cross-examination.

[67] I find that Mr. Roche has not fulfilled his disclosure obligations in this proceeding. I make no comment about the extent of his disclosure in the Superior Court proceeding as this issue is not before me and has already been adjudicated upon by that Court.

[68] Therefore I must decide how Mr. Roche's non-disclosure impacts my decision in this case. In Reyes v. Rollo (2001), 24 R.F.L. (5th) 120 (S.C.J.) at ¶ 44, Justice Francis Kiteley said the following about disclosure in the context of a child support case:

It is inherent in the circumstances of those who are self-employed, that they have a positive obligation to put forward not only adequate, but comprehensive records of income and expenses. That does not mean audited statements. But it does mean a package from which the recipient spouse can draw conclusions and the amount of child support can be established. Where disclosure is inadequate and inferences are to be drawn, they should be favourable to the spouse who is confronted with the challenge of making sense out of financial disclosure, and against the spouse whose records are so inadequate or whose response to the obligation to produce is so unhelpful that cumbersome calculations and intensive and costly investigations or examinations are necessary.

[69] In my view, a similar approach applies equally in a default proceeding. For example, at ¶55-59 of Ontario (Director, Family Responsibility Office) v. Garrick, Kurz J. relied on the payor's failure to provide disclosure as a factor to consider in determining that he failed to rebut the presumption of his ability to pay.

2. Mr. Roche's Reasons for Non-Payment

[70] I find that there are insufficient reasons for Mr. Roche's non-payment in this case for him to avoid a finding that he is in default. Mr. Roche continues to work in the same field that he worked when the support orders were made. While his income clearly appears to have declined, he is not completely without income with which to make some payments towards his obligations.

[71] Furthermore, although he has a significant amount of debt, I am drawing an adverse inference based on his failure to provide disclosure fully. As a result of his failure to file the aforementioned tax returns, financial statements and comprehensive records concerning the Victoria property transaction, and bearing in mind his obligation to prioritize the payment of support over the payment of his debts, I cannot determine that there are no assets available to pay support in this case.

[72] Most of the reasons that Mr. Roche advanced for non-payment (his short relationship with the mother, his relationship with Cesar, and the circumstances surrounding the creation of the Orders being enforced), relate to factors that go to either the validity of the underlying Orders or entitlement, which are improper considerations respecting whether Mr. Roche rebutted the presumption concerning his ability to pay.

3. Mr. Roche's Conduct

[73] I also agree with counsel for the FRO concerning the submissions about Mr. Roche's conduct. Although this is not a case in which Mr. Roche chose to pay his own debts ahead of support, I had no evidence concerning how he otherwise prioritized the support order ahead of his own needs. I find that Mr. Roche has not voluntarily paid support. He has only paid when compelled to do so by Orders of this Court. He made no voluntarily payments towards the support orders. He did not even make voluntary partial payments, in years when he had the means to do so based on the documentary evidence that I have before me.

C. Remedy

1. Payment Order

[74] The remedies that I may order are set out in s. 41(10) of the Act. There are a number of remedies available to the Court with differing severity. As set out above, FRO counsel asks that I order Mr. Roche to pay an amount that it says is outstanding pursuant to the temporary default Order of Justice Cohen dated November 19, 2015, plus monthly support payments in excess of $40,000 per month towards arrears and ongoing support. She asks for an order that Mr. Roche be jailed for 30 days for any default in these payment terms. Although she has not asked for the maximum committal term, incarceration is a remedy of a more drastic nature than the other options under s. 41(10).

[75] Despite my findings about Mr. Roche's failure to provide disclosure, his reasons for non-payment and his conduct, I am not prepared to order the remedy sought by the FRO.

[76] In a child or spousal support case being heard on its merits (such as in Reyes v. Rollo), as opposed to an enforcement case, the consequences of the spouse's non-disclosure are that the Court may draw adverse inferences and make a support order against the payor based on the incomplete information supplied. Mr. Roche is in the current mess because of his failure to participate properly in the prior proceedings in the Superior Court.

[77] In later support enforcement proceedings, the consequences of continued non-disclosure are not only adverse inferences, but potential incarceration. In Garrick, Kurz J. relied on the payor's non-disclosure, in part, to attach a committal term to the repayment schedule he ordered[7]. However, in Garrick, Kurz J. found the payor had "utterly" failed to meet his obligation[8] and he sought to challenge findings about his financial affairs that he had also challenged during the trial. Moreover, the payor's attempts to challenge entitlement in related proceedings were "conclusively dismissed".

[78] Despite my findings, I have sufficient evidence to cause me concern about Mr. Roche's ability to pay over $40,000 per month going forward. I also have a concern about his past ability to make the full monthly payments ordered when those amounts accrued.

[79] As the Court of Appeal said in Fischer v. Ontario (Director, Family Responsibility Office), 2008 ONCA 825, imprisonment is a remedy of last resort. It is a remedy to be used as a means to enforce the order, not punish the payor. Its enforcement rationale only makes sense if the payor has the ability to make the payments required by the order.

[80] In my view, incarceration will be a foregone conclusion if I order the remedy sought by the FRO, and this is contrary to the legal principles I must apply. Just because I have found Mr. Roche in default, I am not required to order Mr. Roche to pay the full ongoing payments plus arrears payments under s. 41(10). In my view, this is tantamount to a punitive order.

[81] As set out in the chart above, Mr. Roche's 2016 income ranges between $125,893 and $178,095 depending on how the business expenses and Air B&B income are dealt with. Given his failure to provide disclosure and the adverse inference I have drawn, I am basing my decision on an income at the higher end of the range.

[82] I am directing Mr. Roche to pay $12,920 as requested by the FRO (which Mr. Roche did not dispute) and the further sum of $5,000 per month. In making the $5,000 per month payment order, the majority of his income will go towards the payment of support.

2. Whether I Should Order Mr. Roche to Bring Another Motion to Change

[83] Parenthetically, although I have no jurisdiction to address entitlement, I am concerned about enforcing over $1 million in arrears and ongoing support of $20,740 with incarceration in the circumstances of this relationship. The evidence before me is that this was little more than a two year relationship, and the child is now an adult child who is not entitled to the support.

[84] Although Mr. Roche created these conditions through his conduct in the Superior Court proceedings, unlike Garrick, the issue of entitlement has not been "conclusively determined".

[85] While I have jurisdiction to order Mr. Roche to bring a further Motion to Change pursuant to s. 41(10)(d) of the Act as Mr. Roche has asked me to order, I am not prepared to make this Order. Were this case still at the temporary stage, I might be more inclined to consider making such an Order but there are a number of problems associated with such an Order.

[86] The first is delay. As set out above, there have been 21 appearances in the default proceeding before the matter came on before me for a hearing.

[87] The second problem is that such an Order has already been made by this Court and Mr. Roche did not proceed with that opportunity properly.

[88] A third problem is that Mr. Roche's last Motion to Change was struck by Justice Penny. So if I sent Mr. Roche back to the Superior Court with yet another Motion to Change, and if he proceeded in the fashion that he proceeded on the last occasion, his further Motion to Change would very likely get dismissed. I would be setting Mr. Roche up for further costs orders.

[89] Lastly, Mr. Roche's request that I make such an order is unnecessary. Mr. Roche can bring another Motion to Change on his own initiative if he wishes. He does not need an order from me to do this. I do offer a word of caution. Should he decide to bring another Motion to Change, it is imperative that he gets legal advice about how to proceed, especially now that his pleadings have been struck.

[90] If Mr. Roche actually seeks legal advice about how to proceed, rather than bringing a further Motion to Change in a cavalier fashion, then the lawyer providing that advice will need to review this endorsement, the Superior Court's endorsements, the list of disclosure that Mr. Roche apparently didn't provide in the Superior Court proceeding, the initial Motion to Change materials (filed by both parties), the materials filed by both parties when Mr. Roche filed a further Motion to Change, and all of the materials that were filed for the motion before Penny J. That lawyer will need an accurate list of any costs orders that have been made in the Superior Court, and he or she will need accurate information about whether those costs orders have been paid, as payment of outstanding costs orders will almost certainly be a prerequisite to Mr. Roche getting any relief from the Superior Court.

[91] In summary, based on the number of appearances in this enforcement proceeding to date and the evidence that I do have before me, I am making what I view to be a final default Order that is fair and just in the circumstances.

PART VI: ORDER

[92] I make the following orders:

(a) On a final basis, Mr. Roche is in default of the Orders of Justice Paisley dated October 16, 2012 and May 1, 2013;

(b) Mr. Roche shall be committed to jail for 30 days, or less until such time as he pays the sum of $12,920 to the Family Responsibility Office towards arrears;

(c) A warrant of committal shall issue respecting the term set out in (b) above. However, the return date in this matter is October 19, 2017 at 10:00 am. The warrant of committal shall be held in abeyance and not enforced until that date, and Mr. Roche shall attend Court with a bank draft or certified cheque in the amount of $12,920 payable to the Family Responsibility Office (if he has not paid this amount to the FRO prior to that date);

(d) Commencing November 1, 2017, Mr. Roche shall pay the sum of $5,000 per month to the Family Responsibility Office for the benefit of Yanet Candelario Salazar; and

(e) In the event of a default of any payment referred to in (d), Mr. Roche shall be incarcerated for up to 30 days (or less if he pays the amounts owing sooner than 30 days) for each and every default.

PART VII: A NOTE FOR CLARITY FOR MR. ROCHE'S BENEFIT

[91] For Mr. Roche's benefit as a self-represented litigant, this Order respecting remedy does not rescind the arrears that have accumulated, nor does it impact the accruing of more arrears, nor does it limit the FRO's other means of enforcing the Orders.

Released: October 11, 2017

Signed: Justice Alex Finlayson

Footnotes

[1] Mr. Roche's viva voce evidence was that he did this in 2014.

[2] However, Mr. Roche also testified that he is the sole shareholder of that company from which income was derived.

[3] The Orders also contain an element of retroactive support. There is no issue as to the accuracy of that component of the arrears reflected on the Director's Statement. The payor admitted that the Director's Statement of Arrears was correct.

[4] I wasn't told the type of watch or its value.

[5] There have also been a number of adjournments not referenced herein.

[6] I am unable to determine what Mr. Roche was ordered to provide. Paisley J.'s endorsement respecting disclosure cross-references a disclosure request in a brief that was not attached.

[7] Kurz J.'s Order required the payor to make payments towards arrears until paid in full, plus ongoing support.

[8] He didn't even provide tax returns.