DATE: October 31, 2023 COURT FILE NO. D42958/22
ONTARIO COURT OF JUSTICE
B E T W E E N:
THUSHAJINI JEEVANANTHAM also known as JENNY JEEVANANTHAM
APPLICANT
GLENDA PERRY, for the APPLICANT
- and -
MARTHIRAJ THIRUCHELVAM also known as SANJAY THIRUCHELVAM
RESPONDENT
LEMOORIYA ANANTHAN, for the RESPONDENT
HEARD: OCTOBER 30, 2023
JUSTICE S.B. SHERR
ENDORSEMENT
Part One – Introduction
[1] The applicant (the mother) has brought a motion that includes requests for the following relief:
a) Striking the respondent’s (the father’s) Answer/Claim due to his breach of court orders to provide financial disclosure and to pay child support for the parties’ two-year-old child (the child). b) Temporary child support, retroactive to April 1, 2021, based on an annual imputed income to the father of $96,000. c) A restraining order. d) Further financial disclosure.
[2] In submissions, the father consented to the mother’s request for a restraining order. A separate endorsement will be issued regarding this. He also consented to her request for further financial disclosure and that order will be made.
[3] The father asks for a further 30 days to provide any outstanding financial disclosure. He says that he is unemployed and asks that no change be made to an existing temporary order requiring him to pay child support of $250 each month. He asks that the balance of the mother’s motion be dismissed.
[4] The court read the affidavits filed by both parties. The court permitted the father to file a supplementary affidavit sworn on October 29, 2023.
[5] The significant remaining issues on this motion are:
a) Has the father breached court orders? b) If so, what is the appropriate enforcement remedy? c) What annual income should the court assess to the father for child support purposes? d) When should the temporary child support order start?
Part Two – Brief background
[6] The mother is 33 years old. The father is 39 years old.
[7] The parties have the one child together. The child lives with the mother and does not see the father.
[8] The parties did not cohabit, although they briefly stayed together.
[9] The mother issued this application on July 26, 2022.
[10] The father filed his Answer/Claim on November 25, 2022.
[11] On January 11, 2023, on consent, the court made final orders that the mother have decision-making responsibility for the child and that she may obtain or renew government documentation for the child without the father’s consent. The court made a financial disclosure order and granted leave for DNA testing.
[12] The DNA tests were 99.99% positive. The father concedes that he is the child’s biological father.
[13] On June 28, 2023, based on the represented annual income of the father of $29,352, the court ordered him, on a temporary without prejudice basis, to pay the mother child support of $250 each month, starting on May 1, 2023. This is the Child Support Guidelines (the guidelines) table amount for one child. The court also ordered the father to update his financial disclosure.
[14] On July 19, 2023, after a contested motion, Justice Sheilagh O’Connell permitted the mother to travel with the child for a 14-day vacation outside of Canada.
[15] On September 11, 2023, on an uncontested Form 14B motion, the court gave the mother leave to bring this motion. The court also ordered the father to produce further financial disclosure.
Part Three – Enforcement orders – legal considerations
[16] Subrule 1 (8) of the Family Law Rules (all references to rules in this decision are to the Family Law Rules) sets out that if a person fails to obey an order in a case, the court may make any order it considers necessary for a just determination of the matter, including:
a) An order for costs; b) An order dismissing a claim; c) An order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit or any other document filed by a party; d) An order that all or part of a document that was required to be provided but was not, may not be used in the case: e) If the failure to obey was by a party, an order that the party is not entitled to any further order from the court, unless the court orders otherwise; f) An order postponing the trial or any other step in the case; and g) On motion, a contempt order.
[17] In family law cases, pleadings should only be struck, and trial participation denied, in exceptional circumstances and where no other remedy would suffice. See: Purcaru v. Purcaru, 2010 ONCA 92, at para. 47.
[18] Where children’s interests are involved, courts should use utmost caution in striking pleadings because trial court needs participation of both parties and information that each can provide about best interests. See: King v. Mongrain, 2009 ONCA 486, [2009] O.J. No. 2466 (C.A.); Haunert-Faga v. Faga, 2005 ONCA 39324.
[19] The decision-making framework for addressing a breach of a financial disclosure order was set out in paragraphs 44 to 49 of Mullin v. Sherlock, 2018 ONCA 1063 as follows:
Decision-making Framework
[44] First, when faced with an allegation of failure to obey a disclosure order, before granting a remedy, the judge must be satisfied that there has been non-compliance with the court order.
[45] Second, once satisfied, a judge may have recourse to the alternatives described in Rule 1(8). In assessing the most appropriate remedy, a judge should consider the following factors:
- the relevance of the non-disclosure, including its significance in hindering the resolution of issues in dispute;
- the context and complexity of the issues in dispute, understanding that an uncomplicated case should have little tolerance for non-disclosure, whereas a case involving extensive valuation of assets may permit some reasonable delay in responsiveness;
- the extensiveness of existing disclosure;
- the seriousness of efforts made to disclose, and the explanations offered by a defaulting party for the inadequate or non-disclosure; and
- any other relevant factors.
[46] Having considered these factors, the judge will then determine the best remedy. The orders identified in Rule 1(8) are not exclusive. Other approaches may be appropriate. For example, one option might be to invite the moving party to seek at trial an adverse inference from the failure to disclose and for the motion judge to memorialize this invitation in reasons for decision. Parties frequently rely on another option, namely a request for an adjournment to allow for more time to effect disclosure. Occasionally this may be appropriate especially in a complex case, but an adjournment should not be considered to be automatic. Fully compliant disclosure is the expectation, not the exception.
[20] The obligation to make full and frank financial disclosure in a family law case is an immediate and ongoing obligation. See: Colucci v. Colucci, 2021 SCC 24, at paragraph 42.
[21] In Roberts v. Roberts, 2015 ONCA 450, the court stated that the most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing. Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage of the opposite party. It also impacts the administration of justice. Unnecessary judicial time is spent and the final adjudication is stalled. Financial disclosure is automatic.
[22] Justice Robert Spence set out the following three-step process when determining whether to strike a pleading for a breach of an order (not just a financial disclosure order) in paragraph 64 of Ferguson v. Charlton, 2008 ONCJ 1:
[64] ... First, the court must ask whether there a triggering event that would allow it to consider the wording of either subrule 1(8) or subrule 14(23). That triggering event would be non-compliance with a court order “in the case or a related case” [subrule 1(8)] or an order “made on motion” [subrule 14(23)]. Second, if the triggering event exists, the court should then ask whether it is appropriate to exercise its discretion in favour of the non-complying party by not sanctioning that party under subrule 1(8), or by ordering that subrule 14 (23) does not apply. My review of the foregoing case law suggests that this discretion will only be granted in exceptional circumstances. In my view, the court’s decision whether or not to exercise its discretion in favour of a non-complying party, ought to take into account all relevant history in the course of the litigation and, more specifically, the conduct of the non-complying party. Third, in the event that the court determines that it will not exercise its discretion in favour of the non-complying party, it is then left with a very broad discretion as to the appropriate remedy pursuant to the provisions of either subrule 1(8) or subrule 14(23).
It would be superfluous to order that a party comply with an existing order. To order compliance does not add to or take away from the initial order. If there has been a breach, the appropriate step is to seek a remedy under subrule 1(8). See: Varcoe v. Varcoe, 2014 ONSC 328.
[23] In exercising its discretion under subrule 1 (8), the court should consider the primary purpose of the rules set out in rule 2 – to deal with cases justly.
Part Four – Analysis
[24] The father did not dispute that he has breached the three financial disclosure orders and the temporary child support order. These are triggering events for the court to consider the remedies set out in subrule 1 (8).
[25] The next step is to determine the appropriate remedy under subrule 1 (8).
[26] The court finds that the remedy sought by the mother to strike the father’s Answer/Claim is disproportionate for the following reasons:
a) The father has provided partial financial disclosure. b) The extent of the father’s non-disclosure does not warrant striking his Answer/Claim. There are five remaining areas of disclosure. The most important is that the father has not provided an updated financial statement since November 25, 2022. The father still has to produce his most recent record of employment, full disclosure of his CERB application, and his full car loan application. He only provided portions of these documents to the mother. He still also has to provide his most recent work permit application. c) There are outstanding parenting issues in this case. d) The father is $1,500 in child support arrears pursuant to the temporary order. His default in paying this support does not justify striking his Answer/Claim. e) These are not exceptional circumstances that warrant striking the father’s Answer/Claim. f) There are more proportionate enforcement options available under subrule 1 (8).
[27] The court finds that the appropriate remedy for the father’s financial non-disclosure is to make an adverse inference against him when assessing his income on the temporary support issue. As will be set out below, there will be a significant increase in his child support arrears after the court changes the temporary support order. The court also finds that the mother will be entitled to costs for her enforcement motion.
[28] The father’s failure to pay any child support is more concerning. According to his financial statement, the father spends $1,626 each month on his Mercedes vehicle – yet he has chosen to pay no child support. This conduct merits a sterner remedy.
[29] The court will order, pursuant to paragraph (e) of subrule 1 (8), that the father is not entitled to any further order from the court, unless the court orders otherwise, until he has done the following:
a) He pays $3,000 towards his support arrears (which will be set out below) and keeps his ongoing support payments, starting on November 1, 2023, in good standing. The court will not require the father to pay the balance of his arrears to proceed with his parenting time claim. b) He serves and files an updated sworn financial statement, together with all attachments required by the rules. c) He serves and files all pay stubs and records of employment that he has received in 2023.
[30] The court recognizes that this order places restrictions on the father pursuing his parenting time claim. However, the restrictions are modest. The court finds that the father can afford the $3,000 ordered over the next 90 days. He has enjoyed a windfall by not paying any support. This payment will be less than 40% of the arrears he will owe the mother after temporary child support is changed in this order. The court also considered in making this order that the father denied paternity, does not see the child and has only passively pursued his claim for parenting time.
[31] It would be unfair to the mother to have the father’s parenting time claim left in abeyance indefinitely. Accordingly, the father has 90 days to meet these conditions and bring a Form 14B motion for permission to obtain a parenting order from the court. If he fails to do so, the mother may move by Form 14B motion, on notice, to dismiss his claim.
Part Five – Child support
5.1 Legal considerations for imputing income
[32] Section 19 of the guidelines permits the court to impute income to a party as it considers appropriate.
[33] 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 ONCA 41868, [2002] O.J. No. 3731 (Ont. C.A.). 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: i) Is the party intentionally under-employed or unemployed? ii) If so, is the intentional under-employment or unemployment required by virtue of his or her reasonable educational needs, the needs of the child or reasonable health needs? iii) If not, what income is appropriately imputed? c) The onus is on the party seeking to impute income to the other party to establish that the other party is intentionally unemployed or under-employed. The person requesting an imputation of income must establish an evidentiary basis upon which this finding can be made. See: Homsi v. Zaya, 2009 ONCA 322, [2009] O.J. No. 1552 (Ont. C.A.). However, in Graham v. Bruto, 2008 ONCA 260, the court inferred that the failure of the payor to properly disclose would mitigate the obligation of the recipient to provide an evidentiary basis to impute income. d) Once a party seeking the imputation of income presents the evidentiary basis suggesting a prima facie case, the onus shifts to the individual seeking to defend the income position they are taking. Lo v. Lo, 2011 ONSC 7663; Charron v. Carriere, 2016 ONSC 4719. e) 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: Thompson v. Gilchrist, 2012 ONSC 4137; DePace v. Michienzi, 2000 ONSC 22560, [2000] O.J. No. 453 (Ont. Fam. Ct.). f) Absence of a reasonable job search will also usually leave the court with no choice but to find that the payor is intentionally under-employed or unemployed. See Filippetto v. Timpano, 2008 ONSC 3962, [2008] O.J. No. 417 (Ont. S.C.); T.L. v. D.S., 2019 ONCJ 809. g) The court must have regard to the payor’s capacity to earn income in light of such factors as employment history, age, education, skills, health, available employment opportunities and the standard of living enjoyed during the parties’ relationship. The court looks at the amount of income the party could earn if he or she worked to capacity. See: Lawson v. Lawson, 2006 ONCA 26573. h) The court will usually draw an adverse inference against a party for his or her failure to comply with their disclosure obligations as provided for in section 21 of the guidelines and impute income. See: Smith v. Pellegrini, 2008 ONSC 46927, [2008] O.J. No. 3616 (Ont. S.C.); Maimone v. Maimone, 2009 ONSC 25981, [2009] O.J. No. 2140 (Ont. S.C.). i) The court may impute income where it finds that a party has hidden or misrepresented relevant information respecting their income to the other party or to the authorities. This includes cases where the evidence indicates that a party earns cash income that they do not declare for income tax purposes. See: Kinsella v. Mills, 2020 ONSC 4785; Sobiegraj v. Sobiegraj, 2014 ONSC 2030 (S.C.J.); Lu v. Zhao, 2012 ONSC 5354 (S.C.J.), at para. 26, aff’d 2014 ONCA 12 (C.A.), at para. 5. j) The court can also impute income where the evidence respecting income is not credible for any other reason. See: Heard v. Heard, 2014 ONCA 196 (C.A.), at paras. 33-35; Gostevskikh v. Gostevskikh, 2018 BCSC 1441 (S.C.). k) A person’s lifestyle can provide the basis for imputing income. See: Aitken v. Aitken, [2003] O.J. No. 2780 (SCJ); Jonas v. Jonas, [2002] O.J. No. 2117 (SCJ); Price v. Reid, 2013 ONCJ 373.
5.2 The parties’ positions
[34] The mother seeks to impute the father’s annual income at $96,000, retroactive to April 1, 2021.
[35] The mother deposed that:
a) The father is an experienced chef. b) The father works long hours. She used to keep his records. c) The father works for friends and earns additional cash income. d) In 2020, the father collected CERB payments and car accident benefits at the same time. e) In January 2022, the father was paid through his sister so that he could receive Employment Insurance benefits at the same time. f) The father has worked regularly for his friends despite not having a work permit. g) Every time she finds out where the father is working, he stops working. h) The father has failed to advise her when he has obtained employment. He has represented to her and the court that he has been unemployed when he has been working. i) On August 18, 2023, the father sent her his 2022 financial statement showing that he earned $46,851. His financial statement sworn in November 2022, had shown that he had no income. j) The father produced a letter to her from his employer stating that he had worked as a chef until June 24, 2022 and that in March 2022, his salary had been increased to $25 per hour (overtime time rate $36 per hour). The letter further stated that the father had been working 60 hours each week. k) The father is the beneficial owner of a home and car in Sri Lanka and has put these assets in his sister’s name.
[36] The father asks that the court not change the temporary support order.
[37] The father deposed that:
a) He only worked in 2022 until June 24th. b) He is unable to work now because his work permit expired in March 2023. His employer let him work a little longer because he had applied for a new work permit. However, his employer did not want to get into trouble and ended his employment at the end of June 2023. c) He has not collected CERB and accident benefits at the same time. d) He has not collected income under his sister’s name. e) He does not own a home or car in Sri Lanka that he has put in his sister’s name. f) He has not paid the support ordered in the temporary order because he is still waiting to hear from the Family Responsibility Office.
5.3 Analysis
Courts are cautious about making credibility findings on temporary motions, as the evidence has not been tested by cross-examination. However, it is not difficult to make credibility findings on this motion. The father is not a credible witness for the following reasons:
a) The mother filed a private investigator’s report. In short, the father was operating a restaurant, all day, from September 21 to 23, 2023, despite his claim that he was not working. The father’s explanation was fantastical. He claimed that on those particular dates, his friend, who owned the restaurant, had asked him to do him a favour and operate it. He said that his brother has subsequently bought that restaurant and has closed it for renovations. What are the odds that the father would be asked to do this favour for his friend only on the days that the private investigator saw him working at the restaurant? The odds are astronomical. The father’s evidence is not credible. b) An adverse inference is drawn against the father for his failure to provide full financial disclosure. He has been aware from the beginning that the mother seeks to impute annual income of $96,000 to him. Yet, he has still not provided an updated financial statement, proof of his 2023 income and his car loan application which would show what income he had represented that he was earning. This non-disclosure is deliberate and is a poor attempt to hide his income. c) The father represented that he was not earning income at the outset of this case. He did not produce his 2022 income tax return showing that he earned over $46,800 in 2022 until August 2023. d) The father failed to explain how he earned over $46,800 in 2022, when he claimed that he only worked until June 2022. e) The father has lost employment close to his court dates. The court finds that is no coincidence. The mother issued her claim in July 2022. The father claimed that he lost his job at the end of June 2022. The court ordered support on June 28, 2023. The father claimed that he lost his job within 2 days after that order. f) It is evident that the father has been employed by close friends in non-arm’s length relationships. The father deposed that his last employer has been paying his legal fees. Any evidence from them about when he is working or how much he is earning is not reliable. g) Payors who refuse to pay any child support will have reduced credibility with the court. Particularly payors who still maintain vehicle expenses of over $1,600 each month. h) The father provided no explanation about how he has been able to meet his monthly expenses without any income.
The court finds that:
a) The father has been working or has been capable of working full-time as a chef since this case started. b) The father has likely been earning much of his income in cash since he claims that his job with his friend ended in June 2023. c) Failure to have a work permit has not and will not be an impediment to the father working due to his network of friends and family employing him.
[38] This leaves the court to determine how much income should be imputed to the father for support purposes.
[39] The evidence does not support a finding that the father is earning or is capable of earning annual income of $96,000. The father has worked as a kitchen chef in small restaurants – most of them operated by friends. Those jobs are unlikely to pay wages at the level sought by the mother.
[40] The court finds that the father is capable of earning annual income of $50,000 each year. This is based on $25 per hour for 40 hours for 50 weeks. This is a rate of pay he was earning during 2022.
However, the income analysis does not end there. It is appropriate in these circumstances to gross up the payor’s income, as he is earning undeclared cash income. This is done to ensure consistency of treatment where a party is found to have arranged his affairs to pay less tax on income. See Sarafinchin v. Sarafinchin, 2000 ONSC 22639, [2000] O.J. No. 2855 (Ont. S.C.).
[41] The court finds that the father’s annual income for temporary support purposes is approximately $60,000, after gross-up. If this amount is somewhat high, the father only has himself to blame. He has lost credibility with the court due to his failure to provide transparent financial information and to pay support. Hopefully, this decision will be a wake-up call to him to comply with court orders. He will need to do this if he wants the judge to adjust his child support obligations at trial.
[42] The monthly guidelines table amount for one child at this income is $556.
[43] The court will order temporary support to start on August 1, 2022. This is the first day of the first month after the application was issued. It is prospective support and is presumptively payable. See: MacKinnon v. MacKinnon (2005), 2005 ONCA 13191, 13 R.F.L. (6th) 221 (Ont. C.A.). The father did not rebut that presumption.
[44] The court will not order retroactive support on a temporary basis, as requested by the mother. The court has the ability to make such an order; however, courts should be cautious before doing this. See. Palaganas v. Marshall, 2016 ONCJ 445; McConkey v. McConkey, 2022 ONSC 4600; Botros v. Botros, 2022 ONSC 5911. In this case, neither party provided the evidentiary basis for the holistic analysis required for a retroactive support claim, as set out in Colucci. The trial judge will be in a better position to conduct this analysis with a full evidentiary record and with the benefit of cross-examinations.
[45] This order creates immediate support arrears of $8,340 ($556 each month for 15 months).
Part Six – Conclusion
[46] An order shall go on the following terms:
a) Pursuant to paragraph (e) of subrule 1 (8), the father is not entitled to any further order from the court, unless the court orders otherwise, until he has done the following: i) Paid $3,000 towards his support arrears and has kept his ongoing support payments, starting on November 1, 2023, in good standing. The court will not require the father to pay the balance of his arrears to obtain permission to proceed with his parenting time claim. Further, the father may make the November 1, 2023 support payment of $556 by November 15, 2023, as this decision is only being released a day before the next payment is due. ii) Served and filed an updated sworn financial statement, with all attachments required by the rules. iii) Served and filed all pay stubs and records of employment that he received in 2023. b) The father has 90 days to meet these conditions and bring a Form 14B motion for permission to obtain a parenting order from the court. If he fails to do so, the mother may move by Form 14B motion, on notice, to dismiss his claim. c) Based on an imputed annual income of $60,000, the father shall pay the mother temporary child support of $556 each month, starting on August 1, 2022. This is the guidelines table amount for one child. d) A support deduction order shall issue. e) The father shall file a Privacy Act (Canada) request to obtain his complete file for all immigration-related disclosure and provide proof of this request to the mother. The father shall make no additions or deletions to this disclosure.
[47] The mother is entitled to her costs of this motion. She shall serve and file any written costs submissions by November 14, 2023. The father will then have until November 28, 2023, to respond. The submissions shall not exceed 3 pages, not including any offer to settle or bill of costs. The submissions should be delivered to the trial coordinator’s office on the second floor of the courthouse.
[48] The court thanks counsel for the professional presentation of this motion.
Released: October 31, 2023 _____________________ Justice S.B. Sherr