Court File and Parties
Court: Ontario Court of Justice
Date: August 14, 2020
Court File No.: Brampton 698/00
Between:
B.M. Applicant
— AND —
P.L. Respondent
Before: Justice A.W.J. Sullivan
Heard on: July 2, 2020
Reasons for Judgment released on: August 14, 2020
Counsel
Mr. R. Diamond — counsel for the applicant B.M.
Ms. P. Bateman — counsel for the respondent P.L.
Reasons for Judgment
SULLIVAN, A.W.J.:
Introduction
[1] This is the trial decision heard on July 2, 2020 pertaining to Mr. B.M.'s Motion to Change dated November 21, 2019.
[2] He seeks to change the child support Order of Justice T. Wolder dated November 22, 2000.
[3] Ms. P.L. is the recipient. She filed a Response to Motion to Change dated February 19, 2020.
[4] The child support is for the parties' daughter H. L.-M., who is 21 years old and has just completed her 3rd year in Communication and Business Management at an Ontario University.
[5] This trial was conducted via Zoom video link with a recording of the trial evidence.
[6] The parties filed their direct evidence by affidavits and were cross-examined on this evidence. Each attended their lawyer's office for this trial to assist in the management of documents and video communication.
Evidence Filed
[7] Mr. M.'s Affidavits and Financial Statements entered in this trial were as follows:
a) Affidavits: November 27, 2019 Exhibit 1, December 17, 2019 Exhibit 2 and March 9, 2020 Exhibit 3.
b) Financial Statements: November 8, 2019 Exhibit 4 and February 6, 2020 Exhibit 5.
[8] Ms. L.'s Affidavits and Financial Statements entered at trial were as follows:
a) Affidavits: December 9, 2019 Exhibit 7, February 19, 2020 Exhibit 8 and June 29, 2020 Exhibit 10.
b) Financial Statement: February 19, 2020 Exhibit 9.
c) FRO Director's Statement June 2020, Exhibit 6.
The Original Order
[9] The child support order by Justice Wolder in 2000 reads as follows:
The temporary order of October 19, 2000 (as amended and reflected in finding the applicant's income to be 30,000 per year) and as further amended as herein stated, shall continue as a final order of this court, subject to the following changes:
For the months of October 2000 through to March 2001, the child care expenses are 680 dollars per month and the applicant's share shall be 206 dollars per month. Therefore, the total child support payable on October 19, 2000, through to March 2001 will be the guidelines amount of 266 dollars per month plus special expenses contribution of 206 dollars per month for a total of 472 dollars per month. Commencing in April 2001 the special expenses will increase to 800 dollars per month and the applicant's share thereof will be 240 dollars per month commencing April 19, 2001, for the total support payments starting April 19, 2001, of 506 dollars per month.
The order bears post judgment interest of seven percent per annum effective from the date of this order where there is a default in payment, the payment in default shall bear interest only from the date of the default.
Issues in the Motion to Change
[10] In Mr. M.'s Motion to Change he seeks the following:
a) A finding that there has been a material change in circumstances since the making of the last Order.
b) A change to the last Order for a period of the last three years to reflect his declared income.
c) A determination of the quantum of monthly child support arrears owed from the date of the Order, November 2000, to take into account the direct payments and "in kind" payments that he claims he made directly rather than through FRO and a finding that child support terminated when H. commenced university in 2017.
d) A finding of the quantum of section 7 expenses owed since the last Order and a termination date of section 7 expenses.
e) The amount of post-secondary expenses that he owes and what is his daughter's contribution to this expense.
f) A reduction of post judgment interest to an appropriate rate rather than the ordered amount of 7%.
[11] Ms. L. requests the following in this action:
a) A finding that Mr. M. has not shown a material change regarding his income to warrant a change in his payments for the past 3 years as he requests.
b) Regarding the quantum of arrears owed, she disputes the amounts claimed by Mr. M. in direct payments to her since the 2000 Order.
c) She disputes the request that child support be terminated.
d) Section 7 costs arrears and ongoing. A finding as to when daycare section 7 costs ceased for H. and that the dollar amount of $240.00 as set out in the Order for daycare may be applied to other section 7 costs subsequently incurred for H. as submitted in these proceedings.
e) A determination of H.'s contribution to post-secondary university expenses.
f) Costs for defending the motion.
[12] Prior to this trial commencing, Ms. L. brought a motion for security of costs which I ruled on February 27, 2020. In that decision I granted security of costs in the amount of $5,000 to be made by March 9, 2020.
Background History to the Motion to Change
[13] Apparently, the event that caused Mr. M. to commence this Motion to Change was a notice of garnishment issued against him dated January 8, 2019. This was issued by the Family Responsibility Office (FRO) for the benefit of Ms. L. to satisfy outstanding child support payments that date back to the beginning of this Order.
[14] In this trial a June 2020 Director's Statement from FRO was entered as Exhibit 6. The statement indicates that effectively other than for a number of sporadic payments which are credited to Mr. M., there is as of June 2, 2020, some $111,482 owing in combined monthly child support and section 7 costs.
[15] The Director's Statement added on June 2, 2020 the 7% interest owing on the above arrears as set out in the 2000 Order to be $68,969.32.
[16] Ms. L. claims this interest as set out in the Order.
[17] The notice of garnishment was executed against funds that were being dispersed to Mr. M. after litigation regarding his mother's estate was settled through a mediated settlement on October 29, 2019.
[18] The Minutes of Settlement from the estate litigation and the contested wills involved in that litigation were filed as exhibits to the affidavits of the parties in this trial.
[19] Based on the notice of garnishment, FRO received $107,540 from the above-noted estate litigation.
[20] It was upon the garnishment of this money that Mr. M. commenced a Motion to Change the 2000 Order of Justice Wolder as well as a motion that the monies garnished be held by FRO until the final disposition of this trial.
Analysis of Issues
[21] In reviewing the evidence led on the issues as noted above, I will attempt to do so issue by issue. I considered the relevant evidence on the main issues to be the following:
Material Change in Circumstances
[22] On this issue both parties did not spend much time arguing the issue of material change which is an essential starting point and finding that I must make to permit a Motion to Change to proceed.
[23] Mr. M. argued the relevant sections of the Family Law Act 37 (2.1) in that the Court must be satisfied that a change in circumstances within the meaning of the Child Support Guidelines must have occurred.
To ascertain whether a change in circumstances has occurred, a court must consider whether the change advanced was "material" – meaning a change that, "if known at the time, would likely have resulted in different terms" – and a change with some degree of continuity, and not merely a temporary set of circumstances: L.M.P. v. L.S., at paras. 32 and 35; Gray v. Rizzi, 2016 ONCA 152.
[24] Mr. M. argued that there have been several changes in circumstances that would permit a review of the quantum of child support arrears owing as well as ongoing payments of support to H. and the section 7 costs.
[25] Mr. M. suggests that his daughter H. has moved from Ms. L.'s home as of September 2017 in order to attend Laurier University and there is little evidence of her returning to her mother's home during the summer.
[26] In addition, he argued that H. received an inheritance in November 2019 in the amount of $268,349. This was from her paternal grandmother's estate.
[27] Essentially Mr. M. argues that H. is no longer a "child" as defined under the Child Support Guidelines.
[28] On the issue of whether there has been a material change or not, Ms. L. focused her arguments on this issue around Mr. M.'s request that his income be considered less than the $30,000 imputed to him in the original Order. On the issue of backdating his income, Mr. M. does not ask that this be more than three years as set out in the Supreme Court's decision in D.B.S..
[29] Ms. L. points to the Trang v. Trang, 2013 ONSC 1980 decision and argues that a Motion to Change is not one to set aside an Order based on an error and it is not an appeal.
[30] She deposed that in 2000 Mr. M. showed up on the first appearance and declared to Justice Wolder that his income was $30,000 and requested an adjournment but did not return for the second appearance and he did not file financial documents. Justice Wolder's Order actually notes this income as declared by Mr. M. when he sought an adjournment.
[31] Ms. L. argues that as the court in 2000 imputed income to Mr. M. of $30,000, that this is a determination of fact and that it is not open to Mr. M. now to suggest that his declared income of $15,000 to $20,000 per year should automatically be accepted by this court at this time.
[32] Ms. L. argues that Mr. M. has the onus today that if he wants this court to rely on his current declared income to establish why, at this point in time, such an assertion is to be considered correct by me.
Discussion/Finding and Decision on the Issue of a Material Change in Circumstances
[33] I find the following facts that there is a material change since the date of the 2000 Order.
[34] I heard that some 20 years have passed since the date of the last Order at which time H. was just 1 year old.
[35] I heard that during this time Mr. M. argues that he paid support in cash and in-kind to Ms. L. Ms. L.'s evidence is that she received some money over the years from Mr. M. and reported this to FRO. She contests the amount that he suggests in this trial as well as the amount of "in-kind" renovation work he did around her home.
[36] In this matter H. is now attending university completing her third year. She has had part-time employment over the past several years.
[37] Both H. and Mr. M. received inheritance from his mother's estate. This directly affects their respective positions in this matter.
[38] These funds were not available to H. when the original Order was made.
[39] I also heard and received evidence that H. has been working part-time and has annual income. H.'s income tax returns for several years were filed in this trial.
[40] I also heard conflicting evidence about how the parties dealt with the collection and enforcement of monthly support over the course of the 20 years of this Order.
[41] I recognize there is a dispute as to whether this was an agreed to change in the way that the support was to be paid and collected through FRO.
[42] Although an area of dispute in terms of how much this was agreed to, it does appear to be the set of circumstances that has shaped the way this litigation has unfolded and is, I find, a material change from the date of the last Order.
[43] Considering the above I find that there has been a material change in circumstances that would permit a review of the following areas of the Order, specifically:
- What arrears, monthly child support, section 7 costs and interests, are owing and Mr. M.'s ability to pay.
- Whether Ms. L. today can request to substitute the dollar amount in the last Order allocated to daycare for these costs hence increasing Mr. M.'s total arrears owing.
- Whether H. continues to be a child as defined under the legislation such that support should continue to her monthly.
- What percentage should H.'s and the parties' contribution be towards H.'s postsecondary university costs.
Arrears Owing Since the Date of the Order
[44] Mr. M.'s evidence in this trial was that he paid support, as best he could, and what he was able to afford to Ms. L. as follows.
[45] He does not dispute that he owes child support based on the last Order. The FRO Director's Statement was unchallenged at trial, but rather that he argues that he should be credited for the support he provided to Ms. L. both in-kind and through direct cash payments.
[46] His evidence was that he would regularly pay cash and to work around Ms. L.'s home such that it amounted to an exact number of $59,500. It is this amount that he seeks a credit for.
[47] He points to the FRO Director's Statement filed with the court which shows that the recipient, Ms. L., reported some $10,264 in cash payments received from Mr. M. since 2000.
[48] Mr. M. further argued that Ms. L. admitted in her testimony and in her last affidavit of June 29, 2020 that she received from Mr. M. one last payment of at least $1000 in 2013 which he apparently left in the mail at Ms. L.'s work. This money Ms. L. had not reported to FRO. Mr. M. suggests that the 2013 payment was more along the lines of $2400 to $2600, which Ms. L. denies.
[49] Mr. M. points to the above in support of his assertion that it is reasonable for me to assume that he made payments, as he suggests, totaling some $59,500 which were not reported by Ms. L.
[50] Mr. M. testified that he also bought a bedroom suite for his daughter and school clothing which Ms. L. accepted as support payments and stated that she never complained to him but had asked for more money in payments per month. Mr. M. outlined some of the dates and details as he recalls them of these payments in his March 9, 2020 affidavit. He also recalled giving his daughter concert tickets that he had received from clients in barter for his renovation work. He is not seeking credit for these. Mr. M. had some connections in the music industry that he had some interest in over the years as he played a little music from time to time.
[51] Mr. M. was questioned about his renovation business and the barter system that he uses as part of his income and business model. For some 15 years or so now this has been the principal means of his employment and income.
[52] Mr. M.'s principal residence is on a friend's farm in Fenelon Falls, Ontario, for which he pays no rent.
[53] When questioned about the fact he has no rent declared on his Financial Statement, Mr. M. indicated in lieu of rent he works around this farm on a regular basis on different projects and this is how he pays for rent in the form of barter. This he declared he has done for years as a means to support himself.
[54] So too he argued he did so with Ms. L. to pay his monthly child support. When questioned as to what projects he did as in-kind child support payment over the 20 years since the Order, two projects that came to mind were a renovation of a bathroom and the improvement of Ms. L.'s house carport. He also recalled buying a bedroom set for his daughter and doing some painting for Ms. L.
[55] During questioning on these two projects, in order to estimate their value, at best Mr. M. deposed that the bathroom renovation required him to work about 3.2 weeks at 30 to 40 hours per week for an average of $25 per hour. This would total if all the time was accepted to be $3,200. The carport project took less time, about 6 days at about 8 to 10 hours per day or about $1,500.
[56] Mr. M. testified that it takes him longer than others to complete projects as he has OCD.
[57] This he claims impedes his progress on projects, and he has worked with this over the years. He did not provide any doctor's report on his OCD but testified that he does see a doctor and participates in "talk session" to manage his OCD.
[58] When asked how he financed his renovation projects in terms of material, Mr. M.'s best answer was that he would use money that he had obtained from earlier jobs he had completed.
[59] When asked if he had any documentation of any sort throughout the 20 years since the Order to establish his argument that he paid some $59,000 in support through cash payments and barter to Ms. L., Mr. M. stated that he did not.
[60] Mr. M. added that all of his personal records were removed from his mother's home in 2015 by his estranged brother. Mr. M. had resided with his mother for several years assisting her. This was part of the dispute and litigation surrounding his mother's estate which is a backdrop to this Motion to Change.
[61] When asked if he had any documentation from 2015 through to the present as a form of new record-keeping, Mr. M. said he did not.
[62] When questioned as to when he stopped making child support payments of any sort either in cash or in-kind to Ms. L., Mr. M. testified that he stopped this direct payment method in about 2015 when his daughter stopped visiting with him on a regular basis and Ms. L. did not communicate with him as she did in the past.
[63] It should be noted that Mr. M. always claims that he paid what he could in support based on the level of income that he made from his repair/contracting work. However, there is no record even with FRO of a lesser amount which he claims he would have made to Ms. L. if she was communicating with him.
[64] At trial it was established that Mr. M. was in communication with FRO around the time he claims his daughter stopped communicating with him. Apparently he did not take up the services of FRO to record any payments of any amount that he suggested he made directly to Ms. L.
[65] I also heard conflicting evidence that after 2015 he brought his daughter to a concert. There was also evidence that his daughter sent him a text message requesting money for textbooks for university.
[66] Earlier in this Motion to Change I had heard evidence that Mr. M. had not filed his income tax for some 20 years. In the preparation of this trial he was ordered to do so and was able to complete at least 10 years with Revenue Canada which he did with the assistance of an accountant.
[67] When questioned how he was able to prove his income to complete his taxes as he testified he had no records, he stated that he did so by estimating his income as a contractor as best as possible.
Discussion and Decision on the Issue of a Credit to Mr. M. Regarding Arrears in Child Support
[68] In terms of assessing what credit I could grant Mr. M. against the arrears owing, this is an extremely challenging if not impossible task given the evidence that he has provided.
[69] Ms. L. has admitted in her testimony that Mr. M. did some work as noted above on her bathroom and carport. At no time did she directly admit to accepting this work in lieu of support although in her overall testimony I was left with the impression that she accepted this out of frustration with Mr. M.'s non-payment of monthly support. The issue is what was this work worth to establish a credit to Mr. M. thus reducing the arrears owed.
[70] Ms. L. did testify that she was extremely frustrated with the collection process and continuously insisted that Mr. M. pay through FRO which he did not. Ms. L. filed at trial a December 6, 2019 letter from FRO indicating that FRO over the years took the following enforcement actions against Mr. M. to collect arrears owing to no avail:
a) Credit Bureau Reporting
b) Writ of Seizure and Sale
c) Federal Support Deduction Notice
d) Driver's Licence Suspension Notice
e) Federal Licence and Passport Suspension Notice
f) Notice of Garnishment
g) Voluntary Arrears Payment Schedule Notice
h) Request for Financial Statement Notice
[71] A review of Exhibit 6 which is a comprehensive Director's Statement shows that Mr. M.'s payment from the first day of the Order is delinquent on each and every payment other than those credits that Ms. L. reported to FRO. She also admits to receiving a $1000 payment that is not recorded in March 2013, but other than this there is little in the way of evidence that would assist Mr. M. other than what Ms. L. admits to.
[72] It is important to pause at this point in the analysis and review the evidence and note the following.
[73] Mr. M. has a positive obligation to prove to the court his case. It is not on Ms. L.'s shoulders to disprove what he is asserting. A self-employed person such as Mr. M. has an obligation to disclose in these matters adequate and comprehensive records of income and expenses, from which the court and the recipient can draw conclusions and on which basis the amount of child support can be calculated, Meade v. Meade (2002), 31 RFL 5th 88 (Ont SCJ), Reyes v. Rollo.
[74] In addition to asserting these direct payments as noted above in cash and barter, Mr. M. seems to conflate some of the principles of hardship found in the leading cases of D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 SCR 231, and applied in Gray v. Rizzi, 2016 ONCA 152, to his situation above in which he is claiming direct cash and in-kind payments that he wishes to receive a credit for.
[75] What is similar to the above-noted cases and the principles taken from those cases is that we are looking to the past. In the above-noted cases there are a series of principles that need to be established if one is arguing that one did not have the ability to pay from the start of an Order and/or that there is a hardship to ask the payor to do so at this point in time.
The Supreme Court of Canada in D.B.S. v. S.R.G. 2006 SCC 37, [2006] 2 SCR 231, set out the test and legal principles to apply in determining whether retroactive orders should be granted.
In D.B.S. v. S.R.G., the Supreme Court confirmed that retroactive child support orders are neither rare nor exceptional, and stated the following general principles:
a) Child Support is the right of the child and a parent cannot barter away a child's right to support, as per Willick v. Willick, [1994] 3 SCR 670. Parents have an obligation to support their children in an amount commensurate with their income, as required by the Child Support Guidelines. This obligation, and the child's right to support, exist independently of any statute or court order.
Recipient and payor parents both have the responsibility to ensure the correct amount of child support is paid. While child support orders should provide payors with the benefit of predictability, and a degree of certainty in managing their affairs, such orders do not absolve payors or recipients of the responsibility to continually ensure that the child is receiving an appropriate amount of support.
b) In determining whether to award retroactive child support, payors' interests in certainty must be balanced with fairness to the child and the need for flexibility. All factors must be examined, including the reason the recipient delayed in seeking child support, the conduct of the payor, the past and present circumstances of the child, and whether the retroactive award might entail hardship for the payor.
c) If the recipient is found to be entitled to a retroactive award, the general rule is that the award should go back to the date the recipient provided effective notice to the payor, but to no more than three years unless the payor has engaged in blameworthy conduct.
[76] In this case Mr. M. is seeking a re-evaluation of his income from 2017 to the present. He is not at this time asking to go back any further than 2017, nor would I find he had the ability to make such an argument from the date of the Order in 2000.
[77] At that time his income was imputed to him based on his own testimony before Justice Wolder that he earned $30,000 per year and he did not produce his financial details when he was given an opportunity to do so.
[78] Where income has been imputed, a support payor is not going to be able to vary that Order unless he can demonstrate that there has been a material change since the making of that Order. It is not open to a litigant to fail to produce financial information, run the risk that a trial judge will impute income, and then come back to a new court and suggest that the imputed income was wrong. Ruffolo v. David, 2016 ONSC 754, 2016 CarswellOnt 2151 (Ont. Div. Ct.).
[79] Mr. M. took no steps until this action to change the Order and argue that his real income is less than the $30,000 per year imputed to him based on his own evidence.
[80] At this point in time I find that there is no hardship to Mr. M. to ask him to pay what he owes from the date of the Order, as most of the money that he owes is sitting with FRO from part of his share from his mother's estate.
[81] This in itself is a significant distinction from cases in which a payor is facing a potential hardship if ordered to pay arrears coupled with a lower income than what the Order was based on.
[82] In this matter the only credit that I can find based on the evidence is what is admitted by Ms. L. to be some form of barter that she accepted out of frustration for Mr. M.'s refusal to pay child support through FRO. From the evidence that I heard this seems to have been passively accepted by Ms. L. while at the same time she asked Mr. M. for more support, as he testified she was asking him to pay $1000 a month at one point.
[83] Mr. M.'s lifestyle was such that he was able to operate and live off the financial grid while still being able to benefit from a lifestyle that met his needs and avoided his responsibilities toward his daughter for years. I find this evidence, coupled with the lack of Mr. M.'s adequate financial disclosure from his business, permits the court to draw adverse inferences on Mr. M.'s credibility in his evidence about the credit he claims and his real and potential income. See Aitken v. Aitken, [2003] O.J. No. 2780 (SCJ), and Reyes v. Rollo, [2001] O.J. 5110 (SCJ) at para 62, and McLean v. Vassell, [2004] O.J. 3036 (SCJ) at para 22.
[84] Ms. L. has every right to express her frustration in this matter and frustration with the enforcement despite FRO's multiple attempts short of bringing Mr. M. to court and asking that he be incarcerated which would not have achieved the goal of payment of support.
[85] Ms. L. does recognize that Mr. M. did some work for her on the carport and the bathroom of her home. The extent of this work, however, in her testimony contrasted greatly with what Mr. M. described. On the issue of the work done on the carport she recalls having four sheets of plywood installed and some bricks. That is the sum total of the work that she recalls being done. As for the bathroom she testified that she recalls Mr. M. painting the bathroom as well as her daughter's room and doing some work on the carport. At no time did she recall any additional worker being involved in this work.
[86] Mr. M. has no records as is his obligation to present if he is asking for this court to consider as a credit this work and other payments that he lists in paragraph 13 to his March 9, 2020 affidavit, totaling $59,500. If it wasn't for Ms. L.'s honesty, he would not receive any credit.
[87] In the end I have very little to go on. No records, cheques, wire or e-transfers, invoices, credit card payments, no scraps of note paper with dates and payments, no photos of his work, no evidence from individuals, some of whom Mr. M. might have been able to bring forward, as he claimed that at least for the carport job there was a helper for a day or so.
[88] In Gray v. Rizzi, 2016 ONCA 152, the court states the following regarding disclosure from a self-employed individual such as Mr. M. when asking the court to establish one's income or in this case payments.
… 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 the disclosure is inadequate or inferences are to be drawn, they should be favourable to the spouse who is confronted with the challenge of making sense out of the financial disclosure, and against the spouse whose records are so inadequate.
[89] Considering the above findings and law, at best I find that the work and materials for the two projects at Ms. L.'s house to amount to $5000 and the additional $1000 in money that was left at her workplace for a credit of $6000 in payments and barter. This is being very generous to Mr. M. given the evidence filed and what I heard.
[90] If I am to accept his own testimony, Mr. M. works on average 20 hours per week doing renovations. This considering his OCD. He stated his hourly rate can be about $25 per hour on the low end. Some of this is at his friend's farm where he pays no rent. I also heard over the years he lived with partners in the GTA. Considering these 20 hours at $25 per hour by 52.143 weeks in a year, this would provide Mr. M. with an average annual salary of $26,071.50.
[91] This up until recently was tax free to Mr. M. as he had not filed any income tax. Cash and in-kind income should be grossed up, despite a payor's liability to be reassessed by Canada Revenue Agency; see Ali v. Williams-Cespedes, 2015 ONSC 3560.
[92] In any case, it is reasonable to conclude that his annual income should have increased over 20 years by at least the cost of living, earning Mr. M. a greater income than what the above basic math has produced considering Mr. M.'s own testimony and mitigating factors.
[93] I have further considered the Ontario Court of Appeal's decision in Gray and the factors that a court should apply when faced with a request for a recession in arrears owing and repayment and a retroactive reassignment in a payor's income. I find these do not apply to this case at bar as I find Mr. M.'s income has not decreased when considered in the overall context from the last Order some 20 years ago.
The Ontario Court of Appeal applied DBS principles in Gray v. Rizzi, 2016 ONCA 152. Where a payor seeks a retroactive decrease in support, the D.B.S. factors – such as considering 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). Absent exceptional circumstances, the factors the Supreme Court of Canada identified in D.B.S. provide useful guidance to a court faced with a request to reduce child support based upon a payor's material decline in income. Although those factors require some minor alteration to suit circumstances where the payor's income has gone down, not up, the fundamentals still apply (Gray, par. 54).
[94] I find the exceptional circumstances do not apply to this case at bar as I find Mr. M.'s income has at best remained stable and it could be argued that his income in overall terms has increased if one were to factor in the benefits he receives given his barter lifestyle and the passive cost of living increases over the past 20 years, although I recognize that Ms. L. is not making that claim given the facts at this point in her daughter's life.
Decision on Credit
[95] On the issue of a credit to Mr. M. I set this to be $6000.
[96] On the issue of Mr. M.'s request for a retroactive reassessment from 2017 of his annual income at less than the $30,000 imputed to him in Justice Wolder's Order of 2000, I find Mr. M. has not proven this claim and this part of his Motion to Change is dismissed.
Issue of Section 7 Expenses
[97] On this issue of arrears in daycare section 7 costs, there are several issues that need to be resolved.
[98] The first is that the 2000 Order established the section 7 costs to be for daycare only.
[99] If so, what was the date that daycare costs ended. Can Ms. L. substitute the daycare costs or other section 7 costs incurred for her daughter prior to H. commencing university. Ms. L. provided invoices for services and activities for her daughter such as tutoring, dance, dental work, and a high school trip to Europe.
[100] At trial it is agreed that the section 7 costs outlined in the 2000 Order of Justice Wolder was for H.'s daycare costs only.
[101] As for when this cost ceased, the best evidence that Ms. L. was able to provide were receipts for daycare for the years 2003, 2009 and 2010 all attached to Ms. L.'s February 19, 2020 affidavit. The issue was when did daycare either part-time or full-time end.
[102] Although the last daycare invoice attached was December 2010, Ms. L. testified that she remembered that her daughter attended daycare up until she was about 12 years old and that would have been the last time.
[103] The last receipt provided by Ms. L. would have placed H. at about 10 years old in 2010.
[104] It is probable that H. required daycare either part or full-time through to 12 years old or about 2011.
[105] Given the evidence as set out in the Order that daycare was a section 7 expense and the receipts provided after so many years by Ms. L. and the age of their daughter, it is reasonable for me to assume that daycare costs were incurred up to H.'s 12 birthday, June 27, 2011.
Decision on Daycare Costs
[106] I find that Mr. M. owes daycare costs in the FRO Director's Statement from the registration date of December 19, 2000, through to June 27, 2011.
[107] The issue at this point is whether Ms. L. be permitted to substitute the daycare costs for the other section 7 costs that she incurred for her daughter and have now been submitted in her Response to Motion to Change.
[108] Mr. M. argues that these should not be permitted to be substituted. The reason for this is according to Mr. M. is that Ms. L. did not ask him for contributions for these other potential section 7 costs other than what he understood to be daycare as set out in the Order.
[109] I did hear some evidence that Mr. M. knew of H.'s soccer play and I was provided family photos in which Mr. M. is present with H. and other family members at H.'s dance recitals. Mr. M. also lists payments towards dance as part of the list of cash/in-kind payments that he claims to have made to Ms. L. over the years. This is found in his affidavit evidence.
[110] There appears to be some evidence that Mr. M. was aware of some of these activities that H. participated in over the years.
[111] In this case the 2000 Order of Justice Wolder does not state that Ms. L. must first obtain the consent of Mr. M. prior to incurring an expense for H. that might be considered a section 7 expense.
[112] Mr. M. provided the case of Mistry v. Mistry 2019 ONSC 193 in support of this argument. However, in that case Justice Fowler-Byrne did have a clause in the Order being reviewed that placed a positive obligation on Ms. Mistry to seek the father's consent. The court in Mistry then went through each request being made for a retroactive contribution to many expenses and first considered if the expenses were within the section 7 definition of the Guidelines, reasonable and necessary for a child's health, education, best interest and if so, was the father aware of them prior to the final Order that required notice/and consent.
[113] This clause does not exist in the Order of Justice Wolder under review by me.
[114] Ms. L. points to Scarrow v. Cowan, 2014 ONSC 3012, where that court permitted the use of daycare funds that had been paid based on an Order since daycare had stopped for payment towards other section 7 costs.
[115] An interesting and related issue in Justice Fowler-Byrne's above decision is that Her Honour found that although certain section 7 activities for the children in that case had been paid for by grandparents, this did not absolve Mr. and Ms. Mistry from their share of recognized section 7 costs.
[116] This applies to this case in that H. did receive an inheritance from her grandmother's estate. The wills filed in this trial do speak of funds being left to H. for post-secondary education which Mr. M. points to as partial support for his position that H.'s university cost is covered today or in part that H. should be asked to contribute to as well.
[117] To this Ms. L. noted that the wills did not prevail in the estate litigation and that Minutes of Settlement that concluded the estate litigation and divided the estate funds did not mention why H. received part of her grandmother's estate.
[118] At this stage however, I have considered the four key factors outlined in D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 SCR 231, when considering Ms. L.'s request that Mr. M. share in the expenses that she incurred for H. since daycare ended.
[119] Ms. L. did not seek to change the Order as she did struggle with Mr. M. for years to comply with what existed. It is apparent that on some level Mr. M. was aware of H.'s changing needs and interests as he attended some of these activities and claims he contributed to them as best he could.
[120] Mr. M. has not assisted his situation as he ignored from day one compliance with the monthly payments in the 2000 Order and did not turn to FRO to track any payments of any amount he could have managed when he suggested his daughter and Ms. L. stopped communicating with him in 2015.
[121] When considering H.'s age and her progress at school and in the community, she was in need and dependent on her mother through the period in question until very recently based on the evidence at trial.
Termination of Monthly Child Support and Post-Secondary Expenses
[122] In relation to when child support should terminate for H. and her contribution to her university costs, I have considered the following.
[123] H. has been attending university for the past 3 years. She did receive some scholarship funding as her grades have been excellent. Little evidence was filed about her splitting of her time between university and Ms. L.'s home and her overall needs for support today and an adult child. I have received her income tax for the last few years. Considering the factors as set out by Justice Chappel in Myer v. Content, 2014 ONSC 6001, I find that H. is no longer in need of monthly child support. She has income from some employment. She did receive as noted above an inheritance from the paternal grandmother's estate in November 2019. She has received some grants and scholarships towards her education and has or completed her first degree. She will also receive the money from his decision to plan her future and discuss with Ms. L. how this is to be used.
[124] As for any hardship to Mr. M. if he is required to pay his contribution to some of the extra expenses, what I consider fair at this point is that he be asked to pay his propionate share of the cost outlined below that I have found meet the section 7 definition.
[125] Ms. L. will not be permitted to substitute the daycare sum in the last Order towards these cost as she requested. The fact that Mr. M.'s income is much lower than Ms. L.'s does not relieve him of his fair share of these costs considering his daughter's changing needs over the years.
Decision on Section 7 Expenses
[126] Mr. M. is ordered to pay his propionate share based on the parties' respective income of the net cost to Ms. L. of the following extra expenses that I find meet the definition of section 7 costs as per the Guidelines, but only towards the following cost for which Ms. L. has been able to provide receipts, invoices as entered into evidence at trial.
- Summer camps
- Tutoring
- Dental/orthodontic work
- Dance
- H.'s post-secondary costs 2017/18 and 2018/19 only.
Decision Regarding Termination of Monthly Child Support
[127] Considering H.'s income and inheritance and the overall evidence submitted, monthly child support as set out in the 2000 Order of J. Wolder is terminated as of December 31, 2019. From this point H. is independent of her parents.
Interest Owing for Arrears in Child Support and Section 7 Costs
[128] On this issue the Order under review has a 7% per annum charge for all unpaid support both monthly and section 7 costs.
[129] Ms. L. seeks this interest. Given my decisions above this could as submitted be $68,969.32.
[130] Mr. M. argues that at this point to request this of him would be a hardship and it should be rescinded. He points to the reasoning in Levesque v. Levesque ONSC 3079, 2009 and MacKinnon v. Duffy, where both courts found that simply too much time had passed from the date of the Order.
[131] At best he argues that there should be an averaging of the % rate requested as found in the Ontario Court of Appeal decision in Crosbie v. Crosbie, [2012] Carswell Ont 9333, 2012 ONCA 516. The OCA found interest rates had declined since the date of the Order and that allowing arrears to accumulate at the higher level for years is unfair and could be an incentive to the recipient to move to enforce the Order.
[132] In Crosbie the court concluded it would be fair to average the interest rate over the years to arrive at a fair % owing. In this case Mr. M. submitted this to be 3.52%.
[133] In the case at bar it was not argued that Ms. L. has waited for 20 years to gain a windfall in interest owing if a court found in her favour. Indeed, she testified when questioned about her choice of a Young Driver's program as compared to others and her not consulting with Mr. M., that she testified that she had not because nothing had proven effective in having Mr. M. respect the Order. She reached a point of frustration that she gave up asking him to comply with the Order let alone consult with him towards a payment that he would have ignored based on her past experience with him over the course of the Order.
[134] The end result however is that with the passage of time the % owed is substantial at 7% and will place him in a difficult circumstance to repay. The question is if it is an insurmountable hardship or one that can be managed with a repayment schedule.
[135] Mr. M. in cross-examination at one point indicated he was surprised to learn of the amount he owed overall as reflected in the FRO Director's Statement. This he says he realized when his estate lawyer received the Garnishment Direction.
[136] Considering Mr. M.'s off-the-grid lifestyle, in a way I'm not surprised to hear this from him, although I am not convinced that if he had received a Director's Statement with a clear interest charge this might have made a difference in this matter.
[137] However, I was not provided with any evidence that such Director's Statements are sent to either party that might generate some action on either part, sort of like a monthly mortgage or credit card statement that looms large for the payor.
[138] I did hear that it was not until recently that Ms. L. registered with FRO for enforcement purposes the accumulated 7% interest that was calculated based on the old Order to be $68,969.32.
[139] This I understand as FRO is a mechanism to enforce what is clear on the face of support orders. It is in most cases the recipient that is required to bring to FRO's attention the need to enforce these support orders.
[140] Some decisions that have reviewed the interest that is owing on orders have considered this issue in relation to what findings the court has made regarding the payor's income to be. In this case I have found Mr. M.'s income to be unchanged, and, as I have commented above, it could be argued it should be higher. This I have not found to be the case nor was evidence provided to find the same.
[141] I find that routine annual FRO Director's Statements to both parties would be overall helpful in these matters. This does not relieve Mr. M. of his obligation to pay some interest on the support that he knew he owed.
[142] I find that the rate should be averaged to reflect the ebb and flow of the interest rate that existed over the past 20 years similar to the market. As there was no evidence to the contrary, I will accept the rate provided to be 3.52% owing.
Decision on Interest
[143] The interest rate owed by Mr. M. on the arrears owing is set at 3.52%. This is owed on the following arrears as set out in the filed FRO Director's Statement:
a. Considering the credit of $6000 dollars.
b. Monthly child support from the date of the final Order to December 31, 2019.
c. Daycare section 7 costs of $240 per month from the date of the final Order to June 27, 2011.
d. There shall be no interest owing on the additional section 7 costs as found to be owing in this Order.
Final Order
I find that there has been a material change in circumstances and change/terminate the 2000 Order of J. Wolder as follows:
On the issue of Mr. M.'s request for a retroactive reassessment from 2017 of his annual income at less than the $30,000 imputed to him in Justice Wolder's Order of 2000, this request in the Motion to Change is dismissed.
Mr. M. shall be credited $6000 towards current arrears owing.
Monthly child support is terminated as of December 31, 2019.
Daycare section 7 costs of $240 per month terminated on June 27, 2011.
Mr. M. owes interest of 3.52% annual interest on the above calculated arrears only.
Mr. M. is ordered to pay his propionate share based on the parties' respective annual income (Mr. M's is $30,000 for the purposes of this Order) of the net cost to Ms. L. of the following extra expenses that I find meet the definition of section 7 costs as per the Guidelines, but only towards the following cost for which Ms. L. has been able to provide receipts, invoices as entered into evidence at trial.
- Summer camps
- Tutoring
- Dental/orthodontic work
- Dance
- H.'s post-secondary costs 2017/18 and 2018/19 only.
There shall be no interest owing on these section 7 costs as found to be owing in this Order.
Based on this Order, counsel for Ms. L. shall calculate the total arrears owing, considering the finding of Mr. M.'s annual income to be unchanged, $30,000, the $6000 credit, termination date(s) that I have made regarding monthly child support, daycare and interest, and the net section 7 expenses as per item #7, and provide this to Mr. M.'s counsel for approval and file the same in the form of a Final Order along with a final SDO via a 14B motion for my consideration.
Final SDO to issue (will be required to be completed and filed).
Issue of costs: If costs cannot be resolved by the parties within 30 days, a party asking for costs shall serve and file via 14B costs submissions no greater than 2 pages (case citations only), with a bill of costs and signed offer to settle that predates the trial. The party responding shall have an additional 30 days to do so in the same fashion.
Released: August 14, 2020
Justice A.W.J. Sullivan