Court File and Parties

Court File No.: Toronto DFO-14-12249 Date: 2018-04-09 Ontario Court of Justice

Between:

Brigette Rosemarie Rose Applicant

— AND —

Todd Raymond Baylis Respondent

Before: Justice Sheilagh O'Connell

Heard on: December 5, 2017

Reasons for Judgment released on: April 9, 2018

Counsel:

• Paul Cooper, counsel for the applicant
• Lainie Basman, Duty Counsel, agent for the respondent

O'CONNELL J.:

Introduction

[1] The Applicant mother ("the mother") has brought a motion to dismiss the Respondent father's ("the father") motion to change the child support and access provisions of the Final Order of Justice Heather Katarynych, dated October 22, 2015 ("the Final Order"). In the alternative, the mother seeks an order striking the father's financial pleadings and an order that she can proceed by way of an uncontested trial on the financial issues.

[2] On March 28, 2017, the father brought a motion to change Justice Katarynych's 2015 Final Order. The Order was made at a hearing in which the father chose not to participate. Justice Katarynych imputed annual income to the father in the amount $58,000 and required him to pay child support for the four children in the amount of $1,332.00 per month, commencing June 1, 2012. This is the Child Support Guidelines Table amount for four children based on the income imputed to the father.

[3] The father seeks an order that ongoing child support be set at zero, based on an income of $1,920.00 per year, which is his declared income on his tax returns. He further seeks an order that all of the child support arrears accumulated be rescinded and that he should not be legally obligated to pay support for the oldest child who is not his biological child. Currently, the father owes approximately $91,000.00 in child support arrears. The father has made one payment of child support of approximately $600.00 since the court order was made.

[4] The Final Order also provided specified access twice weekly from 4:30 p.m. to 8:00 p.m., subject to the mother's discretion in consideration of the children's views and preferences and best interests. The father asks that this order be changed to alternating overnight weekend access, shared holidays and other relief.

Brief Background Facts

[5] The father is 44 years old. The mother is 45 years old.

[6] The parties began a relationship and started living together in March of 2001. They have three children together, namely, Avaya Faith Baylis born January 7, 2002 ("Avaya"), age 15, Davonte Beres Baylis, born March 30, 2003, ("Davonte") age 14, and Jahvon Tayten Baylis, born April 15, 2009 ("Jahvon"), age 8. The mother has another child from a previous relationship, namely Hunter Boden Rose, born March 26, 1996, ("Hunter"), age 21. According to the mother, the father has acted as a father figure to Hunter since he was 5 years old until the parties separated, approximately 11 years.

[7] Davonte has very special needs and has been diagnosed with non-verbal autism. All four children are enrolled in school. Hunter is enrolled at Ryerson University.

[8] The mother has always been the primary caregiver of the children. She was a stay at home mother from 2002 to 2012 and continued to be the primary caregiver for the children after the parties' separated.

[9] The parties separated on or about May of 2012. After the parties separated, the mother secured employment to support herself and the children. The children lived with the mother and visited the father.

[10] According to the father's court documents, the father has historically worked as a carpenter. The father stated that he was unable to work at all for several months after the summer of 2015 as a result of an injury he sustained. In December of 2016, he started a business painting houses called 'Ablaze Painting'.

[11] The father currently resides with his new partner and their four year old child. The father's new partner is a college professor, and according to the father, she is the main financial provider for the family.

[12] On December 29, 2014, the mother commenced her application for custody, specified access and child support. On April 7, 2015, the mother issued an amended application after she retained counsel. The mother sought child support for all four children retroactive to May 26, 2012, the date of separation. The mother claimed that throughout their relationship, the father was employed as a carpenter and in the construction industry, earning a cash income at an hourly wage of approximately $30.00 per hour or $58,000.00 per annum. The mother claimed that since the separation, the father had paid little to no child support even though he continued to work in that field.

[13] On May 25, 2015, the father delivered his answer to the mother's amended application. In his answer, the father stated that he was receiving social assistance (Ontario Works) because he had difficulty securing work for the past three years. He did not dispute that he had paid no child support since the parties' separation. He opposed the claim for retroactive child support and stated that the mother "never requested child support until she filed her application." He further denied that he acted as parent to Hunter and that he was legally obligated to support him. He stated that "he will continue to seek employment and begin to pay monthly child support for his three biological children as soon as possible."

[14] Given the mother's position that the father was self-employed, earning a cash income as a carpenter and in construction at the time, a number of detailed requests for financial disclosure were made. On July 2, 2015, the court ordered the father to provide financial disclosure, including income tax returns and notices of assessment, copies of bank statements, proof of job search efforts, proof of registration at any job assistance organizations, and copies of all statements of revenue and expenses for all business operated by the father.

[15] The father did not comply with this court order. It appears that the only disclosure provided were copies of the father's social assistance deposit slips, which indicated that this money was being deposited into a bank account not produced by the father. The father did not produce any bank accounts.

[16] In the summer of 2015, the father injured his Achilles tendon while playing basketball, according to the medical report that he filed during the argument of this motion. The father stated that as a result of this injury he was unable to work at all.

[17] On August 10, 2015, the father did not attend court, advising the mother's counsel that he was unable to come to court due to his injury. Justice Katarynych adjourned the court hearing to October 22, 2015 for this reason. However, in her endorsement, Justice Katarynych expressed her concern that father had not provided the financial disclosure ordered. The Court granted the mother leave to bring a motion seeking final orders.

[18] On October 22, 2015, the mother brought a motion for summary judgment. The motion materials were properly served upon the father. The father was aware of the court date.

[19] The father did not attend court or participate in the proceedings. Based on the evidence filed, Justice Katarynych proceeded on a summary judgment basis to make the orders that formed the basis of the final order. She reviewed all of the evidence before her. Justice Katarynych also ordered that the father pay the mother $5,000.00 for her legal costs incurred.

[20] The father did not appeal or move to set aside the Final Order.

[21] Other than one payment of $600.00, the father did not pay any child support under the Final Order, nor did he comply with the costs order. There have been no other payments of child support since the parties separated.

[22] The father has not seen the children since December of 2016. The father blames the mother for this, stating that she has refused to allow access since that time. The mother states that the father's access has always been sporadic and inconsistent. The issue of access is a subject of contention and ongoing litigation between the parties.

[23] On March 28, 2017, the father brought his motion to change the Final Order after the Family Responsibility Office ("FRO") served him with notice that he owed $71,805.00 in unpaid child support and that his driver's license was going to be suspended.

[24] Prior to bringing his motion, the father brought an urgent refraining motion seeking to refrain the FRO from suspending his driver's license.

[25] In his Affidavit in support of his Refraining Motion, sworn December 29, 2016, the father deposed the following at paragraphs 7 and 8 of his sworn statement:

"Suspending my driver's license would significantly limit my employment opportunities. It is currently necessary for me to travel throughout the city in order to perform work as a painter. As indicated, I recently started a painting business and am currently borrowing my mother's vehicle in pursuit of painting contracts. Without a driver's license, I would once again rely upon social assistance…Should my driver's licence be suspended, it would not give me a chance to get my recent painting business off the ground."

[26] On February 15, 2017, the court granted the father's request and made an order refraining FRO from suspending his license. Shortly thereafter, the father brought his motion to change the Final Order for child support and arrears.

The Father's Motion to Change, dated March 28, 2017

[27] In his motion to change materials, the father states that he has historically worked as a carpenter, however, after he ruptured his Achilles tendon in 2015, he required several months of treatment and was unable to work. The father also stated that he was suffering from depression and associated symptoms for which he sought treatment.

[28] Following his injury in 2015, the father submits that he currently continues to suffer from symptoms and that he has been unable to return to work as a carpenter.

[29] However, the father further submits that at no point while he was working as a carpenter did he earn an income close to that which was imputed in the Final Order. According to him, the existing child support order should never have been made in the first place.

[30] The father further states that he has searched for employment outside of the field of carpentry and has been unsuccessful. As a consequence of his injury, he is precluded from the kind of work that he used to do in carpentry and other trades, which requires strenuous physical activity.

[31] As well, the father states that as a result of his criminal record for two convictions of assaulting the mother during their relationship, he has faced other obstacles in finding employment.

[32] The father deposed that in an attempt to find an alternative source of income, he started a business painting houses in December of 2016. According to the father, the business is "gradually garnering greater income".

[33] The father also deposed that he is willing to provide bank statements for the business should they be requested, and that he was also willing to produce all of the medical documents from the relevant professionals who treated his injuries and depression.

[34] Finally, the father states that he should not be obligated to pay child support for Hunter because he is not Hunter' biological father and he never acted in the place of a parent to him.

[35] In her response, the mother requested an order dismissing the motion as the father has not shown any change in circumstances. According to the mother, nothing has changed. The father did not provide even the most basic financial disclosure to prove any change in his circumstances since Justice Katarynych's Final Order. Further, the father has failed to pay the two previous costs orders made against him, totalling $6,500.00.

[36] The first case conference in the father's motion to change was August 22, 2017. The father was represented by counsel at that hearing. On that date, the father with counsel, consented to a very detailed order for medical and financial disclosure to prove the claims in his motion to change, including but not limited to the following:

1. Copies of all bank statements and credit card statements;
2. Financial Statements and bank statements for the father's painting business (Ablaze Painting);
3. Current unredacted Equifax Report;
4. Copies of all applications for loans, leases, mortgages, financing or credit, for any purpose;
5. Complete medical report detailing father's current and previous diagnosis, prognosis, treatment plan and information from medical professionals detailing how his medical condition impacts on his ability to work, including effective limitations;
6. Original letter from every major banking institution in Canada (TD, CIBC, RBC, BOM etc.) confirming current and historic account history, including the existence of any accounts.

[37] On September 18, 2017, the next court date in this matter, the father attended without his lawyer, who had removed herself as counsel of record. He was assisted by duty counsel. The father had not produced any of the financial disclosure ordered at the last hearing date. The father blamed his lawyer for this, claiming that she had not communicated with him. The father was present in court when the order for disclosure was made on consent, and he signed the consent in the presence of his lawyer.

[38] The father further stated that he did not have any bank accounts or credit card statements to produce. The father later qualified that statement and advised that he did have a bank account for his painting business. The court explained to him the importance of producing the financial and medical disclosure ordered.

[39] The father was granted a further opportunity and extension to comply with the financial disclosure order until November 17, 2017. If the father did not comply, then the mother was granted permission to bring a motion to strike the father's motion to change or to seek other final orders.

[40] On November 17, 2017, the father did not produce the documents ordered. The mother's motion to strike was scheduled for December 5, 2017. The father attended on the day of the hearing with some of the medical disclosure and a current Equifax report. He did not produce any bank statements or credit card statements, or any other the other disclosure requested.

The Law and Governing Principles

The Mother's Request to Strike the Father's Pleadings

[41] The court authority to strike the father's pleadings is as follows:

1. Sub-rule 1(8) of the Family Law Rules ("the Rules") - The court may deal with the failure to follow an order in a case by "making any order that it considers necessary for a just determination of the matter", including an order dismissing the claim, striking out any application, answer, motion to change, among other pleadings, or any other document filed by a party, among any orders described under this Rule.

2. Section 24 of the Child Support Guidelines - If a party does not comply with an order to provide documents under section 22 of the Child Support Guidelines, the court can strike out that party's pleadings, proceed to a hearing, in the course of which it may draw an adverse inference and impute income to the parent that the court considers appropriate.

[42] Subrule 1(8.4) of the Rules provides that if an order is made striking out a party's application, answer, motion to change or response to motion to change in a case, then the party is not entitled to any further notice of steps in a case, except for service of a court order and the party is not entitled to participate in the case in any way. The court may deal with the case in the party's absence and a date may be set for an uncontested trial.

[43] In Van v. Palombi, 2017 ONSC 2492, the Divisional Court held that the case law well establishes that the legal principle governing the exercise of judicial discretion to strike a party's pleadings is a three-pronged test as follows:

(1) Is there a triggering event justifying the striking of pleadings?

(2) Is it appropriate to strike the pleadings in the circumstances of the case?

(3) Are there other remedies in lieu of striking pleadings that might suffice?

[44] However, the case law is clear that striking a party's pleadings is a remedy of last resort. In a number of decisions, the Ontario Court of Appeal has made it clear that the power to strike out a party's pleadings should be used sparingly and only in exceptional cases. See Roberts v. Roberts, 2015 ONCA 450; Manchanda v. Thethi, 2016 ONCA 909.

[45] Even in the event of a court finding a "triggering event", justifying the striking of pleadings, it is still within the discretion of the court to decide to strike or not on all of the circumstances of the case. Given the exceptional nature of the remedy, the court should examine other remedies that might be appropriate in lieu of striking pleadings, which is the third step of the three-pronged test. See Van v. Palombi, supra, at paragraph 36.

[46] In Chiaramonte v. Chiaramonte, 2013 ONCA 641, the Ontario Court of Appeal held that in family law cases, pleadings should only be struck and trial participation denied in exceptional circumstances and where no other remedy would suffice, following its earlier decision in Purcaru v. Purcaru, 2010 ONCA 92. The Court of Appeal went on to say as follows at paragraph 32 of that decision:

"Striking a party's pleadings is a drastic remedy that should only be applied in exceptional circumstances. The rules authorizing this remedy must be interpreted in light of the draconian effect of rule 10(5)(b). That rule provides that a respondent whose answer has been struck is not entitled to participate in the case in any way. For example, in Kim v. Kim, 2001 CarswellOnt 502 (ONSC), on the basis of rule 10(5)(b), an uncontested hearing was held on custody, support and property without further notice to the party whose pleadings had been struck. Similarly, in Costabile v Costabile, 2004 CarswellOnt 4860 (ONSC), a party whose pleadings had been struck was not entitled to notice of further proceedings nor was he entitled to participate in any way."

[47] Where custody and access interests are involved, the court should avoid the sanction of striking pleadings or use utmost caution because trial courts need the participation of both parties and information that each can provide about best interests. A full evidentiary record, which involves the participation of both parties, is generally required to make a custody decision in the best interests of the children. See King v. Mongrain, 2009 ONCA 486, cited with approval in D.D. v. H.D., 2015 ONCA 2959, and Haunert-Faga v. Faga, 2005 ONCA 39324.

[48] Further, in Kovachis v. Kovachis, 2013 ONCA 663, the court held that on a motion to strike a party's pleadings in the family law case because of non-compliance with court orders, the court must consider whether the default is willful and whether striking the pleadings is the only appropriate remedy.

[49] The Court of Appeal has also stated that in exercising the discretion to strike pleadings, a court has the jurisdiction to order the reinstatement of pleadings on conditions. In Costabile v. Costabile, 2005 ONCA 6909, the court upheld the lower court's decision to strike the appellant's pleadings as the judge contemplated that the appellant would have the right to move to set aside the default and to try to persuade a family court judge that his disclosure and efforts in providing disclosure justified reinstating his pleading. The Court of Appeal opined that this was "a sensible resolution of the matter" and given the broad discretion under the Family Law Rules, the Court also held that a family court judge had jurisdiction to make such an order.

[50] Where financial disclosure orders are violated, courts have struck pleadings on financial issues and have permitted the parenting issues to continue. See: Sleiman v. Sleiman, 2002 ONCA 44930.

[51] Finally, before striking a pleading for failure to pay support, the court must consider a payor's financial circumstances and his or her ability to pay support. See Higgins v. Higgins, 2006 ONCA 33303. Courts have also given a party the opportunity to restore the pleading if arrears of support are paid. See Stein v. Stein, 2003 ONCA 2288; Roberts v. Roberts, 2015 ONCA 450.

Application of the Law and Governing Principles to the Facts of this Case

[52] It is abundantly clear that the father has failed to comply with court orders in 2015 and 2017 for financial and medical disclosure to support his claim that he is incapable of paying any child support or the arrears owing. Here the "triggering" event to justify the striking of the father's pleadings is his deliberate failure to comply with orders for financial and medical disclosure.

[53] The father has provided some disclosure, albeit woefully inadequate. The father provided some last minute medical disclosure on the day of the hearing, as well as a very unhelpful Equifax Report which did not make sense as there were no bank accounts listed or credit cards listed, nor was there any history. Although the father repeatedly advised the court that he did not have any bank accounts or credit cards, he later advised the court that he had opened a bank account for his painting business more than one year ago. This account was not listed on the Equifax Report.

[54] The father did not disclose any of the statements for the bank account apparently opened for his painting business. Nor did he disclose any ledgers, general or otherwise, or financial statements regarding his painting business, which would record the revenue or cash earned, his list of clients, any expenses for travel, materials, supplies, etc. According to his own sworn affidavit supporting his refraining motion and the statements that he made in court, the father opened this business in December of 2016.

[55] The father provided some medical disclosure confirming that he injured his Achilles' tendon in the summer of 2015. According to the physiotherapy reports produced on the day of the hearing, the father ruptured his Achilles' tendon while playing basketball. He attended hospital emergency and was given a hard cast for three weeks, and then moved to an air cast which he wore until approximately October of 2015. He continued to have some difficulty walking after that time and underwent physiotherapy until December 14, 2015.

[56] The father provided a further medical report dated September 14, 2017 from a registered psychotherapist which stated that the father had been attending out-patient counselling services between January 21, 2016 to May 18, 2016 due to a number of acute stressors in his life creating anxiety and depression.

[57] Although the father provided very little financial disclosure and partial medical disclosure, given the very high threshold to strike pleadings in family law cases, particularly when access to the children is a live issue, as in the case before me, the court is not prepared to strike the father's pleadings in these circumstances but will consider other appropriate remedies.

[58] Sub-Rule 1(8) of the Family Law Rules permits the court, when dealing with the failure to follow a court order, to make any order "that the court considers necessary for a just determination of the matter."

[59] Mother's counsel has asked me to consider dismissing the father's motion to change on the paper and evidentiary record before me in the event that I decide not to strike the father's pleadings.

[60] Rule 15 of the Family Law Rules governs the procedure on motions to change. Under Rule 15, the motion to change a final order shall be dealt with on the basis of the documentary evidence filed unless the court is of the opinion that it cannot properly be dealt with in the fashion. See Rule 15(26). The onus is on the moving party to show that a trial or viva voce hearing is needed. See Martineau v. Orlankco, 2006 ONCJ 176; I. v. W., 2011 ONSC 2021.

[61] I am of the opinion that the father's motion to change support can be dealt with on the basis of the documentary evidence before me, including the parties' affidavit evidence, financial statements, and all of the exhibits filed. I will proceed to do so in the interest of justice, having regard to Rule 1(8), Rule 2(2), Rule 2(3), Rule 2(4), and Rule 2(5) of the Family Law Rules.

[62] Regarding the father's motion to change access, this issue has not been fully case conferenced given the focus on the financial issues to this point. The court will adjourn the issue of access to a case conference before me once the financial issues are disposed of by this decision.

Legal Considerations on the Father's Motion to Change

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

Powers of court: child support

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

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

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

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

[64] The onus is on the father, the moving party, to prove the change in circumstances or that evidence not available on the previous hearing has become available, thereby justifying the change in the child support order.

[65] The mere accumulation of arrears without evidence of a past inability to pay is not a change in circumstances. Present inability to pay does not by itself justify a variation order. It should only be granted if the payor can also prove a future inability to pay. Otherwise, the option is to suspend, or order repayment of arrears. See: Haisman v. Haisman, 1994 ABCA 249. The court must determine whether the income imputed to the father in the existing order should continue.

[66] It is well settled law that, if income is imputed, then the issue will generally be res judicata on a motion to vary or change support. See: Bemrose v. Fetter, 2007 ONCA 637. Although the court always has discretion with respect to the issue of res judicata and can consider fraud, fresh evidence, additional disclosure or issues of fairness, the principle of res judicata provides that generally, a matter cannot be re-litigated once it has been determined on its merits.

[67] The court also has discretion under section 37 (2.1) (a) of the Family Law Act to retroactively recalculate support based on the correct income information (as opposed to imputed income), once it has found that there has been a change in circumstances. Trembley v. Daley, 2012 ONCA 780. This is permitted by s. 37 (2.1) of the Family Law Act.

[68] In Trang v. Trang, 2013 ONSC 1980 (the "Trang" decision), Justice Pazaratz discussed how courts should address support change motions when income was imputed to a payor in the original order as follows. The principles are summarized below:

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

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

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

Or,

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

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

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

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

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

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

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

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

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

[69] The Trang decision stands for the principle that when income is imputed at the original hearing, this amount is presumed to be correct and the onus is on the person whose income was imputed to establish why this time their representations about their income should be accepted by the court. See McDonald v. Profeiro, 2018 ONCJ 110, at paragraph 36.

Analysis: Application of the Law and Legal Principles to the Facts of this Case

[70] There is evidence to establish a change in the father's circumstances after July 28, 2015, when the father ruptured or tore his Achilles' tendon. The father produced medical reports from St. Michael's Hospital and from the O'Connor Rehab and Wellness Clinic that indicate that the father ruptured his Achilles tendon while playing basketball. This injury had an impact on his physical mobility for a period of time. He had difficulty walking, and according to the physiotherapy reports produced, he underwent treatment and physiotherapy until December of 2015. The Discharge Summary Report produced indicates that the father was discharged from physiotherapy on December 14, 2015. He was instructed and educated on a "Home Exercise Program" after that time, according to the report.

[71] There is also evidence that the father was attending out-patient counselling for anxiety from January 21, 2016 to May 18, 2016, according to the report of the psychotherapist dated September 14, 2017. According to the report, the father "appeared to benefit from his involvement in the therapy sessions and his mood and anxiety symptoms appeared to have improved on his terminating therapy in May of 2016." However, the report does not state anything about whether the father's anxiety affected his ability to work, either on a part-time or full-time basis during that time period.

[72] During argument, the mother conceded that the father's Achilles tendon injury affected his ability to work for a period of time. However, she submitted that the father has not produced any evidence regarding the long term effects, if any, of this injury on his ability to work.

[73] The mother is correct. The medical evidence that the father finally produced is very thin. At best, the evidence demonstrates that the father wore a hard cast for a period of two weeks before moving to an "Aircast boot with a 2 centimetre heel lift" for a period of eight to twelve weeks. After twelve weeks, he was to be "weaned" off the boot, then returned to crutches or a cane until he regained his strength through retraining and physiotherapy. He successfully completed physiotherapy in December of 2015. There is no medical evidence regarding his injury after that time.

[74] The mother also conceded during argument at the hearing that the father should not be obligated to support Hunter, the oldest child, as she is receiving some child support from Hunter's biological father.

[75] There is evidence in the father's own sworn affidavit that he started his painting business, "Ablaze Painting" in December of 2016. It is not disputed that the father is still engaged in this painting business, which provide painting for residential premises.

[76] The father produced two sworn Financial Statements, one sworn March 19, 2017, and one sworn December 29, 2016. In the both Financial Statements, the father deposes that he is self-employed in his painting business and that his annual income before deductions is $6,000.00, or $500.00 monthly.

[77] According to the sworn Financial Statement dated March 29, 2017 in support of his motion to change, the father deposes that he has monthly expenses of $1,300.00 or $15,600.00 annually, including rent, food, cell phone, alcohol and tobacco, yet no additional source of income indicated. Further, there is no supporting documentation or financial statements provided for his painting business.

[78] It is well established in the case law that the self-employed person has an obligation to put forward adequate and comprehensive records of income and expenses, so that a proper determination of the amount of child support can be established. See Meade v. Meade, 2002 ONSC 2806 and Orser v. Grant, 2000 ONSC 1429. As Justice Frances P. Kiteley summarized in Meade v. Meade, supra:

"[81] It is inherent in the circumstances of those who are self-employed or who have irregular income and expenses, 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."

[79] In Duffy v. Duffy, 2009 NLCA 48, the Newfoundland Court of Appeal summarized the general principles governing the issue of imputing income for child support purposes:

1. The fundamental obligation of a parent to support his or her children takes precedence over the parent's own interests and choices.

2. A parent will not be permitted to knowingly avoid or diminish, and may not choose to ignore, his or her obligation to support his or her children.

3. A parent is required to act responsibly when making financial decisions that may affect the level of child support available from that parent.

4. Imputing income to a parent on the basis that the parent is "intentionally under-employed or unemployed" does not incorporate a requirement for proof of bad faith. "Intentionally" in this context clarifies that the provision does not apply to situations beyond the parent's control.

5. The determination to impute income is discretionary, as the court considers appropriate in the circumstances.

6. Where a parent is intentionally under-employed or unemployed, the court may exercise its discretion not to impute income where that parent establishes the reasonableness of his or her decision.

7. A parent will not be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations or interests. Nor will it be acceptable for a parent to choose to work for future rewards to the detriment of the present needs of his or her children, unless the parent establishes the reasonableness of his or her course of action.

8. A parent must provide proper and full disclosure of financial information. Failure to do so may result in the court drawing an adverse inference and imputing income.

[80] The father is 44 years old. He has established a painting business in December of 2016. He completed his treatment for physiotherapy in December of 2015, according to his evidence, and he completed his psychotherapy in May of 2016. There is no medical evidence of any further limitations on his ability to work since May of 2016.

[81] The father failed to comply with any financial disclosure orders to establish the income of his new painting business. He failed to provide even the bank statements for the business, despite being ordered to do so. He failed to produce any evidence that he is not capable of working at least at a minimum wage income.

[82] During the hearing of this motion, the father conceded that he was earning income from his painting business.

[83] When asked directly by the court why the father had not made any voluntary payments of child support, even nominal amounts of $25.00 or $50.00 per month since at least December of 2016, the father had no explanation except that "nobody told him to." The father has three biological children that have received no child support from him since the parties separated in 2012, but for $600.00. The father has chosen not to support his children.

[84] The father was unable to adequately explain how he was meeting his expenses in his sworn financial statement, including the $160.00 per month for his alcohol and tobacco expenses and the $160.00 per month in gifts, while not paying any child support.

[85] The father did not plead an undue hardship claim under section 10 of the Guidelines. Even if he did, the evidence does not support it. Although the father now has another child in his new relationship, the father stated that his new partner is employed as a college professor and pays a majority of the household expenses. The mother is a single parent of four children.

[86] The court finds that for the period of time from July 28, 2015 to December 31, 2015, there is some evidence that the father was not working as a result of his injury. There is little, if any, evidence of the father's ability to work in 2016. There is evidence that the father was receiving some psychotherapy for anxiety until May of 2016 and that his mood and anxiety had improved on his terminating therapy at that time. There is no evidence of the father's work history or ability to work between May of 2016 until December of 2016 when he started his painting business.

[87] The father himself stated that after December of 2016, his business was "gradually garnering greater income". The court finds that the father is capable of earning a minimum wage income in his painting business, however, I will provide some relief to the father for the six month period between May and December of 2016 while the father was establishing his painting business.

[88] There is absolutely no evidence that the father is not capable of earning at least a minimum wage income in his new painting business. In this hearing, I draw an adverse inference against the father and impute income to him for his failure to comply with orders for financial disclosure, in accordance with section 24(c) of the Child Support Guidelines.

[89] The court finds that at a minimum, commencing December 1, 2016, minimum wage income should be imputed to the father for child support purposes. Effective December 1, 2016, the father should have been paying $494.00 per month, which is the Child Support Guidelines Table amount for three children, based on the minimum wage of $23,712.00 at that time. Effective October 1, 2017, the father should have been paying $502.00 per month, which is the Table amount for three children based on the minimum wage of $24,128.00 at that time. Effective January 1, 2018, the father should be paying $604.00 per month, which is the Table amount for three children based on the minimum wage of $29,120.00.

[90] Although there is evidence to establish a change in circumstances since July 28, 2015 after the father sustained his injury and started his new painting business, there is no evidence to establish a change in the amount of income imputed in the existing order before July 28, 2015.

[91] The mother deposed that throughout the parties' 12 year relationship, she witnessed the father earn a significant cash income from his carpentry and construction or trade work while she remained at home caring for the four children. As the mother was a stay at home parent, it is difficult to believe that the father was only earning $6,000.00 per year to support a family of five. Indeed, the father does not dispute this, only that he was not earning $58,000.00 per year.

[92] The father provided absolutely no evidence why the income imputed to him in the existing order prior to his injury should be changed. Prior to the father's injury, the father was an able-bodied 43 year old man who had extensive experience as a carpenter and in the construction field. There is evidence of multiple text messages between the parties post-separation which indicated that the father was working, despite his statements to the contrary in response to the mother's original application.

[93] The court finds that the income amount imputed to the father by Justice Katarynych in the Final Order prior to the father's injury in July of 2015 was reasonable given the following:

1. The father's good health prior to his injury and his lengthy history or earning a cash income as a carpenter and in the construction industry, not disputed by him;

2. The evidence that the father was working post-separation through text messages exchanged between the parties;

3. The father's ability to comfortably support a family of five during the 12 year relationship while working as a carpenter and in construction;

4. The father's refusal to comply with any of the orders for financial disclosure made at the original hearing, despite given a number of opportunities by the court;

5. The father's bad faith, in his refusal to make any voluntary payments of child support after the parties' separation.

6. The failure of the father to provide any new evidence after the Final Order was made justifying a change in child support prior to his injury on July 28, 2015.

The Determination of Arrears

[94] As set out, the father is able to establish a change in circumstances warranting a change in the existing order after July 28, 2015. Based on the ongoing child support ordered the court has calculated those arrears as follows:

1. From Dec. 1, 2016 to Oct. 1, 2017: $4,940.00 ($494.00 x 10 months)
2. From Oct. 1, 2017 to Jan. 1, 2018: $1,506.00 ($502.00 x 3 months)
3. From Jan. 1, 2018 to April 1, 2018: $2,416.00 ($604.00 x 4 months)

TOTAL: $8,862.00 for this period.

[95] The court still needs to assess whether it should make a retroactive downward variation of arrears owing for the period prior to July 28, 2015. The court found that the income imputed in the Final Order for the period prior to July 28, 2015 was reasonable and should not be changed. However, the mother conceded that the father should not be legally obligated to support Hunter, so there needs to be some adjustment to determine child support for the father's three biological children during that period under the existing Final Order, as well as other considerations.

[96] The Ontario Court of Appeal set out the considerations for a court to apply when determining a retroactive downward variation of child support by a payor in Gray v. Rizzi, 2016 ONCA 152.

[97] The court set out that where a payor seeks a retroactive decrease in support, the 'D.B.S.' factors -- such as taking into account the circumstances of the child, the conduct of the payor parent, the hardship of a retroactive award, and the reason for delaying in seeking a variation in support -- remain relevant (par. 51). Although those factors require some minor alteration to suit circumstances where the payor's income has gone down, not up, the fundamentals still apply (par. 54).

[98] The court applied the process set out by Justice Deborah Chappel in Corcios v. Burgos, 2011 ONSCJ 3326, as follows:

[56] First, when applying the adapted D.B.S. principles on a motion to retroactively vary child support, one must always keep in mind the ultimate issue: namely, the best interests of the child: DiFrancesco, 2001 ONCA 8613, [2001] O.J. No. 4307 at para. 24. As Chappel J. stated, "Ultimately, the goal in addressing child support issues is to ensure that children benefit from the support they are owed when they are owed it, and any incentives for payor parents to be deficient in meeting their child support obligations should be eliminated."

[57] Next, a court should distinguish cases where a payor seeks relief from payment of arrears based on current inability to pay from those where arrears accumulated due to a change in the payor's circumstances that affected the payor's ability to make the child support payments when they came due.

[58] A payor's request for relief from payment of arrears based on a current inability to pay generally will not result in the rescission or reduction of arrears unless the payor has established, on a balance of probabilities, that he cannot and will not ever be able to pay the arrears. Evidence that the recipient agreed to non-payment of the support is irrelevant, as child support is the right of the child and cannot be bargained away by the recipient parent.

[59] Where, however, the payor demonstrates that a change in circumstances took place during the time that arrears were accumulating which rendered the payor unable to make child support payments for a substantial period of time, the court may provide relief by varying the child support order or rescinding arrears. As Chappel J. stated: "[the court] may determine that it is appropriate to retroactively suspend enforcement of the support order during the time when the payor was unable to pay, or decrease the amount of child support owed during that time and reduce or rescind the arrears owing accordingly."

[99] In paragraph 60 of Gray, supra, the court stated that the following factors should guide a court in determining whether to grant retroactive relief, the date of retroactivity, and the quantum of relief:

1. The nature of the obligation to support, whether contractual, statutory or judicial;

2. The ongoing needs of the support recipient and the child;

3. Whether there is a reasonable excuse for the payor's delay in applying for relief;

4. The ongoing financial capacity of the payor and, in particular, his ability to make payments towards the outstanding arrears;

5. The conduct of the payor, including whether the payor has made any voluntary payments on account of arrears, whether he has cooperated with the support enforcement authorities, and whether he has complied with obligations and requests for financial disclosure from the support recipient. As stated by Chappel J.:

"Behaviour that indicates wilful non-compliance with the terms of the order or failure to work cooperatively to address the child support issue is a factor that militates against even partial rescission or reduction of arrears";

6. Delay on the part of the support recipient, even a long delay, in enforcing the child support obligation does not, in and of itself, constitute a waiver of the right to claim arrears;

7. Any hardship that may be occasioned by a retroactive order reducing arrears or rescinding arrears, or by an order requiring the payment of substantial arrears. As put by Chappel J.:

'[I]f a retroactive order reducing child support would result in the child support recipient having to repay money to the child support payor, this may militate against making the order, particularly if the payor has not given the recipient notice of the change in their circumstances, has not provided appropriate disclosure to support their claim for an adjustment to the child support, or has delayed initiating court proceedings to change the order.'

[100] The Court of Appeal considered how the retroactive award should be calculated once it is decided that there should be an adjustment in paragraphs 61-64 as follows:

[61] If a retroactive reduction of child support is appropriate in light of these factors and any other relevant considerations, the court must determine the date from which the reduction should take place and the extent of the reduction. Following D.B.S., a retroactive order normally should commence as of the date of effective notice that a request is being made for a child support adjustment. It is generally inappropriate for a retroactive order to extend back more than three years before formal notice is given.

[62] Where a payor seeks a retroactive reduction in child support or rescission of arrears, effective notice requires the payor to provide "reasonable proof to support the claim for a change to the [order], so that the recipient can independently assess the situation in a meaningful way and respond appropriately." As put by Chappel J.:

'A child support recipient is entitled to expect that the existing order will be complied with, and to arrange their financial affairs respecting their children accordingly, unless they are in receipt of reasonable proof that a relevant change in the payor's circumstances has occurred.'

[63] This obligation to disclose and negotiate with the recipient parent is ongoing, so that the recipient can assess and react to changes in the payor's financial situation. A payor's failure to comply with his continuing notice and financial disclosure obligations most likely will impact the remedy which the court crafts.

[64] Finally, "with respect to the quantum of any retroactive child support order, the Child Support Guidelines apply, provided that the date of retroactivity is not prior to the date when the Guidelines came into force, and subject to the principles set out in the statutory scheme under which the Court is operating."

[101] In determining what child support arrears are owed by the father prior to December 1, 2016, I considered the following:

1. In eliminating the father's obligation to support Hunter, the father's child support obligation for his three biological children between June 1, 2012 and July 28, 2015, based on the existing Final Order, is $41,810.00.

2. The child support is based on a Court Order that was never appealed or set aside. The father's request for relief is partially based on his claim that he never earned what the Court had imputed to him in 2015. I have rejected that claim for the reasons set out previously in this decision.

3. The father's claim is also partially based on his current inability to pay arrears following his injury in July of 2015. I have found for the reasons previously set out that the father's income was reduced following his injury. However, the father has not established, on a balance of probabilities, that he will never be able to pay the arrears. The father has established a new painting business, he acknowledged that he is earning income, and the court has found that at a minimum, he has been capable of earning minimum wage since December 1, 2016. He also has a partner who is paying most of his household expenses.

4. The father has engaged in blameworthy conduct. Other than one payment of $600.00, the father has not made any voluntary payments of child support since the parties separated in 2012, not even nominal amounts. The father conceded this during the hearing. He has failed to comply with all orders for financial disclosure and ignored all requests for financial disclosure made by the mother through her counsel prior to the hearing date. He only commenced this motion to change when he became aware that the Family Responsibility Office ("FRO") was going to suspend his driver's license. He was able to successfully refrain FRO from suspending his driver's license based on his claim that he needed his license for his painting business to earn income and support his children. That was in December of 2016. He still has not paid any child support, not even nominal amounts. He is simply choosing not to support his children.

5. The mother is a single parent and meeting all of the children's financial needs. The father's biological children with the mother are now 16, 15, and 8 years old. They were very young at the time the parties separated. The youngest child has very special needs and requires additional assistance. The children are in need of support. There is no question that the children will experience hardship if the arrears are significantly reduced. The older children will soon be finished high school and hopefully pursuing post-secondary education.

6. The court can craft an order that will permit the repayment of arrears in a manner that will not be unduly onerous to the father.

[102] In considering all of the above factors, I find that the arrears accumulated prior to the father's injury should be fixed at $40,000.00. The total arrears of child support are therefore $48,862.00 (the arrears that accumulated prior to July 28, 2015 and the arrears that I have determined since December 1, 2016). I find that the father is capable of paying those arrears at a rate of $250.00 per month.

FINAL ORDER

[103] For the above reasons, this court orders that the Final Order of Justice Katarynych dated October 22, 2015 shall be changed as follows:

1. Commencing May 1, 2018, the father shall pay ongoing child support for the three biological children of the relationship in the amount of $604.00 per month. This is the Table amount for three children based on an imputed minimum wage income of $29,120.00, in accordance with the Child Support Guidelines for Ontario.

2. The arrears of all child support owed are fixed at $48,862.00. The arrears shall be paid in a lump sum forthwith and no later than 30 days from the date of this Order, or at a rate of $250.00 per month, commencing June 1, 2018. These monthly payments towards arrears may be increased once the father is earning more income or other changes in circumstances, such as a reduction in the ongoing support for one or more of the three children if entitlement ends after the age of eighteen.

3. Commencing July 1, 2018, and every year thereafter for so long as the father is obligated to pay child support and arrears, the father shall provide the mother with copies of his income tax returns, statement of professional activities, including gross revenue and business expenses, financial statements from his business, general ledgers, notices of assessment and any further supporting documentation and reasonable request for disclosure, in accordance with the Child Support Guidelines for Ontario.

4. The Family Responsibility Office shall adjust its records accordingly. Nothing in this Order precludes the Family Responsibility Office from collecting support arrears from any government source (such as refunds or federal diversions), or prize winnings.

5. A Support Deduction Order shall issue.

6. The parties shall return before me at a case conference to be scheduled with the Trial Coordinator to address the issue of access.

[104] If either party seeks costs, then he or she shall serve and file written submissions, limited to three single spaced pages, not including any offers to settle or bill of costs no later than 30 days from the date of this Order. The other party may serve and file any written response to the written submissions within 20 days.

Released: April 9, 2018

Signed: Justice Sheilagh O'Connell