Court File and Parties
Ontario Court of Justice
Date: 2017-09-29
Court File No.: Halton 09/526
Between:
Vanessa Martinez Scott (formerly known as Vanessa Martinez Rubatto) Applicant
— And —
Alvaro Ernesto Martinez Sandoval Respondent
Before: Justice Victoria Starr
Heard on: September 26, 2017
Reasons for ruling on motion released on: September 29, 2017
Counsel
Vanessa Scott — on her own behalf
Alvaro Martinez Sandoval — on his own behalf, assisted by D.C. J. Diaz
INTRODUCTION
[1] These reasons relate to a motion brought within the context of a default hearing.
[2] An unusual aspect of this case is that it is the recipient who is the applicant, not the Director of the Family Responsibility Office, who is seeking to enforce the support order and who has carriage of these default proceedings.
[3] By way of notice of motion dated September 5, 2017, and returnable today, the applicant moves, before this court, for a variety of orders including:
(a) An order that the respondent be required to deposit his Canadian and Uruguay passports with the court;
(b) An order varying the temporary Default Order dated May 12, 2017 from $496 per month to $1700 per month.
(c) An order that the respondent be required to serve and file full financial disclosure, including un-redacted bank account statements for any bank account used to pay month to month bills, car payments, car insurance premiums, and residential rent/mortgage;
(d) An order that any other third-party be added as a payor to the ongoing default hearing and required to provide the above financial disclosure if any of the accounts, bills or payments above are in such third party's name;
(e) An order that the above disclosure be provided not later than 14 days after the hearing of this motion;
(f) An order for costs in the amount of $330 for the motion.
[4] The applicant's motion was brought on notice to the respondent. He was served with the motion materials on September 13, 2017.
[5] The respondent neither served nor filed any evidence or documentation in response to the mother's motion. By the time this motion was heard, he was no longer represented by his former lawyer. He appeared at the hearing, without counsel, and was assisted by duty counsel.
[6] Following the hearing of the motion on September 26, 2017, I gave my decision and brief reasons orally, with this written ruling to follow.
BACKGROUND
[7] The respondent's support obligation is set out in the temporary order of Justice O'Connell dated May 13, 2011. That obligation requires him to pay $1,455 per month in support for his two children: Nicole Gladys Martinez Rubatto, born September 24, 1996 and Alexander Ernesto Martinez Rubatto, born October 10, 1998. Pursuant to Justice O'Connell's order, he is also required to pay arrears of child support fixed as at May 13, 2011, at $5,022.50.
[8] The level of support payable is based on an imputed income to him of $71,000 per year and is the Guideline table amount payable for two children.
[9] The respondent failed to pay what he was required to pay. He is in arrears (not including interest or any penalties) in excess of $96,751.34.
[10] The Director issued a Notice of Default Hearing on October 19, 2016. Based on the Affidavit of Service sworn December 28, 2016, the respondent was served with a number of documents including the Notice of Default hearing and Director's Statement of arrears on December 28, 2016 by way of substituted service.
[11] The default hearing was adjourned twice before May 12, 2017. On May 12th the matter came before Justice Paulseth. She made a temporary default order requiring the respondent to pay the sum of $496 per month, commencing June 1, 2017 with a three day term of incarceration to attach for any default in payment. She further directed that any Federal funds do not count towards the support order.
[12] It is not clear why the respondent's support obligation was reduced to $496 a month. That is, whether the Director and the respondent agreed to the payment term or whether they were the result of a finding made by Justice Paulseth. What is clear, from my review of her endorsement is that the respondent and his counsel represented that they have a draft motion to change with income tax returns for 2013, 2014, and 2015 showing an average income of $10,000 USD annually. The applicant was not present that day. The documents were not filed with the court but respondent's counsel was directed to and undertook to file them.
[13] On July 27, 2017 the applicant issued a Notice of Transfer of Enforcement. This notice withdrew the order from the enforcement program run by the Director and, at her request, the Director assigned to her the enforcement measure(s). That document was served on July 27, 2017.
[14] The respondent brought an ex parte motion for leave to commence his motion to change in Milton. Leave was required because Justice O'Connell ordered on May 13, 2011 that the respondent may not bring any future proceedings without leave of the court. That motion was dealt with in chambers by Justice Kurz. By order dated July 14, 2017, Justice Kurz dismissed the ex parte motion for leave.
[15] The matter next came before Justice Paulseth on August 4, 2017. As her endorsement from that date indicates, she was aware at that time that Justice Kurz had dismissed the ex parte motion for leave. Her endorsement of that date demonstrates that the mother was requesting a change in the amount payable under the temporary default order. Specifically, she wanted $245 payable towards arrears per month as well as an additional $1700 per month for ongoing. The mother also sought disclosure.
[16] The disclosure ordered on August 4, 2017 includes: income information, pay stubs, "job letters – Uruguay x2", and income tax returns for the years 2013, 2014, and 2015. In addition, the respondent was ordered to produce bank statements for RBC from June 2016 onwards and a copy of the respondent's 2016 income tax return within 30 days.
[17] Finally, she ordered that the status quo continue and set September 29, 2017 as the return date for the default hearing and to hear requests of the mother to change the payment terms of the temporary default order.
[18] By way of 14B Motion form dated August 16, 2017, the applicant moved for an order to transfer the Default Hearing then before the Ontario Court of Justice at 47 Sheppard Avenue East, in Toronto, to this court, the Ontario Court of Justice – Milton and for an order that it be combined with file number 526/09 of this Court. That motion proceeded unopposed and the order was granted on August 21, 2017.
[19] When this matter was transferred from 47 Sheppard to this court, the trial coordinator of the Milton court set September 26, 2017, as the date for the return of the default hearing.
ADJOURNMENT REQUEST REFUSED
[20] At the outset of the hearing today the respondent indicated that he had changed lawyers. He had spoken to Z. Khan a lawyer in this jurisdiction but had not yet formally retained him as they were waiting for authorization and a certificate from Legal Aid. He sought an adjournment. The mother opposed the adjournment.
[21] I dismissed the request for an adjournment. I gave oral reasons for doing so. My reasons focused on the fact that the father:
Is technically in default as he did not serve or file a Default Dispute within the prescribed time, and has failed to do so within the 10 months that have gone by since he was first served;
Had more than adequate notice of the mother's motion [informal notice was given on August 4, 2017 and formal notice served on September 13, 2017];
Has failed to comply with any of the disclosure orders;
Has failed to comply with his obligations under the legislation and regulations for disclosure;
Has failed to diligently pursue the commencement of a motion to change;
Has failed to file any responding materials or sworn evidence explaining the need for the adjournment and delay.
DISMISSAL OF REQUEST TO ADD UNNAMED THIRD PARTY AND FOR ORDER FOR DISCLOSURE FROM UNNAMED THIRD PARTIES
[22] The applicant suspects that when the respondent provides disclosure of un-redacted bank account statements for any bank accounts used to pay month to month bills, car payments, car insurance premiums and residential rent/mortgage, it may be revealed that such payments are made from an account held solely in the name of a third party. Rather than wait to see if such an order is required, she wants the orders made now, at a time when she does not even know (or will not tell the court) who the third party is or suspected to be.
[23] I dismiss these requests. I did so because the third party is unnamed, for procedural reasons (i.e. Lack of notice of the motion) and because the evidence before me is not sufficient to satisfy the test in ss. 41(5), (12) and (13) of the Family Responsibility and Support Arrears Enforcement Act. Such requests are premature.
REQUEST TO VARY PAYMENT TERMS OF TEMPORARY DEFAULT ORDER
The Issues
[24] The issues this court must decide in order to vary the temporary default order are these:
(1) Has there been a material change in the payor's or other person's circumstances?
(2) If so, what, if any, changes, should be made to the temporary default order.
Legal Context and Principles
Generally
[25] This proceeding is governed by the Family Responsibility and Support Arrears Enforcement Act, 1996, SO 1996, c 31 ("FRSAEA").
[26] Under Rule 30 of the Family Law Rules O Reg 114/99 ("FLR" or "the rules"), the payor, once served with a notice of default hearing must file a financial statement and notice of dispute within 10 days (r. 30(3)). Arrears are enforceable to the date of the hearing (r. 30(7)).
[27] Under FRSAEA s. 41(2), when a support order that is not filed in the Director's office is in default, the recipient may file a request with the court, together with a statement of arrears, and, on such filing, the clerk of the court shall, by notice served on the payor together with the statement of arrears, require the payor to file a financial statement and appear before the court to explain the default. The hearing where this occurs is called a default hearing.
[28] Under s. 15(1) of the applicable regulation, Ontario Regulation 167/97, under the FRSAEA, the payor must produce the following disclosure regarding his or her own income:
A copy of every personal income tax return filed by the payor with Canada Revenue Agency for the years determined under subsection (3), together with a copy of all material filed with each return, and a copy of every notice of assessment or re-assessment received for those years.
If the payor is an employee,
i. the three most recent statements of earnings indicating the payor's total earnings to date for the current calendar year, including overtime, or
ii. if the employer does not provide a statement described in subparagraph i, a letter from the employer setting out that information, including the annual rate of remuneration.
- If the payor is self-employed,
i. the financial statements of the payor's business or professional practice, other than as a partner in a partnership, for the years determined under subsection (3), and
ii. Statements for those years showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to or on behalf of persons or corporations with whom the payor does not deal at arm's length.
If the payor is a partner in a partnership, confirmation of the payor's income and draw from and capital in the partnership for the years determined under subsection (3).
If the payor controls a corporation,
i. the financial statements of the corporation and its subsidiaries for the years determined under subsection (3), and
ii. statements for those years showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to or on behalf of persons or corporations with whom the corporation or a related corporation does not deal at arm's length.
If the payor is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust's financial statements for the years determined under subsection (3).
If the payor receives income from a source other than the ones mentioned in paragraphs 2 to 6, including but not limited to employment insurance, social assistance, a pension, payments under the Workplace Safety and Insurance Act, 1997 and disability payments,
i. a statement from each applicable income source indicating the total amount received from that source during the current year, or
ii. if no statement described in subparagraph (i) is provided, a letter from the applicable income source setting out the required information.
Letters from the payor's sources of income other than employers of the payor, verifying the payor's income for the three consecutive payments made to the payor immediately before the date of the financial statement in Form 4.
Any other documents that are necessary to verify the income set out in the financial statement.
[29] Under s. 15(3) of O.Reg. 167/97:
(3) The information described in paragraphs 1, 3, 4, 5 and 6 of subsection (1) shall be provided,
(a) for each of the three most recent taxation years, if arrears have accrued during three or fewer taxation years; or
(b) for each taxation year during which arrears accrued, if arrears have accrued during more than three taxation years.
[30] Under s. 41(9) of the FRSAEA, the Director's statement of arrears is presumed to be accurate for the period in which the order is filed with the Director's office. There is nothing in the Act to suggest that this presumption applies in situations where the applicant is not the Director and the document relied upon is a Statement of Money Owed rather than Statement of Arrears. As such, this presumption does not apply where anyone other than the Director is the applicant. I find that in such cases, the applicant must prove that the Statement of Money Owed is correct as to arrears accruing since the underlying support order was made.
[31] There is a second presumption set out in s. 41(9) and I find it does apply even when the applicant is someone other than the Director. That presumption is this:
…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 [original support] order...
[32] The court has a broad palate of remedies available when it finds that the payor has failed to pay support without a valid reason. FRSAEA s. 41(10) reads as follows:
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,
(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.
[33] As the Ontario Court of Appeal stated in Fischer v. Ontario (Director, Family Responsibility Office), 2008 ONCA 825:
Any one of those powers may be exercised by the court unless it is satisfied that the payor is unable for valid reasons to pay the arrears or to make subsequent payments under the order.
Adjournments and Temporary Default Orders
[34] The court's power to make a temporary order and to subsequently change it pending the default hearing is found in ss. 41(14) and (15), which read as follows:
Temporary orders
41 (14) The court may make a temporary order against the payor, or a person who was made a party to the hearing under subsection (5), that includes any order that may be made under subsection (10) or (12), as the case may be.
Power to change order
(15) The court that made an order under subsection (10) or (12) may change the order on motion if there is a material change in the payor's or other person's circumstances, as the case may be. 2005, c. 16, s. 24.
[35] Subsection 41(14) does not set out the test the court is to apply when making a temporary default order. This suggests that the court is to make such order as is fair and appropriate based on the evidence before it. Thus, at its highest, the onus on the payor can be as high as that which will be applied at the final default hearing. At its lowest, such as where the payor is prepared to at least pay his ongoing obligation and something towards arrears, the onus on the payor may be as low as putting some evidence before the court for it to believe that the payor has a defense on the merits.
[36] Where the payor seeks a temporary default order that would have him or her pay less than the ongoing amount, the bar must be set higher than the lowest standard applicable. This is because another court has already determined that the level of support is appropriate based on the payor's ability to pay. Unless that order is successfully appealed or set aside, it is not open to the judge presiding over a default hearing to substitute his or her judgment for that of the judge who made the order.
[37] Further, the financial assistance the support order is meant to ensure the payor provides, is often needed for children to live on. Also, the public, the recipient, and the children have an interest in ensuring that support orders are obeyed until and unless they are changed. Finally, when parties are able to breach court orders without remedy or sanction, confidence and respect for the administration of justice is undermined. Thus, when a temporary default order is made for an amount less than that set out in the order to be enforce, there is often significant prejudice to the other stakeholders.
[38] In such cases the balance may be struck by applying a higher standard. In my view that standard should be that the payor, on actual evidence before the court, demonstrate that: (1) he has a strong prima facie case on the merits; (2) is acting in good faith; and (3) has filed a sworn financial statement to demonstrate his current financial circumstances.
[39] With respect to demonstrating that he has a strong prima facie case, he or she must show strong evidence that goes to the applicable merits of the defense, such as:
(1) Evidence to support a variation of the underlying support order - a material change in circumstances which can be expected, if proven, to support reduced support, and an undertaking, if this has not already been done, to take immediate steps to vary the underlying order;
(2) Evidence to support an argument rebutting the presumption that the Director's Statement of Arrears is inaccurate, or if the applicant is the recipient, to demonstrate that her calculation of arrears as reflected in the Statement of Money Owed is wrong;
(3) Evidence that may arguably rebut the presumption of his or her ability to pay support arising from the support order;
(4) Evidence to support an argument that he or she has a valid reason for his or her defaults;
(5) Evidence to support an argument that he has accepted responsibility for his or her support obligation and put the child's needs before his or her own; and
(6) Evidence to demonstrate that he or she has made and is willing to provide the required disclosure.
[40] With respect to the terms that may be included in any temporary default order, the court can order any of the term available to it when making a final default as it sees fit and appropriate [see ss. 41(10), (12), and (13)].
Analysis
Key Considerations
[41] In reaching my decision in this case, I have placed great weight on the fact that the respondent has a pattern of bad faith conduct. Justice O'Connell's endorsement of May 13, 2011 demonstrates that she struck the respondent's pleadings and limited the respondent's right to bring future proceedings because she found that the respondent misled the court, filed a false affidavit, failed to provide disclosure ordered by the court, and failed to pay support, also in breach of a court order.
[42] Justice Kurz's endorsement dated July 14, 2017 demonstrates that he dismissed the respondent's motion for leave to commence a motion to change on the basis that it should not have been brought without notice, reliance on hearsay and because the respondent had not met his duty of candour. With respect to his failure to comply with his duty of candour, Justice Kurz noted that "it appears that vital information has been withheld, and then shielded by the use of a law clerk as the affiant, rather than the respondent himself."
[43] The respondent has once again failed to follow the rules, honour his statutory and regulatory obligations, failed to honour undertakings and failed to follow a court order. For example, he has had 10 months within which to serve and file his Notice of Dispute and the financial statement and information he is required by statute, regulation, and rule, to file in these proceedings.
[44] Further, the respondent undertook to the court that he would commence a motion to change in Milton. He attempted to do so by way of an ex parte motion that was dismissed. It has been over two months since that motion was dismissed and there is no evidence whatsoever that the respondent has taken steps to correct the deficiencies and bring a further motion for leave to commence his motion to change.
[45] In addition, he undertook to file the financial documentation referenced in Justice Paulseth's endorsement dated May 12, 2017 but to date, has failed to do so.
[46] Finally, the respondent was ordered to provide very specific financial disclosure to the applicant on or before September 4, 2017 [30 days approximately from the date of Justice Paulseth August 4, 2017 order]. He has not complied with this order.
[47] All of this bad faith conduct has occurred despite the fact that he has been represented by counsel for the majority of these proceedings.
Issue #1: Has a Material Change in Circumstance Occurred?
[48] In this case, Justice Paulseth adjusted the respondent's payment to an amount well below his ongoing support obligation. She appears to have done so on the basis of his oral representation to her that he would be defending the proceeding and about his income / ability to pay, and that he would start the motion to change. It is reasonable to infer that she also expected him to file, as he is required, his Notice of Dispute, financial statement, and to provide financial disclosure.
[49] After securing a temporary default order with payment terms that greatly advantaged him and disadvantaged the children, the respondent engaged in the bad faith conduct I have just outlined. His actions have caused significant delay in moving forward with the final default hearing. They have also meant that the court and the applicant still do not have the information needed to assess the respondent's ability to pay.
[50] The respondent's inability or unwillingness to do any of the things he said he would do, is required to do, and has been ordered to do, represents a marked and significant change in his intentions regarding the conduct of these proceedings, from those he represented to the court at the time when Justice Paulseth made the temporary default order.
[51] This change has had significant negative consequences. It has negatively affected the children's right to support. It has also impeded the applicant's ability to enforce the support order. It has prevented the court from dealing with the case justly, including preventing it from providing timely access to justice and dealing with the case in ways that save time and expense.
[52] These consequences are material and not likely to come to an end for some time to come. I say this because there are many signals of further delay on the horizon. As I have noted, the respondent's former counsel has been discharged and the respondent intends to retain new counsel. The fact that counsel has not yet been retained suggests to me that there is going to be more delay moving forward as an adjournment request will likely be forthcoming, and may, depending on the circumstances and evidence before the court, be granted.
[53] There are other reasons to expect further delay as well, the fault for which also lies squarely at the feet of the respondent. For example, neither the court nor the applicant will be in a position to know whether it is necessary to add a third party or what disclosure may be required from that third-party until after the respondent has complied with the August 2017 order and the order I have made below for additional disclosure.
[54] The applicant fully expects that the disclosure will reveal that someone is shielding the assets or income of the payor from enforcement. In that event, she will no doubt want to have the third party added and seek an order for disclosure from him or her. If she does, there will be steps that she is required to take, including bringing a fresh motion for the relief she sought today, but which was dismissed. If the applicant wishes to pursue such an order a very lengthy adjournment will follow.
[55] Further, if and when the respondent has provided the disclosure he is already obliged to provide, the applicant may have additional disclosure requests that will need to be answered. If he sticks to his past pattern of not providing her with the document she requests without a court order and of failing to comply with court orders once made, this too will likely cause significant delay in proceeding with the final default hearing.
[56] Had the respondent complied with his disclosure obligations in the first place this delay would likely have been avoided. The delay is entirely due to the changes in the respondent's litigation intentions and strategy from that which he represented to the court on May 12, 2017. Those changes are changes in his circumstances, which in turn have caused changes in the applicant's circumstances. The changes have had a profound impact on the case.
[57] No matter how one looks at it, if the respondent changes his litigation strategy and with the help of new counsel now engages properly in these proceedings, the final default hearing will not actually be heard any time soon. This means that the actions of the respondent will continue to negatively affect the applicant and the court's management of this case for some time to come.
[58] I find that at the time when she made the order Justice Paulseth could not have foreseen the changes in the respondent's litigation strategy and intentions or the delay that has followed and will continue to follow as a result. She could not have foreseen that the order she made, would remain in place for so long without any actual evidence from the respondent. Had she foreseen any of this, I am fairly certain she would not have made the order reducing the respondent's support payment.
[59] For all these reasons I find that there has been a material change in circumstance and a fresh inquiry into the appropriate temporary default order is required.
Issue #2: What Changes if Any should be made to the Temporary Default order?
[60] To date, the respondent has benefited greatly from his misconduct in that he has managed to avoid his support obligation and pay significantly reduced support, all without having to even bring a motion to change let alone secure an outcome in such proceedings that would justify reducing his support obligation.
[61] This is not just wrong but completely prejudicial to society's and the applicant's interest in ensuring that support orders are obeyed, but to the children. They have been deprived of their right to be supported at the level the court determined previously was fair and just, on the basis of no evidence of inability to pay and in proceedings where the payor has not even bothered to serve and file his defense.
[62] The applicant has satisfied me that her Statement of Money Owed dated August 3, 2017, correctly sets out the respondent's arrears as at August 1, 2017. In reaching this decision I have placed weight on these considerations. First, the respondent's support obligation as set out in the temporary order of Justice O'Connell dated May 13, 2011, is that he is required to pay $1055 per month in child support plus $400 per month as his contribution towards the child's section 7 expenses. The $400 is comprised of the aggregate of $150 per month on account of orthodontic expenses and $250 per month towards any other special expenses. The total amount payable in temporary child support and section 7 expenses is $1455. Justice O'Connell's order also fixed arrears as at May 13, 2011, at $5,022.50. The interest rate that is to be applied in the event of default is 3%.
[63] Second, based on the Director's Statement of Arrears sworn May 11, 2017, the respondent's arrears as at May 11, 2017 were $103,467.92 [$93,592.58 arrears of support, $9075.34 interest on arrears, plus $800 representing FRO's enforcement fee]. The presumption that the Director's Statement of Arrears is accurate applies and has not been rebutted.
[64] Third, the mother gave oral evidence at this hearing as to how she calculated arrears. She prepared and served a Statement of Money Owed dated August 3, 2017. In completing this she incorporated the information set out in the Director's Statement of Arrears dated May 11, 2017. From there she added any amounts she received from FRO after that date up to August 3, 2017 when she swore her Statement of Money Owed. As of today, those arrears are even higher as the applicant has only received two payments of $496 since that date [one made on August 18, 2017 and the other on September 3 or fourth 2017]. In completing her calculations she used 3% to calculate the interest.
[65] The respondent did not seek to cross-examine the applicant and there is no evidence from him to suggest that the applicant's calculation of arrears is incorrect.
[66] There is also no evidence from the respondent addressing his ability to pay or reasons explaining his default. Thus, I find that:
(1) He has failed to rebut the presumption of his ability to pay support arising from the support order;
(2) He has failed to prove that he has a valid reason for his defaults;
(3) He has failed to prove that he has accepted responsibility for his support obligation and put the child's needs before his own; and
(4) He has failed to provide required disclosure.
[67] I find the applicant's request that the temporary default order be varied such that the respondent be required to pay his ongoing monthly support obligation of $1455, fair and reasonable. Although she has asked for an additional payment towards arrears such that the total payable be $1700 a month, I declined that request.
[68] For now the respondent shall pay only $100 towards arrears on a monthly basis. I have decided this because, while payment towards arrears is important and should be made, the most pressing issue pending the final default hearing is to ensure that the children's ongoing financial needs are met. By requiring the respondent to honour his ongoing child support obligation, I am satisfied that this priority will be accomplished. A payment of $100 a month towards the arrears will not result in their satisfaction, but it at least sends the message that some effort towards their repayment must be demonstrated during the adjournment.
[69] I grant the applicant's requests regarding the deposit of passports and for additional disclosure from the respondent as well. I do so because there is no evidence before me suggesting that the request is unreasonable or disproportionate. I note as well the respondent's failure to oppose the order by filing responding materials to the mother's motion, and his failure today to take any position during submissions with respect to the making of such an order. As such, the request is unopposed.
[70] With respect to this court's jurisdiction regarding the deposit of passports the applicant relied on the case of Sadlier v. Carey, 2015 ONSC 3537. This decision deals with section 34 of the Family Law Act, R.S.O. 1990, c F.3 ("FLA"), which provides the court with the power to make an interim or final order in the context of an application under s. 33 of the Act. Section 33 deals with a claim for child support and spousal support. The case addresses the question of whether the phrase "or otherwise" used in ss. 34(1)(k) is broad enough to include deposits of passports as a method of securing payment of a support order.
[71] The powers afforded to a judge in s. 34 of the FLA only apply in applications made under s. 33 of the FLA. These proceedings and this court's authority are found in a different Act, FRSAEA. I therefore cannot rely on s. 34 of the FLA to make the order for the deposit of the respondent's passports.
[72] I find that this court's authority to order that the payor deposit his passport as a means to secure arrears and subsequent payment, is found under ss. 41(1)(e). It provides that the court may order that the payor:
41(1)(e) provide security in such form as the court directs for the arrears and subsequent payment.
[73] This subsection does not refer specifically to the deposit of passports as security. However, I conclude that the phrase "in such form as the court directs" captures this form of security. The language of this subsection is much broader than the language in s. 34(k) of the FLA, in that it leaves the decision as to the form of security, entirely up to the discretion of the presiding judge.
[74] Further, section 34(k) of the FLA, which contains similar, but less broad language (the word "otherwise") has been interpreted as including this form of security [see: Sadlier v. Carey (supra), Jones v. Hugo, 2012 ONCJ 211, and F. (H.) v. H. (M.), 2014 ONCJ 450]. It stands to reason, given that the underlying purpose of both sections is to ensure that children are supported – one by the making of an order and the other by providing a mechanism to enforce it – that the broader language of s. 41(1)(e) also captures this form of security.
[75] I note as well that this enforcement measure is an administrative one afforded to the Director. As such, it is clearly a form of security contemplated as a method to secure arrears and subsequent payment, under the governing Act. I see no reason why a recipient who stands in the place of FRO as applicant, should not also have access to this enforcement mechanism.
[76] The respondent holds both a Canadian and Uruguayan passport and based on the evidence, has strong ties to Uruguay. He has a terrible payment history when it comes to paying support, although he has been making the reduced payments ordered by Justice Paulseth. He has a long history of failing to follow court orders and rules. Two previous judges (Justice O'Connell and Justice Kurz) have found his integrity lacking. I too have now found that he has acted in bad faith in his conduct of this litigation. In such circumstances, it is fit and appropriate to order that the court direct that he provide security for the arrears and subsequent payment by depositing his passports with the court.
[77] As an aside, I find that I also have authority to order the respondent to deposit his passports pursuant to the powers afforded to the court under Rule 1(8). Rule 1(8) states that where a party "fails to obey an order ..., the court may deal with the failure by making any order that it considers necessary for a just determination of the matter". Rule 1(8) lists various orders that a court may make. While the list does not include surrendering passports or posting security, the list is not exhaustive. It is open to the court to make other types of orders that are "necessary for a just determination of the matter."
[78] Finally, I have continued the three day committal term to attach to any payment for which there is default, originally ordered by Justice Paulseth, as this was agreed to by the respondent at the time when the order was made and there is a need in this case to send a strong message to the respondent that if he does not comply with this order and has no valid reason for failing to do so, the consequences will be severe.
LIMITS PLACED ON RESPONDENT'S DEFENCE
[79] As I have noted, the respondent is technically in default and not entitled to participate further in these proceedings. During the attendance on September 26, 2017, the applicant indicated that she was prepared to go ahead with a final default hearing. The court began the hearing and this is why it heard oral evidence from the applicant about her calculation of arrears. It is why I have made findings about its accuracy. I have decided that the respondent shall be precluded from challenging the accuracy of the Statement of Money Owed dated August 3, 2017, going forward.
[80] I make this order pursuant to my authority under r. 1(8) and under r. 2 which compels both the court to deal with cases justly, including by finding ways to save time and expenses and in ways that ensure that its resources are not unnecessarily or disproportionately consumed. Conducting a second inquiry into the accuracy of the Statement of Money Owed, would be duplicative and result in a disproportionate use of court resources and taxing on the applicant in terms of time and expense.
THE NEXT COURT DATE AND ITS PURPOSE
[81] At the September 26, 2017 hearing I set October 10, 2017 as the date for the final default hearing. I have reconsidered this in light of two factors: First, this endorsement is being released late and as such, the respondent will not have it in time to comply with all of the October 2, 2017 deadlines I set.
[82] Second, it is obvious to me now that we will not be in a position to proceed with the final hearing on October 10 as the applicant needs time to review any disclosure she receives and to proceed with any motion she intends to bring regarding third parties.
[83] Third, now that I have set the payment terms of the temporary default order such that I have restored the respondent's obligation to pay the ongoing support, and as well, have directed that some payment towards arrears is to be made, the prejudice to the public, the applicant, the children, and the administration of justice is significantly reduced.
[84] Fourth, the respondent blamed much of his conduct in this litigation on his former counsel. He has been proactive in changing lawyers. He has found a lawyer whom he says will represent him provided a Legal Aid certificate is granted. Although I take what he says with a healthy dose of skepticism, I want to make sure that if he is truly going to change his ways for the better, that he is given a fair opportunity to comply with his disclosure obligations, to put his defense together, and to present it.
[85] For these reasons, my order below is different in terms of deadlines and the purpose of the next attendance than the order I made at the hearing.
COSTS
[86] The applicant sought costs of this motion. After hearing submissions I dismissed her request. I gave oral reasons for doing so.
ORDER
[87] For all these reasons I make the following finding and temporary order:
(1) This court finds that the Statement of Money Owed sworn by the applicant on August 3, 2017, accurately reflects the calculation of arrears accrued under the order of Justice O'Connell dated May 13, 2011.
(2) This court finds that the arrears accrued under the order of Justice O'Connell dated May 13, 2011, are $107,067.54 as at August 1, 2017; and are comprised of: $96,751.34 support arrears and $10,306.20 interest accrued on support owed.
(3) The respondent shall be precluded from challenging the accuracy of the calculation of arrears as reflected on the applicant's Statement of Money Owed sworn August 3, 2017, at the final default hearing. He shall not be precluded from challenging any calculation of arrears that have or will accrue after August 1, 2017, as may be relied upon by the applicant.
(4) The respondent shall deposit his Canadian and Uruguayan passports with the court, on or before October 2, 2017 at 4:00 p.m. Said passports shall not be released to the respondent until this court orders otherwise.
(5) The respondent shall serve and file, by no later than October 20, 2017 full financial disclosure as follows:
(a) As required in sections 15(1) and 15(3) of FRSAEA;
(b) Copies of all bank account statements for any bank account used to pay month-to-month bills, car payments, car insurance premiums, and residential rent/mortgage from October 1, 2016 onwards. These statements shall not have any information reflected on them redacted.
(6) The applicant's request for the following relief is dismissed, without prejudice to her right to bring a motion for such relief in future, on a date set by the case management judge.
(a) An order that any other third-party be added as a payor to the ongoing default hearing; and,
(b) An order that any other third party be required to provide financial disclosure if any of the accounts, bills or payments above are in such third party's name.
(7) There shall be no order as to costs of the applicant's motion heard today or with respect to today's court attendance.
(8) The temporary default order of Justice Paulseth dated May 12, 2017, is varied as follows: On October 2, 2017, and on the 1st (first) day of each month thereafter, the respondent shall pay to the applicant, the sum of $1055 on account of his ongoing child support obligation together with the sum of $400 towards section 7 expenses and together with $100 on account of arrears of support. The total payable shall be $1555 per month. Any Federal funds diverted and collected do not count towards the support order.
(9) On default in any payment ordered under this order, the respondent shall be imprisoned for a period of three days for each missed payment, for up to 180 days or until the payment is made, whichever is sooner.
(10) This matter is adjourned to be spoken to on October 10, 2017 at 10:00 a.m. for the purpose of monitoring compliance with this order, setting further timelines, conferencing any additional disclosure requests, and to possibly set a date for the final default hearing.
(11) Despite the foregoing, the October 10, 2017 date shall be converted to a final default hearing, peremptory on the respondent, if he has not done the following by October 8, 2017:
(a) Served and filed his notice of dispute;
(b) Served and filed a detailed and fully particularized sworn financial statement with notices of assessment and income tax returns for 2013, 2014, 2015 and 2016 attached as well as proof of income from all sources in 2017;
(c) Served upon the applicant all bank statements for RBC Bank accounts held in his name, in his name jointly with someone else, or, held in the name of a third party in trust for him, from June 2016 onwards; and,
(d) Made the payment due on October 2, 2017.
(12) The applicant is to serve and file an updated Statement of Money Owed, on or before October 6, 2017.
(13) Court Services is requested to ensure that court records are changed to reflect the addresses for service for each party (based on oral representations made today).
(14) The Judicial secretary is requested to email a copy of this endorsement to the parties at the addresses provided.
Released: September 29, 2017
Signed: Justice Victoria Starr