DATE : February 24, 2022 COURT FILE NO. D50519/10
ONTARIO COURT OF JUSTICE
B E T W E E N:
PATRICIA McALISTER ACTING IN PERSON APPLICANT
- and -
CLAYTON DUNKLEY ACTING IN PERSON RESPONDENT
HEARD: FEBRUARY 22, 2022
JUSTICE S.B. SHERR
REASONS FOR DECISON
Part One – Introduction
[1] This respondent (the father) has brought a motion to change the child support provisions contained in the final order of Justice Nathalie Gregson, dated May 18, 2017 [1] (the existing order), retroactively to the date of the order.
[2] The existing order imputed the father’s annual income at $20,805. It required him to pay the Child Support Guidelines (the guidelines) table amount for his two children, now ages 12 and 11 (the children), in the amount of $317 each month.
[3] According to the mother, the father was $8,165 in arrears of support under the existing order, as of January 28, 2022. The father did not dispute this figure.
[4] The father asked the court in his closing submissions to reduce his arrears by 50% and to reduce his ongoing support obligation by 50%.
[5] The applicant (the mother) asks that the father’s motion to change be dismissed.
[6] The court read the affidavits and financial statements of the parties. The parties were permitted to give additional oral evidence at the hearing, cross-examine each other and make final submissions.
[7] The court must determine whether it should make any changes to the existing order, either retroactively or prospectively.
Part Two – Background facts
[8] The father is 36 years old. The mother is 39 years old.
[9] The parties married in 2007 and have been separated since February 2010.
[10] The children have lived with the mother since the separation.
[11] The mother has custody (now decision-making responsibility) orders from this court regarding the children.
[12] On November 18, 2011, the court ordered the father to pay child support for the children in the amount of $348 each month, based on his annual income of $23,080.
[13] The mother subsequently brought a motion to change that was heard in the Ontario Court of Justice in Welland, Ontario. The existing order was made on May 18, 2017. Support was adjusted upwards for the years 2014 to 2016 and the father was ordered to pay child support of $317 each month, starting on January 1, 2017. The court ordered that support arrears be paid at $50 each month. An order for annual financial disclosure to be exchanged was also made.
[14] The father issued this motion to change on April 21, 2021.
Part Three – Legal framework
[15] The father’s motion to change support is governed by subsection 37 (2.1) of the Family Law Act which reads as follows:
Powers of court: child support
(2.1) In the case of an order for support of a child, if the court is satisfied that there has been a change in circumstances within the meaning of the child support guidelines or that evidence not available on the previous hearing has become available, the court may,
(a) discharge, vary or suspend a term of the order, prospectively or retroactively;
(b) relieve the respondent from the payment of part or all of the arrears or any interest due on them; and
(c) make any other order for the support of a child that the court could make on an application under section 33.
[16] The powers of the court on a motion to vary a child support order are very broad. The court can not only change the terms of the order, either prospectively or retroactively, but can also suspend or discharge the order, either in whole or in part, and on either a prospective or retroactive basis. The court's authority with respect to arrears is similarly broad and includes the power to rescind the arrears and interest, either entirely or in part, or to reduce the amount of arrears payable. See: Meyers v. Content, 2014 ONSC 6001.
[17] The child’s interest in a fair standard of support commensurate with income is the core interest to which all rules and principles must yield. A fair result that adequately protects this interest will sometimes lean toward preserving certainty, and sometimes toward flexibility. See: Colucci v. Colucci, 2021 SCC 24, par. 4.
[18] In Michel v. Graydon, 2020 SCC 24, the Supreme Court of Canada made the following observations about retroactive support that are germane to this case:
a) Courts must also turn their minds to other forms of marginalization in the courtroom. The gendered dimensions of poverty at different times mirror or obscure its intersections with race, disability, religion, gender modality, sexual orientation and socioeconomic class. The judiciary must take these differences into account and give them their due weight in considering the tests at issue. In the end, a system that can account for the social dynamics which act to impoverish certain members of society over others, or to prevent them from accessing the courtroom and reclaiming their rights, is a fairer system for all (par. 101).
b) The neglect or refusal to pay child support is strongly linked to child poverty and female poverty (par. 121).
c) Retroactive child support simply holds payors to their existing (and unfulfilled) support obligations. (par. 25).
[19] The Supreme Court of Canada set out the framework for deciding applications to decrease support retroactively at paragraph 113 in Colucci as follows:
(1) The payor must meet the threshold of establishing a past material change in circumstances. The onus is on the payor to show a material decrease in income that has some degree of continuity, and that is real and not one of choice.
(2) Once a material change in circumstances is established, a presumption arises in favour of retroactively decreasing child support to the date the payor gave the recipient effective notice, up to three years before formal notice of the application to vary. In the decrease context, effective notice requires clear communication of the change in circumstances accompanied by the disclosure of any available documentation necessary to substantiate the change and allow the recipient parent to meaningfully assess the situation.
(3) Where no effective notice is given by the payor parent, child support should generally be varied back to the date of formal notice, or a later date where the payor has delayed making complete disclosure in the course of the proceedings.
(4) The court retains discretion to depart from the presumptive date of retroactivity where the result would otherwise be unfair. The D.B.S. factors (adapted to the decrease context) guide this exercise of discretion. Those factors are: (i) whether the payor had an understandable reason for the delay in seeking a decrease; (ii) the payor’s conduct; (iii) the child’s circumstances; and (iv) hardship to the payor if support is not decreased (viewed in context of hardship to the child and recipient if support is decreased). The payor’s efforts to pay what they can and to communicate and disclose income information on an ongoing basis will often be a key consideration under the factor of payor conduct.
(5) Finally, once the court has determined that support should be retroactively decreased to a particular date, the decrease must be quantified. The proper amount of support for each year since the date of retroactivity must be calculated in accordance with the Guidelines.
Part Four – Has there been a material change in circumstances?
4.1 The father’s evidence
[20] The father states that there has been a material change in circumstances because he has not been earning the income that was imputed to him in the existing order.
[21] The father deposed that he worked as a shipper/receiver for the same company from 2014 until 2017. He said that he learned in 2017 that a co-worker was leaving a sales position. He spoke to his manager about applying for the position but instead his company hired someone else. The father deposed, “that was it for me” and he quit his job in February 2017 – before the existing order was made.
[22] The father deposed that he has been in school since 2017. He first attended Emery Adult School to obtain the credits to enroll in Humber College.
[23] The father stated that he is taking the program for his G2 gas licence and that he is optimistic that he will complete this program in 2022. His plan is to look for work in this field. He hopes to earn income in the range of $30,000 annually, to start.
[24] The father filed his annual notices of assessment. They show line 150 income as follows:
2017 - $6,654 2018 - $0 2019 - $0 2020 - $15,127
[25] The father said that he worked part-time jobs while going to school in 2020. He did not provide any documentary evidence of his 2021 and 2022 income. He said that he has been a full-time student. He said that he has been looking for part-time jobs without success. He did not provide a job search list or any details of employment sought.
[26] The father has remarried. He has two children, ages 4 and 15, who live with him and his wife. He testified that his wife earns $27,600 annually and that she has primarily supported their family.
4.2 Analysis
[27] The threshold for a person to establish a material change in circumstances in their income is fairly low. See: Retroactive Support after Colucci, by Professor Rollie Thompson, 40 CFLQ 61. Paragraph one of section 14 of the Child Support Guidelines reads as follows:
Circumstances for variation
For the purposes of subsection 37 (2.2) of the Act and subsection 17 (4) of the Divorce Act (Canada), any one of the following constitutes a change of circumstances that gives rise to the making of a variation order:
In the case where the amount of child support includes a determination made in accordance with the table, any change in circumstances that would result in a different order for the support of a child or any provision thereof.
[28] If the court just looked at the father’s line 150 income for each year, it would have no difficulty finding that he passed the required threshold.
[29] However, the analysis does not stop there. The mother asks that the court impute income to the father since 2017 in an amount equal to that imputed to him in the existing order.
[30] If the court accepts the mother’s position, there will be no change in circumstances that would result in a different order for the support of the children, either retroactively or prospectively, and the father’s motion will fail.
[31] The onus is on the father, the person with knowledge of his income, to show a material decrease in income that has some degree of continuity, and that is real and not one of choice. See: Colucci, supra, subparagraph 1 of paragraph 113. The court is not bound by the reported income of a party. See: Laing v. Mahmoud, 2011 ONSC 4047. Section 19 of the guidelines permits the court to impute income to a party if it finds that the party is earning or is capable of earning more income than they claim.
[32] The jurisprudence for imputation of income sets out the following:
a) Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this obligation, the parties must earn what they are capable of earning. If they fail to do so, they will be found to be intentionally under-employed. See: Drygala v. Pauli, [2002] O.J. No. 3731(Ont. CA).
b) The Ontario Court of Appeal in Drygala v. Pauli set out the following three questions which should be answered by a court in considering a request to impute income:
Is the party intentionally under-employed or unemployed?
If so, is the intentional under-employment or unemployment required by virtue of the party’s reasonable education or health needs?
If not, what income is appropriately imputed?
c) When an employment decision results in a significant reduction of child support, it needs to be justified in a compelling way. See: Riel v. Holland, at paragraph 23.
d) As a general rule, separated parents have an obligation to financially support their children and they cannot avoid that obligation by a self-induced reduction of income. See: DePace v. Michienzi, [2000] O.J. No. 453, (Ont. Fam. Ct.); Rogers v. Rogers, 2013 ONSC 1997.
e) It is not reasonable for a payor to return to school and not pay support, unless it is justified by a sufficient increase in earning ability that will benefit the children. See: Carter v. Spracklin, 2012 ONCJ 193, [2012] O.J. No. 1533 (OCJ); Ffrench v. Williams, 2016 ONCJ 105.
f) Where the under-employment or unemployment is the result of one's own actions (an event over which the payor had some control) or misconduct, the support obligations will not be reduced or cancelled. See: Luckey v. Luckey, [1996] O.J. No. 1960 (SCJ); Maurucci v. Maurucci; Sherwood v. Sherwood, O.J. No. 4860 (SCJ).
g) Courts have found it appropriate to impute income at the level a person was earning before they unreasonably quit a job. See: Thompson v. Gilchrest, 2012 ONSC 4137; Lindsay v. Jeffrey, 2014 ONCJ 1.
[33] Additional legal principles apply on a motion to change when income was imputed at the initial hearing – as was the case here. In Trang v. Trang, 2013 ONSC 1980, Justice Alex Pazaratz wrote as follows:
In most variation proceedings, it should be possible to establish why (and how) income was imputed in the original order. Those factual findings and calculations are usually set out in affidavits or transcripts (in uncontested proceedings) and written endorsements or judgments (in contested proceedings). This is relevant information which should be presented to the court on a motion to change. It is essential to an understanding of what factors the court considered when the previous order was made – and whether those factors have changed.
When a court imputes income, that’s a determination of a fact. It’s not an estimate. It’s not a guess. It’s not a provisional order awaiting better disclosure, or further review. It’s a determination that the court had to calculate a number, because it didn’t feel it was appropriate to rely on – or wait for -- representations from the payor.
A party who argues that an imputed income level is no longer appropriate must go beyond establishing their subsequent “declared” income. They must address why income had to be imputed in the first place. They must present evidence of changed circumstances which establish that either:
a. It is no longer necessary or appropriate to impute income. The payor’s representations as to income should now be accepted, even if they weren’t accepted before.
Or,
b. Even if income should still be imputed, changed circumstances suggest a different amount is more appropriate.
If “declared income” automatically prevailed on a motion to change support, it would defeat the purpose of imputing income in the first place. It might even be a disincentive for payors to participate in the initial court process. They could simply ignore support Applications – as they often do. They could wait to see if the court imputes income, and how much. If dissatisfied with the amount, the payor could later return to court waving their tax returns, to suggest that the original judge got it wrong.
Support claimants should not be forced to go through this two-step process. Our family court system certainly can’t afford it.
Similarly, the onus should not fall on the support recipient to establish why income should still be imputed on a motion to change. That determination has already been made. The onus is on the support payor to establish that there should be a change in the way their income is to be calculated.
If for example the original support order imputed income because the court concluded an unemployed payor should have been working, it would be illogical to allow the payor to extinguish that determination by returning on a motion to change, with proof that he wasn’t working. That wouldn’t constitute a change in circumstances.
If a trial judge imputed income to a self-employed person on the basis that their tax return didn’t reflect cash sales and excessive write-offs, there should be a presumption that so long as the payor maintains the same business activities and accounting practices, subsequent tax returns will be equally unreliable.
Imputed income matters. The reason why income had to be imputed matters.
If an aggrieved party feels income was wrongly imputed, they can take timely steps to correct the original determination. They can appeal. They can bring a motion to set aside the order based on mistake or misrepresentation.
But if a payor proceeds by way of motion to change, they must face the presumption that the original order was correct – and the original imputation of income was correct. If they want to rely on their declared income, they must establish why this time their representations should be accepted by the court.
[34] The mother submits that the father’s income should be imputed at the same level as in the existing order for the following reasons:
a) The father unreasonably quit his job. He became intentionally unemployed or underemployed without valid excuse.
b) The father made an unreasonable choice by returning to school, and remaining in school for almost five years, when he had the children to support.
c) The father has had the ability to earn at least $20,805 annually since the existing order was made.
[35] Put simply, the court agrees with the mother’s submissions.
[36] Justice Gregson imputed a modest amount of income to the father in May 2017. The father testified that he quit his job in February 2017. Although the court was not provided with Justice Gregson’s reasons for decision, it is a reasonable inference from the evidence that she found that the father should not have quit his job.
[37] The father did not appeal that decision. He cannot manufacture a material change in circumstances by choosing to remain out of the workforce.
[38] In the event that the father was mistaken, and he quit his job after the existing order was made, this court finds that quitting his job shortly after his child support obligation was established was an unreasonable decision. He has been deliberately unemployed or underemployed without reasonable excuse.
[39] The father’s decision to return to school and earn nominal income for almost five years has not been a reasonable one. The children required support. If the father wanted to upgrade his education, he should have done this part-time while meeting his financial obligations that were determined in the existing order.
[40] The father did not explain why he earned zero income in 2018 and 2019. Even if he went to school, he could have worked. The mother, since the existing order was made, went to school, taking social work and nursing programs, worked full-time and was the primary caregiver of the children. The mother has also paid all the additional expenses for the parties’ special needs child.
[41] It appears that the father was content to live off of his wife’s income, Canada Child Benefits and over $29,000 he received in student loans. Hardly any of this money went to child support. The father has a very poor payment history. A review of the record of arrears from the Family Responsibility Office reveals that the father has made few voluntary payments since the existing order – most collections are through federal diversions. [2]
[42] The father’s lifestyle has not suffered. He drives a Mercedes Benz. He spends $760 a month on his car (yet he wants to pay only $158 per month for two children). [3]
[43] The father attached some medical letters to his affidavit. He has had some issues with tendonitis; however, he told the court that this should not affect his ability to work.
[44] The court finds that the father has had the ability to earn at least $20,805 annually since 2017. He has chosen not to. The father has experience in factory work, shipping and receiving and in delivery work. He was a supervisor at UPS packaging. The income imputed to the father was well below full-time employment based on minimum wage. With his job skills, he could and should have been earning in excess of this income since 2018. This continues to be the case. [4]
[45] The father is very fortunate that the mother did not seek an increase in child support.
[46] The court finds that there has not been a material change in circumstances with respect to the father’s income. The father’s claim to retroactively reduce support is dismissed.
[47] The court also finds that there has not been any change in circumstances with respect to the father’s income. His claim to prospectively reduce support is also dismissed.
Part Six – Conclusion
[48] An order shall go that the father’s motion to change is dismissed.
[49] If the mother chooses to seek her costs, she is to serve and file written submissions by March 14, 2022. The father will then have until March 28, 2022, to serve and file a written response. The submissions should not exceed 2 pages, double-spaced, not including any offer to settle or bill of costs.
Released: February 24, 2021
Justice S.B. Sherr
[1] This order was made when Justice Gregson sat in the Ontario Court of Justice. She now sits in the Superior Court of Justice. [2] The father also did not comply with the existing order to provide annual financial disclosure to the mother. [3] The mother also alleges that the father owns land and a fleet of taxis in Jamaica. However, the court does not need to find that the father owns these assets to support its findings in this decision. [4] There was a short period where the father was caring for his mother, who died in December 2020. However, given that the father was capable of earning far more than $20,805 since 2018, the court finds that any temporary reduction in income-earning ability would not drop the father below the amount imputed to him in the existing order.