Ontario Court of Justice

Date: 2024 02 29 Court File No.: City of Guelph F153/21

Between:

Franklin Zolnai Applicant

-AND-

Natalia Zolnai Respondent

Before: Justice K.S. Neill

Heard on: November 30, 2023 Reasons for Judgment released on: February 29, 2024

Counsel: James Higginson ............................................................... counsel for the applicant Mark Rush ...................................................... . .................counsel for the respondent

Neill, J.:

[1] The applicant ("the father") and the respondent ("the mother") are the parents of Lucas Thomas Zolnai Verna ("L.V.") born January 16, 2002. The parties married on August 4, 2001, separated on June 26, 2003 and divorced on March 26, 2007. L.V. is now 22 years old, resides with the mother and continues to attend post-secondary school on a full-time basis.

[2] On November 6, 2003, the parties entered into a Separation Agreement granting the parties joint decision-making, primary residence with the mother, regular alternate weekend parenting time with the father, and child support by the father in the amount of $900 per month based on his income of $119,000.00. Child support was to continue until L.V. obtained one post-secondary degree or diploma. In satisfaction of his spousal support obligation, the father paid the mother's costs for her car lease and insurance until September 1, 2005, and then spousal support ended. At that time, both parties were residing in Ontario.

[3] In 2006, the mother moved with L.V. from Mississauga, Ontario to Uruguay. The mother is a citizen of Uruguay and her family continues to reside there. The father consented to L.V.'s move to Uruguay with the mother. In anticipation of this move, the parties entered into an Amended Separation Agreement dated September 5, 2006, which provided that:

(i) The mother has sole decision-making responsibility for L.V.

(ii) The parties will make their best efforts to arrange parenting time for the father a minimum of one occasion a year, including:

• Overnight access for two weeks and up to four consecutive weeks during the summer school break, which in Uruguay occurs in December and January. The father was responsible for the reasonable costs for airfare for L.V. only.

• Should the mother and L.V. return to Canada or the U.S., the father would have overnight access with L.V. for up to one week, with the father to pay for the costs of airfare for L.V. to and from Toronto.

• If the father attends in South America, he shall be able to visit with L.V. and L.V. will be allowed to miss school for a period of up to one week.

• Once a year, the father was able to arrange a vacation with L.V. for a period of up to one week.

(iii) The father was permitted phone and email access with L.V.

(iv) Child support was amended by the following provisions:

(a) The parties agree that child support shall be paid in the amount of $1,300.00 CON per month while L.V. is residing outside of Ontario, Canada commencing on the 1st day of the first month after the mother and L.V. leave Ontario for Uruguay.

(b) The father may be paying less than Table amount of child support because of the high cost of access and communications with L.V. while he resides outside of Canada. Given these special circumstances, the application of the Guidelines would result in an amount of child support that is inappropriate. The parents agree that this child support arrangement is reasonable and meets the objective of the Guidelines.

(c) L.V. currently has no special or extraordinary expenses and the parties agree that they will agree on any expenses prior to incurring same and will share the net costs of any extraordinary expenses such that the father will pay 75% of the net costs and the mother will pay 25% of the net costs.

(d) So long as the mother resides in Uruguay, or out of Ontario, Canada with L.V. then child support shall remain payable in the amount of $1,300.00 CON per month with no review or variation or change for any material change in circumstances.

(e) So long as the mother resides out of Ontario, Canada, the father shall not be required to provide the mother with any financial disclosure.

(f) In the event that the mother and L.V. return to reside permanently in Canada for a period in excess of 90 days, then child support shall be calculated at that time pursuant to the Guidelines for L.V. based on the father's income at that time and shall commence on the first day of the first month after L.V. has been residing in Canada for 90 days and shall be payable on a prospective basis only.

(g) No retroactive table child support or section 7 expenses child support shall be payable for L.V. for the period of time that L.V. resides outside of Ontario, Canada specifically and particularly notwithstanding any failure of the father to provide ongoing financial disclosure.

(h) The mother undertakes and agrees to save the father harmless and to indemnify the father from all and future claims for table child support over $1,300.00 CON per month and, without limiting the generality thereof, shall indemnify and save the father harmless from all claims, costs and expenses referable to any application for any increase in table child support for L.V. while she is residing outside of Ontario, Canada with L.V. save and except any claims to enforce the terms of the within Agreement.

[4] Both parties had independent legal advice when they signed the Amended Separation Agreement.

[5] Since their move in or about 2006, the mother and L.V. have continued to reside in Uruguay. The father subsequently remarried and has 3 children from a second marriage. He is now separated from his second wife, and is subject to a final order dated August 15, 2019 granting his second wife decision-making responsibility for their 3 children; the father has alternate weekend and mid-week parenting time; and he must pay child support in the amount of $3,428.00 per month based on an imputed income of $200,000.00 and spousal support of $2,162.00 per month.

[6] The Amending Agreement dated September, 2006 has been filed with the court and pursuant to s. 35 of the Family Law Act ("FLA") it is enforceable as if it were an order of the court.

[7] In June, 2017, the father commenced his first Motion to Change in these proceedings in which he pursued a reduction of child support on the basis of his change in financial circumstances. Ultimately child support was not varied, but there was a final order made on consent dated February 20, 2019 that the father pay $130.00 per month for expenses for English language training for L.V. The order further provided that the father pay $7,500.00 for costs and retroactive child support. This order was made before the global pandemic significantly affected the father's income.

The father's parenting time with L.V.:

[8] The mother moved to Uruguay with L.V. when L.V. was only 4 years old. The Amending Agreement contemplated that the father would have parenting time with L.V. a minimum of once per year, and consistent phone and email access with L.V.

[9] Since 2006, the father has had limited parenting time with L.V. The mother came to Canada with L.V. on 3 occasions from 2009 to 2015, during which time the father only saw L.V. for dinner on a few occasions. The mother paid for the costs for L.V. to travel to Canada.

[10] The father travelled to Uruguay to see L.V. on one occasion in January, 2020.

[11] The father has never paid for L.V. to travel to Canada to visit with him. The father has had limited virtual contact with L.V. and presently they have no communication.

Present Motion to Change:

[12] The father stopped paying child support in March, 2020 as a result of his financial circumstances due to the pandemic. In the summer, 2021, the Family Responsibility Office ("FRO") sent the father notice that they would suspend his driver's license if he did not pay his arrears of child support. Pursuant to a motion for a refraining order, on September 24, 2021, a temporary order was made that the father pay ongoing child support of $256.51 per month, (which is essentially the Guideline amount for one child based on a minimum wage income) with an undertaking to commence a Motion to Change within 20 days, which he has now brought. On March 16, 2022, the refraining order was extended for a further 3 months pursuant to s. 35(21) of the Family Responsibility and Support Arrears Enforcement Act.

[13] On October 7, 2021, the father commenced a second Motion to Change seeking to terminate child support and his obligation to pay $130 per month for s. 7 expenses. The basis for the father's second Motion to Change is the following:

• The father is a 33% minority shareholder in the Ontario Conservatory of Music ("OCOM"), which has been his sole source of income for most of his adult life.

• His income from OCOM is dependent on the enrollment of students. His income has varied from over $200,000.00 to $146,000.00 before the pandemic.

• On March 11, 2020, due to the pandemic, the Canadian government announced that all parents of young children should remove children from extracurricular activities.

• As of March 14, 2020, OCOM had the entire student body (approximately 3,500 students) drop out of their music lessons. As a result of loss of revenue, OCOM shut down its business as of March 16, 2020 laying off all 150 staff. The father's income therefore stopped.

• On March 17, 2020, a provincial state of emergency was declared and businesses such as OCOM were forced to close.

• In March, 2020, the father's income was $193,526.00. Thereafter, the father had no income and was not eligible for employment insurance. The father was only eligible for the Canadian Emergency Response Benefit ("CERB") in the amount of $2,000.00 per month.

• OCOM obtained a loan in the amount of $350,000.00 to cover the outstanding payroll, taxes and payables, but the loan could not be applied to the father's income. This loan was depleted by July, 2020.

• OCOM was only able reopen as of August, 2020 and was only able to have 20% of its customer base.

• In November, 2020, the government imposed a further lockdown of OCOM's business. During its brief period of reopening, the father received no income.

• OCOM received a further loan in early 2021 in the amount of $250,000.00.

• OCOM reopened in July, 2021 when the provincial lockdown restrictions were lifted. However, at that point, OCOM had lost almost the entire management and sales team and 75% of the teachers and was near bankruptcy. OCOM did receive other emergency government funds.

• In August, 2021, it was possible to put the father back on the payroll at OCOM in the amount of $1000 per week or $52,000 annually. In August, 2021, FRO began to deduct $1,207.00 per month based on an income of $52,000 for 4 children, dividing this between the mother at $301.75 monthly and the father's second wife at $902.25 monthly.

• As of 2023, OCOM has almost $60,000 in rental arrears across 6 separate locations. In April, 2023, OCOM was required to shut down another campus location in Toronto due to the fact that the landlords demanded a huge rental increase. This was the fourth location the school has had to close.

• The father's annual income from OCOM continues to be $52,000. He has no other source of income. OCOM is in significant debt. OCOM is a family business and the father has worked for OCOM since he was 19 years old, being over 20 years.

• The father has considered trying to obtain a new job, but as he owes personal guarantees of banking facilities with two banks in excess of $1 million dollars, he needs to stay with OCOM and get the company to its minimum financial requirements so that payments can be made. Enrollment at OCOM is 46% of the pre-pandemic student body.

[14] The father states that his child support payments were in good standing as of March, 2020, but that he has no ability to pay the support under the Amended Separation Agreement or the order of February 20, 2019.

Proceedings within the Motion to Change

[15] On March 30, 2022 a temporary order was made on consent terminating the father's obligation to pay $130 monthly for English Language Training for L.V.

[16] On April 14, 2023, counsel agreed that a preliminary issue of entitlement to bring a Motion to Change given the terms of the Amended Separation Agreement should be argued. A date of July 5, 2023 was set to argue this issue. On that date, the parties attempted to resolve the issue, but ultimately could not. On July 31, 2023, Justice Bondy directed counsel to further clarify the preliminary issues for argument. In her endorsement on the return of this matter on September 29, 2023, Justice Bondy raised an additional issue of whether the Amending Agreement was either void ab initio or voidable at law as it did not provide for child support in accordance with the Guidelines.

[17] A consent order was made on October 6, 2023 that:

1. The threshold issues of the Motion to Change to be determined are: a. The entitlement of the applicant father to bring his Motion to Change in light of the agreement dated November 6, 2003 and the Amending Agreement dated September 5, 2006, if it is assumed there has been and unforeseen and unforeseeable reduction in his income in light of the pandemic. This threshold issue is in accordance with the order of Justice Caspers dated April 14, 2023; and b. Whether or not the Amending Agreement dated November 6, 2003 was either void ab initio or voidable in law for reasons based on the principles found in Michel v. Graydon as the Amending Agreement did not provide for child support in accordance with the child support guidelines nor was it consistent with the Applicant's income at that time. This threshold issue is in accordance with the endorsement of Justice Bondy dated September 29, 2023.

[18] These threshold issues were argued on November 30, 2023.

Position of the Parties:

[19] The father's position is that pursuant to s. 33(4)(a) of the FLA, the court should set aside the provision for a non-variation of child support in the Amending Agreement as it results in an "unconscionable circumstance" due to the unforeseen economic consequences of the pandemic and permit the father to pursue his Motion to Change.

[20] The mother's position is that the father's financial circumstances are not relevant and requests that the father's Motion to Change be dismissed with respect to child support as the child support provisions in the Amending Agreement were non-reviewable and non-variable. The mother did agree to terminate s. 7 expenses for English language training for L.V. pursuant to the order of February 20, 2019. In the alternate if the Motion to Change is permitted to proceed, the mother is seeking retroactive child support for the entire period from September, 2026 to the present on the basis of the father's actual income.

Is the Amending Separation Agreement Void Ab Initio or Voidable in Law based on the principles articulated by the Supreme Court of Canada in Michel v Graydon?

[21] Neither of the parties had sought to set aside the terms of the Separation Agreement or the Amending Separation Agreement so the issue of whether or not the Agreements were void ab initio or voidable in law was not addressed in the pleadings. This issue was only raised by the court.

[22] Both parties agree that the Amending Separation Agreement was not void or voidable in law in based on the principles articulated in Michel v Graydon.

[23] As a starting point, s. 2(10) of the Ontario Family Law Act articulates the principle of paramountcy of domestic contracts as it states that:

s. 2(10): A domestic contract dealing with a matter that is also dealt with in this Act prevails unless this Act provides otherwise.

[24] The Ontario legislation chose to provide separating spouses with the freedom to make agreements concerning child support. However, there is a duty on the court to make child support orders in accordance with the Guidelines and to depart from the Table amounts in limited circumstances.

[25] Nowhere in the FLA is there a provision that suggests that an agreement is void or voidable if it does not comply with the Guidelines. Under s. 56 of the FLA, a court can disregard certain provisions of a domestic contract based on what occurred at the time the agreement was signed or where the provision was unreasonable considering the Child Support Guidelines. A court is not bound by the terms of a separation agreement in exercising its discretion to award support under the legislation. As further indicated below, s. 10 of the Guidelines specifically indicates that child support can be different than the Guideline amount due to the high expenses in relation to exercising parenting time, which was contemplated in this case.

[26] Neither party was arguing to set aside the terms of the Amending Agreement under s. 56 given the circumstances at the time the Agreement was signed, such as lack of financial disclosure or lack of independent legal advice.

[27] The Supreme Court of Canada case of Michel v. Graydon dealt with an application to vary a court order by a recipient mother to retroactively vary child support for a period of 11 years to reflect the payor father's actual income during that time. The two main issues dealt with by the Supreme Court of Canada in that case were whether the mother could claim retroactive child support when at the date of the application the child was no longer entitled to child support, and if the mother could claim retroactive support back 11 years to the date of the original order. The provincial court in British Colombia who initially heard this application found that the mother could claim retroactive child support even though the child was no longer entitled to support. The court also found that the father had engaged in blameworthy conduct by failing to accurately disclose his income since the final order and ordered $23,000 in retroactive child support back to the date of the original final order.

[28] The Supreme Court of Canada agreed with the provincial court hearing judge on both issues, and in particular that the father's failure to accurately disclose his income at the time of the initial final order, and failure to disclose material changes in his income for the 11 years that followed, constituted blameworthy conduct which justified an award for retroactive child support back to the date of the original final order. The Supreme Court of Canada held, at paragraph 79, that:

"... the obligation to support one's child exists irrespective of whether an action has been started by the recipient parent against the payor parent to enforce it, because child support is a continued obligation owed independently of any statute of court order."

[29] Michel v. Graydon focused on the blameworthy conduct of the father by not disclosing his income on an annual basis in accordance with the court order which had the effect of privileging his interests over the child's right to support.

[30] The facts and issues in this case are very different.

• Michel v. Graydon dealt with the variation of a court order and this case deals with variation of a separation agreement.

• Michel v. Graydon considered provisions of the legislation in British Colombia and this case deals with Ontario legislation in the Family Law Act. The Supreme Court of Canada in D.B.S. made it clear that provinces can chose to legislate differently regarding support. This case focuses on a specific section of the Family Law Act.

• L.V. is still a child of the marriage and still entitled to child support.

• There is no issue regarding disclosure of the father's income in either the original or Amending Agreement. In the original Separation Agreement, the parties agreed to base child support on the father's income of $119,000. The original Separation Agreement indicates that:

  "For the purposes of determining child support for L.V., the mother's position is that the father's annual income is $119,000.00 and the father's position is that his income is much less than $119,000.00 but has agreed to pay basic child support in the amount of $900.00 per month which happens to correspond with an annual income of $119,000.00".

• The Amending Agreement did not outline either parties' incomes at that time or the basis for the monthly amount of child support. However, the monthly child support of $1,300.00 in the Amending Separation Agreement would be the Guideline amount at that time in accordance with an annual income of approximately $156,000.00. The father indicates that his income was within that range at the time. The Amending Agreement specifically provided that:

  • "5.1: Although neither the father or mother has requested financial disclosure from the other, they are satisfied with the financial information he or she has about the other and each waives further financial disclosure".

  • "5.22: So long as the mother resides out of Ontario, Canada, the father shall not be required to provide the mother with any financial disclosure".

• Unlike in Michel v Graydon, the child support amount in this case was determined as a result of relocation. The Amending Agreement was clear that the father may be paying less than Table amount of child support because of the high cost of access/parenting time and communication with L.V. while he resides outside of Canada. Section 10 of the Guidelines specifically permits a court to award an amount of child support that is different than the Guidelines if the Guideline amount would otherwise cause a payor to suffer undue hardship, which includes the high expenses in relation to exercising parenting time with the child. This situation was specifically contemplated by the parties when they entered into the Amending Agreement and the father consented to L.V. moving to Uruguay with the mother.

• The mother acknowledges that her agreeing to the amount of $1,300.00 for child support was in exchange for the father's agreeing to permit her to move with L.V.

• There is no claim by the mother that the father engaged in blameworthy conduct by not disclosing his income as it was agreed that he did not have to disclose his income.

[31] I cannot find that the Amending Agreement was voidable or void ab initio in the basis of the ruling in Michel v Graydon. Even if there are concerns with the lack of financial disclosure by the father, if the Motion to Change is permitted to proceed, the father will have to provide his financial disclosure back to 2006. There was already an order made in this Motion to Change on March 30, 2022 that the father must disclose his income tax returns from 2006 to 2013, 2016 and 2017. The father acknowledges this reality and is aware that this could result in a payment of child support arrears based on his actual income from previous years. The father also acknowledges that his income has substantially increased in several years since the Amending Agreement and until March, 2020.

Is the father entitled to bring his Motion to Change in light of the Amending Agreement which provided that child support was not subject to review or variation for any material change in circumstances?

[32] The Amending Agreement is a domestic contract that has been filed for enforcement under s. 35(1) of the FLA. Pursuant to the FLA:

• A domestic contract dealing with a matter that is also dealt with in this Act prevails unless the Act provides otherwise.

• A party to a domestic contract may file the contract with the court to be enforced or varied.

• Enforcement of support by the court is available despite a waiver in a domestic contract stating otherwise. However, variation of support pursuant to s. 37 of the FLA is not necessarily available if the domestic contract waives the right to variation.

[33] Justice McSorley in Woodall v. Woodall, 2005 ONCJ 253 was faced with this situation where the parties agreed in a separation agreement that spousal support would be permanent and unchangeable. The agreement was filed with the court under s. 35 of the FLA. The husband then sought to vary the spousal support provisions. In dealing with the threshold jurisdictional issue of the husband's right to vary the spousal support, Justice McSorley stated at paragraph 15 that:

"... the husband must overcome subsection 2(10) of the Family Law Act, which states that, where an agreement deals with a matter that is also dealt with in the Act, the agreement governs unless the Act provides otherwise. If the husband contractually released his right to vary as appears to be the case, he cannot rely on the statutory right to vary in section 37 of the Act, unless the Act otherwise allows him to override his release. It is telling that, although s. 35(4) of the Family Law Act provides that a party may file an agreement and enforce it notwithstanding an agreement to the contrary, it does not allow a party to vary the support provisions if the agreement releases the right to vary. It may be possible to override the apparent support release under subsection 33(4) of the Act, which provides that a court may set aside a provision for support in a domestic contract if one of the following occurs:

(a) the provision for support results in unconscionable circumstances; the provision for support is in favour of a dependant who qualifies for an allowance for support out of public money; or

(b) there is a default of support under the contract at the time the application is made.

None of these criteria apply in this case".

[34] In Woodall, the husband did not lead evidence or make submissions on subsection 33(4) and ignored s. 2(10) of the FLA entirely. Therefore, the court found that the husband had no right to vary the support provisions of the agreement under s. 37 of the FLA.

[35] In O'Connor v. O'Connor, the court refused to deal with an application to vary a separation agreement under s. 35 of the Family Law Act as variation under the Act is not permitted in the face of an "agreement to the contrary", and the parties agreed that variation should only be through arbitration.

[36] As neither party was seeking to set aside the Amending Agreement for circumstances as outlined in s. 56 of the Act, it appears that the only way that the father can set aside the non-variable term of the Amending Agreement is pursuant to s. 33(4) of the FLA.

[37] Section 33(4) of the Family Law Act provides that:

s. 33(4) SETTING ASIDE DOMESTIC CONTRACT - The court may set aside a provision for support or a waiver of the right to support in a domestic contract and may determine and order support in an application under subsection (1) although the contract contains an express provision excluding the application of this section,

(a) If the provision for support or the waiver of the right to support results in unconscionable circumstances.

(b) If the provision for support is in favour of or the waiver is by or on behalf of a dependent who qualifies for an allowance for support out of public money; or

(c) If there is default in the payment of support under the contact at the time the application is made.

[38] In this case, the father argues that s. 33(4)(a) applies and has provided evidence of, what he argues, is the unforeseen change in circumstances beyond the parties' reasonable contemplation at the time the Amending Agreement was signed that undermine the integrity of their settlement.

[39] The caselaw has interpreted "unconscionable circumstances" in s. 33(4)(a) of the FLA as follows:

• This subsection is not directed at unconscionable agreements, but to unconscionable results of a provision waiving support (or variation of support). An agreement that was fair and reasonable when it was signed, may, through circumstances that occur in the future, result in unconscionable circumstances at the time of the variation application.

• An unconscionable agreement may be set aside under s. 56(4) of the Family Law Act. This differs from s. 33(4), which operates in respect of valid and subsisting domestic contracts and enables a court to set aside a waiver of variation where such provision results in unconscionable circumstances, and not unconscionable agreements.

• The definition of "unconscionable" is "something that is shocking, oppressive, not in keeping with a caring society", or "shocking to the conscience". The use of the word "unconscionable" creates a test that is more grave and weighty than mere harshness or injustice.

• In determining whether there are unconscionable circumstances, the court should consider all the circumstances from the time of executing the agreement through to the hearing or variation application, including a parties' health and employability.

• The court can look at unconscionable circumstances as they relate to both the parents and the child. An agreement for child support which was significantly lower than the Guideline amount given the payor's income was found to place the child in an unconscionable circumstance given the payor's significant income imputed at $200,000.

[40] In support of his position of "unconscionable circumstances", the father filed two cases; Skotnicki v. Cayen and Ramsahai v. Whing both decided under the Divorce Act of applications to vary support in the face of non-variation clauses in a court order. In Skotnicki v. Cayen the court found that even though there was a provision in the order that it would not be subject to variation "for any reason whatsoever", it could still potentially be varied for an event that could not have been contemplated by the parties at the time of the order that could amount to a material change in circumstances. The court in Ramsahai v. Whing permitted a mother to seek a retroactive increase in child support in the face of a non-variation clause in a court order as the father had provided faulty or misleading information regarding his income at the time of the final order.

[41] However, neither of these cases dealt with variations of an Agreement pursuant to the Family Law Act, which are subject to different principles.

Unconscionable circumstances:

[42] The court must consider whether or not there has been circumstance in this case that are "shocking to the conscience" not just mere harshness or injustice. In this analysis, the court must consider what has occurred in the past 17 years since the Amending Agreement was signed to determine if there is an unconscionable circumstance for either of the parties or the child, L.V. In doing so, I note the following:

• The reduced child support was premised on the fact that the father would have to incur costs to have parenting time with L.V., which did not occur.

• Due to the recent lack of child support, L.V. had to attend a public rather than a private post-secondary institution.

• The Amending Agreement provided that the mother was not entitled to any financial disclosure from the father, and she had to indemnify the father for his costs should she try to pursue an increase in child support. The Amending Agreement was based on the father's annual income being approximately $156,000.00 Considering the father's actual incomes since 2006, the father's Notices of Assessment were filed for the following years:

  • 2014: $342,279.56 - child support obligation: $2,686/month
  • 2015: $223,253.54 - child support obligation: $1,805/month
  • 2018: $160,534.00 - child support obligation $1,375/month
  • 2019: $193,525.00 - child support obligation $1,613/month

  Therefore, just in those 4 years, if the father had to pay strictly in accordance with the Guidelines, he would owe child support arrears of $27,348.00. He also has an additional 10 years for readjustment of child support to account for. The father clearly benefited from the non-variation clause until March, 2020.

• The father's income did not decrease or significantly decrease until 2020. The evidence filed indicates that the father's income since that time was as follows:

  • 2020: $70,896 - child support obligation of $662/month
  • 2021: $50,192 - child support obligation of $463/month
  • 2022: $52,000 - child support obligation of $479/month
  • 2023: $52,000 - child support obligation of $479/month

  Therefore, for those 4 years, child support could be readjusted giving the father a credit of $37,404.00. As of March, 2023, L.V. is in a new post-secondary educational program to become a professor of English. There is no information as to the length of this program, but it is assumed that L.V. will be in school at least for the next 2 years. Thus, the father's child support obligation will continue for at least another 2 years.

• The father's Financial Statement sworn October 4, 2021 shows limited assets of $5,193.67 and significant debts of $330,000.00. The mother has not filed a Financial Statement, so her financial situation is unknown.

[43] This is not the situation where the father is the author of his own misfortune where a finding of unconscionable circumstances has been denied. When the Amending Agreement was signed, the father had employment security. OCOM had been in existence since 1939 and it was not contemplated by either party at the time of the Amending Agreement in 2006 that the company would be forced to closed due to a worldwide pandemic.

[44] Further, the father has not engaged in blameworthy conduct.

[45] The father did what he could to maintain OCOM during the pandemic. Throughout the pandemic, the father was in contact with FRO. When he began to receive an income in August, 2021, he immediately contacted FRO and was advised to voluntarily send child support payments in accordance with the Guidelines and his income of $52,000, prorated for his 4 children. Therefore, the father immediately began paying $1,207.00 per month, or $301.75 to the mother for the support of J.V. Making voluntary payments, paying in accordance with his ability to pay, cooperating with enforcement agencies, and making genuine efforts to continue to pay as much as he could shows good faith and a willingness to support the child, all of which is positive conduct the court considers when determining retroactive decreases in child support.

[46] Due to the financial situation of OCOM and the personal guarantees that he provided to enable OCOM to be viable of over $1 million, the father needs to stay with the company at this time to get the company to its minimum financial requirements. It would be difficult for the father to leave the business now to look for other employment.

Effect of the Pandemic on Child Support Orders:

[47] Courts have recognized that the pandemic has had an impact on a payer's ability to earn income to decrease or suspend child support for a period of time. Courts have not found fault in a payer parent due to losing his or her job as a result of the pandemic. Courts have also recognized that after at least mid-2021 or 2022, a payer's income can again be increased.

[48] In Seigel-Nudelman v Nudelman, 2021 ONSC 3064, the court indicated that during the pandemic it may not be reasonable for a person employed at a job in excess of 15 years, to abandon that career and choose another career to try to make up the lost income.

[49] In the context of a Default proceedings under the Family Responsibility and Support Arrears Enforcement Act, 1996, the court in Ontario (Director, Family Responsibility Office) v. Kranyak, 2023 ONSC 5728 dealt with the issue of the impact of the COVID-19 situation on the payor's ability to pay as he was employed in the area of construction and whether discontinuation of gainful employment as a result of employer shutdown due to the pandemic constitutes a "valid reason" for non-payment, being "an event over which the debtor has no control which renders him totally without assets or income with which to meet his obligations". In this case, Justice Breithaupt Smith indicated:

"Without a doubt, Canadians were impacted very differently by government mandates and closure orders."

[50] In that case, the payor was employed in the area of construction, and the court found that as the payor was laid-off due to the COVID-19 situation and was unable to replace that employment with a comparable position or skilled self-employment, he had demonstrated a "valid reason" for his inability to pay, and dismissed the Default Hearing, which did not affect the accruing of arrears.

[51] The mother's counsel agrees that due to financial non-disclosure by the father as agreed upon in the Amending Agreement, this may have resulted in an unconscionable situation for his client. If the Motion to Change is permitted to proceed, the mother is able to obtain financial disclosure back to 2006 and readjust child support, which could be a significant benefit to her and L.V. However, her first position is to not spend the time and significant costs of re-litigation.

Conclusion:

[52] The circumstances of the pandemic were unprecedented and have made a significant impact on many payors and their ability to pay child support. However, in this case the father had 17 years of potentially underpaying child support that significantly benefited him. If the father is entitled to have his ongoing child support reviewed despite the non-variation clause, the mother should also be entitled to the same review back to the date of the Amending Agreement. The mother has accepted her potentially unconscionable circumstances of underpayment of child support. She should not have to engage in further lengthy litigation to do a forensic accounting of the father's income back to 2006. I cannot find that these circumstances create a situation that is "shocking to the conscience" to make a finding that they are "unconscionable circumstances" for the father. I recognize that the father is in a challenging situation at this time to pay his ongoing child support. However, his circumstances will hopefully change in the future in the post-pandemic world. L.V. will complete his first post-secondary degree in a few years so the father's going child support obligation is time-limited.

[53] While I will not permit the Motion to Change to proceed to vary the underlying amount of the ongoing child support, the court is willing to entertain a motion for stay of enforcement, or suspension of the full amount of child support for a period of time. A motion to stay or suspend a support order must be brought within a Motion to Change. I do not believe that Default Proceedings are presently before the court. However, Mr. Higginson advised at the hearing of this motion that he was keeping the FRO office apprised of this matter.

[54] The next court date on this case is April 24, 2024 at 10 a.m. I would like to remain seized of this case for the next court date for a case conference on the issue of a suspension of full child support and on what terms, with the benefit of input from both parties and if required FRO counsel.

[55] At the closing of arguments of this motion, Mr. Rush suggested to the court not to order costs of this motion, as some issues were not raised by either counsel in pleadings and this was not a case of a "winner or loser". He suggested that costs should be determined by the justice who ultimately hears the issue. Mr. Higginson agreed with this approach.

Order:

1. The Amending Agreement dated September 5, 2006 is not void ab initio or voidable in law.

2. The applicant father is permitted to bring his Motion to Change only with respect to the issue of staying or suspending the full amount of child support payable for a period of time, and not with respect to varying the underlying amount of ongoing child support.

3. This matter is adjourned to April 24, 2024 at 10 a.m. for a case conference, only on the outstanding issue. Should the parties believe that counsel from the Family Responsibility Office is required to be in attendance, they shall provide notice to them of the next court date.

4. As agreed, costs for this initial hearing on the threshold issues shall be reserved to any hearing on the outstanding issue.

Released: February 29, 2024 Signed: Justice K.S. Neill