Court File and Parties

Date: 2018-05-17

Court File No.: Toronto D10687/17

Ontario Court of Justice

Between:

The Director, Family Responsibility Office, For the Benefit of Margaret Ainslie

Applicant

— And —

Kevin Philip O'Neill

Respondent

Before: Justice Carole Curtis

Heard on: 10, 12, 16, 18, 26 April 2018

Reasons for Judgment released on: 17 May 2018

Counsel:

• Caroline Brett, for the applicant
• Kevin O'Neill, unrepresented

Index

1. Overview
2. Positions of the Parties
3. Arrears of Support
4. Litigation History
5. Issues to be Determined
6. The Law
7. The Payor's Evidence
8. Analysis
9. Orders

Overview

[1] This is the decision in a default hearing in an enforcement case. The enforcement trial took place over four full days.

[2] The enforcement case arises from the payor's default in the payment of his court ordered child and spousal support. The Director, Family Responsibility Office ("the Director" or "F.R.O.") started this default case on 12 April 2017, for the benefit of the support recipient, Margaret Ainslie ("the recipient"), against the support payor, Kevin O'Neill, ("the payor"). The arrears of child and spousal support as of 1 April 2018 were $1,105,390.77.

[3] The support arrears owing arose from the order of Justice Harvison-Young of the Superior Court of Justice made 30 April 2007, following a 16 day trial. Among other things, the trial decision ordered the following periodic payments:

a) final child support of $5,475 per month for three children, from 1 June 2007 on imputed annual income to the payor of $344,261; and,

b) final spousal support of $4,340 per month from 1 June 2007, with an annual cost of living adjustment from 12 June 2008, on imputed annual income of $344,261.

There were also several lump sum payments ordered, some regarding property orders, but most for various forms of support.

Positions of the Parties

[4] The Director was satisfied that the payor had partially rebutted the presumption regarding his ability to pay the arrears in full, and was therefore not seeking a lump sum order for the payment of arrears, in full or otherwise.

[5] The Director sought the following enforcement orders:

a) periodic payments of the on-going order and payments towards arrears, in a stepped up schedule, leading eventually (by 1 May 2019) to payments totalling $9,000 to $11,000 per month (which would be applied as the on-going amount of $5,074.30 for spousal support (and indexed annually under the Family Law Act, s. 34 (5) ), plus the balance of the payment being applied towards arrears;

b) an order that in default of any payment the payor shall be committed to jail for three days for each and every default; and,

c) an order that the payor shall serve on the Director, F.R.O. a copy of his most recent income tax return and notice of assessment, together with an updated sworn financial statement on 1 June 2019, and each year thereafter, until the arrears are paid in full, under s. 41 (10) (f) of the Family Responsibility and Support Arrears Enforcement Act, 1996 (" F.R.S.A.E.A ").

[6] The payor sought an enforcement order for the payment of $500 per month only, with no term of committal attached, for 18 months, until the fall of 2019. He took no position regarding what order should follow this.

Arrears of Support

[6] The amount of arrears of child and spousal support ($1,105,390.77 as of 1 April 2018) was determined, in part, according to a manual recalculation by the Director (pursuant to the order of Curtis, J. made 21 March 2018). The Director acknowledges that this amount is likely incorrect (that is, that the amount is too low), as the Director has not included at least two separate amounts (one amount owing, and one credit amount), due to the fact that the orders granting these amounts have not been issued and entered.

[7] These are the amounts that have not been included in the Director's Statement of Arrears as of 1 April 2018:

a) the order of Harvison-Young, J. made 16 May 2008 regarding costs of the trial for $185,435 , of which $92,500 was enforceable as support; and,

b) the order of McLeod, J. made 24 November 2015 crediting the payor with $2,930.

[8] The net amount owing by the payor regarding these two orders is $89,570, a significant amount.

[9] The policy of the Director to not enforce these amounts when there is no issued and entered order is not a sound one. One of these orders was made 10 years ago (the costs order). The lawyer who acted for the recipient then is long gone from this court case, and unlikely to be now issuing and entering a 10 year old order. Nor should that lawyer be expected to now issue and enter that order. The costs order is a significant amount. The order made in 2015 resulted from a motion to change in which neither party was represented. The court should have had this order issued and entered. There are reasons for decision for both these orders, and endorsements regarding the orders. The court orders are clear and unambiguous regarding these amounts. The amounts in question are specifically set out. This approach by the Director does not serve either the support recipients, or the payors of Ontario well. The Director should revisit this policy.

[10] The payor took no issue regarding the amount of arrears the Director sought to enforce.

[11] The arrears owing are significant, and the Director is not asking for an order fixing the arrears in this default hearing. The Director is asking that the court enforce the amount of arrears shown on the Statement of Arrears, that is, $1,105,390.77 as of 1 April 2018.

Litigation History

[7] The payor was born on 6 December 1960 and is now 57 years old. The recipient and the payor were married in 1992 and separated on 3 June 2001. There are three children of the marriage, who are now 25, 24 and 20 years old. They are no longer dependant. Two of the children (ages 25 and 20) are currently living with the father.

[8] The following is a chart of the relevant court orders made in the 17 year period since the parties separated and started this litigation. The chart includes the court orders made in the original application, the three motions to change brought by the payor, and the three default cases brought by the Director.

Litigation History Chart

Date & Judge	Type of case	Orders (regarding support and costs, only)	Relevant Findings
4 March 2004 Backhouse, J., Superior Court	Application	Temporary without prejudice child support $3,265 per month for 3 from 1 Feb. 2002 Temporary without prejudice spousal support $4,441.66 per month from 1 Feb. 2002
30 April and 2 May 2007 Harvison-Young, J., Superior Court	Application 16 day trial in 2006	Final Child support • $5,475 per month for 3 children from 1 June 2007 on imputed annual income $344,261 • 92% of cost of private school • $7,917 for shortfall of private school for 2006-2007 year • $5,750 for current orthodontic expenses • 92% of s. 7 expenses • Retroactive child support from July 2001 to May 2007 of $76,057 Final spousal support • $4,340 per month from 1 June 2007 • Retroactive spousal support from July 2001 to May 2007 of $30,066 • Cost of living adjustment from 12 June 2008 Amounts owing by payor to recipient for retroactive support, equalization payment and pre-judgment interest are secured against the payor personally and against 24 Hour Toner Service	A 37 page judgment Conflict • The conflict between the parents has been bitter and relentless, with crippling legal bills for both (payor testified he had spent $500,000 in the litigation) • Well over a dozen motions and court orders • Intense hostility between the parents • Intense and continuing conflict has characterized the financial issues • The difficult and protracted nature of the litigation Payor's conduct • Lack of disclosure and non-compliance by payor continued to be a problem • Payor's conduct made the case very difficult • Payor ignored orders regarding disclosure • Payor was not forthcoming about his real income • Disclosure of payor's income was a serious problem • 3 experts testified on the subject of income available to the payor for support purposes • Obtaining disclosure from the payor can best be described as being like pulling teeth • Obtaining disclosure was long, gruelling and characterized by a spirit of minimal compliance on his part • The pattern of non-disclosure by the payor was an affront to the spirit of candid and prompt disclosure required by the rules, as well as any notions of justice and fair play • The clear message from his evidence was the level of animosity directed at the recipient and his determination to do what he could to avoid paying her any money, whether for spousal or child support • Payor's conduct in the litigation was reprehensible • Payor's evidence at trial, along with his conduct throughout the litigation, made it very clear that he considers his legal obligations to be excessive and unreasonable • There is sufficient evidence that the payor has, in several ways, attempted to use the corporation as a way of evading his financial responsibilities • There is enough evidence of fraudulent use or attempts at fraudulent use of the corporation in a way that is intended to harm the recipient and the children to warrant an order for security • Payor's obvious pattern of non-compliance Payor disobeys court orders • Payor's conduct reveals a pattern of disregard for court orders and process, a determination to get his own way, and a determination to pay as little as possible to the recipient and the children, regardless of her legal needs and entitlements, and the needs and interests of the children • Payor admitted that he refused to comply with court orders that he disagreed with • Payor did not comply with the order of Rivard, J. because he felt he was paying enough support • Payor failed to respect numerous court orders and had been unco-operative to an extraordinary degree • Payor disobeyed court orders relating to the payment of support and school fees, as well as disclosure relating to income, and when he has complied he has done so in the most minimalist manner possible • With virtually everything in this case, payor took the position of minimal compliance at best along every step of the way • Payor's general attitude and conduct in this case raises a reasonable apprehension that he will attempt to evade the orders made against him • Payor has been not only generally disrespectful of court proceedings, but also, more importantly, egregiously non-compliant with his interim financial obligations Payor's credibility • Payor was an unreliable witness on the subject of his finances • Payor's evidence was less credible and less reliable in relation to financial issues • Payor was not a credible witness on the subject of his income for support purposes • Payor's testimony was replete with inconsistencies
16 May 2008 Harvison-Young, J., Superior Court	Costs of trial	Costs $185,435 $92,500 to be enforced as support Pre-judgment interest of $79,950.50	A 6 page endorsement Payor behaved unreasonably in relation to financial matters and disclosure Payor has manifests a pattern of being able to access funds when it has suited him Repeated failure on payor's part to respect the letter and spirit of court orders relating to disclosure and the payment of money Payor's own conduct made it difficult to assess what his means are Payor's conduct bore out his threat to essentially bankrupt the recipient Payor's continuing failure to make timely disclosure and to repeated delays and to his recalcitrance in meeting his financial obligations from the beginning
6 June 2008 Backhouse, J., Superior Court	Payor's 1st motion to change	Motion to change is dismissed Prior to bringing a further motion to change payor shall file proof of compliance with judgment of Harvison-Young dated 30 April 2007 Costs of motion to recipient fixed at $7,400	A 6 page judgment Payor did not pay the recipient: • the equalization payment of $260,794 • the retroactive child and spousal support in excess of $100,000 • 92% of the private school fees • Costs of $185,435 • Pre-judgment interest of $79,950.50 • Current arrears of support of $164,244.99 Payor immediately went into default on the on-going support There has not been one month since the release of the judgment that the payor has complied with the on-going support ordered Payor has continued his practice of paying what he feels like Payor has refused to provide proof that he has obtained a life insurance policy with face value of $500,000 Payor's evidence on the motion to change makes essentially the same claims that he made at the trial Payor has a history of ignoring court orders Payor has continued in this pattern and has failed to comply with any part of the Harvison-Young, J. judgment, which he did not appeal Payor has offered no acceptable reason to justify the non-payment of the terms of the judgment Payor has wilfully failed to obey the judgment
30 June 2008 Scott, J., Superior Court	1st Default case	Temporary default order $15,000 per month for on-going support and arrears from 1 July 2008 In default of any payments 3 days in jail
6 April 2009 Perkins, J., Superior Court	1st Default case Motion for warrant for committal	warrant for committal to issue for 12 days in jail or until sum of $45,260 is paid Cost to FRO of $250	Payor has made no payments for 6 months Payor is incarcerated directly from court
15 October 2009 Timms, J., Superior Court	1st Default case motion to add parties and compel disclosure	Payor's mother and father ordered to file individual personal financial statements and financial statements for the business Universal Toner Recovery Inc. for the past 5 years	Support arrears were then $185,250.09 and unpaid costs of $92,500 Payor was current on support payments up to early 2008
12 April 2010 Superior Court	1st Default case	Motion for warrant for committal is withdrawn Case is adjourned with no return date
8 Aug. 2011 Timms, J., Superior Court	2nd default case	Default case adjourned for payor to bring motion for leave to bring motion to change. To be served and filed within 60 days
22 March 2012 Rowsell, J., Superior Court	Payor seeks leave to bring 2nd motion to change	Payor may bring motion to change	Arrears are $581,438 as of July 2011 Payor does not come to court with clean hands Registrar in bankruptcy, Backhouse, J. and Harvison-Young, J. all made adverse findings about payor's disclosure and credibility
12 April 2012 Hughes, J., Superior Court	2nd default case	Payor successful in getting leave to bring motion to change (on 22 March 2012) motion to change to be served and filed by 16 July 2012
16 July 2012 Hatton, J., Superior Court	2nd default case	Payor has not started motion to change Temporary default order: • Payor to pay on-going support of $9,815 per month from 1 Aug. 2012 • Payor to pay $5,185 per month towards arrears from 1 Aug. 2012 • Total payments of $15,000 per month • Failing compliance with this order 5 days in jail for each default	Arrears owing almost $675,000 Payor does not comply with court orders
16 Sept. 2013 Rowsell, J., Superior Court	2nd motion to change	Extensive disclosure is required from both parties, in particular from the payor Disclosure orders re both parties
16 Sept. 2013 Rowsell, J., Superior Court	2nd default case Motion for warrant for committal	warrant for committal to issue for 20 days in jail or until sum of $153,655 is paid	Payor has not complied in any meaningful way with temporary default order of 16 July 2012 Payor is incarcerated directly from court
25 July 2014 Rowsell, J., Superior Court	Payor's 2nd motion to change	Child support is suspended as of 25 July 2014 Recipient shall make disclosure
16 Oct. 2014 Rowsell, J., Superior Court	Payor's 2nd motion to change	Suspension of child support ordered 25 July 2014 is lifted 1/3 of monthly child support order is suspended Child support is now $3,650 per month Annual financial disclosure by payor
23 Jan. 2015 Rowsell, J., Superior Court	Payor's 2nd motion to change	Spousal support is suspended until completion of recipient's disclosure Recipient shall make disclosure Payor has no obligation to make further disclosure until recipient completes disclosure ordered
24 Nov. 2015 McLeod, J., Superior Court	Payor's 2nd motion to change	Motion to change is dismissed Motion to change restricted to changes in the child's circumstances, the period of time that has elapsed since the last motion to change, and the allegations by the payor that his circumstances have changed Consent reduction of child support arrears by $14,172 Temporary orders suspending child and spousal support made 25 July 2014, 16 Oct. 2014, and 23 Jan. 2015 are terminated Payor to pay costs $100	Oral decision, transcript 15 pages There was, and continues to be a failure on payor's part to pay the equalization payment, retroactive child support and spousal support, provide proof that he obtained a life insurance policy, pay the costs of $185,434 and pre-judgment interest of $79,950 (all of which amounts were as of 30 April 2007) Payor did not appeal order of Backhouse, J. Payor attempted to avoid his obligation by filing for bankruptcy Despite 3 orders, payor has failed to serve and file 2013 and 2014 Income Tax Returns and Notices of Assessment Another example of payor wilfully disregarding court orders
25 May 2017		Recipient notifies FRO of termination dates for child support: • Connor as of 1 Aug. 2011 • Krista as of 30 June 2017 • Calvin as of 30 June 2016
6 July 2017 Curtis, J., Ontario Court	3rd default case	temporary default order for $800 per month from 1 Aug. 2017 in default of payment 3 days in jail for each payment
1 March 2018 Kiteley, J., Superior Court	Payor seeks leave to bring 3rd motion to change	Motion for leave to bring motion to change is dismissed On consent support terminated: • For Krista as of 30 June 2017 • For Calvin as of 30 June 2016 Motion to set aside order of Backhouse, J. dated 6 June 2008 and McLeod, J. dated 24 Nov. 2015 and to re-instate order of Rowsell, J. dated 22 March 2012 is dismissed as court does not have jurisdiction Payor to pay costs $300	Before payor brings any motion to change he shall file proof that he has complied with order of Harvison-Young, J. dated 30 April 2007
4 April 2018	3rd default case	(not a court order; evidence from FRO) Support terminated by FRO for: • Connor as of 1 Aug. 2012 • Calvin as of 30 June 2016

[9] The recipient and the payor have been in litigation almost constantly since the separation in 2001 (17 years). The original application was started in 2001. The litigation has been acrimonious, and at times, relentless.

[10] The Director has been involved in enforcement court cases regularly since 2008 (for 10 years).

[11] The trial in the original application in 2006 dealt only with three issues, and still required 16 days of trial:

a) access (for children who were then 15, 12 and 8 years old);

b) the valuation of the payor's business for purposes of determining the equalization payment; and,

c) determining the payor's income for child and spousal support purposes.

[12] Three experts gave evidence on the income available from the business to the payor for support purposes. As well, on 16 May 2008 Harvison-Young, J. ordered the payor to pay costs of the trial of $185,435, and pre-judgment interest of $79,950.50.

[13] There have been three motions to change brought by the payor, or more accurately, the payor has tried to bring three motions to change. He has come to court to start a motion to change in 2008, 2012 and 2018.

[14] On the payor's first motion to change, Backhouse, J. dismissed his motion on 6 June 2008, as he had not complied with the trial order of Harvison-Young, J. made 30 April 2007. Backhouse, J. also ordered that he cannot bring any further motions to change until he files proof of compliance with the trial judgment.

[15] The payor brought two subsequent requests for leave to bring a motion to change. The request for leave to bring his second motion to change was granted on 22 March 2012 by Rowsell, J.. After much litigation and many court appearances, on 24 November 2015, McLeod, J. made orders adjusting arrears of support (a consent reduction of $14,172 and a further reduction of $ 2,930 ) but otherwise the motion to change was dismissed.

[16] A request by the payor for leave to bring a third motion to change was dismissed by Kiteley, J. on 1 March 2018. On consent, support was terminated for two of the children. The request for leave was dismissed as he had not complied with the trial order of Harvison-Young, J. made 30 April 2007.

[17] There have been three default cases brought by the Director in 2008, 2011, and 2017. In the first default case, Perkins, J. ordered the payor committed to jail for 12 days on 6 April 2009, or until the sum of $45,260 was paid, and the payor was incarcerated directly from court. In the second default case, Rowsell, J. ordered the payor committed to jail for 20 days on 16 September 2013, or until the sum of $153,655 was paid, and the payor was again incarcerated directly from court. The current default case, started in 2017, is the third default case.

[18] There have been many findings made about the payor and the payor's conduct in the multiple court cases that have taken place since the separation in 2011. Here are some of the findings that are relevant:

Conflict

• the conflict between the parents has been bitter and relentless, with intense hostility between the parents;

• intense and continuing conflict has characterized the financial issues;

Payor's Conduct

• payor's conduct in the litigation was reprehensible;

• the pattern of non-disclosure by the payor was an affront to the spirit of candid and prompt disclosure required by the rules, as well as any notions of justice and fair play;

• payor's obvious pattern of non-compliance;

• payor behaved unreasonably in relation to financial matters and disclosure;

• payor ignored orders regarding disclosure and was not forthcoming about his real income;

• obtaining disclosure from the payor was long, gruelling and characterized by a spirit of minimal compliance on his part;

• payor's own conduct made it difficult to assess what his means are;

• payor's continuing failure to make timely disclosure and to repeated delays and to his recalcitrance in meeting his financial obligations from the beginning;

• the payor has, in several ways, attempted to use the corporation, in a fraudulent way, as a way of evading his financial responsibilities, and in a way that is intended to harm the recipient and the children;

• payor's evidence at trial, along with his conduct throughout the litigation, made it very clear that he considers his legal obligations to be excessive and unreasonable;

• payor's conduct bore out his threat to essentially bankrupt the recipient;

• the clear message from his evidence was the level of animosity directed at the recipient and his determination to do what he could to avoid paying her any money, whether for spousal or child support;

• payor does not come to court with clean hands;

• payor has manifested a pattern of being able to access funds when it has suited him;

Payor Disobeys Court Orders

• payor has a history of ignoring court orders;

• payor's conduct reveals a pattern of disregard for court orders and process, a determination to get his own way, and a determination to pay as little as possible to the recipient and the children, regardless of her legal needs and entitlements, and the needs and interests of the children;

• payor admitted that he refused to comply with court orders that he disagreed with;

• payor has continued his practice of paying what he feels like;

• payor failed to respect numerous court orders and had been unco-operative to an extraordinary degree;

• payor disobeyed court orders relating to the payment of support and school fees, as well as disclosure relating to income, and when he has complied he has done so in the most minimalist manner possible;

• repeated failure on payor's part to respect the letter and spirit of court orders relating to disclosure and the payment of money;

• with virtually everything in this case, payor took the position of minimal compliance at best along every step of the way;

• payor has been not only generally disrespectful of court proceedings, but also, more importantly, egregiously non-compliant with his financial obligations;

• payor has continued in this pattern and has failed to comply with any part of the Harvison-Young, J. judgment, which he did not appeal;

• payor has offered no acceptable reason to justify the non-payment of the terms of the trial judgment;

• payor has wilfully failed to obey the trial judgment;

• payor's general attitude and conduct in this case raises a reasonable apprehension that he will attempt to evade the orders made against him;

Payor's Credibility

• payor was not a credible witness on the subject of his income for support purposes;

• payor's testimony was replete with inconsistencies; and,

• payor was an unreliable witness on the subject of his finances.

[19] Most of these findings were first made by Harvison-Young, J. in the trial decision on 30 April 2007, and the costs decision on 16 May 2008, and many findings were repeated, almost verbatim, by subsequent judges in the motions to change and the default cases. Multiple judges made these repeated findings:

• the payor has a history of not obeying court orders;

• the payor has a history of not complying with court ordered disclosure;

• the payor ignored orders regarding disclosure and was not forthcoming about his real income;

• the payor refuses to comply with court orders he disagrees with; and,

• the payor has continued the practice of paying what he feels like.

[20] The payor's positions included the following:

a) he had paid what he could, and could not afford to pay any more; and,

b) the judge got his income wrong.

[21] This appears to be a reference to the finding made by the trial judge establishing the amount of the payor's annual income, as set out in the support order. The payor did not appeal the trial judgment and thus the trial judgment is assumed to be correct. In this enforcement case, the payor cannot challenge the correctness of the trial decision or the findings made by the trial court, as at the date of the decision.

Issues to be Determined

[22] These are the issues for determination in this default case:

a) has the payor satisfied the court that he is unable, for valid reasons, to pay the arrears and to make subsequent payments under the order? and,

b) if the court finds that the payor has the ability to pay some or all of the arrears and to make subsequent payments under the order, what is the appropriate order to be made by the court to enforce payment?

The Law

[23] The default case is brought by the Director under section 41 of the F.R.S.A.E.A. to enforce the terms of a support order filed in the Director's office.

[24] These are the relevant sections of s. 41 :

Presumptions at Hearing

s. 41 (9) At the default hearing, unless the contrary is shown, the payor shall be presumed to have the ability to pay the arrears and to make subsequent payments under the order, and the statement of arrears prepared and served by the Director shall be presumed to be correct as to arrears accruing while the order is filed in the Director's office.

Powers of Court

s. 41 (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.

No Effect on Accruing of Arrears or Other Means of Enforcement

s. 41 (11) An order under subsection (10) does not affect the accruing of arrears, nor does it limit or otherwise affect any other means of enforcing the support order.

Imprisonment Does Not Discharge Arrears

s. 41 (17) Imprisonment of a payor under clause (10) (h) or (i) does not discharge arrears under an order.

[25] In a default case, pursuant to section 41 (9), unless the contrary is shown, two legal presumptions apply. Firstly, the payor is presumed to have the ability to pay the arrears and to make subsequent payments under the order (emphasis added). Secondly, the statement of arrears prepared and served by the Director is presumed to be correct as to arrears accruing while the order is filed in the Director's office.

[26] The court must determine whether the support payor has satisfied the court that he is unable, for valid reasons , to pay the arrears of support that have accrued, and to make subsequent payments of the on-going support (emphasis added). If the payor fails to satisfy the court of these facts, the court must determine the appropriate enforcement order to be made.

[27] For the payor to satisfy the court that there should be no default order made, he must fit his reasons for non-payment into the statutory scheme in section 41 F.R.S.A.E.A. .

[28] Section 41 (10) of the Act sets out a broad range of remedies available to the court to address a payor's default. These remedies include a period of incarceration for up to 180 days, to enforce payment of support arrears.

[29] Any one of the powers in section 41 (10) F.R.S.A.E.A. may be used by the court, unless the court is satisfied that the payor is unable, for valid reasons, to pay the arrears, or to make subsequent payments under the order.

[30] The presumptions set out in section 41 (9) of the Act are not absolute, rather they are rebuttable presumptions . However, the onus of disproving the presumptions rests squarely with the support payor. In order to rebut the presumption that the payor has the ability to pay the arrears and to make subsequent payments under the order, the payor must prove, on a balance of probabilities, through admissible evidence, that he does not have the ability to pay. Further, under section 41 (10) of the Act, the payor has the onus of proof to demonstrate that this inability to pay is for valid reasons.

[31] A valid reason would be an event over which the payor has no control that renders him totally without assets or income with which to meet his obligations. Illness and involuntary unemployment are such examples. In considering a payor's ability to pay, the court can consider not only his income, but also his assets.

[32] Valid reasons, within the meaning of section 41 (10) of the Act, imply reasons for which the payor cannot be faulted or for which the payor does not bear responsibility in the culpable sense. The court would expect some evidence of circumstances where, despite reasonable, diligent and legitimate efforts by the support payor to comply with the support order, the support payor has been unable to do so for reasons that are not connected with an unwillingness to pay, a lack of effort, a failure to prioritize the support obligation or a deliberate neglect, failure or avoidance on the part of the payor. Evidence relating to the past and present circumstances of the payor, including his financial circumstances since the time of the first default under the order, the manner in which he has applied his available income and assets, and his efforts to secure employment or income during the time that the arrears have arisen will have some bearing upon the determination of the legitimacy of the reasons the payor puts forward for his default under the support order.

[33] Circumstances that are beyond the control of the payor, resulting in the payor's inability to pay, would be valid reasons. An illness on the part of the payor, including a mental disorder, rendering the payor completely unable to work on either a full or part time basis, would amount to a valid reason for the payor's failure to pay.

[34] In order for a payor to argue that he is unable for a valid reason to pay the arrears, he must demonstrate that:

(a) the circumstance giving rise to failure to pay is not voluntary;

(b) he accepts his responsibility and places the interests of the child above his own; and

(c) he has provided full, frank disclosure to the court.

[35] Payors must not arrange their financial affairs so as to prefer their own interests over those of their children.

[36] The fact that the payor comes before the court declaring that he is impecunious does not relieve him of his child support obligations, when he deliberately refused to comply earlier.

[37] Section 41 (10) (i) provides authority for an order of imprisonment for failure to pay arrears owing under a support order or for failure to make future payments required under the order. This section contemplates an order for imprisonment for failure to pay an amount owing at the time the order is made, or a failure to make future payments required under the order.

[38] Enforcement legislation should be viewed as remedial rather than punitive. Imprisonment is a last resort. The payor's conduct must demonstrate a willful and deliberate disregard for his court-ordered support obligation. A period of incarceration is meant as a mechanism to enforce support and not as a means of punishing the payor.

[39] Imprisonment for non-payment is meant as a means of enforcing the support order and not as a means of punishing the payor. The payor must be released upon payment of the amount owed: s. 41 (10) (i). A committal order, imposed as a term of either a temporary or final order in a default hearing, is intended to induce compliance with the payment terms of the order. The prospect of imprisonment hopefully focuses the payor's mind on the importance of making the required payments. The enforcement rationale for imprisonment upon non-payment makes sense only if the payor has the ability to make the payments required by the order.

[40] Individuals must make diligent efforts to pay court-ordered support for their dependents. Our society, as well as support recipients and children for whom the support order is intended to provide, have an interest in ensuring that such orders are obeyed until and unless they are varied. If a payor is able to breach a valid court order without remedy or sanction, this undermines the confidence and respect of the public and the parties to the proceeding for the administration of justice.

The Payor's Evidence

[41] The payor filed several affidavits in this enforcement case, provided documents for disclosure (financial documents and medical letters), and as well, gave extensive oral testimony. The payor was on the witness stand for over two and one-half days. His evidence in chief lasted two full days. He was unrepresented, and was given a wide latitude by the court regarding his evidence, which means he was permitted to give evidence on many topics, some of which were not relevant to the determinations the court had to make. His evidence was repetitious. He was restricted in his evidence only infrequently, and in very few circumstances. He told the court repeatedly that this was the first time in 10 years that he had been able to tell a judge his story.

[42] The payor gave detailed and extensive evidence about the original litigation, the trial decision in 2007 and the acrimony and hostility between himself and the recipient.

[43] The payor filed a considerable volume of financial disclosure, including income tax returns, bank statements, and other financial documents. Some of the statements are incomplete. While there is a substantial amount of disclosure provided, the financial documentation has been presented in a disorganized manner.

[44] The payor takes the position that he ought to have paid less child and spousal support than that ordered by the trial judge in 2007. He did not appeal the trial decision of Harvison-Young, J. made 30 April 2007, and for the purposes of the enforcement case, the support order is considered to be correct as of its date.

[45] The payor also believes he should be paying much less support, based upon his position that his income has been reduced from the level it previously had been. This is an issue for the court hearing a motion to change. It is not an issue in relation to the enforcement case. The support order has not been changed and is a valid order.

[46] The payor described the trial judgment of Harvison-Young, J. as "horrible" and "shocking". He repeatedly attempted to give evidence disputing the findings made at the trial, although the trial decision was not appealed. He gave extensive evidence about what he described as the custody dispute (although only access was at issue by the time of the trial in 2006). He repeatedly described and revisited the access conflict from the time of the separation in 2001 to the trial (which took place 12 years ago) regarding his children, who are now 25, 24, and 20 years old, and two of whom live with him. He admits that he was angry. He admits that he dug his heels in after the recipient moved with the children to Whitby, and he admits that he stopped paying spousal support.

[47] The payor gave detailed and extensive evidence about his business, 24 Hr. Toner, which he started in 1992 as a sole proprietorship, and incorporated in 1996. The business supplied recycled toner cartridges to small and large businesses and government. The payor was the owner and the primary salesperson, and at times he was the only salesman. The business was, as the payor described it, self-financed, which meant that there was no bank loan regarding the business, and that at one time, the business had $300,000 in the bank. At times, the business had 15 employees. The payor closed the business in August 2008.

[48] At the trial in 2006, three experts gave evidence about the value of the business (for purposes of determining the equalization payment) and the value of the payor's income (for support purposes). The child and spousal support orders were based on imputed annual income of $344,261 (as of the trial date).

[49] Various members of the payor's family worked in the business from time-to-time (four family members were identified as having worked there in the trial decision). Harvison-Young, J. found that the salaries paid to family members for the years following 2001 (the separation year) jumped sharply and exceeded reasonable levels. Over a six year period the payor paid salaries to the four family members (there were never more than three at a time employed there) totalling $1,170,006, an average of $195,001 to family members per year. Harvison-Young, J. found that these amounts were paid out of the payor's desire to keep his income for support purposes as low as possible in order to pay the recipient as little as possible.

[50] The closing of the business was either not well-documented, or the payor failed to produce the documentation regarding its closing. The payor said that when he closed the business, he was emotionally shattered and was devastated. He just walked away from the business, and made no efforts to collect receivables owing (including a loan to family members of $21,000), nor to sell assets owned by the business (including two vehicles). After he closed the business, he did not work for two years. He stayed at home, watched television, talked to his parents, was not working and was not looking for work.

[51] The payor started working in 2010 with Commercial Laser Technology, a business partly owned by his current girlfriend. He was originally paid a salary (about $40,000), but was switched to commissions in 2012. He still works there. He works as a delivery person, and he also works in sales. He is not attempting to gain new customers, but is just servicing the customers that he has. He admits that he gave up. His evidence is that this is the only job he has applied for since he closed the business in 2008 (10 years ago). He says he has no ambition and cannot even imagine working anywhere else.

[52] The payor repeatedly referred to the fact that he had paid significant amounts of money to the recipient. He admitted that there were times when he stopped paying spousal support. He admitted that the way he deals with things is to run and hide.

[53] The payor's evidence is that he and his two sons are now living in a property owned by his parents (who do not live at that address). He does not pay rent to his parents. He said that his parents pay many of his expenses. His two sons (ages 24 and 20) do not contribute financially to the household.

[54] The payor testified that he has paid what he could for the support owing when he could and for as long as he could. He repeatedly said that to pay any more than he did pay would have jeopardized the financial stability of his company, and he was not prepared to do that. He said he paid what he thought was appropriate.

[55] Rowsell, J. gave the payor leave to bring a motion to change on 22 March 2012. This motion to change lasted more than three years. The payor was slow to even start this motion to change, not issuing it for many months after he obtained leave to do so. He obtained several sympathetic orders from Rowsell, J. along the way. Child support was suspended (25 July 2014), and then spousal support was suspended (23 January 2015), until the recipient produced the disclosure ordered. But the payor did not produce the disclosure ordered, and did not proceed with the motion to change. He did not come to court. He just stopped participating. He basically walked away from the court case. The motion to change was dismissed by McLeod, J. on 24 November 2015.

[56] The payor referred to medical evidence as a reason to support why he was unable to work or to earn the kind of money he earned at the trial. He gave detailed evidence about his history of seeing different doctors over a period of many years, and filed letters from many of these doctors. Most of the doctor's letters said the same thing, that the payor was depressed, or had a generalized anxiety disorder, that it may be situational depression (related to the separation and the family law court case), that he would likely benefit from taking anti-depressant medication, that the doctor had discussed this recommended treatment with him and he had refused to do this. Many doctors (about five or six doctors), over a period of many years, said exactly the same thing about their recommendation of anti-depressant medication for him. He finally began a course of anti-depressant medication recently (Sertraline, begun in April 2017).

[57] The payor also described his current health situation. He said that his blood sugar is now under control. He said that he lost a considerable amount of weight. He said that he responded well to cognitive behavioural therapy. He said that he is taking anti-depressants, after a long period of resisting this treatment.

Analysis

[58] The support order being enforced is the order of Harvison-Young, J. for child and spousal support made 30 April 2007 at the trial.

[59] The only case before this court is the default hearing, arising from the Notice of Default filed by the Director to enforce the support order. The parties to the enforcement case are only the Director and the payor. The recipient is not a party to the enforcement case.

[60] The trial order continues to be a valid and subsisting order. It was not appealed. It has not been changed. The only issue in the enforcement case is whether the payor's failure to pay the arrears and ongoing support is due to an inability to pay, for valid reasons.

[61] This case is not dealing with the terms of the trial order, other than in the context of enforcement. That is, in this case, the court does not have any ability to change the court order for child and spousal support. If there has been a material change in circumstances since the granting of the order, as the payor suggests, that can only be addressed by a motion to change brought in the Superior Court of Justice. The payor has brought (or asked for leave to bring) three motions to change since the trial order. Two of the motions to change were brought, and were dismissed. While this payor is an extremely experienced litigant and a litigant who has frequently acted on his own without lawyers, over a period of many years now (about 10 years, he said), it was not always clear that the payor understood what issues the court was dealing with in the enforcement case, and that the court had no jurisdiction to change the support order.

[62] The payor's position is that he is unable to make payments of the on-going amounts and is unable to make payments on the arrears for these reasons:

a) his business failed in 2008 and he has been unable to focus on earning a similar income since then due to the on-going family law case; and,

b) he lives with health issues that impact on his current employment and his employability. The mental health issues are, he says, largely attributable to the family law case;

[63] The default hearing was repeatedly adjourned at the request of the payor, to allow him to seek leave to bring a motion to change in the Superior Court of Justice. The payor finally sought leave to bring such a motion to change and on 1 March 2018, a few weeks before the default hearing, Kiteley, J. dismissed this request.

[64] The onus is on the payor to prove that a medical excuse provided a reasonable explanation to justify his underemployment. The medical information produced by the payor was inadequate to accomplish the goals for which he provided it. None of the doctors gave evidence at the trial. No curriculum vitae were filed regarding any of the doctors. Most of the medical information was quite dated. The letters provided fell far short of the type of evidence required to support a claim for inability to pay for medical reasons. The payor also has previous unsuccessful experience with attempting to file medical letters alone, with no other evidence. Without the curriculum vitae information for any of the doctors, and with none of the doctors giving evidence, this information was afforded little weight.

[65] The Director does not concede that the payor is unable to pay support due to medical reasons. And the court does not find this to be so. The payor says he has taken steps to improve his health (set out above). Even if he had some limitations at one point which affected his ability to work, he did not follow the recommendations of his several doctors which might have put him in a better position to pay. He acknowledged that his health circumstances are now much improved. He is capable of working full-time, and he is working. The question is not whether the payor is capable of working, but rather, whether his current level of work is reasonable in the circumstances.

[66] Over a period of many years now (the trial order was made in 2007, 11 years ago), the payor was not prepared to make the necessary choices in order to properly address the issue of his mounting support arrears.

[67] The Director has been trying to enforce the trial order for more than 10 years, and has been using all the tools available to do so. The Director has, however been unsuccessful in enforcing even the payment of the on-going amounts.

[68] The payor closed his business almost 10 years ago. He was 47 years old when it closed. It was not clear, from the evidence provided, that the payor needed to close the business. If, as he says, the industry that his business served was no longer lucrative, he could have and should have made efforts to get work in another industry. When asked why he did not look for work in another industry, he did not answer that question. He was an experienced businessman, a successful business owner and a successful salesman, capable of earning annual income of over $344,000, as Harvison-Young, J. found in 2007. He has taken no meaningful steps to obtain employment, in which he would earn income at the level he is capable of earning, since August 2008 (when he closed his business), when he clearly has the skills to do so.

[69] The onus is on the payor to satisfy the court that the court should not make a default order. To do so, the payor must fit his reasons for non-payment into the statutory scheme in F.R.S.A.E.A. section 41 . If the payor fails to satisfy the court of these facts, the court must determine the appropriate enforcement order to be made.

[70] These are the findings the court makes about the payor:

a) he has repeatedly and intentionally avoided his responsibility towards his children and his former spouse, over a great many years. He has demonstrated a long-term, wilful and deliberate disregard for his obligation to comply with court orders;

b) he has taken no steps at all to obtain employment which would permit him to earn income at the level he is capable of;

c) he provided no justifiable reason for his inadequate payment history;

d) he has not shown reasonable, diligent or legitimate efforts to comply with the court order;

e) he has not acted in good faith, and has a long history of not complying with court orders for disclosure;

f) he continued to provide some but not all disclosure needed in this court case, as he has repeatedly in the past, in the original trial, in the several motions to change and in several previous default cases;

g) he owned a valuable business which produced significant income for himself, and for several of his family members;

h) he has not established that he closed the business for valid reasons;

i) the onus is on the payor to provide a complete financial picture, which he has not. An adverse inference should be drawn against the payor;

j) he admits that he intentionally stopped paying support, and that this was a choice that he had made;

k) he has structured his personal financial affairs so as to make enforcement through other means (other than a default order and imprisonment) very difficult and unlikely;

l) he has no plan on how to meet his ongoing support obligation in the future nor to retire the existing arrears;

m) he is openly defiant of the support order, and has no intention of paying ongoing support or any of the arrears;

n) it is clear that all other enforcement options did not result in support order compliance. This is the third default case in the 11 years since the order was made, all of which have had little impact on his payment history;

o) he is not an unsophisticated payor, nor is he an inexperienced litigant, lacking in understanding of the court process or of the possible consequences of the default case. He has been involved in litigation for about 17 years, and has been involved in enforcement cases for 10 years;

p) he is not making the best efforts at obtaining more lucrative employment. Even minimum wage would amount to three times what he says he is earning at his current job; and,

q) he relies heavily on his family for his daily needs. His family appears to be prepared to provide for him. He earns nominal income, but still appears to have his needs met. His parents are facilitating his under-employment.

[71] As long as the payor has a continuing legal obligation for support, continuing on the way he has been is not an option. He cannot continue to be intentionally underemployed, earning far less than he is capable of earning, and then expect the court to accept that he has a valid reason not to pay the arrears owing and the on-going support.

[72] The payor has not provided sufficient evidence to establish that he is unable, for valid reasons, to pay the arrears of support that have accrued, and to make subsequent payments of the ongoing support. An order shall be made that requires payment of the on-going support (presently spousal support of $5,074.39 per month, indexed under section 34 (5) F.L.A. ), and payment of an amount towards the arrears that have accrued.

[73] The F.R.O. is seeking a committal term of three days in jail for every default in payment of the order made, under F.R.S.A.E.A. section 41 (10) (i). The payor has been in jail twice before, in previous enforcement cases (for 12 days regarding the payment of $45,260 and for 20 days regarding the payment of $153,655). These jail terms were not successful in collecting this money.

[74] However, when a committal term was attached to the temporary default order in this case, the payor made the payments. The threat of jail does have an effect to compel payments. A committal term is necessary, in these circumstances, to compel payment. Without a committal term, the default order would have no greater effect than the support order, which the payor has not complied with.

[75] The F.R.O. also seeks an order under F.R.S.A.E.A. s. 41 (10) (f) requiring the payor to provide annually, by 1 June, copies of his income tax returns and notices of assessment, and a sworn up-dated financial statement. The purpose of such an order is to ensure that the default order made is accurate on a go forward basis, and continues to reflect the payor's circumstances.

[76] The payment plan sought in this order by F.R.O., if it is complied with, is a lengthy one. The F.R.O. noted that if the payor has an increased ability to pay, the F.R.O. would consider a motion to change the default order under F.R.S.A.E.A. section 41 (15), based on a change in circumstances.

[77] The order granted today does not change the original support order.

[78] The maximum length of time, cumulatively, the payor can be imprisoned under each default order is 180 days ( F.R.S.A.E.A. , s. 41 (10) (i)). Once that limit is reached, a new default case would be required.

Orders

[79] These are the final orders in this case:

a) the payor shall pay periodic payments of the on-going order and payments towards arrears, in the following amounts. These payments shall be applied as the on-going current amount of $5,074.30 per month for spousal support (and indexed annually under the Family Law Act, s. 34 (5) ), and the balance of the payment shall be applied towards arrears:

i. From 1 July 2018 $6,000 per month;

ii. From 1 January 2019 $8,000 per month;

iii. From 1 June 2019 $10,000 per month;

b) in default of any payment the payor shall be committed to jail for three days for each and every default;

c) the payor shall pay the sum of $5,000 on account of the support arrears, on 1 July 2018, and every year on that date. In default of this payment, the payor shall be incarcerated for 10 days, or until the sum is sooner paid;

d) on 1 June of each year starting in 2019, for so long as arrears of support are owing, the payor shall provide the Director, F.R.O. the following:

i. a copy of his income tax returns and notices of assessment for the prior year; and,

ii. an up-to-date sworn financial statement (under the Family Law Rules).

e) the payor shall notify the Director in writing of any future change of his address, income, and employment, to be provided within 48 hours of any such change.

f) this order does not limit or restrict the Director in pursuing any other available enforcement remedies for the enforcement of the support arrears or the ongoing spousal support payments due under the order.

Released: 17 May 2018

Justice Carole Curtis